<PAGE>
As filed with the Securities and Exchange Commission on October 5, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ALLFIRST FINANCIAL INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 6712 52-0981378
(State or otherjurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
25 South Charles Street
Baltimore, Maryland 21201
(410) 244-4000
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
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ALLFIRST PREFERRED CAPITAL TRUST
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 6719 [Applied for]
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
25 South Charles Street
Baltimore, Maryland 21201
(410) 244-4000
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
</TABLE>
ALLFIRST PREFERRED ASSET TRUST
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 6719 [Applied for]
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
25 South Charles Street
Baltimore, Maryland 21201
(410) 244-4000
(Address, including ZIP code, and telephone number, including area code, of
registrant's principal executive offices)
</TABLE>
Ralph V. Partlow III
Allfirst Financial Inc.
25 South Charles Street, MS101-850
Baltimore, Maryland 21201
(410) 244-3800
(Name, address, including zip code and telephone number, including area code of
agent of service)
---------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [_]
CALCULATION OF REGISTRATION FEE
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PROPOSED
PROPOSED MAXIMUM
MAXIMUM AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE OFFERING REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) PRICE (1) FEE
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<S> <C> <C> <C> <C>
SKATES..................................... $100,000,000 98.903% $98,903,000 $27,800
Preferred Securities of Allfirst Preferred
Asset Trust (2)........................... -- -- -- NA
Junior Subordinated Debentures of Allfirst
Financial Inc. (2)........................ -- -- -- NA
Allfirst Financial Inc. Guarantee with
respect to SKATES (3)..................... -- -- -- NA
Allfirst Financial Inc. Guarantee with
respect to Preferred Securities of
Allfirst Preferred Asset Trust (3)........ -- -- -- NA
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Total (4).................................. $100,000,000(5) 98.903% $98,903,000 $27,800
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</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) Allfirst Preferred Capital Trust originally purchased the preferred
securities of Allfirst Preferred Asset Trust with the proceeds of the sale
of the SKATES to the initial purchaser. Allfirst Preferred Asset Trust
originally purchased the junior subordinated debenture with the proceeds of
the sale of its preferred securities to Allfirst Preferred Capital Trust.
No separate consideration will be received (i) for the preferred securities
of Allfirst Preferred Asset Trust distributed upon liquidation of Allfirst
Preferred Capital Trust, or (ii) for the junior subordinated debentures
under any circumstances.
(3) No separate consideration will be received for the Allfirst Financial Inc.
guarantees.
(4) This Registration Statement is deemed to cover: (i) the junior subordinated
debenture and the rights of holders of the junior subordinated debenture
under the Indenture; (ii) the rights of holders of preferred securities of
Allfirst Preferred Asset Trust under a declaration of trust; (iii) the
rights of holders of SKATES under a declaration of trust; (iv) the rights
of holders of SKATES and of the preferred securities of Allfirst Preferred
Asset Trust under the respective guarantees; and (v) certain backup
undertakings as described herein.
(5) Such amount represents the aggregate liquidation amount of the SKATES to be
exchanged hereunder.
---------------
The Registrants hereby amends this registration statement on such date or
dates as may be necessary to delay its effective date until the registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act or until this Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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<PAGE>
PROSPECTUS EXCHANGE OFFER
100,000 Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities "SKATESSM"
Allfirst Preferred Capital Trust
Liquidation Amount $1,000 per SKATES
guaranteed to the extent described in this prospectus by
Allfirst Financial Inc. (formerly First Maryland Bancorp)
-------------
In the exchange offer:
. Allfirst Capital Trust offers to . Neither we nor the trusts will
exchange new SKATES registered receive any cash proceeds in the
under the 1933 Act for the SKATES exchange offer, and no dealer-
initially issued to institutional manager will assist us.
investors in a private offering;
The terms of the new securities being
. Allfirst Asset Trust will issued in the exchange offer are
exchange the Asset Preferred identical in all respects to the
Securities it originally issued terms of the old securities issued in
to Allfirst Capital Trust in the the private offering, except that:
private offering for new Asset
Preferred Securities registered . the new securities have been
under the 1933 Act; registered under the 1933 Act and
will not be subject to restrictions
. We will exchange the junior on transfer applicable to the old
subordinated debenture we securities;
originally issued to Allfirst
Asset Trust in the private . the new SKATES and the new Asset
offering for a new junior Preferred Securities will not
subordinated debenture registered provide for any penalty increase in
under the 1933 Act; their distribution rates; and
. We will exchange the guarantees . the new junior subordinated
we originally issued in the debenture do not provide for any
private offering for new penalty increase in its interest
guarantees registered under the rate.
1933 Act;
The exchange offer and withdrawal
. If you participate in the rights expire at 5:00 p.m., New York
exchange offer, no further City time, on , 1999, unless
distributions will be paid on extended.
your old SKATES and any future
distributions on your new SKATES
will be payable on the scheduled
payment dates; and
Participating in the exchange offer or investing in new SKATES involves risks.
Please see "Risk Factors" on page 8.
The new SKATES will not be listed on a national securities exchange or quoted
on the Nasdaq Stock Market.
Neither the SKATES nor any of the other securities offered in this prospectus
are deposits or other obligations of a bank or savings association or are
insured by the Federal Deposit Insurance Corporation or any other governmental
agency.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is
a criminal offense.
This prospectus, together with the letter of transmittal, is being sent to
all registered holders of old SKATES as of , 1999.
, 1999
SMService mark of Lehman Brothers Inc.
<PAGE>
TABLE OF CONTENTS
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Page
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<S> <C>
Summary Information--Q&A................................................... 1
Risk Factors............................................................... 8
Allfirst Financial Inc..................................................... 13
Ratio of Earnings to Fixed Charges and Preferred Dividends of
Allfirst Financial Inc.................................................... 13
Selected Consolidated Financial Data....................................... 15
Allfirst Preferred Capital Trust........................................... 16
Allfirst Preferred Asset Trust............................................. 18
The Exchange Offer......................................................... 21
Description of the New SKATES.............................................. 31
Description of the New Capital Guarantee................................... 46
Description of the New Asset Preferred Securities.......................... 49
Description of the New Asset Guarantee..................................... 58
Description of Investments................................................. 61
United States Federal Income Taxation...................................... 70
Certain ERISA Considerations............................................... 74
Plan of Distribution....................................................... 77
Where You Can Find More Information........................................ 77
Incorporation of Information We File With the SEC.......................... 77
Legal Matters.............................................................. 78
Experts.................................................................... 78
Financial Statements of the Trusts......................................... 79
</TABLE>
This prospectus incorporates important business and financial information
about Allfirst that is not included in or delivered with this prospectus. The
information so omitted is available without charge to a SKATES holder upon
written or oral request. You may make a request using the following
information: Allfirst Financial Inc., 25 S. Charles St., Mailcode 101-450,
Baltimore, Maryland 21201, Attn: Richard C. Cumbers, telephone (410) 244-4723.
In order to obtain desired materials in a timely fashion, you must make your
request by no later than , 1999.
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<PAGE>
SUMMARY INFORMATION--Q&A
This summary includes questions and answers that highlight selected
information elsewhere in this prospectus to help you understand the exchange
offer and the new SKATES. This summary may not contain all the information that
may be important to you. You should carefully read this prospectus to fully
understand the terms of the exchange offer. You should pay special attention to
the "Risk Factors" section beginning on page 8.
In this prospectus:
. references to "Allfirst," "we", "us" and "our" are to Allfirst Financial
Inc.;
. references to "Allfirst Capital Trust" are to Allfirst Preferred Capital
Trust;
. references to "Allfirst Asset Trust" are to Allfirst Preferred Asset
Trust.
. references to "your" SKATES or "old" SKATES means the SKATES that are
currently outstanding
. references to "SKATES" are to the new SKATES and the old SKATES, if any,
that will be outstanding after the exchange offer; and
. use of the word "old" or "new" to describe the Asset Preferred
Securities, our junior subordinated debenture or our guarantees means
that security as currently outstanding or as outstanding after the
exchange offer
What are the SKATES?
Each SKATES is a preferred interest in the assets of Allfirst Capital Trust.
We own all of the common securities of Allfirst Capital Trust. The sole assets
of Allfirst Capital Trust are the Asset Preferred Securities issued by Allfirst
Asset Trust, which represent preferred ownership interests in the assets of
Allfirst Asset Trust, and a limited Allfirst guarantee. Allfirst Asset Trust
used all of the proceeds from the sale of its Asset Preferred Securities to
Allfirst Capital Trust and the sale of its common securities to us to purchase
the junior subordinated debenture from us and to make the other permitted
investments described in this prospectus.
Who is Allfirst?
We are a bank holding company headquartered in Baltimore, Maryland, formerly
known as First Maryland Bancorp. We operate primarily in the Mid-Atlantic
states. At June 30, 1999, we had total assets of $17.7 billion. Through our
various banking subsidiaries, we offer a full range of banking products and
services to consumers, businesses and governmental units.
What is Allfirst Capital Trust?
Allfirst Capital Trust is a Delaware business trust that exists only for the
purposes of issuing the old and new SKATES, investing the proceeds in the Asset
Preferred Securities issued by Allfirst Asset Trust, participating in the
exchange offer and engaging in incidental activities.
What is Allfirst Asset Trust?
Allfirst Asset Trust is a Delaware business trust that exists only for the
purposes of issuing the old and new Asset Preferred Securities, investing the
proceeds in specified assets, participating in the exchange offer and engaging
in incidental activities. Allfirst Asset Trust has elected to be treated as a
partnership for U.S. Federal income tax purposes. The assets of Allfirst Asset
Trust are:
. a junior subordinated debenture issued by us; and
. other permitted investments described in this prospectus.
What is the exchange offer?
Allfirst Capital Trust is offering to exchange new SKATES for your old
SKATES. Allfirst Asset Trust will exchange new Asset Preferred Securities for
the old Asset Preferred Securities now owned by Allfirst Capital Trust. We will
exchange a new junior subordinated debenture for our old junior subordinated
debenture now owned by Allfirst Asset Trust. We will also exchange new
guarantees for our old guarantees. The old SKATES, Asset Preferred Securities,
junior subordinated debenture and guarantees were originally sold to
institutional investors in a private offering on July 13, 1999. We
1
<PAGE>
and the trusts are engaging in the exchange offer pursuant to the registration
rights agreement. See "The Exchange Offer."
What are the differences between my old SKATES and the new SKATES?
The only differences between old SKATES and new SKATES are:
. new SKATES have been registered under the 1933 Act;
. new SKATES are freely transferable; and
. the penalty distribution rate provisions of the registration rights
agreement do not apply to the new SKATES.
All of other terms and conditions of the old and new SKATES are the same.
See, "Description of the New Skates."
What distributions will I receive on the SKATES?
The SKATES provide for a quarterly cash distribution at the rate of three-
month LIBOR plus 1.50% per year, reset quarterly, for each SKATES you own.
Distributions are payable on each January 15, April 15, July 15 and October 15,
beginning October 15, 1999. Until October 15, 1999, the distribution rate on
the SKATES is 6.81% per year.
The distributions on the SKATES are non-cumulative. This means that, if
Allfirst Capital Trust does not pay a distribution in full on any distribution
payment date, then you will not, and will have no right to, receive that
distribution or, if paid in part, the unpaid portion of that distribution, at
any time, even if Allfirst Capital Trust pays other distributions in the
future.
The sole assets of Allfirst Capital Trust are the Asset Preferred Securities
of Allfirst Asset Trust and our limited guarantee. Because Allfirst Asset Trust
will only pay quarterly distributions on the Asset Preferred Securities if we
make interest payments (other than deferred interest) on the junior
subordinated debenture on the interest payment dates immediately following the
corresponding quarterly periods, Allfirst Capital Trust's ability to pay
distributions on the SKATES in full is ultimately
dependent upon our ability to make interest payments (other than deferred
interest) on the junior subordinated debenture on each interest payment date.
If we defer making interest payments on the junior subordinated debenture,
which we may for up to twenty quarterly periods, Allfirst Asset Trust will not
make payments on its Asset Preferred Securities and Allfirst Capital Trust will
not pay quarterly distributions for any quarterly period immediately following
any interest payment date on which we fail to make interest payments on the
junior subordinated debenture. Because the Asset Preferred Securities and the
SKATES are non-cumulative, if you do not receive a distribution for any
quarterly period, you will never receive or be entitled to receive a
distribution for that quarterly period. In other words, if we resume making
interest payments on the junior subordinated debenture after we have deferred
making interest payments, any payments of deferred interest will not be
distributed to Allfirst Capital Trust, as holder of the Asset Preferred
Securities, and, therefore, will not be paid to you.
Will payments made on the other permitted investments held by Allfirst Asset
Trust be available for distributions or payments in redemption or liquidation
of the SKATES?
The other permitted investments of Allfirst Asset Trust will not be a source
of funds for the payment of quarterly distributions on, or redemption payments
in respect of, the Asset Preferred Securities, and consequently will not be a
source of funds for the payment of quarterly distributions on, or redemption
payments in respect of, the SKATES.
In the event of a liquidation of Allfirst Asset Trust, Allfirst Capital
Trust, as the holder of the Asset Preferred Securities, would be entitled to
receive a liquidation preference equal to the liquidation amount of the Asset
Preferred Securities from all assets of Allfirst Asset Trust, including the
other permitted investments, after payment of its creditors, before any
liquidation payment would be made to Allfirst , as the holder of Allfirst Asset
Trust's common securities. Thus, the other permitted investments would serve as
a source of funds for payments on the SKATES in an event of liquidation of
Allfirst Capital Trust, which will occur if there is a liquidation of Allfirst
Asset Trust.
2
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Can the SKATES be redeemed?
Yes. If we redeem the junior subordinated debenture, Allfirst Asset Trust
will use the cash it receives on the redemption of the junior subordinated
debenture to redeem for cash Asset Preferred Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the junior
subordinated debenture redeemed. Allfirst Capital Trust, in turn, will use the
cash it receives on the redemption of the Asset Preferred Securities to redeem
for cash a proportionate liquidation amount of SKATES and its common securities
having an aggregate liquidation amount equal to the Asset Preferred Securities
being redeemed. The redemption price of the SKATES will equal $1,000 per SKATES
plus any accrued and unpaid distributions for the then current quarterly period
to the date of redemption.
The trustees of Allfirst Capital Trust can elect to liquidate Allfirst
Capital Trust and distribute the Asset Preferred Securities to you if at any
time any of the changes in U.S. tax law, U.S. investment company law or U.S. or
Irish banking law described elsewhere in this prospectus occur.
Neither the Asset Preferred Securities nor the SKATES can be redeemed at any
time at the option of their holders. Neither the SKATES nor the Asset Preferred
Securities have any scheduled maturity.
When can Allfirst redeem the junior subordinated debenture?
We may redeem the junior subordinated debenture for cash:
. before July 15, 2009 in whole only and only if any of the specified
changes in U.S. tax law, U.S. investment company law or U.S. or Irish
banking law described in this prospectus occur; and
. in whole or in part from time to time at any time on or after July 15,
2009.
To redeem the junior subordinated debenture, we need the prior approval of
the Federal Reserve Board and the Central Bank of Ireland.
In addition, we may not redeem the junior subordinated debenture unless (1)
all amounts then due on any of our senior obligations are paid or duly
provided for and (2) no event permitting acceleration of any of our senior
obligations has occurred and is continuing.
What happens if Allfirst Capital Trust doesn't pay quarterly distributions on
the SKATES in full?
If Allfirst Capital Trust does not pay a full quarterly distribution or
other scheduled payment on the SKATES for any reason, including because:
. we defer interest payments on the junior subordinated debenture in
accordance with its terms;
. we default on our obligation to pay interest not deferred on the junior
subordinated debenture;
. we do not make a scheduled principal payment on the junior subordinated
debenture;
. we are not permitted to make payments of interest after a deferral period
or principal on the junior subordinated debenture because we do not
receive prior approval from the Federal Reserve Board and the Central
Bank of Ireland;
. we, as guarantor of the Asset Preferred Securities, do not make any
payment that our guarantee of the Asset Preferred Securities requires us
to make to Allfirst Capital Trust; or
. we, as guarantor of the SKATES, do not make any payment that our
guarantee of the SKATES requires us to make to you,
then, we may not (1) declare or pay cash dividends on, redeem, acquire, or make
a liquidation payment with respect to, any of our outstanding capital stock, or
(2) make any payment on, repay, repurchase or redeem any of our debt securities
or guarantees that rank equally with or subordinate and junior to the junior
subordinated debenture, other than pro rata interest payments or payments in
lieu of interest on the junior subordinated debenture and our debt that ranks
equally with the junior subordinated
3
<PAGE>
debenture, unless and until, since the curing or waiver of any default or the
end of the interest deferral period, as the case may be:
. Allfirst Capital Trust has paid distributions on the SKATES in full on
four consecutive distribution payment dates;
. Allfirst Asset Trust has paid distributions on the Asset Preferred
Securities in full on four consecutive distribution payment dates; and
. we have paid all deferred interest on the junior subordinated debenture
for any interest deferral period and paid interest in full on four
consecutive interest payment dates.
This limitation prevents us from paying cash or other dividends to the
holders of our capital stock or making payments on obligations that rank
equally with or subordinate and junior to the junior subordinated debenture,
other than pro rata payments on obligations which rank equally with the junior
subordinated debenture, if payments are not being made on the SKATES, the Asset
Preferred Securities, the junior subordinated debenture or the guarantees.
Do I have voting rights?
Generally, you do not have any voting rights except under the limited
circumstances described below. The holders of a majority of the SKATES,
however, have the right to direct the time, method and place of conducting any
proceeding for any remedy available to the property trustee of Allfirst Capital
Trust, or direct the exercise of any trust or other power conferred upon the
property trustee of Allfirst Capital Trust.
What other rights of action do I have as a holder of the SKATES?
As a holder of the SKATES, you have the right to bring a direct action
against us if we do not:
. pay interest and principal on the junior subordinated debenture in
accordance with its terms; or
. perform our obligations under our guarantees.
You also have the right as a holder of the SKATES to bring a direct action
against Allfirst Asset Trust if it does not fulfill its obligations under the
Asset Preferred Securities in accordance with their terms.
When does the exchange offer expire?
The exchange offer expires on , 1999, at 5:00 p.m., New York City
time, unless we extend the offer. See, "The Exchange Offer--Expiration Date;
Extensions; Amendments."
How do I participate in the exchange offer?
You must send the properly completed letter of transmittal to the exchange
agent. You must also have your SKATES delivered to the exchange agent before
the expiration date or provide for guaranteed delivery. See, "The Exchange
Offer--Procedures for Tendering Old SKATES."
Are all holders of old SKATES eligible to participate in the exchange offer?
No. If:
. you are an affiliate of Allfirst; or
. you intend to participate in the exchange offer for the purpose of
distributing new SKATES; or
. you are a broker-dealer that purchased old SKATES from Allfirst Capital
Trust to resell under Rule 144A or any other available exemption under
the 1933 Act,
then you are not eligible to participate in the exchange offer. You must resell
your old SKATES in accordance with the registration and prospectus delivery
requirements of the 1933 Act. See, "The Exchange Offer--Eligibility."
Are there any other reasons why participating in the exchange offer may not be
appropriate for me?
Yes. If:
. you are prohibited by law or policy of the SEC from participating in the
exchange offer; or
. you may not resell new SKATES to the public without delivering a
prospectus and this prospectus is not appropriate or available for your
resales; or
. you are a broker-dealer that acquired old SKATES directly from Allfirst
Capital Trust or its affiliates,
4
<PAGE>
and if you notify us in a timely fashion, then we are obligated to use our
reasonable best efforts to file a shelf registration statement with the SEC,
cause it to become effective, and keep it effective until July 9, 2001 at the
latest. You would then be able to sell your old SKATES under the shelf
registration statement. See, "The Exchange Offer--Other Registration Rights."
Who is the exchange agent and how do I contact them?
The exchange agent information is as follows:
The Bank of New York
101 Barclay St., Floor 7E
New York, New York 10286
(212) 815-
Attn:
Additional information about contacting the exchange agent is contained in
the letter of transmittal.
May I change my mind once I have tendered my SKATES?
You may withdraw your SKATES from the exchange offer at any time before the
expiration date by delivering a written withdrawal notice to the exchange
agent. See "The Exchange Offer--Withdrawal Rights."
What if I don't participate in the exchange offer?
If you don't exchange your old SKATES for new SKATES, then:
. your old SKATES will remain restricted securities and may not be resold
prior to July 9, 2001 except in compliance with Rule 144A or another
exemption under the 1933 Act; and
. the penalty distribution rate provisions of the registration rights
agreement will not apply to your SKATES.
Otherwise, you will have the same rights and duties as a holder who receives
new SKATES in the exchange offer.
May I resell my new SKATES without any restrictions?
You may freely resell your new SKATES unless:
. you are a broker-dealer; and
. you acquired your old SKATES for your own account as a result of market
making or other trading activities,
in which case you must deliver a prospectus when you sell your new SKATES. See,
"The Exchange Offer--Resales of New SKATES."
What about distributions on the old SKATES?
If you exchange your old SKATES for new SKATES, you will not receive any
further distributions with respect to your old SKATES. Instead, your new SKATES
will be treated as being outstanding for the period of time from the last
payment date or the original issue date. See, "The Exchange Offer--
Distributions on New SKATES."
Are there any income tax consequences to participating in the exchange offer?
There will be no U.S. federal income tax consequences to you when you
exchange your old SKATES for new SKATES. See, "United States Federal Income
Taxation."
What is the junior subordinated debenture?
The junior subordinated debenture is a long term loan made by Allfirst Asset
Trust to us. The junior subordinated debenture initially comprised 95% of
Allfirst Asset Trust's assets. It has a principal amount of approximately
$105,310,000, bears interest at a rate per year of three-month LIBOR plus
1.43%, reset quarterly, and pays interest on January 15, April 15, July 15 and
October 15 of each year, commencing October 15, 1999. Until October 15, 1999,
the interest rate on the junior subordinated debenture is 6.74%. The junior
subordinated debenture is scheduled to mature on July 15, 2029.
The junior subordinated debenture is an unsecured obligation of ours and
ranks subordinate and junior in right of payment of principal and interest to
our general creditors.
5
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We may not make any payment of principal or interest on the junior
subordinated debenture unless:
. all amounts then due on all of our obligations ranking senior to our
obligations under the junior subordinated debenture have been paid in
full or duly provided for; and
. there has not occurred or is continuing an event of default or a default
in payment in respect of any obligation ranking senior to our obligation
under the junior subordinated debenture which would permit acceleration
under the terms of that senior obligation.
We may exercise our right to defer interest payments on the junior
subordinated debenture for a period of not more than twenty quarterly periods.
However, in the event that we exercise our right to defer interest payments on
the junior subordinated debenture, we may not resume making any interest
payments without the prior approval of the Board of Governors of the Federal
Reserve System and the Central Bank of Ireland.
In addition, we may not redeem or repay the junior subordinated debenture at
maturity, or at any other time, without the prior consent of the Federal
Reserve Board and the Central Bank of Ireland. As a result, if either the
Federal Reserve Board or the Central Bank of Ireland does not permit us to
repay the junior subordinated debenture at the stated maturity date, you may
not receive the corresponding redemption payment on your SKATES on the
corresponding redemption date or at all.
If we do not receive these approvals to resume paying interest after
deferring interest payments for any interest deferral period or to repay the
junior subordinated debenture at maturity:
. no event of default will have occurred;
. in the case of resuming interest payments after an interest deferral
period, the interest deferral period may exceed twenty quarterly periods;
and
. in the case of repayment at maturity, the junior subordinated debenture
will remain outstanding.
What are the differences between the old junior subordinated debenture and the
new junior subordinated debenture?
The only differences between the old junior subordinated debenture and the
new junior subordinated debenture are that:
. the new junior subordinated debenture has been registered under the 1933
Act; and
. the penalty interest rate provisions of the registration rights agreement
do not apply to the new junior subordinated debenture.
All of the other terms and conditions of the old and new junior subordinated
debenture are the same. See, "Description of Investments--Junior Subordinated
Debenture."
What are the differences between the old Asset Preferred Securities and the new
Asset Preferred Securities?
The only differences between old Asset Trust Preferred Securities and the
new Asset Trust Preferred Securities are that:
. the new Asset Trust Preferred Securities have been registered under the
1933 Act; and
. the penalty distribution rate provisions of the registration rights
agreement do not apply to the new Asset Trust Preferred Securities.
All of other terms and conditions of the old and new Asset Trust Preferred
Securities are the same. See, "Description of New Asset Preferred Securities."
What are the guarantees?
We will guarantee, to the extent described in this prospectus:
. quarterly distributions on the Asset Preferred Securities by Allfirst
Asset Trust to Allfirst Capital Trust on each distribution date to the
extent Allfirst Asset Trust receives on the corresponding interest
payment date interest payments on the junior subordinated debenture and
has sufficient cash available to pay such distributions on the scheduled
distribution date;
. payment of quarterly distributions on the SKATES by Allfirst Capital
Trust to you on
6
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each distribution payment date to the extent Allfirst Capital Trust
receives a distribution on the Asset Preferred Securities on that date;
. distribution of the Asset Preferred Securities to you in the event
Allfirst Capital Trust is liquidated as described in this prospectus;
. the redemption amount due to Allfirst Capital Trust if Allfirst Asset
Trust redeems the Asset Preferred Securities to the extent Allfirst Asset
Trust has funds for that redemption;
. the redemption amount due to you if Allfirst Capital Trust redeems the
SKATES for cash to the extent Allfirst Capital Trust has funds for that
redemption;
. the liquidation amount of the Asset Preferred Securities due to Allfirst
Capital Trust if Allfirst Asset Trust is liquidated to the extent
Allfirst Asset Trust has assets after payment to its creditors; and
. the liquidation amount of the SKATES due to you if Allfirst Capital Trust
is liquidated to the extent Allfirst Capital Trust has assets after
payment to its creditors.
As described in this prospectus, our obligations under the guarantees are
subordinate and junior in right of payment to all of our other liabilities.
What are the differences between the old Allfirst guarantees and the new
Allfirst guarantees?
The only differences between our old guarantees of the SKATES and the Asset
Trust Preferred Securities and the new guarantees are that the new guarantees
have been registered under the 1933 Act. See, "Description of the New Capital
Guarantee" and "Description of the New Asset Guarantee".
Are the SKATES rated by any rating agencies?
Yes. Moody's Investors Service has assigned a rating of "a3" to the SKATES,
and Standard & Poor's Ratings Services has assigned them a rating of "BBB+." A
security rating is not a recommendation to buy, sell or hold a security, and
the rating agency may revise or withdraw its rating at any time. See "Allfirst
Financial Inc."
In what form will the new SKATES be issued?
The new SKATES will be issued in the form of a global certificate registered
in the name of Cede & Co., as nominee for The Depository Trust Company, also
known as DTC. Ownership interests in new SKATES will be evidenced by, and
transfers of new SKATES will be effected only through, records maintained by
DTC and its direct and indirect participants, including Euroclear and
Cedelbank.
7
<PAGE>
RISK FACTORS
Risk Factors Relating to the Exchange Offer
The new SKATES do not represent any different investment risk than the old
SKATES you currently own. See "--Risks of Investing in the SKATES." However,
. if you are eligible to participate in the exchange offer and fail to do
so, or
. if you fail to determine whether you are eligible to participate in the
exchange offer,
then you will be subject to the risks described below.
If you are eligible to participate in the exchange offer and fail to do so,
then your SKATES will continue to be restricted and you will not have any
further registration rights.
The old SKATES have not been registered under the 1933 Act or any state
securities laws, and may not be offered, sold or otherwise transferred except
in compliance with applicable securities laws, including any exemptions. Old
SKATES that remain outstanding after the exchange offer is completed will
continue to bear a restrictive legend. In addition, after the exchange offer is
completed, a holder of old SKATES will not be entitled to any registration
rights, and we do not intend to register any old SKATES which remain
outstanding.
If you fail to determine whether you are eligible to participate in the
exchange offer or to notify us that you are not eligible, then you may lose the
alternative registration rights provided to you in the registration rights
agreement.
Certain brokers and dealers may not be eligible to participate in the
exchange offer. If you are not eligible to participate in the exchange offer,
then you may have alternative registration rights. You must notify us at least
20 days before the expiration date of the exchange offer in order to take
advantage of these rights or you will lose them. See, "The Exchange Offer--
Eligibility" and "--Other Registration Rights."
Exchange Offer Procedures
In order to participate in the exchange offer, you must:
. properly complete and execute the letter of transmittal and all other
required documents;
. deliver the letter of transmittal to the exchange agent in a timely
fashion; and
. arrange for your old SKATES to be delivered to the exchange agent in a
timely fashion.
Neither we nor the exchange agent is obligated to notify you of any defects or
irregularities with respect to your tender of old SKATES for exchange.
Neither the new SKATES nor the new Asset Preferred Securities are insured.
Neither the Federal Deposit Insurance Corporation nor any other governmental
agency has insured the new SKATES, the new Asset Preferred Securities or any of
the other securities offered by this prospectus.
There is no public market for the SKATES.
New SKATES issued in the exchange offer will be a new issue of securities,
with no established trading market. Lehman Brothers Inc., the initial purchaser
of the old SKATES, has informed Allfirst Capital Trust and us that it intends
to make a market in the new SKATES. However, the initial purchaser is not
obligated to do so and it may terminate any market making activity it engages
in at any time without notice to you. Any market making activity it engages in
will be subject to the limits prescribed under the 1933 Act and may be limited
during the registration process described in the section entitled "Exchange
Offer; Registration Rights" in this prospectus.
8
<PAGE>
Risks of Investing in the SKATES
An investment in SKATES involves risks, and you should carefully consider
the following discussion before investing in SKATES.
You will only receive quarterly distributions and other payments if Allfirst
Asset Trust receives timely interest and principal payments on the junior
subordinated debenture and Allfirst Capital Trust receives corresponding
distributions on the Asset Preferred Securities or payments on our guarantee of
the Asset Preferred Securities.
Allfirst Capital Trust's ability to pay distributions on the SKATES to you
on scheduled payment dates is dependent upon its receipt of payments on the
Asset Preferred Securities from Allfirst Asset Trust. If we fail to pay
interest or principal on the scheduled payment dates for the junior
subordinated debenture, Allfirst Asset Trust will not make payments on the
Asset Preferred Securities and we will not make payments under our guarantee of
our Asset Preferred Securities. If Allfirst Asset Trust does not make a payment
on the Asset Preferred Securities or we fail to make a payment on our
guarantee, Allfirst Capital Trust will not have funds to make the corresponding
quarterly distribution or other payments to you on the SKATES.
Quarterly distributions on the SKATES are non-cumulative.
Quarterly distributions on the SKATES are not cumulative. If Allfirst
Capital Trust does not pay a quarterly distribution or pays only a portion of a
quarterly distribution on the distribution payment date immediately following
the quarterly period, you will not receive that distribution or the unpaid
portion of that distribution and will have no claim to that distribution or the
unpaid portion of that distribution, whether or not Allfirst Capital Trust
subsequently pays quarterly distributions in full or has funds to pay
subsequent quarterly distributions in full. This also means that, if we fail to
make interest payments on the junior subordinated debenture, you will not
receive any distributions on any distribution payment date for that interest
deferral period. Moreover, when we pay any deferred interest on the junior
subordinated debenture after any interest deferral period ends, you will not
receive that deferred interest because Allfirst Asset Trust will not distribute
it on the Asset Preferred Securities.
Our primary regulator and the primary regulator of our parent, Allied Irish
Banks p.l.c., can prevent you from receiving quarterly distributions beyond the
duration of any interest deferral period we may elect, as well as the payment
to you of the redemption or liquidation amount of your SKATES.
In the event that we do not make interest payments on the junior
subordinated debenture, we may not resume making any interest payments,
including interest accrued during the interest deferral period, without the
prior approval of our primary regulator, the Federal Reserve Board, and the
Central Bank of Ireland, the primary regulator of our parent, Allied Irish
Banks p.l.c. In addition, we may not redeem or repay the junior subordinated
debenture on the July 15, 2029 maturity date or at any other time without the
prior consent of both the Federal Reserve Board and the Central Bank of
Ireland. You may not receive any quarterly distributions on or the cash payable
on the redemption or repayment of your SKATES, and a holder of the junior
subordinated debenture will not have any right to enforce the junior
subordinated debenture, if either of these regulators do not permit us to make
any principal or interest payments on the junior subordinated debenture.
Our ability to defer interest payments on the junior subordinated debenture
may affect the trading value of the SKATES.
If no event of default under the junior subordinated debenture has occurred
and is continuing, we can, on one or more occasions, defer interest payments on
the junior subordinated debentures for up to twenty quarterly periods, but not
beyond the scheduled maturity date of the junior subordinated debenture.
Moreover, we may not resume making interest payments on the junior subordinated
debenture until we have obtained the prior
9
<PAGE>
approval of the Federal Reserve Board and the Central Bank of Ireland, which
may result in an interest deferral period exceeding twenty quarterly periods.
If we fail to make interest payments on the junior subordinated
debenture, Allfirst Asset Trust will lack the funds necessary to make payments
on the Asset Preferred Securities. If Allfirst Asset Trust does not pay
distributions on the Asset Preferred Securities, Allfirst Capital Trust will
lack the funds necessary to pay distributions on the SKATES. If any
distribution is not paid on the SKATES in full, you will not receive or have
any right to receive that distribution or the unpaid portion of that
distribution at any time, even if we resume making interest payments on the
junior subordinated debenture in the future. The existence of our right to
defer interest payments on the junior subordinated debenture may mean that the
trading value for the SKATES may be more volatile than other securities that do
not provide issuers these rights.
The guarantees cover payments only if Allfirst Asset Trust or Allfirst
Capital Trust, as the case may be, has the cash available to make the payments.
If we do not make payments on the junior subordinated debenture, Allfirst
Asset Trust will not have sufficient funds to make payments on the Asset
Preferred Securities and, in turn, Allfirst Capital Trust will not have
sufficient funds to make distributions on or pay the liquidation amount of the
SKATES. Because our guarantee of the Asset Preferred Securities does not cover
payments when Allfirst Asset Trust does not have sufficient funds and our
guarantee of the SKATES does not cover payments when Allfirst Capital Trust
does not have sufficient funds, you will not be able to rely on the guarantees
for payments of these amounts. Instead, you or the property trustees may
enforce the rights of Allfirst Asset Trust under the junior subordinated
debenture directly against us. However, as a holder of the SKATES, you are not
entitled to receive deferred or late interest payments.
Our obligations under the guarantees and the junior subordinated debenture
are subordinated.
Our obligations under the guarantees and the junior subordinated debenture
are unsecured and will rank in priority of payment:
. except as described below, subordinate and junior in right of payment to
our obligations for borrowed money and to all of our other liabilities;
. subordinate and junior in right of payment to our obligations under the
$200,000,000 aggregate principal amount of our 7.20% Subordinated Notes
due 2007 and the $100,000,000 aggregate principal amount of our 6.875%
Subordinated Notes due 2009;
. equally with our obligations under guarantees and indebtedness issued by
us in connection with:
. the $150,000,000 aggregate liquidation amount of Floating Rate
Subordinated Capital Income Securities issued by First Maryland
Capital I; and
. the $150,000,000 aggregate liquidation amount of Floating Rate
Subordinated Capital Income Securities issued by First Maryland
Capital II; and
. equally with or senior to our obligations under any other instrument or
agreement of ours which is stated to rank equally with or junior to the
guarantees and the junior subordinated debenture.
Our obligations under the guarantees and the junior subordinated debenture
will not be paid unless:
. all amounts then due on all of our obligations ranking senior to our
obligations under the junior subordinated debenture and the guarantees
have been paid in full or duly provided for; and
. there has not occurred or is continuing an event of default or a default
in payment on any obligations ranking senior to our obligations under the
junior subordinated debenture and the guarantees which would permit
acceleration under the terms of those senior obligations.
At June 30, 1999, we had outstanding indebtedness and other liabilities
aggregating approximately $676.5 million, and our subsidiaries had deposits and
other liabilities of approximately $14.7 billion, to which the guarantees and
the junior subordinated debenture would have been subordinated.
10
<PAGE>
There are no terms in the SKATES, the Asset Preferred Securities, the
guarantees or the junior subordinated debenture that limit our ability to incur
additional indebtedness, including indebtedness that ranks senior, equally with
or junior to the guarantees or the junior subordinated debenture.
Distribution of the Asset Preferred Securities to you may affect your
return.
In the event that the trustees of Allfirst Capital Trust elect to liquidate
Allfirst Capital Trust as a result of certain changes in U.S. tax, U.S.
investment company or U.S. or Irish banking law and Allfirst Asset Trust does
not redeem the Asset Preferred Securities, Allfirst Capital Trust may
distribute the Asset Preferred Securities to you in exchange for your SKATES.
The trading value of the Asset Preferred Securities may be lower than the
trading value of the SKATES. This may result in a lower return to you upon your
sale of the Asset Preferred Securities.
Because you may receive Asset Preferred Securities upon the liquidation of
Allfirst Capital Trust, in connection with your investment decision to purchase
the SKATES, you are also making an investment decision with regard to the Asset
Preferred Securities. You should carefully review all of the information
regarding the Asset Preferred Securities contained in this prospectus.
Your return on the SKATES may be lower than the return on other investments
if the SKATES are redeemed, and you would be required to reinvest the
redemption amount of your SKATES sooner than expected.
If Allfirst Capital Trust redeems your SKATES, there is a risk that the
redemption amount paid to you may be less than the return you could earn on
other investments for the same holding period. If redeemed, your investment in
the SKATES may not reflect the full opportunity cost to you when you take into
account factors that affect the time value of money. Moreover, if your SKATES
are redeemed, you may be required to reinvest your redemption proceeds at a
time when you may not be able to earn a return that is as high as you were
earning on the SKATES.
Allfirst Capital Trust's and Allfirst Asset Trust's investments may not
generate sufficient income to enable payments on the SKATES.
Because the sole asset of Allfirst Asset Trust from which earnings will be
used to pay distributions on the Asset Preferred Securities will be the junior
subordinated debenture and all of the assets of Allfirst Capital Trust are
comprised of the Asset Preferred Securities, you are subject to a greater risk
that their assets will not generate sufficient income to pay quarterly
distributions and redemption and liquidation payments on the SKATES and the
Asset Preferred Securities than you would with a vehicle whose investments were
diversified and less exposed to the risk that non-payment on any particular
investment asset would impair its ability to make payments to holders of its
capital stock.
Enforcement of certain rights by or on your behalf is limited.
The Bank of New York is the property trustee of Allfirst Asset Trust and the
guarantee trustee of our guarantee of the Asset Preferred Securities. Its
ability to take action on your behalf as property trustee or guarantee trustee
is limited. This is because (a) our guarantee of the Asset Preferred Securities
guarantees distributions on the Asset Preferred Securities only to the extent
Allfirst Asset Trust receives payments (other than late payments or payments of
deferred interest) on the junior subordinated debenture and, upon liquidation
of Allfirst Capital Trust, other assets to which holders of the Asset Preferred
Securities are entitled, and (b) holders of the Asset Preferred Securities are
not entitled to receive interest on the junior subordinated debenture if we
defer or otherwise fail to pay interest on time. As a result, although the
property trustee of Allfirst Asset Trust may be able to enforce Allfirst Asset
Trust's creditors' rights to receive payments in respect of the junior
subordinated debenture, Allfirst Asset Trust will not pay, and we will not
guarantee the payment of, deferred or late interest payments to holders of the
Asset Preferred Securities or make other distributions on the Asset Preferred
Securities unless Allfirst Asset Trust receives such payments on the junior
subordinated debenture.
11
<PAGE>
In addition, our guarantee of the SKATES guarantees distributions on the
SKATES only to the extent Allfirst Capital Trust receives distributions on the
Asset Preferred Securities. To the extent Allfirst Capital Trust does not
receive distributions on the Asset Preferred Securities for any quarterly
period, you will not receive distributions on the SKATES for that quarterly
period.
If at any time:
. an event of default occurs and is continuing on the junior subordinated
debenture; or
. we default on our obligations under our guarantees of the SKATES or the
Asset Preferred Securities;
then:
. you would rely on the enforcement by the property trustee of Allfirst
Capital Trust of its rights, as a holder of the Asset Preferred
Securities, against us, including the right to direct the property
trustee of Allfirst Asset Trust to enforce:
. Allfirst Asset Trust's creditors' rights and other rights with
respect to the junior subordinated debenture;
. the rights of the holders of the Asset Preferred Securities under
our guarantee of the Asset Preferred Securities; and
. the rights of the holders of the Asset Preferred Securities to
receive distributions on the Asset Preferred Securities;
. the trustee under our guarantee of the SKATES will have the right to
enforce the terms of the guarantee; and
. you will have the right to act directly against us under the junior
subordinated debenture and our guarantee of the SKATES.
You have limited voting rights.
As a holder of the SKATES, you will have limited voting rights and will not
be entitled to vote to appoint, change, or increase or decrease the number of
trustees of Allfirst Capital Trust except as described in this prospectus. As
holder of all of Allfirst Capital Trust's common securities, those rights are
ours except as described in this prospectus.
Because we are a bank holding company, we have limited sources of funds.
Because we are a bank holding company, our operations are conducted by our
subsidiaries, including Allfirst Bank, which is subject to significant federal
and state regulation. As a result, our ability to receive dividends and loans
from our subsidiaries is restricted. At June 30, 1999, $124 million of the
retained earnings of Allfirst Bank were available to pay dividends to us,
without regulatory approval. Dividend payments by Allfirst Bank to us in the
future will require generation of future earnings by Allfirst Bank and may
require regulatory approval. Further, our right to participate in the assets of
any bank subsidiary upon its liquidation, reorganization or otherwise, and the
resulting ability of the holders of the SKATES to benefit indirectly from any
participation, will be subject to the claims of the bank subsidiary's
creditors, which will take priority except to the extent to which we may be a
creditor with a recognized claim. Accordingly, the junior subordinated
debenture will be subordinated to all existing and future liabilities of our
subsidiaries, including the deposit liabilities of Allfirst Bank, and you
should look only to our assets for payments on the junior subordinated
debenture. As of June 30, 1999, our subsidiaries had deposits and other
liabilities of approximately $14.7 billion.
12
<PAGE>
ALLFIRST FINANCIAL INC.
Allfirst (formerly First Maryland Bancorp) is a bank holding company
headquartered in Baltimore, Maryland. At June 30, 1999, Allfirst had
consolidated total assets of $17.7 billion, total deposits of $12.0 billion,
and total stockholders' equity of $1.9 billion. Its principal subsidiary is
Allfirst Bank, a Maryland commercial bank. Allfirst Bank provides:
. comprehensive corporate, commercial, correspondent and retail banking
services;
. personal trust, corporate trust, other asset management services; and
. related financial products and services
to individuals, businesses, governmental units and financial institutions,
primarily in Maryland and the adjacent states. The assets of Allfirst Bank at
June 30, 1999 accounted for approximately 94% of Allfirst's consolidated total
assets.
Allied Irish Banks, p.l.c. ("AIB") owns 100% of the common stock, and
controls 99% of the voting power of the capital stock, of Allfirst. AIB is an
Irish banking corporation whose securities are traded on the Dublin, London and
New York Stock Exchanges, and is a registered bank holding company under the
Bank Holding Company Act. At June 30, 1999, based upon United States generally
accepted accounting principles, AIB and its subsidiaries had total assets of
approximately $64 billion, making it the largest banking corporation organized
under the laws of Ireland. AIB provides a full range of banking, financial and
related services principally in Ireland, Poland, the United Kingdom and the
United States.
AIB will not guarantee or otherwise be responsible for payments due on the
SKATES or any other security offered by this prospectus. Because Allfirst is
wholly-owned by AIB, AIB's credit ratings are expected to influence the credit
ratings assigned from time to time to obligations of Allfirst. On August 25,
1999, Standard & Poor's Ratings Services, a division of the McGraw-Hill
Companies, Inc. ("S&P") announced that it had affirmed its credit rating
assigned to AIB's long-term debt and had removed the long-term debt ratings of
AIB and related entities from the credit watch list with negative outlook.
However, S&P's outlook on the ratings remains negative. It is likely that any
lowering of the credit ratings assigned to AIB's obligations by S&P would
result in the lowering of S&P's rating of the SKATES.
For financial reporting purposes, Allfirst Capital Trust and Allfirst Asset
Trust will be treated as subsidiaries of Allfirst and, accordingly, the
accounts of the trusts will be included in the consolidated financial
statements of Allfirst. The SKATES will be presented in the consolidated
balance sheet of Allfirst as long term debt, and appropriate disclosures about
the SKATES, the Asset Preferred Securities, the Capital and Asset Guarantees
and the junior subordinated debenture will be included in the notes to the
consolidated financial statements for financial reporting purposes. Allfirst
will record distributions payable on the SKATES as an interest expense in the
consolidated statements of income.
RATIO OF EARNINGS TO FIXED CHARGES AND PREFERRED DIVIDENDS
OF ALLFIRST FINANCIAL INC.
Allfirst's consolidated ratio of earnings to fixed charges and preferred
dividends for each of the periods indicated is set forth below:
<TABLE>
<CAPTION>
Six Months
Ended Years Ended December 31,
June 30, ----------------------------
1999 1998 1997 1996 1995 1994
---------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Excluding Interest on Deposits......... 2.37x 3.01x 2.32x 2.52x 2.35x 2.75x
Including Interest on Deposits......... 1.45 1.60 1.48 1.58 1.52 1.61
</TABLE>
13
<PAGE>
For purposes of computing the ratio of earnings to fixed charges and
preferred dividends, earnings represent net income plus applicable income taxes
and fixed charges. Fixed charges, excluding interest on deposits, represent
interest expense on long-term debt and short-term borrowings and the interest
factor included in rents, which is deemed to be one-third of rental expense.
Fixed charges, including interest on deposits, represent all interest expense
and the interest factor included in rents. Preferred dividends represent an
amount equal to the pretax earnings required to meet applicable preferred stock
dividend requirements.
14
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table sets forth our historical consolidated financial
information as of and for the periods indicated below. The summary consolidated
financial data as of and for the five years ended December 31, 1998 was derived
from our audited financial statements incorporated herein by reference. The
summary data as of and for the six months ended June 30, 1999 and 1998 is
unaudited and is not necessarily representative of the results to be expected
for the year ended December 31, 1999 or for any future periods, and includes
all adjustments consisting only of normal recurring accruals, which, in the
opinion of our management, are necessary for a fair statement of results for
such periods.
<TABLE>
<CAPTION>
Six Months Ended
June 30, Years Ended December 31,
------------------------ -------------------------------------------------------------
1999 1998 1998 1997 (1) 1996 1995 1994
----------- ----------- ----------- ----------- ----------- ---------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Consolidated Summary of
Operations:
Interest and dividend
income................ $ 525,698 $ 539,943 $ 1,076,406 $ 941,498 $ 719,029 $ 707,541 $ 619,746
Interest expense....... 259,708 266,621 534,178 445,754 315,373 314,548 241,099
----------- ----------- ----------- ----------- ----------- ---------- ----------
Net interest income.... 265,990 273,322 542,228 495,744 403,656 392,993 378,647
Provision for credit
losses................ 20,979 14,122 34,297 32,017 6,500 16,000 22,996
----------- ----------- ----------- ----------- ----------- ---------- ----------
Net interest income
after provision for
credit losses......... 245,011 259,200 507,931 463,727 397,156 376,993 355,651
Noninterest income..... 167,109 269,333 450,105 326,118 216,892 195,910 210,978
Noninterest expenses... 285,496 301,545 615,446 554,356 406,861 388,724 396,201
----------- ----------- ----------- ----------- ----------- ---------- ----------
Income before income
taxes................. 126,624 226,988 342,590 235,489 207,187 184,179 170,428
Income tax expense..... 46,655 83,835 124,467 84,301 74,850 63,992 59,288
----------- ----------- ----------- ----------- ----------- ---------- ----------
Net income............. $ 79,969 $ 143,153 $ 218,123 $ 151,188 $ 132,337 $ 120,187 $ 111,140
=========== =========== =========== =========== =========== ========== ==========
Dividends declared on
preferred stock....... $ 5,355 $ 5,910 $ 11,820 $ 11,820 $ 11,820 $ 11,820 $ 11,820
Dividends declared on
redeemable preferred
stock................. 203 203 405 405 203 -- --
Consolidated Average
Balances:
Total assets........... $17,732,400 $16,968,400 $17,072,800 $14,132,300 $10,477,100 $9,789,500 $9,411,400
Loans, net of unearned
income................ 10,586,300 10,079,400 10,214,100 8,358,500 6,312,300 5,804,700 5,291,200
Deposits............... 12,015,600 12,105,500 11,961,400 9,569,600 7,073,500 6,744,100 6,635,300
Long-term debt......... 863,000 686,100 686,400 594,900 481,800 269,500 198,000
Common stockholder's
equity................ 1,831,600 1,790,900 1,812,100 1,438,300 1,062,300 965,000 856,600
Stockholders' equity... 1,976,400 1,936,000 1,957,000 1,583,200 1,207,200 1,109,800 1,001,500
Consolidated Ratios:
Return on average
assets ............... 0.91% 1.70% 1.28% 1.07% 1.26% 1.23% 1.18%
Return on average
common stockholder's
equity................ 8.19 15.43 11.36 9.66 11.33 11.23 11.59
Return on average
total stockholders'
equity................ 8.16 14.91 11.15 9.55 10.96 10.83 11.10
Average total
stockholders' equity
to average total
assets................ 11.15 11.41 11.46 11.20 11.52 11.34 10.64
Capital to risk-
adjusted assets:
Tier 1............... 9.41 8.94 9.38 8.30 14.12 13.77 14.05
Total................ 12.80 12.30 12.65 11.90 17.20 17.05 17.68
Tier 1 leverage ratio
...................... 8.33 8.06 8.41 7.26 12.18 10.91 11.05
Net interest margin
(FTE)................. 3.61 3.86 3.79 4.07 4.30 4.47 4.51
Net charge-offs to
average loans, net of
unearned income....... 0.40 0.28 0.36 0.48 0.61 0.51 0.56
Allowance for credit
losses to loans, net
of unearned income.... 1.47 1.58 1.49 1.67 2.28 2.89 3.50
Nonperforming assets
to loans, net of
unearned income plus
other foreclosed
assets owned.......... 0.86 0.93 0.95 0.80 0.87 0.73 1.35
Tax-effected net income
and ratios excluding
goodwill and core
deposit intangible
amortization and
balances: (2)
Net income............. $ 102,824 $ 167,680 $ 266,696 $ 179,204 $ 136,322 $ 122,812 $ 113,722
Return on average
assets................ 1.23% 2.11% 1.65% 1.32% 1.31% 1.26% 1.21%
Return on average
common stockholder's
equity................ 20.20 37.17 27.85 18.69 12.34 11.87 12.36
Return on average
total stockholders'
equity................ 18.58 33.10 25.19 17.26 11.83 11.37 11.73
</TABLE>
- ----------
(1) We acquired Dauphin Deposit Corporation ("DDC") on July 8, 1997. Results of
operations for the year ended December 31, 1997 are not comparable to the
results of operations in 1998. DDC's results of operations have been
included in our results since July 1, 1997.
(2) Amortization and balances of core deposit intangibles are net of applicable
income taxes. Goodwill amortization and balances are not tax effected.
15
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
Allfirst Preferred Capital Trust is a statutory business trust formed under
the Delaware Business Trust Act, as amended, pursuant to a declaration of
trust, which was amended and restated in connection with the issuance of the
old SKATES (as amended and restated, the "Capital Declaration"), and the filing
of a certificate of trust with the Secretary of State of the State of Delaware
on June 29, 1999. Upon issuance of new SKATES, the holders of new and old
SKATES will own all the SKATES issued by Allfirst Capital Trust. See
"Description of the New SKATES."
We acquired Allfirst Capital Trust's common securities in an aggregate
liquidation amount of $3,059,070 at the time of the initial offering. Allfirst
Capital Trust used all the proceeds from the issuance of the old SKATES to
investors and its common securities (collectively, and together with the new
SKATES, the "Capital Securities") to purchase the old Asset Preferred
Securities from Allfirst Asset Trust. Accordingly, the assets of Allfirst
Capital Trust will consist solely of the Asset Preferred Securities.
Allfirst Capital Trust exists for the exclusive purposes of:
. issuing the Capital Securities representing undivided beneficial
ownership interests in the assets of Allfirst Capital Trust;
. investing the gross proceeds of the Capital Securities in the Asset
Preferred Securities;
. issuing new SKATES in the exchange offer and exchanging the old Asset
Preferred Securities for the new ones; and
. engaging in only those other activities necessary or incidental to the
foregoing purposes.
Under the Capital Declaration, there are two administrators (each, a
"Capital Administrator") and two trustees (each, a "Capital Trustee") for
Allfirst Capital Trust, including:
. two Capital Administrators who are employees or officers of or who are
affiliated with Allfirst;
. a property trustee (the "Capital Property Trustee") , which is The Bank
of New York; and
. a Delaware trustee (the "Capital Delaware Trustee"), which is The Bank of
New York (Delaware).
The Bank of New York also acts as trustee under the guarantee of the SKATES,
as Asset Property Trustee under the Asset Declaration and as trustee under the
indenture under which the junior subordinated debenture is issued.
The Capital Property Trustee holds title to the Asset Preferred Securities
for the benefit of the holders of the Capital Securities. As such, the Capital
Property Trustee has the power to exercise all rights, powers and privileges
with respect to the Asset Preferred Securities. In addition, the Capital
Property Trustee maintains exclusive control of the Capital Property Account.
This account is a segregated non-interest bearing bank account to hold all
payments made in respect of the Asset Preferred Securities for the benefit of
the holders of the Capital Securities. The trustee of the guarantee of the
SKATES holds the guarantee for the benefit of the holders of the SKATES.
In accordance with the terms of the Capital Declaration, before a Capital
Enforcement Event occurs, Allfirst, as the holder of all the common securities
of Allfirst Capital Trust, has the right to appoint, remove or replace any of
the Capital Administrators and Capital Trustees and to increase or decrease the
number of Capital Administrators or Capital Trustees, provided that at least
one Capital Trustee must be a Capital Delaware Trustee, at least one Capital
Trustee must be the Capital Property Trustee and there must always be at least
one Capital Administrator. After a Capital Enforcement Event occurs and so long
as it is continuing, holders of the SKATES have the right to appoint, remove or
replace the Capital Property Trustee and the Capital Delaware Trustee in
accordance with the terms of the Capital Declaration.
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Allfirst will pay all fees and expenses related to the organization and
operations of Allfirst Capital Trust, including any taxes, duties, assessments
or governmental charges of whatever nature imposed by the United States or any
other domestic taxing authority upon Allfirst Capital Trust (other than
withholding taxes) and on the exchange offer. We also will be responsible for
all debts and obligations of Allfirst Capital Trust, other than those
obligations with respect to the Capital Securities.
For so long as the SKATES remain outstanding, We will be obligated:
. except as described below, to maintain 100% direct ownership of Allfirst
Capital Trust's common securities;
. to cause Allfirst Capital Trust to remain a statutory business trust and
not to voluntarily dissolve, wind-up, liquidate or terminate, except as
permitted by the Capital Declaration; and
. to use commercially reasonable efforts to ensure that Allfirst Capital
Trust will not be:
. an investment company for purposes of the Investment Company Act of
1940, as amended; or
. classified as other than a grantor trust for United States Federal
income tax purposes.
Allfirst or the then holder of Allfirst Capital Trust's common securities
may transfer its interest to a wholly-owned direct or indirect subsidiary of
Allfirst provided that:
. the successor entity expressly accepts the transfer of the obligations as
sole holder of Allfirst Capital Trust's common securities; and
. before any transfer, Allfirst has received an opinion of nationally
recognized independent legal counsel to Allfirst Capital Trust
experienced in these matters to the effect that:
. following any transfer, Allfirst Capital Trust will be classified as a
grantor trust for United States Federal income tax purposes;
. following any transfer, Allfirst and the successor entity will be in
compliance with the Investment Company Act without being subject to
registration as an investment company thereunder; and
. any transfer will not adversely affect the limited liability of the
holders of the SKATES.
The rights of the holders of the SKATES, including economic rights, rights
to information and voting rights, are as set forth in the Capital Declaration
and the Delaware Trust Act. See "Description of the New SKATES." The Capital
Declaration and the guarantee also incorporate by reference the terms of the
Trust Indenture Act.
The location of the principal executive office of Allfirst Capital Trust is
c/o Allfirst Financial Inc., 25 South Charles Street, Baltimore, Maryland
21201. Its telephone number is (410) 244-4000.
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ALLFIRST PREFERRED ASSET TRUST
Allfirst Preferred Asset Trust is a statutory business trust formed under
the Delaware Business Trust Act, pursuant to a declaration of trust, which was
amended and restated in connection with the issuance of the old Asset Preferred
Securities (as amended and restated, the "Asset Declaration"), and the filing
of a certificate of trust with the Secretary of State of the State of Delaware
on June 29, 1999. Allfirst Capital Trust owns all the Asset Preferred
Securities issued by Allfirst Asset Trust. See "Description of the New Asset
Preferred Securities."
We acquired Allfirst Asset Trust's common securities in an aggregate
liquidation amount of $7,674,873 at the time of the initial offering. Allfirst
Asset Trust used all the proceeds from the issuance of the old Asset Preferred
Securities to Allfirst Capital Trust and its common securities (collectively,
together with the new Asset Preferred Securities, the "Asset Securities") to
purchase the old junior subordinated debenture from us and the other permitted
investments described in this prospectus. See "Description of Investments."
Allfirst Asset Trust exists for the exclusive purposes of:
. issuing the Asset Securities representing undivided beneficial ownership
interests in the assets of Allfirst Asset Trust;
. investing the gross proceeds of the Asset Securities in the junior
subordinated debenture and other permitted investments;
. issuing new Asset Preferred Securities in the exchange offer and
exchanging the old junior subordinated debenture for the new one; and
. engaging in only those other activities necessary or incidental to the
foregoing purposes.
Under the Asset Declaration, there are two administrators (each, an "Asset
Administrator") and two trustees for Allfirst Asset Trust (each, an "Asset
Trustee"), including:
. two Asset Administrators who are employees or officers of or who are
affiliated with Allfirst;
. a property trustee (an "Asset Property Trustee" and together with the
Capital Property Trustee, the "property trustees"), which is The Bank of
New York; and
. a Delaware trustee (an "Asset Delaware Trustee" and together with the
Capital Delaware Trustee, the "Delaware trustees"), which is The Bank of
New York (Delaware).
The Bank of New York also acts as trustee under the guarantee of the Asset
Preferred Securities and as Capital Property Trustee under the Capital
Declaration.
The Asset Property Trustee holds title to all the assets of Allfirst Asset
Trust for the benefit of the holders of the Asset Securities. As such, the
Asset Property Trustee has the power to exercise all rights, powers and
privileges with respect to Allfirst Asset Trust's assets. In addition, the
Asset Property Trustee maintains exclusive control of the Asset Property
Account. This account is a segregated non-interest bearing bank account to hold
all payments made in respect of Allfirst Asset Trust's investments for the
benefit of the holders of the Asset Securities. The trustee for the guarantee
of the Asset Preferred Securities holds the guarantee for the benefit of the
holders of the Asset Preferred Securities.
Allfirst Asset Trust has elected to be treated as a partnership (that will
not be treated as a publicly traded partnership) for United States Federal
income tax purposes.
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In accordance with the terms of the Asset Declaration, before an Asset
Enforcement Event occurs, Allfirst, as the holder of all the common securities
of Allfirst Asset Trust, has the right to appoint, remove or replace any of the
Asset Administrators and Asset Trustees and to increase or decrease the number
of Asset Administrators or Asset Trustees, provided that at least one Asset
Trustee must be an Asset Delaware Trustee, at least one Asset Trustee must be
the Asset Property Trustee and there must always be at least one Asset
Administrator. After an Asset Enforcement Event occurs and so long as it is
continuing, holders of the SKATES (or the holders of the Asset Preferred
Securities in the event Asset Preferred Securities are distributed to holders
of the Capital Securities) have the right to appoint, remove or replace the
Asset Property Trustee and the Asset Delaware Trustee in accordance with the
terms of the Asset Declaration.
Holder of Common Securities of Allfirst Asset Trust
We will pay all fees and expenses related to the organization and operations
of Allfirst Asset Trust, including any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United States or any
other domestic taxing authority upon Allfirst Asset Trust, other than
withholding taxes. We also will be responsible for all debts and obligations of
Allfirst Asset Trust, other than those obligations with respect to the Asset
Securities.
For so long as the SKATES remain outstanding, we will be obligated:
. except as described below, to maintain 100% direct ownership of Allfirst
Asset Trust's common securities, which will at all times represent at
least 1% of the total capital of Allfirst Asset Trust;
. to cause Allfirst Asset Trust to remain a statutory business trust and
not to voluntarily dissolve, wind-up, liquidate or terminate, except as
permitted by the Asset Declaration; and
. to use commercially reasonable efforts to ensure that Allfirst Asset
Trust will not be:
. an investment company for purposes of the Investment Company Act of
1940; or
. an association or a publicly traded partnership taxable as a corporation
for United States Federal income tax purposes.
Allfirst or the then holder of Allfirst Asset Trust's common securities may
transfer its interest to a wholly-owned direct or indirect subsidiary of
Allfirst provided that:
. the successor entity expressly accepts the transfer of the obligations as
sole holder of Allfirst Asset Trust's common securities; and
. before any transfer, Allfirst has received an opinion of nationally
recognized independent legal counsel to Allfirst Asset Trust experienced
in these matters to the effect that:
. Allfirst Asset Trust will be treated as a partnership for United States
Federal income tax purposes;
. any transfer would not cause Allfirst Asset Trust to be classified as an
association or a publicly traded partnership taxable as a corporation
for United States Federal income tax purposes;
. following any transfer, Allfirst and the successor entity will be in
compliance with the Investment Company Act without being subject to
registration as an investment company; and
. any transfer will not adversely affect the limited liability of the
holders of the Asset Preferred Securities.
Distributions to Holder of Common Securities
Immediately following completion of the initial placement of the old SKATES,
the junior subordinated debenture constituted 95% of Allfirst Asset Trust's
assets and other investments constituted 5% of its assets. See "Description of
Investments." To the extent that the earnings Allfirst Asset Trust receives on
its
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investments exceed distributions accrued or payable with respect to the Asset
Preferred Securities, Allfirst Asset Trust may at times have excess funds.
Also, the holders of the Asset Preferred Securities are not entitled to
deferred or late interest payments on the junior subordinated debenture or
income on other permitted investments prior to the liquidation of Allfirst
Asset Trust. The Asset Property Trustee will allocate and distribute these
funds in accordance with the distribution instructions set forth in the Asset
Declaration to Allfirst, as holder of the common securities of Allfirst Asset
Trust, as described below.
On December 20 of each year, commencing December 20, 1999, the Asset
Property Trustee will distribute to the holder of the common securities the
maximum amount of undistributed income of Allfirst Asset Trust that may be
distributed on the applicable distribution payment date after taking into
account the following guidelines:
. The Asset Property Trustee shall not make any distribution to the holder
of the common securities if, on the distribution payment date, after
giving effect to that distribution, the distribution would cause the book
value of the junior subordinated debenture to comprise more than 95% of
the book value of all the assets of Allfirst Asset Trust.
. So long as Allfirst has not deferred interest payments on the junior
subordinated debenture, unless the failure to make any distribution on
the applicable distribution payment date to the holder of the common
securities would cause the book value of the junior subordinated
debenture to comprise less than 92% of the book value of all of the
assets of Allfirst Asset Trust, the Asset Property Trustee shall not make
any distribution to such holder on such distribution payment date. If the
failure to make such distribution would cause the junior subordinated
debenture to comprise less than 92% of the book value of all of the
assets of Allfirst Asset Trust, the Asset Property Trustee shall make a
distribution of income of Allfirst Asset Trust to the holder of the
common securities only to the extent necessary to ensure that the book
value of the junior subordinated debenture comprises no less than 92% of
the book value of all of the assets of Allfirst Asset Trust.
. After Allfirst defers interest payments on the junior subordinated
debenture, unless the failure to make any distribution on the applicable
distribution payment date to the holder of the common securities would
cause the book value of the junior subordinated debenture to comprise
less than 85% of the book value of all of the assets of Allfirst Asset
Trust, the Asset Property Trust shall not make any distribution to such
holder on such distribution payment date. If the failure to make such
distribution would cause the junior subordinated debenture to comprise
less than 85% of the book value of all of the assets of Allfirst Asset
Trust, the Asset Property Trustee shall make a distribution of income of
Allfirst Asset Trust to the holder of the common securities only to the
extent necessary to ensure that the book value of the junior subordinated
debenture comprises no less than 85% of the book value of all of the
assets of Allfirst Asset Trust.
. Notwithstanding the foregoing, the Asset Property Trustee shall
distribute to the holder of the common securities income of Allfirst
Asset Trust, in an amount equal to no greater than 37% of the net income
of Allfirst Asset Trust for the calendar year in which the related
distribution payment date falls, that is attributable to Allfirst Asset
Trust's assets other than payments of deferred interest made on the
junior subordinated debentures (a "Tax Amount") to the extent that such
Tax Amount has not already been distributed to such holder for such
calendar year.
Rights of Holders of Asset Preferred Securities
The rights of the holders of the Asset Preferred Securities, including
economic rights, rights to information and voting rights, are set forth in the
Asset Declaration and the Delaware Trust Act. See "Description of the Asset
Preferred Securities."
The location of the principal executive office of Allfirst Asset Trust is
c/o Allfirst Financial Inc., 25 South Charles Street, Baltimore, Maryland
21201. Its telephone number is (410) 244-4000.
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THE EXCHANGE OFFER
Purpose and Effect of the Exchange Offer
In connection with the sale of the old SKATES to institutional investors,
Allfirst and the trusts agreed:
. to use their reasonable efforts to file a registration statement covering
the exchange of old SKATES for new SKATES with the SEC by October 7,
1999;
. to use their reasonable efforts to cause the registration statement to
become effective by January 5, 2000; and
. to complete the exchange offer by February 4, 2000.
The registration rights agreement has been filed as an exhibit to the
registration statement of which this prospectus is a part.
If Allfirst and the trusts fail to satisfy their obligations under the
registration rights agreement, then the distribution rate on the old SKATES
will increase by 0.50% per year and the interest rate on the old junior
subordinated debenture will also increase by 0.50% per year. Once the exchange
offer is completed, holders of old SKATES will not be entitled to any increase
in the distribution rate or any further registration rights under the
registration rights agreement.
The exchange offer is not being made to, nor will Allfirst or Allfirst
Capital Trust accept tenders for exchange from, holders of old SKATES in any
jurisdiction in which the exchange offer or its acceptance would not be in
compliance with the securities or blue sky laws of that jurisdiction.
Unless the context requires otherwise, the term "holder," with respect to
the exchange offer, means any person in whose name old SKATES are registered
on the books of Allfirst Capital Trust or any other person who has obtained a
properly completed bond power from the registered holder, or any person whose
old SKATES are held of record by The Depository Trust Company and who desires
to deliver its old SKATES by book-entry transfer at The Depository Trust
Company.
Terms of the Exchange
Allfirst and the trusts are offering, on the terms and subject to the
conditions set forth in this prospectus and in the accompanying letter of
transmittal, to exchange up to $100,000,000 aggregate liquidation amount of
new SKATES for a like amount of old SKATES properly tendered on or prior to
the expiration date and not properly withdrawn in accordance with the
procedures described below. Holders may tender their old SKATES in whole or in
part in a liquidation amount of not less than $100,000 or any integral
multiple of $1,000 in excess thereof.
The exchange offer is not conditioned on any minimum amount of old SKATES
being tendered. As of the date of this prospectus $100,000,000 aggregate
liquidation amount of the old SKATES are outstanding. Holders of old SKATES do
not have any appraisal or dissenters' rights in connection with the exchange
offer. Old SKATES which are not tendered in the exchange offer or are tendered
but not accepted will remain outstanding and be entitled to the benefits of
the Capital Declaration, but will not be entitled to any further registration
rights.
Holders who tender old SKATES in the exchange offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the
letter of transmittal, transfer taxes with respect to the exchange of old
SKATES. Allfirst will pay all charges and expenses, other than certain
applicable taxes described below, in connection with the exchange offer. See
"--Fees and Expenses."
Neither the board of directors of Allfirst nor the trustees of the trusts
makes any recommendation to holders of old SKATES as to whether to participate
in the exchange offer. In addition, no one has been authorized to make any
such recommendation. Holders of old SKATES must make their own decision
whether to tender pursuant to the exchange offer and, if so, the aggregate
amount of old SKATES to tender, after reading this prospectus and the letter
of transmittal and consulting with their advisers, if any, based on their own
financial position and requirements.
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Expiration Date; Extensions; Amendments
The exchange offer will expire at 5:00 p.m., New York City time, on ,
1999, unless extended by Allfirst and the trusts. Allfirst and the trusts
expressly reserve the right in their sole and absolute discretion, subject to
applicable law, at any time and from time to time:
. to delay acceptance of old SKATES for exchange;
. to terminate the exchange offer, whether or not any old SKATES have been
accepted for exchange, if Allfirst and the trusts determine, in their
sole and absolute discretion, that any of the events or conditions
referred to under "--Conditions to the Exchange Offer" have occurred or
exist or have not been satisfied;
. to extend the expiration date of the exchange offer and retain all old
SKATES tendered, subject, however, to the right of holders to withdraw
their tendered old SKATES; and
. to waive any condition or otherwise amend the terms of the exchange offer
in any respect.
If the exchange offer is amended in a material manner, or if Allfirst and
the trusts waive a material condition of the exchange offer, then Allfirst or
either trust will promptly disclose such amendment by means of a prospectus
supplement that will be distributed to the registered holders of the old
SKATES, and Allfirst and the trusts will extend the exchange offer to the
extent required by Rule 14e-1 under the 1934 Act.
Allfirst will promptly notify the exchange agent of any delay in acceptance,
extension, termination or amendment and will make a public announcement of the
action. In the event of an extension, public announcement will be made no later
than 9:00 a.m., New York City time, on the next business day after the
previously scheduled expiration date. Neither Allfirst nor either trust has any
obligation to publish, advertise or otherwise communicate any public
announcement other than by issuing a release to an appropriate news agency.
Eligibility
If you wish to exchange your old SKATES for new SKATES in the exchange
offer, then you will represent to us in the letter of transmittal that:
. you are not an affiliate of Allfirst or either trust within the meaning
of the 1933 Act;
. you are acquiring new SKATES in the ordinary course of your business; and
. you:
.are not engaged in;
.do not intend to engage in; and
.have no arrangement or understanding with any person to participate in,
a public distribution (within the meaning of the 1933 Act) of the new SKATES.
You may not be eligible to participate in the exchange offer. If:
. you are an affiliate of Allfirst; or
. you intend to participate in the exchange offer for the purpose of
distributing your new SKATES; or
. you are a broker-dealer who purchased your SKATES from Allfirst Capital
Trust to resell pursuant to Rule 144A or any other available exemption
under the Securities Act,
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then you:
. will not be able to rely on the SEC staff interpretation discussed under
"-- Resales of New SKATES";
. may not tender your old SKATES in the exchange offer; and
. must comply with the registration and prospectus delivery requirements of
the 1933 Act (including any exemptions) in connection with any sale or
transfer of your old SKATES.
Other Registration Rights
If you:
. are prohibited by law or policy of the SEC from participating in the
exchange offer; or
. may not resell new SKATES to the public without delivering a prospectus
and this prospectus is not appropriate or available for your resales; or
. are a broker-dealer that acquired your old SKATES directly from Allfirst,
one of the trusts or their affiliates
then you must notify us of your special status at least 20 days prior to the
expiration date of the exchange offer. If you fit within one of the above
categories and you notify us in a timely fashion, then we and the trusts are
obligated to use our reasonable best efforts:
. to file a shelf registration statement covering your old SKATES with the
SEC within 120 days after the date we receive your notice;
. to cause the shelf registration statement to become effective within 180
days after the date we receive your notice; and
. to keep the shelf registration statement effective until July 9, 2001 at
the latest.
Upon effectiveness of the shelf registration statement, you would then be
able to resell your old SKATES free of restrictions. Our and your rights and
responsibilities with respect to the shelf registration statement are set forth
in detail in the registration rights agreement.
Acceptance for Exchange and Issuance of New SKATES
In all cases, the exchange agent will deliver new SKATES in exchange for old
SKATES tendered and accepted for exchange in the exchange offer only after it
has timely received:
. old SKATES or a book-entry confirmation of a book-entry transfer of old
SKATES into the exchange agent's account at The Depositary Trust Company
("DTC");
. the letter of transmittal (or facsimile thereof), properly completed and
duly executed, with any required signature guarantees; and
. any other documents required by the letter of transmittal.
The term "book-entry confirmation" means a timely confirmation of a book-
entry transfer of old SKATES into the exchange agent's account at DTC.
Subject to the terms and conditions of the exchange offer, Allfirst and the
trusts will be deemed to have accepted for exchange, and thereby exchanged, old
SKATES validly tendered and not withdrawn as, if and when Allfirst or the
trusts give oral or written notice to the exchange agent of their acceptance of
the old SKATES for exchange.
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The exchange agent will act as agent for us and the trusts for the purpose
of receiving tenders of old SKATES, letters of transmittal and related
documents, and as agent for tendering holders for the purpose of receiving old
SKATES, letters of transmittal and related documents and transmitting new
SKATES to validly tendering holders.
The exchange of SKATES will be made on or promptly after the expiration
date of the exchange offer. If:
. for any reason whatsoever, acceptance for exchange or the exchange of any
old SKATES is delayed (whether before or after our and the trusts'
acceptance for exchange of old SKATES); or
. we or the trusts extend the exchange offer; or
. we or the trusts are unable to accept for exchange or exchange old SKATES
tendered in the exchange offer,
then, without prejudice to our or the trusts' rights set forth in this
prospectus, the exchange agent may, nevertheless, on behalf of Allfirst and
the trusts and subject to Rule 14e-1(c) under the 1934 Act, retain tendered
old SKATES and such old SKATES may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights.
You will warrant and agree in the letter of transmittal:
. that you have full power and authority to tender, exchange, sell, assign
and transfer old SKATES;
. that Allfirst Capital Trust will acquire good, marketable and
unencumbered title to your old SKATES, free and clear of all liens,
restrictions, charges and encumbrances; and
. that your old SKATES are not subject to any adverse claims or proxies.
You will also warrant and agree that you will, upon request, execute and
deliver any additional documents deemed by Allfirst, the trusts or the
exchange agent to be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the old SKATES tendered in the exchange offer.
Procedures for Tendering Old SKATES
Valid Tender. In order for your old SKATES to be validly tendered in the
exchange offer, you must do one of the following:
. complete, sign and date the letter of transmittal (or a facsimile of it),
have the signature guaranteed if the letter of transmittal so requires,
and mail or deliver the executed letter of transmittal to the exchange
agent prior to the expiration date, or
. comply with DTC's Automated Tender Offer Program described below.
In addition, one of the following events must occur:
. the exchange agent must receive certificates for your old SKATES; or
. the exchange agent must receive a book-entry confirmation of the book-
entry transfer of your old SKATES, or
. you must comply with the guaranteed delivery procedures described below.
If you tender less than all of your old SKATES, then you should fill in the
amount of old SKATES being tendered in the appropriate box on the letter of
transmittal. If you don't, then the entire amount of old SKATES delivered to
the exchange agent will be deemed to have been tendered.
The method of delivery of old SKATES, the letter of transmittal and all
other required documents is at the option and sole risk of the tendering
holder, and delivery will be deemed made only when actually received by the
exchange agent. Registered mail, return receipt requested, properly insured,
or an overnight delivery service, is recommended. In all cases, sufficient
time should be allowed to ensure timely delivery.
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Book-entry Transfer. The exchange agent will establish an account at DTC for
purposes of receiving book-entry deliveries of old SKATES within two business
days after the date of this prospectus. Any broker, dealer, bank or other
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of old SKATES by causing DTC to
transfer the old SKATES into the exchange agent's account at DTC. However, the
exchange agent must still receive an agent's message (as described in the next
paragraph) or your letter of transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature guarantees and any
other required documents, on or prior to the expiration date, or the guaranteed
delivery procedure set forth below must be complied with.
The exchange agent and DTC have confirmed that any financial institution
that is a participant in DTC's system may use DTC's Automated Tender Offer
Program to tender old SKATES. A DTC participant may, instead of physically
completing and signing the letter of transmittal and delivering it to the
exchange agent, transmit its acceptance of the exchange offer electronically.
The participant may do so by causing DTC to transfer the old SKATES to the
exchange agent in accordance with DTC's procedures for transfer. DTC will then
send an agent's message to the exchange agent. An "agent's message" is a
message received by the exchange agent from DTC that forms a part of the book-
entry confirmation and that has the following effect:
. DTC has received an express acknowledgement from a participant in DTC's
Automated Tender Offer Program that the participant is tendering old
SKATES that are the subject of a book-entry confirmation;
. the participant has received and agrees to be bound by the terms of the
letter of transmittal or, in the case of an agent's message relating to
guaranteed delivery, that the participant has received and agrees to be
bound by the applicable notice of guaranteed delivery; and
.the agreement may be enforced against the participant.
Delivery of documents to DTC does not constitute delivery to the exchange
agent.
Signature Guarantees. You do not need to endorse certificates for the old
SKATES and you do not need to get signature guarantees on the letter of
transmittal unless:
. a certificate for the old SKATES is registered in a name other than that
of the person surrendering the certificate; or
. a registered holder completes the box entitled "Special Issuance
Instructions" or "Special Delivery Instructions" in the letter of
transmittal.
In either case, the certificates for the old SKATES must be duly endorsed or
accompanied by a properly executed bond power, with the endorsement or
signature on the bond power and on the letter of transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the 1934 Act as an
"eligible guarantor institution," including (as the following terms are defined
in Rule 17Ad-15):
. a bank;
. a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer;
. a credit union;
. a national securities exchange, registered securities association or
clearing agency; or
. a savings association that is a participant in a Securities Transfer
Association (each an "Eligible Institution"). See Instruction 1 to the
letter of transmittal.
Guaranteed Delivery. If you desire to tender old SKATES and:
. your certificates are not immediately available; or
. time will not permit all required documents to reach the exchange agent
on or before the expiration date of the exchange offer; or
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. the procedures for book-entry transfer cannot be completed on a timely
basis,
then you may nevertheless tender your old SKATES, as long as all of the
following guaranteed delivery procedures are complied with:
. your tender is made by or through an Eligible Institution;
. the exchange agent receives your properly completed and duly executed
notice of guaranteed delivery, substantially in the form accompanying the
letter of transmittal, on or prior to the expiration date; and
. the exchange agent receives the certificates or a book-entry confirmation
representing your tendered old SKATES, in proper form for transfer,
together with a properly completed and duly executed letter of
transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the letter of transmittal,
within three New York Stock Exchange trading days after the date of
execution of the notice of guaranteed delivery.
The notice of guaranteed delivery may be delivered by hand or transmitted by
facsimile or mail to the exchange agent and must include a signature guarantee
(as described above) in the form set forth in the notice.
The acceptance by Allfirst and the trusts of old SKATES tendered pursuant to
any of the procedures described above will constitute a binding agreement
between the tendering holder, Allfirst and the trusts upon the terms and
subject to the conditions of the exchange offer.
Determination of Validity. Allfirst Capital Trust will determine all
questions as to the form of documents, validity, eligibility (including time of
receipt) and acceptance for exchange of any tendered old SKATES, in its sole
discretion. Allfirst and the trusts reserve the absolute right, in their sole
and absolute discretion, to reject any and all tenders determined by them not
to be in proper form or the acceptance of which, or exchange for, may, in the
view of counsel to Allfirst and the trusts, be unlawful. Allfirst and the
trusts also reserve the absolute right, subject to applicable law:
. to waive any of the conditions of the exchange offer as set forth under
"--Conditions to the Exchange Offer;" or
. to waive any condition or irregularity in any tender of old SKATES of any
particular holder, whether or not similar conditions or irregularities
are waived in the case of other holders.
Our and the trusts' interpretation of the terms and conditions of the
exchange offer (including the letter of transmittal) will be final and binding.
No tender of old SKATES will be deemed to have been validly made until all
irregularities with respect to such tender have been cured or waived. Neither
Allfirst, the trusts, any affiliates or assigns of Allfirst, the trusts, the
exchange agent nor any other person shall be under any duty to give any
notification of any irregularities in tenders or incur any liability for
failure to give any such notification.
If you are signing the letter of transmittal, any endorsement, bond power,
power of attorney, or any other document required by the letter of transmittal,
as trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
then you must so indicate when signing and must submit proper evidence of your
authority, unless waived by Allfirst or either trust Capital Trust.
In all cases, the exchange agent will deliver new SKATES in exchange for old
SKATES tendered and accepted for exchange in the exchange offer only after
timely receipt by the exchange agent of old SKATES, or of a book-entry
confirmation with respect to old SKATES, and either an agent's message from DTC
or a properly completed and duly executed letter of transmittal (or facsimile
thereof), together with any required signature guarantees and any other
documents required by the letter of transmittal. Accordingly, new SKATES might
not be delivered to all tendering holders at the same time.
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If your old SKATES are held by or registered in the name of a broker,
dealer, commercial bank, trust company or other nominee or custodian, then you
should contact that person promptly if you want to participate in the exchange
offer.
Resales of New SKATES
Based on existing interpretations of the 1933 Act by the staff of the SEC
set forth in several no-action letters to third parties, and subject to the
immediately following sentence, we and the trusts believe that the new SKATES,
the new Asset Preferred Securities, the new junior subordinated debenture and
the new guarantees may be offered for resale, resold and otherwise transferred
by the holders thereof (other than holders who are broker-dealers) without
further compliance with the registration and prospectus delivery provisions of
the 1933 Act. However, if you:
. are an affiliate of Allfirst; or
. intend to participate in the exchange offer for the purpose of
distributing your new SKATES; or
. are a broker-dealer who purchased your SKATES from Allfirst Capital Trust
to resell pursuant to Rule 144A or any other available exemption under
the 1933 Act,
then you:
. will not be able to rely on the interpretation of the SEC staff set forth
in the above-mentioned no-action letters;
. will not be entitled to tender your old SKATES in the exchange offer; and
. must comply with the registration and prospectus delivery requirements of
the 1933 Act in connection with any sale or transfer of your old SKATES
unless an exemption is available.
We and the trusts have not sought our own no-action letter and there can be
no assurance that the SEC staff would make a similar determination with respect
to the exchange offer as it has in prior no-action letters to third parties.
If:
. you are a broker-dealer participating in the exchange offer (a
"Participating Broker-Dealer"); and
. you acquired old SKATES for your own account as a result of market making
or other trading activities,
then you must deliver a prospectus meeting the requirements of the 1933 Act in
connection with any resales of new SKATES. The SEC has taken the position that
you may fulfill your prospectus delivery requirements (other than in connection
with resale of an unsold allotment from the original sale of the old SKATES)
with this prospectus. Under the registration rights agreement, Allfirst Capital
Trust must allow you, and any other persons subject to similar prospectus
delivery requirements, to use this prospectus in connection with the resale of
new SKATES.
In that regard, as a Participating Broker-Dealer, you will be deemed to have
agreed, by execution of the letter of transmittal, that you will suspend the
sale of new SKATES pursuant to this prospectus upon receipt of notice from
Allfirst or either trust of the occurrence of any event or the discovery of any
fact which makes any statement contained or incorporated by reference in this
prospectus untrue in any material respect or which causes this prospectus to
omit to state a material fact necessary in order to make the statements
contained or incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence of certain
other events specified in the registration rights agreement. You may not resume
sales of new SKATES until:
. Allfirst or the trusts have amended this prospectus to correct the
misstatement or omission and have furnished you copies of the amended
prospectus; or
. you have been otherwise notified that you may resume the sale of the new
SKATES.
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Withdrawal Rights
Except as otherwise provided in this prospectus, you may withdraw a tender
of your old SKATES at any time on or prior to the expiration date of the
exchange offer. In order for your withdrawal to be effective, the exchange
agent must receive your written withdrawal notice (by telegraph, telex or
facsimile transmission) on or prior to the expiration date. Your notice of
withdrawal must specify:
. the name of the person who tendered the old SKATES to be withdrawn;
. the aggregate principal amount of old SKATES to be withdrawn; and
. if certificates for the old SKATES have been tendered, the name of the
registered holder of the old SKATES if different from that of the person
who tendered such old SKATES.
If a certificate for old SKATES has been delivered or otherwise identified
to the exchange agent, then prior to the physical release of the old SKATES:
. the tendering holder must submit the serial numbers shown on the
certificate; and
. the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution (except in the case of old SKATES tendered for the
account of an Eligible Institution).
If old SKATES have been tendered by book-entry transfer, then the notice of
withdrawal must also specify the name and number of the account at DTC to be
credited with the withdrawal of old SKATES.
You may not change your mind and revoke a withdrawal notice before the
withdrawal process has been completed. You may re-tender old SKATES that have
been withdrawn at any subsequent time on or prior to the expiration date by
following any of the procedures described above under "--Procedures for
Tendering Old SKATES." Any old SKATES which have been tendered but which are
withdrawn will be returned to the holder thereof promptly after withdrawal.
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Allfirst and the
trusts, in their sole discretion, and their determination shall be final and
binding on all parties. Neither Allfirst, the trusts, any affiliates or assigns
of Allfirst or the trusts, the exchange agent nor any other person:
. is under any duty to give you any notification of any irregularities in a
notice of withdrawal; and
. will incur any liability for failure to give you any notification of any
irregularities.
Distributions on New SKATES
If your old SKATES are accepted for exchange, then you will not receive any
distributions on your old SKATES for any period from the last distribution date
for old SKATES or, if no distributions have been made, from the original issue
date, to the exchange date. Your new SKATES will be treated as having been
outstanding from last distribution date or the original issue date, and the
amount of any distributions you are entitled receive will not be affected by
the exchange.
Conditions to the Exchange Offer
If Allfirst or Allfirst Capital Trust determines, in its sole and absolute
discretion, that any of the following events or conditions has occurred or
exists or has not been satisfied:
. there is a change in the current interpretation by the SEC staff
permitting resales of new SKATES issued in the exchange offer without
compliance with the registration and prospectus delivery provisions of
the 1933 Act, as described under "-- Resales of New SKATES"; or
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. any action or proceeding is instituted or threatened in any court or by
or before any governmental agency or body with respect to the exchange
offer that, in our and Allfirst Capital Trust's judgment, would
reasonably be expected to impair our ability to proceed with the exchange
offer; or
. any law, statute, rule or regulation is adopted or enacted that, in our
and Allfirst Capital Trust's judgment, would reasonably be expected to
impair our ability to proceed with the exchange offer; or
. a banking moratorium is declared by United States federal or Maryland or
New York State authorities that, in our and Allfirst Capital Trust's
judgment, would reasonably be expected to impair our ability proceed with
the exchange offer; or
. trading on the New York Stock Exchange or generally in the United States
over-the-counter market is suspended by order of the SEC or any other
governmental authority, and the suspension, in our and Allfirst Capital
Trust's judgment, would reasonably be expected to impair our ability to
proceed with the exchange offer; or
. a stop order is issued by the SEC or any state securities authority
suspending the effectiveness of the registration statement or proceedings
are initiated or, to the knowledge of Allfirst or Allfirst Capital Trust,
threatened for that purpose; or
. any change, or any development involving a prospective change, in the
business or financial affairs of Allfirst or the trusts or any of their
subsidiaries has occurred which, in the sole judgment of Allfirst and
Allfirst Capital Trust, might materially impair their ability to proceed
with the exchange offer;
then we and Allfirst Capital Trust may determine (subject to applicable law):
. to terminate the exchange offer (whether or not any old SKATES have been
accepted for exchange); or
. to waive any condition or otherwise amend the terms of the exchange offer
in any respect.
If any waiver or amendment constitutes a material change to the exchange
offer, then we and the trusts will promptly disclose the action by means of a
prospectus supplement that will be distributed to the registered holders of the
old SKATES, and we and the trusts will extend the exchange offer to the extent
required by Rule 14e-1 under the 1934 Act.
Exchange Agent
The Bank of New York has been appointed as exchange agent for the exchange
offer. Delivery of the letters of transmittal and any other required documents,
questions, requests for assistance, and requests for additional copies of this
prospectus or of the letter of transmittal should be directed to the exchange
agent as follows:
The Bank of New York
101 Barclay Street
Floor 7E
New York, New York 10286
Attention: Reorganization Section
Telephone: (212) 815-
Facsimile: (212 815-6339
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
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Fees and Expenses
We will pay the exchange agent reasonable and customary fees for its
services and will reimburse it for its reasonable out-of-pocket expenses in
connection with the exchange offer. We will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this prospectus and related documents
to the beneficial owners of old SKATES, and in handling or tendering for their
customers.
If you tender your old SKATES for exchange, you will not be obligated to pay
any transfer taxes in connection with the exchange. If, however, your new
SKATES are to be delivered to, or are to be issued in the name of, any person
other than the registered holder of the old SKATES tendered, or if a transfer
tax is imposed for any reason other than the exchange of old SKATES in
connection with the exchange offer, then the tendering holder must pay the
amount of any transfer taxes (whether imposed on the registered holder or any
other persons). If you do not submit satisfactory evidence of payment of any
transfer taxes (or your exemption therefrom) with the letter of transmittal,
then the amount of the transfer taxes will be billed directly to the tendering
holder.
Neither we nor the trusts will make any payment to brokers, dealers or
others soliciting acceptances of the exchange offer.
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DESCRIPTION OF THE NEW SKATES
The new SKATES will be issued under the terms of the Capital Declaration.
The Capital Declaration will be qualified under the Trust Indenture Act, and
upon consummation of the exchange offer, the Capital Declaration will be
subject to and governed by the Trust Indenture Act. The terms of the SKATES
will include those stated in the Capital Declaration and those made part of
the Capital Declaration by the Trust Indenture Act. The following summary of
the material terms and provisions of the new SKATES is not complete and is
subject to, and qualified in its entirety by reference to, the Capital
Declaration, the Delaware Trust Act and the Trust Indenture Act.
The new SKATES will be issued in fully registered form without coupons. See
"--Form of SKATES."
The Capital Declaration authorizes and directs the Capital Administrators
to issue the Capital Securities, which represent undivided beneficial
ownership interests in the assets of Allfirst Capital Trust. The only assets
of Allfirst Capital Trust are the Asset Preferred Securities. Title to the old
Asset Preferred Securities is, and to the new Asset Preferred Securities will
be, held by the Capital Property Trustee for the benefit of the holders of the
Capital Securities, unless Asset Preferred Securities are distributed to
holders of the Capital Securities as described under "--Capital Special Event
Redemption or Distribution."
The payment of distributions out of money held by Allfirst Capital Trust,
and payments out of money held by Allfirst Capital Trust upon redemption of
the SKATES or liquidation of Allfirst Capital Trust, are guaranteed by
Allfirst to the extent described under "Description of the New Capital
Guarantee." Under its guarantee of the old and new SKATES (the "Capital
Guarantee"), First Maryland also guarantees that you will receive the Asset
Preferred Securities if Allfirst Capital Trust decides to liquidate and
distribute the Asset Preferred Securities to you as described under "--Capital
Special Event Redemption or Distribution."
The Capital Guarantee is held by The Bank of New York, as trustee (the
"Capital Guarantee Trustee"), for the benefit of the holders of the SKATES.
The Capital Guarantee does not cover payments when Allfirst Capital Trust does
not have sufficient available funds to make such payments. In any event of
non-payment, holders of the SKATES will have the remedies described below
under "--Capital Enforcement Events."
The new SKATES will not be registered under the 1934 Act unless required by
the rules and regulations thereunder.
Distributions
Allfirst Capital Trust will make distributions to each holder of a SKATES
in an amount equal to that holder's pro rata share of the distributions
Allfirst Capital Trust receives with respect to the Asset Preferred Securities
or from payments made on the Asset Guarantee. Distributions on the Asset
Preferred Securities on each distribution payment date, in turn, will be made
by Allfirst Asset Trust from interest, other than deferred interest, paid on
the junior subordinated debenture on the interest payment date immediately
following the corresponding quarterly period.
The distribution rate on the SKATES will be at a rate per annum of three-
month LIBOR plus 1.50% of the stated liquidation amount of $1,000 per SKATES,
reset quarterly, and will be calculated on the basis of the actual number of
days elapsed during the related Distribution Period (as defined below) and a
360-day year. The distributions will be paid if, as and when Allfirst Capital
Trust has funds available for distribution. Distributions on the SKATES will
be payable quarterly on each January 15, April 15, July 15 and October 15,
commencing October 15, 1999 if, as and when funds are available for payment,
by the Capital Property Trustee, except as otherwise described below. Until
October 15, 1999, the distribution rate on the SKATES is 6.81% per year.
If your old SKATES are accepted for exchange, then you will not receive any
further distributions on your old SKATES for any period from the last
distribution date for old SKATES or, if no distributions have been
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made, from the original issue date, to the exchange date. Your new SKATES will
be treated as having been outstanding from the last distribution date or the
original issue date, and the amount of any distributions you are entitled to
receive will not be affected by the exchange.
The distributions on the SKATES are non-cumulative. This means that if
Allfirst Capital Trust does not declare and pay a distribution on a
distribution payment date, holders of the SKATES will not receive and will have
no right to receive that distribution at any time, even if Allfirst Capital
Trust pays distributions on the SKATES in the future.
Distributions on the SKATES will be payable to their holders as they appear
on the books and records of Allfirst Capital Trust on the relevant record
dates, which will be one Business Day, as defined below, before the relevant
distribution payment dates. These distributions will be paid through the
Capital Property Trustee who will hold payments received in respect of the
Asset Preferred Securities in the Capital Property Account for the benefit of
the holders of the Capital Securities. Subject to any applicable laws and
regulations and the provisions of the Capital Declaration, each payment will be
made as described under "--Form of SKATES" below. In the event that the SKATES
do not remain in book-entry only form, the relevant record dates shall be the
first day of the month of the relevant payment dates. In the event that any
date on which distributions are payable on the SKATES is not a Business Day,
payment of the distribution payable on that date will be made on the next
succeeding day which is a Business Day, without any interest or other payment
in respect of the distribution subject to delay, except that, if that Business
Day falls in the next succeeding calendar year, the relevant payment shall be
made on the immediately preceding Business Day, in each case with the same
force and effect as if made on the scheduled payment date.
A "Business Day" shall mean any day other than a day on which banking
institutions in The City of New York or The City of Baltimore, Maryland are
authorized or required by law or executive order to close.
Calculations of LIBOR
Three-month LIBOR will be calculated in the following manner with respect to
calculations of the distribution rate on the SKATES and the Asset Preferred
Securities and the interest rate on the junior subordinated debenture. On each
Determination Date, The Bank of New York, as calculation agent for First
Maryland Bancorp, will determine the three-month LIBOR rate. The three-month
LIBOR rate for any Determination Date will be the rate for deposits in U.S.
dollars having a three-month maturity which appears on Telerate Page 3750, as
defined below, as of 11:00 a.m., London time, on that Determination Date.
"Determination Date" means, with respect to any Distribution Period, the
second London Business Day, as defined below, immediately preceding the first
day of the Distribution Period.
"Distribution Period" means with respect to any distribution payment date,
the period from and including the immediately preceding distribution payment
date to but excluding that distribution payment date, or in the case of the
initial Distribution Period, the period from the original issue date of the
SKATES to but excluding the initial distribution payment date.
"Telerate Page 3750" means the display page so designated by Bridge
Telerate, Inc. or such page as may replace that page or any successor service
as may be nominated by the British Bankers' Association for the purpose of
displaying London interbank offered rates for U.S. dollar deposits.
"London Business Day" means any day on which commercial banks and foreign
exchange markets are open for business, including dealings in foreign exchange
and foreign currency deposits, in The City of London.
If three-month LIBOR does not appear on Telerate Page 3750 on a
Determination Date, three-month LIBOR will be the arithmetic mean rounded if
necessary, to the nearest one hundred-thousandth of a
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percentage point, with five one-millionths of a percentage point rounded
upwards, of the rates (expressed as percentages per annum) for Eurodollar
deposits having a three-month maturity that appear on Reuters Monitor Money
Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m. (London time) on that
Determination Date.
If the three-month LIBOR rate for Eurodollar deposits does not appear on
Reuters Page LIBO as of 11:00 a.m. (London time) on a Determination Date, the
three-month LIBOR rate will be determined on the basis of the rates at which
deposits in U.S. dollars are offered by four major banks in the London
interbank market selected by the calculation agent (after consultation with
Allfirst) (the "Reference Banks") at approximately 11:00 a.m., London time, on
that Determination Date to prime banks in the London interbank market. The
calculation agent will request the principal London office of each Reference
Bank to provide a quotation of its rate. If at least two quotations are
provided, the three-month LIBOR rate on that Determination Date will be the
arithmetic mean, rounded if necessary, to the nearest one hundred-thousandth of
a percentage point, with five one-millionths of a percentage point rounded
upwards, of those quotations.
If fewer than two quotations are provided, the three-month LIBOR rate on
that Determination Date will be the arithmetic mean, rounded if necessary, to
the nearest one hundred-thousandth of a percentage point, with five one-
millionths of a percentage point rounded upwards, of the rates quoted by four
major banks in New York City selected by the calculation agent (after
consultation with Allfirst) at approximately 11:00 a.m., New York City time, on
that Determination Date for loans in U.S. dollars to leading European banks;
provided, however, that if the banks in New York City selected as previously
described above by the calculation agent are not quoting rates as mentioned in
this sentence, the three-month LIBOR rate for that Distribution Period will be
the three-month LIBOR rate in effect on the day immediately preceding the
related Determination Date.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case may
be, as of 11:00 a.m. (London time) on a Determination Date is superseded on
Telerate Page 3750 or Reuters Page LIBO, respectively, by a corrected rate
before 12:00 noon (London time) on that Determination Date, the corrected rate
as so substituted on the applicable page will be the applicable three-month
LIBOR rate for that Determination Date.
The determination of the three-month LIBOR rate on any Determination Date by
the calculation agent shall, in the absence of manifest error, be final and
binding.
Limitations on Payment of Distributions
Distributions on the SKATES will be made to the extent that Allfirst Capital
Trust has funds available for the payment of the distributions in the Capital
Property Account. Amounts available to Allfirst Capital Trust for distribution
to the holders of the SKATES will be limited to payments received by Allfirst
Capital Trust from Allfirst Asset Trust with respect to the Asset Preferred
Securities or from Allfirst on Allfirst's guarantee of the Asset Preferred
Securities (the "Asset Guarantee" and together with the Capital Guarantee, the
"guarantees") as described in this offering memorandum. Distributions on the
Asset Preferred Securities and the SKATES for any quarterly period will be paid
only if Allfirst Asset Trust receives interest payments, other than deferred
interest, under the junior subordinated debenture on the interest payment date
immediately following the corresponding quarterly period. Under the Capital
Guarantee, Allfirst will pay to you, or cause Allfirst Capital Trust to pay to
you, distributions on the SKATES to the extent that Allfirst Capital Trust has
sufficient funds available for this purpose in the Capital Property Account on
scheduled distribution payment dates. In addition, because the distributions
are non-cumulative, the Capital Guarantee does not apply to past distributions
that have not been paid by Allfirst Capital Trust.
The assets of Allfirst Asset Trust consist only of the junior subordinated
debenture and other permitted investments. To the extent that Allfirst does not
make any payment of current interest in respect of the junior subordinated
debenture for the corresponding quarterly period or fails to make a required
payment under the guarantees, Allfirst Asset Trust will not pay distributions
on the Asset Preferred Securities. If Allfirst Asset Trust does not make
payments on the Asset Preferred Securities in full out of funds legally
available for
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distribution (i.e., interest, other than deferred interest, redemption proceeds
and payments due at maturity, paid on the junior subordinated debenture) or, if
required, Allfirst does not make payments on the Asset Guarantee, Allfirst
Capital Trust will not have sufficient funds to make payments on the SKATES in
full, in which event the Capital Guarantee will not apply to those payments or
the unpaid portion of those payments. See "Description of the New Asset
Preferred Securities--Distributions" and "Description of the New Capital
Guarantee."
In the event Allfirst Capital Trust makes a distribution on the SKATES in
part, that distribution will be made on a pro rata basis to all holders of
outstanding SKATES, new and old.
Capital Enforcement Events
The occurrence, at any time, of any of the following events will constitute
an enforcement event under the Capital Declaration with respect to the Capital
Securities (a "Capital Enforcement Event"):
. Allfirst is in default in respect of any of its obligations under the
Capital Guarantee; or
. an Asset Enforcement Event (as defined on page 48 of this prospectus)
under the Asset Declaration.
Under the Capital Declaration, the holder of the common securities waives
any Capital Enforcement Event with respect to the common securities of Allfirst
Capital Trust until all Capital Enforcement Events with respect to the SKATES
have been cured, waived or otherwise eliminated. Until every Capital
Enforcement Event with respect to the SKATES has been so cured, waived or
otherwise eliminated, the Capital Property Trustee will act solely on behalf of
the holders of the SKATES and only the holders of the SKATES will have the
right to direct the Capital Property Trustee on certain matters under the
Capital Declaration and, in the case of an Asset Enforcement Event, the Asset
Property Trustee with respect to certain matters under the Asset Declaration.
See "Description of the New Asset Preferred Securities--Asset Enforcement
Events" for a description of the events that will trigger the occurrence of an
Asset Enforcement Event.
Upon the occurrence and during the continuance of a Capital Enforcement
Event,
. the Capital Property Trustee, as the holder of the Asset Preferred
Securities, shall have the right to enforce the terms of the Asset
Preferred Securities, including the right to direct the Asset Property
Trustee to enforce:
. Allfirst Asset Trust's creditors' rights and other rights with respect
to the junior subordinated debenture;
. the rights of the holders of the Asset Preferred Securities under the
Asset Guarantee; and
. the rights of the holders of the Asset Preferred Securities to receive
distributions on the Asset Preferred Securities; and
. the Capital Guarantee Trustee shall have the right to enforce the terms
of the Capital Guarantee, including the right to enforce the restriction
on payments by Allfirst on its securities as set forth in the Capital
Guarantee.
If the Capital Property Trustee fails to enforce its rights under the Asset
Preferred Securities after a holder of the SKATES has made a written request,
that holder may directly institute a legal proceeding against Allfirst Asset
Trust and the Asset Property Trustee to enforce the Capital Property Trustee's
rights under the Asset Preferred Securities without first instituting any legal
proceeding against the Capital Property Trustee, Allfirst Capital Trust or any
other person or entity. In addition, for so long as Allfirst Capital Trust
holds any Asset Preferred Securities, if the Asset Property Trustee fails to
enforce its rights on behalf of Allfirst Asset Trust under the junior
subordinated debenture after a holder of the SKATES has made a written request,
any holder
may on behalf of Allfirst Asset Trust directly institute a legal proceeding
against Allfirst under the junior subordinated debenture, without first
instituting any legal proceeding against the Capital Property Trustee,
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Allfirst Capital Trust, the Asset Property Trustee or Allfirst Asset Trust. In
any event, for so long as Allfirst Capital Trust is the holder of any Asset
Preferred Securities, if a Capital Enforcement Event has occurred and is
continuing and that event is attributable to the failure of Allfirst to make
any required payment when due on the junior subordinated debenture, then a
holder of the SKATES may on behalf of Allfirst Asset Trust directly institute a
proceeding against Allfirst with respect to the junior subordinated debenture
for enforcement of payment. A holder of SKATES may also bring a direct action
against Allfirst to enforce the holder's right under the Capital Guarantee. See
"Description of the New Capital Guarantee--Events of Default; Enforcement of
Capital Guarantee."
Under no circumstances, however, will the Asset Property Trustee or any
holder of the SKATES have authority to cause Allfirst Asset Trust to make
distributions on the Asset Preferred Securities of deferred interest or
interest for a quarterly period not paid on the interest payment date
immediately following such quarterly period. As a result, although the Asset
Property Trustee may be able to enforce Allfirst Asset Trust's creditors'
rights in respect of the junior subordinated debenture, Allfirst Asset Trust
will not make distributions of deferred or late interest payments on the junior
subordinated debenture to holders of the Asset Preferred Securities. Because
the guarantees do not cover distribution payments on the Asset Preferred
Securities from deferred or late interest payments on the junior subordinated
debenture, holders of the SKATES will not receive any distributions of deferred
or late interest payments.
Until Allfirst has received approval from the Federal Reserve Board and the
Central Bank of Ireland to do so, its failure to resume paying interest after
deferring interest payments for any interest deferral period or to repay the
junior subordinated debenture at maturity will not constitute a Capital
Enforcement Event or an Asset Enforcement Event.
Allfirst and Allfirst Capital Trust are each required to file annually with
the Capital Property Trustee an officer's certificate as to its compliance with
all conditions and obligations under the Capital Declaration.
Redemption
With the prior consent of the Federal Reserve Board and the Central Bank of
Ireland, at the option of Allfirst, Allfirst may redeem the junior subordinated
debenture, in whole or in part, at any time on or after July 15, 2009 or at any
time in certain circumstances upon the occurrence of a Debenture Special Event
(as defined below). Allfirst Asset Trust will use proceeds from any redemption
of the junior subordinated debenture to redeem for cash Asset Preferred
Securities having a total liquidation amount equal to the total principal
amount of the junior subordinated debenture redeemed. Allfirst Capital Trust
will apply the proceeds from the subsequent redemption of the Asset Preferred
Securities to redeem Capital Securities having an aggregate liquidation amount
equal to the Asset Preferred Securities so redeemed at an amount per Capital
Security equal to $1,000 plus accrued and unpaid distributions from the last
distribution payment date. Holders of the Capital Securities will be given not
less than 30 nor more than 60 days' notice of any redemption. See "Description
of the New Asset Preferred Securities--Redemption."
Capital Special Event Redemption or Distribution
If, at any time, a Capital Tax Event, a Capital Regulatory Event or a
Capital Investment Company Event (each as defined below, and each, a "Capital
Special Event") occurs and is continuing, the holder of the common securities
of Allfirst Capital Trust shall, unless the Asset Preferred Securities are
redeemed in the limited circumstances described below, within 90 days following
the occurrence of the Capital Special Event elect to either:
. dissolve Allfirst Capital Trust upon not less than 30 nor more than 60
days notice with the result that, after satisfaction of creditors of
Allfirst Capital Trust, if any, Asset Preferred Securities would be
distributed on a pro rata basis to the holders of the Capital Securities
in liquidation of the holders' interests in Allfirst Capital Trust; except
that if at the time there is available to Allfirst Capital Trust the
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opportunity to eliminate, within the 90-day period, the Capital Special
Event by taking some ministerial action, such as filing a form or making
an election, or pursuing some other similar reasonable measure which in
the sole judgment of Allfirst has or will cause no adverse effect on
Allfirst Capital Trust, Allfirst Asset Trust, Allfirst or the holders of
the Capital Securities and will involve no material cost, Allfirst Capital
Trust will pursue that measure in lieu of dissolution; or
. cause the SKATES to remain outstanding, and in such event Allfirst shall
pay any and all expenses incurred by or payable by Allfirst Capital Trust
attributable to the Capital Special Event.
Furthermore, if, upon the occurrence of a Capital Tax Event, the Capital
Administrators receive an opinion of nationally recognized independent tax
counsel experienced in these matters that there is more than an insubstantial
risk that interest payable by Allfirst on the junior subordinated debenture is
not, or will not be, deductible by Allfirst for United States Federal income
tax purposes, even if the Asset Preferred Securities are distributed to the
holders of the Capital Securities in liquidation of the holders' interests in
Allfirst Capital Trust as described above, then Allfirst will have the right,
within 90 days following the occurrence of the Capital Tax Event, to elect to
redeem the junior subordinated debenture in whole, but not in part, and, in
turn, Allfirst Asset Trust will redeem the Asset Preferred Securities in
whole, but not in part, for cash upon not less than 30 nor more than 60 days'
notice. Promptly following any redemption of the Asset Preferred Securities by
Allfirst Asset Trust, the Capital Securities will be redeemed by Allfirst
Capital Trust at the redemption price.
"Capital Tax Event" means that Allfirst shall have requested and received
and shall have delivered to the Capital Administrators an opinion of
nationally recognized independent tax counsel experienced in these matters to
the effect that after the date of this offering memorandum one or more of the
following events (each, a "Tax Event") has occurred:
. an amendment to, change in or announced proposed change in the laws of
the United States or any political subdivisions or taxing authorities, or
any regulations promulgated thereunder;
. a judicial decision interpreting, applying, or clarifying these laws or
regulations;
. an administrative pronouncement or action that represents an official
position, including a clarification of an official position, of the
governmental authority or regulatory body making the administrative
pronouncement or taking any action; or
. a threatened challenge asserted in connection with an audit of Allfirst
or any of its affiliates included in its consolidated financial
statements, Allfirst Asset Trust, or Allfirst Capital Trust, or a
threatened challenge asserted in writing against any other taxpayer that
has raised capital through the issuance of securities that are
substantially similar to the junior subordinated debenture, the Asset
Preferred Securities or the SKATES;
and that as a result of the occurrence of any Tax Event there is more than an
insubstantial risk that:
. Allfirst Capital Trust is, or will be, subject to United States Federal
income tax with respect to income received on the Asset Preferred
Securities;
. Allfirst Capital Trust is, or will be, subject to more than a minimal
amount of other taxes, duties or other governmental charges; or
. interest payable by Allfirst with respect to the junior subordinated
debenture is not, or will not be, deductible by Allfirst for United
States Federal income tax purposes.
"Capital Regulatory Event" means Allfirst becomes, or under law or
regulation or any rules, guidelines or policies of the Federal Reserve Board
or the Central Bank of Ireland or any official administrative announcement or
decision interpreting these laws, regulations, rules, policies or guidelines,
or will become within 180 days, subject to capital requirements under which,
in the written opinion of independent bank regulatory counsel experienced in
such matters, the SKATES or the Asset Preferred Securities would not
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qualify, disregarding any Tier 1 category limits, for treatment as (1) Tier 1
capital for Allfirst as a bank holding company or its then equivalent or (2)
consolidated Tier 1 capital of AIB.
"Capital Investment Company Event" means that Allfirst has requested,
received and delivered to the Capital Administrators an opinion of nationally
recognized independent legal counsel experienced in these matters to the effect
that, as a result of the occurrence on or after the date of this prospectus of
a change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in Investment Company Act Law"), Allfirst
Capital Trust is or will be considered an investment company which is required
to be registered under the Investment Company Act.
Redemption Procedures
If Allfirst Capital Trust gives a notice of redemption in respect of the
SKATES, which notice will be irrevocable, and if the Asset Property Trustee has
paid to the Capital Property Trustee a sufficient amount of cash in connection
with the related redemption of the Asset Preferred Securities, then, by 1:00
p.m., New York City time, on the redemption date, Allfirst Capital Trust will:
. if the SKATES are in book-entry form with DTC, deposit irrevocably with
DTC funds sufficient to pay the applicable redemption price; or
. if the SKATES are held in certificated form, deposit with the paying
agent for the SKATES funds sufficient to pay any amount in respect of any
SKATES in certificated form and give the paying agent irrevocable
instructions and authority to pay these amounts to the holders of SKATES
upon surrender of their certificates.
See "--Form of SKATES."
Allfirst Asset Trust will only redeem the Asset Preferred Securities in
connection with the corresponding redemption by Allfirst of the junior
subordinated debenture.
If notice of redemption shall have been given and funds are deposited as
required, then upon the date of deposit, all rights of holders of any SKATES so
called for redemption will cease, except the right of the holders of those
SKATES to receive the redemption price, but without interest. If any date fixed
for redemption of the SKATES is not a Business Day, then payment of the
redemption price payable on that date will be made on the next succeeding day
that is a Business Day, without any interest or other payment in respect of any
delay, except that, if that Business Day falls in the next calendar year, the
payment will be made on the immediately preceding Business Day, in each case,
with the same force and effect as if made on the date fixed for redemption.
If fewer than all of the outstanding SKATES are to be redeemed, the SKATES
will be redeemed in accordance with the procedures of DTC. See "--Form of
SKATES." If the SKATES do not remain in book-entry only form and fewer than all
of the outstanding SKATES are to be redeemed, the SKATES will be redeemed on a
pro rata basis or pursuant to the rules of any securities exchange on which the
SKATES are listed.
Subject to the foregoing and applicable law, including, without limitation,
United States Federal securities laws, Allfirst or its subsidiaries may at any
time and from time to time purchase outstanding SKATES by tender, in the open
market or by private agreement.
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Subordination of the Common Securities of Allfirst Capital Trust
Payment of amounts upon liquidation of the Capital Securities shall be made
pro rata based on the liquidation amount of the Capital Securities. However,
upon:
. the occurrence of an event of default by Allfirst under the junior
subordinated debenture; or
. default by Allfirst on any of its obligations under any of the
guarantees,
then the holders of the SKATES will have a preference over the holders of the
common securities of Allfirst Capital Trust with respect to payments upon
liquidation of Allfirst Capital Trust.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary liquidation, dissolution,
winding-up or termination of Allfirst Capital Trust, other than as described
above under "--Capital Special Event Redemption or Distribution," the holders
of the SKATES will be entitled to receive out of the assets of Allfirst Capital
Trust, after satisfaction of liabilities to creditors, distributions in cash or
other immediately available funds in an amount equal to the aggregate of the
stated liquidation amount of $1,000 per SKATES plus accrued and unpaid
distributions from the last distribution payment date.
If, upon Allfirst Capital Trust's liquidation, the liquidation distribution
can be paid only in part because Allfirst Capital Trust has insufficient assets
available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by Allfirst Capital Trust on the SKATES will be paid
on a pro rata basis. The holders of the common securities of Allfirst Capital
Trust will be entitled to receive distributions upon liquidation pro rata with
the holders of the SKATES, except in the limited circumstances described above
under "--Subordination of the Common Securities of Allfirst Capital Trust."
Under the Capital Declaration, Allfirst Capital Trust will dissolve and
liquidate and thereafter terminate upon:
. the bankruptcy or insolvency of Allfirst;
. the filing of a certificate of dissolution or the equivalent with respect
to Allfirst, the filing of a certificate of cancellation with respect to
Allfirst Capital Trust after having obtained the consent of the holders
of at least a majority in liquidation amount of the Capital Securities,
voting together as a single class, to file such certificate of
cancellation, or the revocation of the charter of Allfirst and the
expiration of 90 days after the date of revocation without reinstatement;
. the distribution of all of the Asset Preferred Securities upon the
occurrence of a Capital Special Event;
. the entry of a decree of a judicial dissolution of Allfirst, Allfirst
Asset Trust or Allfirst Capital Trust; or
. the redemption of all the Capital Securities.
Voting Rights
Except as described in this offering memorandum, including under
"Description of the New Capital Guarantee--Amendments and Assignment," or as
otherwise required by law or the Capital Declaration, the holders of the SKATES
will have no voting rights.
Subject to the requirement that the Capital Property Trustee receive a tax
opinion as set forth in the last sentence of the next paragraph, the holders of
a majority in liquidation amount of the SKATES have the right to direct the
time, method and place for conducting any proceeding for any remedy available
to the Capital Property Trustee, and to direct the exercise of any trust or
other power conferred upon the Capital Property
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Trustee under the Capital Declaration, including the right to direct the
Capital Property Trustee, as holder of the Asset Preferred Securities, to:
. exercise the remedies available to it under the Asset Declaration as a
holder of the Asset Preferred Securities, including the right to direct
the Asset Property Trustee to exercise its rights in the manner described
above under "--Capital Enforcement Events;" and
. consent to any amendment, modification, or termination of the Asset
Declaration or the Asset Preferred Securities where consent is required;
except, that where a consent or action under the Asset Declaration would
require the consent or act of the holders of more than a majority of the
aggregate liquidation preference of Asset Preferred Securities affected,
only the holders of the percentage of the aggregate stated liquidation
amount of the SKATES which is at least equal to the percentage required
under the Asset Declaration may direct the Capital Property Trustee to
give consent or take action on behalf of Allfirst Capital Trust. See
"Description of the New Asset Preferred Securities--Voting Rights."
If the Asset Property Trustee has actual notice of an Asset Enforcement
Event, the Capital Property Trustee will notify all holders of the SKATES of
any notice of such Asset Enforcement Event received from the Asset Property
Trustee with respect to the Asset Preferred Securities. The notice will state
that the Asset Enforcement Event also constitutes a Capital Enforcement Event.
Except with respect to directing the time, method, and place of conducting a
proceeding for a remedy as described above, the Capital Property Trustee will
be under no obligation to take any of the actions described above unless the
Capital Property Trustee has received an opinion of nationally recognized
independent tax counsel to the effect that as a result of that action, Allfirst
Capital Trust will not fail to be classified as a grantor trust for United
States Federal income tax purposes and that after that action each holder of
Capital Securities will continue to be treated as owning an undivided
beneficial ownership interest in the Asset Preferred Securities.
A waiver of an Asset Enforcement Event with respect to the Asset Preferred
Securities held by the Capital Property Trustee will constitute a waiver of the
corresponding Capital Enforcement Event.
Any required approval or direction of holders of the SKATES may be given at
(1) a separate meeting of holders of the SKATES convened for that purpose, (2)
at a meeting of all of the holders of Capital Securities or (3) pursuant to
written consent. The Capital Property Trustee will cause a notice of any
meeting at which holders of the SKATES are entitled to vote, or of any matter
upon which action by written consent of the holders is to be taken, to be
mailed to each holder of record of the SKATES. Each notice will include a
statement setting forth the following information:
. the date of the meeting or the date by which any action is to be taken;
. a description of any resolution proposed for adoption at the meeting on
which the holders are entitled to vote or of the matter upon which
written consent is sought; and
. instructions for the delivery of proxies or consents.
No vote or consent of the holders of the SKATES will be required for
Allfirst Capital Trust to redeem and cancel the SKATES or distribute Asset
Preferred Securities in accordance with the Capital Declaration.
Even when holders of the SKATES are entitled to vote or consent under any of
the circumstances described above, any of the Capital Securities that are
beneficially owned at that time by Allfirst or any entity directly or
indirectly controlled by, or under direct or indirect common control with,
Allfirst, shall not be entitled to vote or consent and shall, for purposes of
any vote or consent, be treated as if such Capital Securities were not
outstanding; except that persons, other than affiliates of Allfirst, to whom
Allfirst or any of its subsidiaries have pledged the SKATES may vote or consent
with respect to the pledged SKATES pursuant to the terms of the pledge.
The procedures by which holders of the SKATES represented by the global
certificates may exercise their voting rights are described below. See "--Form
of SKATES."
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Holders of the SKATES will have no rights to appoint or remove the Capital
Administrators, who may be appointed, removed or replaced solely by Allfirst,
as the holder of all of the common securities of Allfirst Capital Trust.
Merger, Consolidation or Amalgamation of Allfirst Capital Trust
Allfirst Capital Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other entity, except as
described below. Allfirst Capital Trust may, with the consent of a majority of
the Capital Administrators and without the consent of the holders of the
Capital Securities, the Capital Property Trustee or the Capital Delaware
Trustee consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any State of the United States if:
. Allfirst Capital Trust is not the surviving entity, the successor entity
either:
. expressly assumes all of the obligations of Allfirst Capital Trust under
the Capital Securities; or
. substitutes for the SKATES other securities having substantially the
same terms as the SKATES, so long as the successor securities rank the
same as the Capital Securities rank with respect to distributions,
assets and payments;
. Allfirst expressly acknowledges a trustee of the successor entity
possessing the same powers and duties as the Capital Property Trustee as
the holder of the Asset Preferred Securities;
. the SKATES or any successor securities are listed or quoted, or any
successor securities will be listed or quoted upon notification of
issuance, on any national securities exchange or quotation system on
which the SKATES are then listed or quoted;
. any merger, consolidation, amalgamation or replacement does not cause the
SKATES, including any successor securities, to be downgraded by any
nationally recognized statistical rating organization;
. any merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the
SKATES, including any successor securities, in any material respect;
. the successor entity has a purpose substantially identical to that of
Allfirst Capital Trust;
. Allfirst guarantees the obligations of the successor entity under the
successor securities to the same extent as provided by the Capital
Guarantee; and
. before any merger, consolidation, amalgamation or replacement, Allfirst
has received an opinion of nationally recognized independent legal
counsel experienced in these matters to the effect that:
. any merger, consolidation, amalgamation or replacement will not
adversely affect the rights, preferences and privileges of the holders
of the SKATES, including any successor securities, in any material
respect, other than with respect to any dilution of the holders'
interest in the new entity;
. following any merger, consolidation, amalgamation or replacement,
neither Allfirst Capital Trust nor the successor entity will be required
to register as an investment company under the Investment Company Act;
. following any merger, consolidation, amalgamation or replacement,
Allfirst Capital Trust, or any successor trust, will not be classified
as an association or a publicly traded partnership taxable as a
corporation for United States Federal income tax purposes; and
. following any merger, consolidation, amalgamation or replacement,
Allfirst Asset Trust will not be classified as an association or a
publicly traded partnership taxable as a corporation for United States
Federal income tax purposes.
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Allfirst Capital Trust may not, except with the consent of holders of 100%
in liquidation amount of the SKATES, consolidate, amalgamate, merge with or
into, or be replaced by any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it, if it would cause
Allfirst Capital Trust or the successor entity to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States Federal income tax purposes.
Modification of the Capital Declaration
The Capital Declaration may be modified and amended as described below.
If any proposed amendment to the Capital Declaration provides for, or the
Capital Administrators otherwise propose to effect,
. any action that would adversely affect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to the
Capital Declaration or otherwise; or
. the dissolution, winding-up or termination of Allfirst Capital Trust
other than under the terms of the Capital Declaration;
then, in each case, the holders of the Capital Securities voting together as a
single class will be entitled to vote on the amendment or proposal and the
amendment or proposal will not be effective except with the approval of the
holders of at least a majority in liquidation amount of the Capital Securities
affected. If any amendment or proposal referred to in the first bullet point
above would adversely affect only the SKATES or Allfirst Capital Trust's
common securities, then only the affected class will be entitled to vote on
the amendment or proposal and the amendment or proposal will not be effective
except with the approval of the holders of a majority in liquidation amount of
that class of Capital Securities.
The Capital Declaration may be amended without the consent of the holders
of the Capital Securities to:
. cure any ambiguity;
. correct or supplement any provision in the Capital Declaration that may
be defective or inconsistent with any other provision of the Capital
Declaration;
. add to the restrictions or obligations of the sponsor;
. conform to any change in the Investment Company Act, the Trust Indenture
Act or the rules or regulations under either law; and
. modify, eliminate and add to any provision of the Capital Declaration to
the extent as may be necessary or desirable;
if any such amendment does not have a material adverse effect on the rights,
preferences or privileges of the holders of the Capital Securities.
Notwithstanding the foregoing, no amendment or modification may be made to
the Capital Declaration if the amendment or modification would:
. cause Allfirst Capital Trust to fail to be classified as a grantor trust
for United States Federal income tax purposes;
. cause Allfirst Asset Trust to be classified as an association or publicly
traded partnership taxable as a corporation for United States Federal
income tax purposes;
. cause the SKATES or the Asset Preferred Securities to fail to qualify as
Tier 1 capital of Allfirst or consolidated Tier 1 capital of AIB;
. reduce or otherwise adversely affect the powers of the Capital Property
Trustee; or
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. cause Allfirst Capital Trust or Allfirst Asset Trust to be deemed an
investment company which is required to be registered under the
Investment Company Act.
Form of SKATES
New SKATES (and any old SKATES that remain outstanding after the exchange
offer) will be in the form of fully-registered global securities registered in
the name of Cede & Co. (DTC's nominee). DTC will act as securities depositary
for the SKATES being represented by global certificates and, to the extent
distributed to the holders of the SKATES, the Asset Preferred Securities. One
or more fully-registered global certificates, representing the total aggregate
number of new SKATES, will be issued and will be deposited with DTC. Beneficial
interests in global certificates evidencing the SKATES may not be exchanged for
SKATES in certificated form except in the limited circumstances described
below.
DTC Procedures
DTC has advised Allfirst Capital Trust, Allfirst Asset Trust and Allfirst
that it is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934, as amended. DTC holds securities that its participants deposit
with DTC. DTC also facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited securities through
electronic computerized book-entry changes in participants' accounts, thereby
eliminating the need for physical movement of securities certificates.
Participants in DTC include securities brokers and dealers, banks, trust
companies, clearing corporations and certain other organizations. DTC is owned
by a number of its participants and by the New York Stock Exchange, the
American Stock Exchange, Inc., and the National Association of Securities
Dealers, Inc. Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that clear through or
maintain a custodial relationship with a participant, either directly or
indirectly. The rules applicable to DTC and its participants are on file with
the SEC.
Purchases of the SKATES within the DTC system must be made by or through
participants, who will receive a credit for the SKATES on DTC's records. The
ownership interest of each beneficial owner of the SKATES is in turn to be
recorded on the participants' and indirect participants' records. Beneficial
owners will not receive written confirmation from DTC of their purchases, but
beneficial owners are expected to receive written confirmations providing
details of the transactions, as well as periodic statements of their holdings,
from the participants or indirect participants through which the beneficial
owners purchased SKATES. Transfers of ownership interests in the SKATES are to
be accomplished by entries made on the books of participants and indirect
participants acting on behalf of beneficial owners. Beneficial owners will not
receive certificates representing their ownership interests in the SKATES,
except in the event that use of the book-entry system for the SKATES is
discontinued.
DTC has no knowledge of the actual beneficial owners of the SKATES; DTC's
records reflect only the identity of the participants to whose accounts the
SKATES are credited, which may or may not be the beneficial owners. The
participants and indirect participants will remain responsible for keeping
account of their holdings on behalf of their customers.
So long as DTC or its nominee is the registered owner or holder of a global
certificate, DTC or such nominee, as the case may be, will be considered the
sole owner or holder of the SKATES being represented for all purposes under the
Capital Declaration and the SKATES. No beneficial owner of an interest in a
global certificate will be able to transfer that interest except in accordance
with DTC's applicable procedures, in addition to those provided for under the
Capital Declaration.
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DTC has advised Allfirst that it will take any action permitted to be taken
by a holder of the SKATES, including the presentation of the SKATES for
exchange as described below, only at the direction of one or more participants
to whose account interests in the global certificates are credited and only in
respect of such portion of the aggregate liquidation amount of the SKATES as to
which the participant or participants has or have given the direction. Also, if
there is a Capital Enforcement Event under the SKATES, DTC will exchange the
global certificates for certificated securities, which it will distribute to
its participants in accordance with its customary procedures.
Conveyance of notices and other communications by DTC to participants, by
participants to indirect participants, and by participants and indirect
participants to beneficial owners will be governed by arrangements among them,
subject to any statutory or regulatory requirements as may be in effect from
time to time.
Redemption notices in respect of the SKATES held in book-entry form will be
sent to Cede & Co. If less than all of the SKATES are being redeemed, DTC will
determine the amount of the interest of each participant to be redeemed in
accordance with its procedures.
Although voting with respect to the SKATES is limited, in those cases where
a vote is required, neither DTC nor Cede & Co. will itself consent or vote with
respect to the SKATES. Under its usual procedures, DTC would mail an omnibus
proxy to Allfirst Capital Trust as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
participants to whose accounts the SKATES are allocated on the record date
identified in a listing attached to the omnibus proxy.
Distributions on the SKATES held in book-entry form will be made to DTC in
immediately available funds. DTC's practice is to credit participants' accounts
on the relevant payment date in accordance with their respective holdings shown
on DTC's records unless DTC has reason to believe that it will not receive
payments on the payment date. Payments by participants and indirect
participants to beneficial owners will be governed by standing instructions and
customary practices and will be the responsibility of the participants and
indirect participants and not of DTC, Allfirst Capital Trust or Allfirst,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of any distributions to DTC is the responsibility of
Allfirst Capital Trust, disbursement of those payments to participants is the
responsibility of DTC, and in turn, disbursement of those payments to the
beneficial owners is the responsibility of participants and indirect
participants.
Except as described below, a beneficial owner of an interest in a global
certificate will not be entitled to receive physical delivery of the SKATES.
Accordingly, each beneficial owner must rely on the procedures of DTC to
exercise any rights under the SKATES.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of interests in the global certificates among participants of DTC,
DTC is under no obligation to perform or continue to perform such procedures,
and such procedures may be discontinued at any time. Neither Allfirst nor
Allfirst Capital Trust will have any responsibility for the performance by DTC
or its participants or indirect participants under the rules and procedures
governing DTC. DTC may discontinue providing its services as securities
depository with respect to the SKATES at any time by giving notice to Allfirst
Capital Trust. Under these circumstances, in the event that a successor
securities depository is not obtained, the SKATES certificates are required to
be printed and delivered to the Capital Property Trustee. Additionally,
Allfirst Capital Trust, with the consent of Allfirst, may decide to discontinue
use of the system of book-entry transfers through DTC or any successor
depository. In that event, certificates for the SKATES will be printed and
delivered to the Capital Property Trustee. In each of the above circumstances,
Allfirst will appoint a paying agent with respect to the SKATES.
The laws of some jurisdictions require that certain purchasers of securities
take physical delivery of securities in definitive form. These laws may impair
the ability to transfer beneficial interests in the global SKATES as
represented by a global certificate.
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The information in this section concerning DTC and DTC's system has been
obtained from sources that Allfirst, Allfirst Capital Trust and Allfirst Asset
Trust believe to be reliable, but neither Allfirst nor Allfirst Capital Trust
nor Allfirst Asset Trust takes responsibility for the accuracy of the
information.
Exchange of Global Securities for Certificated Securities
A global certificate is exchangeable for SKATES in definitive form if:
. DTC is at any time unwilling or unable to continue as depositary and a
successor depositary is not appointed by Allfirst within 60 days; or
. Allfirst Capital Trust (or Allfirst Asset Trust in the event Asset
Preferred Securities are delivered to holders of the SKATES) elects to
exchange the global certificates for definitive certificates.
If either of these events occurs, or, in the event a Capital Enforcement Event
has occurred and is continuing, at the request of a holder of the SKATES, the
global certificates will be exchangeable for SKATES in definitive form of like
tenor and of an equal aggregate liquidation amount of the global certificates
or the portion thereof to be exchanged. The definitive certificates will be
registered in the name or names as the depositary, or any holder, will request.
It is expected that instructions may be based upon directions received by the
depositary from participants with respect to ownership of beneficial interests
in the global securities.
Payment
Payments in respect of the SKATES represented by the global certificates
will be made to DTC, which shall credit the relevant accounts at DTC on the
scheduled payment dates or, in the case of certificated securities, if any,
payments shall be made by check mailed to the address of the holder entitled to
receive the payment as the holder's address shall appear on the register. The
paying agent will be permitted to resign as paying agent upon 30 days written
notice to the Capital Administrators. In the event that The Bank of New York is
no longer the paying agent, the Capital Administrators will appoint a successor
to act as paying agent that will be a bank or trust company.
Registrar, Transfer Agent, and Paying Agent
The Capital Property Trustee acts as registrar, transfer agent and paying
agent for the SKATES.
Registration of transfers of the SKATES may be effected without charge by or
on behalf of Allfirst Capital Trust, but upon payment and with the giving of
any indemnity as Allfirst Capital Trust or Allfirst may require, in respect of
any tax or other government charges which may be imposed in relation to it.
Allfirst Capital Trust will not be required to register or cause to be
registered the transfer of the SKATES after the SKATES have been called for
redemption.
Information Concerning the Capital Property Trustee
The Capital Property Trustee, before the occurrence of a default with
respect to the Capital Securities, undertakes to perform only the duties as are
specifically set forth in the Capital Declaration and, after default, must
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to these provisions, the Capital
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Capital Declaration at the request of any holder of the SKATES,
unless offered indemnity reasonably satisfactory to the Capital Property
Trustee by the holder against the costs, expenses and liabilities which might
be incurred in connection with the exercise of any powers.
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Governing Law
The Capital Declaration and the SKATES are governed by, and will be
construed in accordance with, the internal laws of the State of Delaware.
Miscellaneous
The Capital Administrators are authorized and directed to conduct the
affairs of and to operate Allfirst Capital Trust in such a way that Allfirst
Capital Trust will not be deemed to be an investment company required to be
registered under the Investment Company Act or characterized as other than a
grantor trust for United States Federal income tax purposes. In this
connection, the Capital Administrators are authorized to take any action, not
inconsistent with applicable law, the certificate of trust or the Capital
Declaration that the Capital Administrators determine in their discretion to be
necessary or desirable for those purposes as long as such action does not
adversely affect the interests of the holders of the SKATES.
Holders of the SKATES have no preemptive rights.
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DESCRIPTION OF THE NEW CAPITAL GUARANTEE
Set forth below is a summary of material information concerning the new
Capital Guarantee which will be executed and delivered by Allfirst to the
Capital Guarantee Trustee in exchange for the old Capital Guarantee. The
summary is not complete and is subject in all respects to the provisions of,
and is qualified in its entirety by reference to, the Capital Guarantee. As
previously noted, the old and new Capital Guarantees are identical, except that
the new Capital Guarantee has been registered under the 1933 Act and qualified
under the Trust Indenture Act. References in the following discussion to the
"Capital Guarantee" are to the new and the old Capital Guarantee. The Capital
Guarantee Trustee will hold the Capital Guarantee for the benefit of the
holders of the SKATES and will act as indenture trustee for the purposes of
compliance with the Trust Indenture Act.
Status of Old Capital Guarantee
If not all of the old SKATES are exchanged for new SKATES, then the old
Capital Guarantee will not terminate, but will continue to guarantee the
obligations of Allfirst Capital Trust for the benefit of the holders of old
SKATES. The old Capital Guarantee will terminate upon:
. full payment of the redemption price of all of the old SKATES;
. distribution of the Asset Preferred Securities to holders of SKATES as a
result of a Capital Special Event as described under "Description of the
New SKATES--Capital Special Event Redemption or Distribution"; or
. full payment of the amounts payable in accordance with the Capital
Declaration upon liquidation of Allfirst Capital Trust.
The old Capital Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of old SKATES must
restore payment of any sums paid under the old SKATES or the old Capital
Guarantee.
Terms of the Capital Guarantee
Under the Capital Guarantee, Allfirst irrevocably agrees, on a subordinated
basis and to the extent set forth in the Capital Guarantee, to pay in full or
distribute to the holders of the SKATES, except to the extent paid by Allfirst
Capital Trust, as and when due, regardless of any defense, right of set-off or
counterclaim which Allfirst Capital Trust may have or assert, the following
payments (the "Capital Guarantee Payments"), without duplication:
. any accrued and unpaid distributions on the SKATES to the extent Allfirst
Capital Trust has funds available for distribution;
. the redemption price with respect to any SKATES called for redemption by
Allfirst Capital Trust, to the extent Allfirst Capital Trust has funds
available for payment; and
. upon any other voluntary or involuntary dissolution, winding-up or
termination of Allfirst Capital Trust, the lesser of:
. the aggregate of the liquidation amount and all accrued and unpaid
distributions on the SKATES since the last distribution payment date,
and
. the amount of assets of Allfirst Capital Trust remaining available for
distribution to holders of the SKATES upon the liquidation of Allfirst
Capital Trust.
Allfirst's obligation to make a Capital Guarantee Payment may be satisfied by
direct payment of the required amounts by Allfirst to the holders of the SKATES
or by causing Allfirst Capital Trust to pay these amounts to holders.
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Allfirst also irrevocably agrees to cause Allfirst Capital Trust, upon
liquidation of Allfirst Capital Trust as a result of a Capital Special Event as
described under "Description of the New SKATES--Capital Special Event
Redemption or Distribution," to distribute the outstanding Asset Preferred
Securities to holders of the SKATES.
The Capital Guarantee is a guarantee on a subordinated basis with respect to
the SKATES from the time of issuance of the SKATES but only applies to the
payment of distributions or the redemption price, or to payments upon the
dissolution, winding-up or termination of Allfirst Capital Trust in full, to
the extent Allfirst Capital Trust has funds legally available for payment. If
Allfirst Asset Trust does not receive payment on the junior subordinated
debenture, it will not make payment on the Asset Preferred Securities, and
Allfirst Capital Trust would lack available funds for the payment of
distributions or amounts payable on redemption of the SKATES or otherwise. In
that event, holders of the SKATES would not be able to rely upon the Capital
Guarantee for payment of these amounts. Instead, holders of the SKATES will
have the remedies described under "Description of the New SKATES--Capital
Enforcement Events," including the right to direct the Capital Guarantee
Trustee to enforce the restriction of payments by Allfirst on its securities.
See "--Obligations of Allfirst" below.
The guarantees, when taken together with the junior subordinated debenture
and Allfirst's obligations to pay all fees and expenses of Allfirst Capital
Trust and Allfirst Asset Trust, constitute a limited guarantee to the extent
set forth in this prospectus by Allfirst of the distribution, redemption and
liquidation payments payable to the holders of the SKATES in full. The
guarantees do not apply, however, to current distributions by Allfirst Asset
Trust unless and until these distributions are paid by Allfirst Asset Trust out
of funds legally available for payment or to liquidating distributions unless
there are assets available for payment in Allfirst Asset Trust, each as more
fully described under "Risk Factors--Risks of Investing in the SKATES" above.
In addition, because the quarterly distributions are non-cumulative, the
guarantees do not apply to past quarterly distributions that have not been paid
by Allfirst Asset Trust or Allfirst Capital Trust.
Obligations of Allfirst
Under the Capital Guarantee, Allfirst agrees that if it is in default of its
obligations thereunder, then, unless and until, since the curing or waiver of
any such default, Allfirst Capital Trust has paid distributions on the SKATES
in full on four consecutive distribution payment dates, Allfirst may not:
. declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock; or
. make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any of its debt securities that rank equally with
or subordinate and junior in interest and right of payment to the junior
subordinated debenture or make any guarantee payments with respect to any
guarantee that ranks equally with or junior in interest and right of
payment to the junior subordinated debenture.
However, this limitation does not apply to:
. the declaration or payment of dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of,
Allfirst's capital stock;
. any conversions or exchanges of Allfirst's common stock of one class into
common stock of another class; or
. any declaration or payment of a dividend or distribution on, or any
payment of the principal, premium, if any, or interest on any guarantee,
debt security or other instrument of Allfirst ranking equally with the
junior subordinated debenture that is made on a pro rated basis with all
other equally ranking guarantees, debt securities and instruments,
including the junior subordinated debenture and the Asset Guarantee.
Events of Default; Enforcement of the Capital Guarantee
An event of default under the Capital Guarantee will occur upon the failure
of Allfirst to perform any of its payment or other obligations set forth in the
Capital Guarantee.
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The holders of a majority in liquidation amount of the SKATES have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Capital Guarantee Trustee or to direct the exercise of
any trust or other power conferred upon the Capital Guarantee Trustee under the
Capital Guarantee. If the Capital Guarantee Trustee fails to enforce its rights
under the Capital Guarantee after a holder of the SKATES has made a written
request, the holder may institute a legal proceeding directly against Allfirst
to enforce the Capital Guarantee Trustee's rights under the Capital Guarantee,
without first instituting a legal proceeding against Allfirst Capital Trust,
the Capital Guarantee Trustee or any other person or entity. In any event, if
Allfirst fails to make a guarantee payment under the Capital Guarantee, a
holder of the SKATES may directly institute a proceeding in the holder's own
name against Allfirst for enforcement of the Capital Guarantee for payment.
Status of the Capital Guarantee; Subordination
The Capital Guarantee constitutes an unsecured obligation of Allfirst and
ranks equally with its obligations under the junior subordinated debenture and
the Asset Guarantee. See "Description of Investments--Junior Subordinated
Debenture--Subordination."
In addition, the Capital Guarantee is effectively subordinated to the
deposits and all other liabilities of Allfirst's subsidiaries.
Accordingly, the rights of the holders of the SKATES to receive payments
under the Capital Guarantee are subject to the rights of the holders of any
obligations of Allfirst that are senior in priority to the obligations under
the Capital Guarantee. Furthermore, the holders of obligations of Allfirst that
are senior to the obligations under the Capital Guarantee, including, but not
limited to, obligations constituting senior indebtedness of Allfirst, are
entitled to the same rights upon payment default or dissolution, liquidation
and reorganization in respect of the Capital Guarantee that inure to the
holders of senior indebtedness as against the holders of the junior
subordinated debenture. Under the terms of the SKATES each holder of the
SKATES, by acceptance of the SKATES, agrees to the subordination provisions and
other terms of the Capital Guarantee.
The Capital Guarantee constitutes a guarantee of payment and not of
collection. That is, the guaranteed party may directly institute a legal
proceeding against Allfirst to enforce its rights under the Capital Guarantee
without instituting a legal proceeding against any other person or entity.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the SKATES, in which case no vote will be required,
the Capital Guarantee may be amended only with the prior approval of the
holders of at least a majority in liquidation amount of all the outstanding
SKATES. The manner of obtaining any approval of holders of the SKATES will be
as set forth under "Description of the New SKATES--Voting Rights." All
guarantees and agreements contained in the Capital Guarantee will bind the
successors, assigns, receivers, trustees and representatives of Allfirst and
will inure to the benefit of the holders of the SKATES then outstanding. Except
in connection with any permitted merger or consolidation of Allfirst with or
into another entity or any permitted sale, transfer or lease of Allfirst's
assets to another entity in which the surviving corporation, if other than
Allfirst, assumes Allfirst's obligations under the Capital Guarantee, Allfirst
may not assign its rights or delegate its obligations under the Capital
Guarantee without the prior approval of the holders of at least a majority of
the aggregate stated liquidation amount of the SKATES then outstanding.
Termination of the New Capital Guarantee
The new Capital Guarantee will terminate as to each holder of new SKATES
upon:
. full payment of the redemption price of all the new SKATES;
. distribution of the new Asset Preferred Securities to holders of the new
SKATES as a result of a Capital Special Event as described under
"Description of the New SKATES--Capital Special Event Redemption or
Distribution"; or
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. full payment of the amounts payable in accordance with the Capital
Declaration upon liquidation of Allfirst Capital Trust.
The new Capital Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of new SKATES must
restore payment of any sum paid under the new SKATES or the new Capital
Guarantee.
Information Concerning the Capital Guarantee Trustee
The Capital Guarantee Trustee, before the occurrence of a default with
respect to the Capital Guarantee, undertakes to perform only those duties that
are specifically set forth in the Capital Guarantee and, after default with
respect to the Capital Guarantee, will exercise the same degree of care as a
prudent individual would exercise in the conduct of his own affairs. Subject
to that provision, the Capital Guarantee Trustee is under no obligation to
exercise any of the powers vested in it by the Capital Guarantee at the
request of any holder of SKATES unless it is offered indemnity reasonably
satisfactory to the Capital Guarantee Trustee against the costs, expenses and
liabilities that might be incurred in connection with the exercise of those
powers.
Governing Law
The Capital Guarantee is governed by, and will be construed in accordance
with, the internal laws of the State of New York.
DESCRIPTION OF THE NEW ASSET PREFERRED SECURITIES
The old Asset Preferred Securities were, and the new Asset Preferred
Securities will be, issued under the terms of the Asset Declaration. The Asset
Declaration has been qualified under the Trust Indenture Act, and upon
consummation of the exchange offer the Asset Declaration will be subject to
and governed by the Trust Indenture Act. As previously noted, the old and new
Asset Preferred Securities are identical except that the new securities have
been registered under the 1933 Act and do not provide for a penalty
distribution rate. References in the following discussion to the "Asset
Preferred Securities" are to the new and the old Asset Preferred Securities.
The Asset Property Trustee acts as trustee for the Asset Preferred
Securities under the Asset Declaration for purposes of compliance with the
provisions of the Trust Indenture Act. The terms of the Asset Preferred
Securities include those stated in the Asset Declaration and those made part
of the Asset Declaration by the Trust Indenture Act. The following summary of
the material terms and provisions of the Asset Preferred Securities is not
complete and is subject to, and qualified in its entirety by reference to, the
Asset Declaration, the Delaware Trust Act and the Trust Indenture Act.
The Asset Declaration authorizes and directs the Asset Administrators of
Allfirst Asset Trust to issue the old and new Asset Securities, which
represent undivided beneficial ownership interests in the assets of Allfirst
Asset Trust. Title to the assets of Allfirst Asset Trust will be held by the
Asset Property Trustee for the benefit of the holders of the Asset Securities.
The payment of distributions out of money held by Allfirst Asset Trust, and
payments out of money held by Allfirst Asset Trust upon redemption of the
Asset Preferred Securities or liquidation of Allfirst Asset Trust, are
guaranteed by Allfirst to the extent described under "Description of the New
Asset Guarantee."
The Asset Guarantee is held by The Bank of New York, as trustee (the "Asset
Guarantee Trustee"), for the benefit of the holders of the Asset Preferred
Securities. The Asset Guarantee does not cover payment of distributions when
Allfirst Asset Trust has not received payments of current interest on the
junior subordinated debenture on the interest payment date immediately
following the corresponding quarterly period. In any event of non-payment,
holders of the Asset Preferred Securities will have the remedies described
below under "--Asset Enforcement Events."
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The new Asset Preferred Securities will not be registered under the 1934 Act
unless required by the rules and regulations thereunder.
Status of Old Asset Preferred Securities
If not all of the old SKATES are exchanged for new SKATES, then a like
liquidation amount of the old Asset Preferred Securities:
. will not be exchanged for new Asset Preferred Securities;
. will continue to be outstanding and to bear a restrictive legend;
. will not provide for any penalty increase in the distribution rate or for
any registration rights; and
. would be distributed only to holders of old SKATES in the event that
Asset Preferred Securities are distributed to holders of SKATES.
Distributions
The distribution rate on each Asset Preferred Security is a rate per annum
of three-month LIBOR plus 1.50% of the stated liquidation amount of $1,000 per
Asset Preferred Security, reset quarterly, and will be paid if, as and when
Allfirst Asset Trust has funds from corresponding interest payments on the
junior subordinated debenture from Allfirst available for distribution. These
distributions will be paid through the Asset Property Trustee, who will hold
amounts received in respect of the junior subordinated debenture in the Asset
Property Account for the benefit of the holders of the Asset Preferred
Securities. Distributions on the Asset Preferred Securities are non-cumulative,
and will be payable quarterly on January 15, April 15, July 15 and October 15
of each year, commencing October 15, 1999 if, as and when available for
payment. Until October 15, 1999, the distribution rate on the Asset Preferred
Securities is 6.81% per year.
The distributions on the Asset Preferred Securities are non-cumulative. This
means that if Allfirst Asset Trust does not pay a distribution on a
distribution payment date, holders of the Asset Preferred Securities will not
receive and will have no right to receive that distribution at any time, even
if Allfirst Asset Trust declares and pays distributions on the Asset Preferred
Securities in the future.
The distribution calculation and payment provisions for the Asset Preferred
Securities correspond to the distribution calculation and payment provisions
for the SKATES. See "Description of the New SKATES--Distributions."
Limitation on Payment of Distributions
Distributions on the Asset Preferred Securities will be payable to holders
as they appear on the books and records of Allfirst Asset Trust on the relevant
record dates, which, as long as the SKATES remain in book-entry only form or,
if Allfirst Capital Trust is liquidated in connection with a Capital Special
Event and Asset Preferred Securities are distributed to holders of the SKATES
and as long as the Asset Preferred Securities remain in book-entry only form,
will be one Business Day before the relevant payment dates. If Allfirst Capital
Trust is liquidated in connection with a Capital Special Event and Asset
Preferred Securities are distributed to holders of the SKATES, and the Asset
Preferred Securities will not continue to remain in book-entry only form, the
relevant record dates shall be the first day of the month of the relevant
payment dates. If any date on which distributions are payable on the Asset
Preferred Securities is not a Business Day, then payment of the distribution
payable on that date will be made on the next succeeding day that is a Business
Day and without any interest or other payment in respect of any delay, except
that, if that Business Day is in the next succeeding calendar year, that
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on that date.
Allfirst Asset Trust's earnings available for payments to the holders of the
Asset Preferred Securities will be limited to payments made on the junior
subordinated debenture (other than payments of deferred interest, redemption
payments and payments due at maturity). See "Description of Investments--Junior
Subordinated
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Debenture." Allfirst Asset Trust will only make a distribution on the Asset
Preferred Securities on any distribution payment date if Allfirst has made a
payment on the junior subordinated debenture on the interest payment date for
the immediately preceding quarterly period and only if Allfirst Asset Trust has
funds available in the Asset Property Account, in which event the Asset
Guarantee will not apply to those distributions. See "Description of the New
Asset Guarantee." Under the Asset Guarantee, Allfirst will pay to Allfirst
Capital Trust, or cause Allfirst Asset Trust to pay to Allfirst Capital Trust,
payments on the Asset Preferred Securities to the extent that Allfirst Asset
Trust has sufficient funds available for this purpose in the Asset Property
Account. If Allfirst Capital Trust does have sufficient funds to make
distributions on the SKATES, the Capital Guarantee will not apply to those
distributions until Allfirst Capital Trust has sufficient funds available.
In the event Allfirst Asset Trust makes a distribution on the Asset
Preferred Securities in part, that distribution will be made on a pro rata
basis to all holders of outstanding Asset Preferred Securities.
Asset Enforcement Events
The occurrence, at any time, of any of the following events will constitute
an enforcement event under the Asset Declaration with respect to the Asset
Securities (an "Asset Enforcement Event"):
. Allfirst is in default on any of its obligations under the Asset
Guarantee; or
. an event of default occurs and is continuing on the junior subordinated
debenture.
Under the Asset Declaration, the holder of the common securities waives any
Asset Enforcement Event with respect to the common securities of Allfirst Asset
Trust until all Asset Enforcement Events with respect to the Asset Preferred
Securities have been cured, waived or otherwise eliminated. Until every Asset
Enforcement Event with respect to the Asset Preferred Securities has been so
cured, waived or otherwise eliminated, the Asset Property Trustee will act
solely on behalf of the holders of the Asset Preferred Securities and only the
holders of the Asset Preferred Securities will have the right to direct the
Asset Property Trustee on certain matters under the Asset Declaration. So long
as the Asset Preferred Securities are held by Allfirst Capital Trust, the
holders of SKATES will have the rights of a holder of Asset Preferred
Securities described in this paragraph.
Upon the occurrence and during the continuance of an Asset Enforcement
Event, the Capital Property Trustee, for so long as the Asset Preferred
Securities are held by the Capital Property Trustee, will have the right, or
holders of the Asset Preferred Securities will be entitled by the vote of a
majority in aggregate liquidation preference of the holders:
. under the Asset Declaration to enforce the terms of the Asset Preferred
Securities, including the right to direct the Asset Property Trustee to
enforce:
. Allfirst Asset Trust's creditors' rights and other rights with
respect to the junior subordinated debenture;
. the rights of the holders of the Asset Preferred Securities under
the Asset Guarantee; and
. the rights of the holders of the Asset Preferred Securities to
receive distributions on the Asset Preferred Securities; and
. under the Asset Guarantee to enforce the terms of the Asset Guarantee,
including the right to enforce the restriction on payments by Allfirst on
its securities as set forth in the Asset Guarantee.
Until Allfirst has received approval from the Federal Reserve Board or the
Central Bank of Ireland to do so, its failure to resume paying interest after
deferring the payment of interest for any deferral period or to repay the
junior subordinated debenture at maturity will not constitute an Asset
Enforcement Event and neither a holder of the junior subordinated debenture nor
a holder of the Asset Preferred Securities will have any creditors' rights
against Allfirst.
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If the Asset Property Trustee fails to enforce its rights under the junior
subordinated debenture after a holder of Asset Preferred Securities has made a
written request, the holder of record of Asset Preferred
Securities may directly institute a legal proceeding against Allfirst to
enforce the rights of the Asset Property Trustee and Allfirst Asset Trust under
the junior subordinated debenture without first instituting any legal
proceeding against the Asset Property Trustee, Allfirst Asset Trust or any
other person or entity. In any event, if an Asset Enforcement Event has
occurred and is continuing and this event is attributable to the failure of
Allfirst to make any required payment when due on the junior subordinated
debenture, then a holder of Asset Preferred Securities may on behalf of
Allfirst Asset Trust directly institute a proceeding against First Maryland
with respect to the junior subordinated debenture for enforcement of payment. A
holder of Asset Preferred Securities may also bring a direct action against
Allfirst to enforce the holder's right under the Asset Guarantee. See
"Description of the New Asset Guarantee--Events of Default; Enforcement of
Asset Guarantee." So long as the Asset Preferred Securities are held by
Allfirst Capital Trust, the holders of SKATES will have the rights of a holder
of Asset Preferred Securities described in this paragraph.
Under no circumstances, however, will the Asset Property Trustee have
authority to cause Allfirst Asset Trust to make distributions on the Asset
Preferred Securities of deferred interest or interest for a quarterly period
not paid on the interest payment date immediately following that quarterly
period. As a result, although the Asset Property Trustee may be able to enforce
Allfirst Asset Trust's creditors' rights in respect of the junior subordinated
debenture, Allfirst Asset Trust will not make distributions of deferred or late
interest payments on the junior subordinated debenture to holders of the Asset
Preferred Securities.
Allfirst and Allfirst Asset Trust are each required to file annually with
the Asset Property Trustee an officer's certificate as to its compliance with
all conditions and obligations under the Asset Declaration.
Mandatory Redemption
With the prior consent of the Federal Reserve Board and the Central Bank of
Ireland, at the option of Allfirst, Allfirst may redeem the junior subordinated
debenture, in whole or in part, at any time on or after July 15, 2009 or at any
time in certain circumstances upon the occurrence of a Debenture Special Event
(as defined below). If the junior subordinated debenture is redeemed, Allfirst
Asset Trust will redeem the Asset Preferred Securities having an aggregate
liquidation amount equal to the aggregate principal amount of the junior
subordinated debenture being redeemed, upon not less than 30 nor more than 60
days' notice, at an amount per Asset Preferred Security equal to $1,000 plus
accrued and unpaid distributions for the then current quarterly period from the
last distribution payment date. If Allfirst Asset Trust redeems Asset Preferred
Securities in accordance with their terms, Allfirst Capital Trust will redeem
an equal liquidation amount of Capital Securities at the redemption price. If
Allfirst Capital Trust is liquidated in connection with a Capital Special Event
which is also a Debenture Special Event, Allfirst Asset Trust may only redeem
the Asset Preferred Securities in whole.
Redemption Procedures
If Allfirst Asset Trust gives a notice of redemption in respect of Asset
Preferred Securities, which notice will be irrevocable, and, if the indenture
trustee has paid to the Asset Property Trustee a sufficient amount of cash in
connection with the related redemption of the junior subordinated debenture,
then, by 1:00 p.m., New York City time, on the redemption date, Allfirst Asset
Trust will:
. if the Asset Preferred Securities are in book-entry form with DTC,
deposit irrevocably with DTC funds sufficient to pay the applicable
redemption price; or
. if the Asset Preferred Securities are held in certificated form, deposit
with the paying agent for the Asset Preferred Securities funds sufficient
to pay any amount in respect of any Asset Preferred Securities in
certificated form and give the paying agent irrevocable instructions and
authority to pay these amounts to the holders of Asset Preferred
Securities upon surrender of their certificates.
If notice of redemption has been given and funds deposited as required, then
upon the date of the deposit, all rights of holders of any Asset Preferred
Securities so called for redemption will cease, except the right of
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the holders of those Asset Preferred Securities to receive the redemption
price, but without interest. If any date fixed for redemption of Asset
Preferred Securities is not a Business Day, then payment of the redemption
price payable on that date will be made on the next succeeding day that is a
Business Day, and without any interest or other payment in respect of any
delay, except that, if that Business Day falls in the next calendar year, the
payment will be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date fixed for redemption.
If the Asset Preferred Securities are in book-entry form and fewer than all
of the outstanding Asset Preferred Securities are to be redeemed, the Asset
Preferred Securities will be redeemed in accordance with the procedures of
DTC. See "Description of the New SKATES--Form of SKATES." If the Asset
Preferred Securities are not in book-entry form and fewer than all of the
outstanding Asset Preferred Securities are to be redeemed, the Asset Preferred
Securities will be redeemed on a pro rata basis or pursuant to the rules of
any securities exchange on which the Asset Preferred Securities are listed.
Subject to the foregoing and applicable law, including, without limitation,
United States Federal securities laws, Allfirst or any of its subsidiaries may
at any time and from time to time purchase outstanding Asset Preferred
Securities by tender, in the open market or by private agreement.
Subordination of the Common Securities of Allfirst Asset Trust
Payment of amounts upon liquidation of the Asset Securities shall be made
pro rata based on the liquidation amount of the Asset Securities. However,
upon:
. the occurrence of an event of default by Allfirst under the junior
subordinated debenture; or
. default by Allfirst on any of its obligations under any of the
guarantees,
the holders of the Asset Preferred Securities will have a preference over the
holders of the common securities of Allfirst Asset Trust with respect to
payments upon liquidation of Allfirst Asset Trust.
Liquidation Distribution Upon Dissolution
In the event of any voluntary or involuntary dissolution, winding-up or
termination of Allfirst Asset Trust, the holders of the Asset Preferred
Securities at the time will be entitled to receive out of the assets of
Allfirst Asset Trust, after satisfaction of liabilities of creditors,
distributions in cash or other immediately available funds in an amount equal
to the aggregate of the stated liquidation amount of $1,000 per Asset
Preferred Security plus accrued and unpaid distributions from the last
distribution payment date.
If, upon Allfirst Asset Trust's liquidation, the liquidation distribution
can be paid only in part because Allfirst Asset Trust has insufficient assets
available to pay in full the aggregate liquidation distribution, then the
amounts payable directly by Allfirst Asset Trust on the Asset Preferred
Securities will be paid on a pro rata basis. The holder of the common
securities of Allfirst Asset Trust will be entitled to receive distributions
upon liquidation only after the holders of Asset Preferred Securities have
been paid, or amounts have been set aside to pay the holders of the Asset
Preferred Securities, their liquidation distribution in full.
Under the Asset Declaration, Allfirst Asset Trust will dissolve and
liquidate and thereafter terminate upon:
. the bankruptcy or insolvency of Allfirst;
. the filing of a certificate of dissolution or the equivalent with respect
to Allfirst, the filing of a certificate of cancellation with respect to
Allfirst Asset Trust after having obtained the consent of the holders of
at least a majority in liquidation amount of the Asset Securities, voting
together as a single class, to file such certificate of cancellation, or
the revocation of the charter of Allfirst and the expiration of 90 days
after the date of revocation without reinstatement;
. the entry of a decree of a judicial dissolution of Allfirst or Allfirst
Asset Trust; or
. the redemption of all the Asset Securities.
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Voting Rights
Except as described in this offering memorandum, including under
"Description of the New Asset Guarantee--Amendments and Assignment," or as
otherwise required by law or the Asset Declaration, the holders of the Asset
Preferred Securities have no voting rights.
If any proposed amendment to the Asset Declaration provides for, or
Allfirst, as holder of the common securities of Allfirst Asset Trust otherwise
proposes to effect:
. any action that would adversely affect the powers, preferences or special
rights of the Asset Preferred Securities, including, without limitation,
the authorization or issuance of any additional preferred securities of
Allfirst Asset Trust ranking senior to the Asset Preferred Securities; or
. the dissolution or liquidation of Allfirst Asset Trust, other than as
described under "--Merger, Consolidation or Amalgamation of Allfirst
Asset Trust" below;
then the holders of outstanding Asset Preferred Securities will be entitled to
vote on any such amendment or proposal of Allfirst as a class, and no such
amendment or proposal will be effective without the approval of the holders of
a majority in liquidation preference of the outstanding Asset Preferred
Securities having a right to vote on the matter. However, if the Capital
Property Trustee on behalf of Allfirst Capital Trust is the holder of the Asset
Preferred Securities, no such amendment or proposal will be effective without
the prior or concurrent approval of the holders of a majority in liquidation
amount of the outstanding SKATES having a right to vote on such matters.
The Asset Administrators may not:
. direct the time, method and place of conducting any proceeding for any
remedy available;
. waive any event of default that is waivable under the junior subordinated
debenture;
. exercise any right to rescind or annul a declaration that the principal
of the junior subordinated debenture shall be due and payable;
. waive the breach of the obligation by Allfirst to restrict certain
payments on its capital stock, debt securities or guarantees; or
. consent to any amendment, modification or termination of the junior
subordinated debenture, where such consent shall be required from the
holder of the junior subordinated debenture;
without, in each case, obtaining the prior approval of the holders of at least
a majority in liquidation amount of the Asset Preferred Securities. However, if
the Capital Property Trustee on behalf of Allfirst Capital Trust is the holder
of the Asset Preferred Securities, any waiver, consent or amendment or other
action will not be effective without the prior or concurrent approval of at
least a majority in liquidation amount of the outstanding SKATES having a right
to vote on these matters. The Asset Administrators will not revoke any action
previously authorized or approved by a vote of the holders of the Asset
Preferred Securities without the approval of the revocation by a majority in
liquidation preference of the outstanding Asset Preferred Securities. The Asset
Administrators must notify all holders of the Asset Preferred Securities of any
notice of an event of default received with respect to the junior subordinated
debenture.
Any required approval of holders of Asset Preferred Securities may be given
(1) at a separate meeting of holders of Asset Preferred Securities convened for
that purpose, (2) at a meeting of all of the holders of Asset Securities or (3)
pursuant to written consent. The Asset Property Trustee must cause a notice of
any meeting at which holders of Asset Preferred Securities are entitled to
vote, or of any matter upon which action by written consent of the holders is
to be taken, to be mailed to each holder of record of Asset Preferred
Securities. Each notice will include a statement setting forth:
. the date of the meeting or the date by which action is to be taken;
. a description of any resolution proposed for adoption at the meeting on
which holders are entitled to vote or of the matters upon which written
consent is sought; and
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. instructions for the delivery of proxies or consents.
No vote or consent of the holders of Asset Preferred Securities will be
required for Allfirst Asset Trust to redeem and cancel Asset Preferred
Securities in accordance with the Asset Declaration.
Even when holders of Asset Preferred Securities are entitled to vote or
consent under any of the circumstances described above, any of the Asset
Preferred Securities that are beneficially owned by Allfirst or by any entity
directly or indirectly controlled by, or under direct or indirect common
control with, Allfirst, will not be entitled to vote or consent and will, for
purposes of any vote or consent, be treated as if they were not outstanding,
except that persons, other than affiliates of Allfirst, to whom Allfirst or any
of its subsidiaries have pledged Asset Preferred Securities may vote or consent
with respect to the pledged Asset Preferred Securities under the terms of the
pledge.
Holders of the Asset Preferred Securities have no rights to appoint or
remove the Asset Administrators, who may be appointed, removed or replaced
solely by Allfirst, as the holder of all the common securities of Allfirst
Asset Trust.
Merger, Consolidation or Amalgamation of Allfirst Asset Trust
Allfirst Asset Trust may not consolidate, amalgamate, merge with or into, or
be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to, any corporation or other body, except as
described below. Allfirst Asset Trust may, with the consent of a majority of
the Asset Administrators and without the consent of the holders of the Asset
Preferred Securities, the Asset Property Trustee or the Asset Delaware Trustee,
consolidate, amalgamate, merge with or into, or be replaced by a trust
organized as such under the laws of any state of the United States if:
. Allfirst Asset Trust is not the surviving entity, the successor entity
either:
. expressly assumes all of the obligations of Allfirst Asset Trust under
the Asset Preferred Securities; or
. substitutes for the Asset Preferred Securities other securities having
substantially the same terms as the Asset Preferred Securities so long
as such successor securities rank the same as the Asset Preferred
Securities rank with respect to distributions, assets and payments;
. Allfirst expressly acknowledges a trustee of the successor entity
possessing the same powers and duties as the Asset Property Trustee as
the holder of the junior subordinated debenture and the other assets of
Allfirst Asset Trust;
. if the Asset Preferred Securities are distributed in liquidation of the
SKATES as described under "Description of the New SKATES--Capital Special
Event Redemption or Distribution," the Asset Preferred Securities or any
successor securities are listed or quoted, or any successor securities
will be listed or quoted upon notification of issuance, on any national
securities exchange or quoted on any quotation system on which the Asset
Preferred Securities are then listed or quoted;
. any merger, consolidation, amalgamation or replacement does not cause the
SKATES or, in the event that Allfirst Capital Trust is liquidated in
connection with a Capital Special Event, the Asset Preferred Securities
or any successor securities, to be downgraded by any nationally
recognized statistical rating organization;
. any merger, consolidation, amalgamation or replacement does not adversely
affect the rights, preferences and privileges of the holders of the
SKATES or Asset Preferred Securities, including any successor securities,
in any material respect;
. the successor entity has a purpose substantially identical to that of
Allfirst Asset Trust;
. Allfirst guarantees the obligations of the successor entity under the
successor securities at least to the extent provided by the Asset
Guarantee; and
. before any merger, consolidation, amalgamation or replacement, Allfirst
has received an opinion of nationally recognized independent legal
counsel experienced in these matters to the effect that:
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. any merger, consolidation, amalgamation or replacement will not
adversely affect the rights, preferences and privileges of the holders
of the SKATES or the Asset Preferred Securities, including any successor
securities, in any material respect, other than with respect to any
dilution of the holders' interest in the new entity;
. following any merger, consolidation, amalgamation or replacement,
neither Allfirst Asset Trust nor the successor entity will be required
to register as an investment company under the Investment Company Act;
. following any merger, consolidation, amalgamation or replacement,
Allfirst Capital Trust, or any successor trust, will not be classified
as an association or a publicly traded partnership taxable as a
corporation for United States Federal income tax purposes; and
. following any merger, consolidation, amalgamation or replacement,
Allfirst Asset Trust will not be classified as an association or
publicly traded partnership taxable as a corporation for United States
Federal income tax purposes.
Modification of the Asset Declaration
The Asset Declaration may be modified and amended as described below.
If any proposed amendment to the Asset Declaration provides for, or the
Asset Administrators otherwise propose to effect,
. any action that would adversely affect the powers, preferences or special
rights of the Asset Securities, whether by way of amendment to the Asset
Declaration or otherwise; or
. the dissolution, winding-up or termination of Allfirst Asset Trust other
than under the terms of the Asset Declaration;
then, in each case, the holders of the Asset Securities voting together as a
single class will be entitled to vote on the amendment or proposal and the
amendment or proposal will not be effective except with the approval of the
holders of at least a majority in liquidation amount of the Asset Securities
affected. However, if the Capital Property trustee on behalf of Allfirst
Capital Trust is the holder of the Asset Preferred Securities, no such
amendment or proposal will be effective without the prior or concurrent
approval of the holders of a majority in liquidation amount of the outstanding
SKATES having a right to vote on such matters. If any amendment or proposal
referred to in the first point above would adversely affect only the Asset
Preferred Securities or the common securities of Allfirst Asset Trust, then
only the affected class will be entitled to vote on the amendment or proposal
and the amendment or proposal will not be effective except with the approval of
a majority of the holders in liquidation amount of that class of Asset
Securities.
The Asset Declaration may be amended without the consent of the holders of
the Asset Securities to:
. cure any ambiguity;
. correct or supplement any provision in the Asset Declaration that may be
defective or inconsistent with any other provision of the Asset
Declaration;
. add to the restrictions or obligations of the sponsor;
. conform to any change in the Investment Company Act, the Trust Indenture
Act or the rules or regulations under either law; and
. modify, eliminate and add to any provision of the Asset Declaration to
the extent as may be necessary or desirable;
if any such amendment does not have a material adverse effect on the rights,
preferences or privileges of the holders of the Asset Securities or the SKATES.
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Notwithstanding the foregoing, no amendment or modification may be made to
the Asset Declaration if the amendment or modification would:
. cause Allfirst Asset Trust to be classified as an association or publicly
traded partnership taxable as a corporation for United States Federal
income tax purposes;
. cause the SKATES or the Asset Preferred Securities to fail to qualify as
Tier 1 capital of Allfirst or consolidated Tier 1 capital of AIB;
. reduce or otherwise adversely affect the powers of the Asset Property
Trustee; or
. cause Allfirst Asset Trust to be deemed an investment company which is
required to be registered under the Investment Company Act.
Form of Asset Preferred Securities and Payment
In the event that the Asset Preferred Securities are distributed in
liquidation of the SKATES as described under "Description of the New SKATES--
Capital Special Event Redemption or Distribution," the form and payment
provisions applicable to the Asset Preferred Securities will be as described
under "Description of the New SKATES--Form of SKATES" and "--Payment."
Registrar, Transfer Agent and Paying Agent
The Asset Property Trustee, acts as registrar, transfer agent and paying
agent for the Asset Preferred Securities.
Registration of transfers of Asset Preferred Securities will be effected
without charge by or on behalf of Allfirst Asset Trust, but upon payment, with
the giving of such indemnity as Allfirst Asset Trust or First Maryland may
require, in respect of any tax or other governmental charges that may be
imposed in relation to it.
Allfirst Asset Trust will not be required to register or cause to be
registered the transfer of Asset Preferred Securities after those Asset
Preferred Securities have been called for redemption.
Information Concerning the Asset Property Trustee
The Asset Property Trustee, before the occurrence of a default with respect
to the Asset Securities, undertakes to perform only the duties as are
specifically set forth in the Asset Declaration and, after default, must
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. Subject to these provisions, the Asset
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Asset Declaration at the request of any holder of the Asset Preferred
Securities or SKATES, unless offered indemnity reasonably satisfactory to the
Asset Property Trustee by the holder against the costs, expenses and
liabilities which might be incurred in connection with the exercise of any
powers.
Governing Law
The Asset Declaration and the Asset Preferred Securities are governed by,
and will be construed in accordance with, the internal laws of the State of
Delaware.
Miscellaneous
The Asset Administrators are authorized and directed to conduct the affairs
of and to operate Allfirst Asset Trust in such a way that:
. Allfirst Asset Trust will not be deemed to be an investment company
required to be registered under the Investment Company Act or
characterized as an association taxable as a corporation for United
States Federal income tax purposes;
. the junior subordinated debenture will be treated as indebtedness of
Allfirst for United States Federal income tax purposes; and
. Allfirst Asset Trust will not be treated as an association or as a
publicly traded partnership, within the meaning of Section 7704 of the
Internal Revenue Code of 1986, as amended, taxable as a corporation.
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In this connection, the Asset Administrators are authorized to take any
action, not inconsistent with applicable law, the certificate of trust or the
Asset Declaration that the Asset Administrators determine in their discretion
to be necessary or desirable for those purposes as long as such action does not
adversely affect the interests of the holders of the SKATES or the Asset
Preferred Securities.
Holders of the Asset Preferred Securities have no preemptive rights.
DESCRIPTION OF THE NEW ASSET GUARANTEE
Set forth below is a summary of the material information concerning the new
Asset Guarantee that will be executed and delivered by Allfirst to the Asset
Guarantee Trustee in exchange for the old Asset Guarantee. As previously noted,
the old and new Asset Guarantees are identical except that the new guarantee
has been registered under the 1933 Act and qualified under the Trust Indenture
Act. References in the following discussion to the "Asset Guarantee" are to the
new and the old Asset Guarantee. The summary is not complete and is subject in
all respects to the provisions of, and is qualified in its entirety by
reference to, the Asset Guarantee. The Asset Guarantee Trustee holds the Asset
Guarantee for the benefit of the holders of the Asset Preferred Securities.
Status of Old Asset Guarantee
If not all of the old SKATES are exchanged for new SKATES, and thus not all
of the old Asset Preferred Securities are exchanged for new Asset Trust
Preferred Securities, then the old Asset Guarantee will not terminate, but will
continue to guarantee the obligations of Allfirst Asset Trust for the benefit
of the holders of old Asset Preferred Securities. The old Asset Guarantee will
terminate upon:
. full payment of the redemption price of all of the old Asset Preferred
Securities; or
. full payment of the amounts payable in accordance with the Asset
Declaration upon liquidation of Allfirst Asset Trust.
The old Asset Guarantee will continue to be effective or will be reinstated,
as the case may be, if at any time any holder of old Asset Preferred Securities
must restore payment of any sums paid under the old Asset Preferred Securities
or the old Asset Guarantee.
Terms of the Asset Guarantee
Under the Asset Guarantee, Allfirst irrevocably agrees, on a subordinated
basis to the extent set forth in this offering memorandum, to pay in full to
the holders of the Asset Preferred Securities, without duplication of amounts
previously paid by Allfirst Asset Trust, as and when due, regardless of any
defense, right of set-off or counterclaim that Allfirst Asset Trust may have or
assert, the following payments (the "Asset Guarantee Payments"):
. any accrued and unpaid distribution with respect to any distribution
payment date on the Asset Preferred Securities to the extent Allfirst has
paid interest on the junior subordinated debenture on such date for the
immediately preceding quarterly period;
. the redemption price with respect to any Asset Preferred Securities
called for redemption by Allfirst Asset Trust, to the extent Allfirst has
paid the redemption price of a like amount of the junior subordinated
debenture called for redemption by Allfirst; and
. upon a liquidation of Allfirst Asset Trust, the lesser of:
. the aggregate of the liquidation amount and all accrued and unpaid
distributions on the Asset Preferred Securities since the last
distribution payment date; and
. the amount of assets of Allfirst Asset Trust, after satisfaction of all
liabilities, remaining available for distribution to holders of Asset
Preferred Securities in liquidation of Allfirst Asset Trust.
Allfirst's obligation to make an Asset Guarantee Payment may be satisfied by
direct payment of the required amounts by Allfirst to the holders of Asset
Preferred Securities or by causing Allfirst Asset Trust to pay these amounts to
holders.
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The Asset Guarantee is a guarantee on a subordinated basis with respect to
the Asset Preferred Securities from the time of issuance of the Asset Preferred
Securities but will not apply to any payment of distributions or the redemption
price, or to payments upon the dissolution, winding-up or termination of
Allfirst Asset Trust, except to the extent Allfirst Asset Trust has assets
available for such payment in accordance with the terms of the Asset
Declaration. For example, if on any interest payment date Allfirst fails to pay
interest or defers the payment of interest otherwise payable on the junior
subordinated debenture, Allfirst Asset Trust will not pay distributions on the
Asset Preferred Securities for the corresponding quarterly period. In such
event, holders of the Asset Preferred Securities would not be able to rely upon
the Asset Guarantee for payment of these amounts. Instead, holders of the Asset
Preferred Securities will have the remedies described in this offering
memorandum under "Description of the New Asset Preferred Securities--Asset
Enforcement Events."
The guarantees, when taken together with the junior subordinated debenture
and Allfirst's obligations to pay all fees and expenses of Allfirst Capital
Trust and Allfirst Asset Trust, constitute a limited guarantee to the extent
set forth in this prospectus by Allfirst of the distribution, redemption and
liquidation payments payable to the holders of the SKATES. The guarantees do
not apply, however, to distributions in full by Allfirst Asset Trust unless and
until Allfirst Asset Trust receives interest payments on the junior
subordinated debenture for the corresponding quarterly periods on the interest
payment date immediately following each quarterly period, to redemption
payments on the junior subordinated debenture received by Allfirst Asset Trust
or to liquidating distributions unless there are assets available for payment
in Allfirst Asset Trust. In addition, because the distributions are non-
cumulative, the guarantees do not apply to past quarterly distributions that
have not been paid by Allfirst Asset Trust or Allfirst Capital Trust.
Obligations of Allfirst
Under the Asset Guarantee, Allfirst agrees that if it is in default of its
obligations thereunder, then, unless and until, since the curing or waiver of
any such default, Allfirst Asset Trust has paid distributions on the Asset
Preferred Securities in full on four consecutive distribution payment dates,
Allfirst may not:
. declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock; or
. make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any of its debt securities that rank equally with
or subordinate and junior in interest and right of payment to the junior
subordinated debenture or make any guarantee payments with respect to any
guarantee that ranks equally with or junior in interest and right of
payment to the junior subordinated debenture.
However, this limitation does not apply to:
. the declaration or payment of dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of,
Allfirst's capital stock;
. any conversions or exchanges of its common stock of one class into common
stock of another class; or
. any declaration or distribution on, or any payment of the principal,
premium, if any, or interest on any guarantee, debt security or other
instrument of Allfirst ranking equally with the junior subordinated
debenture that is made on a pro rated basis with all other equally
ranking guarantees, debt securities and instruments, including the junior
subordinated debenture and the Capital Guarantee.
Events of Default; Enforcement of Asset Guarantee
An event of default under the Asset Guarantee will occur upon the failure of
Allfirst to perform any of its payment or other obligations under the Asset
Guarantee.
The holders of a majority in liquidation amount of the Asset Preferred
Securities have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Asset Property Trustee in
respect of the Asset Guarantee or to direct the exercise of any trust or power
conferred upon the Asset Property Trustee under the Asset Guarantee. If the
Asset Property Trustee fails to enforce its rights under the Asset Guarantee,
after a holder of Asset Preferred Securities has made a written request, such
holder of Asset Preferred Securities may institute a legal
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proceeding directly against Allfirst to enforce the Asset Property Trustee's
rights under the Asset Guarantee without first instituting a legal proceeding
against Allfirst Asset Trust, the Asset Property Trustee or any other person or
entity. In any event, if Allfirst fails to make an Asset Guarantee Payment, a
holder of Asset Preferred Securities may directly institute a proceeding
against Allfirst for enforcement of the Asset Guarantee for that payment.
Status of the Asset Guarantee; Subordination
The Asset Guarantee constitutes an unsecured obligation of Allfirst and
ranks equally with its obligations under the junior subordinated debenture and
the Capital Guarantee. See "Description of Investments--Junior Subordinated
Debenture--Subordination."
In addition, the Asset Guarantee is effectively subordinated to the deposits
and all other liabilities of Allfirst's subsidiaries.
Accordingly, the rights of the holders of Asset Preferred Securities to
receive payments under the Asset Guarantee are subject to the rights of the
holders of any obligations of Allfirst that are senior in priority to the
obligations under the Asset Guarantee. Furthermore, the holders of obligations
of Allfirst that are senior to the obligations under the Asset Guarantee,
including, but not limited to, obligations constituting senior indebtedness,
will be entitled to the same rights upon payment default or dissolution,
liquidation and reorganization in respect of the Asset Guarantee that inure to
the holders of senior indebtedness as against the holders of the junior
subordinated debenture. The Asset Declaration provides that each holder of
Asset Preferred Securities, by their acceptance of the Asset Preferred
Securities, agrees to the subordination provisions and other terms of the Asset
Guarantee.
The Asset Guarantee constitutes a guarantee of payment and not of
collection. That is, the guaranteed party may directly institute a legal
proceeding against Allfirst to enforce its rights under the Asset Guarantee
without instituting a legal proceeding against any other person or entity.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the rights
of holders of Asset Preferred Securities, in which case no consent will be
required, the Asset Guarantee may be amended only with the prior approval of
the holders of not less than a majority in liquidation preference of the
outstanding Asset Preferred Securities. All guarantees and agreements contained
in the Asset Guarantee will bind the successors, assigns, receivers, trustees
and representatives of Allfirst and will inure to the benefit of the holders of
the Asset Preferred Securities then outstanding. Except in connection with any
permitted merger or consolidation of Allfirst with or into another entity or
any permitted sale, transfer or lease of Allfirst's assets to another entity in
which the surviving corporation, if other than Allfirst, assumes First
Maryland's obligations under the Asset Guarantee, Allfirst may not assign its
rights or delegate its obligations under the Asset Guarantee without the prior
approval of the holders of at least a majority of the aggregate stated
liquidation amount of the Asset Preferred Securities then outstanding.
Termination of the New Asset Guarantee
The new Asset Guarantee will terminate and be of no further force and effect
as to the new Asset Preferred Securities upon:
. full payment of the redemption price of all new Asset Preferred
Securities; or
. full payment of the amounts payable in accordance with the Asset
Declaration upon liquidation of Allfirst Asset Trust.
The new Asset Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any holder of new Asset Preferred Securities
must restore payment of any sum paid under the new Asset Preferred Securities
or the new Asset Guarantee.
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Information Concerning the Asset Guarantee Trustee
The Asset Guarantee Trustee, before the occurrence of a default with respect
to the Asset Guarantee, undertakes to perform only those duties that are
specifically set forth in the Asset Guarantee and, after default with respect
to the Asset Guarantee, will exercise the same degree of care as a prudent
individual would exercise in the conduct of his own affairs. Subject to that
provision, the Asset Guarantee Trustee is under no obligation to exercise any
of the powers vested in it by the Asset Guarantee at the request of any holder
of the Asset Preferred Securities unless it is offered indemnity reasonably
satisfactory to the Asset Guarantee Trustee against the costs, expenses and
liabilities that might be incurred in connection with the exercise of those
powers.
Governing Law
The Asset Guarantee is governed by and will be construed in accordance with
the internal laws of the State of New York.
DESCRIPTION OF INVESTMENTS
Allfirst Asset Trust used approximately 95% of the proceeds from the sale of
the old Asset Preferred Securities and its common securities to purchase the
junior subordinated debenture. It invested the remaining 5% of the initial sale
proceeds in the permitted investments described below. In the exchange offer,
Allfirst Asset Trust will exchange the old junior subordinated debenture for
the new junior subordinated debenture issued by Allfirst, except to the extent
that old SKATES are not exchanged in the exchange offer. See "--Status of Old
Junior Subordinated Debenture." As previously noted, the old and new junior
subordinated debentures are identical, except that the new junior subordinated
debenture has been registered under the 1933 Act and does not provide for a
penalty interest rate. References in the following discussion to the "junior
subordinated debenture" are to the new and the old junior subordinated
debenture.
Junior Subordinated Debenture
Allfirst will issue the new junior subordinated debenture under the terms of
the indenture in a principal amount of approximately $105,310,000, assuming
that all old SKATES are exchanged in the exchange offer. The junior
subordinated debenture is scheduled to mature on July 15, 2029. The indenture
has been qualified under the Trust Indenture Act. The Bank of New York acts as
indenture trustee for the junior subordinated debenture under the indenture.
The terms of the junior subordinated debenture include those stated in the
indenture and those made part of the indenture by the Trust Indenture Act.
The following summary of the material terms and provisions of the junior
subordinated debenture is not complete and is subject to, and qualified in its
entirety by reference to, the indenture and the Trust Indenture Act. A copy of
the indenture is available, at no cost, by contacting Allfirst at the following
address: Allfirst Financial Inc., 25 South Charles Street, Investor Relations
Dept., Baltimore, Maryland 21201.
Subordination
The junior subordinated debenture is an unsecured, subordinated obligation
of Allfirst. The junior subordinated debenture ranks:
. except as described below, subordinate and junior in right of payment of
principal and interest to Allfirst's obligations for borrowed money and
all other liabilities of Allfirst;
. subordinate and junior in right of payment to its obligations under the
$200,000,000 aggregate principal amount of its 7.20% Subordinated Notes
due 2007 and the $100,000,000 aggregate principal amount of its 6.875%
Subordinated Notes due 2009;
. equally with its obligations under guarantees and indebtedness issued by
Allfirst in connection with:
. the $150,000,000 aggregate liquidation amount of Floating Rate
Subordinated Capital Income Securities issued by First Maryland Capital
I; and
. the $150,000,000 aggregate liquidation amount of Floating Rate
Subordinated Capital Income Securities issued by First Maryland Capital
II;
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. equally with its obligations under the guarantees; and
. equally with or senior to any other instrument or agreement of Allfirst
which is stated to rank equally with or junior to the junior subordinated
debenture.
No payment of principal or interest on the junior subordinated debenture may
be made unless:
. all amounts then due on all of Allfirst obligations ranking senior to its
obligations under the junior subordinated debenture have been paid in
full or duly provided for; and
. there has not occurred or is continuing an event of default or a default
in payment in respect of any obligation ranking senior to Allfirst's
obligation under the junior subordinated debenture which would permit a
holder of any senior obligation to accelerate that senior obligation
under its terms.
In addition, the junior subordinated debenture is effectively subordinated
to the deposits and all other liabilities of Allfirst subsidairies.
The junior subordinated debenture does not represent a deposit liability of
Allfirst or any of its bank subsidiaries.
Interest
The junior subordinated debenture bears interest at an annual rate of three-
month LIBOR plus 1.43%, reset quarterly, from and including July 13, 1999.
Interest is payable quarterly on January 15, April 15, July 15 and October 15
of each year, beginning October 15, 1999. The record dates are the 15th
calendar day, whether or not a Business Day, immediately preceding the relevant
interest payment dates. Interest payments not paid when due will accrue
interest, compounded quarterly, at the annual rate of three-month LIBOR plus
1.43%. Until October 15, 1999, the interest rate on the junior subordinated
debenture will be 6.74% per year.
The amount of interest payable for any period will be computed on the basis
of a 360-day year and the actual number of days elapsed during that period.
The interest calculation provisions for payments on the junior subordinated
debenture correspond to the interest calculation provisions for the
distributions on the SKATES. See "Description of the New SKATES--
Distributions--Calculations of LIBOR."
Allfirst Asset Trust will not receive any accumulated interest on the old
junior subordinated debenture for the period from the last interest payment
date or, if no interest payments have been made, from the original issue date,
to the exchange date. The new junior subordinated debenture will be treated as
having been outstanding from last interest payment date or the original issue
date, and the amount of any interest the trust is entitled to receive will not
be affected by the exchange.
Deferral of Interest Payments
Under the terms of the junior subordinated debenture, Allfirst may defer
interest payments on the junior subordinated debenture for a period of not more
than twenty quarterly periods or beyond the stated maturity of the junior
subordinated debenture. Because Allfirst Asset Trust will not make payments on
the Asset Preferred Securities for any quarterly period unless Allfirst makes
payments on the junior subordinated debenture on the interest payment date
immediately following the corresponding quarterly period and Allfirst Capital
Trust will not make distributions on the SKATES for any quarterly period unless
Allfirst Asset Trust makes distributions on the Asset Preferred Securities on
the distribution payment date immediately following the corresponding quarterly
period, holders of the SKATES will not receive distributions from Allfirst
Capital Trust for any quarterly period as to which Allfirst exercises its right
to defer interest payments on the junior subordinated debenture.
In the event that Allfirst defers interest payments on the junior
subordinated debenture, it may not resume making any interest payments without
the prior approval of the Federal Reserve Board and the Central Bank of
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Ireland. As a result, holders of the SKATES will not receive any distributions
following an interest deferral period if the Federal Reserve Board or the
Central Bank of Ireland does not permit Allfirst to resume making interest
payments on the junior subordinated debenture. If Allfirst is permitted to
resume making interest payments on the junior subordinated debenture after an
interest deferral period, holders of the SKATES will not receive any payments
of deferred interest.
If Allfirst defers interest payments on the junior subordinated debenture,
it will use its best efforts to give the Asset Property Trustee and the
indenture trustee notice of its election not less than one Business Day prior
to the related record date. Notwithstanding Allfirst's failure to give such
notice for any quarterly period, the failure to pay any interest payment in
full on any interest payment date will be deemed to be an election by Allfirst
to defer the interest payment due on that interest payment date. The Capital
Property Trustee will give notice of Allfirst's election to defer interest
payments to the holder of the SKATES.
Dividend and Payment Limitations
Under the terms of the indenture, Allfirst agrees that if:
. it defers interest payments on the junior subordinated debenture;
. there shall have occurred any event which it knows that, with the giving
of notice or the lapse of time, or both, would be an event of default in
respect of the junior subordinated debenture, which it has not taken
reasonable steps to cure or which has not been waived; or
. an event of default with respect to the junior subordinated debenture
occurs;
then, Allfirst may not:
. declare or pay dividends on, make distributions with respect to, or
redeem, purchase or acquire, or make a liquidation payment with respect
to, any of its capital stock, or
. make any payment of principal, interest or premium, if any, on or repay
or repurchase or redeem any of its debt securities that rank equally with
or subordinate and junior in interest and right of payment to the junior
subordinated debenture or make any guarantee payments with respect to any
guarantee that ranks equally with or junior in interest and right of
payment to the junior subordinated debenture,
unless and until, since the end of any interest deferral period and the curing
or waiving of any such event or event of default, it has paid all deferred
interest for any such deferral period and interest on the junior subordinated
debenture in full on four consecutive interest payment dates.
However, the limitation in the immediately preceding paragraph does not
apply to:
. the declaration or payment of dividends or distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of,
Allfirst's capital stock;
. any conversions or exchanges of its common stock of one class into common
stock of another class; or
. any declaration or distribution on, or any payment of the principal,
premium, if any, or interest on any guarantee, debt security or other
instrument of Allfirst ranking equally with the junior subordinated
debenture that is made on a pro rated basis with all other equally
ranking guarantees, debt securities and instruments, including the
guarantees.
Redemption
The junior subordinated debenture is not redeemable before July 15, 2009
unless a Debenture Special Event has occurred. At any time on or after July 15,
2009, upon prior approval from the Federal Reserve Board and the Central Bank
of Ireland to do so, Allfirst may redeem the junior subordinated debenture, in
whole or in part, from time to time, at a redemption price equal to 100% of the
principal amount of junior subordinated
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debenture to be redeemed plus any accrued but unpaid interest (including any
Additional Interest (as defined below)) to the redemption date.
Allfirst will not redeem the junior subordinated debenture in part unless
all accrued and unpaid interest (including any Additional Interest) has been
paid in full on the outstanding aggregate principal amount of the junior
subordinated debenture for all quarterly interest periods terminating on or
prior to the redemption date.
In addition, Allfirst may not redeem the junior subordinated debenture
unless:
. all amounts then due on all of Allfirst's obligations ranking senior to
its obligations under the junior subordinated debenture have been paid in
full or duly provided for; and
. there has not occurred or is continuing an event of default or a default
in payment in respect of any obligation ranking senior to Allfirst's
obligation under the junior subordinated debenture which would permit a
holder of any senior obligation to accelerate that senior obligation
under its terms.
Notice of any redemption will be mailed at least 30 days but not more than
60 days' before the redemption date to each holder of the junior subordinated
debenture to be redeemed at its registered address. Unless Allfirst defaults in
payment of the redemption price, on and after the redemption date, interest
will cease to accrue on the principal amount of the junior subordinated
debenture being called for redemption.
Debenture Special Event Redemption
If, at any time, a Debenture Tax Event, a Debenture Regulatory Event or a
Debenture Investment Company Event (each as defined below, and each a
"Debenture Special Event") occurs and is continuing, Allfirst must, within 90
days following the occurrence of such Debenture Special Event, elect either:
. with prior approval from the Federal Reserve Board and the Central Bank
of Ireland, to redeem the junior subordinated debenture in whole, but not
in part, upon not less than 30 or more than 60 days notice at the
redemption price, provided that, if at the time there is available to
Allfirst the opportunity to eliminate, within the 90-day period, the
Debenture Special Event by taking some ministerial action, such as filing
a form or making an election, or pursuing some other similar reasonable
measure that in the sole judgment of Allfirst has or will cause no
adverse effect on Allfirst Asset Trust, Allfirst Capital Trust or
Allfirst, Allfirst will pursue that measure in lieu of redemption; or
. to cause the junior subordinated debenture to remain outstanding,
provided that in the case of this clause, Allfirst must pay any and all
costs and expenses incurred by or payable by Allfirst Asset Trust
attributable to the Debenture Special Event.
"Debenture Tax Event" means that Allfirst has requested and received an
opinion of nationally recognized independent tax counsel experienced in these
matters to the effect that there has been a Tax Event and that, as a result,
there is more than an insubstantial risk that:
. Allfirst Asset Trust is, or will be, subject to United States Federal
income tax with respect to income accrued or received on the junior
subordinated debenture or its permitted investments;
. Allfirst Asset Trust is, or will be, subject to more than a minimal
amount of other taxes, duties or other governmental charges; or
. interest payable by Allfirst with respect to the junior subordinated
debenture to Allfirst Asset Trust is not, or will not be, deductible by
Allfirst for United States Federal income tax purposes.
"Debenture Regulatory Event" will occur at any time that Allfirst becomes,
or under law or regulation or any rules, guidelines or policies of the Federal
Reserve Board, the Central Bank of Ireland or any official administrative
announcement or decision interpreting these laws, regulations, rules, policies
or guidelines, will become within 180 days, subject to capital requirements
under which, in the written opinion of independent
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bank regulatory counsel experienced in such matters, the SKATES or the Asset
Preferred Securities would not qualify, disregarding any Tier 1 category
limits, for treatment as (1) Tier 1 capital applied for Allfirst as a bank
holding company or its then equivalent, or (2) consolidated Tier 1 capital of
AIB.
"Debenture Investment Company Event" means that Allfirst has requested and
received an opinion of nationally recognized independent legal counsel
experienced in these matters to the effect that as a result of the occurrence
on or after the date of this offering memorandum of a Change in Investment
Company Act Law, Allfirst Asset Trust is or will be considered an investment
company which is required to be registered under the Investment Company Act.
Indenture Events of Default
The indenture provides that any one or more of the following events with
respect to the junior subordinated debenture that has occurred and is
continuing constitutes an "Event of Default" with respect to the junior
subordinated debenture:
. failure for 30 days to pay any interest on the junior subordinated
debenture when due (subject to the deferral of any due date in the case
of a deferral period);
. failure to pay any principal on the junior subordinated debenture when
due whether at maturity, upon redemption, by declaration or otherwise;
. failure to observe or perform in any material respect any other covenant
contained in the indenture for 90 days after written notice to Allfirst
from the indenture trustee or the holders of at least 25% in aggregate
outstanding principal amount of the junior subordinated debenture; or
. certain events in bankruptcy, insolvency or reorganization of Allfirst.
Notwithstanding the foregoing, no default or Event of Default will exist if
the failure to pay interest or principal on the junior subordinated debenture
when due is the result of the failure of Allfirst to receive the prior approval
of the Federal Reserve Board and the Central Bank of Ireland to resume interest
payments after an interest deferral period or to repay the principal of the
junior subordinated debenture.
If an Event of Default, other than as a result of certain events in
bankruptcy, insolvency or reorganization of Allfirst, occurs and is continuing,
then there will be no right of acceleration of the payment of principal of the
junior subordinated debenture. In that event, the indenture trustee, subject to
certain limitations and conditions, may institute judicial proceedings to
enforce the payment of overdue principal or interest, or to obtain the
performance of any covenant or agreement, or to enforce any other proper
remedy. If an Event of Default as a result of certain events in bankruptcy,
insolvency or reorganization of Allfirst occurs and is continuing, then the
indenture trustee of the holders of not less than 25% in aggregate principal
amount of the junior subordinated debenture outstanding may, or the indenture
trustee if so directed by those holders will, declare the principal of the
junior subordinated debenture to be due and payable immediately. The holders of
a majority in aggregate outstanding principal amount of the junior subordinated
debenture may annul such declaration and waive the default if the default
(other than the non-payment of the principal of the junior subordinated
debenture which has become due solely by such acceleration) has been cured and
a sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the indenture trustee,
and should the holders of the junior subordinated debenture fail to annul such
declaration and waive such default, the holders of a majority in aggregate
liquidation amount of the outstanding SKATES (or, in the event the Asset
Preferred Securities are distributed to holders of the SKATES in connection
with a Capital Special Event, the Asset Preferred Securities) shall have the
right to do so.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debenture affected may, on behalf of all holders of the
junior subordinated debenture, waive any past default, except a default in the
payment of principal or interest (unless such default has been cured and a sum
sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with
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the indenture trustee) or a default in respect of a covenant or provision which
under the indenture cannot be modified or amended without the consent of each
holder of the outstanding junior subordinated debenture, and should the holders
of the junior subordinated debenture fail to waive such default, the holders of
a majority in aggregate liquidation amount of the SKATES (or, in the event the
Asset Preferred Securities are distributed to holders of the SKATES in
connection with a Capital Special Event, the Asset Preferred Securities) shall
have the right to do so.
If an Event of Default has occurred and is continuing, the Asset Property
Trustee will have the right to declare the principal of and the interest on the
junior subordinated debenture and any other amounts payable under the indenture
to be forthwith due and payable and to enforce Allfirst Asset Trust's other
rights as a creditor with respect to the junior subordinated debenture.
Allfirst is required to file annually with the indenture trustee a
certificate as to whether or not First Maryland is in compliance with all the
conditions and covenants applicable to it under the indenture.
Enforcement of Certain Rights by Holders of SKATES
For so long as Allfirst Capital Trust holds any Asset Preferred Securities,
if the Asset Property Trustee fails to enforce its rights on behalf of Allfirst
Asset Trust under the junior subordinated debenture after a holder of the
SKATES has made a written request, any holder may on behalf of Allfirst Asset
Trust directly institute a legal proceeding against Allfirst under the junior
subordinated debenture, without first instituting any legal proceeding against
the Capital Property Trustee, Allfirst Capital Trust, the Asset Property
Trustee or Allfirst Asset Trust. In any event, for so long as Allfirst Capital
Trust is the holder of any Asset Preferred Securities, if a Capital Enforcement
Event has occurred and is continuing and that event is attributable to failure
of Allfirst to make any required payment when due on the junior subordinated
debenture, then a holder of the SKATES may on behalf of Allfirst Asset Trust
directly institute a proceeding against Allfirst with respect to the junior
subordinated debenture for enforcement of payment.
Allfirst may not amend the indenture to remove the foregoing right of a
holder of the SKATES to bring a direct action against Allfirst for the
enforcement of payment without the prior written consent of the holders of all
of the outstanding SKATES. Notwithstanding any payment made to such holders of
the SKATES by Allfirst in connection with a direct action, Allfirst shall
remain obligated to pay the principal of or interest on the junior subordinated
debenture held by Allfirst Asset Trust and Allfirst shall be subrogated to the
rights of the holder of the SKATES with respect to payments on the SKATES to
the extent of any payments made by Allfirst to such holder in any direct
action. The holders of SKATES will not be able to exercise directly any other
remedy available to the holders of the junior subordinated debenture.
Consolidation, Merger, Sale of Assets and Other Transactions
The indenture provides that Allfirst shall not consolidate with or merge
into any other entity or convey, transfer or lease its properties and assets
substantially as an entirety to any other entity, unless:
. in the event Allfirst consolidates with or merges into another entity or
conveys, transfers or leases its properties and assets substantially to
another entity, the successor entity is organized under the laws of the
United States or any state or the District of Columbia, and the successor
entity expressly assumes Allfirst's obligations under the junior
subordinated debenture;
. immediately after giving effect to any consolidation, merger, conveyance,
transfer or lease, no Event of Default, and no event which, after notice
or lapse of time or both, would become an Event of Default, shall have
happened and be continuing;
. if at the time any SKATES (or, in event the Asset Preferred Securities
are distributed to holders of the SKATES in connection with a Capital
Special Event, Asset Preferred Securities) are outstanding, such
transaction is permitted under the Capital Declaration or Capital
Guarantee (or, in the event the Asset
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Preferred Securities are distributed to holders of the SKATES in
connection with a Capital Special Event, the Asset Declaration or Asset
Guarantee);
. any such lease shall provide that it will remain in effect so long as the
junior subordinated debenture is outstanding; and
. certain other conditions prescribed in the indenture are met.
Modification Of Indenture
From time to time, Allfirst and the indenture trustee may, without the
consent of the holders of the junior subordinated debenture, amend, waive or
supplement the indenture for specified purposes, including, among other things,
curing ambiguities, defects or inconsistencies, provided that any such action
does not materially adversely affect the interest of the holders of the junior
subordinated debenture. Allfirst and the indenture trustee may also modify the
indenture without consent of the holders of the junior subordinated debenture
for the purpose of qualifying, or maintaining the qualification of, the
indenture under the Trust Indenture Act.
The indenture also contains provisions permitting Allfirst and the indenture
trustee to modify the indenture in a manner affecting the rights of holders of
the junior subordinated debenture with the consent of the holders of not less
than a majority in principal amount of the outstanding junior subordinated
debenture; except that no modification may, without the consent of each holder
of the outstanding junior subordinated debenture so affected:
. change the stated maturity of, the principal amount of, or reduce the
rate or extend the time of payment of interest on the junior subordinated
debenture (except an extension pursuant to an existing interest deferral
right); or
. reduce the percentage of principal amount of the junior subordinated
debenture the holders of which are required to consent to any such
modification of the indenture.
However, so long as any SKATES (or if Asset Preferred Securities have been
distributed to holders of the SKATES in connection with a Capital Special
Event, Asset Preferred Securities) remain outstanding, no such modification may
be made that adversely affects the holders of the SKATES (or if Asset Preferred
Securities have been distributed to holders of the SKATES in connection with a
Capital Special Event, Asset Preferred Securities) in any material respect, and
no termination of the indenture may occur, and no waiver of any Event of
Default under the indenture or compliance with any covenant under the indenture
may be effective, without the prior consent of the holders of at least a
majority of the aggregate liquidation amount of the outstanding SKATES (or if
Asset Preferred Securities have been distributed to holders of the SKATES in
connection with a Capital Special Event, Asset Preferred Securities) unless and
until the principal of the junior subordinated debenture and all accrued and
unpaid interest (including all Additional Interest) have been paid in full and
certain other conditions are satisfied.
Defeasance And Discharge
The indenture provides that Allfirst, at its option:
. will be discharged from any and all obligations in respect of the junior
subordinated debenture, other than certain obligations to register the
transfer or exchange of the junior subordinated debenture, replace the
stolen, lost or mutilated junior subordinated debenture, maintain paying
agencies and hold moneys for payment in trust; or
. need not comply with certain restrictive covenants of the indenture,
if Allfirst deposits, in trust with the indenture trustee, cash or U.S.
Government obligations which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, in an
amount sufficient to pay all the principal of, and interest and premium, if
any, on the junior subordinated
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debenture on the dates payments on the junior subordinated debenture are due in
accordance with the terms of such junior subordinated debenture.
To exercise this option, Allfirst is required to deliver to the indenture
trustee an opinion of nationally recognized independent tax counsel to the
effect that the deposit and related defeasance would not cause Allfirst Asset
Trust, as holder of the junior subordinated debenture to recognize income, gain
or loss for United States Federal income tax purposes and, in the case of a
discharge pursuant to the first bullet point above, that opinion shall be
accompanied by a private letter ruling received by Allfirst from the United
States Internal Revenue Service or revenue ruling pertaining to a comparable
form of transaction to such effect published by the United States Internal
Revenue Service.
Payment and Paying Agents
Allfirst initially will act as paying agent with respect to the junior
subordinated debenture. Allfirst may at any time designate additional paying
agents or rescind the designation of any paying agent or approve a change in
the office through which any paying agent acts, except that Allfirst will be
required to maintain a paying agent at the place of payment.
All moneys deposited with the indenture trustee or any paying agent, or then
held by Allfirst in trust, for the payment of the principal of and premium, if
any, or interest that has become due and payable on the junior subordinated
debenture will, at the request of Allfirst, be repaid to Allfirst and the
holders of the junior subordinated debenture shall thereafter look as a general
unsecured creditor, only to Allfirst for payment.
Status of Old Junior Subordinated Debenture
If not all of the old SKATES are exchanged for new SKATES, and thus not all
of the old Asset Preferred Securities are exchanged for new Asset Trust
Preferred Securities, then a like principal amount of the old junior
subordinated debenture:
. will not be exchanged for a new junior subordinated debenture;
. will continue to be outstanding and to bear a restrictive legend; and
. will not provide for any penalty increase in the interest rate or for any
registration rights.
The Indenture Trustee
The Bank of New York, as indenture trustee, has and is subject to all the
duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to those provisions, the indenture
trustee is under no obligation to exercise any of the powers vested in it by
the indenture at the request of any holder of the junior subordinated
debenture, unless offered indemnity reasonably satisfactory to it by that
holder against the costs, expenses and liabilities which might be incurred by
exercising those powers. The indenture trustee is not required to expend or
risk its own funds or otherwise incur personal financial liability in the
performance of its duties.
Governing Law
The indenture and the junior subordinated debenture are governed by and will
be construed in accordance with the laws of the State of New York.
Other Permitted Investments
In accordance with the investment directions set forth in the Asset
Declaration, the Asset Property Trustee, on behalf of Allfirst Asset Trust,
invested approximately 5% of the initial sale proceeds of the Asset Securities
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and the income of Allfirst Asset Trust retained in accordance with the
distribution guidelines described under "Allfirst Preferred Asset Trust--
Distributions to Holder of Common Securities," in eligible debt securities.
These eligible debt securities comprises cash or book-entry securities,
negotiable instruments, or other securities of entities not affiliated with
Allfirst which evidence any of the following:
. any security issued or guaranteed as to principal or interest by the
United States, or by a person controlled or supervised by and acting as
an instrumentality of the Government of the United States pursuant to
authority granted by the Congress of the United States, or any
certificate of deposit for any of the foregoing; and
. demand deposits, time deposits and certificates of deposit of an Eligible
Institution (as defined below) which are fully insured by the Federal
Deposit Insurance Corporation, in no case having a maturity greater than
nine months.
"Eligible Institution" means, a depository institution organized under the
laws of the United States or any one of the states thereof or the District of
Columbia, or any domestic branch of a foreign bank, which has either:
. a long-term unsecured debt rating of AA or better by S&P and Aa or better
by Moody's Investors Service, Inc. ("Moody's"); or
. a short-term unsecured debt rating or a certificate of deposit rating of
A-1+ or better by S&P and P-1 or better by Moody's;
and whose deposits are insured by the FDIC or whose parent has a long-term or
short-term unsecured debt rating which signifies investment grade and whose
deposits are insured by the FDIC.
To the extent not distributed to the holder of Allfirst Asset Trust's common
securities, the Asset Property Trustee, on behalf of Allfirst Asset Trust will,
from time to time and subject to the restrictions described in this prospectus
and in the Asset Declaration, reinvest payments received with respect to (1)
earnings received on the eligible debt securities and (2) deferred interest on
the junior subordinated debenture in additional eligible debt securities in
accordance with the investment directions set forth in the Asset Declaration.
Income with respect to these assets will not be available to make payments to
holders of the SKATES (or, in the event the Asset Preferred Securities are
distributed to holders of the SKATES in connection with a Capital Special
Event, Asset Preferred Securities) except upon liquidation of Asset Trust.
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UNITED STATES FEDERAL INCOME TAXATION
General
The SKATES and payments on the SKATES generally are subject to taxation. The
following discussion is equally applicable to old and new SKATES.
We have engaged Arnold & Porter as special tax counsel ("Tax Counsel") to
review the following discussion. Tax Counsel has given us its written legal
opinion that the discussion correctly describes in all material respects the
principal aspects of the U.S. Federal tax treatment of beneficial owners of
SKATES. Unless otherwise stated, this summary deals only with SKATES held as
capital assets by United States Persons who purchase the SKATES upon original
issuance. As used in this prospectus, a "United States Person" means a person
that is a:
. citizen or resident of the United States;
. a corporation or a partnership (including an entity treated as a
corporation or partnership for United States Federal income tax purposes)
created or organized in or under the laws of the United States, any state
thereof or the District of Columbia (unless, in the case of a
partnership, Treasury regulations are adopted that provide otherwise);
. an estate whose income is subject to United States Federal income tax
regardless of its source; or
. a trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States Persons have the authority to control all substantial decisions of
the trust.
Notwithstanding the last bullet point above, to the extent provided in
Treasury regulations, certain trusts in existence on August 20, 1996, and
treated as United States Persons prior to such date, that elect to continue to
be treated as United States Persons, will also be United States Persons.
This summary does not address all the tax consequences that may be relevant
to holders who may be subject to special tax treatment, such as banks, real
estate investment trusts, regulated investment companies, insurance companies,
dealers in securities or currencies, tax-exempt investors, and foreign
investors. This summary does not include any description of any alternative
minimum tax consequences or the tax laws of any state or local government or of
any foreign government that may be applicable to the SKATES. This summary is
based on the Code, the Treasury regulations promulgated under the Code and
administrative and judicial interpretations of the Code, as of the date of this
offering memorandum, all of which are subject to change, possibly on a
retroactive basis.
Tax Counsel has advised us that there is no authority directly on point
dealing with securities similar to the SKATES or transactions of the type
described in this prospectus (other than the exchange offer) and that the
opinions of Tax Counsel are not binding on the IRS or the courts, either of
which could take a contrary position. No rulings have been or will be sought
from the IRS. Accordingly, there can be no assurance that the IRS will not
challenge the opinions expressed in this tax discussion or that a court would
not sustain a challenge to these opinions.
You should consult with your own tax advisors regarding the tax consequences
of purchasing, owning and disposing of the SKATES, including the tax
consequences under state, local, foreign, and other tax laws and the possible
effects of changes in United States Federal or other tax laws. For a discussion
of the possible redemption of the SKATES or redemption of the Asset Preferred
Securities upon the occurrence of certain tax events see "Description of the
New SKATES--Capital Special Event Redemption or Distribution" and "Description
of Investments--Junior Subordinated Debenture--Debenture Special Event
Redemption," respectively.
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Exchange Offer
The exchange of the old junior subordinated debenture for the new junior
subordinated debenture will not be treated as an "exchange" for United States
federal income tax purposes since the new junior subordinated debenture does
not differ materially in kind or extent from the old junior subordinated
debenture. Rather, the new junior subordinated debenture should be treated as a
continuation of the old junior subordinated debenture in the hands of the
trustee. As a result, there will be no United States federal income tax
consequences to a holder exchanging old SKATES for new SKATES in the exchange
offer. The new SKATES will be treated as having the same issue date and issue
price as the old SKATES for United States federal income tax purposes.
Classification of Allfirst Capital Trust
Tax Counsel has given us their opinion that, under current law, and based on
certain representations made by Allfirst Capital Trust and Allfirst, as well as
certain facts and assumptions with respect to the transaction described in this
offering memorandum, Allfirst Capital Trust will be classified for United
States Federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States Federal income tax
purposes, each holder of the SKATES will be considered the owner of an
undivided interest in the Asset Preferred Securities held by Allfirst Capital
Trust. As a result of this treatment, each holder of the SKATES will be
required to include in its gross income its distributive share of income
attributable to Allfirst Asset Trust. This amount generally will be equal to a
holder's allocable share of amounts paid on the Asset Preferred Securities. No
amount included in income with respect to the SKATES will be eligible for the
corporate dividends-received deduction.
Classification of Allfirst Asset Trust
Tax Counsel has given us their opinion that, under current law, and based on
certain representations made by the Allfirst Asset Trust and Allfirst, as well
as certain facts and assumptions with respect to the transaction described in
this offering memorandum, Allfirst Asset Trust will be classified for United
States Federal income tax purposes as a partnership and not as an association
or publicly traded partnership taxable as a corporation.
Tax Counsel's opinion is based on certain factual assumptions relating to
the organization and operation of Allfirst Asset Trust and is conditioned upon
certain representations made by Allfirst and Allfirst Asset Trust as to factual
matters, including the organization and the operation of Allfirst Asset Trust
and the type and frequency of investments made by Allfirst Asset Trust.
Allfirst Asset Trust and Allfirst have represented that they intend to
operate Allfirst Asset Trust in a manner that will enable Allfirst Asset Trust
to be classified as a partnership as long as any Asset Preferred Securities
remain outstanding. In particular, under the Asset Declaration, the Asset
Administrators and Asset Trustees cannot take any action that would cause
Allfirst Asset Trust to be a "publicly traded partnership" taxable as a
corporation. Accordingly, we expect that Allfirst Asset Trust will continue to
qualify as a partnership and, therefore, will not constitute a publicly traded
partnership taxable as a corporation for all taxable years in which any Asset
Preferred Securities remain outstanding.
Classification of the Junior Subordinated Debenture
Allfirst Asset Trust, Allfirst and the holders of SKATES (by acceptance of a
beneficial interest in a SKATES) have agreed to treat the junior subordinated
debenture as indebtedness of Allfirst for all United States tax purposes. Based
on certain representations made by Allfirst Asset Trust and Allfirst and
certain other facts and assumptions referred to in its opinion, Tax Counsel has
given us its opinion that, although there are no authorities addressing the
proper treatment of instruments substantially similar to the SKATES and the
junior subordinated debenture, the junior subordinated debenture should be
treated as indebtedness of Allfirst for United States Federal income tax
purposes.
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Income and Deductions
Because Allfirst Capital Trust will be classified as a grantor trust for
United States Federal income tax purposes, holders of SKATES will be considered
to own an undivided interest in the Asset Preferred Securities held by Allfirst
Capital Trust. As a result of this treatment, you will be required to take into
income your proportionate share of income attributable to Allfirst Asset Trust.
Your distributive share of income attributable to Allfirst Asset Trust
generally will be equal to the amount of the cash distributions that accumulate
with respect to the SKATES. Actual cash distributions on the SKATES will not,
however, be separately reported as taxable income to the holders at the time
they are received.
The nature and timing of the income that is allocated to holders of the
SKATES will depend on the United States Federal income tax characterization of
the income earned on the investments held by Allfirst Asset Trust during the
relevant period.
Receipt of Asset Preferred Securities Upon Liquidation of Allfirst Capital
Trust
Under certain circumstances, as described under the caption "Description of
the New SKATES--Capital Special Event Redemption or Distribution," Asset
Preferred Securities may be distributed to holders of the SKATES in exchange
for their SKATES and in liquidation of Allfirst Capital Trust. Unless the
liquidation of Allfirst Capital Trust occurs as a result of Allfirst Capital
Trust being treated as an association taxable as a corporation or otherwise
being subject to United States Federal income tax with respect to income
accrued or received on the Asset Preferred Securities, a distribution to
holders under these circumstances would, for United States Federal income tax
purposes, be treated as a nontaxable event. You would receive a tax basis in
the Asset Preferred Securities equal to your tax basis in your SKATES with a
holding period in the Asset Preferred Securities so received in liquidation of
Allfirst Capital Trust that would include the period during which the SKATES
were held. If, however, the liquidation of Allfirst Capital Trust were to occur
because Allfirst Capital Trust is subject to United States Federal income tax
with respect to income accrued or received on the Asset Preferred Securities,
the distribution of Asset Preferred Securities to you by Allfirst Capital Trust
would likely be a taxable event to you, and you would recognize gain or loss as
if you had exchanged your SKATES for the Asset Preferred Securities you
received upon the liquidation of Allfirst Capital Trust. Gain or loss you
recognize on the exchange would be equal to the difference between your tax
basis in your SKATES surrendered in the exchange and the aggregate fair market
value of the Asset Preferred Securities you receive in the exchange.
Redemption of SKATES for Cash
Under certain circumstances, as described under the caption "Description of
the New SKATES--Mandatory Redemption Description of the SKATES--Capital Special
Event Redemption or Distribution" and "Description of Investments--Junior
Subordinated Debenture--Debenture Special Event Redemption," Allfirst Asset
Trust may redeem the Asset Preferred Securities for cash, in which event
Allfirst Capital Trust shall simultaneously apply the cash received to redeem
the SKATES. Under current law, this redemption of the SKATES would constitute,
for United States Federal income tax purposes, a taxable disposition and you
would recognize gain or loss as if you sold your proportionate interest in the
redeemed Asset Preferred Securities for an amount of cash equal to the proceeds
received upon redemption. See "--Disposition of SKATES."
Disposition of SKATES
If you sell SKATES, you will recognize gain or loss equal to the difference
between the amount realized on the sale of the SKATES and your adjusted tax
basis in the SKATES sold. Gain or loss to the seller generally will be a
capital gain or loss and will be a long-term capital gain or loss if you have
held the SKATES for more than one year at the time of the sale.
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Your tax basis in your SKATES generally will equal:
. the amount you paid for your SKATES;
. increased by the amount includible in your income with respect to your
SKATES; and
. reduced by the amount of cash or other property distributed to you with
respect to your SKATES.
If you acquire SKATES at different prices you may be required to maintain a
single aggregate adjusted tax basis in all of your SKATES and, upon sale or
other disposition of some of your SKATES, to allocate a pro rata portion of
such aggregate tax basis to the SKATES sold, rather than maintaining a separate
tax basis in each SKATES for purposes of computing gain or loss on a sale of
those SKATES.
Partnership Provisions
Section 754. Allfirst Asset Trust does not presently intend to make an
election under Code Section 754. Accordingly, a purchaser of SKATES who does
not purchase the SKATES at initial issuance will not be permitted to adjust the
tax basis in his allocable share of Allfirst Asset Trust's assets so as to
reflect any difference between his purchase price for the SKATES and his share
of Allfirst Asset Trust's underlying tax basis in its assets. As a result, you
may be required to report a larger or smaller amount of income from holding the
SKATES than would otherwise be appropriate based on your purchase price for the
SKATES.
Section 708. Under Section 708 of the Code, Allfirst Asset trust will be
deemed to terminate for United States Federal income tax purposes if 50% or
more of the capital and profits interests in Allfirst Capital Trust are sold or
exchanged within a 12-month period. If a deemed termination under Section 708
were to occur, Allfirst Asset Trust would be considered to have contributed its
assets to a new "partnership" in return for "partnership interests" therein and
then to have distributed those new partnership interests to the holders of
Asset Securities in liquidation of Allfirst Asset Trust.
Section 701. The Department of Treasury has promulgated regulations under
Section 701 of the Code that generally permit it to recast a transaction or
disregard a partnership if a partnership is formed or availed of in connection
with a transaction a principal purpose of which is to reduce substantially the
present value of the partners' aggregate federal tax liability in a manner that
is inconsistent with the intent of the partnership provisions of the Code. The
regulations also permit the Department of the Treasury to treat a partnership
as an aggregate of its partners where appropriate to carry out the purpose of
any provision of the Code or the Treasury regulations thereunder. Allfirst
Asset Trust has been formed for, and will engage in, activities typical for
partnerships. Although there is no precedent that applies to the transactions
contemplated herein, Tax Counsel believes that Allfirst Asset Trust is not of
the type intended to fall within the scope of these regulations.
Non-United States Persons
The following discussion applies to you if you are not a United States
Person as described above.
Payments to you, as a non-United States Person, on a SKATES generally will
not be subject to withholding of income tax, provided that:
. you did not (directly or indirectly, actually or constructively) own 10%
or more of the total combined voting power of all classes of our stock
entitled to vote;
. you are not a controlled foreign entity that is related to us through
stock ownership; and
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. either (a) you certify under penalties of perjury, that you are not a
United States Person and provide your name and address, or (b) a
securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business, and holds the capital security in such capacity, certify, under
penalties of perjury, that it requires and has received such a statement
from you or another financial institution between it and you in the chain
of ownership, and furnishes a copy thereof.
It is possible that changes in the law affecting the United States Federal
income tax consequences of the junior subordinated debenture could adversely
affect our ability to deduct interest payable on the junior subordinated
debenture. Such changes could also cause the junior subordinated debenture to
be classified as our equity (rather than our debt) for United States federal
income tax purposes. This might cause the income on the SKATES to be
characterized as dividends, generally subject to a 30% income tax (on a
withholding basis) when paid to you if you are a non-United States Person,
rather than as interest which, as discussed above generally is exempt from
income tax in the hands of a person who is a non-United States Person.
You, as a non-United States Person, will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a SKATES.
If you hold the SKATES in connection with the active conduct of a United
States trade or business, you will be subject to United States Federal income
tax on all income and gains recognized with respect to your proportionate share
of the SKATES.
Information Reporting and Backup Withholding
Income on the SKATES will be reported to holders on an IRS Form 1099, which
form should be mailed to holders of SKATES by January 31 following each
calendar year. Payments made on and proceeds from the sale of SKATES may be
subject to a "back-up" withholding tax of 31% unless the holder is an exempt
recipient (generally corporations and certain other entities) or complies with
certain identification requirements (such as supplying their taxpayer
identification number). Any withheld amount generally will be allowed as a
credit against the holder's United States Federal income tax, provided the
required information is timely filed with the IRS.
New Withholding Regulations
In October 1997, the IRS issued final regulations relating to withholding,
backup withholding and information reporting with respect to payments made to
non-U.S. Persons. The regulations generally are effective for payments made
after December 31, 2000. When effective, the new regulations will streamline
and, in some cases, alter the types of statements and information that must be
furnished to claim a reduced rate of withholding. The regulations also clarify
the duties of payors and modify the rules concerning withholding on payments
made to non-United States Persons through foreign intermediaries. With some
exceptions, the new regulations treat a payment to a foreign partnership as a
payment directly to the partner.
CERTAIN ERISA CONSIDERATIONS
Each fiduciary of a pension, profit-sharing or other employee benefit plan
subject to the Employee Retirement Income Security Act of 1974, as amended or
ERISA (a "Plan"), should consider the fiduciary standards and other
requirements of ERISA in the context of the Plan's particular circumstances
before authorizing an investment in the SKATES, both old and new. Accordingly,
among other factors, the fiduciary should consider whether the investment would
satisfy the prudence and diversification requirements of ERISA and would be
permissible under the documents and instruments governing the Plan and ERISA's
prohibited transactions rules.
74
<PAGE>
Section 406 of ERISA and Section 4975 of the Code prohibit Plans, as well as
individual retirement accounts and Keogh plans subject to Section 4975 of the
Code (also "Plans"), from engaging in certain transactions involving "plan
assets" with persons who are "parties in interest" under ERISA or "disqualified
persons" under the Code ("Parties in Interest") with respect to such Plans. A
violation of these "prohibited transaction" rules may result in an excise tax
or other liabilities under ERISA and/or Section 4975 of the Code for such
persons, unless exemptive relief is available under an applicable statutory or
administrative exemption. Employee benefit plans that are governmental plans
(as defined in Section 3(32) of ERISA), certain church plans (as defined in
Section 3(33) of ERISA) and foreign plans (as described in Section 4(b)(5) of
ERISA) are not subject to the requirements of ERISA or Section 4975 of the
Code.
Under a regulation (the "Plan Assets Regulation") issued by the U.S.
Department of Labor (the "DOL"), the assets of Allfirst Capital Trust would be
deemed to be "plan assets" of a Plan for purposes of ERISA and Section 4975 of
the Code if "plan assets" of the Plan were used to acquire an equity interest
in Allfirst Capital Trust and no exception were applicable under the Plan
Assets Regulation. An "equity interest" is defined under the Plan Assets
Regulation as any interest in an entity other than an instrument which is
treated as indebtedness under the applicable local law and which has no
substantial equity features and specifically includes a beneficial interest in
a trust.
Pursuant to an exception contained in the Plan Assets Regulation, the assets
of Allfirst Capital Trust would not be deemed to be "plan assets" of investing
Plans if, immediately after the most recent acquisition of any equity interest
in Allfirst Capital Trust, less than 25% of the value of each class of equity
interests in Allfirst Capital Trust were held by Plans, other employee benefit
plans not subject to ERISA or Section 4975 of the Code (such as governmental,
church and foreign plans), and entities holding assets deemed to be "plan
assets" of any Plan (collectively, "Benefit Plan Investors"). No assurance can
be given that the value of the SKATES held by Benefit Plan Investors was or
will be less than 25% of the total value of the SKATES at the completion of the
initial offering or thereafter, and no monitoring or other measures have been
or will be taken with respect to the satisfaction of the conditions to this
exception. All of the common securities of Allfirst Capital Trust have been
purchased and are held by Allfirst.
Certain transactions involving Allfirst Capital Trust and Allfirst Asset
Trust could be deemed to constitute direct or indirect prohibited transactions
under ERISA and Section 4975 of the Code with respect to a Plan if the SKATES
were acquired with "plan assets" of such Plan and assets of Allfirst Capital
Trust and Allfirst Asset Trust were deemed to be "plan assets" of Plans
investing in SKATES. For example, if Allfirst is a Party in Interest with
respect to an investing Plan (either directly or by reason of its ownership of
Allfirst or other subsidiaries, including Allfirst Asset Trust), extensions of
credit between First Maryland and Allfirst Asset Trust (as represented by the
junior subordinated debenture and the guarantees) would likely be prohibited by
Section 406(a)(1)(B) of ERISA and Section 4975(c)(1)(B) of the Code, unless
exemptive relief were available under an applicable administrative exemption
(see below).
The DOL has issued five prohibited transaction class exemptions ("PTCEs")
that may provide exemptive relief for direct or indirect prohibited
transactions resulting from the purchase or holding of the SKATES, assuming
that assets of Allfirst Capital Trust were deemed to be "plan assets" of Plans
investing in the Allfirst Capital Trust (see above). Those class exemptions are
PTCE 96-23 (for certain transactions determined by in-house asset managers),
PTCE 95-60 (for certain transactions involving insurance company general
accounts), PTCE 91-38 (for certain transactions involving bank collective
investment funds), PTCE 90-1 (for certain transactions involving insurance
company pooled separate accounts), and PTCE 84-14 (for certain transactions
determined by independent qualified professional asset managers).
Because the SKATES may be deemed to be equity interests in Allfirst Capital
Trust or Allfirst Asset Trust for purposes of applying ERISA and Section 4975
of the Code, the SKATES may not be purchased or held by any Plan, any entity
whose underlying assets include "plan assets" by reason of any Plan's
investment in the entity (a "Plan Asset Entity") or any person investing "plan
assets" of any Plan, unless such purchaser or holder is eligible for the
exemptive relief available under PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or
another
75
<PAGE>
applicable exemption. If a purchaser or holder of SKATES that is a Plan or a
Plan Asset Entity elects to rely on an exemption other than PTCE 96-23, 95-60,
91-38, 90-1 or 84-14, Allfirst and the Capital Property Trustee may require a
satisfactory opinion of counsel or other evidence with respect to the
availability of such exemption for such purchase and holding. Any purchaser or
holder of the SKATES or any interest therein that is a Plan or a Plan Asset
Entity or that is purchasing such securities on behalf of or with "plan assets"
of any Plan will be deemed to have represented by its purchase and holding
thereof that: (a) the purchase and holding of the SKATES is covered by the
exemptive relief provided by PTCE 96-23, 95-60, 91-38, 90-1 or 84-14 or another
applicable exemption; (b) Allfirst, the Capital Administrators and the Asset
Administrators are not "fiduciaries," within the meaning of Section 3(21) of
ERISA and the regulations thereunder, with respect to such person's interest in
the Allfirst Capital Trust, the Allfirst Asset Trust or the junior subordinated
debenture; and (c) in purchasing the SKATES, such person approves the purchase
of the Asset Preferred Securities and the junior subordinated debenture and the
appointment of the property trustees and the Delaware trustees.
Due to the complexity of these rules and the penalties that may be imposed
upon persons involved in non-exempt prohibited transactions, it is particularly
important that fiduciaries or other persons considering purchasing SKATES on
behalf of or with "plan assets" of any Plan consult with their counsel
regarding the potential consequences if the assets of Allfirst Capital Trust
were deemed to be "plan assets" and the availability of exemptive relief under
PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
Governmental plans and certain church plans (as defined in ERISA) are not
subject to ERISA or the prohibited transaction provisions under Section 4975 of
the Code. However, state laws or regulations governing the investment and
management of the assets of such plans may contain fiduciary and prohibited
transaction requirements similar to those under ERISA and the Code discussed
above.
The discussion herein of ERISA is general in nature and is not intended to
be all inclusive. Any fiduciary of a Plan, governmental plan or church plan
owning SKATES should consult with its legal advisors regarding the consequences
of such an investment.
76
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives new SKATES for its own account in the
exchange offer must acknowledge that it will deliver a prospectus in connection
with any resale of its new SKATES.
A Participating Broker-Dealer may use this prospectus, as it may be amended
or supplemented from time to time, in connection with resales of new SKATES
received in the exchange offer:
. for a period ending 90 days after the expiration date of the exchange
offer (subject to any extension); or
. if earlier, when all such new SKATES have been disposed of by the
Participating Broker-Dealer,
but only if the Participating Broker-Dealer acquired old SKATES for its own
account as a result of market-making activities or other trading activities.
Neither Allfirst nor Allfirst Capital Trust will receive any cash proceeds
from the issuance of the new SKATES offered hereby. New SKATES received by
broker-dealers for their own accounts in connection with the exchange offer may
be sold from time to time in one or more transactions in the over-the-counter
market, in negotiated transactions, through the writing of options on the new
SKATES or a combination of such methods of resale, at market prices prevailing
at the time of resale, at prices related to such prevailing market prices or at
negotiated prices. Any such resale may be made directly to purchasers or to or
through brokers or dealers who may receive compensation in the form of
commissions or concessions from any such broker-dealer and/or the purchasers of
any such new SKATES. Any broker-dealer that resells new SKATES that were
received by it for its own account in the exchange offer and any broker or
dealer that participates in a distribution of new SKATES may be deemed to be an
"underwriter" within the meaning of the 1933 Act, and any profit on any resale
of new SKATES and any commissions or concessions received by any such persons
may be deemed to be underwriting compensation under the 1933 Act. The letter of
transmittal states that by acknowledging that it will deliver and by delivering
a prospectus, a broker-dealer will not be deemed to admit that it is an
"underwriter" within the meaning of the 1933 Act.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, information statements and other information with the SEC.
Our SEC filings are available over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document we file by visiting
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information about the public reference rooms.
This prospectus summarizes material provisions of contracts and other
documents that we refer you to. Because the prospectus may not contain all the
information that you may find important, you should review the full text of
these documents. You may obtain copies of these documents, at no cost, by
contacting us at the following address: Allfirst Financial Inc., 25 South
Charles Street, Baltimore, Maryland 21201, Attention: Investor Relations.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
We incorporate by reference in this prospectus information we file with the
SEC, which means:
. incorporated documents are considered part of the prospectus;
. we can disclose important information to you by referring you to those
documents; and
. information that we file with the SEC will automatically update and
supersede this incorporated information.
77
<PAGE>
We incorporate by reference the documents listed below which were filed with
the SEC under the 1934 Act:
. annual report on Form 10-K for the year ended December 31, 1998;
. quarterly reports on Form 10-Q for the quarters ended March 31, and June
30, 1999; and
. current reports on Form 8-K dated May 25, 1999 and September 15, 1999.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospecuts until this placement
is completed:
. reports filed under Sections 13(a) and (c) of the 1934 Act;
. definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting; and
. any reports filed under Section 15(d) of the 1934 Act.
You should rely only on information contained or incorporated by reference
in this prospectus. We have not authorized any other person to provide you with
different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We are not making an offer to sell
these securities in any jurisdiction where the offer or sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition, results of operations and prospects may have changed since that
date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Allfirst
Financial Inc., 25 South Charles Street, Baltimore, Maryland 21201, Attention:
Investor Relations. Our telephone number is (410) 244-4000.
LEGAL MATTERS
Certain matters of Delaware law relating to the validity of the new SKATES
and the Asset Preferred Securities are being passed upon by Morris, Nichols,
Arsht & Tunnell, special Delaware counsel to Allfirst Capital Trust, Allfirst
Asset Trust and Allfirst. The legality under state law of the guarantees and
the junior subordinated debenture will be passed upon on behalf of Allfirst
Capital Trust, Allfirst Asset Trust and Allfirst by Gregory K. Thoreson, Senior
Vice President and General Counsel of Allfirst.
EXPERTS
The financial statements incorporated in this Registration Statement by
reference to the Annual Report on Form 10-K of Allfirst Financial Inc.
(successor to First Maryland Bancorp) for the year ended December 31, 1998 have
been so incorporated in reliance on the report of PricewaterhouseCoopers LLP,
independent accountants, given on the authority of said firm as experts in
accounting and auditing.
The financial statements of the trusts as of July 13, 1999 included in this
prospectus have been audited by PricewaterhouseCoopers LLP, independent
accountants, as stated in their report included herein.
78
<PAGE>
INDEX TO FINANCIAL STATEMENTS OF THE TRUSTS
<TABLE>
<S> <C>
ALLFIRST PREFERRED CAPITAL TRUST
Report of Independent Accountants......................................... F-1
Balance Sheet............................................................. F-2
Notes to Balance Sheet.................................................... F-3
ALLFIRST PREFERRED ASSET TRUST
Report of Independent Accountants......................................... F-5
Balance Sheet............................................................. F-6
Notes to Balance Sheet.................................................... F-7
</TABLE>
79
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Allfirst Preferred Capital Trust
In our opinion, the accompanying balance sheet presents fairly, in all
material respects, the financial position of Allfirst Preferred Capital Trust
(the "Trust") at July 13, 1999, in conformity with generally accepted
accounting principles. This financial statement is the responsibility of the
Trust's management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of this
financial statement in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statement is free from material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statement, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
September 24, 1999
F-1
<PAGE>
ALLFIRST PREFERRED CAPITAL TRUST
BALANCE SHEET
JULY 13, 1999
<TABLE>
<S> <C>
ASSETS
Investment in Asset Preferred Securities--Allfirst Asset Trust.... $101,962,070
------------
Total Assets.................................................... $101,962,070
============
STOCKHOLDERS' EQUITY
Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities; (aggregate liquidation amount $100,000,000).......... $ 98,903,000
Trust Common Securities (aggregate liquidation amount
$3,059,070)...................................................... 3,059,070
------------
Total Stockholders' Equity...................................... $101,962,070
============
</TABLE>
See Notes to Balance Sheet
F-2
<PAGE>
NOTES TO BALANCE SHEET OF ALLFIRST PREFERRED CAPITAL TRUST
1. ORGANIZATION AND PURPOSE
Allfirst Preferred Capital Trust ("Allfirst Capital Trust") is a statutory
business trust formed on June 29, 1999 under the laws of the State of Delaware
for exclusive purposes of (i) issuing Floating Rate Non-Cumulative Subordinated
Capital Trust Enhanced Securities ("SKATES") and common securities,
(ii) purchasing Asset Preferred Securities issued by Allfirst Asset Trust and
(iii) engaging in only those other activities necessary or incidental thereto.
Allfirst Financial Inc. (the "Company") has paid compensation of $1.5
million to the initial purchaser of the SKATES. The Company has also agreed to
pay all fees and expenses related to the organization and operations of
Allfirst Capital Trust, including any taxes, duties, assessments or
governmental charges of whatever nature imposed by the United States or any
other domestic taxing authority upon Allfirst Capital Trust, other than
withholding taxes. The Company will also be responsible for all debts and
obligations of Allfirst Capital Trust, other than those obligations with
respect to the SKATES. The Company has agreed to indemnify the trustees and
certain other persons.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements are presented in accordance with United States
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet. Actual results could differ
significantly from those estimates.
Investment
The investment in Asset Preferred Securities represents an undivided
beneficial ownership interest in the assets of Allfirst Preferred Asset Trust
("Allfirst Asset Trust") and is classified as held to maturity and, therefore,
is recorded at cost. Income on the Asset Preferred Securities is accrued when
earned.
Income Taxes
Allfirst Capital Trust is treated as a grantor trust for U.S. federal income
tax purposes and, therefore, no provision for income taxes has been made.
3. INVESTMENT IN ASSET PREFERRED SECURITIES
Allfirst Capital Trust holds 103,093 Asset Preferred Securities with a
stated liquidation amount of $1,000 per Asset Preferred Security. The
distribution rate on each Asset Preferred Security is a rate per annum of
three-month LIBOR plus 1.50% of the stated liquidation amount of $1,000 per
Asset Preferred Security, reset quarterly. Distributions will be paid if, as
and when Allfirst Asset Trust has funds available for distribution from
corresponding interest payments on a junior subordinated debenture from the
Company. Distributions on the Asset Preferred Securities are non-cumulative,
and will be payable quarterly on January 15, April 15, July 15, and October 15
of each year commencing October 15, 1999, if, as and when funds are available
for payment. The initial distribution rate on the Asset Preferred Securities is
6.81% per year.
The distributions on the Asset Preferred Securities are non-cumulative. The
distribution calculation and payment provisions for the Asset Preferred
Securities correspond to the distribution calculation and payment provisions
for the SKATES.
Allfirst Asset Trust will redeem the Asset Preferred Securities if the
junior subordinated debenture of the Company held by the Allfirst Asset Trust
is redeemed. The Company may redeem the junior subordinated
F-3
<PAGE>
NOTES TO BALANCE SHEET OF ALLFIRST PREFERRED CAPITAL TRUST--(Continued)
debenture, in whole or in part, at any time on or after July 15, 2009 with the
prior consent of the Federal Reserve Board and the Central Bank of Ireland.
Allfirst Asset Trust will redeem the Asset Preferred Securities at an amount
equal to $1,000 plus accrued and unpaid distributions for the current
quarterly period from the last distribution date. An equal amount of the
SKATES will be redeemed upon any redemption of the Asset Preferred Securities
at the redemption price.
The Company has guaranteed, on a subordinated basis, the payment of
distributions by Allfirst Asset Trust if, as and when declared out of funds
legally available and payments upon liquidation of Allfirst Asset Trust or the
redemption of the Asset Preferred Securities to the extent of funds legally
available.
4. SUBORDINATED CAPITAL TRUST ENHANCED SECURITIES ("SKATES")
Allfirst Capital Trust issued 100,000 of its Floating Rate Non-Cumulative
Subordinated Capital Trust Enhanced Securities, Series A, $1,000 liquidation
preference per security ("SKATES"), on July 13, 1999 for an aggregate purchase
price of $98,903,000. The SKATES are redeemable if the Asset Preferred
Securities of Allfirst Asset Trust are redeemed. Allfirst Asset Trust will
redeem the Asset Preferred Securities if the junior subordinated debenture of
the Company held by the Allfirst Asset Trust is redeemed. The Company may
redeem the junior subordinated debenture, in whole or in part, at any time on
or after July 15, 2009 with the prior consent of the Federal Reserve Board and
the Central Bank of Ireland. Allfirst Asset Trust will redeem the Asset
Preferred Securities at an amount equal to $1,000 plus accrued and unpaid
distributions for the current quarterly period from the last distribution
date. An equal amount of the SKATES will be redeemed upon any redemption of
the Asset Preferred Securities at an amount per SKATE equal to $1,000 plus
accrued and unpaid distributions from the last distribution payment date.
Distributions on the SKATES are non-cumulative. The distribution rate on
the SKATES is a rate per annum of three month LIBOR plus 1.50% of the stated
liquidation amount of $1,000 per SKATES, reset quarterly. The distributions
will be paid if, as and when Allfirst Capital Trust has funds available for
distribution. Distributions on the SKATES will be payable quarterly on each
January 15, April 15, July 15 and October 15, commencing October 15, 1999 if,
as and when funds are available for payment. The initial distribution rate is
6.81% per year.
The Company has guaranteed, on a subordinated basis, the payment in full of
all distributions and other payments on the SKATES to the extent that the
Allfirst Capital Trust has funds legally available. This guarantee is
subordinated to all other liabilities of the Company. Under certain
circumstances, the SKATES have preferential rights to payment relative to the
Trust Common Securities.
5. TRUST COMMON SECURITIES
The Company owns 100% of the common securities of Allfirst Capital Trust.
F-4
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Trustees of Allfirst Preferred Asset Trust
In our opinion, the accompanying balance sheet presents fairly, in all
material respects, the financial position of Allfirst Preferred Asset Trust
(the "Trust") at July 13, 1999, in conformity with generally accepted
accounting principles. This financial statement is the responsibility of the
Trust's management; our responsibility is to express an opinion on this
financial statement based on our audit. We conducted our audit of this
financial statement in accordance with generally accepted auditing standards
which require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statement is free from material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statement, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for the opinion expressed above.
PricewaterhouseCoopers LLP
Baltimore, Maryland
September 24, 1999
F-5
<PAGE>
ALLFIRST PREFERRED ASSET TRUST
BALANCE SHEET
JULY 13, 1999
<TABLE>
<S> <C>
ASSETS
Cash............................................................. $ 923
U.S. Treasury bills available for sale........................... 5,481,271
Investment in affiliate junior subordinated debenture............ 104,154,749
------------
Total Assets................................................... $109,636,943
============
STOCKHOLDERS' EQUITY
Asset Preferred Securities (aggregate liquidation amount
$103,093,000)................................................... $101,962,070
Trust Common Securities (aggregate liquidation amount
$7,674,873)..................................................... 7,674,873
------------
Total Stockholders' Equity................................... $109,636,943
============
</TABLE>
See Notes to Balance Sheet
F-6
<PAGE>
NOTES TO BALANCE SHEET OF ALLFIRST PREFERRED ASSET TRUST
1. ORGANIZATION AND PURPOSE
Allfirst Preferred Asset Trust ("Allfirst Asset Trust") is a statutory
business trust formed on June 29, 1999 under the laws of the State of Delaware
for exclusive purposes of (i) issuing Asset Preferred Securities and its common
securities (collectively the "asset securities"), (ii) investing the gross
proceeds of the asset securities in junior subordinated debentures of Allfirst
Financial Inc. and other permitted investments and (iii) engaging in only those
other activities necessary or incidental thereto.
Allfirst Financial Inc. ("the Company") has agreed to pay all fees and
expenses related to the organization and operations of Allfirst Asset Trust,
including any taxes, duties, assessments or governmental charges of whatever
nature imposed by the United States or any other domestic taxing authority upon
the Allfirst Asset Trust, other than withholding taxes. The Company will also
be responsible for all debts and obligations of Allfirst Asset Trust, other
than those obligations with respect to the Asset Securities. The Company has
agreed to indemnify the trustees and certain other persons.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The financial statements are presented in accordance with United States
generally accepted accounting principles, which require management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities as of the date of the balance sheet. Actual results could differ
significantly from those estimates.
Investments
Allfirst Asset Trust's investment in the Company's junior subordinated
debenture is recorded at cost. Its investment in U.S. Treasury bills is
classified as available-for-sale and is recorded at accreted cost which
approximates fair value.
Income Taxes
Allfirst Asset Trust is treated as a partnership for U.S. federal income tax
purposes and, therefore, no provision for income taxes has been made.
3. INVESTMENT IN AFFILIATE JUNIOR SUBORDINATED DEBENTURE
Allfirst Capital Trust holds a junior subordinated debenture of the Company
in a principal amount of $105,310,000 with a maturity date of July 15, 2029,
which it acquired for a purchase price of $104,154,749. The junior subordinated
debenture bears interest at a rate of LIBOR plus 1.43%, reset quarterly, from
and including July 13, 1999. Interest is payable quarterly on January 15, April
15, July 15 and October 15 of each year, beginning October 15, 1999. Interest
payments not paid when due will accrue interest, compounded quarterly, at the
annual rate of LIBOR plus 1.43%. The initial interest rate on the junior
subordinated debenture is 6.74% per year.
Under the terms of the junior subordinated debenture, the Company may defer
interest payments on the junior subordinated debenture for a period of not more
than twenty quarterly periods or beyond the stated maturity of the junior
subordinated debenture.
4. ASSET PREFERRED SECURITIES
Allfirst Asset Trust issued 103,093 Asset Preferred Securities with a stated
liquidation amount of $1,000 per Asset Preferred Security for an aggregate
purchase price of $101,962,070. The distribution rate on each Asset Preferred
Security is a rate per annum of three-month LIBOR plus 1.50% of the stated
liquidation
F-7
<PAGE>
NOTES TO BALANCE SHEET OF ALLFIRST PREFERRED ASSET TRUST--(Continued)
amount of $1,000 per Asset Preferred Security, reset quarterly. Distributions
will be paid if, as and when Allfirst Asset Trust has funds available for
distribution from corresponding interest payments on a junior subordinated
debenture from the Company. Distributions on the Asset Preferred Securities are
non-cumulative, and will be payable quarterly on January 15, April 15, July 15,
and October 15 of each year commencing October 15, 1999, if, as and when funds
are available for payment. The initial distribution rate on the Asset Preferred
Securities is 6.81% per year.
Allfirst Asset Trust will redeem the Asset Preferred Securities if the
junior subordinated debenture of the Company is redeemed. The Company may
redeem the junior subordinated debenture, in whole or in part, at any time on
or after July 15, 2009 with the prior consent of the Federal Reserve Board and
the Central Bank of Ireland. Allfirst Asset Trust will redeem the Asset
Preferred Securities at an amount equal to $1,000 plus accrued and unpaid
distributions for the current quarterly period from the last distribution date.
The Company has guaranteed, on a subordinated basis, the payment of
distributions by Allfirst Asset Trust if, as and when declared out of funds
legally available and payments upon liquidation of Allfirst Asset Trust or the
redemption of the Asset Preferred Securities to the extent of funds legally
available.
5. TRUST COMMON SECURITIES
The Company owns 100% of the common securities of Allfirst Asset Trust.
F-8
<PAGE>
[back cover page of prospectus]
Until , 2000 all dealers that effect transactions in these securities,
whether or not participating in this offering, may be required to deliver a
prospectus. This requirement is in addition to the dealers' obligation to
deliver a prospectus when acting as an underwriter and with respect to their
unsold allotments or subscriptions.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Section 145 of the General Corporation Law of the State of Delaware (the
"OGCL") contains detailed provisions for indemnification of directors and
officers of Delaware corporations against expenses, judgments, fines and
settlements in connection with litigation. Article EIGHTH of Allfirst's
restated certificate of incorporation (the "Articles"), provides that the
officers and directors of Allfirst and certain others shall be indemnified to
substantially the same extent as permitted by Delaware law.
Article EIGHTH of the Articles also provides that a director shall not be
personally liable to Allfirst or its stockholders for monetary damages for
breach of fiduciary duty to the fullest extent permitted under Delaware
statutory and decisional law. However, such limitation would not cover
liability: (i) for any breach of the director's duty of loyalty to Allfirst or
its stockholders; (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) under Section 174
of the DGCL; or (iv) for any transaction in which the director actually
received an improper personal benefit.
Allfirst maintains a standard policy of officers' and directors' insurance.
Under the Capital Declaration and the Asset Declaration, Allfirst has agreed
to indemnify each of the trustees of the respective trust or any predecessor
trustee and to hold the trustees harmless against, any loss, damage, claims,
liability or expense incurred without gross negligence or willful misconduct on
its part, arising out of or in connection with the acceptance or administration
of the trusts, 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 under the declarations.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to officers, directors, trust administrators or
persons controlling the Registrants pursuant to the foregoing provisions, the
Registrants have been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is therefore unenforceable.
II-1
<PAGE>
Item 21. Exhibits and Financial Schedules.
<TABLE>
<C> <S>
Exhibit Description
------- -----------
4.1 Supplement No. 1 to Indenture, dated as of September 15, 1999, between
Allfirst Finanical Inc., as successor by merger to First Maryland
Bancorp, and The Bank of New York, as Trustee
4.2 Indenture, dated as of July 13, 1999, between First Maryland Bancorp
and The Bank of New York, as Trustee
4.3 Amended and Restated Declaration of Trust of Allfirst Preferred
Capital Trust, dated as of July 13, 1999, among First Maryland
Bancorp, The Bank of New York, as Property Trustee, The Bank of New
York (Delaware), as Delaware Trustee, and the Administrators named
therein
4.4 Amended and Restated Declaration of Trust of Allfirst Preferred Asset
Trust, dated as of July 13, 1999, among First Maryland Bancorp, The
Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and the Administrators named therein
4.5 Form of Capital Guarantee to be entered into by Allfirst and The Bank
of New York, as Capital Guarantee Trustee, and registered under the
Securities Act of 1933, as amended
4.6 Form of Asset Guarantee to be entered into by Allfirst and The Bank of
New York, as Asset Guarantee Trustee, and registered under the
Securities Act of 1933, as amended
4.7 Registration Rights Agreement, dated July 9, 1999, among Allfirst,
Allfirst Preferred Capital Trust, Allfirst Preferred Asset Trust and
the initial purchaser named therein
5.1 Opinion and consent of Gregory K. Thoreson, Senior Vice President and
General Counsel of Allfirst, as to legality of the junior subordinated
debenture and the guarantees to be issued by Allfirst
5.2 Opinion of special Delaware counsel as to the legality of the SKATES
to be issued by Allfirst Preferred Capital Trust and the Asset
Preferred Securities to be issued by Allfirst Preferred Asset Trust
8.1 Opinion of special tax counsel as to certain federal income tax
matters
12.1 Computation of ratio of earnings to fixed charges and of earnings to
fixed charges and preferred stock dividends
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Gregory K. Thoreson (included in Exhibit 5.1)
23.3 Consent of special Delaware counsel (included in Exhibit 5.2)
23.4 Consent of special tax counsel (included in Exhibit 8.1)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust of
Allfirst Preferred Capital Trust.
25.3 Form T-1 Statement of Eligibility of The Bank of New York to act as
trustee under the Amended and Restated Declaration of Trust of
Allfirst Preferred Asset Trust.
25.4 Form T-1 Statement of Eligibility of The Bank of New York under the
Capital Guarantee for the benefit of the holders of SKATES
25.5 Form T-1 Statement of Eligibility of The Bank of New York under the
Asset Guarantee for the benefit of the holders of Asset Preferred
Securities
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
- ------------
II-2
<PAGE>
Item 22. Undertakings.
Each of the undersigned Registrants hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
filing of a Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934) that is incorporated by reference in this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of each
Registrant pursuant to the provisions, or otherwise, each Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by each Registrant of expenses
incurred or paid by a director, officer of controlling person of each
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
The undersigned registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Item 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request. The undersigned registrants hereby
undertake to supply by means of a post-effective amendment all information
concerning a transaction, and First Maryland being acquired or involved
therein, that was not the subject of and included in the registration statement
when it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Allfirst
Financial Inc. certifies that it has reasonable grounds to believe that it
meets all the requirements for filing this Registration Statement on Form S-4
and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Baltimore, Maryland
on October 5, 1999.
ALLFIRST FINANCIAL INC.
By: Frank P. Bramble
---------------------------------
Frank P. Bramble
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated below on October , 1999.
Signature Title
Frank P. Bramble Chief Executive Officer and
- ------------------------------------ Director (Principal
Frank P. Bramble Executive Officer)
Jerome W. Evans* Vice Chairman, Chief
- ------------------------------------ Financial Officer and
Jerome W. Evans Director (Principal
Financial Officer)
Robert L. Carpenter, Jr.* Senior Vice President and
- ------------------------------------ Controller (Principal
Robert L. Carpenter, Jr. Accounting Officer)
A Majority of the Board of Directors*:
Benjamin L. Brown, Michael D. Buckley, J. Owen Cole, Edward A. Crooke, John F.
Dealy, Mathias J. DeVito, Jerome W. Geckle, Frank A. Gunther, Jr., Margaret M.
Heckler, Lee H. Javitch, Gary Kennedy, William T. Kirchhoff, Henry J. Knott,
Andrew Maier II, Thomas P. Mulcahy, William M. Passano, Jr., R. Champlin
Sheridan
*By: David M. Cronin
----------------------------
David M. Cronin, as
Attorney-in-Fact
II-4
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Allfirst
Preferred Capital Trust certifies that it has reasonable grounds to believe
that it meets all the requirements for filing this Registration Statement on
Form S-4 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Baltimore,
Maryland on October 5, 1999.
ALLFIRST PREFERRED CAPITAL TRUST
By: David M. Cronin__________________
David M. Cronin
Administrator
Pursuant to the requirements of the Securities Act of 1933, Allfirst
Preferred Asset Trust certifies that it has reasonable grounds to believe that
it meets all the requirements for filing this Registration Statement on Form S-
4 and has duly caused this Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Baltimore, Maryland
on October 5, 1999.
ALLFIRST PREFERRED ASSET TRUST
By: David M. Cronin__________________
David M. Cronin
Administrator
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
------- ----------- ----
<C> <S> <C>
4.1 Supplement No. 1 to Indenture, dated as of September 15, 1999,
between Allfirst Finanical Inc., as successor by merger to
First Maryland Bancorp, and The Bank of New York, as Trustee
4.2 Indenture, dated as of July 13, 1999, between First Maryland
Bancorp and The Bank of New York, as Trustee
4.3 Amended and Restated Declaration of Trust of Allfirst Preferred
Capital Trust, dated as of July 13, 1999, among First Maryland
Bancorp, The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee, and the
Administrators named therein
4.4 Amended and Restated Declaration of Trust of Allfirst Preferred
Asset Trust, dated as of July 13, 1999, among First Maryland
Bancorp, The Bank of New York, as Property Trustee, The Bank of
New York (Delaware), as Delaware Trustee, and the
Administrators named therein
4.5 Form of Capital Guarantee to be entered into by Allfirst and
The Bank of New York, as Capital Guarantee Trustee, and
registered under the Securities Act of 1933, as amended
4.6 Form of Asset Guarantee to be entered into by Allfirst and The
Bank of New York, as Asset Guarantee Trustee, and registered
under the Securities Act of 1933, as amended
4.7 Registration Rights Agreement, dated July 9, 1999, among
Allfirst, Allfirst Preferred Capital Trust, Allfirst Preferred
Asset Trust and the initial purchaser named therein
5.1 Opinion and consent of Gregory K. Thoreson, Senior Vice
President and General Counsel of Allfirst, as to legality of
the junior subordinated debenture and the guarantees to be
issued by Allfirst
5.2 Opinion of special Delaware counsel as to the legality of the
SKATES to be issued by Allfirst Preferred Capital Trust and the
Asset Preferred Securities to be issued by Allfirst Preferred
Asset Trust
8.1 Opinion of special tax counsel as to certain federal income tax
matters
12.1 Computation of ratio of earnings to fixed charges and of
earnings to fixed charges and preferred stock dividends
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Gregory K. Thoreson (included in Exhibit 5.1)
23.3 Consent of special Delaware counsel (included in Exhibit 5.2)
23.4 Consent of special tax counsel (included in Exhibit 8.1)
24.1 Powers of Attorney
25.1 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of Allfirst Preferred Capital Trust.
25.3 Form T-1 Statement of Eligibility of The Bank of New York to
act as trustee under the Amended and Restated Declaration of
Trust of Allfirst Preferred Asset Trust.
25.4 Form T-1 Statement of Eligibility of The Bank of New York under
the Capital Guarantee for the benefit of the holders of SKATES
25.5 Form T-1 Statement of Eligibility of The Bank of New York under
the Asset Guarantee for the benefit of the holders of Asset
Preferred Securities
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
</TABLE>
- ------------
<PAGE>
EXHIBIT 4.1
SUPPLEMENTAL INDENTURE NO. 1
(Allfirst Preferred Asset Trust)
SUPPLEMENTAL INDENTURE NO. 1, dated as of September 15, 1999 (this "First
Supplemental Indenture"), by and between Allfirst Financial Inc., a Delaware
corporation (the "Company") and successor by merger to First Maryland Bancorp,
and The Bank of New York (the "Trustee").
RECITALS
--------
1. The Trustee is the trustee under that certain Indenture, dated as of
July 13, 1999 (the "Indenture"), between the Trustee and First Maryland Bancorp
("First Maryland"), Under the Indenture, First Maryland issued $105,310,000
aggregate principal amount of Floating Rate Junior Subordinated Debentures due
July 15, 2029 (the "Outstanding Debt").
2. On September 15, 1999, First Maryland, a Maryland corporation, merged
with and into the Company for the sole purpose of changing the state of
incorporation of First Maryland from the State of Maryland to the State of
Delaware.
3. The Company now wishes, pursuant to Section 801 of the Indenture,
expressly to assume all of First Maryland's obligations under the Indenture and
the Outstanding Debt.
NOW, THEREFORE, in consideration of the premises, the agreements contained
herein and other good and valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, the parties hereto agree as follows:
1. Certain Definitions; Interpretation; Recitals. A capitalized term used
---------------------------------------------
in this First Supplemental Indenture (including the above Recitals) without
definition and defined in the Indenture shall have the meaning given it in the
Indenture. All references in the Indenture to "this Indenture" or words of
similar import, and the terms "hereby", "hereof", "hereunder", "herein" and any
similar terms, as used in the Indenture, shall be deemed to refer to the
Indenture as supplemented by this First Supplemental Indenture. The above
Recitals are an integral part of this First Supplemental Indenture.
2. Assumption. Pursuant to Section 801 of the Indenture, the Company
----------
hereby expressly assumes the due and punctual payment of the principal of,
premium, if any, and interest (including any additional interest) on all the
Securities (which consist of the Outstanding Debt) and the performance of every
covenant of the Indenture on the part of First Maryland to be performed or
observed, as fully and completely as if the Company had originally
<PAGE>
executed and delivered the Indenture to the Trustee and had issued the
Outstanding Debt.
3. Amendments. From and after the date of this First Supplemental
----------
Indenture, all references in the Indenture and in the Outstanding Debt to "First
Maryland Bancorp" or to "the Company" shall be references to Allfirst Financial
Inc., a Delaware corporation and the successor by merger to First Maryland.
4. Representations, Warranties, Etc. The Company represents and warrants
--------------------------------
to and covenants with the Trustee as follows:
(a) The Company is a corporation duly formed, validly existing and in good
standing under the laws of the State of Delaware, with the power and authority
to own its assets and conduct its business as currently conducted, to enter into
this First Supplemental Indenture and to perform its obligations under the
Indenture and the Outstanding Debt.
(b) First Maryland has been duly and validly merged into the Company, and
the Company has succeeded to all of the rights, privileges, duties and
responsibilities of First Maryland, under the laws of the States of Maryland and
Delaware.
(c) The execution, delivery and performance of this First Supplemental
Indenture have been duly authorized by all necessary action on the part of the
Company, and this First Supplemental Indenture represents the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
(d) No Event of Default, and no event which with notice or lapse of time
or both would constitute an event of Default, has happened and is continuing as
a result of the merger of First Maryland into the Company or otherwise.
5. Other Agreements. (a) Except as expressly supplemented or amended
----------------
hereby, all of the terms, provisions and conditions of the Indenture and the
Outstanding Debt are ratified and confirmed and shall remain in full force and
effect. This First Supplemental Indenture shall in no way operate as a novation,
release or discharge of any of the obligations the Company under, or of any of
the provisions of, the Indenture and the Outstanding Debt.
(b) This Agreement does not, and shall not be deemed to, constitute a
waiver of any past, present or future defaults by the Company under the
Indenture or the Outstanding Debt, and the Trustee expressly reserves all rights
and remedies available to it
2
<PAGE>
under the Indenture, the Outstanding Debt and under applicable law for the
benefit of Holders from time to time.
(c) This First Supplemental Indenture shall be governed by and construed
in accordance with the laws of the State of New York.
(d) Provided that each party executes a copy hereof, this Agreement may be
executed in two or more counterparts, each of which shall be deemed an original
but all of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental
Indenture to be duly executed as of the date first written above.
ALLFIRST FINANCIAL INC.
By: /s/ JEROME W. EVANS
------------------------------
Jerome W. Evans
Executive Vice President
THE BANK OF NEW YORK
By: /s/ MARYBETH LEWICKI
------------------------------
Name: Marybeth Lewicki
Title: Vice President
3
<PAGE>
EXHIBIT 4.2
FIRST MARYLAND BANCORP
TO
THE BANK OF NEW YORK
a New York banking corporation, Trustee
INDENTURE
Dated as of July 13, 1999
Floating Rate Junior Subordinated Debentures due July 15, 2029
<PAGE>
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
<S> <C>
SECTION 101. Definitions............................................ 1
Act.................................................... 2
Additional Interest.................................... 2
Affiliate.............................................. 2
Asset Declaration...................................... 2
Asset Property Trustee................................. 2
Asset Trust............................................ 2
Asset Trust Common Securities.......................... 2
Asset Trust Preferred Guarantee........................ 2
Asset Trust Preferred Securities....................... 2
Authenticating Agent................................... 2
Board of Directors..................................... 2
Board Resolution....................................... 2
Business Day........................................... 2
Calculation Agent...................................... 3
Capital Administrator.................................. 3
Capital Declaration.................................... 3
Capital Property Trustee............................... 3
Capital Special Event.................................. 3
Capital Trust.......................................... 3
Capital Trust Common Securities........................ 3
Capital Trust Guarantee................................ 3
Capital Trust Preferred Securities..................... 3
Central Bank of Ireland................................ 3
Closing Date........................................... 3
Commission............................................. 3
Company................................................ 3
Company Request........................................ 4
Company Order.......................................... 4
Corporate Trust Office................................. 4
Covenant Defeasance.................................... 4
Creditor............................................... 4
Debenture Investment Company Event..................... 4
Debenture Regulatory Capital Event..................... 4
Debenture Special Event................................ 4
Debenture Tax Event.................................... 4
Debentures............................................. 5
Defaulted Interest..................................... 5
Determination Date..................................... 5
Direct Action.......................................... 5
</TABLE>
-i-
<PAGE>
<TABLE>
<S> <C>
Event of Default....................................... 5
Exchange Act........................................... 5
Exchange Offer......................................... 5
Extension Period....................................... 5
Federal Reserve........................................ 5
Holder................................................. 5
Indebtedness........................................... 5
Indenture.............................................. 6
Initial Purchaser...................................... 6
Institutional Accredited Investor...................... 6
Interest Payment Date.................................. 6
Interest Period........................................ 6
Legal Defeasance....................................... 6
LIBOR.................................................. 6
London Business Day.................................... 7
Maturity............................................... 7
Offering Memorandum.................................... 8
Officers' Certificate.................................. 8
Opinion of Counsel..................................... 8
Outstanding............................................ 8
Outstanding Trust Preferred Securities Issuances....... 9
Paying Agent........................................... 9
Person................................................. 9
Predecessor Debenture.................................. 9
Qualified Institutional Buyer.......................... 9
QIB.................................................... 9
Redemption Date........................................ 9
Redemption Price....................................... 9
Registration Rights Agreement.......................... 9
Regular Record Date.................................... 9
Regulatory Approval.................................... 9
Responsible Officer.................................... 9
Restricted Security.................................... 10
Rule 144A.............................................. 10
Securities Act......................................... 10
Security Register...................................... 10
Security Registrar..................................... 10
Series A Debentures.................................... 10
Series B Debentures.................................... 10
Special Record Date.................................... 10
Stated Maturity........................................ 10
Subsidiary............................................. 10
Trust Indenture Act.................................... 10
Trustee................................................ 11
U.S. Government Obligations............................ 11
Vice President......................................... 11
</TABLE>
-ii-
<PAGE>
<TABLE>
<S> <C>
SECTION 102. Compliance Certificates and Opinions................... 11
SECTION 103. Form of Documents Delivered to Trustee................. 11
SECTION 104. Acts of Holders; Record Dates.......................... 11
SECTION 105. Notices, Etc. to Trustee and the Company............... 12
SECTION 106. Notice to Holders; Waiver.............................. 13
SECTION 107. Conflict With Trust Indenture Act...................... 13
SECTION 108. Effect of Headings and Table of Contents............... 13
SECTION 109. Separability Clause.................................... 13
SECTION 110. Benefits of Indenture.................................. 14
SECTION 111. GOVERNING LAW.......................................... 14
SECTION 112. Legal Holidays......................................... 14
ARTICLE TWO
SECURITY FORMS
ARTICLE THREE
THE DEBENTURES
SECTION 301. Title and Terms........................................ 15
SECTION 302. Denominations.......................................... 16
SECTION 303. Execution, Authentication, Delivery and Dating......... 16
SECTION 304. Temporary Debentures................................... 17
SECTION 305. Registration; Registration of Transfer and Exchange.... 17
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures....... 18
SECTION 307. Payment of Interest; Interest Rights Preserved......... 19
SECTION 308. Persons Deemed Owners.................................. 20
SECTION 309. Cancellation........................................... 20
SECTION 310. Computation of Interest................................ 21
SECTION 311. Right of Set-off....................................... 21
SECTION 312. CUSIP Numbers.......................................... 21
SECTION 313. Restrictive Legend..................................... 21
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture................ 23
SECTION 402. Legal Defeasance....................................... 24
SECTION 403. Covenant Defeasance.................................... 24
SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance.. 25
SECTION 405. Application of Trust Money............................. 26
SECTION 406. Indemnity for U.S. Government Obligations.............. 26
</TABLE>
-iii-
<PAGE>
ARTICLE FIVE
REMEDIES
<TABLE>
<S> <C>
SECTION 501. Events of Default.................................................................... 26
SECTION 502. Acceleration of Maturity; Rescission and Annulment................................... 27
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee...................... 28
SECTION 504. Trustee may File Proofs of Claim..................................................... 28
SECTION 505. Trustee may Enforce Claims Without Possession of Debentures.......................... 29
SECTION 506. Application of Money Collected....................................................... 29
SECTION 507. Limitation on Suits.................................................................. 29
SECTION 508. Unconditional Right of Holders to Receive Principal and Interest;
Capital Trust Preferred Securities Holders' Rights................................. 30
SECTION 509. Restoration of Rights and Remedies................................................... 31
SECTION 510. Rights and Remedies Cumulative....................................................... 31
SECTION 511. Delay or Omission not Waiver......................................................... 31
SECTION 512. Control by Holders................................................................... 31
SECTION 513. Waiver of Past Defaults.............................................................. 32
SECTION 514. Undertaking for Costs................................................................ 32
SECTION 515. Waiver of Stay or Extension Laws..................................................... 32
ARTICLE SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.................................................. 33
SECTION 602. Notice of Defaults................................................................... 33
SECTION 603. Certain Rights of Trustee............................................................ 33
SECTION 604. Not Responsible for Recitals or Issuance of Debentures............................... 35
SECTION 605. Trustee and Other Agents may Hold Debentures......................................... 35
SECTION 606. Money Held in Trust.................................................................. 35
SECTION 607. Compensation; Reimbursement; and Indemnity........................................... 35
SECTION 608. Disqualification; Conflicting Interests.............................................. 36
SECTION 609. Corporate Trustee Required; Eligibility.............................................. 36
SECTION 610. Resignation and Removal; Appointment of Successor.................................... 37
SECTION 611. Acceptance of Appointment by Successor............................................... 38
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.......................... 38
SECTION 613. Preferential Collection of Claims Against Company.................................... 38
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders............................ 39
SECTION 702. Preservation of Information; Communications to Holders............................... 39
SECTION 703. Reports by Trustee................................................................... 39
SECTION 704. Reports by Company................................................................... 40
</TABLE>
-iv-
<PAGE>
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<TABLE>
<S> <C>
SECTION 801. Company May Consolidate, etc., only on Certain Terms.............................. 40
SECTION 802. Successor Person Substituted...................................................... 41
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders................................ 41
SECTION 902. Supplemental Indentures With Consent of Holders................................... 42
SECTION 903. Execution of Supplemental Indentures.............................................. 43
SECTION 904. Effect of Supplemental Indentures................................................. 43
SECTION 905. Conformity With Trust Indenture Act............................................... 43
SECTION 906. Reference in Debentures to Supplemental Indentures................................ 43
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest................................................ 44
SECTION 1002. Maintenance of Office or Agency.................................................. 44
SECTION 1003. Money for Debenture Payments to be Held in Trust................................. 44
SECTION 1004. Statements by Officers as to Default............................................. 45
SECTION 1005. Existence........................................................................ 45
SECTION 1006. Maintenance of Properties........................................................ 46
SECTION 1007. Payment of Taxes and Other Claims................................................ 46
SECTION 1008. Waiver of Certain Covenants...................................................... 46
SECTION 1009. Payment of Capital Trust's and Asset Trust's Costs and Expenses and Taxes........ 47
SECTION 1010. Restrictions on Payments and Distributions....................................... 47
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Debentures Subordinate to Indebtedness........................................... 48
SECTION 1102. Default on Indebtedness.......................................................... 49
SECTION 1103. Prior Payment of Indebtedness Upon Acceleration of Debentures.................... 49
SECTION 1104. Liquidation; Dissolution; Bankruptcy............................................. 50
SECTION 1105. Subrogation...................................................................... 51
SECTION 1106. Trustee to Effectuate Subordination.............................................. 52
SECTION 1107. Notice by the Company............................................................ 52
SECTION 1108. Rights of the Trustee; Holders of Indebtedness................................... 53
SECTION 1109. Subordination May Not Be Impaired................................................ 53
</TABLE>
-v-
<PAGE>
ARTICLE TWELVE
REDEMPTION OF SECURITIES
<TABLE>
<S> <C>
SECTION 1201. Optional Redemption; Conditions to Optional Redemption........................... 54
SECTION 1202. Applicability of Article......................................................... 54
SECTION 1203. Election to Redeem; Notice to Trustee............................................ 54
SECTION 1204. Selection by Trustee of Debentures to be Redeemed................................ 55
SECTION 1205. Notice of Redemption............................................................. 55
SECTION 1206. Deposit of Redemption Price...................................................... 56
SECTION 1207. Debentures Payable on Redemption Date............................................ 56
SECTION 1208. Debentures Redeemed in Part...................................................... 56
</TABLE>
-vi-
<PAGE>
CROSS REFERENCE SECTION
-----------------------
<TABLE>
<CAPTION>
Trust Indenture Act Section Indenture Section
- --------------------------- -----------------
<S> <C>
Section 310(a)(1).......................................................................... 609
(a)(2).......................................................................... 609
(a)(3).......................................................................... Not Applicable
(a)(4).......................................................................... Not Applicable
(b)............................................................................. 608, 610
Section 311(a)............................................................................. 613
(b)............................................................................. 613
Section 312(a)............................................................................. 701
(b)............................................................................. 702(b)
(c)............................................................................. 702(c)
Section 313(a)............................................................................. 703(a)
(a)(4).......................................................................... 101, 1004
(b)............................................................................. 703(a)
(c)............................................................................. 703(a)
(d)............................................................................. 703(b)
Section 314(a)............................................................................. 704
(b)............................................................................. Not Applicable
(c)(1).......................................................................... 102
(c)(2).......................................................................... 102
(c)(3).......................................................................... Not Applicable
(d)............................................................................. Not Applicable
(e)............................................................................. 102
Section 315(a)............................................................................. 601
(b)............................................................................. 602
(c)............................................................................. 601
(d)............................................................................. 601
(e)............................................................................. 514
Section 316(a)............................................................................. 101
(a)(1)(A)....................................................................... 502
(a)(1)(B)....................................................................... 513
(a)(2).......................................................................... Not Applicable
(b)............................................................................. 508
(c)............................................................................. 104(c)
Section 317(a)(1).......................................................................... 503
(a)(2).......................................................................... 504
(b)............................................................................. 1003
Section 318(a)............................................................................. 107
</TABLE>
-vii-
<PAGE>
This INDENTURE is dated as of July 13, 1999, between FIRST MARYLAND
BANCORP, a corporation duly organized and existing under the laws of the State
of Maryland (herein called the "Company"), having its principal office at 25
South Charles Street, Baltimore, Maryland 21201 and THE BANK OF NEW YORK, a New
York banking corporation, as Trustee (herein called the "Trustee").
WITNESSETH:
For and in consideration of the premises and the purchase of the Debentures
(as defined below) by the Holders thereof, it is mutually agreed, for the equal
and proportionate benefit of all Holders of the Debentures, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as expressly provided or unless
the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular and the
masculine as well as the feminine;
(2) 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;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles;
(4) 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;
(5) a reference to any Person shall include its successor and
assigns;
(6) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended or amended and
restated and in effect from time to time;
(7) a reference to any statute, law, rule or regulation, shall
include any amendments thereto applicable to the relevant Person, and any
successor statute, law, rule or regulation; and
(8) a reference to any particular rating category shall be deemed to
include any corresponding successor category, or any corresponding rating
category issued by a successor or subsequent rating agency.
<PAGE>
"Act", when used with respect to any Holder, has the meaning specified
in Section 104.
"Additional Interest" has the meaning specified in Section 307.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Asset Declaration" means the Amended and Restated Declaration of
Trust of Asset Trust, dated as of July 13, 1999, as amended, modified or
supplemented from time to time, among the administrators and the trustees
of Asset Trust named therein, the Company, as sponsor, and the holders of
undivided beneficial ownership interests in the assets of Asset Trust.
"Asset Property Trustee" has the meaning set forth in the Asset
Declaration.
"Asset Trust" means Allfirst Preferred Asset Trust, a statutory
business trust declared and established pursuant to the Delaware Business
Trust Act.
"Asset Trust Common Securities" has the meaning set forth in the Asset
Declaration.
"Asset Trust Preferred Guarantee" means the Asset Trust Preferred
Guarantee Agreement entered into by the Company, as guarantor, for the
benefit of the holders of the Asset Trust Preferred Securities.
"Asset Trust Preferred Securities" has the meaning set forth in the
Asset Declaration.
"Authenticating Agent" means any Person authorized by the Trustee to
act on behalf of the Trustee to authenticate Debentures.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board as the context
requires.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly
adopted by the Board of Directors or the Executive Committee thereof and to
be in full force and effect on the date of such certification, and
delivered to the Trustee.
"Business Day" means any day other than a Saturday or Sunday or a day
on which banking institutions in The City of New York or The City of
Baltimore, Maryland are authorized or required by law or executive order to
remain closed or a day on which
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<PAGE>
the Corporate Trust Office of the Trustee, the principal office of the
Capital Property Trustee (but only if the Asset Trust Preferred Securities
are held by the Capital Property Trustee), or the principal office of the
Asset Property Trustee is closed for business.
"Calculation Agent" means any Person authorized by the Company to
determine the interest rate of the Debentures, which initially shall be The
Bank of New York.
"Capital Administrator" has the meaning specified in the Capital
Declaration.
"Capital Declaration" means the Amended and Restated Declaration of
Trust of the Capital Trust, dated as of July 13, 1999, as amended, modified
or supplemented from time to time, among the trust administrators and the
trustees of the trust named therein, the Company, as sponsor, and the
holders from time to time of undivided beneficial ownership interests in
the assets of Capital Trust.
"Capital Property Trustee" has the meaning set forth in the Capital
Declaration.
"Capital Special Event" has the meaning set forth in the Capital
Declaration.
"Capital Trust" means Allfirst Preferred Capital Trust, a statutory
business trust declared and established pursuant to the Delaware Business
Trust Act.
"Capital Trust Common Securities" has the meaning specified in the
Capital Declaration.
"Capital Trust Guarantee" means the Capital Trust Guarantee Agreement
entered into by the Company, as guarantor, for the benefit of the holders
of the Capital Trust Common Securities and the Capital Trust Preferred
Securities.
"Capital Trust Preferred Securities" has the meaning specified in the
Capital Declaration.
"Central Bank of Ireland"{ means the Central Bank of Ireland or any
successor thereto.
"Closing Date" means July 13, 1999.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument 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.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become
such pursuant to the applicable provisions of this Indenture, and
thereafter "Company" shall mean such successor Person.
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<PAGE>
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Vice
Chairman of the Board, its President or a Vice President, and by its
Treasurer, an Assistant Treasurer, its Secretary or an Assistant Secretary,
and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
the City of New York, at which at any particular time its corporate trust
business shall be administered and which at the date of this Indenture is
located at 101 Barclay Street, Floor 21 West, New York, New York 10286,
Attention: Corporate Trust Administration.
"Covenant Defeasance" has the meaning specified in Section 403.
"Creditor" has the meaning set forth under Section 1009.
"Debenture Investment Company Event" means that the Company shall have
requested and received an opinion of nationally recognized independent
legal counsel experienced in these matters to the effect that as a result
of the occurrence on or after the date of the Offering Memorandum of a
change in law or regulation or a change in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority (a "Change in Investment Company Act Law"), Asset
Trust is or will be considered an investment company which is required to
be registered under the Investment Company Act.
"Debenture Regulatory Event" shall occur at any time that the Company
becomes, or under law or regulation or any rules, guidelines or policies of
the Federal Reserve or the Central Bank of Ireland or any official
administrative announcement or decision interpreting these laws,
regulations, rules, policies or guidelines, will become within 180 days,
subject to capital requirements under which, in the written opinion of
independent bank regulatory counsel experienced in such matters, the
Capital Trust Preferred Securities or the Asset Trust Preferred Securities
would not qualify, disregarding any Tier 1 category limits, for treatment
as (1) Tier 1 capital for the Company as a bank holding company or its then
equivalent or (2) consolidated Tier 1 capital for Allied Irish Banks p.l.c.
"Debenture Special Event" means a Debenture Investment Company Event,
a Debenture Regulatory Event or a Debenture Tax Event.
"Debenture Tax Event" means that the Company shall have requested and
received an opinion of nationally recognized independent tax counsel
experienced in these matters to the effect that there has been: (i) an
amendment to, change in or announced proposed change in the laws, or any
regulations under those laws of the United States or any political
subdivision or taxing authority of that jurisdiction; (ii) a judicial
decision interpreting, applying, or clarifying these laws or regulations;
(iii) an administrative pronouncement or action that represents an official
position, including a clarification of an official position, of the
governmental authority or regulatory body making the administrative
pronouncement or taking any action; or (iv) a threatened challenge asserted
in connection with an audit of the Company or any of its subsidiaries,
4
<PAGE>
Asset Trust, or Capital Trust, or a threatened challenge asserted in
writing against any other taxpayer that has raised capital through the
issuance of securities that are substantially similar to the Debentures,
the Asset Trust Preferred Securities or the Capital Trust Preferred
Securities, which amendment or change is adopted or which proposed change,
decision or pronouncement is announced or which action, clarification or
challenge occurs on or after the date of the Offering Memorandum
(collectively a "Tax Event"), which Tax Event relates to any of the items
described in (a) through (c) below, and that following the occurrence of
any Tax Event there is more than an insubstantial risk that: (a) Asset
Trust is, or will be, subject to United States Federal income tax with
respect to income accrued or received on the Debentures; (b) Asset Trust
is, or will be, subject to more than a minimal amount of other taxes,
duties or other governmental charges; or (c) interest payable by the
Company with respect to the Debentures is not, or will not be, deductible
by the Company for United States Federal income tax purposes.
"Debentures" means, collectively, the Series A Debentures and the
Series B Debentures.
"Defaulted Interest" has the meaning specified in Section 307.
"Deferred Interest" means interest that accrues on the Debentures
during an Extension Period, other than interest that accrues during the
last quarterly period of such Extension Period.
"Determination Date" means, with respect to any Interest Period, the
date that is two London Business Days prior to the first day of such
Interest Period.
"Direct Action" has the meaning specified in Section 508.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor legislation.
"Exchange Offer" has the meaning specified in the Capital Declaration.
"Extension Period" has the meaning specified in Section 301.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"Holder" means a Person in whose name a Debenture is registered in the
Security Register.
"Indebtedness" means, whether recourse is to all or a portion of the
assets of the Company and whether or not contingent, (i) every obligation
of the Company for money borrowed, (ii) every obligation of the Company
evidenced by bonds, debentures, notes or other similar instruments of the
Company, including obligations incurred in connection with the acquisition
of property, assets or businesses, (iii) every reimbursement
5
<PAGE>
obligation of the Company with respect to letters of credit, bankers'
acceptances or similar facilities issued for the account of the Company,
(iv) every obligation of the Company issued or assumed as the deferred
purchase price of property or services, including trade accounts payable or
accrued liabilities arising in the ordinary course of business, (v) every
capital lease obligation of the Company, (vi) every obligation of the
Company for claims (as defined in Section 101(4) of the United States
Bankruptcy Code of 1978, as amended) in respect of derivative products such
as interest and foreign exchange rate contracts, commodity contracts,
options and swaps and similar arrangements, and (vii) every obligation of
the type referred to in clauses (i) through (vi) of another Person and all
dividends of another Person the payment of which, in either case, the
Company has guaranteed or is responsible or liable, directly or indirectly,
as obligor or otherwise; provided that "Indebtedness" shall not include (a)
any obligations which, by their terms, are expressly stated to rank pari
passu in right of payment with, or to not be superior in right of payment
to, the Debentures, (b) any Indebtedness of the Company which when incurred
and without respect to any election under Section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the
Company, or (c) Indebtedness of the Company to any employee.
"Indenture" means this instrument as originally executed or 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, including, for all purposes of this instrument and any such
supplemental indenture, the provisions of the Trust Indenture Act that are
deemed to be a part of and govern this instrument and any such supplemental
indenture, respectively.
"Initial Purchaser" means Lehman Brothers Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Interest Payment Date", when used with respect to any installment of
interest on a Debenture, has the meaning specified in Section 301.
"Interest Period" means, with respect to any Interest Payment Date, the
period from and including the immediately preceding Interest Payment Date
to but excluding such Interest Payment Date, or in the case of the initial
Interest Period, the period from the Closing Date to but excluding the
initial Interest Payment Date.
"Legal Defeasance" has the meaning specified in Section 402.
"LIBOR" means, with respect to an interest period relating to an
Interest Payment Date (in the following order of priority):
(i) the rate (expressed as a percentage per annum) for Eurodollar
deposits having a three-month maturity that appears on Telerate Page 3750
as of 11:00 a.m. (London time) on the related Determination Date;
6
<PAGE>
(ii) if such rate does not appear on Telerate Page 3750 as of 11:00
a.m. (London time) on the related Determination Date, LIBOR will be the
arithmetic mean (if necessary rounded upwards to the nearest whole multiple
of .00001%) of the rates (expressed as percentages per annum) for
Eurodollar deposits having a three-month maturity that appear on Reuters
Monitor Money Rates Page LIBO ("Reuters Page LIBO") as of 11:00 a.m.
(London time) on such Determination Date;
(iii) if such rate does not appear on Reuters Page LIBO as of 11:00
a.m. (London time) on the related Determination Date, the Calculation Agent
will request the principal London offices of four leading banks in the
London interbank market of the Company's selection to provide such banks'
offered quotations (expressed as percentages per annum) to prime banks in
the London interbank market for Eurodollar deposits having a three-month
maturity as of 11:00 a.m. (London time) on such Determination Date. If at
least two quotations are provided, LIBOR will be the arithmetic mean (if
necessary rounded upwards to the nearest whole multiple of .00001%) of such
quotations;
(iv) if fewer than two such quotations are provided as requested in
clause (iii) above, the Calculation Agent will request four major New York
City banks of the Company's selection to provide such banks' offered
quotations (expressed as percentages per annum) to leading European banks
for loans in Eurodollars as of 11:00 a.m. (London time) on such
Determination Date. If at least two such quotations are provided, LIBOR
will be the arithmetic mean (if necessary rounded upwards to the nearest
whole multiple of .00001%) of such quotations; and
(v) if fewer than two such quotations are provided as requested in
clause (iv) above, LIBOR will be LIBOR determined with respect to the
Interest Period immediately preceding such current Interest Period.
If the rate for Eurodollar deposits having a three-month maturity that
initially appears on Telerate Page 3750 or Reuters Page LIBO, as the case
may be, as of 11:00 a.m. (London time) on the related Determination Date is
superseded on Telerate Page 3750 or Reuters Page LIBO, as the case may be,
by a corrected rate before 12:00 noon (London time) on such Determination
Date, the corrected rate as so substituted on the applicable page will be
the applicable LIBOR for such Determination Date.
"London Business Day" means any day, other than a Saturday or Sunday, on
which commercial banks and foreign exchange markets, are open for business,
including dealings in foreign exchange and foreign currency deposits, in London.
"Maturity", when used with respect to any Debenture, means the date on
which the principal of such Debenture becomes due and payable as therein or
herein provided, whether at the Stated Maturity (which may be extended as
therein or herein provided) or
7
<PAGE>
by declaration of acceleration, call for redemption or otherwise; provided
that Regulatory Approval is a condition precedent to any Maturity.
"Offering Memorandum" has the meaning specified in the Capital
Declaration.
"Officers' Certificate"' means a certificate signed on behalf of the
Company by the Chairman of the Board, a Vice Chairman of the Board, the
President or a Vice President, and by the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of the Company, and
delivered to the Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the principal
executive, financial or accounting officer of the Company. Any Officers'
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(a) a statement that each officer signing the Officers'
Certificate on behalf of the Company has read the covenant or
condition and the definitions relating thereto;
(b) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company (and who may be an employee of the Company). An
opinion of counsel may rely on certificates as to matters of fact.
"Outstanding", when used with respect to Debentures, means, as of the date
of determination, all Debentures authenticated and delivered under this
Indenture, except: (i) Debentures cancelled by the Trustee or delivered to
the Trustee for cancellation; (ii) Debentures for whose payment or
redemption money in the necessary amount has been deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holder of such Debentures; provided that, if such
Debentures 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; and (iii) Debentures which have been paid pursuant
to Section 306, or in exchange for or in lieu of which other Debentures
have been authenticated and delivered pursuant to this Indenture, other
than any such Debentures in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Debentures are
held by a bona fide purchaser in whose hands such Debentures are valid
obligations of the Company; provided, however, that in determining whether
the holders of the requisite principal amount of Outstanding Debentures are
present at a meeting of holders of Debentures for quorum purposes or have
consented to or voted in favor of any request, demand, authorization,
direction, notice, consent, waiver, amendment or modification hereunder,
Debentures held for the
8
<PAGE>
account of the Company, any of its subsidiaries or any of its affiliates
shall be disregarded and deemed not to be Outstanding, except that in
determining whether the Trustee shall be protected in making such a
determination or relying upon any such quorum, consent or vote, only
Debentures which a Responsible Officer of the Trustee actually knows to be
so owned shall be so disregarded.
"Outstanding Trust Preferred Securities Issuances" means (i) the
$150,000,000 aggregate liquidation amount of Floating Rate Subordinated
Capital Income Securities issued by First Maryland Capital I and (ii) the
$150,000,000 aggregate liquidation amount of Floating Rate Subordinated
Capital Income Securities issued by First Maryland Capital II.
"Paying Agent" means any Person authorized by the Company to pay the
principal of or interest on any Debentures on behalf of the Company.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Predecessor Debenture" of any particular Debenture means every
previous Debenture evidencing all or a portion of the same debt as that
evidenced by such particular Debenture; and, for the purposes of this
definition, any security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Debenture
shall be deemed to evidence the same debt as the mutilated, destroyed, lost
or stolen Debenture.
"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Redemption Date", when used with respect to any Debentures to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Debentures to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registration Rights Agreement" has the meaning specified in the
Declaration.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the first day of the month of the relevant Interest Payment
Date.
"Regulatory Approval" means prior consent by the Federal Reserve and
the Central Bank of Ireland.
"Responsible Officer", when used with respect to the Trustee, means
any Vice President, any Assistant Secretary, any Assistant Treasurer, 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
9
<PAGE>
other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) of the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Series A Debentures" means the Floating Rate Junior Subordinated
Debentures due July 15, 2029, Series A, issued under this Indenture and to
be held by the Holder thereof until exchanged for the Series B Debentures
in connection with the Exchange Offer.
"Series B Debentures" means the Floating Rate Junior Subordinated
Debentures due July 15, 2029, Series B, issued under this Indenture and
exchanged for the Series A Debentures in connection with the Exchange
Offer.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Debenture or any
installment of interest thereon, means the date specified herein or in such
Debenture as the date on which the principal, together with any accrued and
unpaid interest, of such Debenture or such installment of interest is
scheduled to be due and payable; provided, however, that if Regulatory
Approval for any payment of principal or interest at Stated Maturity is
required and has been refused, then Stated Maturity means the first
Interest Payment Date immediately following the date, if any, on which
Regulatory Approval for such payment has been obtained.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or
by one or more other Subsidiaries or by the Company and one or more other
Subsidiaries. For the purposes of this definition, "voting stock" means
stock which ordinarily has voting power for the election of directors,
whether at all times or only so long as no senior class of stock has such
voting power by reason of any contingency.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided,
however, that in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act" means, to the extent required by any such
amendment, the Trust Indenture Act of 1939 as so amended.
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<PAGE>
"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.
"U.S. Government Obligations" has the meaning specified in Section
404.
"Vice President", when used with respect to the Company 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."
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to take any
action under any provision of this Indenture, the Company shall furnish to the
Trustee such certificates and opinions as may be required under the Trust
Indenture Act. Each such certificate or opinion shall be given in the form of
an Officers' Certificate, if to be given by an officer of the Company, or an
Opinion of Counsel, if to be given by counsel, and shall comply with the
requirements of the Trust Indenture Act and any other requirement set forth in
this Indenture.
SECTION 103. 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 Company 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 Company stating that the
information with respect to such factual matters is in the possession of the
Company, 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.
SECTION 104. Acts of Holders; Record Dates.
(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 an agent
duly appointed in writing; and, except as herein
11
<PAGE>
otherwise expressly provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee at the address
specified in Section 105 and, where it is hereby expressly required, to the
Company. 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 (subject to Section 601)
conclusive in favor of the Trustee and the Company, 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 his 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 Company may, in the circumstances permitted by the Trust
Indenture Act, fix any day as the record date for the purpose of
determining the Holders entitled to give or take any request, demand,
authorization, direction, notice, consent, waiver or other action, or to
vote on any action, authorized or permitted to be given or taken by
Holders. If not set by the Company prior to the first solicitation of a
Holder made by any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any such action or
vote shall be the 15th day (or, if later, the date of the most recent list
of Holders required to be provided pursuant to Section 701) prior to such
first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or
their duly designated proxies) shall be entitled to give or take, or vote
on, the relevant action.
(d) The ownership of Debentures shall be proved by the Security
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other Act of the Holder of any Debenture shall bind every future
Holder of the same Debenture and the Holder of every Debenture 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 Company in reliance thereon, whether or not notation of such
action is made upon such Debenture.
SECTION 105. Notices, Etc. to Trustee and the Company.
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:
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(a) the Trustee by any Holder or by the Company 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 Administration; or
(b) the Company 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, to the Company
addressed to it at the address of its principal office specified in the
first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, 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 (if any), and not earlier than the earliest date (if any),
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. 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.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made by telecopier or overnight air courier
guaranteeing next day delivery.
SECTION 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with a provision of
the Trust Indenture Act that is required under such Act to be a part of and
govern this Indenture, the provision of the Trust Indenture Act shall control.
If any provision of this Indenture modifies or excludes any provision of the
Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as to modified or so be excluded, as
the case may be.
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. Separability Clause.
In case any provision in this Indenture or in the Debentures shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 110. Benefits of Indenture.
Nothing in this Indenture or in the Debentures, express or implied, shall
give to any Person, other than the parties hereto and their successors
hereunder, the holders of Indebtedness, the holders of Capital Trust Preferred
Securities (to the extent provided herein), the holders of the Asset Trust
Preferred Securities (to the extent provided herein) and the Holders of
Debentures, any benefit or any legal or equitable right, remedy or claim under
this Indenture.
SECTION 111. GOVERNING LAW.
THIS INDENTURE AND THE DEBENTURES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF. THIS INDENTURE IS SUBJECT TO THE PROVISIONS OF THE
TRUST INDENTURE ACT THAT ARE REQUIRED TO BE PART OF THIS INDENTURE AND SHALL, TO
THE EXTENT APPLICABLE, BE GOVERNED BY SUCH PROVISIONS.
SECTION 112. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Debenture shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Debentures) payment of interest or
principal of the Debentures need not be made on such date, but may be made on
the next succeeding Business Day (except that, if such Business Day is in the
next succeeding calendar year, such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, shall be the immediately preceding Business
Day) with the same force and effect as if made on the Interest Payment Date or
Redemption Date, or at the Stated Maturity, provided that no interest shall
accrue for the period from and after such Interest Payment Date, Redemption Date
or Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
The Series A Debentures in definitive form (whether issued at the initial
Closing Date or a subsequent Closing Date) and the Series B Debentures in
definitive form shall be in the form attached hereto as Exhibit A; provided,
that the Series B Debentures shall not contain a Restricted Securities Legend.
The Debentures shall have such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Debentures, as evidenced by their
execution of the Debentures.
The definitive Debentures shall be printed, lithographed or engraved or
produced by any combination of these or other methods, all as determined by the
officers of the Company executing such Debentures, as evidenced by their
execution of such Debentures.
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ARTICLE THREE
THE DEBENTURES
SECTION 301. Title and Terms.
The aggregate principal amount of Debentures which may be authenticated and
delivered under this Indenture is unlimited.
The Debentures' Stated Maturity shall be July 15, 2029; provided, that the
Company must receive Regulatory Approval to pay the principal of, and accrued
interest on, the Debentures at Stated Maturity.
The Debentures shall bear interest at a variable per annum rate equal to
LIBOR plus 1.43%, from the Closing Date, or from the most recent Interest
Payment Date to which interest has been paid or duly provided for, as the case
may be, payable quarterly (subject to deferral as set forth herein), in arrears,
on the 15th day of January, April, July and October of each year, commencing
October 15, 1999 (each, an "Interest Payment Date"), until the principal thereof
is paid or made available for payment. Interest will compound quarterly and
will accrue at a variable per annum rate equal to LIBOR plus 1.43% to the extent
permitted by applicable law, on any interest installment in arrears for more
than one quarterly period or during an extension of an interest payment period
as set forth below in this Section 301. In the event that any date on which
interest is payable on the Debentures is not a Business Day, then a payment of
the interest payable on such date will be made on the next succeeding day which
is a Business Day (and without any interest or other payment in respect of any
such delay), except that, if that Business Day falls in the next succeeding
calendar year, the relevant payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on that
date.
The Company shall have the right, at any time during the term of the
Debentures, from time to time, to defer payment of interest on the Debentures
(an "Extension Period") provided that no Extension Period may be terminated
without any required Regulatory Approval or extend past the Stated Maturity of
the principal of the Debentures. There may be multiple Extension Periods of
varying lengths during the term of the Debentures. At the end of each Extension
Period, if any, the Company shall pay all interest then accrued and unpaid,
together with interest thereon, compounded quarterly at the rate specified on
such Debentures to the extent permitted by applicable law. Prior to the
termination of any such Extension Period, the Company may further extend such
Extension Period, provided that no Extension Period may exceed 20 quarterly
periods (unless the Company has not received Regulatory Approvals to terminate
such Extension Period) or extend beyond the Stated Maturity of the Debentures.
Upon the termination of any such Extension Period and the payment of all amounts
then due on any Interest Payment Date, the Company may elect to begin a new
Extension Period subject to the above requirements. No interest shall be due
and payable during an Extension Period. If the Company is unable to terminate
an Extension Period due to the failure to obtain Regulatory Approval, such
Extension Period shall terminate on the first Interest Payment Date following
the date, if any, on which Regulatory Approval for such termination has been
obtained.
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The Company shall give the Trustee written notice of its election of an
Extension Period at least one Business Day prior to the record date for the
related interest payment. Notwithstanding the Company's failure to give such
notice for any period, the failure to pay any interest payment in full on any
Interest Payment Date automatically will be deemed an election by the Company to
defer the interest payment due on that Interest Payment Date.
The Trustee shall promptly give notice of the Company's election, or deemed
election, as the case may be, of an Extension Period to the Asset Property
Trustee.
The principal of and interest on the Debentures shall be payable in
accordance with the terms of this Indenture at the office or agency of the
Paying Agent in the United States maintained for such purpose and at any other
office or agency maintained by the Company for such purpose in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
option of the Company payment of interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer in immediately available funds at
such place and to such account as may be designated in writing at least 15 days
prior to the relevant record date by the Person entitled thereto as specified in
the Security Register.
The Debentures shall be subordinated in right of payment to Indebtedness as
provided in Article Eleven.
The Debentures shall be redeemable as provided in Article Twelve.
SECTION 302. Denominations.
The Debentures 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 Debentures shall be executed on behalf of the Company by its Chairman
of the Board, its Vice Chairman of the Board, its President or one of its Vice
Presidents. The signature of any of these officers on the Debentures may be
manual or facsimile.
Debentures bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Debentures or did not
hold such offices at the date of such Debentures.
In the event that the Company elects to issue additional Debentures
hereunder, the Company shall deliver to the Trustee, in the manner provided
under the following paragraph, duly executed Debentures and a Company Order,
together with such Officers' Certificates, Board Resolutions and Opinions of
Counsel (in each case in substantially the form delivered at the initial Closing
Date), as are required for the issuance of Debentures under this Indenture.
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At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver Debentures executed by the Company to the
Trustee for authentication, together with a Company Order for the authentication
and delivery of such Debentures; and the Trustee in accordance with such Company
Order shall authenticate and make available for delivery such Debentures as
provided in this Indenture and not otherwise.
Each Debenture shall be dated the date of its authentication.
No Debenture shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Debenture a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Debenture shall be conclusive evidence, and the only evidence, that such
Debenture has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Debentures.
Pending the preparation of definitive Debentures, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Debentures which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Debentures in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Debentures may determine, as
evidenced by their execution of such Debentures.
If temporary Debentures are issued, the Company will cause definitive
Debentures to be prepared without unreasonable delay. After the preparation of
definitive Debentures, the temporary Debentures shall be exchangeable for
definitive Debentures upon surrender of the temporary Debentures at any office
or agency of the Company designated pursuant to Section 1002, without charge to
the Holder. Upon surrender for cancellation of any one or more temporary
Debentures the Company shall execute and the Trustee shall authenticate and make
available for delivery in exchange therefor a like principal amount of
definitive Debentures of authorized denominations. Until so exchanged, the
temporary Debentures shall in all respects be entitled to the same benefits
under this Indenture as definitive Debentures.
SECTION 305. Registration; Registration of Transfer and Exchange.
The Company 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
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Debentures and of transfers of Debentures. The Trustee is
hereby appointed "Security Registrar" for the purpose of registering Debentures
and transfers of Debentures as herein provided.
Upon surrender for registration of transfer of any Debenture at an office
or agency of the Company designated pursuant to Section 1002 for such purpose,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, in the name of the designated
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transferee or transferees, one or more new Debentures of any authorized
denominations and of a like aggregate principal amount.
At the option of the Holder, Debentures may be exchanged for other
Debentures of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Debentures to be exchanged at such office or
agency. Whenever any Debentures are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, the Debentures which the Holder making the exchange is entitled to
receive.
All Debentures issued upon any registration of transfer or exchange of
Debentures shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Debentures
surrendered upon such registration of transfer or exchange.
Every Debenture presented or surrendered for registration of transfer or
for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company 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 of Debentures, but the Company 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 Debentures, other than
exchanges pursuant to Sections 304, 906 or 1208 not involving any transfer.
If the Debentures are to be redeemed in part, the Company shall not be
required (A) to issue, register the transfer of or exchange any Debentures
during a period beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of any such Debentures selected for
redemption under Section 1204 and ending at the close of business on the day of
such mailing, or (B) to register the transfer of or exchange any Debenture so
selected for redemption in whole or in part, except the unredeemed portion of
any Debenture being redeemed in part.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debentures.
If any mutilated Debenture is surrendered to the Trustee, the Company shall
execute and the Trustee shall authenticate and make available for delivery in
exchange therefor a new Debenture of like tenor and principal amount and bearing
a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i) evidence to
their satisfaction of the destruction, loss or theft of any Debenture and (ii)
such security or indemnity as may be required by them to save each of them and
any agent of either of them harmless, then, in the absence of notice to the
Company or the Trustee that such Debenture has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and make
available for delivery, in lieu of any such destroyed, lost or stolen Debenture,
a new Debenture of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
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In case any such mutilated, destroyed, lost or stolen Debenture has become
or is about to become due and payable, the Company in its discretion may,
subject to the preceding paragraph, pay such Debenture instead of issuing a new
Debenture.
Upon the issuance of any new Debenture under this Section, the Company 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 Debenture issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debenture shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Debenture shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Debentures 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 Debentures.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Debenture 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 that Debenture (or one or more Predecessor Debentures) is registered at the
close of business on the Regular Record Date for such interest.
Any interest on any Debenture which is payable, but is not punctually paid
or duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder on the relevant
Regular Record Date by virtue of having been such Holder, and such Defaulted
Interest may be paid by the Company, at its election in each case, as provided
in clauses (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Debentures (or their respective
Predecessor Debentures) 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 Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
Debenture and the date of the proposed payment, and at the same time the
Company 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 Company of such Special Record Date and, in the
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name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder at his address as it
appears in the Security Register, 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 mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Debentures (or their respective Predecessor Debentures) are registered at
the close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Debentures may be listed, and if so
listed, upon such notice as may be required by such exchange, if, after
notice given by the Company 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
Debenture delivered under this Indenture upon registration of transfer of
or in exchange for or in lieu of any other Debenture shall carry the rights
to interest accrued and unpaid, and to accrue which, which were carried by
such other Debenture.
Deferred Interest shall not constitute Defaulted Interest. In the event
that a Registration Default (as defined in the Registration Rights Agreement)
occurs, additional interest ("Additional Interest") shall become payable in
respect of the Debentures as specified therein.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Debenture for registration of transfer, the
Company, the Trustee and any agent of the Company or the Trustee shall treat the
Person in whose name such Debenture is registered as the owner of such Debenture
for the purpose of receiving payment of principal of and (subject to Section
307) interest on such Debenture and for all other purposes whatsoever, whether
or not such Debenture be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the contrary.
SECTION 309. Cancellation.
All Debentures 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 cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Debentures
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Debentures so delivered shall be
promptly cancelled by the Trustee. No Debentures shall be authenticated in lieu
of or in exchange for any Debentures cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Debentures held
by the Trustee shall be disposed of as directed by a Company Order, provided,
however, that the Trustee may but shall not be required to destroy such
Debentures.
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SECTION 310. Computation of Interest.
The Company shall appoint a Calculation Agent, which may be the Trustee, to
determine LIBOR as of the Determination Date for each quarterly interest period
and to calculate the interest rate and the amount of interest due for each such
interest period. Absent manifest error, the Calculation Agent's determination
of LIBOR and its calculation of the interest rate for each interest period shall
be final and binding on the holders of the Debentures.
The amount of interest on the Debentures payable for any period shall be
computed on the basis of a 360-day year and the actual number of days elapsed
during that period.
SECTION 311. Right of Set-off.
Notwithstanding anything to the contrary in the Indenture, the Company
shall have the right to set-off any payment it is otherwise required to make
thereunder to the extent the Company has theretofore made, or is concurrently on
the date of such payment making, a related payment under the Asset Trust
Guarantee or Capital Trust Guarantee.
SECTION 312. CUSIP Numbers.
The Company in issuing the Debentures may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of redemption as a convenience to Holders; provided that any such notice may
state that no representation is made as to the correctness of such numbers
either as printed on the Debentures or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Debentures, and any such redemption shall not be affected
by any defect in or omission of such numbers. The Company shall promptly notify
the Trustee of any change in the "CUSIP" numbers.
SECTION 313. Restrictive Legend.
(a) Each definitive Debenture that constitutes a Restricted Security shall
bear the following legend (the "Restricted Securities Legend") on the face
thereof until two years after the later of the date of original issue and the
last date on which the Company or any Affiliate of the Company was the owner of
such Debentures (or any predecessor thereto) (the "Resale Restriction
Termination Date"), unless otherwise agreed by the Company and the Holder
thereof:
"THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF IS DEEMED TO
HAVE AGREED TO BE BOUND BY THE PROVISIONS OF A REGISTRATION RIGHTS
AGREEMENT AMONG FIRST MARYLAND BANCORP, ALLFIRST PREFERRED ASSET TRUST,
ALLFIRST PREFERRED CAPITAL TRUST ("ALLFIRST CAPITAL TRUST") AND LEHMAN
BROTHERS INC. DATED JULY 9, 1999 (THE "REGISTRATION RIGHTS AGREEMENT").
FIRST MARYLAND BANCORP WILL PROVIDE A COPY OF THE REGISTRATION RIGHTS
AGREEMENT TO A HOLDER WITHOUT CHARGE UPON WRITTEN REQUEST TO ALLFIRST
CAPITAL TRUST AT ITS PRINCIPAL PLACE OF BUSINESS.
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THIS DEBENTURE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS DEBENTURE 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,
SUCH REGISTRATION.
THE HOLDER OF THIS DEBENTURE BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS TRUST PREFERRED SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH FIRST
MARYLAND BANCORP OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS DEBENTURE
(OR ANY PREDECESSOR OF THIS DEBENTURE) ONLY (A) TO FIRST MARYLAND BANCORP,
(B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) SO LONG AS THIS DEBENTURE IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT 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 ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WHEN THE MEANING OF
REGULATION 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 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS DEBENTURE 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 ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST
AND THE COMPANY 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,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM. SUCH
HOLDER FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
DEBENTURE IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
THE HOLDER OF THIS DEBENTURE BY ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT IF IT IS A PURCHASER IN A SALE THAT OCCURS
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S OF THE
SECURITIES ACT, IT ACKNOWLEDGES THAT,
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UNTIL EXPIRATION OF THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" WITHIN THE
MEANING OF RULE 903 OF REGULATION S, ANY OFFER OR SALE OF THIS DEBENTURE
SHALL NOT BE MADE BY IT TO A U.S. PERSON TO FOR THE ACCOUNT OR BENEFIT OF A
U.S. PERSON WITHIN THE MEANING OF RULE 902(o) UNDER THE SECURITIES ACT."
Any Debenture (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms may, upon satisfaction of the requirements of Section 313(b) and
surrender of such Debenture for exchange to the Security Registrar in accordance
with the provisions of this Section 313, be exchanged for a new Debenture or
Debentures, of like tenor and aggregate principal amount, which shall not bear
the restrictive legend required by this Section 313(a).
(b) Upon any sale or transfer of any Restricted Security (i) that is
effected pursuant to an effective registration statement under the Securities
Act or (ii) in connection with which the Trustee receives certificates and other
information (including an opinion of counsel, if requested) reasonably
acceptable to the Company and the Trustee to the effect that such security will
no longer be subject to the resale restrictions under federal and state
securities laws, then, the Security Registrar or co-Registrar shall permit the
holder thereof to exchange such Restricted Security for a Debenture that does
not bear the legend set forth in Section 313(a), and shall rescind any such
restrictions on transfer. In addition, any Debenture (or Debenture issued in
exchange or substitution therefor) as to which the restrictions on transfer
described in the legend set forth in Section 313(a) have expired by their terms,
may, upon surrender thereof (in accordance with the terms of this Indenture)
together with such certifications and other information (including an Opinion of
Counsel having substantial experience in practice under the Securities Act and
otherwise reasonably acceptable to the Company, addressed to the Company and the
Trustee and in a form acceptable to the Company, to the effect that the transfer
of such Restricted Security has been made in compliance with Rule 144 or such
successor provision) acceptable to the Company and the Trustee as either of them
may reasonably require, be exchanged for a new Debenture or Debentures of like
tenor and aggregate principal amount, which shall not bear the restrictive
legends set forth in Section 313(a).
ARTICLE FOUR
SATISFACTION AND DISCHARGE; DEFEASANCE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to any
surviving rights of registration of transfer or exchange of Debentures herein
expressly provided for), and the Trustee, on written demand of and at the
expense of the Company, shall execute instruments supplied by the Company
acknowledging satisfaction and discharge of this Indenture, when (1) either (A)
all Debentures theretofore authenticated and delivered (other than (i)
Debentures which have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii) Debentures for whose
payment money has theretofore been deposited in trust or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to the Trustee for
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cancellation; or (B) all such Debentures not theretofore delivered to the
Trustee for cancellation (i) have become due and payable, or (ii) will become
due and payable at their Maturity within one year, or (iii) if redeemable at the
option of the Company, 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 of the expense, of the Company and the Company,
in the case of (i), (ii) or (iii) above, has deposited or caused to be deposited
with the Trustee as funds in trust for the purpose an amount sufficient to pay
and discharge the entire indebtedness on such Debentures not theretofore
delivered to the Trustee for cancellation, for principal and interest to the
date of such deposit (in the case of Debentures which have become due and
payable) or to the Maturity or Redemption Date, as the case may be; (2) the
Company has paid or caused to be paid all other sums payable hereunder by the
Company; and (3) the Company 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 Company 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. Legal Defeasance.
In addition to discharge of this Indenture pursuant to Section 401, in the
case of any Debentures with respect to which the exact amount described in
subparagraph (a) of Section 404 can be determined at the time of making the
deposit referred to in such subparagraph (a), the Company shall be deemed to
have paid and discharged the entire indebtedness on all the Debentures as
provided in this Section on and after the date the conditions set forth in
Section 404 are satisfied, and the provisions of this Indenture with respect to
the Debentures shall no longer be in effect (except as to (i) rights of
registration of transfer and exchange of Debentures, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Debentures, (iii) maintenance of a
Paying Agent, (iv) rights of Holders of Debentures to receive, solely from the
trust fund described in subparagraph (a) of Section 404, payments of principal
thereof and interest, if any, thereon upon the original stated due dates
therefor (but not upon acceleration), (v) the rights, obligations, duties and
immunities of the Trustee hereunder, (vi) this Section 402 and (vii) the rights
of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them)
(hereinafter called "Legal Defeasance"), and the Trustee, at the cost and
expense of the Company, shall execute proper instruments acknowledging the same.
SECTION 403. Covenant Defeasance.
In the case of any Debentures with respect to which the exact amount
described in subparagraph (a) of Section 404 can be determined at the time of
making the deposit referred to in such subparagraph (a), (x) the Company shall
be released from its obligations under any covenants specified in or pursuant to
this Indenture (except as to (i) rights of registration of transfer and exchange
of Debentures, (ii) substitution of mutilated, defaced, destroyed, lost or
stolen Debentures, (iii) maintenance of a Paying Agent, (iv) rights of Holders
of Debentures to receive, from the Company pursuant to Section 1001, payments of
principal thereof and interest, if any, thereon upon the original stated due
dates therefor (but not upon acceleration), (v) the
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rights, obligations, duties and immunities of the Trustee hereunder and (vi) the
rights of the Holders of Debentures as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them), and (y)
the occurrence of any event specified in Section 501(c) (with respect to any of
the covenants specified in or pursuant to this Indenture) shall be deemed not to
be or result in an Event of Default, in each case with respect to the
Outstanding Debentures as provided in this Section on and after the date the
conditions set forth in Section 404 are satisfied (hereinafter called "Covenant
Defeasance"), and the Trustee, at the cost and expense of the Company, shall
execute proper instruments acknowledging the same. For this purpose, such
Covenant Defeasance means that the Company may omit to comply with and shall
have no liability in respect of any term, condition or limitation set forth in
any such covenant (to the extent so specified in the case of Section 501(c)),
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, but the remainder of this
Indenture and the Debentures shall be unaffected thereby.
SECTION 404. Conditions to Legal Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either Section 402
or 403 to the Outstanding Debentures:
(a) with reference to Section 402 or 403, the Company has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as funds
in trust, specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of Debentures (i) cash in an amount, (ii) direct
obligations of the United States of America, backed by its full faith and
credit ("U.S. Government Obligations"), maturing as to principal and
interest, if any, at such times and in such amounts as will ensure the
availability of cash, (iii) 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, or
(iv) a combination thereof, in each case 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 the principal of and interest, if any, on all Debentures on each
date that such principal or interest, if any, is due and payable;
(b) in the case of Legal Defeasance under Section 402, the Company
has delivered to the Trustee an Opinion of Counsel based on the fact that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling or (y), since the date hereof, there has
been a change in the applicable United States federal income tax law, in
either case to the effect that, and such opinion shall confirm that, the
Holders of the Debentures of such series will not recognize income, gain or
loss for federal income tax purposes as a result of such deposit and Legal
Defeasance and will be subject to federal income tax on the same amount and
in the same manner and at the same times as would have been the case if
such deposit and Legal Defeasance had not occurred;
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(c) in the case of Covenant Defeasance under Section 403, the Company
has delivered to the Trustee an Opinion of Counsel to the effect that, and
such opinion shall confirm that, the Holders of the Debentures will not
recognize income, gain or loss for federal income tax purposes as a result
of such deposit and Covenant Defeasance and will be subject to federal
income tax on the same amount in the same manner and at the same times as
would have been the case if such deposit and Covenant Defeasance had not
occurred;
(d) such Legal Defeasance or Covenant Defeasance will not result in a
breach or violation of, or constitute a default under, any agreement or
instrument to which the Company is a party or by which it is bound; and
(e) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent contemplated by this provision have been complied with.
SECTION 405. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003, all money
and U.S. Government Obligations deposited with the Trustee pursuant to Section
401 shall be held in trust and such money and all money from such U.S.
Government Obligations shall be applied by it, in accordance with the provisions
of the Debentures and this Indenture, to the payment, either directly or through
any Paying Agent (including the Company acting as its own Paying Agent) as the
Trustee may determine, to the Persons entitled thereto, of the principal and
interest for whose payment such money and U.S. Government Obligations has been
deposited with the Trustee.
SECTION 406. Indemnity for U.S. Government Obligations.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 404 or the principal or interest received in
respect of such obligations other than any such tax, fee or other charge that by
law is for the account of the Holders of Outstanding Debentures.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default" wherever used herein, means any one of the following
events that has occurred and is continuing (whatever the reason for such Event
of Default and whether it shall be occasioned by the provisions of Article
Eleven or be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(a) failure for 30 days to pay any interest on the Debentures when
due (subject to the deferral of any due date in the case of an Extension
Period); or
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(b) failure to pay any principal on the Debentures when due, whether
at Maturity, upon redemption, by declaration of acceleration; or
(c) failure to observe or perform in any material respect any other
covenant herein that continues 90 days after written notice to the Company
from the Trustee or the holders of at least 25% in aggregate principal
amount of the Outstanding Debentures; or
(d) entry by a court having jurisdiction in the premises of (1) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (2) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, at
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of substantially
all of the property of the Company, or ordering the winding up or
liquidation of its affairs, and the continuance of any such decree or order
for relief or any such other decree or order unstayed and in effect for a
period of 90 consecutive days; or
(e) (1) the commencement by the Company of a voluntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or (2) the consent by the Company
or to the entry of a decree or order for relief in respect of itself in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding against the
Company, or (3) the filing by the Company of a petition or answer or
consent seeking reorganization or relief under any applicable Federal or
State law, or (4) the consent by the Company to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of all or substantially all of the property of the Company,
or (5) the making by the Company of an assignment for the benefit of
creditors.
Notwithstanding any provision of this Indenture or the Debentures to the
contrary, no default or Event of Default shall exist if the Stated Maturity of
the Debentures or any Extension Period is extended due to the failure of the
Company to receive Regulatory Approval to pay the principal of or any interest
on the Debentures or to terminate such Extension Period or both, as the case may
be.
SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default specified in Section 501(d) or (e) occurs or is
continuing, then the principal of the Debentures shall become and be due and
payable immediately, without any declaration or other act on the part of the
Trustee or any Holder.
At any time after such 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 provided
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in this Article, the Holders of a majority in aggregate principal amount of the
Outstanding Debentures, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if (1) the Company has
paid or deposited with the Trustee a sum sufficient to pay (A) all overdue
interest on all Debentures, (B) the principal of (and premium, if any, on) any
Debentures which have become due otherwise than by such declaration of
acceleration and interest thereon at the rate borne by the Debentures, (C) to
the extent that payment of such interest is lawful, interest upon overdue
interest at the rate borne by the Debentures, and (D) all sums paid or advanced
by the Trustee hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel; and (2) all
Events of Default, other than the non-payment of the principal of Debentures
which have become due solely by such declaration of acceleration, have been
cured or waived as provided in Section 513. Should the Holders of such
Debentures fail to annul such declaration and waive such default, the holders of
a majority in aggregate liquidation amount of the Asset Trust Preferred
Securities (or, if Asset Trust Preferred Securities are being held by the
Capital Property Trustee, Capital Trust Preferred Securities) then outstanding
shall have such right. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee
The Company covenants that if
(a) default is made in the payment of any interest on any Debenture
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 any Debenture
at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Debentures, the whole amount then due and payable on such
Debentures for principal and interest, and, to the extent that payment thereof
shall be legally enforceable, interest on any overdue principal and on any
overdue interest, at the rate borne by the Debentures, and, in addition thereto,
such further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
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 any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other similar judicial
proceeding relative to the Company (or any other obligor upon the Debentures),
its property or its creditors, the Trustee shall be entitled and empowered, by
intervention in such proceeding or otherwise, to take any
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and all actions authorized under the Trust Indenture Act in order to have claims
of the Holders and the Trustee allowed in any such proceeding. In particular,
the Trustee shall be authorized 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, assignee, trustee, liquidator, sequestrator or
other 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 to 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. No provision of this Indenture 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 Debentures 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 Debentures.
All rights of action and claims under this Indenture or the Debentures may
be prosecuted and enforced by the Trust without the possession of any of the
Debentures or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of any 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 Debentures in respect of which such
judgment has been recovered.
SECTION 506. Application of Money Collected.
Subject to Article Eleven, any money collected by the Trustee pursuant to
this Article 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, upon presentation of the Debentures 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 the Trustee under Section 607;
and
SECOND: To the payment of the amounts then due and unpaid for principal of
and interest on the Debentures 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 as such Debentures for principal
and interest, respectively.
THIRD: To the Company, if any balance shall remain.
SECTION 507. Limitation on Suits.
No Holder of any Debenture 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
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(a) such Holder has previously given written notice to the Trustee of
a continuing Event of Default;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Debentures 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;
(c) such Holder or Holders have offered to the Trustee indemnity
reasonably satisfactory to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(d) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the Outstanding Debentures; 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 and Interest;
Capital Trust Preferred Securities Holders' Rights.
Notwithstanding any other provision in this Indenture, the Holder of any
Debenture shall have the right, which is absolute and unconditional, to receive
payment of the principal of and (subject to Section 307) interest on such
Debenture on the Stated Maturity expressed in such Debenture (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.
If an Event of Default constituting the failure to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable has occurred and is continuing, then a holder of Asset Trust Preferred
Securities may directly institute a proceeding for enforcement of payment to the
Asset Trust of the principal of or interest on the Debentures having a principal
amount equal to the aggregate liquidation amount of the Asset Trust Preferred
Securities as such holder on or after the respective due date specified in the
Debentures (a "Direct Action"). For so long as the Capital Property Trustee
holds any Asset Trust Preferred Securities, if a holder of Asset Trust Preferred
Securities fails to enforce payment of the principal of or interest on the
Debentures after any holder of the Capital Trust Preferred Securities makes a
written request, such holder of the Capital Trust Preferred Securities may on
behalf of the holder of the Asset Trust Preferred Securities directly institute
a proceeding for enforcement of such payment. The Company may not amend this
Section without the prior written consent of the holders of all of the Capital
Trust Preferred Securities. Notwithstanding any payment made to the Asset Trust
by the Company in connection with such a Direct Action, the Company shall
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remain obligated to pay the principal of or interest on the Debentures held by
Asset Trust or the Asset Property Trustee and the Company shall be subrogated to
the rights of the holders of such Asset Trust Preferred Securities with respect
to payments on the Asset Trust Preferred Securities to the extent of any
payments made by the Company to such holder in any Direct Action. A holder of
Asset Trust Preferred Securities or Capital Trust Preferred Securities will not
be able to exercise directly any other remedy available to the Holders of the
Debentures.
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 Company, 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.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debentures in the last paragraph of Section
306, 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 Debenture 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 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 a majority in principal amount of the Outstanding Debentures
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
(a) such direction shall not be in conflict with any rule of law or
with this Indenture; and
(b) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
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SECTION 513. Waiver of Past Defaults.
Subject to Sections 902 and 1008 hereof, the Holders of not less than a
majority in principal amount of the Outstanding Debentures may on behalf of the
Holders of all the Debentures waive any past default hereunder and its
consequences, except a default
(a) in the payment of the principal of or interest on any Debenture
(unless such default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration
has been deposited with the Trustee); or
(b) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Debenture affected;
provided, however, that such waiver or modification to such waiver shall not be
effective until the holders of a majority in liquidation preference of Capital
Trust Preferred Securities (or, if Asset Trust Preferred Securities have been
distributed to holders of the Capital Trust Preferred Securities in connection
with a Capital Special Event, Asset Trust Preferred Securities) shall have
consented to such waiver or modification to such waiver; provided further, that
if the consent of the Holder of each of the Outstanding Debentures is required,
such waiver shall not be effective until each holder of the Capital Trust
Preferred Securities (or, if Asset Trust Preferred Securities have been
distributed to holders of the Capital Trust Preferred Securities in connection
with a Capital Special Event, Asset Trust Preferred Securities) shall have
consented to such waiver.
Upon any such waiver, such default shall cease to exist, effective as of
the date specified in such waiver (and effective retroactively to the date of
default, if so specified) 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 impair any right
consequent thereon.
SECTION 514. Undertaking for Costs.
In any suit for the 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, a court may require any party litigant in such suit to
file an undertaking to pay the costs of such suit, and may assess costs,
including attorneys' fees and expenses reasonably incurred, against any such
party litigant, in the manner and to the extent provided in the Trust Indenture
Act; provided, that neither this Section nor the Trust Indenture Act shall be
deemed to authorize any court to require such an undertaking or to make such an
assessment in any suit instituted by the Company or the Trustee or in any suit
for the enforcement of the right to receive the principal of and interest on any
Debenture.
SECTION 515. Waiver of Stay or Extension Laws.
The Company 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,
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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 Company (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.
ARTICLE SIX
TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee shall be as provided by the
Trust Indenture Act. Notwithstanding the foregoing, 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. 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.
SECTION 602. Notice of Defaults.
The Trustee shall give the Holders notice of any default hereunder as and
to the extent provided by the Trust Indenture Act; provided, however, that
except in the case of a default in the payment of the principal of or interest
on any Debenture, the Trustee shall be protected in withholding such notice if
and so long as 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 of Debentures; provided, further, that in the case of
any default of the character specified in Section 501(c), no such notice to
Holders shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event which is, or
after notice or lapse of time or both would become, an Event of Default. For
purposes of this Section, the Trustee shall not be deemed to have knowledge of a
default unless a Responsible Officer of the Trustee has actual knowledge of such
default or has received written notice of such default in the manner
contemplated by Section 105.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall be protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
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(c) 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;
(d) the Trustee may consult with counsel of its choice (and such
counsel may be counsel to the Company or any of its Affiliates and may
include any of its employees) and the 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;
(e) 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 security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction;
(f) 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, 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 Company,
personally or by agent or attorney;
(g) 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;
(h) any application by the Trustee for written instructions from the
Company may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the
date on and/or after which such action shall be taken or such omission
shall be effective. The Trustee shall not be liable to the Company for any
action taken by, or omission of, the Trustee in accordance with a proposal
included in such application on or after the date specified in such
application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless
any such officer shall have consented in writing to any earlier date)
unless prior to taking any such action (or the effective date in the case
of an omission), the Trustee shall have received written instructions in
response to such application specifying the action to be taken or omitted;
(i) the Trustee shall not be liable for any action taken, suffered or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture;
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(j) the Trustee shall not be deemed to have notice of any default or
Event of Default hereunder unless a Responsible Officer of the Trustee has
actual knowledge thereof or unless a written notice of any event which is
in fact such a default is received by the Trustee at its Corporate Trust
Office, and such notice references the Debentures and this Indenture; and
(k) the rights, privileges, protections, immunities and benefits
given to the Trustee, including, without limitation, its right to be
indemnified, are extended to, and shall be enforceable by the Trustee in
each of its capacities hereunder, and to each agent, custodian or other
Person employed to act hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Debentures.
The recitals contained herein and in the Debentures, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and 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 Debentures, the Trustee shall not be accountable for the use or
application by the Company of Debentures or the proceeds thereof.
SECTION 605. Trustee and Other Agents may Hold Debentures.
The Trustee, any Paying Agent, any Security Registrar, or any other agent
of the Company, in its individual or any other capacity, may become the owner or
pledgee of Debentures and, subject to Sections 608 and 613, may otherwise deal
with the Company with the same rights it would have if it were not Trustee,
Paying Agent, Security Registrar, or such other agent. Money held by the
Trustee in trust hereunder shall not be invested by the Trustee pending
distribution thereof to the holders of the Debentures.
SECTION 606. Money Held in Trust.
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 in writing with the Company.
SECTION 607. Compensation; Reimbursement; and Indemnity.
The Company, as issuer of the Debentures, agrees
(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing 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),
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except any such expense, disbursement or advance as may be attributable to
its negligence or wilful misconduct; and
(3) to indemnify each of the Trustee and any predecessor Trustee for,
and to hold it harmless against, any and all loss, damage, claim, liability
or expense, including taxes (other than taxes based on the income, revenues
or gross receipts of the Trustee) incurred without negligence or wilful
misconduct on its part, arising out of or in connection with the acceptance
or administration of this trust or the trusts hereunder, including the
costs and expenses of defending itself against any claim (whether asserted
by the Company, a Holder or any other Person) or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
The obligations of the Company under this Section to compensate the
Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and 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 Company, the Trustee shall have a lien prior to the
Debentures upon all property and lands held or collected by the Trustee as such,
except funds held in trust for the payment of principal of (and premiums, if
any, on) or interest on particular Debentures.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(d) or Section 501(e), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
SECTION 608. Disqualification; Conflicting Interests.
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, the Trust Indenture Act and this Indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a Person
that is eligible pursuant to the Trust Indenture Act to act as such and has a
combined capital and surplus of at least $50,000,000 and has its Corporate Trust
Office in New York, New York. If such Person 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 Person shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. If at
any time the 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.
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SECTION 610. 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 under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the giving of such notice of resignation, the resigning Trustee may
petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Debentures, delivered to
the Trustee and to the Company. If an instrument of acceptance by a
successor Trustee shall not have been delivered to the Trustee within 30
days after the giving of such notice of removal, the removed Trustee may
petition, at the expense of the Company, any court of competent
jurisdiction for the appointment of a successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been
a bona fide Holder of a Debenture for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or
by any such Holder, 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 Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 512, any Holder who has been a
bona fide Holder of a Debenture 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.
(e) 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,
the Company, 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 shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Debentures delivered to the Company and the Retiring Trustee,
the successor Trustee so appointed shall, forthwith upon its acceptance of
such appointment, become the successor Trustee and supersede the successor
Trustee appointed by the Company. If no successor Trustee shall have been
so appointed by the Company or the
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Holders and accepted appointment in the manner hereinafter provided, any
Holder who has been a bona fide Holder of a Debenture 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.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 106. Each notice shall include
the name of the successor Trustee and the address of its Corporate Trust
Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute, acknowledge and
deliver to the Company 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; provided that, on request of the Company 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. Upon request of any such successor Trustee,
the Company 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.
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.
SECTION 612. 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 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 this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Debentures shall have been
authenticated, but not made available for delivery, by the Trustee then in
office, any successor by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and make available for
delivery the Debentures so authenticated with the same effect as if such
successor Trustee had itself authenticated such Debentures.
SECTION 613. Preferential Collection of Claims Against Company.
If and when the Trustee shall be or becomes a creditor of the Company (or
any other obligor upon the Debentures), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
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ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee (a) semi-
annually, not later than June 30 and December 31 in each year, a list, in such
form as the Trustee may reasonably require, of the names and addresses of the
Holders to the extent the Company has knowledge thereof as of a date not more
than 15 days prior to the delivery thereof, and (b) at such other times as the
Trustee may request in writing, within 30 days after the receipt by the Company
of any such, a list of similar form and content as of a date not more than 15
days prior to the time such list is furnished, excluding from any such list
names and addresses received by the Trustee in its capacity as Security
Registrar.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most
recent list furnished to the Trustee as provided in Section 701, and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Debentures, and
the corresponding rights and duties of the Trustee, shall be as provided by
the Trust Indenture Act.
(c) Every Holder of Debentures, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason
of any disclosure of information as to names and addresses of Holders made
pursuant to the Trust Indenture Act.
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders as of May 15 of each year
(commencing in the year following the issuance of the Debentures) such
reports concerning the Trustee and its actions under this Indenture as may
be required pursuant to the Trust Indenture Act at the times and in the
manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange
upon which the Debentures are listed, with the Commission and with the
Company. The Company will notify the Trustee when the Debentures are listed
on any stock exchange and of any delisting thereof.
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SECTION 704. Reports by Company.
The Company shall file with the Trustee and the Commission, and transmit to
Holders, such information, documents and other reports, and such summaries
thereof, as may be required pursuant to the Trust Indenture Act at the times and
in the manner provided pursuant to such Act; provided that any such information,
documents or reports required to be filed with the Commission pursuant to
Section 13(a) or 15(d) of the Exchange Act shall be filed with the Trustee
within 15 days after the same is so required to be filed with the Commission.
Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc., only on Certain Terms.
The Company shall not consolidate with or merge into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, unless:
(a) the Person formed by such consolidation or into which the Company
is merged or the Person that acquires by conveyance or transfer, or which
leases, the properties and assets of the Company substantially as an
entirety shall be a corporation, partnership or trust, shall be organized
and existing under the laws of the United States of America or any State or
the District of Columbia, and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of (and premium, if any) and interest (including any additional interest)
on all the Debentures and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(b) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time, or both, would
become an Event of Default, shall have happened and be continuing;
(c) for so long as Debentures registered on the Securities Register
in the name of Asset Trust (or the Asset Property Trustee) are outstanding,
such consolidation, merger, conveyance, transfer or lease is permitted
under the Asset Declaration and does not give rise to any breach or
violation of the Asset Declaration or the Asset Trust Preferred Guarantee;
(d) any such lease shall provide that it will remain in effect so
long as any Debentures are Outstanding; and
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(e) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel each stating that such consolidation, merger,
conveyance, transfer or lease and any such supplemental indenture complies
with this Article and that all conditions precedent herein provided for
relating to such transaction have been complied with; and the Trustee,
subject to Section 601, may rely upon such Officers' Certificate and
Opinion of Counsel as conclusive evidence that such transaction complies
with this Section 801.
SECTION 802. Successor Person Substituted.
Upon any consolidation or merger by the Company with or into any other
Person, or any conveyance, transfer or lease by the Company of its properties
and assets substantially as an entirety to any Person in accordance with Section
801, the successor Person formed by such consolidation or into which the Company
is merged or to which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and power of, the
Company under this Indenture with the same effect as if such successor Person
had been named as the Company herein; and, in the event of any such conveyance,
transfer or lease the Company shall be discharged from all obligations and
covenants under the Indenture and the Debentures and may be dissolved and
liquidated.
Such successor Person may cause to be signed, and may issue either in its
own name or in the name of the Company, any or all of the Debentures issuable
hereunder which theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor Person instead
of the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee shall authenticate and shall make available
for delivery any Debentures which previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Debentures which such successor Person
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. All the Debentures so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debentures theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Debentures had been issued at the date of the
execution hereof.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(a) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Debentures; or
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(b) to add to the covenants of the Company for the benefit of the
Holders, or to surrender any right or power herein conferred upon the
Company; or
(c) to cure any ambiguity or defect, to correct or supplement any
provision herein which may be inconsistent with any other provision herein,
or to make any other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent with the
provisions of this Indenture, provided that such action pursuant to this
clause (c) shall not adversely affect the interests of the Holders of the
Debentures or, so long as any of the Asset Trust Preferred Securities (and,
if Asset Trust Preferred Securities are held by the Capital Property
Trustee, the Capital Trust Preferred Securities) shall remain outstanding,
the holders of the Asset Trust Preferred Securities; or
(d) to comply with any requirement of the Commission in order to
effect or maintain the qualification of this Indenture under the Trust
Indenture Act.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Debentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, 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 Debenture affected thereby,
(a) change the Stated Maturity of, the principal of, or any
installment of interest on, any Debenture, or reduce the principal amount
thereof or the rate of interest thereon or extend the time of payment of
interest thereon (except such extension as is contemplated hereby), or
change the place of payment where, or the coin or currency in which, any
Debenture or interest thereon is payable, or impair the right to institute
suit for the enforcement of any such payment on or after the Stated
Maturity thereof (or, in the case of redemption, on or after the Redemption
Date), or modify the provisions of this Indenture with respect to the
subordination of the Debentures in a manner adverse to the Holders,
(b) reduce the percentage in principal amount of the Outstanding
Debentures, 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
(c) modify any of the provisions of this Section, Section 513 or
Section 1008, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Debenture affected
thereby; provided, that, so long as any of the Asset Trust
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Preferred Securities (and, if Asset Trust Preferred Securities are held by
the Capital Property Trustee, the Capital Trust Preferred Securities)
remains outstanding, no such amendment shall be made that adversely affects
the holders of the Asset Trust Preferred Securities (and, if Asset Trust
Preferred Securities are held by the Capital Property Trustee, holders of
the Capital Trust Preferred Securities), and no termination of this
Indenture shall occur, and no waiver of any Event of Default or compliance
with any covenant under this Indenture shall be effective, without the
prior consent of the holders of at least a majority of the aggregate
liquidation preference of the outstanding Asset Trust Preferred Securities
(and, if Asset Trust Preferred Securities are held by the Capital Property
Trustee, the Capital Trust Preferred Securities) unless and until the
principal of and any premium on the Debentures and all accrued and unpaid
interest thereon have been paid in full.
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 trust created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall receive, and (subject to
Section 601) shall be fully protected in relying upon, an Opinion of Counsel and
an Officers' Certificate 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 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, 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 Debentures 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 shall
conform to the requirements of the Trust Indenture Act.
SECTION 906. Reference in Debentures to Supplemental Indentures.
Debentures authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article 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 Company shall so determine,
new Debentures so modified as to conform, in the opinion of the Trustee and the
Company, to any such supplemental indenture may be prepared and executed by the
Company and authenticated and made available for delivery by the Trustee in
exchange for Outstanding Debentures.
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ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and interest on
the Debentures in accordance with the terms of the Debentures and this Indenture
and comply with all other terms and conditions and agreements contained herein.
The Company shall use its commercially reasonable best efforts to obtain the
Regulatory Approvals required by the terms of this Indenture and the Debentures
for the termination of any Extension Period and the payment of the principal of
and accrued but unpaid interest on the Debentures at the Stated Maturity of the
principal thereof until, in each case, such Regulatory Approval is obtained.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in The City of New York an office or agency where
Debentures may be presented or surrendered for registration of transfer or
exchange, where Debentures may be surrendered for conversion and where notices
and demands to or upon the Company in respect of the Debentures and this
Indenture may be served. The Company will give prompt written notice to the
Trustee of the location, and any change in location, of such office or agency.
If at any time the Company 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 Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies in the United States where the Debentures may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in the United States for such purposes. The Company will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
SECTION 1003. Money for Debenture Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it will, on,
or at the option of the Company, before each due date of the principal of or
interest on any of the Debentures, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the principal 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. In such case the Company shall not invest the
amount so segregated and held in trust pending the distribution thereof.
Whenever the Company shall have one or more Paying Agents, it will, on or
prior to each due date of the principal of or interest on any Debentures,
deposit with a Paying Agent a sum sufficient to pay such amount, such sum to be
held as provided by the Trust Indenture Act, and
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(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act; provided, however, that any such
deposit on a due date shall be initiated prior to 10:00 a.m. (New York time) in
same-day funds.
The Company 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 (i) comply with the provisions of the Trust Indenture Act applicable
to it as a Paying Agent and (ii) during the continuance of any default by the
Company (or any other obligor upon the Debentures) in the making of any payment
in respect of the Debentures, upon the written request of the Trustee, forthwith
pay to the Trustee all sums held in trust by such Paying Agent as such.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in the trust
by the Company 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 Company or such
Paying Agent; and, upon such payment by any Paying Agent to the Trustee, such
Payment Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee or any Paying Agent, or then held by
the Company, in trust for the payment of the principal or interest that has
become due and payable shall be paid to the Company on Company Request, or (if
then held by the Company) shall be discharged from such trust; and the Holder of
such Debenture shall thereafter, as an unsecured general creditor, look only to
the Company for payment thereof, and all liability of the Trustee or such Paying
Agent with respect to such trust money, and all liability of the Company as
trustee thereof, shall thereupon cease.
SECTION 1004. Statements by Officers as to Default.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, stating whether or not to the best knowledge of the signers thereof
the Company is in default in the performance and observance of any of the
material terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge.
The Company shall deliver to the Trustee, as soon as possible and in any
event within five days after the Company becomes aware of the occurrence of any
Event of Default or an event which, with notice or the lapse of time or both,
would constitute an Event of Default, an Officers' Certificate setting forth the
details of such Event of Default or default and the action which the Company
proposes to take with respect thereto.
SECTION 1005. Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence,
rights (charter and statutory) and
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franchises; provided, however, that the Company shall not be required to
preserve any such right or franchise if the Board of Directors shall determine
that the preservation thereof is no longer desirable in the conduct of the
business of the Company and that the loss thereof is not disadvantageous in any
material respect to the Holders and, while any Asset Trust Preferred Securities
are outstanding, the holders of the Asset Trust Preferred Securities or, if the
Asset Trust Preferred Securities are being held by the Capital Property Trustee,
holders of the Capital Trust Preferred Securities).
SECTION 1006. Maintenance of Properties.
The Company will cause all properties used or useful in the conduct of its
business or the business of any 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 Company 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 shall prevent the Company from discontinuing the
operation or maintenance of any such properties if such discontinuance is, in
the judgment of the Company, desirable in the conduct of its business or the
business of any Subsidiary and not disadvantageous in any material respect to
the Holders.
SECTION 1007. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or discharged, before
the same shall become delinquent, (1) all taxes, assessments and governmental
charges levied or imposed upon the Company or any Subsidiary or upon the income,
profits or property of the Company or any Subsidiary, and (2) all lawful claims
for labor, materials and supplies which, if unpaid, might by law become a lien
upon the property of the Company or any Subsidiary that comprise more than 10%
of the assets of the Company and its Subsidiaries, taken as a whole; provided,
however, that the Company shall not be required to pay or discharge or cause to
be paid or discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings.
SECTION 1008. Waiver of Certain Covenants.
Except as otherwise specified or as contemplated by Section 301 for
Debentures, the Company may, with respect to the Debentures, omit in any
particular instance to comply with any term, provision or condition set forth in
any covenant provided pursuant to Section 901(b) for the benefit of the Holders
if before the time for such compliance the Holders of at least a majority in
principal amount of the Outstanding Debentures shall, by Act of such Holders,
either waive such compliance in such instance or generally waive compliance with
such term, provision or condition, but no 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 Company and the
duties of the Trustee in respect of any such term, provision or condition shall
remain in full force and effect.
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SECTION 1009. Payment of Capital Trust's and Asset Trust's Costs and
Expenses and Taxes.
Since a principal purpose of Capital Trust and Asset Trust is to facilitate
an investment in the Debentures, the Company, as borrower, hereby covenants as
follows: At any time while the Capital Property Trustee is the holder of any
Asset Trust Preferred Securities, the Company shall pay all debts and
obligations (other than with respect to the Capital Trust Preferred Securities
and Capital Trust Common Securities) and all costs and expenses of Capital Trust
(including, but not limited to, all costs and expenses relating to the
organization of Capital Trust, the fees and expenses of the trustees and
administrators and all costs and expenses relating to the operation of Capital
Trust) and to pay any and all taxes, duties, assessments or governmental charges
of whatever nature (other than withholding taxes) imposed on Capital Trust by
the United States, or any other taxing authority, so that the net amounts
received and retained by Capital Trust and the Capital Property Trustee after
paying such expenses will be equal to the amounts Capital Trust and the Capital
Property Trustee would have received had no such costs or expenses been incurred
by or imposed on Capital Trust.
In addition, during any period the Asset Property Trustee is the holder of
any Debentures, the Company shall pay all debts and obligations (other than with
respect to the Asset Trust Preferred Securities and Asset Trust Common
Securities) and all costs and expenses of Asset Trust (including, but not
limited to, all costs and expenses relating to the organization of Asset Trust,
the fees and expenses of the trustees and administrators and all costs and
expenses relating to the operation of Asset Trust) and to pay any and all taxes,
duties, assessments or governmental charges of whatever nature (other than
withholding taxes) imposed on Asset Trust by the United States, or any other
taxing authority, so that the net amounts received and retained by Asset Trust
and the Asset Property Trustee after paying such expenses will be equal to the
amounts Asset Trust and the Asset Property Trustee would have received had no
such costs or expenses been incurred by or imposed on Asset Trust.
The foregoing obligations of the Company are for the benefit of, and shall
be enforceable by, any person to whom any such debts, obligations, costs,
expenses and taxes are owed (each, a "Creditor") whether or not such Creditor
has received notice thereof. Any such Creditor may enforce such obligations of
the Company directly against the Company, and the Company irrevocably waives any
right or remedy to require that any such Creditor take any action against the
Trust, the Partnership or any other person before proceeding against the
Company. The Company shall execute such additional agreements as may be
necessary or desirable to give full effect to the foregoing.
SECTION 1010. Restrictions on Payments and Distributions.
If at any time (x) there shall have occurred an Event of Default, or (y)
there shall have occurred any event of which the Company has actual knowledge
that (I) with the giving of notice or the lapse of time, or both, would
constitute an Event of Default and (II) in respect of which the Company shall
not have taken reasonable steps to cure, or (z) the Company shall have given, or
shall have been deemed to have given, notice of its election of an Extension
Period as provided herein and shall not have rescinded such notice, or such
Extension Period, or any extension thereof, shall be continuing, then unless or
until, since the end of any such Extension Period and the curing or waiving of
any such Event of Default or event, the Company has paid all Deferred
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Interest for any Extension Period and interest on the Debentures in full on four
consecutive Interest Payment Dates, the Company will not, and will not permit
any Subsidiary to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or comparable equity interest or (ii) make any
payment of principal, interest or premium, if any, on or repay or repurchase or
redeem any debt securities of the Company that rank pari passu with or junior in
interest and right of payment to the Debentures or make any guarantee payments
with respect to any guarantee which ranks pari passu with or junior in interest
and right of payment to the Debentures (other than (a) any declaration or
payment of a dividend or distribution on, or any payment of principal, premium,
if any, or interest on any guarantee, debt security or instrument of the Company
ranking pari passu with the Debentures that is made on a pro rated basis with
all other such guarantees, debt securities and instruments, including the
Capital Trust Guarantee and the Asset Trust Preferred Guarantee, (b)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants or in connection with a dividend reinvestment
or stockholder stock purchase plan, (c) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (d) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(e) any declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, or (f)
any dividend in the form of stock, warrants, options or other rights where the
exercise of such warrants, options, or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such
stock).
ARTICLE ELEVEN
SUBORDINATION OF SECURITIES
SECTION 1101. Debentures Subordinate to Indebtedness.
The Company covenants and agrees, and each Holder of a Debenture, by his
acceptance thereof, likewise covenants and agrees, that, to the extent and in
the manner hereinafter set forth in this Article (subject to Article Four), the
payment of the principal of and interest on each and all of the Debentures are
hereby expressly made:
(a) subordinate and subject in right of payment to the prior payment
in full in cash of all Indebtedness;
(b) pari passu with every obligation under guarantees and
indebtedness issued by the Company in connection with its Outstanding Trust
Preferred Securities Issuances; and
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(c) pari passu with or senior to any other instrument or agreement of
the Company which is stated to rank pari passu with or junior to, as the
case may be, the Debentures.
The provisions of this Article Eleven are made for the benefit of the
holders of Indebtedness and such other senior instruments and such holders are
made obligees hereunder and any one or more of them may enforce such provisions.
Such holders need not prove reliance on the subordination provisions hereof.
SECTION 1102. Default on Indebtedness.
No payment on account of principal or interest on the Securities shall be
made by the Company unless full payment of amounts then due for principal (and
premium, if any), sinking funds, and interest on all Indebtedness of the Company
has been made or duly provided for in money or money's worth in accordance with
its terms. No payment on account of principal or interest on the Securities
shall be made by the Company if, at the time of such payment or immediately
after giving effect thereto, there shall have occurred an event of default with
respect to any Indebtedness of the Company or in any instrument under which the
same is outstanding, permitting the holders thereof (or a trustee on behalf of
the holders thereof) to accelerate the maturity thereof, or an event which, with
the giving of notice or the passage of time or both, would constitute such event
of default, and such event of default shall not have been cured or waived.
SECTION 1103. Prior Payment of Indebtedness Upon Acceleration of
Debentures.
In the event that the Debentures are declared due and payable before their
Stated Maturity, then and in such event the holders of the Indebtedness
outstanding at the time such Debentures so become due and payable shall be
entitled to receive payment in full of all amounts then due on or in respect of
such Indebtedness (including any amounts due upon acceleration), or provision
shall be made for such payment in cash or cash equivalents or otherwise in a
manner satisfactory to the holders of Indebtedness, before the Holders of the
Debentures are entitled to receive any payment or distribution of any kind or
character, whether in cash, properties or securities, by the Company on account
of the principal of or interest on the Debentures or on account of the purchase
or other acquisition of Debentures by the Company or any Subsidiary.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee or any Holder when such payment is prohibited by the
preceding paragraph of this Section 1103, such payment shall be held in trust
for the benefit of, and shall be paid over or delivered to, the holders of
Indebtedness or their respective representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Indebtedness may have been
issued, as their respective interests may appear, but only to the extent that
the holders of the Indebtedness (or their representative or representatives or a
trustee) notify the Trustee within 90 days of such payment of the amounts then
due and owing on the Indebtedness and only the amounts specified in such notice
to the Trustee shall be paid to the holders of Indebtedness.
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SECTION 1104. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all principal of, and premium, if any, and
interest due or to become due upon all Indebtedness (including interest after
the commencement of any bankruptcy, insolvency, receivership or other
proceedings at the rate specified in the applicable Indebtedness, whether or not
such interest is an allowable claim in any such proceeding) shall first be paid
in full, or payment thereof provided for in money in accordance with its terms,
before any payment is made on account of the principal or interest on the
Debentures; and upon any such dissolution or winding-up or liquidation or
reorganization any payment by the Company, or distribution of substantially all
of the assets of the Company of any kind or character, whether in cash, property
or securities, to which the Holders of the Debentures or the Trustee would be
entitled, except for the provisions of this Article Eleven, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Holders of the
Debentures or by the Trustee under this Indenture if received by them or it,
directly to the holders of Indebtedness (pro rata to such holders on the basis
of the respective amounts of Indebtedness held by such holders, as calculated by
the Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing any
Indebtedness may have been issued, as their respective interests may appear, to
the extent necessary to pay all Indebtedness in full (including interest after
the commencement of any bankruptcy, insolvency, receivership or other
proceedings at the rate specified in the applicable Indebtedness, whether or not
such interest is in an allowable claim in any such proceeding) or to provide for
such payment in money in accordance with its terms, after giving effect to any
concurrent payment or distribution to or for the holders of Indebtedness, before
any payment or distribution is made to the Holders of Debentures or to the
Trustee or the Property Trustee on behalf of the Holders of Trust Preferred
Securities.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee or the Holders of the Debentures before all Indebtedness is paid in full
(including interest after commencement of any bankruptcy, insolvency,
receivership or other proceedings at the rate specified in the applicable
Indebtedness, whether or not such interest is an allowable claim in any such
proceeding), or provision is made for such payment in money in accordance with
its terms, such payment or distribution shall be held in trust for the benefit
of and shall be paid over or delivered to the holders of Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing any Indebtedness may have
been issued, as their respective interests may appear, as calculated by the
Company, for application to the payment of all Indebtedness remaining unpaid to
the extent necessary to pay all Indebtedness in full in money in accordance with
its terms, after giving effect to any concurrent payment or distribution to or
for the holders of such Indebtedness.
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Any holder of Indebtedness may file any proof of claim or similar
instrument on behalf of the Trustee and the Holders if such instrument has not
been filed by the date which is 30 days prior to the date specified for filing
thereof.
For purposes of this Article Eleven, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article Eleven with
respect to the Debentures to the payment of all Indebtedness that may at the
time be outstanding, provided, however, that (i) the Indebtedness is assumed by
the new corporation, if any, resulting from any such reorganization or
readjustment, and (ii) the rights of the holders of the Indebtedness are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or merger of the Company
into, another corporation or the liquidation or dissolution of the Company
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another corporation upon the terms and
conditions provided for in Article Eight hereof shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section 1104 if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, comply with the conditions stated in Article
Eight hereof. Nothing in Section 1103 or in this Section 1104 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 607.
SECTION 1105. Subrogation.
Subject to the payment in full of all Indebtedness to the extent provided
in Sections 1103 and 1104, the rights of the Holders of the Debentures shall be
subrogated (equally and ratably with the holders of all indebtedness of the
Company which by its express terms is not superior in right of payment to the
Securities and ranks pari passu with the Securities and is entitled to like
rights of subrogation) to the rights of the holders of Indebtedness to receive
payments or distributions of cash, property or securities of the Company
applicable to the Indebtedness until the principal of (and premium, if any) and
interest on the Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of the Indebtedness of
any cash, property or securities to which the Holders of the Debentures or the
Trustee would be entitled except for the provisions of this Article Eleven,
shall, as between the Company, its creditors other than holders of Indebtedness,
and the Holders of the Debentures, be deemed to be a payment by the Company to
or on account of the Indebtedness. It is understood that the provisions of this
Article Eleven are and are intended solely for the purposes of defining the
relative rights of the Holders of the Debentures, on the one hand, and the
holders of the Indebtedness on the other hand.
Nothing contained in this Article Eleven or elsewhere in this Indenture or
in the Debentures is intended to or shall impair, as between the Company, its
creditors other than the holders of Indebtedness, and the Holders of the
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Debentures the principal of (and premium, if any)
and interest on the Debentures as and when the same shall become due and payable
in accordance with their terms, or is intended to or shall affect the relative
rights of the Holders of the Debentures and creditors of the Company other than
the holders of the Indebtedness, nor shall anything herein or therein prevent
the Trustee or the Holder of any
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Debenture from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article Eleven of the holders of Indebtedness in respect of cash, property or
securities of the Company received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to in
this Article Eleven, the Trustee, subject to the provisions of Section 601, and
the Holders of the Debentures, shall be entitled to rely upon any order or
decree made by any court of competent jurisdiction in which such dissolution,
winding-up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidation trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the Holders of the Debentures, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of the Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article Eleven.
SECTION 1106. Trustee to Effectuate Subordination.
Each Holder of a Debenture by acceptance thereof authorizes and directs the
Trustee on such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article Eleven and
appoints the Trustee such Holder's attorney-in-fact for any and all such
purposes.
SECTION 1107. Notice by the Company.
The Company shall give prompt written notice to a Responsible Officer of
the Trustee of any fact known to the Company that would prohibit the making of
any payment of monies to or by the Trustee in respect of the Debentures pursuant
to the provisions of this Article Eleven. Notwithstanding the provisions of
this Article Eleven or any other provision of this Indenture, the Trustee shall
not be charged with knowledge of the existence of any facts that would prohibit
the making of any payment of monies to or by the Trustee in respect of the
Debentures pursuant to the provisions of this Article Eleven, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof at
the Corporate Trust Office of the Trustee from the Company or a holder or
holders of Indebtedness or from any trustee therefor; and before the receipt of
any such written notice, the Trustee, subject to the provisions of Section 601,
shall be entitled in all respects to assume that no such facts exist; provided,
however, that if the Trustee shall not have received the notice provided for in
this Section 1107 at least three Business Days prior to the date upon which by
the terms hereof any money may become payable for any purpose (including,
without limitation, the payment of the principal of (or premium, if any) or
interest on any Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which they were received, and
shall not be affected by any notice to the contrary that may be received by it
within three Business Days prior to such date.
The Trustee, subject to the provisions of Section 601, shall be entitled to
rely on the delivery to it of a written notice by a Person representing himself
to be a holder of Indebtedness (or a trustee on behalf of such holder) to
establish that such notice has been given by a holder of
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Indebtedness or a trustee on behalf of any such holder or holders. In the event
that the Trustee determines in good faith that further evidence is required with
respect to the right of any Person as a holder of Indebtedness to participate in
any payment or distribution pursuant to this Article Eleven, the Trustee may
request such Person to furnish evidence to the reasonable satisfaction of the
Trustee as to the amount of Indebtedness held by such Person, the extent to
which such Person is entitled to participate in such payment or distribution and
any other facts pertinent to the rights of such Person under this Article
Eleven, and if such evidence is not furnished the Trustee may defer any payment
to such Person pending judicial determination as to the right of such Person to
receive such payment.
SECTION 1108. Rights of the Trustee; Holders of Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article Eleven in respect of any Indebtedness at any time held
by it, to the same extent as any other holder of Indebtedness, and nothing in
this Indenture shall deprive the Trustee of any of its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 607.
With respect to the holders of Indebtedness, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article Eleven, and no implied covenants or
obligations with respect to the holders of Indebtedness shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Indebtedness and, subject to the provisions of
Section 601, the Trustee shall not be liable to any holder of Indebtedness if it
shall pay over or deliver to holders of Debentures, the Company or any other
Person money or assets to which any holder of Indebtedness shall be entitled by
virtue of this Article Eleven or otherwise.
SECTION 1109. Subordination May Not Be Impaired.
No right of any present or future holder of any 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 Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance by
the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Indebtedness may, at any time and from time to time, without the
consent of or notice to the Trustee or the Holders of the Debentures, without
incurring responsibility to the Holders of the Debentures and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of the Holders of the Debentures to the holders of Indebtedness, do
any one or more of the following: (i) change the manner, place or terms of
payment or extend the time of payment of, or renew or alter, Indebtedness or
otherwise amend or supplement in any manner Indebtedness or any instrument
evidencing the same or any agreement under which Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property
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pledged, mortgaged or otherwise securing Indebtedness; (iii) release any Person
liable in any manner for the collection of Indebtedness; and (iv) exercise or
refrain from exercising any rights against the Company and any other Person.
ARTICLE TWELVE
REDEMPTION OF SECURITIES
SECTION 1201. Optional Redemption; Conditions to Optional Redemption.
At any time on or after July 15, 2009, the Company may, subject to the last
paragraph of Section 307 and to its obtaining Regulatory Approval to do so,
redeem the Debentures, in whole or in part, from time to time, at a Redemption
Price equal to 100% of the principal amount of Debentures to be redeemed plus
any accrued but unpaid interest (including any Additional Interest) to the
Redemption Date.
If, at any time, a Debenture Special Event shall occur and be continuing,
the Company may, within 90 days following the occurrence of such Debenture
Special Event elect to either (i), subject to obtaining Regulatory Approval to
do so, redeem the Debentures in whole, but not in part, upon not less than 30
nor more than 60 days notice, at a Redemption Price equal to 100% of the
principal amount of Debentures to be redeemed plus any accrued but unpaid
interest (including any Additional Interest) to the Redemption Date; provided,
however, that if at the time there is available to the Company opportunity to
eliminate, within such 90-day period, the Debenture Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure which in the sole judgment of the Company
has or will cause no adverse effect on Capital Trust, Asset Trust, the Company
or the holders of the Capital Trust Securities or Asset Trust Preferred
Securities and will involve no material cost, the Company will pursue such
measure in lieu of redemption or (ii) cause the Debentures to remain
outstanding; provided, that in the case of this clause (ii), the Company shall
pay any and all expenses incurred by or payable by Capital Trust and Asset Trust
attributable to the Debenture Special Event.
The Company shall not redeem the Debentures in part unless all accrued and
unpaid interest (including any Additional Interest) has been paid in full on all
Debentures outstanding for all quarterly interest periods terminating on or
prior to the Redemption Date.
SECTION 1202. Applicability of Article.
Redemption of Debentures at the election of the Company, as permitted by
Section 1201, shall be made in accordance with such provision and this Article.
SECTION 1203. Election to Redeem; Notice to Trustee.
The election of the Company to redeem Debentures pursuant to Section 1201
shall be evidenced by a Board Resolution. In case of any redemption at the
election of the Company, the Company shall, at least 45 days and no more than 60
days prior to the Redemption Date fixed by the Company, notify the Trustee of
such Redemption Date and of the principal amount of
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Debentures to be redeemed and provide a copy of the notice of redemption given
to Holders of Debentures to be redeemed pursuant to Section 1205.
SECTION 1204. Selection by Trustee of Debentures to be Redeemed.
If less than all the Debentures are to be redeemed (unless such redemption
affects only a single Debenture), the particular Debentures to be redeemed shall
be selected by lot (or such other method of selection as the Trustee may
customarily employ) not more than 60 days prior to the Redemption Date by the
Trustee, from the Outstanding Debentures not previously called for redemption.
The Trustee shall promptly notify the Company in writing of the Debentures
selected for redemption as aforesaid and, in case of any Debentures selected for
partial redemption as aforesaid, the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs shall not apply with respect
to any redemption affecting only a single Debenture, whether such Debenture is
to be redeemed in whole or in part. In the case of any such redemption in part,
the unredeemed portion of the principal amount of the Debenture shall be in an
authorized denomination (which shall not be less than the minimum authorized
denomination) for such Debenture.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Debentures shall relate, in the
case of any Debentures redeemed or to be redeemed only in part, to the portion
of the principal amount of such Debentures which has been or is to be redeemed.
SECTION 1205. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage prepaid,
mailed not less than 30 (provided that the Trustee shall itself have received
notice not less than 45 days prior to the Redemption Date) nor more than 60 days
prior to the Redemption Date, to each Holder of Debentures to be redeemed, at
his address appearing in the Security Register.
All notices of redemption shall identify the Debentures to be redeemed
(including CUSIP number) and shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) that on the Redemption Date the Redemption Price will become due
and payable upon each such Debenture to be redeemed and that interest thereon
will cease to accrue on and after said date, and
(4) the place or places where such Debentures are to be surrendered
for payment of the Redemption Price.
55
<PAGE>
Notice of redemption of Debentures to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company.
SECTION 1206. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company 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 (including any
Additional Interest) on, all the Debentures which are to be redeemed on that
date; provided, however, that any such deposit on a Redemption Date shall be
initiated prior to 10:00 a.m. (New York time) in same-day funds.
SECTION 1207. Debentures Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Debentures so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest (including any Additional Interest)) such Debentures shall cease to
bear interest. Upon surrender of any such Debenture for redemption in
accordance with said notice, such Debenture shall be paid by the Company at the
Redemption Price, together with accrued interest 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 Debentures,
or one or more Predecessor Debentures, registered as such at the close of
business on the relevant Record Dates according to their terms and the
provisions of Section 307.
If any Debenture called for redemption shall not be so paid upon surrender
thereof for redemption due to the Company not depositing the Redemption Price,
the principal shall, until paid, bear interest from the Redemption Date at the
rate borne by the Debenture.
SECTION 1208. Debentures Redeemed in Part.
Any Debenture which is to be redeemed only in part shall be surrendered at
a place of payment therefor (with, if the Company or the Trustee so requires,
due endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder therefor or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Debenture without
service charge, a new Debenture or Debentures, 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 Debenture so surrendered.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the day and year first above written.
FIRST MARYLAND BANCORP
By: /s/ ROBERT F. RAY
----------------------------
Name:
Title: Senior Vice President
THE BANK OF NEW YORK,
as Trustee
By: /s/ MARYBETH LEWICKI
----------------------------
Name:
Title: Vice President
57
<PAGE>
EXHIBIT A
[INSERT RESTRICTED SECURITIES LEGEND]
FIRST MARYLAND BANCORP
Floating Rate Junior Subordinated Debenture due July 15, 2029, Series __
$ No. _____
FIRST MARYLAND BANCORP, a corporation duly organized and existing under the
laws of the State of Maryland (herein called the "Company", which term includes
any successor corporation under the Indenture hereinafter referred to), for
value received, hereby promises to pay to The Bank of New York, as Asset
Property Trustee on behalf of First Maryland Preferred Asset Trust, or its
registered assigns, the principal sum of ($ )
on July 15, 2029, and to pay interest on said principal sum from July 13, 1999
or from the most recent interest payment date (each such date, an "Interest
Payment Date") to which interest has been paid or duly provided for, quarterly
(subject to deferral as set forth herein) in arrears on the fifteenth day of
January, April, July and October of each year, commencing October 15, 1999, at a
variable per annum rate equal to LIBOR (as defined in the Indenture) plus 1.43%
until the principal hereof shall have become due and payable (plus Additional
Interest, if any), and on any overdue principal and (without duplication and to
the extent that payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum. The amount of
interest payable for any period will be computed based on a year of 360 days and
the actual number of days elapsed. In the event that any date on which interest
is payable on this Debenture is not a Business Day, then a payment of the
interest payable on such date will be made on the next succeeding day which is a
Business Day (and without any interest or other payment in respect of any such
delay), with the same force and effect as if made on the date the payment was
originally payable. A "Business Day" shall mean any day other than a Saturday
or a Sunday or a day on which banking institutions in the City of New York or
The City of Baltimore, Maryland are authorized or required by law or executive
order to remain closed or a day on which the Corporate Trust Office of the
Trustee, the principal office of the Capital Property Trustee (but only if the
Asset Trust Preferred Securities are held by the Capital Property Trustee) or
the principal corporate trust office of the Asset Property Trustee, is closed
for business. The interest installment so payable, and punctually paid or duly
provided for, on any Interest Payment Date will, as provided in the Indenture,
be paid to the Person in whose name the Debentures (or one or more Predecessor
Debentures, as defined in the Indenture) is registered at the close of business
on the Regular Record Date for such interest installment, which shall be the
first day of the month of such Interest Payment Date. Any such interest
installment not so punctually paid or duly provided for shall forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name the Debentures for one or more Predecessor Debentures
is registered at the close of business on a
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<PAGE>
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Debentures not less
than 10 days prior to such Special Record Date, or be paid at any time in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Debentures may be listed, and upon such notice as may be
required by such exchange, all as more fully provided in said Indenture.
The Company shall have the right at any time during the term of this
Debenture, from time to time, to defer payment of interest on the Debenture (an
"Extension Period"), provided that no Extension Period may be terminated without
any required Regulatory Approval or extend past the Maturity of this Debenture.
There may be multiple Extension Periods of varying lengths during the term of
this Debenture. At the end of each Extension Period, if any, the Company shall
pay all interest then accrued and unpaid, together with interest thereon,
compounded quarterly at the rate specified on this Debenture to the extent
permitted by applicable law. Prior to the termination of any such Extension
Period, the Company may further extend such Extension Period, provided that no
Extension Period may exceed 20 quarterly periods (unless the Company has not
required Regulatory Approvals to terminate such Extension Period) or extend
beyond the Stated Maturity of the Debentures. Upon the termination of any such
Extension Period and the payment of all amounts then due on any Interest Payment
Date, the Company may elect to begin a new Extension Period subject to the above
requirements. No interest shall be due and payable during an Extension Period,
except at the end thereof. If the Company is unable to terminate an Extension
Period due to the failure to obtain Regulatory Approval, such Extension Period
shall terminate on the first Interest Payment Date following the date, if any,
on which Regulatory Approval for such termination has been obtained.
The Company shall give the Trustee notice of its election of such Extension
Period at least one Business Day prior to the record date for the related
interest payment. Notwithstanding the Company's failure to give such notice for
any period, the failure to pay any interest payment in full on any Interest
Payment Date will be deemed an election by the Company to defer the interest
payment due on that Interest Payment Date.
If at any time (x) there shall have occurred an Event of Default, (y) there
shall have occurred any event of which the Company has actual knowledge that (I)
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default and (II) in respect of which the Company shall not have taken
reasonable steps to cure, or (z) the Company shall have given, or shall have
been deemed to have given, notice of its election of an Extension Period as
provided herein and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing, then unless or until,
since the end of any such Extension Period and the curing or waiving of any such
Event of Default or event, the Company has paid all Deferred Interest for any
Extension Period and interest on the Debentures in full on four consecutive
Interest Payment Dates, the Company may not, and may not permit any subsidiary
of the Company to, (i) declare or pay any dividends or distributions on, or
redeem, purchase, acquire, or make a liquidation payment with respect to, any of
the Company's capital stock or (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt securities of the
Company that rank pari passu with or junior in interest and right of payment to
the Debentures or make any guarantee payments with respect to any guarantee
which ranks pari passu or junior in interest and right of payment to the
Debentures (other than (a) any declaration or payment of a dividend or
distribution on, or any payment of principal, premium, if
A-2
<PAGE>
any, or interest on any guarantee, debt security or instrument of the Company
ranking pari passu with the Debentures that is made on a pro rated basis with
all other such guarantees, debt securities and instruments, including the
Capital Trust Guarantee and the Asset Trust Preferred Guarantee, (b)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants or in connection with a dividend reinvestment
or stockholder stock purchase plan, (c) as a result of an exchange or conversion
of any class or series of the Company's capital stock (or any capital stock of a
subsidiary of the Company) for any class or series of the Company's capital
stock or of any class or series of the Company's indebtedness for any class or
series of the Company's capital stock, (d) the purchase of fractional interests
in shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(e) any declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, or (f)
any dividend in the form of stock, warrants, options or other rights where the
exercise of such warrants, options, or other rights is the same stock as that on
which the dividend is being paid or ranks pari passu with or junior to such
stock).
Payment of the principal of and interest on this Debenture will be made at
the office or agency of the Paying Agent maintained for that purpose in the
United States, in such coin or currency of the United States of America as at
the time of payment is legal tender for payment of public and private debts;
provided, however, that at the option of the Company, payment of interest may be
made (i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Security Register or (ii) by wire transfer in
immediately available funds at such place and to such account as may be
designated in writing at least 15 days prior to the relevant record date by the
Person entitled thereto as specified in the Security Register.
The indebtedness evidenced by this Debenture is, to the extent provided in
the Indenture, subordinate and subject in right of payment to the prior payment
in full of all Indebtedness, and this Debenture is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this
Debenture, by accepting the same, (a) agrees to and shall be bound by such
provisions, (b) authorizes and directs the Trustee on his behalf to take such
action as may be necessary or appropriate to effectuate the subordination so
provided and (c) appoints the Trustee his attorney-in-fact for any and all such
purposes. Each Holder hereof, by his acceptance hereof, waives all notice of
the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Indebtedness, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Reference is hereby made to the further provisions of the Indenture
summarized on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Debenture
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
A-3
<PAGE>
IN WITNESS WHEREOF, First Maryland Bancorp has caused this instrument to be
duly executed.
FIRST MARYLAND BANCORP
By:__________________________
Name:
Title:
This is one of the Debentures referred to in the within-mentioned
Indenture.
Dated: ________, __
THE BANK OF NEW YORK,
as Trustee
By:__________________________
Authorized Signatory
A-4
<PAGE>
[Form of Reverse of Debenture]
This Debenture is one of a duly authorized issue of Debentures of First
Maryland Bancorp (the "Company"), designated as its Floating Rate Junior
Subordinated Debentures due 2029, Series __ (herein called the "Debentures"),
issued under an Indenture, dated as of July 13, 1999 (herein called the
"Indenture"), between the Company and The Bank of New York, a New York banking
corporation, as Trustee (herein called the "Trustee," which term includes any
successor trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights, limitations of rights, duties and immunities thereunder of the Trustee,
the Company and the Holders of the Debentures, and of the terms upon which the
Debentures are, and are to be, authenticated and delivered.
All terms used in this Debenture which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
At any time on or after July 15, 2009, the Company may, subject to the last
paragraph of Section 307 of the Indenture and to its obtaining Regulatory
Approval to do so, redeem the Debentures, in whole or in part, from time to
time, at a Redemption Price equal to 100% of the principal amount of Debentures
to be redeemed plus any accrued but unpaid interest (including any Additional
Interest) to the Redemption Date.
If, at any time, a Debenture Special Event shall occur and be continuing,
the Company may, within 90 days following the occurrence of such Debenture
Special Event elect to either (i) subject to obtaining Regulatory Approval to do
so, redeem the Debentures in whole, but not in part, upon not less than 30 nor
more than 60 days' notice, at a Redemption Price equal to 100% of the principal
amount of Debentures to be redeemed plus any accrued but unpaid interest
(including any Additional Interest) to the Redemption Date; provided, however,
that if at the time there is available to the Company opportunity to eliminate,
within such 90-day period, the Debenture Special Event by taking some
ministerial action, such as filing a form or making an election, or pursuing
some other similar reasonable measure which in the sole judgment of the Company
has or will cause no adverse effect on Capital Trust, Asset Trust, the Company
or the holders of the Capital Trust Securities or the Asset Trust Preferred
Securities and will involve no material cost, the Company will pursue such
measure in lieu of redemption or (ii) cause the Debentures to remain
outstanding; provided, that in the case of this clause (ii), the Company shall
pay any and all expenses incurred by or payable by Capital Trust and Asset Trust
attributable to the Debenture Special Event.
The Company shall not redeem the Debentures in part unless all accrued and
unpaid interest (including any Additional Interest) has been paid in full on all
Debentures outstanding for all quarterly interest periods terminating on or
prior to the Redemption Date.
Any redemption will be made upon not less than 30 nor more than 60 days'
notice. If the Debentures are only partially redeemed by the Company, the
Debentures will be redeemed by lot (or such other method of selection as the
Trustee may customarily employ). In the event of
A-5
<PAGE>
redemption of this Debenture in part only, a new Debenture or Debentures for the
unredeemed portion hereof will be issued in the name of the Holder hereof upon
the cancellation hereof.
If an Event of Default with respect to the Debentures shall occur and be
continuing, the principal of the Debentures may be declared due and payable in
the manner, with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions for satisfaction and discharge or legal
defeasance of the entire indebtedness of this Debenture and for the defeasance
of certain covenants under the Indenture at any time upon compliance by the
Company with certain conditions set forth in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of Holders of not less than a majority in principal amount of
the Outstanding Debentures affected by such modification, to modify the
Indenture in a manner affecting the rights of the Holders of the Debentures;
provided that so such modification may, without the consent of the Holder of
each Outstanding Debenture affected thereby, (i) except to the extent permitted
and subject to the conditions set forth in the Indenture with respect to the
extension of the Maturity of the Debenture, change the maturity of, the
principal of, or any installment of interest on, the Debenture or reduce the
principal amount thereof, or the rate of payment of interest thereon, or change
the place of payment where, or the coin or currency in which, this Debenture or
interest thereon is payable, or impair the right to institute suit for the
enforcement of such payment on or after the Maturity thereof (or, in the case of
redemption, on or after the Redemption Date), or modify the provisions of the
Indenture with respect to the subordination of the Debentures in a manner
adverse to the Holders, (ii) reduce the percentage in principal amount of the
Outstanding Debentures, the consent of whose Holders is required for such
supplemental Indenture or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of the Indenture or certain
defaults hereunder and their consequences) provided for in the Indenture, or
(iii) modify any of the provisions of Section 513, Section 902 or Section 1008
of the Indenture, except to increase any such percentage or to provide that
certain other provisions of the Indenture cannot be modified or waived without
the consent of the Holder of each Outstanding Debenture affected thereby,
provided that, so long as any of the Asset Trust Preferred Securities (or, if
Asset Trust Preferred Securities are being held by the Capital Property Trustee,
Capital Trust Preferred Securities) remains outstanding, no such amendment shall
be made that adversely affects the holders of the Asset Trust Preferred
Securities, (or, if Asset Trust Preferred Securities are being held by the
Capital Property Trustee, Capital Trust Preferred Securities) and no termination
of the Indenture shall occur, and no waiver of an Event of Default or compliance
with any covenant under this Indenture shall be effective, without the prior
consent of the holders of at least a majority of the aggregate liquidation
preference of the outstanding Asset Trust Preferred Securities (or, if Asset
Trust Preferred Securities are being held by the Capital Property Trustee,
Capital Trust Preferred Securities) unless and until the principal of and any
premium on the Debentures and all accrued and unpaid interest thereon have been
paid in full.
No reference herein to the Indenture and no provision of this Debenture or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and
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<PAGE>
unconditional, to pay the principal of and interest on this Debenture at the
times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Debenture is registrable in the Security Register,
upon surrender of this Debenture for registration of transfer at the office or
agency of the Company in New York, New York, duly endorsed by, or accompanied by
a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by, the Holder hereof or his attorney duly
authorized in writing, and thereupon one or more new Debentures, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees. No service charge shall be made for any
such registration of transfer or exchange, but the Company may require payment
of a sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
Prior to due presentment of this Debenture for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Debenture is registered as the owner hereof for
all purposes, whether or not this Debenture be overdue, and neither the Company,
the Trustee nor any such agent shall be affected by notice to the contrary.
The Debentures are issuable only in registered form without coupons in
denominations of $1,000 and any integral multiple thereof. As provided in the
Indenture and subject to certain limitations therein set forth, Debentures are
exchangeable for a like aggregate principal amount of Debentures of a different
authorized denomination, as requested by the Holder surrendering the same.
THE DEBENTURES AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
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<PAGE>
In connection with any transfer of this Debenture occurring prior to the
date which is the earlier of (i) the date of the declaration by the Commission
of the effectiveness of a registration statement under the Securities Act
covering resales of this Debenture (which effectiveness shall not have been
suspended or terminated at the date of the transfer) and (ii) two years after
the later of the date of original issue and the last date on which the Company
or any affiliate of the Company was the owner of such Debenture (or any
predecessor thereto) (the "Resale Restriction Termination Date"), the
undersigned confirms that it has not utilized any general solicitation or
general advertising in connection with the transfer:
[CHECK ONE]
<TABLE>
<S> <C>
(1) to the Company or a subsidiary thereof; or
(2) pursuant to and in compliance with Rule 144A under the Securities Act of
1933, as amended; or
(3) to an institutional "accredited investor" (as defined in Rule 501(a)(1),
(2), (3) or (7) under the Securities Act of 1933, as amended) that has
furnished to the Trustee a signed letter containing certain representations
and agreements (the form of which letter can be obtained from the Trustee);
or
(4) outside the United States to a "foreign person" in compliance with Rule 904
of Regulation S under the Securities Act of 1933, as amended; or
(5) pursuant to the exemption from registration provided by Rule 144 under the
Securities Act of 1933, as amended; or
(6) pursuant to an effective registration statement under the Securities Act of
1933, as amended; or
(7) pursuant to another available exemption from the registration requirements
of the Securities Act of 1933, as amended.
</TABLE>
Unless one of the boxes is checked, the Trustee will refuse to register any of
the Debentures evidenced by this certificate in the name of any person other
than the registered Holder thereof; provided, however, that if box (3), (4), (5)
or (7) is checked, the Company or the Trustee may require, prior to registering
any such transfer of the Debentures, in its sole discretion, such written legal
opinions, certifications (including an investment letter in the case of box (3)
or (4)) and other information as the Trustee or the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act of 1933, as amended.
A-8
<PAGE>
If none of the foregoing boxes is checked, the Trustee or Registrar shall not be
obligated to register this Debenture 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 shall have been satisfied.
Dated:_______________ Signed:________________________
Sign exactly as name appears
on the other side of this
Debenture
Signature Guarantee:__________________________
TO BE COMPLETED BY PURCHASER IF (2) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Debenture for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act
and 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 Company as the
undersigned has requested pursuant to Rule 144A or has determined not to request
such information and that it 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
A-9
<PAGE>
EXHIBIT 4.3
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ALLFIRST PREFERRED CAPITAL TRUST
DATED AS OF JULY 13, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 INTERPRETATION AND DEFINITIONS............................ 2
Affiliate............................................................. 2
Asset Declaration..................................................... 2
Asset Property Trustee................................................ 2
Asset Trust Enforcement Event......................................... 2
Asset Trust........................................................... 2
Asset Trust Common Securities......................................... 3
Asset Trust Preferred Guarantee....................................... 3
Asset Trust Preferred Securities...................................... 3
Authorized Officer.................................................... 3
Day................................................................... 3
Business Trust Act.................................................... 3
Capital Delaware Trustee.............................................. 3
Capital Property Account.............................................. 3
Capital Property Trustee.............................................. 3
Capital Trust......................................................... 3
Capital Trust Administrator........................................... 3
Capital Trust Administrator's Authorization Certificate............... 3
Capital Trust Common Security......................................... 3
Capital Trust Common Security Certificate............................. 3
Capital Trust Common Securities Holder................................ 3
Capital Trust Enforcement Event....................................... 4
Capital Trust Guarantee............................................... 4
Capital Trust Investment Company Event................................ 4
Capital Trust Liquidation............................................. 4
Capital Trust Liquidation Distribution................................ 4
Capital Trust Preferred Security...................................... 4
Capital Trust Preferred Security Certificate.......................... 4
Capital Trust Redemption Tax Opinion.................................. 4
Capital Trust Regulatory Event........................................ 4
Capital Trust Securities.............................................. 5
Capital Trust Special Event........................................... 5
Capital Trust Tax Event............................................... 4
Capital Trustee....................................................... 5
Capital Trustees...................................................... 5
Central Bank of Ireland............................................... 5
Certificate........................................................... 5
Certificate of Trust.................................................. 6
Closing Date.......................................................... 6
Code.................................................................. 6
Commission............................................................ 6
Company............................................................... 6
Company Indemnified Person............................................ 6
Corporate Trust Office................................................ 6
Covered Person........................................................ 6
Debenture Issuer...................................................... 6
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
Debentures......................................................... 6
Depositary......................................................... 6
DTC................................................................ 6
Distribution....................................................... 7
Distribution Payment Date.......................................... 7
Distribution Period................................................ 7
Exchange Act....................................................... 7
Exchange Offer..................................................... 7
Extension Period................................................... 7
Federal Reserve.................................................... 7
Fiduciary Indemnified Person....................................... 7
Fiscal Period...................................................... 7
Fiscal Year........................................................ 7
Global Security.................................................... 7
Holder............................................................. 7
Indemnified Person................................................. 8
Indenture.......................................................... 8
Initial Purchaser.................................................. 8
Institutional Accredited Investor.................................. 8
Investment Company Act............................................. 8
Legal Action....................................................... 8
List of Holders.................................................... 8
Majority in Liquidation Amount..................................... 8
Offering Memorandum................................................ 8
Officers' Certificate.............................................. 8
Original Declaration............................................... 9
Paying Agent....................................................... 9
Person............................................................. 9
Pro Rata........................................................... 9
Qualified Institutional Buyer...................................... 9
QIB................................................................ 9
Quorum............................................................. 9
Redemption/Distribution Notice..................................... 9
Redemption Price................................................... 9
Registration Rights Agreement...................................... 9
Regulation S....................................................... 9
Regulatory Approval................................................ 9
Related Party...................................................... 9
Resale Restriction Termination Date................................ 9
Responsible Officer................................................ 10
Restricted Global Security......................................... 10
Restricted Securities Legend....................................... 10
Restricted Security................................................ 10
Rule 144A.......................................................... 10
Rule 3a-5.......................................................... 10
Securities Act..................................................... 10
Series A Asset Trust Preferred Guarantee........................... 10
Series A Asset Trust Preferred Securities.......................... 10
Series A Capital Trust Guarantee................................... 10
Series A Capital Trust Preferred Securities........................ 10
Series A Debentures................................................ 10
Series B Asset Trust Preferred Guarantee........................... 11
Series B Asset Trust Preferred Securities.......................... 11
Series B Capital Trust Guarantee................................... 11
Series B Capital Trust Preferred Securities........................ 11
Series B Debentures................................................ 11
</TABLE>
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Sponsor............................................................................... 11
Successor Capital Delaware Trustee.................................................... 11
Successor Capital Property Trustee.................................................... 11
Successor Entity...................................................................... 11
Successor Security.................................................................... 11
Super Majority........................................................................ 11
10% in Liquidation Amount............................................................. 11
Treasury Regulations.................................................................. 11
Trust Indenture Act................................................................... 12
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.......................................... 12
Section 2.2 LISTS OF HOLDERS OF SECURITIES............................................ 12
Section 2.3 REPORTS BY THE CAPITAL PROPERTY TRUSTEE................................... 13
Section 2.4 PERIODIC REPORTS TO THE CAPITAL PROPERTY TRUSTEE.......................... 13
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.......................... 13
Section 2.6 CAPITAL TRUST ENFORCEMENT EVENTS; WAIVER.................................. 13
Section 2.7 CAPITAL TRUST ENFORCEMENT EVENT; NOTICE................................... 15
ARTICLE III
ORGANIZATION
Section 3.1 NAME AND ORGANIZATION..................................................... 15
Section 3.2 OFFICE.................................................................... 16
Section 3.3 PURPOSE................................................................... 16
Section 3.4 AUTHORITY................................................................. 16
Section 3.5 TITLE TO PROPERTY OF CAPITAL TRUST........................................ 16
Section 3.6 POWERS AND DUTIES OF THE CAPITAL TRUST ADMINISTRATORS..................... 17
Section 3.7 PROHIBITION OF ACTIONS BY CAPITAL TRUST AND THE CAPITAL TRUSTEES.......... 20
Section 3.8 POWERS AND DUTIES OF THE CAPITAL PROPERTY TRUSTEE......................... 21
Section 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE CAPITAL PROPERTY TRUSTEE....... 23
Section 3.10 CERTAIN RIGHTS OF THE CAPITAL PROPERTY TRUSTEE............................ 25
Section 3.11 CAPITAL DELAWARE TRUSTEE.................................................. 28
Section 3.12 EXECUTION OF DOCUMENTS.................................................... 28
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF CAPITAL TRUST SECURITIES...... 28
Section 3.14 DURATION OF CAPITAL TRUST................................................. 28
Section 3.15 MERGERS................................................................... 28
Section 3.16 CAPITAL PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM......................... 30
ARTICLE IV
SPONSOR
Section 4.1 RESPONSIBILITIES OF THE SPONSOR........................................... 31
Section 4.2 COMPENSATION, INDEMNIFICATION AND EXPENSES OF CAPITAL TRUSTEES............ 32
ARTICLE V
CAPITAL TRUST COMMON SECURITIES HOLDER
Section 5.1 COMPANY'S PURCHASES OF CAPITAL TRUST COMMON SECURITIES.................... 33
Section 5.2 COVENANTS OF THE CAPITAL TRUST COMMON SECURITIES HOLDER................... 33
</TABLE>
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Section 5.3 TRANSFER OF CAPITAL TRUST COMMON SECURITIES........................... 33
ARTICLE VI
CAPITAL TRUSTEES
Section 6.1 NUMBER OF CAPITAL TRUSTEES............................................ 33
Section 6.2 CAPITAL DELAWARE TRUSTEE.............................................. 34
Section 6.3 CAPITAL PROPERTY TRUSTEE; ELIGIBILITY................................. 34
Section 6.4 QUALIFICATIONS OF CAPITAL TRUST ADMINISTRATORS AND
CAPITAL DELAWARE TRUSTEE GENERALLY.................................... 35
Section 6.5 INITIAL CAPITAL TRUST ADMINISTRATORS.................................. 35
Section 6.6 CAPITAL DELAWARE TRUSTEE.............................................. 36
Section 6.7 APPOINTMENT, REMOVAL AND RESIGNATION OF CAPITAL TRUSTEES.............. 36
Section 6.8 VACANCIES AMONG CAPITAL TRUSTEES...................................... 38
Section 6.9 EFFECT OF VACANCIES................................................... 38
Section 6.10 MEETINGS.............................................................. 38
Section 6.11 DELEGATION OF POWER................................................... 39
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS........... 39
ARTICLE VII
THE CAPITAL TRUST SECURITIES
Section 7.1 GENERAL PROVISIONS REGARDING CAPITAL TRUST SECURITIES................. 39
Section 7.2 DISTRIBUTIONS......................................................... 42
Section 7.3 REDEMPTION OF CAPITAL TRUST SECURITIES................................ 43
Section 7.4 REDEMPTION PROCEDURES................................................. 44
Section 7.5 VOTING RIGHTS OF CAPITAL TRUST PREFERRED SECURITIES................... 46
Section 7.6 VOTING RIGHTS OF CAPITAL TRUST COMMON SECURITIES...................... 49
Section 7.7 PAYING AGENT.......................................................... 50
Section 7.8 TRANSFER OF CAPITAL TRUST SECURITIES.................................. 51
Section 7.9 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES..................... 52
Section 7.10 DEEMED SECURITY HOLDERS............................................... 52
Section 7.11 GLOBAL SECURITIES..................................................... 52
Section 7.12 RESTRICTIVE LEGEND.................................................... 55
Section 7.13 SPECIAL TRANSFER PROVISIONS........................................... 58
Section 7.14 CUSIP NUMBERS......................................................... 59
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 DISSOLUTION AND TERMINATION OF TRUST.................................. 59
Section 8.2 LIQUIDATION DISTRIBUTION UPON TERMINATION AND DISSOLUTION OF
CAPITAL TRUST......................................................... 60
ARTICLE IX
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, CAPITAL TRUSTEES OR OTHERS
Section 9.1 LIABILITY............................................................. 61
Section 9.2 EXCULPATION........................................................... 62
Section 9.3 FIDUCIARY DUTY........................................................ 62
Section 9.4 INDEMNIFICATION....................................................... 63
Section 9.5 OUTSIDE BUSINESSES.................................................... 66
</TABLE>
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ARTICLE X
ACCOUNTING
Section 10.1 FISCAL YEAR........................................................... 66
Section 10.2 CERTAIN ACCOUNTING MATTERS............................................ 66
Section 10.3 BANKING............................................................... 67
Section 10.4 WITHHOLDING........................................................... 67
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1 AMENDMENTS............................................................ 68
Section 11.2 MEETINGS OF THE HOLDERS OF CAPITAL TRUST SECURITIES; ACTION BY
WRITTEN CONSENT....................................................... 71
ARTICLE XII
REPRESENTATIONS OF CAPITAL PROPERTY TRUSTEE AND CAPITAL DELAWARE TRUSTEE. 72
Section 12.1 REPRESENTATIONS AND WARRANTIES OF THE CAPITAL PROPERTY TRUSTEE........ 72
Section 12.2 REPRESENTATIONS AND WARRANTIES OF THE CAPITAL DELAWARE TRUSTEE........ 73
ARTICLE XIII
MISCELLANEOUS
Section 13.1 NOTICES............................................................... 74
Section 13.2 GOVERNING LAW......................................................... 75
Section 13.3 INTENTION OF THE PARTIES.............................................. 75
Section 13.4 HEADINGS.............................................................. 75
Section 13.5 SUCCESSORS AND ASSIGNS................................................ 76
Section 13.6 PARTIAL ENFORCEABILITY................................................ 76
Section 13.7 COUNTERPARTS.......................................................... 76
Section 13.8 UNDERTAKING FOR COSTS................................................. 76
</TABLE>
Exhibit A-1 FORM OF CAPITAL TRUST PREFERRED SECURITY CERTIFICATE
Exhibit A-2 FORM OF CAPITAL TRUST COMMON SECURITY CERTIFICATE
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated as of
July 13, 1999 among FIRST MARYLAND BANCORP, a Maryland corporation, as Sponsor,
and David M. Cronin and Robert F. Ray as the initial Capital Trust
Administrators, THE BANK OF NEW YORK, a New York banking corporation, as the
initial Capital Property Trustee and THE BANK OF NEW YORK (DELAWARE) as the
initial Capital Delaware Trustee, not in their individual capacities but solely
as Capital Trustees, and the holders, from time to time, of undivided beneficial
ownership interests in the assets of Capital Trust (as defined herein) to be
issued pursuant to this Declaration.
WHEREAS, certain of the Capital Trustees and the Sponsor established
Allfirst Preferred Capital Trust ("Capital Trust"), a business trust under the
Business Trust Act (as defined, together with other capitalized terms, herein)
pursuant to a Declaration of Trust dated as of June 29, 1999 (the "Original
Declaration") and a Certificate of Trust (the "Certificate of Trust") filed with
the Secretary of State of the State of Delaware on June 29, 1999; and
WHEREAS, the sole purpose of Capital Trust shall be to issue and sell
certain securities representing undivided beneficial ownership interests in the
assets of Capital Trust, to invest the proceeds from such sales in the Asset
Trust Preferred Securities issued by Asset Trust and to engage in only those
activities necessary or incidental thereto; and
WHEREAS, all of the Capital Trustees and the Sponsor, by this Declaration,
amend and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that Capital
Trust continue as a business trust under the Business Trust Act, the Capital
Trustees hereby declare that all assets contributed to Capital Trust be held in
trust for the benefit of the Holders, from time to time, of the Capital Trust
Securities representing undivided beneficial ownership interests in the assets
of Capital Trust issued hereunder, subject to the provisions of this
Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 INTERPRETATION AND DEFINITIONS.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Declaration unless otherwise defined in this Declaration or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa and
a reference to any masculine form of a term shall include the feminine form of a
term, as applicable.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act or any successor rule thereunder.
"Asset Declaration" means the Amended and Restated Declaration of Trust
of Asset Trust, dated as of July 13, 1999, as amended, modified or supplemented
from time to time, among the administrators and the trustees of Asset Trust
named therein, the Company, as sponsor, and the holders of undivided beneficial
ownership interests in the assets of Asset Trust.
"Asset Property Trustee" has the meaning set forth in Section 6.3(a) of
the Asset Declaration.
"Asset Trust Enforcement Event" has the meaning set forth in Section 1.1
of the Asset Declaration.
"Asset Trust" means Allfirst Preferred Asset Trust, a statutory Delaware
business trust.
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"Asset Trust Common Securities" has the meaning set forth in the Asset
Declaration.
"Asset Trust Preferred Guarantee" means, collectively, the Series A
Asset Trust Preferred Guarantee and the Series B Asset Trust Preferred
Guarantee.
"Asset Trust Preferred Securities"{{ means, collectively, the Series A
Asset Trust Preferred Securities and the Series B Asset Trust Preferred
Securities.
"Authorized Officer" of a Person means the Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President, a Vice
President, the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such Person.
"Business Day" means any day other than a day on which banking
institutions in The City of New York or The City of Baltimore are authorized or
required by law to close .
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code,
12 Del. Code Section 3801 et seq., as it may be amended from time to time, or
-- ---
any successor legislation.
"Capital Delaware Trustee" has the meaning set forth in Section 6.2.
"Capital Property Account" has the meaning specified in Section 3.8(c).
"Capital Property Trustee" means a Capital Trustee meeting the
eligibility requirements set forth in Section 6.3.
"Capital Trust" means the Allfirst Preferred Capital Trust, a Delaware
business trust, formed under the Original Declaration.
"Capital Trust Administrator" means any officer or employee of or any
individual who is affiliated with the Company who serves as an administrator of
Capital Trust.
"Capital Trust Administrator's Authorization Certificate" means a
written certificate signed by two of the Capital Trust Administrators for the
purpose of establishing the terms and form of the Capital Trust Preferred
Securities and the Capital Trust Common Securities as determined by the Capital
Trust Administrators.
"Capital Trust Common Security" has the meaning specified in Section
7.1(a).
"Capital Trust Common Security Certificate" means a definitive
certificate in fully registered form representing a Capital Trust Common
Security.
"Capital Trust Common Securities Holder" means the Company, or any
wholly-owned, direct or indirect subsidiary of the Company, in its capacity as
purchaser and
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holder of all of the Capital Trust Common Securities issued or to be issued by
Capital Trust.
"Capital Trust Enforcement Event" means the occurrence, at any time, of
(i) a default by the Company in respect of any of its obligations under the
Capital Trust Guarantee or (ii) an Asset Enforcement Event.
"Capital Trust Guarantee" means, collectively, the Series A Capital
Trust Guarantee and the Series B Capital Trust Guarantee.
"Capital Trust Investment Company Event" means that the Company shall
have requested and received and shall have delivered to the Capital Trust
Administrators an opinion of nationally recognized independent legal counsel
experienced in these matters to the effect that as a result of the occurrence on
or after the date of the Offering Memorandum of a change in law or regulation or
a change in interpretation or application of law or regulation by any
legislative body, court, governmental agency or regulatory authority (a "Change
in Investment Company Act Law"), Capital Trust is or will be considered an
investment company which is required to be registered under the Investment
Company Act.
"Capital Trust Liquidation" has the meaning set forth in Section 8.2(a).
"Capital Trust Liquidation Distribution" has the meaning set forth in
Section 8.2(a).
"Capital Trust Preferred Security" has the meaning specified in Section
7.1(a).
"Capital Trust Preferred Security Certificate" means a definitive
certificate in fully registered form representing a Capital Trust Preferred
Security.
"Capital Trust Redemption Tax Opinion" means an opinion of nationally
recognized independent tax counsel experienced in such matters that there has
been a Capital Trust Tax Event, and following such Capital Trust Tax Event there
is more than an insubstantial risk that interest payable by the Company with
respect to the Debentures is not, or will not be, deductible by the Company for
United States Federal income tax purposes even if the Asset Trust Preferred
Securities were distributed to the Holders of the Capital Trust Securities in
liquidation of such Holders' interests in Capital Trust.
"Capital Trust Regulatory Event" shall occur at any time that the
Company becomes, or under law, regulation, any rules, guidelines or policies of
the Federal Reserve or the Central Bank of Ireland or any official
administrative announcement or decision interpreting these laws, regulations,
rules, policies or guidelines, or will become within 180 days, subject to
capital requirements under which, in the written opinion of independent bank
regulatory counsel experienced in such matters, the Capital Trust Preferred
Securities or the Asset Trust Preferred Securities would not qualify,
disregarding any Tier 1 category limits, for treatment as (1) Tier 1 capital for
the
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Company as a bank holding company or its then equivalent or (2) consolidated
Tier 1 capital for Allied Irish Banks p.l.c.
"Capital Trust Securities" means, collectively, the Capital Trust Common
Securities and the Capital Trust Preferred Securities.
"Capital Trust Special Event" means a Capital Trust Tax Event, a Capital
Trust Regulatory Event or a Capital Trust Investment Company Event.
"Capital Trust Tax Event" means that the Company shall have requested
and received and shall have delivered to the Capital Trust Administrators an
opinion of nationally recognized independent tax counsel experienced in these
matters to the effect that there has been: (i) an amendment to, change in or
announced proposed change in the laws, or any regulations under those laws of
the United States or any political subdivision or taxing authority of that
jurisdiction; (ii) a judicial decision interpreting, applying, or clarifying
these laws or regulations; (iii) an administrative pronouncement or action that
represents an official position, including a clarification of an official
position, of the governmental authority or regulatory body making the
administrative pronouncement or taking any action; or (iv) a threatened
challenge asserted in connection with an audit of the Company or any of its
subsidiaries, Asset Trust, or Capital Trust, or a threatened challenge asserted
in writing against any other taxpayer that has raised capital through the
issuance of securities that are substantially similar to the Debentures, the
Asset Trust Preferred Securities or the Capital Trust Preferred Securities,
which amendment or change is adopted or which proposed change, decision or
pronouncement is announced or which action, clarification or challenge occurs on
or after the date of the final Offering Memorandum (collectively a "Tax Event"),
which Tax Event relates to any of the items described in (a) through (c) below,
and that following the occurrence of any Tax Event there is more than an
insubstantial risk that: (a) Capital Trust is, or will be, subject to United
States Federal income tax with respect to income received on the Asset Trust
Preferred Securities; (b) Capital Trust is, or will be, subject to more than a
minimal amount of other taxes, duties or other governmental charges; or (c)
interest payable by the Company with respect to the Debentures is not, or will
not be, deductible by the Company for United States Federal income tax purposes.
"Capital Trustee" or "Capital Trustees" means each Person who has signed
this Declaration as a Capital Trust Administrator or trustee, so long as such
Person shall continue in office in accordance with the terms hereof, and all
other Persons who may from time to time be duly appointed, qualified and serving
as Capital Trustees in accordance with the provisions hereof, and references
herein to a Capital Trustee or the Capital Trustees shall refer to such Person
or Persons solely in their capacity as Capital Trustees or as Capital Trust
Administrators hereunder.
"Central Bank of Ireland" means the Central Bank of Ireland.
"Certificate" means a Capital Trust Common Security Certificate or a
Capital Trust Preferred Security Certificate.
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"Certificate of Trust" has the meaning specified in the recitals hereto.
"Closing Date" means July 13, 1999 and such subsequent date or dates on
which the Series A Capital Trust Preferred Securities are issued and sold which
subsequent Closing Date shall in no event occur after August 8, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Company" means First Maryland Bancorp, a Maryland corporation, or any
successor entity in a merger.
"Company Indemnified Person" means (a) any Capital Trust Administrator;
(b) any Affiliate of any Capital Trust Administrator; (c) any officers,
directors, shareholders, members, partners, employees, representatives or agents
of any Capital Trust Administrator or any Affiliate thereof; or (d) any officer,
director, shareholder, member, partner, employee, representative or agent of
Capital Trust or its Affiliates.
"Corporate Trust Office" means the office of the Capital Property
Trustee at which the corporate trust business of the Capital Property Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 101 Barclay Street, Floor 21
West, New York, New York 10286. Attention: Corporate Trust Administration.
"Covered Person" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) Capital Trust or (ii) any of
its Affiliates; and (b) any Holder of Capital Trust Securities.
"Debenture Issuer" means First Maryland Bancorp in its capacity as
issuer, in one or more issuances, of the Debentures under the Indenture.
"Debentures" means, collectively, the Series A Debentures and the
Series B Debentures.
"Depositary" means, with respect to Capital Trust Preferred Securities
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Capital Trust Preferred Securities.
"DTC" means The Depository Trust Company, the initial Depositary.
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"Distribution" means a distribution payable to Holders of Capital Trust
Securities in accordance with Section 7.2.
"Distribution Payment Date" means, January 15, April 15, July 15 and
October 15 of each year, commencing October 15, 1999.
"Distribution Period" means, with respect to any Distribution Payment
Date, the period from and including the immediately preceding Distribution
Payment Date to but excluding such Distribution Payment Date, or in the case of
the initial Distribution Period, the period from the Closing Date to but
excluding the initial Distribution Payment Date.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor legislation.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by Capital Trust to exchange the Series B
Capital Trust Preferred Securities for the Series A Capital Trust Preferred
Securities, (ii) by Asset Trust to exchange the Series A Asset Trust Preferred
Securities for the Series B Asset Trust Preferred Securities, and (iii) by the
Company, as Debenture Issuer, to exchange the Series B Debentures for the Series
A Debentures and to execute the Series B Capital Trust Guarantee in respect of
the Series B Capital Trust Preferred Securities and the Capital Trust Common
Securities and the Series B Asset Trust Preferred Guarantee in respect of the
Series B Asset Trust Preferred Securities.
"Extension Period" has the meaning set forth in the Indenture.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Fiduciary Indemnified Person" has the meaning set forth in Section
9.4(b).
"Fiscal Period" has the meaning set forth in Section 1.1 of the Asset
Declaration.
"Fiscal Year" has the meaning set forth in Section 10.1.
"Global Security" has the meaning set forth in Section 7.11.
"Holder" means a Person in whose name a Certificate representing a
Capital Trust Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act; provided, however, that in
determining whether the Holders of the requisite liquidation amount of Capital
Trust Preferred Securities have voted on any matter provided for in this
Declaration, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Capital Trust Preferred Securities remain in
the form of one or more Global Securities, the term "Holders" shall mean the
holder of the Global Security acting at the direction of the beneficial owners
of the Capital Trust Preferred Securities.
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"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture between the Company, as Debenture
Issuer, and The Bank of New York, as Indenture Trustee, dated as of July 13,
1999, a form of which is attached as Exhibit A to the Asset Declaration, and any
indenture supplement thereto.
"Initial Purchaser" means Lehman Brothers Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the terms
of the Capital Trust Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Capital Trust Securities, voting together as a single
class, or, as the context may require, Holders of outstanding Capital Trust
Preferred Securities or Holders of outstanding Capital Trust Common Securities,
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount of all outstanding Capital Trust Securities of the
relevant class.
"Offering Memorandum" means Capital Trust's offering memorandum used in
connection with offers and sales of the Series A Capital Trust Preferred
Securities.
"Officers' Certificate"' means, with respect to any Person (other than
Capital Trust Administrators who are natural persons), a certificate signed by
two Authorized Officers of such Person on behalf of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer and on behalf of such Person, such condition or covenant has
been complied with;
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provided, that the term "Officers' Certificate", when used with reference to
Capital Trust Administrators who are natural persons shall mean a certificate
signed by two of the Capital Trust Administrators which otherwise satisfies the
foregoing requirements.
"Original Declaration" has the meaning specified in the recitals hereto.
"Paying Agent" has the meaning specified in Section 7.7.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Pro Rata" means, in reference to any distributions on or redemptions of
Capital Trust Securities or the distribution of Asset Trust Preferred Securities
or any other payment with respect to Capital Trust Securities in connection with
a Capital Trust Special Event or liquidation of Capital Trust, pro rata to each
Holder of Capital Trust Securities according to the aggregate liquidation amount
of the Capital Trust Securities held by the relevant Holder in relation to the
aggregate liquidation amount of all Capital Trust Securities outstanding.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in
Rule 144A under the Securities Act.
"Quorum" means a majority of the Capital Trust Administrators or, if
there are only two Capital Trust Administrators, both of them.
"Redemption/Distribution Notice" has the meaning specified in Section
7.4(a).
"Redemption Price" has the meaning specified in Section 7.3(a).
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of July 9, 1999, among the Company, Capital Trust, Asset Trust and the
Initial Purchaser for the benefit of themselves and the Holders of the Capital
Trust Preferred Securities as the same may be amended from time to time in
accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.
"Regulatory Approval" has the meaning set forth in the Indenture.
"Related Party" means, with respect to the Sponsor, any direct or wholly
owned subsidiary of the Sponsor or any Person that owns, directly or indirectly,
100% of the outstanding voting securities of the Sponsor.
"Resale Restriction Termination Date" has the meaning specified in
Section 7.12(a).
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"Responsible Officer" means, with respect to the Capital Property
Trustee, any officer within the Corporate Trust Office of the Capital Property
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, any assistant treasurer or other officer of the Corporate
Trust Office of the Capital Property Trustee customarily performing functions
similar to those performed by any of the above designated officers and also
means, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Restricted Global Security" means any Global Security evidencing
Capital Trust Securities that are to be sold pursuant to Rule 144A or Regulation
S.
"Restricted Securities Legend" has the meaning specified in Section
7.12(a).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act or any successor
rule thereunder.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, or any successor legislation.
"Series A Asset Trust Preferred Guarantee" means the Series A Asset
Trust Preferred Guarantee Agreement, dated as of July 13, 1999, entered into by
the Company, as guarantor, for the benefit of the holders of the Series A Asset
Trust Preferred Securities.
"Series A Asset Trust Preferred Securities" has the meaning set forth in
the Asset Declaration.
"Series A Capital Trust Guarantee" means the Series A Capital Trust
Guarantee Agreement, dated as of July 13, 1999, entered into by the Company, as
guarantor, for the benefit of the Holders of the Series A Capital Trust
Preferred Securities and the Capital Trust Common Securities Holder.
"Series A Capital Trust Preferred Securities" has the meaning set forth
in Section 7.1(a).
"Series A Debentures" means, the floating rate junior subordinated
debentures due July 15, 2029, Series A, issued by the Debenture Issuer under the
Indenture and to be held by the Asset Property Trustee for the benefit of the
holders of the Asset Trust Preferred Securities until exchanged for the Series B
Debentures in connection with the Exchange Offer.
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"Series B Asset Trust Preferred Guarantee" means the Series B Asset
Trust Preferred Guarantee Agreement, dated as of July 13, 1999, to be
entered into by the Company, as guarantor, upon consummation of the
Exchange Offer, for the benefit of the holders of the Series B Asset Trust
Preferred Securities.
"Series B Asset Trust Preferred Securities" has the meaning set forth
in the Asset Declaration.
"Series B Capital Trust Guarantee" means the Series B Capital Trust
Guarantee Agreement, dated as of July 13, 1999, to be entered into by the
Company, as guarantor, upon consummation of the Exchange Offer, for the
benefit of the Holders of the Series B Capital Trust Preferred Securities
and the Capital Trust Common Securities Holder.
"Series B Capital Trust Preferred Securities" has the meaning set
forth in Section 7.1(a).
"Series B Debentures" means the floating rate junior subordinated
debentures due July 15, 2029, Series B, issued by the Debenture Issuer
under the Indenture and exchanged for the Series A Debentures upon
consummation of the Exchange Offer.
"Sponsor" means the Company or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of Capital Trust.
"Successor Capital Delaware Trustee" has the meaning specified in
Section 6.7(b)(ii).
"Successor Capital Property Trustee" has the meaning specified in
Section 6.7(b)(i).
"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Security" has the meaning specified in Section 3.15(b)(i)b.
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"10% in Liquidation Amount" means, except as provided in the terms of
the Capital Trust Preferred Securities or by the Trust Indenture Act,
Holder(s) of outstanding Capital Trust Securities, voting together as a
single class, or, as the context may require, Holders of outstanding
Capital Trust Preferred Securities or Holders of outstanding Capital Trust
Common Securities, voting separately as a class, who are the record owners
of 10% or more of the aggregate liquidation amount of all outstanding
Capital Trust Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to
time (including corresponding provisions of succeeding regulations).
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"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration and shall,
to the extent applicable, be governed by such provisions.
(b) The Capital Property Trustee shall be the only Capital Trustee
which is a trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration
conflicts with the duties imposed by Sections 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this Declaration
shall not affect Capital Trust's classification as a grantor trust for
United States Federal income tax purposes and shall not affect the nature
of the Capital Trust Securities as equity securities representing undivided
beneficial ownership interests in the assets of Capital Trust.
Section 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Capital Trust Administrators on
behalf of Capital Trust shall provide the Capital Property Trustee with a
list, in such form as the Capital Property Trustee may reasonably require,
of the names and addresses of the Holders of the Capital Trust Securities
("List of Holders"), (i) not later than June 30 and December 31 of each
year, commencing December 31, 1999, and current as of such date, and (ii)
at any other time, within 30 days of receipt by Capital Trust of a written
request from the Capital Property Trustee for a List of Holders as of a
date no more than 15 days before such List of Holders is given to the
Capital Property Trustee; provided that neither the Sponsor nor the Capital
Trust Administrators on behalf of Capital Trust shall be obligated to
provide such List of Holders at any time the List of Holders does not
differ from the most recent List of Holders given to the Capital Property
Trustee by the Sponsor and the Capital Trust Administrators on behalf of
Capital Trust. The Capital Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of
Holders given to it or which it receives in the capacity as Paying Agent
(if acting in such capacity), provided that the Capital Property Trustee
may destroy any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Capital Property Trustee shall comply with its obligations
under, and shall be entitled to the benefits of, Sections 311(a), 311(b)
and 312(b) of the Trust Indenture Act.
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Section 2.3 REPORTS BY THE CAPITAL PROPERTY TRUSTEE.
Within 60 days after May 15 of each year (commencing in the year
following the issuance of the Capital Trust Preferred Securities), the
Capital Property Trustee shall provide to the Holders of the Capital Trust
Preferred Securities such reports as are required by Section 313 of the
Trust Indenture Act, if any, in the form and in the manner provided by
Section 313 of the Trust Indenture Act. The Capital Property Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture
Act.
Section 2.4 PERIODIC REPORTS TO THE CAPITAL PROPERTY TRUSTEE.
Each of the Sponsor and the Capital Trust Administrators on behalf of
Capital Trust shall provide to the Capital Property Trustee such documents,
reports and information as required by Section 314 of the Trust Indenture Act
(if any) and, on January 15 of each year, commencing January 15, 2000, the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form and in the manner required by Section 314 of the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Capital Trust Administrators on behalf of
Capital Trust shall provide to the Capital Property Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this
Declaration that relate to any of the matters set forth in Section 314(c) of the
Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
Section 2.6 CAPITAL TRUST ENFORCEMENT EVENTS; WAIVER.
(a) The Holders of a Majority in Liquidation Amount of the
Capital Trust Preferred Securities may, by vote or written consent, on
behalf of the Holders of all of the Capital Trust Preferred
Securities, waive any past Capital Trust Enforcement Event in respect
of the Capital Trust Preferred Securities and its consequences,
provided that, if the underlying event of default under the Capital
Trust Guarantee or if the Asset Enforcement Event:
(i) is not waivable under the Capital Trust Guarantee or
the Asset Declaration, the Capital Trust Enforcement Event under
the Declaration shall also not be waivable; or
(ii) requires the consent or vote of the Holders of greater
than a majority in liquidation amount of Capital Trust Preferred
Securities to be waived under the Capital Trust Guarantee or the
Asset Trust Preferred Securities to be waived under the Asset
Declaration (a "Super Majority"),
the Capital Trust Enforcement Event under the Declaration may only be
waived by the vote or written consent of the Holders of at least the
relevant Super Majority in liquidation amount of the Capital Trust
Preferred Securities.
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The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Capital Trust Securities, as permitted by the
Trust Indenture Act. Upon such waiver, any such default shall cease to
exist, and any Capital Trust Enforcement Event with respect to the Capital
Trust Preferred Securities arising therefrom shall be deemed to have been
cured, for every purpose of this Declaration and the Capital Trust
Preferred Securities, but no such waiver shall extend to any subsequent or
other Capital Trust Enforcement Event with respect to the Capital Trust
Preferred Securities or impair any right consequent thereon. Any waiver by
the Holders of the Capital Trust Preferred Securities of a Capital Trust
Enforcement Event with respect to the Capital Trust Preferred Securities
shall also be deemed to constitute a waiver by the Capital Trust Common
Securities Holder of any such Capital Trust Enforcement Event with respect
to the Capital Trust Common Securities for all purposes of this Declaration
without any further act, vote, or consent of the Capital Trust Common
Securities Holder.
(b) The Holders of a Majority in Liquidation Amount of the Capital
Trust Common Securities may, by vote or written consent, on behalf of the
Capital Trust Common Securities Holder, waive any past Capital Trust
Enforcement Event in respect of the Capital Trust Common Securities and its
consequences, provided that, if the underlying event of default under the
Capital Trust Guarantee or if the Asset Enforcement Event:
(i) is not waivable under the Capital Trust Guarantee or the
Asset Declaration, except where the Capital Trust Common Securities
Holder is deemed to have waived such Capital Trust Enforcement Event
under the Declaration as provided below in this Section 2.6(b), the
Capital Trust Enforcement Event under this Declaration shall also not
be waivable; or
(ii) requires the consent or vote of the Holders of a Super
Majority to be waived, except where the Capital Trust Common
Securities Holder is deemed to have waived such Capital Trust
Enforcement Event under the Declaration as provided below in this
Section 2.6(b), the Capital Trust Enforcement Event under this
Declaration may only be waived by the vote or written consent of at
least the relevant Super Majority in liquidation amount of Capital
Trust Common Securities;
provided further, each Capital Trust Common Securities Holder will be
deemed to have waived any Capital Trust Enforcement Event and all Capital
Trust Enforcement Events with respect to the Capital Trust Common
Securities and the consequences thereof until all Capital Trust Enforcement
Events with respect to the Capital Trust Preferred Securities have been
cured, waived or otherwise eliminated, and until such Capital Trust
Enforcement Events with respect to the Capital Trust Preferred Securities
have been so cured, waived or otherwise eliminated, the Capital Property
Trustee will be deemed to be acting solely on behalf of the Holders of the
Capital Trust Preferred Securities and only the Holders of the Capital
Trust Preferred Securities will have the right to direct the Capital
Property Trustee in accordance with the terms of the Capital Trust
Securities.
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The foregoing provisions of this Section 2.6(b) shall be in lieu of
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Declaration and the Capital Trust
Securities, as permitted by the Trust Indenture Act. Subject to the
foregoing provisions of this Section 2.6(b), upon such waiver, any such
default shall cease to exist and any Capital Trust Enforcement Event with
respect to the Capital Trust Common Securities arising therefrom shall be
deemed to have been cured for every purpose of this Declaration, but no
such waiver shall extend to any subsequent or other Capital Trust
Enforcement Event with respect to the Capital Trust Common Securities or
impair any right consequent thereon.
(c) A waiver of an Asset Enforcement Event under the Asset Declaration
by the Capital Property Trustee at the direction of the Holders of the
Capital Trust Preferred Securities constitutes a waiver of the
corresponding Capital Trust Enforcement Event with respect to the Capital
Trust Preferred Securities under this Declaration. The foregoing provisions
of this Section 2.6(c) shall be in lieu of Section 316(a)(1)(B) of the
Trust Indenture Act and such Section 316(a)(1)(B) of the Trust Indenture
Act is hereby expressly excluded from this Declaration and the Capital
Trust Securities, as permitted by the Trust Indenture Act.
Section 2.7 CAPITAL TRUST ENFORCEMENT EVENT; NOTICE.
The Capital Property Trustee shall, within 90 days after the occurrence of
a Capital Trust Enforcement Event, transmit by mail, first class postage
prepaid, to the Holders of the Capital Trust Securities, notices of all defaults
with respect to the Capital Trust Securities actually known to a Responsible
Officer of the Capital Property Trustee, unless such defaults have been cured
before the giving of such notice (the term "defaults" for the purposes of this
Section 2.7 being hereby defined to be defaults as defined in the Capital Trust
Guarantee or the Asset Declaration, not including any grace periods provided for
therein and irrespective of the giving of any notice provided therein); provided
that, except for a default in the payment of principal of (or premium, if any)
or interest on any of the Debentures or distributions on or the redemption price
of the Asset Trust Preferred Securities, the Capital Property Trustee shall be
protected in withholding such notice if and so long as a Responsible Officer of
the Capital Property Trustee in good faith determines that the withholding of
such notice is in the interests of the Holders of the Capital Trust Securities.
ARTICLE III
ORGANIZATION
Section 3.1 NAME AND ORGANIZATION.
The business trust established under the Original Declaration and hereby
continued is named "Allfirst Preferred Capital Trust" as such name may be
modified from time to time by the Capital Trust Administrators following written
notice to the Holders of Capital Trust Securities. Capital Trust's activities
may be conducted under the name of Capital Trust or any other name deemed
advisable by the Capital Trust Administrators.
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Section 3.2 OFFICE.
The address of the principal executive office of Capital Trust is c/o First
Maryland Bancorp, 25 South Charles Street, Baltimore, Maryland 21201, Attn:
General Counsel. On ten (10) Business Days' written notice to the Holders of
Capital Trust Securities, the Capital Trust Administrators may designate another
principal office.
Section 3.3 PURPOSE.
The exclusive purposes and functions of Capital Trust are (a) to issue the
Capital Trust Securities, (b) to invest the proceeds from such sale of the
Capital Trust Securities to acquire the Asset Trust Preferred Securities, and
(c) except as otherwise limited herein, to engage in only those other activities
necessary or incidental thereto. Capital Trust shall not borrow money, issue
debt or reinvest proceeds derived from investments, mortgage, pledge any of its
assets or otherwise undertake (or permit to be undertaken) any activity that
would cause Capital Trust not to be classified as a grantor trust for United
States Federal income tax purposes. It is the intent of the parties to this
Declaration for Capital Trust to be classified as a grantor trust for United
States Federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Capital Trust Preferred Securities and the
Capital Trust Common Securities will be the owners of Capital Trust for United
States Federal income tax purposes, and such owners will include directly in
their gross income the income, gain, deduction or loss of Capital Trust as if
Capital Trust did not exist.
By the acceptance of this Declaration, none of the Capital Trustees, the
Sponsor, or the Holders or beneficial owners of the Capital Trust Securities
will take any position which is contrary to the classification of Capital Trust
as a grantor trust for United States Federal income tax purposes.
Section 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration and to the specific
duties of the Capital Property Trustee, the Capital Trust Administrators shall
have exclusive authority to carry out the purposes of Capital Trust. An action
taken by the Capital Trust Administrators in accordance with their powers shall
constitute the act of and serve to bind Capital Trust and an action taken by the
Capital Property Trustee on behalf of Capital Trust in accordance with its
powers shall constitute the act of and serve to bind Capital Trust. In dealing
with the Capital Trustees acting on behalf of Capital Trust, no person shall be
required to inquire into the authority of the Capital Trustees to bind Capital
Trust. Persons dealing with Capital Trust are entitled to rely conclusively on
the power and authority of the Capital Trustees as set forth in this
Declaration. Notwithstanding anything herein, it is the intent of the parties
hereto that the Capital Trust Administrators shall not be fiduciaries with
respect to Capital Trust, and this Declaration shall be construed in a manner
consistent with such intent.
Section 3.5 TITLE TO PROPERTY OF CAPITAL TRUST.
Except as provided in Section 3.8 with respect to the Asset Trust Preferred
Securities and the Capital Property Account or as otherwise provided in this
Declaration, legal title to all assets
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of Capital Trust shall be vested in Capital Trust. The Holders shall not have
legal title to any part of the assets of Capital Trust, but shall have an
undivided beneficial ownership interest in the assets of Capital Trust.
Section 3.6 POWERS AND DUTIES OF THE CAPITAL TRUST ADMINISTRATORS.
The Capital Trust Administrators shall have the power and authority to
cause Capital Trust to engage in the following activities, subject to the
limitations and restrictions of applicable laws:
(a) to establish the terms and forms of the Capital Trust Securities
in the manner specified in Section 7.1 and issue and sell the Capital Trust
Preferred Securities and the Capital Trust Common Securities in accordance
with this Declaration;
(b) in connection with the issue and sale of the Capital Trust
Preferred Securities and the consummation of the Exchange Offer, at the
direction of the Sponsor, to :
(i) execute, if necessary, the Offering Memorandum, in
preliminary and final form prepared by the Sponsor in connection with
the offering and sale of the Series A Capital Trust Preferred
Securities and to execute and file with the Commission one or more
registration statements on the applicable forms prepared by the
Sponsor, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(ii) if deemed necessary or desirable by the Sponsor, execute and
file an application, prepared by the Sponsor, to the New York Stock
Exchange, Inc. or any other national stock exchange or the NASDAQ
National Market for listing of any Capital Trust Preferred Securities
and the Capital Trust Guarantee;
(iii) if deemed necessary or desirable by the Sponsor, execute
and file with the Commission a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor, relating to
the registration of the Capital Trust Preferred Securities and the
Capital Trust Guarantee under Section 12(b) of the Exchange Act;
(iv) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary, in order
to qualify or register all or part of the Capital Trust Preferred
Securities in any state in which the Sponsor has determined to qualify
or register such Capital Trust Preferred Securities for sale;
(v) execute and deliver on behalf of Capital Trust one or more
purchase agreements each providing for the sale of the Series A
Capital Trust Preferred Securities to the Initial Purchaser and to
cause Capital Trust to perform its obligations thereunder;
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(vi) execute and deliver into on behalf of Capital Trust one or
more registration rights agreements, including without limitation, the
Registration Rights Agreement, and to cause Capital Trust to perform
its obligations thereunder.
(vii) execute and deliver into on behalf of Capital Trust one or
more purchase agreements each providing for the sale of the Capital
Trust Common Securities to the Capital Trust Common Securities Holder
and to cause Capital Trust to perform its obligations thereunder; and
(viii) execute and deliver into on behalf of Capital Trust one
or more purchase agreements each providing for the purchase of the
Asset Trust Preferred Securities by Capital Trust from Asset Trust and
to cause Capital Trust to perform its obligations thereunder.
(c) to acquire the Series A Asset Trust Preferred Securities with the
proceeds of the sale of the Series A Capital Trust Preferred Securities and
the Capital Trust Common Securities; provided, however, that the Capital
Trust Administrators shall cause legal title to the Asset Trust Preferred
Securities to be held of record in the name of the Capital Property Trustee
for the benefit of the Holders of the Capital Trust Securities;
(d) to give the Sponsor and the Capital Property Trustee prompt
written notice of the occurrence of a Capital Trust Special Event; provided
that the Capital Trust Administrators shall consult with the Sponsor before
taking or refraining from taking any action in relation to any such Special
Event;
(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with
respect to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue
relevant notices to the Holders of Capital Trust Securities as to such
actions and applicable record dates;
(f) to take all actions and perform such duties as may be required of
the Capital Trust Administrators pursuant to the terms of this Declaration
and the Capital Trust Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort
to legal action or otherwise adjust claims or demands of or against Capital
Trust ("Legal Action"), unless pursuant to Section 3.8(e), the Capital
Property Trustee has the exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants to conduct only those services that the Capital Trust
Administrators have authority to conduct directly, and to pay reasonable
compensation for such services;
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(i) to cause Capital Trust to comply with Capital Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by Section 314(a)(4) of the
Trust Indenture Act to the Capital Property Trustee, which certificate may
be executed by any Capital Trust Administrator;
(k) to incur expenses that are necessary or incidental to carry out
any of the purposes of Capital Trust;
(l) to appoint another Person other than the Capital Property Trustee
to act as, registrar and transfer agent for the Capital Trust Securities;
(m) to give prompt written notice to the Holders of the Capital Trust
Securities of any notice received from Asset Trust that a current,
quarterly distribution on the Asset Trust Preferred Securities under the
terms of the Asset Declaration will not be made for any quarterly period;
(n) at the direction of the Sponsor, to take all action that may be
necessary or appropriate for the preservation and the continuation of
Capital Trust's valid existence, rights, franchises and privileges as a
statutory business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary to protect the
limited liability of the Holders of the Capital Trust Preferred Securities
and the Capital Trust Common Securities Holder or to enable Capital Trust
to effect the purposes for which Capital Trust was created;
(o) at the direction of the Sponsor, to take any action, not
inconsistent with applicable law, necessary or desirable in carrying out
the purposes and functions of Capital Trust as set out in Section 3.3 or
the activities of Capital Trust as set out in this Section 3.6, including,
but not limited to:
(i) causing Capital Trust not to be deemed to be an investment
company required to be registered under the Investment Company Act;
(ii) causing Capital Trust to be classified as a grantor trust
for United States Federal income tax purposes; and
(iii) taking no action which would be reasonably likely to cause
Capital Trust to be classified as an association or a publicly traded
partnership taxable as a corporation for United States Federal income
tax purposes;
provided, that such action does not adversely affect the interests of
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Holders;
(p) to take all action necessary to cause all applicable tax returns
and tax information reports that are required to be filed with respect to
Capital Trust to be duly prepared and filed by the Capital Trust
Administrators, on behalf of Capital Trust; and
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(q) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of Capital Trust in all matters
necessary or incidental to the foregoing.
The Capital Trust Administrators shall exercise the powers set forth in
this Section 3.6 in a manner that is consistent with the purposes and functions
of Capital Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Capital Trust Administrators shall have
no power to, and shall not, take any action that is inconsistent with the
purposes and functions of Capital Trust set forth in Section 3.3 or that is
inconsistent with or in contravention of any applicable law.
Subject to this Section 3.6, the Capital Trust Administrators shall have
none of the powers or the authority of the Capital Property Trustee set forth in
Section 3.8.
Any expenses incurred by the Capital Trust Administrators pursuant to this
Section 3.6 shall be reimbursed by Asset Trust pursuant to Section 9.1 of the
Asset Declaration.
Section 3.7 PROHIBITION OF ACTIONS BY CAPITAL TRUST AND THE CAPITAL
TRUSTEES.
(a) Capital Trust shall not, and the Capital Trustees shall cause
Capital Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, Capital Trust shall not and
the Capital Trustees shall cause Capital Trust not to:
(i) invest any proceeds received by Capital Trust from holding
the Asset Trust Preferred Securities, but shall distribute all such
proceeds to Holders of the Capital Trust Securities pursuant to the
terms of this Declaration and of the Capital Trust Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess trust property for other than a trust purpose;
(iv) make any loans or incur any indebtedness or acquire any
securities other than the Asset Trust Preferred Securities;
(v) possess any power or otherwise act in such a way as to vary
Capital Trust's assets after August 8, 1999 ;
(vi) possess any power or otherwise act in such a way as to vary
the terms of the Capital Trust Securities in any way whatsoever
(except to the extent expressly authorized in this Declaration or by
the terms of the Capital Trust Securities);
(vii) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, Capital Trust other than the
Capital Trust Securities;
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(viii) other than as provided in this Declaration or by the terms
of the Capital Trust Securities, (A) cause the Asset Property Trustee
to direct the time, method and place of conducting any proceeding for
any remedy available to the Asset Property Trustee or exercising any
trust or power conferred upon the Asset Property Trustee with respect
to the Asset Trust Preferred Securities, the Asset Trust Preferred
Guarantee and the Debentures, (B) cause the Asset Property Trustee to
waive any past or prospective default that is waivable under the Asset
Declaration, the Asset Trust Preferred Guarantee or the Debentures,
(C) cause the Asset Property Trustee to exercise any right to rescind
or annul any declaration that the principal of, or other amounts in
respect of, any Debenture is due and payable or (D) consent to any
amendment, modification or termination of the Asset Declaration or the
Asset Trust Preferred Securities where such consent shall be required;
(ix) other than in connection with the liquidation of Capital
Trust pursuant to a Capital Trust Special Event or upon redemption of
all the Capital Trust Securities, file a certificate of cancellation
of Capital Trust ;
(x) take any action inconsistent with the status of Capital
Trust as a grantor trust for United States Federal income tax
purposes; or
(xi) revoke any action previously authorized or approved by a
vote of the Holders of the Capital Trust Preferred Securities except
pursuant to a subsequent vote of the Holders of the Capital Trust
Preferred Securities.
Section 3.8 POWERS AND DUTIES OF THE CAPITAL PROPERTY TRUSTEE.
(a) The legal title to the Asset Trust Preferred Securities shall be
owned by and held of record in the name of the Capital Property Trustee in
trust for the benefit of the Holders of the Capital Trust Securities. The
right, title and interest of the Capital Property Trustee to the Asset
Trust Preferred Securities shall vest automatically in each Person who may
hereafter be appointed as Capital Property Trustee in accordance with
Section 6.7. Such vesting and cessation of title shall be effective whether
or not conveyancing documents with regard to the Asset Trust Preferred
Securities have been executed and delivered.
(b) The Capital Property Trustee shall not transfer its right, title
and interest in the Asset Trust Preferred Securities to the Capital Trust
Administrators or to the Capital Delaware Trustee (if the Capital Property
Trustee does not also act as Capital Delaware Trustee).
(c) The Capital Property Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Capital Property Account") in the name of and
under the exclusive control of the Capital Property Trustee on behalf
of the Holders of the Capital Trust Securities and, upon the receipt
of payments of funds made in
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respect of the Asset Trust Preferred Securities held by the Capital
Property Trustee, deposit such funds into the Capital Property Account
and make payments to the Holders of the Capital Trust Preferred
Securities and the Capital Trust Common Securities Holder from the
Capital Property Account in accordance with Section 7.2. Funds in the
Capital Property Account shall be held uninvested until disbursed in
accordance with this Declaration. The Capital Property Account shall
be an account that is maintained with a banking institution (including
the Capital Property Trustee) authorized to exercise corporate trust
powers and having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by federal or
state authority;
(ii) engage in such ministerial activities as shall be necessary
or appropriate to effect the redemption of the Capital Trust Preferred
Securities and the Capital Trust Common Securities to the extent the
Asset Trust Preferred Securities are redeemed; and
(iii) upon written notice of distribution issued by the Capital
Trust Administrators in accordance with the terms of the Capital Trust
Securities, engage in such ministerial activities as shall be
necessary or appropriate to effect the distribution of the Asset Trust
Preferred Securities to Holders of Capital Trust Securities upon the
occurrence of a Capital Trust Special Event.
(d) The Capital Property Trustee shall take all actions and perform
such duties as may be specifically required of the Capital Property Trustee
pursuant to the terms of this Declaration and the Capital Trust Securities.
(e) The Capital Property Trustee shall take any Legal Action which
arises out of or in connection with a Capital Trust Enforcement Event of
which a Responsible Officer of the Capital Property Trustee has actual
knowledge or the Capital Property Trustee's duties and obligations under
this Declaration or the Trust Indenture Act.
(f) The Capital Property Trustee shall continue to serve as a Capital
Trustee until either:
(i) Capital Trust has been completely liquidated and the proceeds of
the liquidation distributed to the Holders of Capital Trust Securities
pursuant to the terms of the Capital Trust Securities; or
(ii) a Successor Capital Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.6.
(g) Subject to such limitations as are necessary to insure compliance
with Section 3.3, the Capital Property Trustee shall have the legal power
to exercise all of the rights, powers and privileges of a holder of Asset
Trust Preferred Securities under the Asset Declaration and, if a Capital
Trust Enforcement Event actually known to a Responsible Officer of the
Capital Property Trustee occurs and is continuing, the Capital
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Property Trustee shall, for the benefit of Holders of the Capital Trust
Securities, enforce its rights as holder of the Asset Trust Preferred
Securities, subject in each case to the obligations of the Capital Trustees
and the rights of the Holders under this Declaration and the Capital Trust
Securities.
(h) Subject to this Section 3.8, the Capital Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Capital Trust Administrators set forth in Section 3.6.
The Capital Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
Capital Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Capital Property Trustee shall have no
power to, and shall not, take any action that is inconsistent with the purposes
and functions of Capital Trust set out in Section 3.3.
Section 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE CAPITAL PROPERTY
TRUSTEE.
(a) The Capital Property Trustee, before the occurrence of any Capital
Trust Enforcement Event and after the curing or waiver of all Capital Trust
Enforcement Events that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Declaration and no
implied covenants shall be read into this Declaration against the Capital
Property Trustee. In case a Capital Trust Enforcement Event has occurred
(that has not been cured or waived pursuant to Section 2.6) of which a
Responsible Officer of the Capital Property Trustee has actual knowledge,
the Capital Property Trustee shall exercise such of the rights and powers
vested in it by this Declaration, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Capital Property Trustee from liability for its own negligent action, its
own negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of a Capital Trust Enforcement Event
and after the curing or waiving of all such Capital Trust Enforcement
Events that may have occurred:
a. the duties and obligations of the Capital Property Trustee
shall be determined solely by the express provisions of this
Declaration and the Capital Property Trustee shall not be
liable except for the performance of such duties and
obligations as are specifically set forth in this
Declaration, and no implied covenants or obligations shall
be read into this Declaration against the Capital Property
Trustee; and
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b. in the absence of bad faith on the part of the Capital
Property Trustee, the Capital Property Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Property
Trustee and conforming to the requirements of this
Declaration; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Capital Property Trustee,
the Capital Property Trustee shall be under a duty to
examine the same to determine whether or not they conform to
the requirements of this Declaration;
(ii) the Capital Property Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Capital Property Trustee, unless it shall be proved that the Capital
Property Trustee was negligent in ascertaining the pertinent facts;
(iii) subject to the requirement of the Capital Property Trustee
receiving a tax opinion as set forth in Sections 7.5(d) and 7.6(c),
the Capital Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it without negligence, in good
faith in accordance with the direction of the Holders of not less than
a Majority in Liquidation Amount of the Capital Trust Securities
relating to the time, method and place of conducting any proceeding
for any remedy available to the Capital Property Trustee, or
exercising any trust or power conferred upon the Capital Property
Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Capital
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers;
(v) the Capital Property Trustee's sole duty with respect to the
custody, safe-keeping and physical preservation of the Asset Trust
Preferred Securities and the Capital Property Account shall be to deal
with such property in a similar manner as the Capital Property Trustee
deals with similar property for its own account, subject to the
protections and limitations on liability afforded to the Capital
Property Trustee under this Declaration and the Trust Indenture Act;
(vi) the Capital Property Trustee shall have no duty or liability
for or with respect to the value, genuineness, existence or
sufficiency of the Asset Trust Preferred Securities or the payment of
any taxes or assessments levied thereon or in connection therewith;
(vii) the Capital Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
with the Sponsor in writing. Money held by the Capital Property
Trustee need not be segregated from
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other funds held by it except in relation to the Capital Property
Account maintained by the Capital Property Trustee pursuant to Section
3.8(c)(i) and except to the extent otherwise required by law; and
(viii) the Capital Property Trustee shall not be responsible for
monitoring the compliance by the Capital Trust Administrators or the
Sponsor with their respective duties under this Declaration, nor shall
the Capital Property Trustee be liable for any default or misconduct
of the Capital Trust Administrators or the Sponsor.
Section 3.10 CERTAIN RIGHTS OF THE CAPITAL PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Capital Property Trustee may conclusively rely and shall
be fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Capital Trust
Administrators acting on behalf of Capital Trust contemplated by this
Declaration shall be sufficiently evidenced by an Officers'
Certificate (or, with respect to the establishment of the terms and
form of the Capital Trust Securities by the Capital Trust
Administrators, by a Capital Trust Administrator's Authorization
Certificate);
(iii) whenever in the administration of this Declaration, the
Capital Property Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting any action
hereunder, the Capital Property Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly delivered by
the Sponsor or the Capital Trust Administrators;
(iv) the Capital Property Trustee shall have no duty to see to
any recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or
securities laws) or any re-recording, refiling or registration
thereof;
(v) the Capital Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of
such experts' area of expertise shall be full and complete
authorization and protection in respect of any action taken, suffered
or omitted by it hereunder in good faith and in accordance with such
advice or opinion, such counsel may be counsel to the Sponsor or any
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of its Affiliates, and may include any of its employees. The Capital
Property Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of
competent jurisdiction, at the expense of the Sponsor;
(vi) the Capital Property Trustee shall be under no obligation
to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Property Trustee security
and indemnity, reasonably satisfactory to the Capital Property
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Capital Property Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such reasonable
advances as may be requested by the Capital Property Trustee and (b)
the Capital Property Trustee has received the legal opinions, if any,
required by Section 7.5(d) or 7.6(c), as the case may be, of this
Declaration; provided that, nothing contained in this Section
3.10(a)(vi) shall be taken to relieve the Capital Property Trustee,
upon the occurrence of a Capital Trust Enforcement Event, of its
obligation to exercise the rights and powers vested in it by this
Declaration;
(vii) the Capital Property Trustee shall not be bound to make
any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital Property
Trustee, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Capital Property
Trustee shall determine to make such further inquiry or investigation,
it shall be entitled to examine the books, records and premises of the
Company, personally or by agent or attorney;
(viii) the Capital Property Trustee may execute any of its trust
or other powers hereunder or perform any duties hereunder either
directly or by or through agents, custodians, nominees or attorneys
and the Capital Property Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(ix) any action taken by the Capital Property Trustee or its
agents hereunder shall bind Capital Trust and the Holders of the
Capital Trust Securities, and the signature of the Capital Property
Trustee or its agents alone shall be sufficient and effective to
perform any such action and no third party shall be required to
inquire as to the authority of the Capital Property Trustee to so act
or as to its compliance with any of the terms and provisions of this
Declaration, both of which shall be conclusively evidenced by the
Capital Property Trustee's or its agent's taking such action;
(x) whenever in the administration of this Declaration the
Capital Property Trustee shall deem it desirable to receive
instructions with respect to
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enforcing any remedy or right or taking any other action hereunder,
the Capital Property Trustee (A) may request instructions from the
Holders of the Capital Trust Securities, the Capital Trust
Administrators or the Sponsor which instructions may only be given by
the Holders of the same proportion in liquidation amount of the
Capital Trust Securities as would be entitled to direct the Capital
Property Trustee under the terms of the Capital Trust Securities in
respect of such remedy, right or action, (B) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (C) shall be protected in conclusively
relying on or acting in accordance with such instructions; provided,
--------
however, that the Capital Property Trustee shall not be required to
-------
take any action unless it shall have received such legal opinions, if
any, required by Sections 7.5(d) and 7.6(c) of this Declaration;
(xi) if no Capital Trust Enforcement Event has occurred and is
continuing and the Capital Property Trustee is required to decide
between alternative causes of action, construe ambiguous provisions in
their Declaration or is unsure of the application of any provision of
their Declaration, and the matter is not one on which Holders of
Capital Trust Preferred Securities are entitled under the Declaration
to vote, then the Capital Property Trustee shall take such action as
it deems advisable and in the best interests of the Holders of the
Capital Trust Securities and will have no liability except for its own
bad faith, negligence or willful misconduct;
(xii) except as otherwise expressly provided by this Declaration,
the Capital Property Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this
Declaration;
(xiii) the Capital Property Trustee shall not be liable for any
action taken, suffered or omitted to be taken by it without
negligence, in good faith and reasonably believed by it to be
authorized or within the discretion, rights or powers conferred upon
it by this Declaration; and
(xiv) the Capital Property Trustee shall not be deemed to have
notice of any Capital Trust Enforcement Event unless a Responsible
Officer of the Capital Property Trustee has actual knowledge thereof
or unless written notice of any event which is in fact a Capital Trust
Enforcement Event is received by the Capital Property Trustee at the
Corporate Trust Office of the Capital Property Trustee, and such
notice references the Capital Trust Preferred Securities and this
Declaration.
(b) No provision of this Declaration shall be deemed to impose
any duty or obligation on the Capital Property Trustee to perform any act
or acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal, or in
which the Capital Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts, or to
exercise any such right, power, duty or obligation. No permissive power or
authority available to the Capital Property Trustee shall be construed to
be a duty.
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Section 3.11 CAPITAL DELAWARE TRUSTEE.
Notwithstanding any provision of this Declaration other than Section
6.2, the Capital Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Capital Delaware Trustee have any of the duties and
responsibilities of the Capital Trust Administrators or the Capital Property
Trustee described in this Declaration. Except as set forth in Section 6.2, the
Capital Delaware Trustee shall be a trustee for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Business Trust Act.
Section 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Capital Trust Administrators, and
except as otherwise required by the Business Trust Act, any Capital Trust
Administrator is authorized to execute on behalf of Capital Trust any documents
that the Capital Trust Administrators have the power and authority to execute
pursuant to Section 3.6; provided, that any registration statement referred to
--------
in Section 3.6(b)(i), including any amendments thereto, shall be signed by or on
behalf of a majority of the Capital Trust Administrators.
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF CAPITAL TRUST
SECURITIES.
The recitals contained in this Declaration and the Capital Trust Securities
shall be taken as the statements of the Sponsor, and the Capital Trustees do not
assume any responsibility for their correctness. The Capital Trustees make no
representations as to the value or condition of the property of Capital Trust or
any part thereof. The Capital Trustees make no representations as to the
validity or sufficiency of this Declaration or the Capital Trust Securities.
Section 3.14 DURATION OF CAPITAL TRUST.
Capital Trust shall exist until terminated pursuant to the provisions of
Article VIII hereof.
Section 3.15 MERGERS.
(a) Capital Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) Capital Trust may, at the request of the Sponsor, with the consent
of the Capital Trust Administrators or, if there are more than two Capital
Trust Administrators, a majority of the Capital Trust Administrators and
without the consent of the Holders of the Capital Trust Securities, the
Capital Delaware Trustee or the Capital Property Trustee, consolidate,
amalgamate, merge with or into, or be replaced by or convey, transfer or
lease its properties substantially as an entirety to a trust organized as
such under the laws of any State of the United States; provided that:
(i) if Capital Trust is not the successor, such successor entity (the
"Successor Entity") either:
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a. expressly assumes all of the obligations of Capital
Trust under the Capital Trust Securities; or
b. substitutes for the Capital Trust Preferred Securities
other securities having substantially the same terms as the
Capital Trust Preferred Securities (the "Successor Securities")
so long as the Successor Securities rank the same as the Capital
Trust Preferred Securities rank with respect to Distributions and
payments upon liquidation, redemption and otherwise;
(ii) the Company expressly acknowledges a trustee of such Successor
Entity that possesses the same powers and duties as the Capital Property
Trustee as the holder of the Asset Trust Preferred Securities;
(iii) the Capital Trust Preferred Securities shall continue to be
listed, or any Successor Capital Trust Preferred Securities are listed, or
any Successor Capital Trust Preferred Securities will be listed upon
notification of issuance, on any national securities exchange or with any
other organization on which the Capital Trust Preferred Securities are then
listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital Trust Preferred
Securities (including any Successor Capital Trust Securities) to be
downgraded by any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the Holders of the Capital Trust Preferred Securities
(including any Successor Capital Trust Securities) in any material respect;
(vi) such Successor Entity has a purpose identical to that of Capital
Trust;
(vii) the Company guarantees the obligations of such Successor Entity
under the Successor Capital Trust Securities at least to the extent
provided by the Capital Trust Guarantee; and
(viii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease the Sponsor has received an opinion of
independent legal counsel to Capital Trust experienced in such matters to
the effect that:
a. such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the
rights, preferences and privileges of the Holders of the
Capital Trust Preferred Securities (including any Successor
Capital Trust Securities) in any material respect other than
with respect to any dilution of such Holders' interest in the
new entity;
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b. following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither Capital
Trust nor the Successor Entity will be required to register as
an investment company under the Investment Company Act;
c. following such merger, consolidation, amalgamation or
replacement, Capital Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United States
Federal income tax purposes and will not be classified as an
association or a publicly traded partnership taxable as a
corporation; and
d. following such merger, consolidation, amalgamation or
replacement, Asset Trust will continue to be classified as a
partnership for United States Federal income tax purposes and
not be classified as an association or a publicly traded
partnership taxable as a corporation.
(c) Notwithstanding Section 3.15(b), Capital Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Capital
Trust Preferred Securities, consolidate, amalgamate, merge with or into, or
be replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause Capital Trust, any
Successor Entity or Asset Trust to be classified as an association or a
publicly traded partnership taxable as a corporation for United States
Federal income tax purposes.
Section 3.16 CAPITAL PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to Capital Trust or any other obligor upon
the Capital Trust Securities or the property of Capital Trust or of such other
obligor or their creditors, the Capital Property Trustee (irrespective of
whether any Distributions on the Capital Trust Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Capital Property Trustee shall have made any demand on Capital Trust
for the payment of any past due Distributions) shall be entitled and empowered,
to the fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any
Distributions owing and unpaid in respect of the Capital Trust Securities
and to file such other papers or documents as may be necessary or advisable
in order to have the claims of the Capital Property Trustee (including any
claim for the reasonable compensation, expenses, disbursements and advances
of the Capital Property Trustee, its agents, experts and counsel) and of
the Holders allowed in such judicial proceeding, and
(b) 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, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is
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hereby authorized by each Holder to make such payments to the Capital
Property Trustee and, in the event the Capital Property Trustee shall
consent to the making of such payments directly to the Holders, to pay to
the Capital Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Capital Property
Trustee, its agents and counsel, and any other amounts due the Capital
Property Trustee.
Nothing herein contained shall be deemed to authorize the Capital Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Capital Trust Securities or the rights of any Holder thereof or to authorize the
Capital Property Trustee to vote in respect of the claim of any Holder in any
such proceeding.
ARTICLE IV
SPONSOR
Section 4.1 RESPONSIBILITIES OF THE SPONSOR.
In connection with the issuances and sales of the Capital Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Offering Memorandum, in preliminary and final
form, and to prepare for filing by Capital Trust with the Commission one or
more registration statements on the applicable forms, including any
amendments thereto, as contemplated by the Registration Rights Agreement;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Capital Trust Preferred
Securities and to do any and all such acts, other than actions which must
be taken by Capital Trust, and advise Capital Trust of actions it must
take, and prepare for execution and filing any documents to be executed and
filed by Capital Trust, as the Sponsor deems necessary or advisable in
order to comply with the applicable laws of any such states;
(c) to prepare any filing by Capital Trust of an application to the
New York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Capital
Trust Preferred Securities, Asset Trust Preferred Securities, the Capital
Trust Guarantee and the Asset Trust Preferred Guarantee, if such filing is
determined to be necessary or desirable by the Sponsor;
(d) to prepare any filing by Capital Trust with the Commission of a
registration statement on Form 8-A, including any amendments thereto, if
such filing is determined to be necessary or desirable by the Sponsor;
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(e) to negotiate the terms on behalf of Capital Trust of one or more
purchase agreements and other related agreements providing for the sale of
the Series A Capital Trust Preferred Securities to the Initial Purchaser;
(f) to negotiate the terms on behalf of Capital Trust of one or more
registration rights agreements including, without limitation, the
Registration Rights Agreement.
(g) to negotiate the terms, on behalf of Capital Trust, of one or
more purchase agreements providing for the sale of the Capital Trust Common
Securities to the Capital Trust Common Securities Holder; and
(h) to negotiate the terms, on behalf of Capital Trust, of one or
more purchase agreements providing for the purchase of the Asset Trust
Preferred Securities by Capital Trust from Asset Trust.
Section 4.2 COMPENSATION, INDEMNIFICATION AND EXPENSES OF CAPITAL
TRUSTEES.
Asset Trust agrees, and to the extent Asset Trust fails to do so, the
Sponsor agrees:
(a) to pay to the Capital Trustees from time to time such
compensation as the Sponsor and the Capital Trustees shall from time to
time agree in writing 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);
(b) except as otherwise expressly provided herein, to reimburse the
Capital Trustees upon their request for all reasonable expenses,
disbursements and advances incurred or made by the Capital Trustees in
accordance with any provision of this Declaration (including the
compensation and the expenses and disbursements of its agent and counsel),
except any such expense, disbursement or advance as may be attributable to
its negligence or willful misconduct; and
(c) to indemnify the Capital Property Trustee and the Capital Delaware
Trustee and their authorized agents for, and to hold each of them harmless
against, any and all loss, liability, damage, claim or expense including
taxes (other than taxes based upon, measured by or determined by the income
of any Capital Trustee) incurred without negligence or willful misconduct
on the part of the Capital Property Trustee, the Capital Delaware Trustee
or their respective authorized agents, as the case may be, arising out of
or in connection with the acceptance or administration of Capital Trust or
trusts hereunder, including the costs and expenses of defending any of them
against any claim, whether asserted by the Company, a Holder or any other
Person, or liability in connection with the exercise or performance of any
of their respective powers or duties hereunder; the provisions of this
Section 4.2 shall survive the resignation or removal of the Capital
Delaware Trustee or the Capital Property Trustee or the termination of this
Declaration.
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ARTICLE V
CAPITAL TRUST COMMON SECURITIES HOLDER
Section 5.1 COMPANY'S PURCHASES OF CAPITAL TRUST COMMON SECURITIES.
On each Closing Date the Company will purchase all of the Capital Trust
Common Securities issued by Capital Trust on such Closing Date, for an amount at
least equal to (i) in the case of the initial Closing Date, 3% of the initial
capital of Capital Trust, and (ii) in the case of any subsequent Closing Date,
3% of the additional capital added to Capital Trust on such Closing Date, in
each case, at the same time as the related Capital Trust Securities are sold on
the Closing Date.
Section 5.2 COVENANTS OF THE CAPITAL TRUST COMMON SECURITIES HOLDER.
For so long as the Capital Trust Preferred Securities remain outstanding,
the Capital Trust Common Securities Holder will covenant (a) except as provided
in Section 5.3, to maintain directly 100% ownership of the Capital Trust Common
Securities, (b) to cause Capital Trust to remain a statutory business trust and
not to voluntarily dissolve, wind up, liquidate or be terminated, except as
permitted by this Declaration, (c) to use its commercially reasonable efforts to
ensure that Capital Trust will not be an investment company for purposes of the
Investment Company Act, and (d) to take no action which would be reasonably
likely to cause Capital Trust to be classified as other than a grantor trust or
as an association or a publicly traded partnership taxable as a corporation for
United States Federal income tax purposes.
Section 5.3 TRANSFER OF CAPITAL TRUST COMMON SECURITIES.
The Capital Trust Common Securities Holder may transfer its interest in the
Capital Trust Common Securities to a wholly-owned direct or indirect subsidiary
of the Company provided that (a) such entity expressly accepts such transfer of
the obligations as Capital Trust Common Securities Holder and (b) prior to such
transfer, the Company has received an opinion of nationally recognized
independent counsel to Capital Trust experienced in such matters to the effect
that (1) following such transfer, Capital Trust will be classified as a grantor
trust for United States federal income tax purposes, (2) following such
transfer, the Company and such successor entity will be in compliance with the
Investment Company Act without registering thereunder as an "investment
company," and (3) such transfer will not adversely affect the limited liability
of the holders of the Capital Trust Preferred Securities.
ARTICLE VI
CAPITAL TRUSTEES
Section 6.1 NUMBER OF CAPITAL TRUSTEES.
The number of Capital Trustees initially shall be four (4), and:
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(a) at any time before the issuance of any Capital Trust Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Capital Trustees; and
(b) subject to Section 6.7(b)(ii) and (iii), after the issuance of
any Capital Trust Securities, the number of Capital Trustees may be
increased or decreased by vote of the Holders of a Majority in Liquidation
Amount of the Capital Trust Common Securities voting as a class at a
meeting of the Capital Trust Common Securities Holder or by written consent
in lieu of such meeting; provided that, the number of Capital Trustees
shall in no event be less than three (3); and provided, further, (i) if
required by the Business Trust Act, one Capital Trustee is the Capital
Delaware Trustee; (ii) at least one Capital Trust Administrator is an
employee or officer of, or is affiliated with, the Sponsor; and (iii) one
Capital Trustee shall be the Capital Property Trustee for so long as this
Declaration is required to qualify as an indenture under the Trust
Indenture Act, and such Capital Trustee may also serve as Capital Delaware
Trustee if it meets the applicable requirements.
Section 6.2 CAPITAL DELAWARE TRUSTEE.
If required by the Business Trust Act, one Capital Trustee (the "Capital
Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Capital Property Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Capital Property Trustee shall
also be the Capital Delaware Trustee and Section 3.11 shall have no
application.
Section 6.3 CAPITAL PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Capital Trustee (the "Capital
Property Trustee") which shall act as Capital Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District of Columbia, or a corporation or other Person
permitted by the Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise
corporate trust owners, having a combined capital and surplus of at
least Fifty Million U.S. Dollars ($50,000,000), and subject to
supervision or examination by Federal, state, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority
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referred to above, then for the purposes of this Section 6.3(a)(ii),
the combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most recent
report of condition so published.
(b) If at any time the Capital Property Trustee shall cease to be
eligible to so act under Section 6.3(a), the Capital Property Trustee shall
immediately resign in the manner and with the effect set forth in Section
6.7(c).
(c) If the Capital Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Property Trustee and the Capital Trust Common
Securities Holder (as if it were the obligor referred to in Section 310(b)
of the Trust Indenture Act) shall in all respects comply with the
provisions of Section 310(b) of the Trust Indenture Act.
(d) The Capital Trust Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Capital Property Trustee shall be:
The Bank of New York.
Section 6.4 QUALIFICATIONS OF CAPITAL TRUST ADMINISTRATORS AND CAPITAL
DELAWARE TRUSTEE GENERALLY.
Each Capital Trust Administrator and the Capital Delaware Trustee (unless
the Capital Property Trustee also acts as Capital Delaware Trustee) shall be
either a natural person who is at least 21 years of age or a legal entity that
shall act through one or more Authorized Officers.
Section 6.5 INITIAL CAPITAL TRUST ADMINISTRATORS.
The initial Capital Trust Administrators shall be:
David M. Cronin and Robert F. Ray the business address of all of whom is
c/o First Maryland Bancorp, 25 South Charles Street, Baltimore, Maryland 21201.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Capital Trust Administrators is called with respect to any
matter over which the Capital Trust Administrators have power to act, any
power of the Capital Trust Administrators may be exercised by, or with the
consent of, any one such Capital Trust Administrator.
(b) Unless otherwise determined by the Capital Trust Administrators,
and except as otherwise required by the Business Trust Act or applicable
law, any Capital Trust Administrator is authorized to execute on behalf of
Capital Trust any documents which the Capital Trust Administrators have the
power and authority to cause Capital Trust to execute pursuant to Section
3.6, provided, that any registration statement referred
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to in Section 3.6(b)(i), including any amendments thereto, shall be signed
by or on behalf of a majority of the Capital Trust Administrators.
(c) A Capital Trust Administrator may, by power of attorney
consistent with applicable law, delegate to any other natural person over
the age of 21 his or her power for the purposes of signing any documents
which the Capital Trust Administrators have power and authority to cause
Capital Trust to execute pursuant to Section 3.6.
Section 6.6 CAPITAL DELAWARE TRUSTEE.
The initial Capital Delaware Trustee shall be:
The Bank of New York (Delaware).
Section 6.7 APPOINTMENT, REMOVAL AND RESIGNATION OF CAPITAL TRUSTEES.
(a) Subject to Section 6.7(b), Capital Trustees may be appointed or
removed without cause at any time:
(i) until the issuance of any Capital Trust Securities, by
written instrument executed by the Sponsor;
(ii) unless a Capital Enforcement Event shall have occurred and be
continuing, after the issuance of any Capital Trust Securities, by
vote of the Holders of a Majority in Liquidation Amount of the Capital
Trust Common Securities; and
(iii) if a Capital Enforcement Event shall have occurred and be
continuing, with respect to:
(A) the Capital Trust Administrators, by the Capital Trust
Common Securities Holder; and
(B) the Capital Property Trustee and the Capital Delaware
Trustee, by the Holders of a Majority in Liquidation Amount of
the Capital Trust Preferred Securities.
(b) (i) the Capital Trustee that acts as Capital Property Trustee
shall not be removed in accordance with Section 6.7(a) until a successor
Capital Trustee possessing the qualifications to act as Capital Property
Trustee under Section 6.3 (a "Successor Capital Property Trustee") has been
appointed and has accepted such appointment by written instrument executed
by such Successor Capital Property Trustee and delivered to the Capital
Trust Administrators and the Sponsor.
(ii) the Capital Trustee that acts as Capital Delaware Trustee
shall not be removed in accordance with Section 6.7(a) until a
successor Capital Trustee possessing the qualifications to act as
Capital Delaware Trustee under Sections
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6.2 and 6.4 (a "Successor Capital Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Capital Delaware Trustee and delivered to
the Capital Trust Administrators and the Sponsor.
(c) A Capital Trustee appointed to office shall hold office until his
or its successor shall have been appointed, until his death or its
dissolution or until his or its removal or resignation. Any Capital Trustee
may resign from office (without need for prior or subsequent accounting) by
an instrument in writing signed by such Capital Trustee and delivered to
the Sponsor and Capital Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein; provided,
however, that:
(i) No such resignation of the Capital Trustee that acts as the
Capital Property Trustee shall be effective:
a. until a Successor Capital Property Trustee has been
appointed and has accepted such appointment by instrument
executed by such Successor Capital Property Trustee and
delivered to Capital Trust, the Sponsor and the resigning
Capital Property Trustee; or
b. until the assets of Capital Trust have been completely
liquidated and the proceeds thereof distributed to the Holders
of the Capital Trust Securities; and
(ii) no such resignation of the Capital Trustee that acts as the
Capital Delaware Trustee shall be effective until a Successor Capital
Delaware Trustee has been appointed and has accepted such appointment
by instrument executed by such Successor Capital Delaware Trustee and
delivered to Capital Trust, the Sponsor and the resigning Capital
Delaware Trustee.
(d) The Capital Trust Common Securities Holder shall use its best
efforts to promptly appoint a Successor Capital Delaware Trustee or
Successor Capital Property Trustee, as the case may be, if the Capital
Property Trustee or the Capital Delaware Trustee delivers an instrument of
resignation in accordance with this Section 6.7.
(e) If no Successor Capital Property Trustee or Successor Capital
Delaware Trustee, as the case may be, shall have been appointed and
accepted appointment as provided in this Section 6.7 within 30 days after
delivery to the Sponsor and Capital Trust of an instrument of resignation
or removal, the resigning or removed Capital Property Trustee or Capital
Delaware Trustee, as applicable, may petition, at the expense of the
Sponsor, any court of competent jurisdiction for appointment of a Successor
Capital Property Trustee or Successor Capital Delaware Trustee, as
applicable. Such court may thereupon, after prescribing such notice, if
any, as it may deem proper, appoint a Successor Capital Property Trustee or
Successor Capital Delaware Trustee, as the case may be.
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(f) No Capital Property Trustee or Capital Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Capital Property
Trustee or Successor Capital Delaware Trustee, as the case may be.
Section 6.8 VACANCIES AMONG CAPITAL TRUSTEES.
If a Capital Trustee ceases to hold office for any reason and the number of
Capital Trustees is not reduced pursuant to Section 6.1, or if the number of
Capital Trustees is increased pursuant to Section 6.1, a vacancy shall occur.
The vacancy shall be filled with a Capital Trustee appointed in accordance with
Section 6.7.
Section 6.9 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Capital
Trustee shall not operate to annul Capital Trust. Whenever a vacancy in the
number of Capital Trust Administrators shall occur, until such vacancy is filled
by the appointment of a Capital Trust Administrator in accordance with Section
6.7, the Capital Trust Administrators in office, regardless of their number,
shall have all the powers granted to the Capital Trust Administrators and shall
discharge all the duties imposed upon the Capital Trust Administrators by this
Declaration.
Section 6.10 MEETINGS.
If there is more than one Capital Trust Administrator, meetings of the
Capital Trust Administrators shall be held from time to time upon the calling of
any Capital Trust Administrator. Regular meetings of the Capital Trust
Administrators may be held at a time and place fixed by resolution of the
Capital Trust Administrators. Notice of any in-person meetings of the Capital
Trust Administrators shall be hand delivered or otherwise delivered in writing
(including by facsimile, with a hard copy by overnight courier) not less than 48
hours before such meeting. Notice of any telephonic meetings of the Capital
Trust Administrators or any committee thereof shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 24 hours before a meeting. Notices shall
contain a brief statement of the time, place and anticipated purposes of the
meeting. The presence (whether in person or by telephone) of a Capital Trust
Administrator at a meeting shall constitute a waiver of notice of such meeting
except where a Capital Trust Administrator attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Capital Trust Administrators may be taken at
a meeting by vote of a majority of the Capital Trust Administrators present
(whether in person or by telephone) and eligible to vote with respect to such
matter; provided, that a Quorum is present, or without a meeting by the
unanimous written consent of the Capital Trust Administrators. Notwithstanding
the foregoing, any and all actions of the Capital Trust Administrators may be
taken by the unanimous written consent of all Capital Trust Administrators.
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Section 6.11 DELEGATION OF POWER.
(a) Any Capital Trust Administrator may, by power of attorney
consistent with applicable law, delegate to any natural person over the age
of 21 his, her or its power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing.
(b) The Capital Trust Administrators shall have power to delegate
from time to time to such of their number or to officers of Capital Trust
the doing of such things and the execution of such instruments either in
the name of Capital Trust or the names of the Capital Trust Administrators
or otherwise as the Capital Trust Administrators may deem expedient, to the
extent such delegation is not prohibited by applicable law or contrary to
the provisions of Capital Trust, as set forth herein.
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Capital Property Trustee or the Capital
Delaware Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any corporation resulting from an merger,
conversion or consolidation to which the Capital Property Trustee or the Capital
Delaware Trustee, as the case may be, shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Capital Property Trustee or the Capital Delaware Trustee, as the case may be,
shall be the successor of the Capital Property Trustee or the Capital Delaware
Trustee, as the case may be, hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article without the execution or
filing of any paper or any further act on the part of any of the parties hereto.
ARTICLE VII
THE CAPITAL TRUST SECURITIES
Section 7.1 GENERAL PROVISIONS REGARDING CAPITAL TRUST SECURITIES.
(a) The Capital Trust Administrators shall on behalf of Capital Trust
issue, a class of Capital Trust Preferred Securities representing undivided
beneficial ownership interests in the assets of Capital Trust designated as
the "Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities, Series A" (the "Series A Capital Trust Preferred Securities"),
a class of Capital Trust Preferred Securities to be issued only in exchange
for the Series A Capital Trust Preferred Securities designated as the
"Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities, Series B" (the "Series B Capital Trust Preferred Securities,"
and together with the Series A Capital Trust Preferred Securities, the
"Capital Trust Preferred Securities"), and one class of Capital Trust
Common Securities representing undivided beneficial ownership interests in
the assets of Capital Trust designated as the "Floating Rate Non-Cumulative
Subordinated Capital Trust Common Securities" (the "Capital Trust Common
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Securities"). The maximum aggregate liquidation amount of Series A Capital
Trust Preferred Securities that may be issued by Capital Trust is
$150,000,000. The maximum aggregate liquidation amount of Series B Capital
Trust Preferred Securities that may be issued by Capital Trust is
$150,000,000. The maximum aggregate amount of the Capital Trust Common
Securities that may be issued is $4,640,000; provided that the Capital
Trust Common Securities outstanding at any time must have an aggregate
liquidation amount with respect to the assets of Capital Trust equal to at
least 3% of the assets of Capital Trust; provided further that after the
initial issuance of Capital Trust Preferred Securities and Capital Trust
Common Securities, Capital Trust may not issue additional Capital Trust
Preferred Securities or Capital Trust Common Securities unless the Capital
Trustees have received an opinion of counsel to the effect that the
issuance of such securities will not affect Capital Trust's status as a
grantor trust for United States Federal income tax purposes, and provided
further that nothing in this Declaration shall prohibit or restrict any
issuance of Capital Trust Securities in connection with the exercise of the
option granted by the Capital Trust pursuant to the purchase agreement
providing for the sale of the Series A Capital Trust Preferred Securities
to the Initial Purchaser.
(i) Capital Trust Preferred Securities. The aggregate
----------------------------------
liquidation amount of the Series A Capital Trust Preferred Securities
issued on the initial Closing Date is $100,000,000. The Capital Trust
Preferred Securities of Capital Trust will have a liquidation amount
with respect to the assets of Capital Trust of $1,000 per Capital
Trust Preferred Security. The Series A Capital Trust Preferred
Security Certificates and the Series B Capital Trust Preferred
Security Certificates evidencing the Capital Trust Preferred
Securities shall be substantially in the form of Exhibit A-1 to this
Declaration, provided, that the Series B Capital Trust Preferred
Security Certificate shall not contain the Restricted Securities
Legend, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice or to conform
to the rules of any stock exchange on which the Capital Trust
Preferred Securities are listed.
(ii) Capital Trust Common Securities. The aggregate liquidation
-------------------------------
amount of the Capital Trust Common Securities issued on the initial
Closing Date is $3,093,000. The Capital Trust Common Securities of
Capital Trust will have a nominal liquidation amount with respect to
the assets of Capital Trust of $1,000 per Capital Trust Common
Security. The Capital Trust Common Security Certificates evidencing
the Capital Trust Common Securities shall be substantially in the form
of Exhibit A-2 to this Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage,
custom or practice.
(b) Payment of Distributions on, and payments of the Redemption Price
upon a redemption of, the Capital Trust Preferred Securities and the
Capital Trust Common Securities, as applicable, shall be made Pro Rata
based on the liquidation amount of such Capital Trust Preferred Securities
and Capital Trust Common Securities; provided, however, that if on any date
on which amounts payable on Distribution or redemption, an event of default
or Asset Enforcement Event shall have occurred and be continuing, no
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payment of any Distribution on, or Redemption Price of, any of the Capital
Trust Common Securities, and no other payment on account of the redemption,
liquidation or other acquisition of such Capital Trust Common Securities,
shall be made unless payment in full in cash of all accrued and unpaid
Distributions (if declared) on all of the outstanding Capital Trust
Preferred Securities for all Distribution Periods terminating on or prior
thereto, or, in the case of amounts payable on redemption, the full amount
of the Redemption Price for all of the outstanding Capital Trust Preferred
Securities then called for redemption, shall have been made or provided
for, and all funds available to the Capital Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or payments
of the Redemption Price upon a redemption of, the Capital Trust Preferred
Securities then due and payable. Capital Trust shall issue no securities or
other interests in the assets of Capital Trust other than the Capital Trust
Preferred Securities and the Capital Trust Common Securities.
(c) The Certificates shall be signed on behalf of Capital Trust by a
Capital Trust Administrator. Such signature shall be the manual or
facsimile signature of any present or any future Capital Trust
Administrator. In case a Capital Trust Administrator of Capital Trust who
shall have signed any of the Certificates shall cease to be such Capital
Trust Administrator before the Certificates so signed shall be delivered by
Capital Trust, such Certificates nevertheless may be delivered as though
the person who signed such Certificates had not ceased to be such Capital
Trust Administrator; and any Certificate may be signed on behalf of Capital
Trust by such persons who, at the actual date of execution of such
Certificate, shall be the Capital Trust Administrators of Capital Trust,
although at the date of the execution and delivery of the Declaration any
such person was not such a Capital Trust Administrator. Certificates shall
be printed, lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Capital Trust Administrators, as
evidenced by their execution thereof, and may have such letters, numbers or
other marks of identification or designation and such legends or
endorsements as the Capital Trust Administrators may deem appropriate, or
as may be required to comply with any law or with any rule or regulation of
any stock exchange on which the Capital Trust Securities may be listed, or
to conform to usage.
A Capital Trust Preferred Security Certificate shall not be valid
until authenticated by the manual signature of an authorized signatory of
the Capital Property Trustee. Such signature shall be conclusive evidence
that the Capital Trust Preferred Security Certificate has been
authenticated under this Declaration.
In the event that Capital Trust elects to issue additional Capital
Trust Securities hereunder on a subsequent Closing Date, Capital Trust
shall deliver to the Capital Property Trustee, in the manner provided in
the following paragraph, duly executed Certificates and a written order,
together with such certificates and opinions of counsel (in each case in
substantially the form delivered at the initial Closing Date), as are
required for the issuance of Capital Trust Securities under this
Declaration, including the opinion of counsel required by Section 7.1(a).
Upon a written order of Capital Trust signed by one Capital Trust
Administrator, the Capital Property Trustee shall authenticate the
Certificates for original issue.
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The Capital Property Trustee may appoint an authenticating agent
acceptable to Capital Trust to authenticate Certificates. An
authenticating agent may authenticate Certificates whenever the Capital
Property Trustee may do so. Each reference in this Declaration to
authentication by the Capital Property Trustee includes authentication by
such agent. An authenticating agent has the same rights as the Capital
Property Trustee to deal with the Sponsor or an Affiliate of the Sponsor.
(d) The consideration received by Capital Trust for the issuance of
the Capital Trust Securities shall constitute a contribution to the capital
of Capital Trust and shall not constitute a loan to Capital Trust.
(e) Upon issuance of the Capital Trust Securities as provided in this
Declaration, the Capital Trust Securities so issued shall be deemed to be
validly issued, fully paid and non-assessable, subject to Section 9.1 with
respect to the Capital Trust Common Securities.
(f) Every Person, by virtue of having become a Holder or a beneficial
owner of a Capital Trust Preferred Security in accordance with the terms of
this Declaration, shall be deemed to have expressly assented and agreed to
the terms of, and shall be bound by, this Declaration and the terms of the
Capital Trust Securities and the Capital Trust Guarantee.
(g) The Capital Trust Securities shall have no preemptive rights.
Section 7.2 DISTRIBUTIONS.
(a) Holders of Capital Trust Securities shall be entitled to receive
non-cumulative cash distributions at a variable per annum rate on the
stated liquidation amount of $1,000 per Capital Trust Security, equal to
the variable per annum rate on the Asset Trust Preferred Securities
calculated on the basis of the actual number of days elapsed in a year
consisting of 360 days. Subject to Section 7.1(b), Distributions shall be
made on the Capital Trust Preferred Securities and the Capital Trust Common
Securities on a Pro Rata basis. Distributions on the Capital Trust
Securities shall, from the date of original issue, be payable quarterly
only to the extent that Capital Trust has funds available for the payment
of such Distributions in the Capital Property Account. Amounts available to
Capital Trust for distribution to the Holders of the Capital Trust
Preferred Securities will be limited to payments received by Capital Trust
from Asset Trust on the Asset Trust Preferred Securities or from the
Company on the Capital Trust Guarantee. "Distributions" shall mean ordinary
quarterly distributions. If and to the extent that Asset Trust makes an
additional distribution on the Asset Trust Preferred Securities to Capital
Trust, the Capital Property Trustee shall and is directed, to the extent
funds are available for that purpose, to make a Pro Rata distribution (an
"Additional Distribution") of such additional distribution to Holders,
subject to the terms of Section 7.1(b).
(b) Distributions on the Capital Trust Securities shall be payable in
cash quarterly in arrears on each Distribution Payment Date, commencing
October 15, 1999.
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Distributions on the Capital Trust Securities shall be payable to the
Holders thereof as they appear on the books and records of Capital Trust on
the relevant record dates, which relevant record date shall be the Business
Day immediately preceding each Distribution Payment Date. In the event that
the Capital Trust Preferred Securities do not remain in book-entry only
form, the relevant record dates shall be the first day of the month of each
Distribution Payment Date. Such distributions will be paid through the
Capital Property Trustee who will hold amounts received in respect of the
Asset Trust Preferred Securities in the Capital Property Account for the
benefit of the Holders of the Capital Trust Securities. In the event that
any date on which distributions are payable on the Capital Trust Securities
is not a Business Day, payment of the distribution payable on such date
will be made on the next succeeding day which is a Business Day (without
any interest or other payment in respect of any such delay) with the same
force and effect as if made on such date, except that, if a Business Day
falls in the next calendar year, the payment will be made on the
immediately preceding Business Day.
Section 7.3 REDEMPTION OF CAPITAL TRUST SECURITIES.
(a) Upon a purchase of the Asset Trust Preferred Securities by Asset
Trust upon redemption or otherwise, subject to Section 7.1(b), the proceeds
from such purchase shall be simultaneously applied Pro Rata to redeem
Capital Trust Securities having an aggregate liquidation amount equal to
the Asset Trust Preferred Securities so purchased or redeemed at an amount
equal to $1,000 per Asset Trust Preferred Security plus an amount equal to
accrued and unpaid Distributions from the last Distribution Payment Date or
such lesser amount as shall be received by Capital Trust in respect of the
Asset Trust Preferred Securities so purchased or redeemed (the "Redemption
Price"). Holders will be given not less than 30 nor more than 60 days'
notice of such redemption.
(b) If fewer than all the outstanding Capital Trust Securities are to
be so redeemed, subject to Section 7.1(b), the Capital Trust Common
Securities and the Capital Trust Preferred Securities will be redeemed Pro
Rata and the Capital Trust Preferred Securities to be redeemed will be
redeemed as described in Section 7.4 below.
(c) If, at any time, a Capital Trust Special Event shall occur and be
continuing, the Capital Trust Administrators shall, unless the Asset Trust
Preferred Securities are redeemed in the limited circumstances described
below, within 90 days following the occurrence of such Capital Trust
Special Event elect to either (i) dissolve Capital Trust upon not less than
30 nor more than 60 days' notice with the result that, after satisfaction
of creditors, if any, of Capital Trust, Asset Trust Preferred Securities
would be distributed on a Pro Rata basis to the Holders of the Capital
Trust Preferred Securities and the Capital Trust Common Securities in
liquidation of such Holders' interests in Capital Trust; provided, however,
that if at the time there is available to Capital Trust the opportunity to
eliminate, within such 90-day period, the Capital Trust Special Event by
taking some ministerial action, such as filing a form or making an
election, or pursuing some other similar reasonable measure which in the
sole judgment of the Sponsor has or will cause no adverse effect on Capital
Trust, Asset Trust, the Sponsor or the Holders of the Capital Trust
Securities and will involve no material cost, Capital Trust will pursue
such measure in lieu of dissolution or (ii) cause the Capital
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Trust Preferred Securities to remain outstanding; provided, that in the
case of this clause (ii), the Sponsor shall pay any and all expenses
incurred by or payable by Capital Trust attributable to the Capital Trust
Special Event. Furthermore, if in the case of the occurrence of a Capital
Trust Tax Event, the Capital Trust Administrators have received a Capital
Trust Redemption Tax Opinion, then the Company shall have the right, within
90 days following the occurrence of such Capital Trust Tax Event, to elect
to redeem the Debentures in whole (but not in part) and, in turn, Asset
Trust will redeem Asset Trust Preferred Securities in whole (but not in
part) for cash upon not less than 30 nor more than 60 days' notice.
Promptly following such redemption, the Capital Trust Securities will be
redeemed by Capital Trust at the Redemption Price as described in Section
7.4 below.
(d) If the Asset Trust Preferred Securities are distributed to the
Holders of the Capital Trust Preferred Securities, the Sponsor will use its
best efforts to cause the Asset Trust Preferred Securities to be listed on
the New York Stock Exchange or on such other national securities exchange
or similar organization as the Capital Trust Preferred Securities may then
be listed or quoted.
(e) On the date fixed for any distribution of Asset Trust Preferred
Securities, upon dissolution of Capital Trust, (i) the Capital Trust
Preferred Securities and the Capital Trust Common Securities will no longer
be deemed to be outstanding and (ii) certificates representing Capital
Trust Securities will be deemed to represent the Asset Trust Preferred
Securities having a liquidation preference equal to the stated liquidation
amount of such Capital Trust Securities until such certificates are
presented to the Sponsor or its agent for transfer or reissuance.
Section 7.4 REDEMPTION PROCEDURES.
(a) Notice of any redemption of, or notice of distribution of Asset
Trust Preferred Securities in exchange for, the Capital Trust Securities (a
"Redemption/Distribution Notice") will be given by Capital Trust, or at
Capital Trust's request, by the Capital Property Trustee in the name and at
the expense of Capital Trust, by mail to each Holder of Capital Trust
Securities to be redeemed or exchanged not fewer than 30 nor more than 60
days before the date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption of the Asset
Trust Preferred Securities.
In case of any redemption at the election of Capital Trust, Capital
Trust shall, at least 45 days and no more than 60 days prior to any date
fixed for redemption, notify the Capital Property Trustee of such date and
the aggregate liquidation amount of the Capital Trust Preferred Securities
to be redeemed and provide a copy of the Redemption/Distribution Notice.
Each Redemption/Distribution Notice shall identify the Capital Trust
Preferred Securities to be redeemed (including CUSIP numbers) and shall
state:
(1) the date fixed for redemption;
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(2) the Redemption Price;
(3) that on the date fixed for redemption, the Redemption Price will
become due and payable upon each Capital Trust Preferred Security to be
redeemed and that Distributions will cease to accrue on and after such
date;
(4) the place or places where such Capital Trust Preferred Securities
are to be surrendered for payment of the Redemption Price; and
(5) any information required by Section 7.14.
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this Section 7.4, a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of
Capital Trust Securities. Each Redemption/Distribution Notice shall be
addressed to the Holders of Capital Trust Securities at the address of each
such Holder appearing in the books and records of Capital Trust. No defect
in the Redemption/Distribution Notice or in the mailing of either thereof
with respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(b) In the event that fewer than all the outstanding Capital Trust
Securities are to be redeemed, the Capital Trust Securities to be redeemed
shall be redeemed Pro Rata from each Holder of Capital Trust Securities,
provided, that in respect of Capital Trust Preferred Securities registered
in the name of and held of record by DTC or its nominee (or any successor
Clearing Agency or its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to DTC or its nominee (or any
successor Clearing Agency or its nominee) or such nominee in accordance
with the procedures applied by such agency or nominee. In the event that
the Capital Trust Securities do not remain in book-entry only form and
fewer than all of the outstanding Capital Trust Securities are to be
redeemed, the Capital Trust Securities shall be redeemed Pro Rata or
pursuant to the rules of any securities exchange on which the Capital Trust
Securities are listed.
(c) If Capital Trust Securities are to be redeemed and Capital Trust
gives a Redemption/ Distribution Notice, which notice may only be issued if
the Asset Trust Preferred Securities are redeemed as set out in this
Section 7.4 (which notice will be irrevocable), then (A) while the Capital
Trust Preferred Securities are in book-entry only form, by 1:00 p.m., New
York City time, on the redemption date, the Capital Property Trustee, upon
receipt of such funds, will deposit irrevocably with the DTC (in the case
of book-entry form Capital Trust Preferred Securities) or its nominee (or
successor Clearing Agency or its nominee) funds sufficient to pay the
applicable Redemption Price with respect to the Capital Trust Preferred
Securities and (B) with respect to Capital Trust Preferred Securities and
Capital Trust Common Securities issued in definitive form, the Capital
Property Trustee will pay the relevant Redemption Price to the Holders of
such Capital Trust Securities by check mailed to the address of the
relevant Holder appearing on the books and records of Capital Trust on the
redemption date. If a
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Redemption/Distribution Notice shall have been given and funds deposited as
required, then immediately prior to the close of business on the date of
such deposit, distributions will cease to accrue on the Capital Trust
Securities so called for redemption and all rights of Holders of such
Capital Trust Securities will cease, except the right of the Holders of
such Capital Trust Securities to receive the Redemption Price, but without
interest on such Redemption Price. If any date fixed for redemption of
Capital Trust Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date fixed for redemption. If payment of the Redemption Price in
respect of any Capital Trust Securities is improperly withheld or refused
and not paid by the Sponsor as guarantor pursuant to the Capital Trust
Guarantee, Distributions on such Capital Trust Securities will continue to
accrue at the then applicable rate from the original redemption date to the
actual date of payment, in which case the actual payment date will be
considered the date fixed for redemption for purposes of calculating the
Redemption Price. For these purposes, the applicable Redemption Price shall
not include Distributions which are being paid to Holders who were Holders
on a relevant record date. Upon satisfaction of the foregoing conditions,
then immediately prior to the close of business on the date of such deposit
or payment, all rights of Holders of such Capital Trust Preferred
Securities so called for redemption will cease, except the right of the
Holders to receive the Redemption Price, but without interest on such
Redemption Price, and from and after the date fixed for redemption, such
Capital Trust Preferred Securities will not accrue distributions or bear
interest.
Neither the Capital Trust Administrators nor Capital Trust shall be
required to register or cause to be registered the transfer or exchange of
any Capital Trust Securities that have been called for redemption, except
in the case of any Capital Trust Securities being redeemed in part, any
portion thereof not to be redeemed.
(d) Subject to the foregoing and applicable law (including, without
limitation, United States Federal securities laws), the Company or its
subsidiaries may at any time and from time to time purchase outstanding
Capital Trust Preferred Securities by tender, in the open market or by
private agreement.
Section 7.5 VOTING RIGHTS OF CAPITAL TRUST PREFERRED SECURITIES.
(a) Except as provided under this Article VII and as otherwise
required by the Business Trust Act, the Trust Indenture Act and other
applicable law, the Holders of the Capital Trust Preferred Securities will
have no voting rights.
(b) Subject to the requirement of the Capital Property Trustee
receiving a tax opinion in certain circumstances set forth in Section
7.5(d) below, the Holders of a Majority in Liquidation Amount of the
Capital Trust Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to
the Capital Property Trustee, or to direct the exercise of any trust or
other power
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conferred upon the Capital Property Trustee under the Declaration,
including the right to direct the Capital Property Trustee, as holder of
the Asset Trust Preferred Securities, to (i) exercise the remedies
available to it under the Asset Declaration as a holder of Asset Trust
Preferred Securities, (A) to enforce Asset Trust's creditors rights and
other rights with respect to the Debentures, (B) to enforce the rights of
the holders of the Asset Trust Preferred Securities under the Asset Trust
Preferred Guarantee, and (C) to enforce the rights of the holders of the
Asset Trust Preferred Securities to receive distributions (if and to the
extent such distributions have been declared out of funds legally available
therefor on the Asset Trust Preferred Securities or (ii) consent to any
amendment or modification or termination of the Asset Declaration or the
Asset Trust Preferred Securities where such consent shall be required;
provided, however, that where a consent or action under the Asset
Declaration would require the consent or act of the Holders of more than a
majority in aggregate liquidation preference of Asset Trust Preferred
Securities affected thereby, only the Holders of the percentage of the
aggregate stated liquidation amount of the Capital Trust Preferred
Securities which is at least equal to the percentage of aggregate
liquidation preference required under the Asset Declaration may direct the
Capital Property Trustee to give such consent to take such action.
(c) If the Capital Property Trustee fails to enforce its rights under
the Asset Trust Preferred Securities after a Holder of record of Capital
Trust Preferred Securities has made a written request and has offered to
the Capital Property Trustee indemnity or security reasonably satisfactory
to the Capital Property Trustee, such holder of record of Capital Trust
Preferred Securities may, to the extent permitted by applicable law,
institute a legal proceeding directly against the holder of the Asset Trust
Common Securities or Asset Property Trustee to enforce the Capital Property
Trustee's rights under the Asset Declaration without first instituting any
legal proceeding against the Capital Property Trustee or any other person
or entity. Notwithstanding the foregoing, if a Capital Trust Enforcement
Event has occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to make any required payment when due on
the Debentures or to terminate an Extension Period in accordance with the
terms of the Debentures, then a Holder of Capital Trust Preferred
Securities may directly institute a proceeding against the Debenture Issuer
for enforcement of such payment with respect to such Debenture.
(d) The Capital Property Trustee shall notify all Holders of the
Capital Trust Preferred Securities of any notice of any Asset Enforcement
Event received from the holder of the Asset Trust Common Securities with
respect to the Asset Trust Preferred Securities and the Debentures. Such
notice shall state that such Asset Enforcement Event also constitutes a
Capital Trust Enforcement Event. Except with respect to directing the time,
method, and place of conducting a proceeding for a remedy, the Capital
Property Trustee shall be under no obligation to take any of the actions
described in clause 7.5(b)(i) and (ii) above unless the Capital Property
Trustee has received an opinion of independent tax counsel to the effect
that as a result of such action, Capital Trust will not fail to be
classified as a grantor trust for United States Federal income tax purposes
and that after such action each Holder will continue to be treated as
owning an undivided beneficial ownership interest in the Asset Trust
Preferred Securities.
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(e) In the event the consent of the Capital Property Trustee, as the
holder of the Asset Trust Preferred Securities, is required under the Asset
Declaration with respect to any amendment, modification or termination of
the Asset Declaration, the Capital Property Trustee shall request the
direction of the Holders of the Capital Trust Securities with respect to
such amendment, modification or termination and shall vote with respect to
such amendment, modification or termination as directed by a Majority in
Liquidation Amount of the Capital Trust Securities voting together as a
single class; provided, however, that where a consent under the Asset
Declaration would require the consent of the holders of more than a
majority of the aggregate liquidation preference of the Asset Trust
Preferred Securities, the Capital Property Trustee may only give such
consent at the direction of the Holders of at least the same proportion in
aggregate stated liquidation amount of the Capital Trust Securities. The
Capital Property Trustee shall not take any such action in accordance with
the directions of the Holders of the Capital Trust Securities unless the
Capital Property Trustee has received an opinion of tax counsel to the
effect that, as a result of such action, Capital Trust will not be
classified as other than a grantor trust for United States Federal income
tax purposes.
(f) A waiver of an Asset Enforcement Event with respect to the Asset
Trust Preferred Securities will constitute a waiver of the corresponding
Capital Trust Enforcement Event.
(g) Any required approval or direction of Holders of Capital Trust
Preferred Securities may be given at a separate meeting of Holders of
Capital Trust Preferred Securities convened for such purpose, at a meeting
of all of the Holders of Capital Trust Securities or pursuant to written
consent. The Capital Trust Administrators will cause a notice of any
meeting at which Holders of Capital Trust Preferred Securities are entitled
to vote, or of any matter upon which action by written consent of such
Holders is to be taken, to be mailed to each Holder of record of Capital
Trust Preferred Securities. Each such notice will include a statement
setting forth the following information: (i) the date of such meeting or
the date by which such action is to be taken; (ii) a description of any
resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought;
and (iii) instructions for the delivery of proxies or consents.
(h) No vote or consent of the Holders of Capital Trust Preferred
Securities will be required for Capital Trust to redeem and cancel Capital
Trust Preferred Securities or distribute Asset Trust Preferred Securities
in accordance with the Declaration.
(i) Notwithstanding that Holders of Capital Trust Preferred
Securities are entitled to vote or consent under any of the circumstances
described above, any of the Capital Trust Securities that are beneficially
owned at such time by the Company or any entity directly or indirectly
controlled by, or under direct or indirect common control with, the
Company, shall not be entitled to vote or consent and shall, for purposes
of such vote or consent, be treated as if such Capital Trust Securities
were not outstanding; provided, however, that persons (other than
Affiliates of the Company) to whom the Company or any of its subsidiaries
have pledged Capital Trust Preferred Securities may
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vote or consent with respect to such pledged Capital Trust Preferred
Securities pursuant to the terms of such pledge.
(j) Holders of the Capital Trust Preferred Securities will have no
rights to appoint or remove the Capital Trust Administrators, who may be
appointed, removed or replaced solely by the Company, as the Capital Trust
Common Securities Holder.
Section 7.6 VOTING RIGHTS OF CAPITAL TRUST COMMON SECURITIES.
(a) Except as provided under Section 6.1(b) or this Section 7.6 or as
otherwise required by the Business Trust Act, the Trust Indenture Act or
other applicable law or provided by the Declaration, the Capital Trust
Common Securities Holder will have no voting rights.
(b) The Capital Trust Common Securities Holder is entitled, in
accordance with Article VI of the Declaration, to vote to appoint, remove
or replace any Capital Trustee or to increase or decrease the number of
Capital Trustees.
(c) Subject to Section 2.6 of the Capital Declaration and only after
every Capital Enforcement Event with respect to the Capital Trust Preferred
Securities has been cured, waived, or otherwise eliminated and subject to
the requirement of the Capital Property Trustee receiving a tax opinion in
certain circumstances set forth in this paragraph (c), the Holders of a
Majority in Liquidation Amount of the Capital Trust Common Securities have
the right to direct the time, method and place of conduction of any
proceeding for any remedy available to the Capital Property Trustee, or
direct the exercise of any trust or power conferred upon the Capital
Property Trustee under the Capital Declaration, including the right to (i)
exercise the remedies available to it under the Asset Declaration as a
Holder of the Asset Trust Preferred Securities (A) to enforce Asset Trust's
creditors rights and other rights with respect to the Debentures, (B) to
enforce the rights of the holders of the Asset Trust Preferred Securities
under the Asset Trust Preferred Guarantee, and (C) to enforce the rights of
the holders of the Asset Trust Preferred Securities to receive
distributions (if and to the extent such distributions have been declared
out of funds legally available therefor) on the Asset Trust Preferred
Securities or (ii) consent to any amendment or modification or termination
of the Asset Declaration or the Asset Trust Preferred Securities where such
consent shall be required; provided, however, that where a consent or
action under the Asset Declaration would require the consent or act of the
holders of more than a majority of the aggregate liquidation preference of
Asset Trust Preferred Securities affected thereby, only the holders of the
percentage of the aggregate stated liquidation amount of the Capital Trust
Common Securities which is at least equal to the percentage required under
the Asset Declaration may direct the Capital Property Trustee to give such
consent or take such action. Except with respect to directing the time,
method, and place of conducting a proceeding for a remedy, the Capital
Property Trustee shall be under no obligation to take any of the actions
described in clause 7.6(c)(i) and (ii) above unless the Capital Property
Trustee has received an opinion of independent tax counsel to the effect
that, as a result of such action, for United States Federal income tax
purposes Capital Trust will not fail
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to be classified as a grantor trust and each holder will be treated as
owning an undivided beneficial ownership interest in the Asset Trust
Preferred Securities.
(d) If the Capital Property Trustee fails to enforce its rights under
the Asset Trust Preferred Securities after a Holder of record of Capital
Trust Common Securities has made a written request, such Holder of record
of Capital Trust Common Securities may directly institute a legal
proceeding directly against the Company or the Asset Property Trustee, to
enforce the Capital Property Trustee's rights under the Asset Trust
Preferred Securities without first instituting any legal proceeding against
the Capital Property Trustee or any other person or entity. Notwithstanding
the foregoing, if a Capital Enforcement Event has occurred and is
continuing and such event is attributable to the failure of the Debenture
Issuer to make any required payment when due on any Debenture, then the
Capital Trust Common Securities Holder may directly institute a proceeding
against the Debenture Issuer for enforcement of payment with respect to
such Debenture.
(e) A waiver of an Asset Enforcement Event with respect to the Asset
Trust Preferred Securities will constitute a waiver of the corresponding
Capital Enforcement Event.
(f) No vote or consent of the Capital Trust Common Securities Holder
shall be required for Capital Trust to redeem and cancel Capital Trust
Common Securities or to distribute Asset Trust Preferred Securities in
accordance with the Declaration and the terms of the Capital Trust
Securities.
Section 7.7 PAYING AGENT.
In the event that any Capital Trust Preferred Securities are not in
book-entry only form, Capital Trust shall maintain in the Borough of
Manhattan, City of New York, State of New York, an office or agency where
the Capital Trust Preferred Securities may be presented for payment
("Paying Agent"). Capital Trust may appoint the paying agent and may
appoint one or more additional paying agents in such other locations as it
shall determine. The term "Paying Agent" includes any additional paying
agent. Capital Trust may change any Paying Agent without prior notice to
the Holders. Capital Trust shall notify the Capital Property Trustee of
the name and address of any Paying Agent not a party to this Declaration.
If Capital Trust fails to appoint or maintain another entity as Paying
Agent, the Capital Property Trustee shall act as such. Capital Trust or
any of its Affiliates may act as Paying Agent. The Bank of New York shall
initially act as Paying Agent for the Capital Trust Preferred Securities
and the Capital Trust Common Securities and shall comply with Section
317(b) of the Trust Indenture Act. In the event the Capital Property
Trustee shall no longer be the Paying Agent, Capital Trust shall appoint a
successor (which shall be a bank or trust company acceptable to the
Debenture Issuer) to act as Paying Agent. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Capital Property Trustee and the Debenture Issuer.
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Section 7.8 TRANSFER OF CAPITAL TRUST SECURITIES.
(a) Capital Trust shall cause to be kept at the Corporate Trust
Office of the Capital Property Trustee a register (the register maintained
in such office being herein sometimes referred to as the "Security
Register") in which, subject to such reasonable regulations as it may
prescribe, Capital Trust shall provide for the registration of Capital
Trust Preferred Securities and of transfers of Capital Trust Preferred
Securities. The Capital Property Trustee is hereby appointed "Security
Registrar" for the purpose of registering Capital Trust Preferred
Securities and transfers of Capital Trust Preferred Securities as herein
provided.
(b) Upon surrender for registration of transfer of any Capital Trust
Preferred Security at an office or agency of Capital Trust designated for
such purpose, Capital Trust shall execute, and the Capital Property Trustee
shall authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Capital Trust Preferred Securities of any
authorized denominations and of a like aggregate liquidation amount.
(c) At the option of the Holder, Capital Trust Preferred Securities
may be exchanged for other Capital Trust Preferred Securities of any
authorized denominations and of a like aggregate liquidation amount, upon
surrender of the Capital Trust Preferred Securities to be exchanged at such
office or agency. Whenever any Capital Trust Preferred Securities are so
surrendered for exchange, Capital Trust shall execute, and the Capital
Property Trustee shall authenticate and deliver, the Capital Trust
Preferred Securities which the Holder making the exchange is entitled to
receive.
(d) Every Capital Trust Preferred Security presented or surrendered
for registration of transfer or for exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to
Capital Trust and the Security Registrar, duly executed, by the Holder
thereof or his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer
or exchange of Capital Trust Preferred Securities, but Capital 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 Capital Trust Preferred Securities.
(f) If the Capital Trust Preferred Securities are to be redeemed in
part, Capital Trust shall not be required (A) to issue, register the
transfer of or exchange any Capital Trust Securities during a period
beginning at the opening of business 15 days before the day of the mailing
of a notice of redemption of any such Capital Trust Preferred Securities
selected for redemption under Section 7.4 and ending at the close of
business on the day of such mailing, or (B) to register the transfer of or
exchange any Capital Trust Preferred Security so selected for redemption in
whole or in part, except the unredeemed portion of any Capital Trust
Preferred Security being redeemed in part.
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Section 7.9 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Capital
Trust Administrators, or if the Capital Trust Administrators and the
Capital Property Trustee shall receive evidence to their satisfaction of
the destruction, loss or theft of any Certificate; and
(b) there shall be delivered to the Capital Trust Administrators and
the Capital Property Trustee such security or indemnity as may be required
by them to keep each of them, the Sponsor and Capital Trust harmless, then,
in the absence of notice that such Certificate shall have been acquired by
a bona fide purchaser, any Capital Trust Administrator on behalf of Capital
Trust shall execute and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under
this Section 7.9, the Capital Trust Administrators and the Capital Property
Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as
if originally issued, whether or not the lost, stolen or destroyed
Certificate shall be found at any time.
Section 7.10 DEEMED SECURITY HOLDERS.
The Capital Trustees may treat the Person in whose name any
Certificate shall be registered on the books and records of Capital Trust
as the sole holder of such Certificate and of the Capital Trust Securities
represented by such Certificate for purposes of receiving Distributions and
for all other purposes whatsoever and, accordingly, shall not be bound to
recognize any equitable or other claim to or interest in such Certificate
or in the Capital Trust Securities represented by such Certificate on the
part of any Person, whether or not Capital Trust shall have actual or other
notice thereof.
Section 7.11 GLOBAL SECURITIES.
If Capital Trust shall establish that the Capital Trust Preferred
Securities are to be issued in the form of one or more fully registered,
global Capital Trust Preferred Securities Certificates ("Global
Securities") to be delivered to DTC, the initial Depositary, by Capital
Trust, then a Capital Trust Administrator on behalf of Capital Trust shall
execute and the Capital Property Trustee shall authenticate and deliver one
or more Global Securities that (i) shall represent and shall be denominated
in an amount equal to the aggregate liquidation amount of all of the
Capital Trust Preferred Securities to be issued in the form of Global
Securities and not yet cancelled, (ii) shall be registered in the name of
the Depositary for such Global Security or Capital Trust Preferred
Securities or the nominee of such Depositary, and (iii) shall be delivered
by the Capital
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Property Trustee to such Depositary or pursuant to such Depositary's
instructions. Global Securities shall bear a legend substantially to the
following effect:
"This Capital Trust Preferred Security is a Global Security
within the meaning of the Declaration hereinafter referred to and is
registered in the name of a Depositary or a nominee of a Depositary.
Notwithstanding the provisions of Section 7.8 of the Declaration,
unless and until it is exchanged in whole or in part for Capital Trust
Preferred Securities in definitive registered form, a Global Security
representing all or a part of the Capital Trust Preferred Securities
may not be transferred in the manner provided in Section 7.8 of the
Declaration except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary or by such Depositary or any such
nominee to a successor Depositary or a nominee of such successor
Depositary. Every Capital Trust Preferred Security delivered upon
registration or transfer of, or in exchange for, or in lieu of, this
Global Security shall be a Global Security subject to the foregoing,
except in the limited circumstances described above. Unless this
certificate is presented by an authorized representative of DTC to
Capital Trust or its agent for registration of transfer, exchange or
payment, and any certificate issued is registered in the name of Cede
& Co. or in such other name as is requested by an authorized
representative of DTC (and any payment is to be 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."
Definitive Capital Trust Preferred Securities issued in exchange for
all or a part of a Global Security pursuant to this Section 7.11 shall be
registered in such names and in such authorized denominations as the
Depositary, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Capital Property Trustee.
Upon execution and authentication, the Capital Property Trustee shall
deliver such definitive Capital Trust Preferred Securities to the persons
in whose names such definitive Capital Trust Preferred Securities are so
registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be, upon receipt
thereof, canceled by the Capital Property Trustee in accordance with
standing procedures and instructions existing between the Depositary and
the Custodian. At any time prior to such cancellation, if any interest in
Global Securities is exchanged for definitive Capital Trust Preferred
Securities, redeemed, canceled or transferred to a transferee who receives
definitive Capital Trust Preferred Securities therefor or any definitive
Capital Trust Preferred Security is exchanged or transferred for part of
Global Securities, the liquidation amount of such Global Securities shall,
in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be reduced or increased, as the
case may be, and an endorsement shall be made on such Global Securities by
the Capital Property Trustee or the Custodian, at the direction of the
Capital Property Trustee, to reflect such reduction or increase.
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Capital Trust and the Capital Property Trustee may for all purposes,
including the making of payments due on the Capital Trust Preferred
Securities, deal with the Depositary as the authorized representative of
the Holders for the purposes of exercising the rights of Holders hereunder.
The rights of the owner of any beneficial interest in a Global Security
shall be limited to those established by law and agreements between such
owners and depositary participants; provided that no such agreement shall
give any rights to any person against Capital Trust or the Capital Property
Trustee without the written consent of the parties so affected. Multiple
requests and directions from and votes of the Depositary as Holder of
Capital Trust Preferred Securities in global form with respect to any
particular matter shall not be deemed inconsistent to the extent they do
not represent an amount of Capital Trust Preferred Securities in excess of
those held in the name of the Depositary or its nominee.
If at any time the Depositary for any Capital Trust Preferred
Securities represented by one or more Global Securities notifies Capital
Trust that it is unwilling or unable to continue as Depositary for such
Capital Trust Preferred Securities or if at any time the Depositary for
such Capital Trust Preferred Securities shall no longer be eligible under
this Section 7.11, Capital Trust shall appoint a successor Depositary with
respect to such Capital Trust Preferred Securities. If a successor
Depositary for such Capital Trust Preferred Securities is not appointed by
Capital Trust within 60 days after Capital Trust receives such notice or
becomes aware of such ineligibility, Capital Trust's election that such
Capital Trust Preferred Securities be represented by one or more Global
Securities shall no longer be effective and a Capital Trust Administrator
on behalf of Capital Trust shall execute, and the Capital Property Trustee
will authenticate and deliver Capital Trust Preferred Securities in
definitive registered form, in any authorized denominations, in an
aggregate liquidation amount equal to the liquidation amount of the Global
Security or Capital Trust Preferred Securities representing such Capital
Trust Preferred Securities in exchange for such Global Security or Capital
Trust Preferred Securities.
Capital Trust may at any time and in its sole discretion determine
that the Capital Trust Preferred Securities issued in the form of one or
more Global Securities shall no longer be represented by a Global Security
or Capital Trust Preferred Securities. In such event a Capital Trust
Administrator on behalf of Capital Trust shall execute, and the Capital
Property Trustee, shall authenticate and deliver, Capital Trust Preferred
Securities in definitive registered form, in any authorized denominations,
in an aggregate liquidation amount equal to the liquidation amount of the
Global Security or Capital Trust Preferred Securities representing such
Capital Trust Preferred Securities, in exchange for such Global Security or
Capital Trust Preferred Securities.
If at any time a Capital Enforcement occurs and is continuing, if
requested by a Holder, a Capital Trust Administrator on behalf of Capital
Trust shall execute, and the Capital Property Trustee, shall authenticate
and deliver, Capital Trust Preferred Securities in definitive registered
form, in any authorized denominations, in an aggregate liquidation amount
equal to the aggregate liquidation amount of the Capital Trust Preferred
Securities requested by such Holder, in exchange for the portion of the
Global Security equal to such Capital Trust Preferred Securities.
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Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in Section 7.13(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary.
Interests of beneficial owners in Global Security may be transferred
or exchanged for definitive Capital Trust Preferred Securities and
definitive Capital Trust Preferred Securities may be transferred or
exchange for Global Securities in accordance with rules of the Depositary
and the provisions of Section 7.13.
Any Capital Trust Preferred Security in global form may be endorsed
with or have incorporated in the text thereof such legends or recitals or
changes not inconsistent with the provisions of this Declaration as may be
required by the Custodian or the Depositary or required to comply with any
applicable law or any regulation thereunder or with Regulation S or with
the rules and regulations of any securities exchange upon which the Capital
Trust Preferred Securities may be listed or traded or to conform with any
usage with respect thereto, or to indicate any special limitations or
restrictions to which any particular Capital Trust Preferred Securities are
subject.
Section 7.12 RESTRICTIVE LEGEND.
(a) Each Global Security and definitive Capital Trust Preferred
Security that constitutes a Restricted Security shall bear a legend
substantially in the form of the following legend (the "Restricted
Securities Legend") on the face thereof until two years after the later of
the date of original issue and the last date on which the Sponsor or any
affiliate of the Sponsor was the owner of such Capital Trust Preferred
Securities (or any predecessor thereto) (the "Resale Restriction
Termination Date"), unless otherwise agreed by Capital Trust and the Holder
thereof:
"THE HOLDER OF THIS CAPITAL TRUST PREFERRED SECURITY BY ITS
ACCEPTANCE HEREOF IS DEEMED TO HAVE AGREED TO BE BOUND BY THE
PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT AMONG FIRST MARYLAND
BANCORP, ALLFIRST PREFERRED ASSET TRUST, ALLFIRST PREFERRED CAPITAL
TRUST ("ALLFIRST CAPITAL TRUST") AND LEHMAN BROTHERS INC. DATED JULY
9, 1999 (THE "REGISTRATION RIGHTS AGREEMENT"). FIRST MARYLAND BANCORP
WILL PROVIDE A COPY OF THE REGISTRATION RIGHTS AGREEMENT TO A HOLDER
WITHOUT CHARGE UPON WRITTEN REQUEST TO ALLFIRST CAPITAL TRUST AT ITS
PRINCIPAL PLACE OF BUSINESS.
THIS CAPITAL TRUST PREFERRED SECURITY HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.
NEITHER THIS CAPITAL
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TRUST PREFERRED SECURITY 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, SUCH REGISTRATION.
THE HOLDER OF THIS CAPITAL TRUST PREFERRED SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS
CAPITAL TRUST PREFERRED SECURITY, PRIOR TO THE DATE (THE "RESALE
RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF
THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH FIRST
MARYLAND BANCORP OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS
CAPITAL TRUST PREFERRED SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL
TRUST PREFERRED SECURITY) ONLY (A) TO FIRST MARYLAND BANCORP, (B)
PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE
UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL TRUST PREFERRED
SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE
SECURITIES ACT 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 ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT
OCCUR OUTSIDE THE UNITED STATES WHEN THE MEANING OF REGULATION 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
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL TRUST
PREFERRED 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
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE SECURITIES ACT, SUBJECT TO THE RIGHT OF CAPITAL TRUST AND THE
COMPANY 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, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM AND (ii) PURSUANT TO CLAUSE (E) TO REQUIRE THAT THE TRANSFEROR
DELIVER TO CAPITAL TRUST A LETTER FROM THE TRANSFEREE SUBSTANTIALLY IN
THE FORM OF ANNEX A TO THE OFFERING MEMORANDUM DATED JULY
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9, 1999 RELATING TO THIS CAPITAL TRUST PREFERRED SECURITY. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
CAPITAL TRUST PREFERRED SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY
TO THE EFFECT OF THIS LEGEND.
THE CAPITAL TRUST PREFERRED SECURITIES WILL BE ISSUED AND, UNTIL
REGISTERED UNDER THE SECURITIES ACT, MAY BE TRANSFERRED ONLY IN
BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100
CAPITAL TRUST PREFERRED SECURITIES). ANY ATTEMPTED TRANSFER OF
CAPITAL TRUST PREFERRED SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO
LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE SHALL BE
DEEMED NOT TO BE THE HOLDER OF SUCH CAPITAL TRUST PREFERRED SECURITIES
FOR ANY PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON SUCH CAPITAL TRUST PREFERRED SECURITIES, AND SUCH
PURPORTED TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN
SUCH CAPITAL TRUST PREFERRED SECURITIES.
THE HOLDER OF THIS CAPITAL TRUST PREFERRED SECURITY BY ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IF IT IS A PURCHASER
IN A SALE THAT OCCURS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S OF THE SECURITIES ACT, IT ACKNOWLEDGES THAT, UNTIL
EXPIRATION OF THE "40-DAY DISTRIBUTION COMPLIANCE PERIOD" WITHIN THE
MEANING OF RULE 903 OF REGULATION S, ANY OFFER OR SALE OF THIS CAPITAL
TRUST PREFERRED SECURITY SHALL NOT BE MADE BY IT TO A U.S. PERSON TO
FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON WITHIN THE MEANING OF RULE
902(o) UNDER THE SECURITIES ACT."
(b) In all circumstances, each Global Security or definitive Capital
Trust Preferred Security shall bear the following legend:
"THE HOLDER OF THIS CAPITAL TRUST PREFERRED SECURITY BY ITS
ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i)
IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR (ii) THE
ACQUISITION AND HOLDING OF THIS CAPITAL TRUST PREFERRED SECURITY BY IT
IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF
THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR IS EXEMPT FROM
ANY SUCH PROHIBITION."
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Any Capital Trust Preferred Security (or security issued in exchange
or substitution therefor) as to which such restrictions on transfer shall
have expired in accordance with their terms may, upon satisfaction of the
requirements of Section 7.12(b) and surrender of such Capital Trust
Preferred Security for exchange to the Security Registrar in accordance
with the provisions of this Section 7.12(a), be exchanged for a new Capital
Trust Preferred Security or Capital Trust Preferred Securities, of like
tenor and aggregate liquidation amount, which shall not bear the
restrictive legend required by this Section 7.12(a).
(c) Upon any sale or transfer of any Restricted Security (including
any interest in a Global Security) (i) that is effected pursuant to an
effective registration statement under the Securities Act or (ii) in
connection with which the Capital Property Trustee receives certificates
and other information (including an opinion of counsel, if requested)
reasonably acceptable to the Sponsor to the effect that such security will
no longer be subject to the resale restrictions under Federal and state
securities laws, then (A) in the case of a Restricted Security in
definitive form, the Capital Trust Preferred Security registrar or co-
registrar shall permit the holder thereof to exchange such Restricted
Security for a security that does not bear the legend set forth in Section
7.12(a), and shall rescind any such restrictions on transfer and (B) in the
case of Restricted Securities represented by a Global Security, such
Security shall no longer be subject to the restrictions contained in the
legend set forth in Section 7.12(a) (but still subject to the other
provisions hereof). In addition, any Capital Trust Preferred Security (or
security issued in exchange or substitution therefor) as to which the
restrictions on transfer described in the legend set forth in Section
7.12(a) have expired by their terms, may, upon surrender thereof (in
accordance with the terms of this Indenture) together with such
certifications and other information (including an opinion of counsel
having substantial experience in practice under the Securities Act and
otherwise reasonably acceptable to the Sponsor, addressed to the Sponsor
and the Capital Property Trustee and in a form acceptable to the Sponsor,
to the effect that the transfer of such Restricted Security has been made
in compliance with Rule 144 or such successor provision) acceptable to the
Sponsor, be exchanged for a new Capital Trust Preferred Security or Capital
Trust Preferred Securities of like tenor and aggregate liquidation amount,
which shall not bear the restrictive legends set forth in Section 7.12(a).
Section 7.13 SPECIAL TRANSFER PROVISIONS.
So long as the Capital Trust Preferred Securities are eligible for book-
entry settlement, or unless otherwise required by law, upon any transfer of a
definitive Capital Trust Preferred Security to a QIB in accordance with Rule
144A, unless otherwise requested by the transferor, and upon receipt of the
definitive Capital Trust Preferred Security being so transferred, together with
a certification from the transferor that the transferor reasonably believes the
transferee is a QIB (or other evidence satisfactory to the Capital Property
Trustee), the Capital Property Trustee shall make an endorsement on the
Restricted Global Security to reflect an increase in the aggregate liquidation
amount of the Restricted Global Security, and the Capital Property Trustee shall
cancel such definitive Capital Trust Preferred Security and cause, in accordance
with the standing instructions and procedures existing between the Depositary
and the Capital Property
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Capital Trustees, the aggregate liquidation amount of Capital Trust Preferred
Securities represented by the Restricted Global Security to be increased
accordingly.
Section 7.14 CUSIP NUMBERS
In issuing the Capital Trust Securities, Capital Trust may use "CUSIP"
numbers (if then generally in use), and if so, shall use "CUSIP" numbers in
Redemption/Distribution Notices as a convenience to Holders; provided that such
notice may state that no representation is made as to the correctness of such
numbers either as printed on Certificates or as contained in any
Redemption/Distribution Notice and that reliance may be placed only on the other
identification numbers printed on the Certificates, and any such redemption
shall not be affected by any defect in or omission of such numbers. Capital
Trust shall promptly notify the Capital Property Trustee of any change in the
"CUSIP" numbers.
ARTICLE VIII
DISSOLUTION AND TERMINATION OF TRUST
Section 8.1 DISSOLUTION AND TERMINATION OF TRUST.
(a) Capital Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Capital Trust Common Securities Holder
or the Sponsor;
(ii) the filing of a certificate of dissolution or its equivalent
with respect to the Sponsor; the consent of the Holders of at least a
Majority in Liquidation Amount of the Capital Trust Securities to the
filing of a certificate of cancellation with respect to Capital Trust
or the revocation of the Sponsor's charter and the expiration of 90
days after the date of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the Sponsor
or Capital Trust;
(iv) the time when all of the Capital Trust Securities shall have
matured or been called for redemption and the amounts then due shall
have been paid to the Holders in accordance with the terms of the
Capital Trust Securities;
(v) upon the election of the Capital Trust Common Securities
Holder, following the occurrence and continuation of a Capital Trust
Special Event, pursuant to which Capital Trust shall have been
dissolved in accordance with the terms of the Capital Trust Securities
and all of the Asset Trust Preferred Securities shall have been
distributed to the Holders of Capital Trust Securities in exchange for
all of the Capital Trust Securities; or
(vi) before the issuance of any Capital Trust Securities, with
the consent of all of the Capital Trust Administrators and the
Sponsor.
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As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) and upon completion of the winding up of Capital Trust,
the Capital Trustees shall terminate Capital Trust by filing a certificate
of cancellation with the Secretary of State of the State of Delaware.
(b) The provisions of Section 3.9 and Article IX shall survive the
termination of Capital Trust.
Section 8.2 LIQUIDATION DISTRIBUTION UPON TERMINATION AND DISSOLUTION OF
CAPITAL TRUST.
(a) In the event of any voluntary or involuntary liquidation,
dissolution, winding-up or termination of Capital Trust (each a "Capital
Trust Liquidation"), the Holders of the Capital Trust Preferred Securities
on the date of the Capital Trust Liquidation will be entitled to receive,
out of the assets of Capital Trust available for distribution to Holders of
Capital Trust Securities after satisfaction of Capital Trust's liabilities
to creditors as provided by applicable law, distributions in cash or other
immediately available funds in an amount equal to the aggregate of the
stated liquidation amount of $1,000 per Capital Trust Security plus accrued
and unpaid Distributions thereon (if declared) to the date of payment (such
amount being the "Capital Trust Liquidation Distribution"), unless, in
connection with such Capital Trust Liquidation, after satisfaction of
Capital Trust's liabilities to creditors as provided by applicable law,
Asset Trust Preferred Securities in an equivalent aggregate liquidation
amount shall be distributed on a Pro Rata basis to the Holders of the
Capital Trust Securities in exchange for such Capital Trust Securities.
(b) If, upon any such Capital Trust Liquidation, the Capital Trust
Liquidation Distribution can be paid only in part because Capital Trust has
insufficient assets available to pay in full the aggregate Capital Trust
Liquidation Distribution, then the amounts payable directly by Capital
Trust on the Capital Trust Securities shall be paid on a Pro Rata basis.
The Capital Trust Common Securities Holder will be entitled to receive
distributions upon any such Capital Trust Liquidation Pro Rata with the
Holders of the Capital Trust Preferred Securities except that if a Capital
Trust Enforcement Event has occurred and is continuing, the Capital Trust
Preferred Securities shall have a preference over the Capital Trust Common
Securities with regard to such distributions as described below. Such
preference is effectuated by the Capital Trust Common Securities Holder
hereby agreeing to provide limited recourse guarantees as follows: (i) to
the Holders of the Capital Trust Preferred Securities, of the Company's
obligations under the Capital Trust Guarantee; (ii) to Capital Trust and
the Holders of the Capital Trust Preferred Securities, of the Company's
obligations under Asset Trust Guarantee; and (iii) to Asset Trust and the
Holders of the Capital Trust Preferred Securities, of the Company's
obligations under the Debentures. In the case of the limited recourse
guarantee given by the Capital Trust Common Securities Holder to Asset
Trust and the Holder of the Capital Trust Preferred Securities in respect
of the Company's obligations under the Debentures, (i) the Capital Trust
Common Securities Holder will be deemed to have pledged the amount due in
respect of its Capital Trust Common Securities upon a liquidation of
Capital Trust to Asset Trust and the Holders of Capital Trust Preferred
Securities; (ii) the
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Capital Trust Common Securities Holder will be deemed to have paid such
amount to Asset Trust in respect of such defaulted Debenture, as the case
may be; (iii) Asset Trust will be deemed to have paid such amount to
Capital Trust; and (iv) the Capital Property Trustee is hereby authorized
to distribute such amount to the Holders of Capital Trust Preferred
Securities (Pro Rata among such Capital Trust Preferred Securities Holders)
in respect of the Capital Trust Common Securities Holder's pledge of such
amounts to such Capital Trust Preferred Securities Holders. In the case of
a limited recourse guarantee given by the Capital Trust Common Securities
Holder to Capital Trust and the Holders of the Capital Trust Preferred
Securities in respect of the Company's obligations under Asset Trust
Guarantee, (i) the Capital Trust Common Securities Holder will be deemed to
have pledged the amount due in respect of its Capital Trust Common
Securities upon a liquidation of Capital Trust to Capital Trust and the
Holders of the Capital Trust Preferred Securities; (ii) the Capital Trust
Common Securities Holder will be deemed to have paid such amount to Capital
Trust in respect of its obligations under Asset Trust Guarantee; and (iii)
the Capital Property Trustee is hereby authorized to distribute such amount
to the Holders of the Capital Trust Preferred Securities (Pro Rata among
such Capital Trust Preferred Securities Holders) in respect of the Capital
Trust Common Securities Holder's pledge of such amount to such Capital
Trust Preferred Securities Holders.
ARTICLE IX
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
CAPITAL TRUSTEES OR OTHERS
Section 9.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Capital
Trust Guarantee and the terms of the Capital Trust Securities, the Sponsor:
(i) shall not be personally liable for the return of any portion
of the capital contributions (or any return thereon) of the Holders of
the Capital Trust Securities which shall be made solely from assets of
Capital Trust; and
(ii) shall not be required to pay to Capital Trust or to any Holder
of Capital Trust Securities any deficit upon dissolution of Capital
Trust or otherwise.
(b) The Capital Trust Common Securities Holder shall be liable for
all of the debts and obligations of Capital Trust (other than with respect
to the Capital Trust Securities) to the extent not satisfied out of Capital
Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Capital Trust Preferred Securities shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
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Section 9.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to Capital Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed
or omitted by such Indemnified Person in good faith on behalf of Capital
Trust and in a manner such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by
this Declaration or by law, except that an Indemnified Person shall be
liable or any such loss, damage or claim incurred by reason of such
Indemnified Person's negligence or willful misconduct with respect to such
acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of Capital Trust and upon such information,
opinions, reports or statements presented to Capital Trust by any Person as
to matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of Capital Trust, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses or any other facts pertinent to the existence
and amount of assets from which Distributions to Holders of Capital Trust
Securities might properly be paid.
Section 9.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to
Capital Trust or to any other Covered Person, an Indemnified Person acting
under this Declaration shall not be liable to Capital Trust or to an other
Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the Capital
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Indemnified Persons and any Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a
manner that is, or provides terms that are, fair and reasonable to
Capital Trust or any Holder of Capital Trust Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices and any
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applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting Capital Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not
be subject to any other or different standard imposed by this
Declaration or by applicable law.
Section 9.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of Capital Trust) by reason of the fact
that he is or was a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
Capital Trust, and, with respect to any criminal action or proceeding, had
no reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the Company Indemnified Person did not act in
good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of Capital Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted by
law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of Capital Trust to procure a
judgment in its favor by reason of the fact that he is or was a
Company Indemnified Person against expenses (including attorneys' fees
and expenses) actually and reasonably incurred by him in connection
with the defense or settlement of such action or suit if he acted in
good faith and in a manner he reasonably believed to be in or not
opposed to the best
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interests of Capital Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to Capital Trust
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any claim,
issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees and expenses)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 9.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Capital Trust Administrators by a majority vote of a quorum consisting
of such Capital Trust Administrators who were not parties to such action,
suit or proceeding, (2) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Capital Trust Administrators so
directs, by independent legal counsel in a written opinion, or (3) by the
Capital Trust Common Securities Holder.
(v) Expenses (including attorneys' fees and expenses ) incurred by
a Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 9.4(a) shall be paid by the Sponsor in advance of
the final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Sponsor as authorized in this Section 9.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Capital Trust
Administrators by a majority vote of a quorum of disinterested Capital
Trust Administrators, (ii) if such a quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Capital Trust Administrators so
directs, by independent legal counsel in a written opinion or (iii) the
Capital Trust Common Securities Holder, that, based upon the facts known to
the Capital Trust Administrators, counsel or the Capital Trust Common
Securities Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the
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best interests of Capital Trust, or, with respect to any criminal
proceeding, that such Company Indemnified Person believed or had
reasonable cause to believe his conduct was unlawful. In no event
shall any advance be made in instances where the Capital Trust
Administrators, independent legal counsel or Capital Trust Common
Securities Holder reasonably determine that such person deliberately
breached his duty to Capital Trust or its Capital Trust Security
Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
9.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Sponsor or Capital Trust Preferred Security Holders
of Capital Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such
office. All rights to indemnification under this Section 9.4(a) shall
be deemed to be provided by a contract between the Sponsor and each
Company Indemnified Person who serves in such capacity at any time
while this Section 9.4(a) is in effect. Any repeal or modification of
this Section 9.4(a) shall not affect any rights or obligations then
existing.
(vii) The Sponsor or Capital Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 9.4(a).
(viii) For purposes of this Section 9.4(a), references to
"Capital Trust" shall include, in addition to the resulting or
surviving entity, any constituent entity (including any constituent of
a constituent) absorbed in a consolidation or merger, so that any
person who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 9.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 9.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person. The obligation to indemnify as set forth in this
Section 9.4(a) shall survive the satisfaction and discharge of this
Declaration.
(b) The Sponsor agrees to indemnify and hold harmless the (i) Capital
Property Trustee, (ii) the Capital Delaware Trustee, (iii) any Affiliate of
the Capital Property Trustee and the Capital Delaware Trustee, and (iv) any
officers, directors,
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shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Capital Property Trustee and the Capital Delaware
Trustee (each of the Persons in (i) through (iv) being referred to as a
"Fiduciary Indemnified Person") for, and to hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of or in
connection with the acceptance or administration of Capital Trust or trusts
hereunder, including the costs and expenses (including reasonable legal
fees and expenses) of defending itself against or investigating any claim,
whether asserted by the Company, a Holder or any other Person, or liability
in connection with the exercise or performance of any of its powers or
duties hereunder. The obligation to indemnify as set forth in this Section
9.4 shall survive the satisfaction and discharge of this Declaration.
Section 9.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Capital Delaware Trustee and the
Capital Property Trustee may engage in or possess an interest in other business
ventures of any nature or description, independently or with others, similar or
dissimilar to the activities of Capital Trust, and Capital Trust and the Holders
of Capital Trust Securities shall have no rights by virtue of this Declaration
in and to such independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the activities of
Capital Trust, shall not be deemed wrongful or improper. No Covered Person, the
Sponsor, the Capital Delaware Trustee or the Capital Property Trustee shall be
obligated to present any particular investment or other opportunity to Capital
Trust even if such opportunity is of a character that, if presented to Capital
Trust, could be taken by Capital Trust, and any Covered Person, the Sponsor, the
Capital Delaware Trustee and the Capital Property Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Capital Delaware Trustee and the Capital Property Trustee
may engage or be interested in any financial or other transaction with the
Sponsor or any Affiliate of the Sponsor, or may act as depositary for, trustee
or agent for, or act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE X
ACCOUNTING
Section 10.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of Capital Trust shall be the calendar
year, or such other year as is required by the Code.
Section 10.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of Capital Trust, the Capital
Trust Administrators shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of Capital Trust. The books of account
shall be maintained on the accrual method of accounting, in
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accordance with generally accepted accounting principles. Capital Trust
shall use the accrual method of accounting for United States Federal income
tax purposes. The books of account and the records of Capital Trust shall
be examined by and reported upon as of the end of each Fiscal Year of
Capital Trust by a firm of independent certified public accountants
selected by the Sponsor.
(b) The Capital Trust Administrators shall cause to be prepared and
delivered to each of the Holders of Capital Trust Securities, within 90
days after the end of each Fiscal Year of Capital Trust, annual financial
statements of Capital Trust, including a balance sheet of Capital Trust as
of the end of such Fiscal Year, and the related statements of income or
loss.
(c) The Capital Trust Administrators shall cause to be duly prepared
and delivered to each of the Holders of Capital Trust Securities, an annual
United States Federal income tax information statement, required by the
Code, containing such information with regard to the Securities held by
each Holder as is required by the Code and the Treasury Regulations.
Notwithstanding any right under the Code to deliver any such statement at a
later date, the Capital Trust Administrators shall endeavor to deliver all
such statements within 30 days after the end of each Fiscal Year of Capital
Trust.
(d) The Capital Trust Administrators shall cause to be duly prepared
and filed with the appropriate taxing authority, an annual United States
Federal income tax return, on a Form 1041 or such other form required by
United States Federal income tax law, and any other annual income tax
returns required to be filed by the Capital Trust Administrators on behalf
of Capital Trust with any state or local taxing authority.
Section 10.3 BANKING.
Capital Trust shall maintain one or more bank accounts in the name and for
the sole benefit of Capital Trust; provided, however, that all payments of funds
in respect of the Debentures held by the Capital Property Trustee shall be made
directly to the Capital Property Account and no other funds of Capital Trust
shall be deposited in the Capital Property Account. The sole signatories for
such accounts shall be designated by the Capital Trust Administrators; provided,
however, that the Capital Property Trustee shall designate the signatories for
the Capital Property Account.
Section 10.4 WITHHOLDING.
Capital Trust and the Capital Trust Administrators shall comply with all
withholding requirements under United States federal, state and local law.
Capital Trust shall request, and the Holders shall provide to Capital Trust,
such forms or certificates as are necessary to establish an exemption from
withholding with respect to each Holder, and any representations and forms as
shall reasonably be requested by Capital Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations. The Capital Trust
Administrators shall file required forms with applicable jurisdictions and,
unless an exemption from withholding is properly established by a Holder, shall
remit amounts withheld with respect to the Holder to applicable jurisdictions.
To the extent that Capital Trust is required to withhold and pay over any
amounts to any
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authority with respect to distributions or allocations to any Holder, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder. In the event of any claimed over withholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, Capital Trust
may reduce subsequent Distributions by the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Securities, this Declaration may only be amended by
a written instrument approved and executed by (i) the Capital Trust
Administrators (or, if there are more than two Capital Trust
Administrators, a majority of the Capital Trust Administrators) and (ii) by
the Capital Property Trustee if the amendment affects the rights, powers,
duties, obligations or immunities of the Capital Property Trustee; and
(iii) by the Capital Delaware Trustee if the amendment affects the rights,
powers, duties, obligations or immunities of the Capital Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective:
(i) unless, in the case of any proposed amendment, the
Capital Property Trustee shall have first received an Officers'
Certificate from each of Capital Trust and the Sponsor that such
amendment is permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of the
Capital Property Trustee, the Capital Property Trustee shall have
first received:
a. an Officers' Certificate from each of Capital Trust and
the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including
the terms of the Securities); and
b. an opinion of counsel (who may be counsel to the
Sponsor or Capital Trust) that such amendment is
permitted by, and conforms to, the terms of this
Declaration (including the terms of the Securities);
and
(iii) to the extent the result of such amendment would be to:
a. cause Capital Trust to be classified other than as a
grantor trust for United States Federal income tax
purposes;
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b. cause Asset Trust to be classified for purposes of
United States Federal income tax purposes as an
association or publicly traded partnership taxable as a
corporation;
c. reduce or otherwise adversely affect the powers of the
Capital Property Trustee in contravention of the Trust
Indenture Act; or
d. cause Capital Trust to be deemed to be an investment
company required to be registered under the Investment
Company Act.
(c) In the event the consent of the Capital Property Trustee, as the
holder of the Asset Trust Preferred Securities is required under the Asset
Declaration with respect to any amendment, modification or termination of
the Asset Declaration or the Asset Trust Preferred Securities the Capital
Property Trustee shall request the direction of the holders of the Capital
Trust Securities with respect to such amendment, modification or
termination and shall vote with respect to such amendment, modification or
termination as directed by a Majority in Liquidation Amount of the Capital
Trust Securities voting together as a single class; provided, however, that
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where a consent under the Asset Declaration would require the consent of a
Super Majority of the holders of Asset Trust Preferred Securities the
Capital Property Trustee may only give such consent at the direction of the
Holders of at least the proportion in liquidation amount of the Capital
Trust Securities which the relevant Super Majority represents of the
aggregate liquidation preference of the Asset Trust Preferred Securities
outstanding; provided, further, that the Capital Property Trustee shall not
-------- -------
be obligated to take any action in accordance with the directions of the
Holders of the Capital Trust Securities under this Section 11.1(c) unless
the Capital Property Trustee has received an opinion of independent tax
counsel to the effect that for United States Federal income tax purposes
Capital Trust will continue to be classified as a grantor trust after
consummation of such action and each Holder will be treated as owning an
undivided beneficial ownership interest in the Asset Trust Preferred
Securities.
(d) At such time after Capital Trust has issued any Capital Trust
Securities that remain outstanding, if an amendment would (i) adversely
affect the powers, preferences or special rights of the Capital Trust
Securities, whether by way of amendment to the Declaration or otherwise or
(ii) result in the dissolution, winding-up or termination of Capital Trust
other than pursuant to the terms of this Declaration or, (iii) change the
amount or timing of any distribution of the Capital Trust Securities or
otherwise adversely affect the amount of any distribution required to be
made in respect of the Securities as of a specified date or (iv) restrict
the right of a Holder of Capital Trust Securities to institute suit for the
enforcement of any such payment on or after such date, then the Holders of
the Capital Trust Securities voting together as a single class will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of at least a
Majority in Liquidation Amount of the Capital Trust Securities affected
thereby; provided that, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Capital Trust Preferred
Securities or the Capital Trust Common Securities, then only the affected
class will be entitled to vote on such amendment or proposal and such
amendment or proposal shall
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<PAGE>
not be effective except with the approval of a Majority in Liquidation
Amount of such class of Capital Trust Securities.
(e) Section 7.8 and this Section 11.1 shall not be amended without
the consent of all of the Holders of the Capital Trust Securities.
(f) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Capital Trust Common
Securities.
(g) The rights of the Capital Trust Common Securities Holder under
Article VI to increase or decrease the number of, and appoint and remove
Capital Trustees shall not be amended without the consent of the Holders of
a Majority in Liquidation Amount of the Capital Trust Common Securities.
(h) Notwithstanding Section 11.1(c), this Declaration may be amended
without the consent of the Holders of the Capital Trust Securities:
(i) to cure any ambiguity, correct or supplement any provisions
in this Declaration that may be inconsistent with any other provision,
or to make any other provisions with respect to matters or questions
arising under this Declaration that shall not be inconsistent with the
other provisions of this Declaration;
(ii) to add to the covenants, restrictions or obligations of the
Sponsor;
(iii) to conform to any change in the Trust Indenture Act or
written change in interpretation or application of the rules and
regulations promulgated thereunder by any legislative body, court,
government agency or regulatory authority;
(iv) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that
Capital Trust will be classified as a grantor trust and will not be
taxable as a corporation for United States Federal income tax purposes
at all times that any Securities are outstanding or to ensure that
Capital Trust will not be required to register as an "investment
company" under the Investment Company Act; or
(v) to conform to any change in Rule 3a-5 or written change in
interpretation or application of Rule 3a-5 by any legislative body,
court, government agency or regulatory authority which amendment does
not have a material adverse effect on the rights, preferences or
privileges of the Holders.
provided, however, that such action shall not adversely affect in any
material respect the interests of any Holder of Capital Trust Preferred
Securities or the Capital Trust Common Securities Holder, and any
amendments of this Declaration shall become effective when notice thereof
is given to the Holders of Capital Trust Securities.
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(i) The issuance of an order by the Capital Trust Administrators for
purposes of establishing the terms and form of the Securities as
contemplated by Section 7.1 shall not be deemed an amendment of this
Declaration subject to the provisions of this Section 11.1.
Section 11.2 MEETINGS OF THE HOLDERS OF CAPITAL TRUST SECURITIES; ACTION
BY WRITTEN CONSENT.
(a) Meetings of the Holders of any class of Capital Trust Securities
may be called at any time by the Capital Property Trustee (or as provided
in the terms of the Capital Trust Securities) to consider and act on any
matter on which Holders of such class of Capital Trust Securities are
entitled to act under the terms of this Declaration, the terms of the
Capital Trust Securities, the Asset Declaration, or the rules of any stock
exchange on which the Capital Trust Preferred Securities are listed or
admitted for trading. The Capital Property Trustee shall call a meeting of
the Holders of such class if directed to do so by the Holders of at least
10% in Liquidation Amount of such class of Capital Trust Securities. Such
direction shall be given by delivering to the Capital Property Trustee one
or more calls in a writing stating that the signing Holders of Capital
Trust Securities wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any Holders of
Capital Trust Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Capital Trust Securities exercising the
right to call a meeting and only those Capital Trust Securities specified
shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
The Capital Trust Administrators, the Sponsor and the Capital Trust Common
Securities Holder may, in their sole discretion, submit for a vote,
approval, or consent of the holders of the Capital Trust Preferred
Securities any action or determination to be taken or made by the Capital
Trust Administrators, the Sponsor or the Capital Trust Common Securities
Holder.
(b) Except to the extent otherwise provided in the terms of the
Capital Trust Securities, the following provisions shall apply to meetings
of Holders of Capital Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Capital Trust Securities having a right to vote thereat at
least 7 days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Capital Trust Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Capital
Trust Preferred Securities are listed or admitted for trading, such
vote, consent or approval may be given at a meeting of the Holders of
Capital Trust Securities. Any action that may be taken at a meeting of
the Holders of Capital Trust Securities may be taken without a meeting
if a consent in writing setting forth the action so taken is signed by
the Holders of Capital Trust Securities owning not less than the
minimum amount of Capital Trust Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at
which all Holders of Capital Trust Securities having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given
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<PAGE>
to the Holders of Capital Trust Securities entitled to vote who have
not consented in writing. The Capital Property Trustee may specify
that any written ballot submitted to the Capital Trust Security
Holders for the purpose of taking any action without a meeting shall
be returned to Capital Trust within the time specified by the Capital
Property Trustee;
(ii) each Holder of a Capital Trust Security may authorize any
Person to act for it by proxy on all matters in which a Holder of
Capital Trust Securities is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No
proxy shall be valid after the expiration of 11 months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be
revocable at the pleasure of the Holder of Capital Trust Securities
executing such proxy. Except as otherwise provided herein, all matters
relating to the giving, voting or validity of proxies shall be
governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if
Capital Trust were a Delaware corporation and the Holders of the
Capital Trust Securities were stockholders of a Delaware corporation;
(iii) each meeting of the Holders of the Capital Trust
Securities shall be conducted by the Capital Property Trustee or by
such other Person that the Capital Trust Administrators may designate;
and
(iv) consistent with the Business Trust Act, this Declaration,
the terms of the Capital Trust Securities, the Asset Declaration, the
Trust Indenture Act or the listing rules of any stock exchange on
which the Capital Trust Preferred Securities are then listed for
trading, otherwise provides, the Capital Property Trustee, in its sole
discretion, shall establish all other provisions relating to meetings
of Holders of Capital Trust Securities, including notice of the time,
place or purpose of any meeting at which any matter is to be voted on
by any Holders of Capital Trust Securities, waiver of any such notice,
action by consent without a meeting, the establishment of a record
date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote.
ARTICLE XII
REPRESENTATIONS OF CAPITAL PROPERTY TRUSTEE AND CAPITAL DELAWARE TRUSTEE
Section 12.1 REPRESENTATIONS AND WARRANTIES OF THE CAPITAL PROPERTY
TRUSTEE.
A Capital Trustee that acts as initial Capital Property Trustee represents
and warrants to Capital Trust and to the Sponsor at the date of this
Declaration, and each Successor Capital Property Trustee represents and warrants
to Capital Trust and the Sponsor at the time of the
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Successor Capital Property Trustee's acceptance of its appointment as Capital
Property Trustee that:
(a) the Capital Property Trustee is a corporation or bank duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration;
(b) the Capital Property Trustee satisfies the requirements set
forth in Section 6.3(a);
(c) the execution, delivery and performance by the Capital Property
Trustee of this Declaration has been duly authorized by all necessary
corporate action on the part of the Capital Property Trustee;
(d) the execution, delivery and performance of this Declaration by
the Capital Property Trustee does not conflict with or constitute a breach
of the articles of association or incorporation, as the case may be, or the
by-laws (or other similar organizational documents) of the Capital Property
Trustee; and
(e) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the
execution, delivery or performance by the Capital Property Trustee of this
Declaration.
Section 12.2 REPRESENTATIONS AND WARRANTIES OF THE CAPITAL DELAWARE
TRUSTEE.
A Capital Trustee that acts as initial Capital Delaware Trustee represents
and warrants to Capital Trust and to the Sponsor at the date of this
Declaration, and each Successor Capital Delaware Trustee represents and warrants
to Capital Trust and the Sponsor at the time of the Successor Capital Delaware
Trustee's acceptance of its appointment as Capital Delaware Trustee that:
(a) the Capital Delaware Trustee satisfies the requirements set forth
in Section 6.2 and has the power and authority to execute and deliver, and
to carry out and perform its obligations under the terms of, this
Declaration and, if it is not a natural person, is duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization;
(b) the Capital Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration; and
(c) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is require for the
execution, delivery or performance by the Capital Delaware Trustee of this
Declaration.
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<PAGE>
ARTICLE XIII
MISCELLANEOUS
Section 13.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to Capital Trust, in care of the Capital Trust
Administrators at Capital Trust's mailing address set forth below (or such
other address as Capital Trust may give notice of to the Capital Property
Trustee, the Capital Delaware Trustee and the Holders of the Capital Trust
Securities):
c/o First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
(b) if given to the Capital Delaware Trustee, at the mailing address
set forth below (or such other address as the Capital Delaware Trustee may
give notice of to the Capital Trust Administrators, the Capital Property
Trustee and the Holders of the Capital Trust Securities):
c/o The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
(c) if given to the Capital Property Trustee, at its Corporate Trust
Office (or such other address as the Capital Property Trustee may give
notice of to the Capital Trust Administrators, the Capital Delaware Trustee
and the Holders of the Capital Trust Securities).
(d) if given to the Sponsor, at the mailing address set forth below
(or such other address as the Sponsor may give notice of to the Capital
Property Trustee, the Capital Delaware Trustee and Capital Trust):
First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
Attn: General Counsel
(e) if given to any Holder, at the address set forth on the books and
records of Capital Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed or mailed by first class mail, postage
prepaid except that if a notice or
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<PAGE>
other document is refused delivery or cannot be delivered because of a changed
address of which no notice was given, such notice or other document shall be
deemed to have been delivered on the date of such refusal or inability to
deliver.
Section 13.2 GOVERNING LAW.
THIS DECLARATION AND THE RIGHTS AND OBLIGATIONS OF HOLDERS, CAPITAL TRUST,
THE SPONSOR AND THE CAPITAL TRUSTEES SHALL BE GOVERNED BY AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES
SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF
LAWS OF THE STATE OF DELAWARE OR ANY OTHER JURISDICTION THAT WOULD CALL FOR THE
APPLICATION OF THE LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE;
PROVIDED, HOWEVER, THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, CAPITAL
TRUST, THE SPONSOR, THE CAPITAL TRUSTEES OR THIS DECLARATION ANY PROVISION OF
THE LAWS (STATUTORY OR COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS
THAT RELATE TO OR REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A)
THE FILING WITH ANY COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR
SCHEDULES OF TRUSTEE FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST
BONDS FOR TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY
FOR OBTAINING COURT OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION,
HOLDING OR DISPOSITION OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS
PAYABLE TO TRUSTEES, OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE
ALLOCATION OF RECEIPTS AND EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS
OR LIMITATIONS ON THE PERMISSIBLE NATURE, AMOUNT OR CONCENTRATION OF TRUST
INVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING, STORAGE OR OTHER MANNER OF
HOLDING OR INVESTING TRUST ASSETS OR (G) THE ESTABLISHMENT OF FIDUCIARY OR OTHER
STANDARDS OF RESPONSIBILITY OR LIMITATIONS ON THE ACTS OR POWERS OF TRUSTEES
THAT ARE INCONSISTENT WITH THE LIMITATIONS OR LIABILITIES OR AUTHORITIES AND
POWERS OF THE CAPITAL TRUSTEES AS SET FORTH OR REFERENCED IN THIS DECLARATION.
SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT APPLY TO CAPITAL TRUST.
Section 13.3 INTENTION OF THE PARTIES.
It is the intention of the parties hereto that Capital Trust be classified
for United States Federal income tax purposes as a grantor trust. The provisions
of this Declaration shall be interpreted in a manner consistent with such
classification.
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Section 13.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 13.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Capital
Trustees shall bind and inure to the benefit of their respective successors and
assigns, whether so expressed.
Section 13.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 13.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Capital Trustees to one of such counterpart signature pages. All of
such counterpart signature pages shall be read as though one, and they shall
have the same force and effect as though all of the signers had signed a single
signature page.
Section 13.8 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Declaration or in any suit against any Capital Trustee for any action taken or
omitted by it as a Capital Trustee, a court in its discretion may require the
filing by any party litigant in the suit of an undertaking to pay the costs of
the suit, and the court in its discretion may assess reasonable costs, including
reasonable attorney's fees and expenses, against any party litigant in the suit,
having due regard to the merits and good faith of the claims or defenses made by
the party litigant. This Section 13.8 does not apply to a suit by a Capital
Trustee, a suit by a Holder to enforce its right to payment or a suit by Holders
of more than 10% in Liquidation Amount of the then outstanding Capital Trust
Securities.
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IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
FIRST MARYLAND BANCORP,
as Sponsor and Capital Trust Common Securities
Holder
By: /s/ DAVID M. CRONIN
----------------------------------------------
Name:
Title Executive Vice President
THE BANK OF NEW YORK, as Capital Property Trustee
By: /s/ MARYBETH LEWICKI
----------------------------------------------
Name:
Title Vice President
THE BANK OF NEW YORK (DELAWARE), as Capital
Delaware Trustee
By: /s/ WALTER N. GITLIN
----------------------------------------------
Name:
Title Authorized Signatory
David M. Cronin, as Capital Trust Administrator
/s/ David M. Cronin
-------------------------------------------------
Robert F. Ray, as Capital Trust Administrator
/s/ Robert F. Ray
-------------------------------------------------
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EXHIBIT A-1
This Capital Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depository"), or a
nominee of the Depository. This Capital Trust Preferred Security is
exchangeable for Capital Trust Preferred Securities registered in the name of a
person other than the Depository or its nominee only in the limited
circumstances described in the Declaration and no transfer of this Capital Trust
Preferred Security (other than a transfer of this Capital Trust Preferred
Security as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository) may be registered except in limited circumstances.
Unless this Capital Trust Preferred Security Certificate is presented by an
authorized representative of the Depository to Allfirst Preferred Capital Trust
or its agent for registration of transfer, exchange or payment, and any Capital
Trust Preferred Security Certificate issued is registered in the name of Cede &
Co. or such other name as registered by an authorized representative of the
Depository (and any payment hereon is made to Cede & Co. or to such other entity
as is requested by an authorized representative of the Depository), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.
THE HOLDER OF THIS CAPITAL TRUST PREFERRED SECURITY BY ITS ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN
EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF
1974, AS AMENDED ("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS CAPITAL
TRUST PREFERRED SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA
OR SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR IS
EXEMPT FROM ANY SUCH PROHIBITION.
[INSERT RESTRICTED SECURITIES LEGEND]
A-1-1
<PAGE>
CERTIFICATE NO. _____ NUMBER OF CAPITAL TRUST PREFERRED SECURITIES:
_______ CUSIP NO. ____________ AGGREGATE LIQUIDATION AMOUNT: _______
CERTIFICATE EVIDENCING CAPITAL TRUST PREFERRED SECURITIES
OF
ALLFIRST PREFERRED CAPITAL TRUST
FLOATING RATE NON-CUMULATIVE SUBORDINATED CAPITAL TRUST ENHANCED SECURITIES,
SERIES ___ (LIQUIDATION AMOUNT $1,000 PER CAPITAL TRUST PREFERRED SECURITY)
ALLFIRST PREFERRED CAPITAL TRUST, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), hereby certifies that Cede &
Co. (the "Holder") is the registered owner of _______ Capital Trust Preferred
Securities (with aggregate liquidation amount of $__________) of Capital Trust
representing undivided beneficial ownership interests in the assets of Capital
Trust designated the Floating Rate Non-Cumulative Subordinated Capital Trust
Enhanced Securities, Series ___ (liquidation amount $1,000 per Capital Trust
Preferred Security) (the "Capital Trust Preferred Securities"). The Capital
Trust Preferred Securities are transferable on the books and records of Capital
Trust, in person or by a duly authorized attorney, upon surrender of this
certificate duly endorsed and in proper form for transfer as provided in the
Declaration (as defined below). The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital Trust
Preferred Securities represented hereby are issued and shall in all respects be
subject to the provisions of the Amended and Restated Declaration of Trust of
Capital Trust, dated as of July 13, 1999 (as the same may be amended from time
to time (the "Declaration"), among First Maryland Bancorp, as Sponsor (the
"Company"), David M. Cronin and Robert F. Ray as Capital Trust Administrators,
The Bank of New York, as Capital Property Trustee, and The Bank of New York
(Delaware), as Capital Delaware Trustee. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Capital Trust Guarantee to the extent described
therein. The Sponsor will provide a copy of the Declaration, the Capital Trust
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
A-1-2
<PAGE>
IN WITNESS WHEREOF, Capital Trust has executed this certificate this ____
day of ____________, 199-.
ALLFIRST PREFERRED CAPITAL TRUST
By:______________________________________________
Name:
Title:
This is one of the Capital Trust Securities referred to in the within-
mentioned Declaration.
THE BANK OF NEW YORK
By:______________________________________________
Authorized Signatory
A-1-3
<PAGE>
[reverse of security]
The distribution rate payable on each Capital Trust Preferred Security will
be equal to the variable distribution rate per annum of the Asset Trust
Preferred Securities. Distributions will be payable at such rate on the stated
liquidation preference of $1,000 per Capital Trust Preferred Security.
Distributions on the Capital Trust Preferred Securities will only be made to the
extent that Capital Trust has funds legally available for the payment of such
distributions. Amounts available to Capital Trust for distribution to the
Holders of the Capital Trust Preferred Securities will be limited to payments
received by Capital Trust from Asset Trust on the Asset Trust Preferred
Securities or from the Company on the Capital Trust Guarantee. The amount of
distributions payable for any Distribution Period will be on the basis of the
actual number of days elapsed during the related Distribution Period and 360-day
year.
Except as otherwise described herein, distributions on the Capital Trust
Preferred Securities will be non-cumulative, and will be payable quarterly, on
January 15, April 15, July 15, and October 15 of each year, commencing on
October 15, 1999. If the Capital Trust Preferred Securities are in book-entry-
only form, distributions will be payable to the holders of record as they appear
on the books and records of the Security Register on the relevant record dates,
which will be one Business Day prior to the relevant payment dates.
Distributions payable on any Capital Trust Preferred Securities that are not
punctually paid on any Distribution Payment Date will cease to be payable to the
Person in whose name such Capital Trust Preferred Securities are registered on
the relevant record date, and such distribution will instead be payable to the
Person in whose name such Capital Trust Preferred Securities are registered on
the special record date or other specified date for payment of such defaulted or
accumulated Distribution. If the Capital Trust Preferred Securities are not in
book-entry-only form, the relevant record dates shall be the first day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of such distribution
shall be made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
The Capital Trust Preferred Securities shall be redeemable as provided in
the Declaration.
A-1-4
<PAGE>
_____________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Trust
Preferred Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
________________________________________________________________________________
________________________________________________________________________________
__________________________________ agent to transfer this Capital Trust
Preferred Security Certificate on the books of Capital Trust. The agent may
substitute another to act for him or her.
Date: ________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Capital Trust
Preferred Security Certificate)
A-1-5
<PAGE>
Include the following if the Capital Trust Preferred Security bears a
Restricted Securities Legend:
In connection with any transfer of any of the Capital Trust Preferred
Securities evidenced by this Certificate, the undersigned confirms that such
Capital Trust Preferred Securities are being:
CHECK ONE BOX BELOW
<TABLE>
<S> <C>
(1) : exchanged for the undersigned's own account without transfer; or
(2) : transferred pursuant to and in compliance with Rule 144A under the
Securities Act of 1933; or
(3) : transferred to an institutional "accredited investor" within the meaning of
subparagraph (a)(1), (2), (3) or (7) of Rule 501 under the Securities Act of
1933 that is acquiring the Capital Trust Preferred 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 in violation of the Securities Act of
1933; or
(4) : transferred pursuant to and in compliance with Regulation S under the
Securities Act of 1933; or
(5) : transferred pursuant to another available exemption from the registration
requirements of the Securities Act of 1933; or
(6) : transferred pursuant to an effective registration statement.
</TABLE>
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Trust Preferred Securities evidenced by this Certificate in the name
of any Person other than the Holder hereof; provided, however, that if box (3),
-------- -------
(4) or (5) is checked, the Registrar may require, prior to registering any such
transfer of the Capital Trust Preferred Securities, such legal opinions,
certifications and other information as Capital Trust has reasonably requested
to confirm that such transfer is being made pursuant to an exemption from, or in
a transaction not subject to, the registration requirements of the Securities
Act of 1933, such as the exemption provided by Rule 144 under such Act;
provided, further, that (i) if box (2) is checked, by acceptance of this
- -------- -------
Certificate, the transferee shall be deemed to have certified that it is a "QIB"
or "qualified institutional buyer" (as defined in Rule 144A) acquiring the
Capital Trust Preferred Securities for its own account or for the account of
another QIB over which it exercises sole investment discretion and that it is
aware that the Holder is relying upon the exemption from registration afforded
by Rule 144A in respect of the Holder's transfer of Capital Trust Preferred
Securities to it or (ii) if box (3) is checked, the transferee must also provide
to the Registrar a Transferee Letter of Representation in the form attached to
the Offering Memorandum of Capital Trust dated July 9, 1999; provided, further,
-------- -------
that after the date that a registration statement has
A-1-6
<PAGE>
been filed and so long as such registration statement continues to be effective,
only then may the Registrar permit transfers for which box (6) has been checked.
__________________________________________
Signature
A-1-7
<PAGE>
EXHIBIT A-2
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NO. ______ NUMBER OF CAPITAL TRUST COMMON SECURITIES: ______
CERTIFICATE EVIDENCING CAPITAL TRUST COMMON SECURITIES
OF
ALLFIRST PREFERRED CAPITAL TRUST
CAPITAL TRUST COMMON SECURITIES (LIQUIDATION AMOUNT $1,000 PER CAPITAL TRUST
COMMON SECURITY)
Allfirst Preferred Capital Trust, a statutory business trust formed under
the laws of the State of Delaware ("Capital Trust"), hereby certifies that First
Maryland Bancorp (the "Holder") is the registered owner of common securities of
Capital Trust representing an undivided beneficial ownership interest in the
assets of Capital Trust designated the Floating Rate Non-cumulative Subordinated
Capital Trust Common Securities (liquidation amount $1,000 per Capital Trust
Common Security) (the "Capital Trust Common Securities"). The Capital Trust
Common Securities are not transferable and any attempted transfer thereof shall
be void. The designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Capital Trust Common Securities represented
hereby are issued and shall in all respects be subject to the provisions of the
Amended and Restated Declaration of Trust of Capital Trust, dated as of July 13,
1999 (as the same may be amended from time to time, the "Declaration"), among
First Maryland Bancorp, as Sponsor, David M. Cronin and Robert F. Ray as Capital
Trust Administrators, The Bank of New York, as Capital Property Trustee, and The
Bank of New York (Delaware), as Capital Delaware Trustee. The Holder is
entitled to the benefits of the Capital Trust Guarantee to the extent described
therein. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Capital Trust Guarantee and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
A-2-1
<PAGE>
IN WITNESS WHEREOF, Capital Trust has executed this certificate this __ day
of _____________, 199-.
ALLFIRST PREFERRED CAPITAL TRUST
By:____________________________________
Name:
Title:
A-2-2
<PAGE>
EXHIBIT 4.4
================================================================================
AMENDED AND RESTATED DECLARATION OF TRUST
OF
ALLFIRST PREFERRED ASSET TRUST
Dated as of July 13, 1999
================================================================================
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ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 INTERPRETATION AND DEFINITIONS........................... 1
Affiliate................................................ 2
Asset Property Trustee................................... 2
Asset Trust.............................................. 2
Asset Trust Common Security.............................. 2
Common Security Certificate.............................. 2
Asset Trust Common Securities Holder..................... 2
Asset Trust Enforcement Event............................ 2
Asset Trust Guarantee.................................... 2
Asset Trust Preferred Securities......................... 2
Capital Trust Preferred Security Certificate............. 2
Asset Trust Preferred Securities Holders................. 2
Asset Trust Securities................................... 2
Authorized Officer....................................... 2
Book Value............................................... 3
Business Day............................................. 3
Business Trust Act....................................... 3
Capital Account.......................................... 3
Capital Property Trustee................................. 3
Capital Trust............................................ 3
Capital Trust Declaration................................ 3
Capital Trust Special Event.............................. 3
Certificate.............................................. 3
Certificate of Trust..................................... 3
Closing Date............................................. 3
Code..................................................... 3
Commission............................................... 3
Common Distribution Payment Date......................... 3
Company.................................................. 3
Company Indemnified Person............................... 3
Corporate Trust Office................................... 4
Covered Person........................................... 4
Debenture Event of Default............................... 4
Debenture Issuer......................................... 4
Debenture Special Event.................................. 4
Debentures............................................... 4
Deferred Interest........................................ 4
Delaware Trustee......................................... 4
Depositary............................................... 4
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DTC...................................................... 4
Distribution............................................. 4
Distribution Payment Date................................ 4
Distribution Period...................................... 4
Eligible Debt Securities................................. 4
Eligible Institution..................................... 5
Exchange Act............................................. 5
Exchange Offer........................................... 5
Extension Period......................................... 5
FDIC..................................................... 5
Fiduciary Indemnified Person............................. 5
Fiscal Period............................................ 5
Fiscal Year.............................................. 5
Global Securities........................................ 5
Holder................................................... 5
Indemnified Person....................................... 6
Indenture................................................ 6
Independent Financial Adviser............................ 6
Initial Proceeds......................................... 6
Initial Purchasers....................................... 6
Institutional Accredited Investor........................ 6
Interest................................................. 6
Investment Company Act................................... 6
Legal Action............................................. 6
List of Holders.......................................... 6
Majority in Liquidation Amount........................... 6
Moody's.................................................. 6
Net Income............................................... 6
Net Loss................................................. 6
Offering Memorandum...................................... 7
Officers' Certificate.................................... 7
Paying Agent............................................. 7
Person................................................... 7
Property Account......................................... 7
Pro Rata................................................. 7
Qualified Institutional Buyer............................ 7
QIB...................................................... 7
Quorum................................................... 8
Redemption Notice........................................ 8
Redemption Price......................................... 8
Registration Rights Agreement............................ 8
Regulation S............................................. 8
Regulatory Approval...................................... 8
Related Party............................................ 8
Resale Restriction Termination Date...................... 8
Responsible Officer...................................... 8
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Restricted Global Security............................... 8
Restricted Securities Legend............................. 8
Restricted Security...................................... 8
Rule 144A................................................ 8
Rule 3a-5................................................ 8
S&P...................................................... 8
Securities Act........................................... 8
Security Register........................................ 9
Security Registrar....................................... 9
Series A Asset Trust Guarantee........................... 9
Series A Asset Trust Preferred Securities................ 9
Series A Capital Trust Guarantee......................... 9
Series A Capital Trust Preferred Securities.............. 9
Series A Debentures...................................... 9
Series B Asset Trust Preferred Guarantee................. 9
Series B Asset Trust Preferred Securities................ 9
Series B Capital Trust Guarantee......................... 9
Series B Capital Trust Preferred Securities.............. 9
Series B Debentures...................................... 9
Sponsor.................................................. 9
Successor Delaware Trustee............................... 9
Successor Entity......................................... 10
Successor Property Trustee............................... 10
Successor Securities..................................... 10
Super Majority........................................... 10
Tax Matters Partner...................................... 10
10% in Liquidation Amount................................ 10
Treasury Regulations..................................... 10
Trust Administrator...................................... 10
Trustees' Authorization Certificate...................... 10
Trustee.................................................. 10
Trustees................................................. 10
Trust Indenture Act...................................... 10
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION......................... 11
Section 2.2 LISTS OF HOLDERS OF SECURITIES........................... 11
Section 2.3 REPORTS BY THE ASSET PROPERTY TRUSTEE.................... 11
Section 2.4 PERIODIC REPORTS TO THE ASSET PROPERTY TRUSTEE........... 12
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT......... 12
Section 2.6 ASSET TRUST ENFORCEMENT EVENTS; WAIVER................... 12
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Section 2.7 ASSET TRUST ENFORCEMENT EVENT; NOTICE............................. 13
ARTICLE III
ORGANIZATION
Section 3.1 NAME AND ORGANIZATION............................................. 13
Section 3.2 OFFICE............................................................ 13
Section 3.3 PURPOSES OF THE ASSET TRUST....................................... 14
Section 3.4 AUTHORITY......................................................... 14
Section 3.5 TITLE TO PROPERTY OF THE TRUST.................................... 15
Section 3.6 POWERS AND DUTIES OF THE TRUST ADMINISTRATORS..................... 15
Section 3.7 PROHIBITION OF ACTIONS BY THE ASSET TRUST AND THE TRUSTEES........ 18
Section 3.8 POWERS AND DUTIES OF THE ASSET PROPERTY TRUSTEE................... 18
Section 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF THE ASSET PROPERTY TRUSTEE. 20
Section 3.10 CERTAIN RIGHTS OF ASSET PROPERTY TRUSTEE.......................... 21
Section 3.11 DELAWARE TRUSTEE.................................................. 24
Section 3.12 EXECUTION OF DOCUMENTS............................................ 24
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF ASSET TRUST SECURITIES 24
Section 3.14 DURATION OF ASSET TRUST........................................... 24
Section 3.15 MERGERS........................................................... 25
Section 3.16 ASSET PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM................... 26
ARTICLE IV
SPONSOR
Section 4.1 RESPONSIBILITIES OF THE SPONSOR................................... 27
Section 4.2 COMPENSATION, INDEMNIFICATION AND EXPENSES OF THE TRUSTEES........ 28
ARTICLE V
ASSET TRUST COMMON SECURITIES HOLDER
Section 5.1 COMPANY'S PURCHASES OF TRUST COMMON SECURITIES.................... 29
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Section 5.2 COVENANTS OF THE ASSET TRUST COMMON SECURITIES HOLDER................ 29
Section 5.3 TRANSFER OF ASSET TRUST COMMON SECURITIES............................ 29
ARTICLE VI
TRUSTEES
Section 6.1 NUMBER OF TRUSTEES................................................... 30
Section 6.2 DELAWARE TRUSTEE..................................................... 30
Section 6.3 ASSET PROPERTY TRUSTEE; ELIGIBILITY.................................. 30
Section 6.4 QUALIFICATIONS OF TRUST ADMINISTRATORS AND DELAWARE TRUSTEE GENERALLY 31
Section 6.5 INITIAL TRUST ADMINISTRATORS......................................... 31
Section 6.6 DELAWARE TRUSTEE..................................................... 32
Section 6.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES..................... 32
Section 6.8 VACANCIES AMONG TRUSTEES............................................. 34
Section 6.9 EFFECT OF VACANCIES.................................................. 34
Section 6.10 MEETINGS............................................................. 34
Section 6.11 DELEGATION OF POWER.................................................. 34
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS......... 35
ARTICLE VII
THE SECURITIES
Section 7.1 GENERAL PROVISIONS REGARDING SECURITIES.............................. 35
Section 7.2 DISTRIBUTIONS ON ASSET TRUST SECURITIES.............................. 37
Section 7.3 REDEMPTION OF ASSET TRUST PREFERRED SECURITIES....................... 40
Section 7.4 REDEMPTION PROCEDURES................................................ 40
Section 7.5 VOTING RIGHTS OF ASSET TRUST PREFERRED SECURITIES.................... 42
Section 7.6 VOTING RIGHTS OF TRUST COMMON SECURITIES............................. 44
Section 7.7 PAYING AGENT......................................................... 44
Section 7.8 TRANSFER OF SECURITIES............................................... 45
Section 7.9 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.................... 46
Section 7.10 DEEMED SECURITY HOLDERS.............................................. 46
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Section 7.11 GLOBAL SECURITIES.................................................... 46
Section 7.12 RESTRICTIVE LEGEND................................................... 49
Section 7.13 SPECIAL TRANSFER PROVISIONS.......................................... 52
Section 7.14 CUSIP NUMBERS........................................................ 52
ARTICLE VIII
CAPITAL CONTRIBUTIONS; REPRESENTATION
OF ASSET TRUST PREFERRED SECURITIES
HOLDERS' INTEREST; CAPITAL ACCOUNTS
Section 8.1 CAPITAL CONTRIBUTIONS................................................ 53
Section 8.2 ASSET TRUST PREFERRED SECURITIES HOLDERS' INTEREST REPRESENTED BY
ASSET TRUST PREFERRED SECURITIES..................................... 53
Section 8.3 CAPITAL ACCOUNTS..................................................... 53
Section 8.4 INTEREST ON CAPITAL CONTRIBUTIONS.................................... 54
Section 8.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS....................... 54
ARTICLE IX
ALLOCATIONS
Section 9.1 PROFITS AND LOSSES................................................... 54
Section 9.2 SPECIAL ALLOCATIONS.................................................. 55
Section 9.3 WITHHOLDING.......................................................... 56
ARTICLE X
ASSET TRUST INVESTMENTS
Section 10.1 INITIAL ASSET TRUST INVESTMENTS...................................... 57
Section 10.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE ASSET TRUST................. 57
ARTICLE XI
DISSOLUTION AND TERMINATION OF ASSET TRUST
Section 11.1 DISSOLUTION AND TERMINATION OF ASSET TRUST........................... 58
Section 11.2 LIQUIDATION DISTRIBUTION UPON TERMINATION AND DISSOLUTION OF THE
ASSET TRUST.......................................................... 58
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ARTICLE XII
LIMITATION OF LIABILITY OF HOLDERS
OF SECURITIES, TRUSTEES OR OTHERS
Section 12.1 LIABILITY................................................ 59
Section 12.2 EXCULPATION.............................................. 59
Section 12.3 FIDUCIARY DUTY........................................... 60
Section 12.4 INDEMNIFICATION.......................................... 61
Section 12.5 OUTSIDE BUSINESSES....................................... 63
ARTICLE XIII
ACCOUNTING
Section 13.1 FISCAL YEAR.............................................. 64
Section 13.2 CERTAIN ACCOUNTING MATTERS............................... 64
Section 13.3 BANKING.................................................. 65
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS............................................... 65
Section 14.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY
WRITTEN CONSENT.......................................... 67
ARTICLE XV
REPRESENTATIONS OF ASSET PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 15.1 REPRESENTATIONS AND WARRANTIES OF THE ASSET PROPERTY
TRUSTEE.................................................. 69
Section 15.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE... 70
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ARTICLE XVI
MISCELLANEOUS
Section 16.1 NOTICES................................................... 70
Section 16.2 GOVERNING LAW............................................. 71
Section 16.3 [Intentionally Omitted]................................... 72
Section 16.4 HEADINGS.................................................. 72
Section 16.5 SUCCESSORS AND ASSIGNS.................................... 72
Section 16.6 PARTIAL ENFORCEABILITY.................................... 72
Section 16.7 COUNTERPARTS.............................................. 72
Section 16.8 UNDERTAKING FOR COSTS..................................... 72
Section 16.9 TAX MATTERS............................................... 73
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Attachments
-----------
Schedule 1
Exhibit A-1 FORM OF TRUST PREFERRED SECURITY CERTIFICATE
Exhibit A-2 FORM OF TRUST COMMON SECURITY CERTIFICATE
Annex 1 Investment Guidelines
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<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
THIS AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated as of
July 13, 1999 among FIRST MARYLAND BANCORP, a Maryland corporation, as Sponsor,
David M. Cronin and Robert F. Ray, as the initial Trust Administrators, THE BANK
OF NEW YORK, a New York banking corporation, as the initial Asset Property
Trustee and THE BANK OF NEW YORK (DELAWARE) as the initial Delaware Trustee, not
in their individual capacities but solely as Trustees, and the holders, from
time to time, of undivided beneficial ownership interests in the assets of the
trust to be issued pursuant to this Declaration.
WHEREAS, certain of the Trustees and the Sponsor established Allfirst
Preferred Asset Trust (the "Asset Trust"), a business trust under the Business
Trust Act (as defined, together with other capitalized terms, herein) pursuant
to a Declaration of Trust dated as of June 29, 1999 (the "Original Declaration")
and a Certificate of Trust (the "Certificate of Trust") filed with the Secretary
of State of the State of Delaware on June 29, 1999; and
WHEREAS, the sole purposes of the Asset Trust shall be to issue and sell
certain securities representing undivided beneficial ownership interests in the
assets of the Asset Trust, to invest the proceeds from such sales in the Series
A Debentures and in Eligible Debt Securities, and to engage in only those
activities necessary or incidental thereto; and
WHEREAS, all of the Trustees and the Sponsor, by this Declaration, amend
and restate each and every term and provision of the Original Declaration.
NOW, THEREFORE, it being the intention of the parties hereto that the Asset
Trust continue as a business trust under the Business Trust Act, the Trustees
hereby declare that all assets contributed to the Asset Trust be held in trust
for the benefit of the Holders, from time to time, of the Asset Trust Securities
representing undivided beneficial ownership interests in the assets of the Asset
Trust issued hereunder, subject to the provisions of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 INTERPRETATION AND DEFINITIONS.
Unless the context otherwise requires:
(a) capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to this
Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
<PAGE>
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Declaration unless otherwise defined in this Declaration or unless
the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa and a
reference to any masculine form of a term shall include the feminine form of a
term, as applicable.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Asset Property Trustee" means the Trustee meeting the eligibility
requirements set forth in Section 6.3(a).
"Asset Trust" means Allfirst Preferred Asset Trust, a Delaware statutory
business trust.
"Asset Trust Common Security"" has the meaning specified in Section 7.1(a).
"Asset Trust Common Security Certificate" means a definitive certificate in
fully registered form representing an Asset Trust Common Security.
"Asset Trust Common Securities Holder" means the Company, or any wholly-
owned, direct or indirect subsidiary of the Company, in its capacity as
purchaser and holder of all of the Asset Trust Common Securities issued or to be
issued by the Asset Trust.
"Asset Trust Enforcement Event" means the occurrence of one or more of the
following events: (i) a default by the Company in respect of any of its
obligations under the Asset Trust Preferred Guarantee or (ii) a Debenture Event
of Default.
"Asset Trust Preferred Guarantee" means, collectively, the Series A Asset
Trust Preferred Guarantee and the Series B Asset Trust Preferred Guarantee.
"Asset Trust Preferred Securities" means, collectively, the Series A Asset
Trust Preferred Securities and the Series B Asset Trust Preferred Securities.
"Asset Trust Preferred Security Certificate" means a definitive certificate
in fully registered form representing a Asset Trust Preferred Security.
"Asset Trust Preferred Securities Holders" means the holders of all of the
Asset Trust Preferred Securities issued or to be issued by the Asset Trust.
"Asset Trust Securities" means, collectively, the Asset Trust Common
Securities and the Asset Trust Preferred Securities.
"Authorized Officer" of a Person means the Chairman of the Board, a Vice
Chairman of the Board, the Chief Executive Officer, the President, a Vice
President, the principal financial officer, the Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of such Person.
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"Book Value" means, with respect to any assets of Asset Trust held by the
Asset Property Trustee, the purchase price of any such asset.
"Business Day" means any day other than a day on which banking institutions
in The City of New York or The City of Baltimore, Maryland are authorized or
required to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code Section 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Account" has the meaning set forth in Section 8.3(a) of this
Declaration.
"Capital Property Trustee" has the meaning specified in the Capital Trust
Declaration.
"Capital Trust" means Allfirst Preferred Capital Trust, a Delaware
statutory business trust.
"Capital Trust Declaration" means the Amended and Restated Declaration of
Trust of Allfirst Preferred Capital Trust to be dated as of July 13, 1999, as
amended, modified or supplemented from time to time.
"Capital Trust Special Event" has the meaning set forth in the Capital
Trust Declaration.
"Certificate" means an Asset Trust Common Security Certificate or an Asset
Trust Preferred Security Certificate.
"Certificate of Trust" has the meaning specified in the recitals hereto.
"Closing Date" means July 13, 1999 and such subsequent date or dates on
which the Series A Capital Trust Preferred Securities are issued and sold which
subsequent Closing Date shall in no event occur after August 8, 1998.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation. A reference to a specific section of the
Code refers not only to such specific section but also to any corresponding
provision of any federal tax statute enacted after the date of this Declaration,
as such specific section or corresponding provision is in effect on the date of
application of the provisions of this Declaration containing such reference.
"Commission" means the Securities and Exchange Commission.
"Common Distribution Funds" has the meaning specified in Section 7.2(e).
"Common Distribution Payment Date" means December 20 of each year,
commencing December 20, 1999.
"Company" means First Maryland Bancorp, a Maryland corporation.
"Company Indemnified Person" means (a) any Trust Administrator; (b) any
Affiliate of any Trust Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Trust
Administrator or any Affiliate thereof; or (d) any officer,
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<PAGE>
director, shareholder, member, partner, employee, representative or agent of the
Asset Trust or its Affiliates.
"Corporate Trust Office" means the office of the Asset Property Trustee at
which the corporate trust business of the Asset Property Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 101 Barclay Street, Floor 21 West,
New York, New York 10286. Attention: Corporate Trust Administration.
"Covered Person" means (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Asset Trust or (ii) any of
its Affiliates; and (b) any Holder of Asset Trust Securities.
"Debenture Event of Default" means an Event of Default (as defined in the
Indenture) with respect to the Debentures.
"Debenture Issuer" means First Maryland Bancorp in its capacity as issuer,
in one or more issuances, of the Debentures under the Indenture.
"Debenture Special Event"" has the meaning specified in the Indenture.
"Debentures" means, collectively, the Series A Debentures and the Series B
Debentures.
"Deferred Interest" has the meaning specified in the Indenture.
"Delaware Trustee" has the meaning set forth in Section 6.2.
"Depositary" means, with respect to Asset Trust Preferred Securities
issuable in whole or in part in the form of one or more Global Securities, a
clearing agency registered under the Exchange Act that is designated to act as
Depositary for such Asset Trust Preferred Securities.
"DTC" means The Depository Trust Company, the initial Depositary.
"Distribution" means a distribution payable to Holders of Asset Trust
Preferred Securities in accordance with Section 7.2.
"Distribution Payment Date" means, collectively, a Preferred Distribution
Payment Date and Common Distribution Payment Date.
"Distribution Period" means, with respect to any Distribution Payment Date,
the period from and including the immediately preceding Distribution Payment
Date to but excluding such Distribution Payment Date, or in the case of the
initial Distribution Period, the period from the Closing Date to but excluding
the initial Distribution Payment Date.
"Eligible Common Distribution Funds" has the meaning specified in Section
7.2(e).
"Eligible Debt Securities" means cash or book-entry securities, negotiable
instruments, or other securities of entities not affiliated with the Company
represented by instruments in registered form which evidence any of the
following: (a) any security issued or guaranteed as to
-4-
<PAGE>
principal or interest by the United States, or by a person controlled or
supervised by and acting as an instrumentality of the Government of the United
States pursuant to authority granted by the Congress of the United States, or
any certificate of deposit for any of the foregoing; or (b) certificates of
deposit which are fully insured by the FDIC, in no case having a maturity
greater than nine months.
"Eligible Institution" means a depository institution organized under the
laws of the United States of America or any one of the states thereof or the
District of Columbia (or any domestic branch of a foreign bank), (1)(i) which
has either (A) a long-term unsecured debt rating of AA or better by S&P and Aa
or better by Moody's or (B) a short-term unsecured debt rating or a certificate
of deposit rating of A-1+ or better by S&P and P-1 or better by Moody's and (ii)
whose deposits are insured by the FDIC or (2)(i) the parent of which has a long-
term or short-term unsecured debt rating which signifies investment grade and
(ii) whose deposits are insured by the FDIC.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Capital Trust to exchange Series B
Capital Trust Preferred Securities for Series A Capital Trust Preferred
Securities, (ii) by the Asset Trust to exchange Series B Asset Trust Preferred
Securities for Series A Asset Trust Preferred Securities, and (iii) by the
Company, as Debenture Issuer, to exchange Series B Debentures for Series A
Debentures and to execute the Series B Capital Trust Guarantee in respect of the
Series B Capital Trust Preferred Securities and the Capital Trust Common
Securities and the Series B Asset Trust Guarantee in respect of the Series B
Asset Trust Preferred Securities and the Asset Trust Common Securities.
"Extension Period" has the meaning set forth in the Indenture.
"FDIC" means the Federal Deposit Insurance Corporation or any successor
thereto.
"Fiduciary Indemnified Person" has the meaning set forth in Section
12.4(b).
"Fiscal Period" means each calendar quarter.
"Fiscal Year" has the meaning set forth in Section 13.1.
"Global Securities" has the meaning set forth in Section 7.11.
"Holder" means a Person in whose name a Certificate representing a Asset
Trust Security is registered, such Person being a beneficial owner within the
meaning of the Business Trust Act; provided, however, that in determining
whether the Holders of the requisite liquidation amount of Asset Trust Preferred
Securities have voted on any matter provided for in this Declaration, then for
the purpose of such determination only (and not for any other purpose
hereunder), if the Asset Trust Preferred Securities remain in the form of one or
more Global Securities, the term "Holders" shall mean the holder of the Global
Security acting at the direction of the beneficial owners of the Asset Trust
Preferred Securities.
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"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture between the Company, as Debenture Issuer,
and The Bank of New York, as Indenture Trustee, dated as of July 13, 1999, and
any indenture supplement thereto.
"Independent Financial Adviser" shall mean a nationally recognized
accounting firm, bank or investment banking firm which shall be designated by
the Company and which firm does not (and whose directors, officers, employees
and affiliates do not) have a direct or indirect material equity interest in the
Company or any of its subsidiaries.
"Initial Proceeds" means the aggregate proceeds received by the Asset Trust
from the sale of the Series A Asset Trust Preferred Securities and the Asset
Trust Common Securities.
"Initial Purchaser" means Lehman Brothers Inc.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as the term is defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act.
"Interest" means the entire ownership interest of a Holder of Asset Trust
Securities in the Asset Trust at any particular time, including, without
limitation, its interest in the capital, profits, and losses of, and
distributions from, the Asset Trust.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(f).
"List of Holders" has the meaning specified in Section 2.2(a).
"Majority in Liquidation Amount" means, except as provided in the terms of
the Asset Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Asset Trust Securities, voting together as a single class, or, as
the context may require, Holders of outstanding Asset Trust Preferred Securities
or Holders of outstanding Asset Trust Common Securities, voting separately as a
class, who are the record owners of more than 50% of the aggregate liquidation
amount of all outstanding Asset Trust Securities of the relevant class.
"Moody's"' means Moody's Investors Service, Inc. or any successor thereto.
"Net Income" and "Net Loss," respectively, for any Fiscal Period mean the
income and loss, respectively, of the Asset Trust for such Fiscal Period as
determined in accordance with the method of accounting followed by the Asset
Trust for United States Federal income tax purposes, including, for all
purposes, the net income, if any, from the Debentures, Eligible Debt Securities
and any income exempt from tax and any noncapital, nondeductible expenditures of
the Asset Trust which are described in the Code.
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"Offering Memorandum" means the Capital Trust's offering memorandum used in
connection with offers and sales of the Series A Capital Trust Preferred
Securities.
"Officers' Certificate"' means, with respect to any Person (other than
Trust Administrators who are natural persons), a certificate signed by two
Authorized Officers of such Person on behalf of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Declaration shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Officers'
Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant
or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such officer
and on behalf of such Person, such condition or covenant has been complied
with;
provided, that the term "Officers' Certificate", when used with reference to
Trust Administrators who are natural persons shall mean a certificate signed by
two of the Trust Administrators which otherwise satisfies the foregoing
requirements.
"Paying Agent" has the meaning specified in Section 7.7.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof or any other entity of whatever nature.
"Preferred Distribution Funds" has the meaning specified in Section 7.2(d).
"Property Account" has the meaning specified in Section 3.8(c)(i).
"Pro Rata" means, in reference to any distributions on or redemptions of
Asset Trust Securities or the distribution of Asset Trust Preferred Securities
or any other payment with respect to Asset Trust Preferred Securities in
connection with a liquidation of the Asset Trust, pro rata to each Holder of
Asset Trust Preferred Securities according to the aggregate liquidation amount
of the Asset Trust Preferred Securities held by the relevant Holder in relation
to the aggregate liquidation amount of all Asset Trust Preferred Securities
outstanding.
"Qualified Institutional Buyer" or "QIB" has the meaning specified in Rule
144A under the Securities Act.
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"Quorum" means a majority of the Trust Administrators or, if there are only
two Trust Administrators, both of them.
"Redemption Notice" has the meaning specified in Section 7.4(a).
"Redemption Price" has the meaning specified in Section 7.3(b).
"Registration Rights Agreement" means, the Registration Rights Agreement
dated as of July 9, 1999, among the Company, the Capital Trust, the Asset Trust
and the Initial Purchaser for the benefit of themselves and the Holders of the
Capital Trust Preferred Securities as the same may be amended from time to time
in accordance with the terms thereof.
"Regulation S" means Regulation S under the Securities Act and any
successor regulation thereto.
"Regulatory Approval" has the meaning set forth in the Indenture.
"Related Party" means, with respect to the Sponsor, any direct or wholly
owned subsidiary of the Sponsor or any Person that owns, directly or indirectly,
100% of the outstanding voting securities of the Sponsor.
"Resale Restriction Termination Date" has the meaning specified in Section
7.12(a).
"Responsible Officer" means, with respect to the Asset Property Trustee,
any officer within the Corporate Trust Office of the Asset Property Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, any assistant treasurer or other officer of the Corporate Trust
Office of the Asset Property Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and familiarity with
the particular subject.
"Restricted Global Security" means any Global Security evidencing Asset
Trust Securities that are to be sold pursuant to Rule 144A or Regulation S.
"Restricted Securities Legend"" has the meaning specified in Section
7.12(a).
"Restricted Security" has the meaning assigned to such term in Rule
144(a)(3) under the Securities Act.
"Rule 144A" means Rule 144A under the Securities Act or any successor rule
thereunder.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act or any
successor rule thereunder.
"S&P" means Standard & Poor's Ratings Services or any successor thereof.
"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
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"Security Register" has the meaning specified in Section 7.8(a).
"Security Registrar" has the meaning specified in Section 7.8(a).
"Series A Asset Trust Preferred Guarantee" means the Series A Asset Trust
Preferred Guarantee Agreement, dated as of July 13, 1999, entered into by the
Company as guarantor, for the benefit of the Holders of the Series A Asset Trust
Preferred Securities.
"Series A Asset Trust Preferred Securities" has the meaning set forth in
Section 7.1(a).
"Series A Capital Trust Guarantee" means the Series A Capital Trust
Guarantee Agreement, dated as of July 13, 1999, entered into by the Company as
guarantor, for the benefit of the holders of the Series A Capital Trust
Preferred Securities and the Holders of the Capital Trust Common Securities.
"Series A Capital Trust Preferred Securities" has the meaning set forth in
the Capital Trust Declaration.
"Series A Debentures" means, the floating rate junior subordinated
debentures due July 15, 2029, Series A, issued by the Debenture Issuer under the
Indenture and to be held by the Asset Property Trustee of the Asset Trust for
the benefit of the Holders of the Asset Trust Preferred Securities until
exchanged for the Series B Debentures in connection with the Exchange Offer.
"Series B Asset Trust Preferred Guarantee" means the Series B Asset Trust
Preferred Guarantee Agreement, dated as of July 13, 1999, to be entered into by
the Company as guarantor, upon consummation of the Exchange Offer, for the
benefit of the Holders of the Series B Asset Trust Preferred Securities.
"Series B Asset Trust Preferred Securities" " has the meaning set forth in
Section 7.1(a).
"Series B Capital Trust Guarantee" means the Series B Capital Trust
Guarantee Agreement, dated as of July 13, 1999, to be entered into by the
Company as guarantor, upon consummation of the Exchange Offer, for the benefit
of the holders of the Series B Capital Trust Preferred Securities and the
Capital Trust Common Securities.
"Series B Capital Trust Preferred Securities" has the meaning set forth in
the Capital Trust Declaration.
"Series B Debentures" means the floating rate junior subordinated
debentures due July 15, 2029, Series B, issued by the Debenture Issuer under the
Indenture and exchanged for the Series A Debentures upon consummation of the
Exchange Offer.
"Sponsor" means the Company or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Asset Trust.
"Successor Delaware Trustee" has the meaning specified in Section
6.7(b)(ii).
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"Successor Entity" has the meaning specified in Section 3.15(b)(i).
"Successor Property Trustee" has the meaning specified in Section
6.7(b)(i).
"Successor Securities" has the meaning specified in Section 3.15(b)(i)(B).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
"Tax Amount" has the meaning specified in Section 7.2(e)(iv).
"Tax Matters Partner" means the Asset Trust Common Securities Holder
designated as such in Section 16.9 of this Declaration.
"10% in Liquidation Amount" means, except as provided in the terms of the
Asset Trust Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Asset Trust Securities, voting together as a single class, or, as
the context may require, Holders of outstanding Asset Trust Preferred Securities
or Holders of outstanding Asset Trust Common Securities, voting separately as a
class, who are the record owners of 10% or more of the aggregate liquidation
amount of all outstanding Asset Trust Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trust Administrator" means any officer or employee of or any individual
who is affiliated with the Company who serves as an administrator of the Asset
Trust.
"Trust Administrator's Authorization Certificate"' means a written
certificate signed by two of the Trust Administrators for the purpose of
establishing the terms and form of the Asset Trust Preferred Securities and the
Asset Trust Common Securities in accordance with the terms of this Declaration.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a Trust Administrator or trustee, so long as such Person shall continue in
office in accordance with the terms hereof, and all other Persons who may from
time to time be duly appointed, qualified and serving as Trustees in accordance
with the provisions hereof, and references herein to a Trustee or the Trustees
shall refer to such Person or Persons solely in their capacity as trustees or as
Trust Administrators hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
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ARTICLE II
TRUST INDENTURE ACT
Section 2.1 TRUST INDENTURE ACT; APPLICATION.
(a) This Declaration is subject to the provisions of the Trust Indenture
Act that are required to be part of this Declaration and shall, to the extent
applicable, be governed by such provisions.
(b) The Asset Property Trustee shall be the only Trustee which is a
Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this Declaration conflicts
with the duties imposed by Sections 310 to 317, inclusive, of the Trust
Indenture Act, such imposed duties shall control.
Section 2.2 LISTS OF HOLDERS OF SECURITIES.
(a) Each of the Sponsor and the Trust Administrators on behalf of the
Trust shall provide the Asset Property Trustee with a list, in such form as the
Asset Property Trustee may reasonably require, of the names and addresses of the
Holders of the Asset Trust Securities ("List of Holders"), (i) not later than
June 30 and December 31 of each year, commencing December 31, 1999, and current
as of such date, and (ii) at any other time, within 30 days of receipt by the
Asset Trust of a written request from the Asset Property Trustee for a List of
Holders as of a date no more than 15 days before such List of Holders is given
to the Asset Property Trustee; provided that neither the Sponsor nor the Trust
Administrators on behalf of the Asset Trust shall be obligated to provide such
List of Holders at any time the List of Holders does not differ from the most
recent List of Holders given to the Asset Property Trustee by the Sponsor and
the Trust Administrators on behalf of the Asset Trust. The Asset Property
Trustee shall preserve, in as current a form as is reasonably practicable, all
information contained in Lists of Holders given to it or which it receives in
the capacity as Paying Agent (if acting in such capacity), provided that the
Asset Property Trustee may destroy any List of Holders previously given to it on
receipt of a new List of Holders.
(b) The Asset Property Trustee shall comply with its obligations under,
and shall be entitled to the benefits of, Sections 311(a), 311(b) and 312(b) of
the Trust Indenture Act.
Section 2.3 REPORTS BY THE ASSET PROPERTY TRUSTEE.
Within 60 days after May 15 of each year (commencing in the year following
the issuance of the Asset Trust Preferred Securities), the Asset Property
Trustee shall provide to the Holders of the Trust Preferred Securities such
reports as are required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust Indenture Act.
The Asset Property Trustee shall also comply with the requirements of Section
313(d) of the Trust Indenture Act.
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Section 2.4 PERIODIC REPORTS TO THE ASSET PROPERTY TRUSTEE.
Each of the Sponsor and the Trust Administrators on behalf of the Asset
Trust shall provide to the Asset Property Trustee such documents, reports and
information as required by Section 314 of the Trust Indenture Act (if any) and,
on January 15 of each year, commencing January 15, 2000, the compliance
certificate required by Section 314 of the Trust Indenture Act in the form and
in the manner required by Section 314 of the Trust Indenture Act.
Section 2.5 EVIDENCE OF COMPLIANCE WITH CONDITIONS PRECEDENT.
Each of the Sponsor and the Trust Administrators on behalf of the Asset
Trust shall provide to the Asset Property Trustee such evidence of compliance
with any conditions precedent, if any, provided for in this Declaration that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers' Certificate.
Section 2.6 ASSET TRUST ENFORCEMENT EVENTS; WAIVER.
(a) The Holders of a Majority in Liquidation Amount of Asset Trust
Preferred Securities may, by vote or written consent, on behalf of the Holders
of all of the Asset Trust Preferred Securities, waive any past Asset Trust
Enforcement Event with respect to the Asset Trust Preferred Securities and its
consequences; provided, that if the underlying event of default or event of
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default:
(i) is not waivable under the Asset Trust Preferred Guarantee,
the Debentures or the Indenture, the Asset Trust Enforcement Event shall
also not be waivable; or
(ii) requires the consent or vote of the Holders of greater than
a majority in aggregate liquidation amount of the Asset Trust Preferred
Securities or Capital Trust Preferred Securities, as the case may be, or
aggregate principal amount of the Debenture (a "Super Majority") to be
waived, the Asset Trust Enforcement Event may only be waived on behalf of
the Holders of Asset Trust Preferred Securities by the vote of the Holders
of the relevant Super Majority in liquidation preference of the Asset Trust
Preferred Securities.
The foregoing provisions of this Section 2.6(a) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section
316(a)(1)(B) of the Trust Indenture Act is hereby expressly excluded from
this Declaration and the Asset Trust Securities, as permitted by the Trust
Indenture Act. Upon such waiver, any such Asset Trust Enforcement Event
shall cease to exist, and shall be deemed to have been cured, for every
purpose of this Agreement, but no such waiver shall extend to any
subsequent or other Asset Trust Enforcement Event or impair any right
consequent thereon. Any waiver by the Holders of the Asset Trust Preferred
Securities of an Asset Trust Enforcement Event with respect to the Asset
Trust Preferred Securities shall also be deemed to constitute a waiver by
the Asset Trust Common Securities Holder of any such Asset Trust
Enforcement Event with respect to the Asset Trust Common Securities for all
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purposes of this Declaration without any further act, vote, or consent of
Asset Trust Common Securities Holder.
(b) A waiver of a Debenture Event of Default by the Asset Property
Trustee, acting at the direction of the holders of a majority in liquidation
preference of Capital Trust Preferred Securities (or, if Asset Trust Preferred
Securities have been distributed to holders of the Capital Trust Preferred
Securities as a result of a Capital Trust Special Event, Asset Trust Preferred
Securities), constitutes a waiver of the corresponding Asset Trust Enforcement
Event. The foregoing provisions of this Section 2.6(b) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such Section 316(a)(1)(B) of
the Trust Indenture Act is hereby expressly excluded from this Declaration and
the Asset Trust Securities, as permitted by the Trust Indenture Act.
Section 2.7 ASSET TRUST ENFORCEMENT EVENT; NOTICE.
The Asset Property Trustee shall, within 90 days after the occurrence of a
Asset Trust Enforcement Event, transmit by mail, first class postage prepaid, to
the Holders of the Asset Trust Securities, notices of all defaults with respect
to the Asset Trust Securities actually known to a Responsible Officer of the
Asset Property Trustee, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this Section 2.7 being
hereby defined to be defaults as defined in the Asset Trust Preferred Guarantee
or the Debentures, not including any grace periods provided for therein and
irrespective of the giving of any notice provided therein); provided that,
except for a default in the payment of principal of (or premium, if any) or
interest on any of the Debentures, the Asset Property Trustee shall be protected
in withholding such notice if and so long as a Responsible Officer of the Asset
Property Trustee in good faith determines that the withholding of such notice is
in the interests of the Holders of the Asset Trust Securities.
ARTICLE III
ORGANIZATION
Section 3.1 NAME AND ORGANIZATION.
The Trust hereby continued is named "Allfirst Preferred Asset Trust" as
such name may be modified from time to time by the Trust Administrators
following written notice to the Holders of Asset Trust Securities. The Asset
Trust's activities may be conducted under the name of the Asset Trust or any
other name deemed advisable by the Trust Administrators.
Section 3.2 OFFICE.
The address of the principal executive office of the Trust is c/o First
Maryland Bancorp, 25 South Charles Street, Baltimore, Maryland 21201, Attn:
General Counsel. On ten (10) Business Days' written notice to the Holders of
Asset Trust Securities, the Trust Administrators may designate another principal
office.
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Section 3.3 PURPOSES OF THE ASSET TRUST.
The purposes of the Asset Trust are:
(a) to issue preferred interests in the Asset Trust in the form of Asset
Trust Preferred Securities;
(b) to issue common interests in the Asset Trust in the form of the Asset
Trust Common Securities;
(c) to use approximately 95% of the Initial Proceeds to purchase, as an
investment, the Series A Debentures;
(d) to invest, at all times, an amount equal to at least 5% of the Initial
Proceeds in Eligible Debt Securities;
(e) to receive interest and other payments on the Debentures and the
Eligible Debt Securities held by the Asset Trust from time to time;
(f) to make distributions on the Asset Trust Preferred Securities and
distributions on the Asset Trust Common Securities pursuant to the terms of
this Declaration;
(g) subject to the restrictions and conditions contained in this
Declaration, to make additional investments in Eligible Debt Securities with
cash from the interest and other payments received on the Debentures and
Eligible Debt Securities to the extent not distributed to Holders of the Asset
Trust Securities in accordance with this Declaration;
(h) to execute, enter into and deliver one or more registration rights
agreements, including the Registration Rights Agreement; and perform its
obligations thereunder; and
(i) except as otherwise limited herein, to enter into, make and perform
all contracts and other undertakings, and engage in those activities and
transactions reasonably necessary or advisable for the carrying out of the
foregoing purposes of the Asset Trust.
The Asset Trust may not engage in any other activities or operations except as
contemplated by this section.
Section 3.4 AUTHORITY.
Subject to the limitations provided in this Declaration, the Trustees shall
carry out the purposes of the Asset Trust. An action taken by the Trust
Administrators in accordance with their powers shall constitute the act of and
serve to bind the Asset Trust and an action taken by the Asset Property Trustee
on behalf of the Asset Trust in accordance with its powers shall constitute the
act of and serve to bind the Asset Trust. In dealing with the Trustees acting
on behalf of the Asset Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Asset Trust. Persons dealing with the
Asset Trust are entitled to rely conclusively on the power and authority of the
Trustees as set forth in this Declaration. Notwithstanding anything herein, it
is the intent of the parties hereto that the Trust Administrators shall not be
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fiduciaries with respect to the Asset Trust, and this Declaration shall be
construed in a manner consistent with such intent.
Section 3.5 TITLE TO PROPERTY OF THE TRUST.
Except as provided in Section 3.8 with respect to the Asset Trust Preferred
Securities or as otherwise provided in this Declaration, legal title to all
assets of the Asset Trust shall be vested in the Asset Trust. The Holders of
the Asset Trust Securities shall not have legal title to any part of the assets
of the Asset Trust, but shall have an undivided beneficial ownership interest in
the assets of the Asset Trust.
Section 3.6 POWERS AND DUTIES OF THE TRUST ADMINISTRATORS.
The Trust Administrators shall have the power and authority to cause the
Asset Trust to engage in the following activities, subject to the limitations
and restrictions of applicable laws:
(a) to establish the terms and forms of the Asset Trust Securities in the
manner specified in Section 7.1 and issue and sell the Asset Trust Preferred
Securities and the Asset Trust Common Securities specified in Section 7.1 in
accordance with this Declaration;
(b) in connection with the issue and sale of the Asset Trust Preferred
Securities and the consummation of the Exchange Offer, at the direction of the
Sponsor, to:
(i) to execute and file with the Commission one or more
registration statements on the applicable forms prepared by the
Sponsor, including any amendments thereto, as contemplated by the
Registration Rights Agreement;
(ii) if deemed necessary or desirable by the Sponsor, execute
and file an application, prepared by the Sponsor, to the New York
Stock Exchange, Inc. or any other national stock exchange or the
NASDAQ National Market for listing of any Asset Trust Preferred
Securities and the Asset Trust Preferred Guarantee;
(iii) if deemed necessary or desirable by the Sponsor, execute
and file with the Commission a registration statement on Form 8-A,
including any amendments thereto, prepared by the Sponsor, relating to
the registration of the Asset Trust Preferred Securities and the Asset
Trust Preferred Guarantee under Section 12(b) of the Exchange Act;
(iv) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary, in order
to qualify or register all or part of the Asset Trust Preferred
Securities in any state in which the Sponsor has determined to qualify
or register such Asset Trust Preferred Securities for sale;
(v) execute and deliver on behalf of Asset Trust into one or
more purchase agreements providing for the sale of the Series A Asset
Trust Preferred
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Securities to Capital Trust and to cause Asset Trust to perform its
obligations thereunder;
(vi) execute and deliver on behalf of Asset Trust one or more
registration rights agreements, including without limitation, the
Registration Rights Agreement, and to cause Asset Trust to perform its
obligations thereunder;
(vii) execute and deliver on behalf of Asset Trust one or more
purchase agreements providing for the sale of the Asset Trust Common
Securities to the Asset Trust Common Securities Holder and to cause
Asset Trust to perform its obligations thereunder;
(viii) execute and deliver on behalf of Asset Trust one or more
purchase agreements providing for the purchase of the Debentures by
Asset Trust from the Debenture Issuer and to cause Asset Trust to
perform its obligations thereunder; and
(ix) execute and deliver on behalf of Asset Trust a purchase
agreement among Asset Trust, Capital Trust, the Company and the
Initial Purchaser relating to the sale of Series A Capital Trust
Preferred Securities to the Initial Purchaser and to cause Asset Trust
to perform its obligations thereunder.
(c) to acquire the Series A Debentures and Eligible Debt Securities with
the proceeds of the sale of the Series A Asset Trust Preferred Securities and
the Asset Trust Common Securities; provided, however, that the Trust
Administrators shall cause legal title to the Debentures and any Eligible Debt
Securities held by the Asset Property Trustee to be held of record in the name
of the Asset Property Trustee for the benefit of the Holders of the Asset Trust
Preferred Securities and the Asset Trust Common Securities Holder;
(d) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of Section 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Asset Trust Securities as to such actions and
applicable record dates;
(e) to take all actions and perform such duties as may be required of the
Trust Administrators pursuant to the terms of this Declaration and the Asset
Trust Securities;
(f) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action or otherwise adjust claims or demands of or against the Asset Trust
("Legal Action"), unless pursuant to Section 3.8(e), the Asset Property Trustee
has the exclusive power to bring such Legal Action;
(g) at the Sponsor's expense, to employ or otherwise engage employees and
agents (who may be designated as officers with titles) and managers,
contractors, advisors and consultants to conduct only those services that the
Trust Administrators have authority to conduct directly, and to and pay
reasonable compensation for such services;
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(h) to cause the Asset Trust to comply with the Asset Trust's obligations
under the Trust Indenture Act;
(i) to give the certificate required by Section 314(a)(4) of the Trust
Indenture Act to the Asset Property Trustee, which certificate may be executed
by any Trust Administrator;
(j) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Asset Trust;
(k) to appoint another Person other than the Asset Property Trustee to act
as, registrar and transfer agent for the Asset Trust Securities;
(l) to give prompt written notice to the Asset Property Trustee and the
Holders of the Asset Trust Securities of any notice received from the Company
that a current, quarterly distribution on the Debentures will not be made for
any quarterly period;
(m) at the direction of the Sponsor, to take all action that may be
necessary or appropriate for the preservation and the continuation of the Asset
Trust's valid existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of each other
jurisdiction in which such existence is necessary to protect the limited
liability of the Holders of the Asset Trust Preferred Securities and the Holders
of the Asset Trust Common Securities or to enable the Asset Trust to effect the
purposes for which the Asset Trust was created;
(n) at the direction of the Sponsor, to take any action, not inconsistent
with applicable law, necessary or desirable in carrying out the purposes and
functions of the Asset Trust as set out in Section 3.3 or the activities of
Asset Trust as set out in this Section 3.6, including, but not limited to:
(i) cause the Asset Trust not to be deemed to be an investment
company required to be registered under the Investment Company Act;
(ii) cause the Asset Trust to be classified as a partnership
for United States Federal income tax purposes; and
(iii) cause the Asset Trust not to be classified as an
association or a publicly traded partnership taxable as a corporation for
United States Federal income tax purposes.
provided, that such action does not adversely affect the interests of
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Holders of Asset Trust Securities;
(o) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Asset
Trust to be duly prepared and filed by the Trust Administrators, on behalf of
the Asset Trust; and
(p) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Asset Trust in all matters
necessary or incidental to the foregoing.
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The Trust Administrators shall exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Asset Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Trust Administrators shall have no power
to, and shall not, take any action that is inconsistent with the purposes and
functions of the Asset Trust set forth in Section 3.3 or that is inconsistent
with or in contravention of any applicable law.
Subject to this Section 3.6, the Trust Administrators shall have none of
the powers or the authority of the Asset Property Trustee set forth in Section
3.8.
Any expenses incurred by the Trust Administrators pursuant to this Section
3.6 shall be reimbursed by the Company pursuant to Section 12.1 of this
Declaration.
Section 3.7 PROHIBITION OF ACTIONS BY THE ASSET TRUST AND THE TRUSTEES.
The Asset Trust shall not, and the Trustees shall cause the Asset Trust not
to, engage in any activity other than as required or authorized by this
Declaration. In particular, the Asset Trust shall not and the Trustees shall
cause the Asset Trust not to:
(a) acquire any assets other than as expressly provided herein;
(b) possess trust property for other than a trust purpose;
(c) make any loans or incur any indebtedness or acquire any securities
other than the Debentures and Eligible Debt Securities;
(d) possess any power or otherwise act in such a way as to vary the terms
of the Asset Trust Securities in any way whatsoever (except to the extent
expressly authorized in this Declaration or by the terms of the Asset Trust
Securities);
(e) issue any securities or other evidences of beneficial ownership of, or
beneficial interest in, the Asset Trust other than the Asset Trust Securities;
(f) file a certificate of cancellation of the Asset Trust;
(g) take any action inconsistent with the status of the Asset Trust as a
partnership for United States Federal income tax purposes; or
(h) revoke any action previously authorized or approved by a vote of the
Holders of the Asset Trust Preferred Securities except pursuant to a subsequent
vote of the Holders of the Asset Trust Preferred Securities.
Section 3.8 POWERS AND DUTIES OF THE ASSET PROPERTY TRUSTEE.
(a) The legal title to the Debentures and Eligible Debt Securities shall
be owned by and held of record in the name of the Asset Property Trustee in
trust for the benefit of the Holders of the Asset Trust Securities. The right,
title and interest of the Asset Property Trustee to the
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Debentures and Eligible Debt Securities shall vest automatically in each Person
who may hereafter be appointed as Asset Property Trustee in accordance with
Section 6.7. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures and Eligible Debt
Securities have been executed and delivered.
(b) The Asset Property Trustee shall not transfer its right, title and
interest in the Debentures and Eligible Debt Securities to the Trust
Administrators or to the Delaware Trustee (if the Asset Property Trustee does
not also act as Delaware Trustee).
(c) The Asset Property Trustee shall:
(i) establish and maintain a segregated non-interest
bearing trust account (the "Property Account") in the name of and
under the exclusive control of the Asset Property Trustee on
behalf of the Asset Trust and Holders of the Asset Trust
Securities and, and upon the receipt of payments of funds made in
respect of the Debentures and Eligible Debt Securities held by
the Asset Property Trustee, deposit such funds into the Property
Account, make payments to the Holders of the Asset Trust
Securities from the Property Account in accordance with Section
7.2 and invest the remainder of such funds in Eligible Debt
Securities pursuant to the investment guidelines set forth in
Annex 1 to this Declaration. The Property Account shall be an
account maintained with a banking institution (including the
Asset Property Trustee) authorized to exercise corporate trust
powers and having a combined capital and surplus of at least
$50,000,000 and subject to supervision or examination by Federal
or State authority; and
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Asset
Trust Preferred Securities to the extent the Debentures are
redeemed.
(d) The Asset Property Trustee shall take all actions and perform such
duties as may be specifically required of the Asset Property Trustee pursuant to
the terms of this Declaration and the Asset Trust Securities.
(e) The Asset Property Trustee shall take any Legal Action which arises
out of or in connection with an Asset Trust Enforcement Event of which a
Responsible Officer of the Asset Property Trustee has actual knowledge or the
Asset Property Trustee's duties and obligations under this Declaration or the
Trust Indenture Act.
(f) The Asset Property Trustee shall continue to serve as a Trustee until
either:
(i) the Asset Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of Asset Trust
Securities pursuant to the terms of the Asset Trust Securities; or
(ii) a Successor Property Trustee has been appointed and has
accepted that appointment in accordance with Section 6.7.
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(g) The Asset Property Trustee shall have the legal power to exercise all
of the rights, powers and privileges of a holder of the Debentures and, if a
Debenture Event of Default occurs and is continuing, the Asset Property Trustee
shall, for the benefit of Holders of the Asset Trust Securities, enforce its
rights as holder of the Debentures subject to the rights of the Holders pursuant
to the terms of such Asset Trust Securities.
(h) Subject to this Section 3.8, the Asset Property Trustee shall have
none of the duties, liabilities, powers or the authority of the Trust
Administrators set forth in Section 3.6.
The Asset Property Trustee shall exercise the powers set forth in this
Section 3.8 in a manner that is consistent with the purposes and functions of
the Asset Trust set out in Section 3.3 and subject to the limitations and
restrictions of applicable law, and the Asset Property Trustee shall have no
power to, and shall not, take any action that is inconsistent with the purposes
and functions of the Asset Trust set out in Section 3.3.
Section 3.9 CERTAIN DUTIES AND RESPONSIBILITIES OF
THE ASSET PROPERTY TRUSTEE.
(a) The Asset Property Trustee, before the occurrence of any Asset Trust
Enforcement Event and after the curing or waiver of all Asset Trust Enforcement
Events that may have occurred, shall undertake to perform only such duties as
are specifically set forth in this Declaration and no implied covenants shall be
read into this Declaration against the Asset Property Trustee. In case an Asset
Trust Enforcement Event has occurred (that has not been cured or waived pursuant
to Section 2.6) of which a Responsible Officer of the Asset Property Trustee has
actual knowledge, the Asset Property Trustee shall exercise such of the rights
and powers vested in it by this Declaration, and use the same degree of care and
skill in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration shall be construed to relieve the
Asset Property Trustee from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct, except that:
(i) prior to the occurrence of an Asset Trust Enforcement Event
and after the curing or waiving of all such Asset Trust Enforcement Events
that may have occurred:
(A) the duties and obligations of the Asset Property
Trustee shall be determined solely by the express provisions of this
Declaration and the Asset Property Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Declaration, and no implied covenants
or obligations shall be read into this Declaration against the Asset
Property Trustee; and
(B) in the absence of bad faith on the part of the Asset
Property Trustee, the Asset Property Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Asset Property Trustee and conforming to the
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requirements of this Declaration; but in the case of any such
certificates or opinions that by any provision hereof are specifically
required to be furnished to the Asset Property Trustee, the Asset
Property Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Declaration;
(ii) the Asset Property Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the Asset
Property Trustee, unless it shall be proved that the Asset Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Asset Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it without negligence, in good
faith in accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Asset Trust Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Asset Property Trustee, or exercising any trust or power
conferred upon the Asset Property Trustee under this Declaration;
(iv) no provision of this Declaration shall require the Asset
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers;
(v) the Asset Property Trustee's sole duty with respect to the
custody, safe-keeping and physical preservation of the Debentures and the
Eligible Debt Securities shall be to deal with such property in a similar
manner as the Asset Property Trustee deals with similar property for its
own account, subject to the protections and limitations on liability
afforded to the Asset Property Trustee under this Declaration and the Trust
Indenture Act;
(vi) the Asset Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of the
Debentures and the Eligible Debt Securities or the payment of any taxes or
assessments levied thereon or in connection therewith;
(vii) the Asset Property Trustee shall not be responsible for
monitoring the compliance by the Trust Administrators or the Sponsor with
their respective duties under this Declaration, nor shall the Asset
Property Trustee be liable for any default or misconduct of the Trust
Administrators or the Sponsor.
Section 3.10 CERTAIN RIGHTS OF ASSET PROPERTY TRUSTEE.
(a) Subject to the provisions of Section 3.9:
(i) the Asset Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to
have been signed, sent or presented by the proper party or parties;
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(ii) any direction or act of the Sponsor or the Trust
Administrators acting on behalf of the Asset Trust contemplated by this
Declaration shall be sufficiently evidenced by an Officers' Certificate
(or, with respect to the establishment of the terms and form of the Asset
Trust Securities by the Trust Administrators, by a Trust Administrator's
Authorization Certificate);
(iii) whenever in the administration of this Declaration, the Asset
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Asset Property Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part, request and
conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Sponsor or the Trust
Administrators;
(iv) the Asset Property Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any
financing or continuation statement or any filing under tax or securities
laws) or any re-recording, refiling or registration thereof;
(v) the Asset Property Trustee may consult with counsel of its
choice or other experts and the advice or opinion of such counsel and
experts with respect to legal matters or advice within the scope of such
experts' area of expertise shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion, such
counsel may be counsel to the Sponsor or any of its Affiliates, and may
include any of its employees. The Asset Property Trustee shall have the
right at any time to seek instructions concerning the administration of
this Declaration from any court of competent jurisdiction, at the expense
of the Sponsor;
(vi) the Asset Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration at
the request or direction of any Holder of Asset Trust Securities, unless
such Holder of Asset Trust Securities shall have provided to the Asset
Property Trustee security and indemnity, reasonably satisfactory to the
Asset Property Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Asset Property Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Asset Property Trustee; provided that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the
Asset Property Trustee, upon the occurrence of an Asset Trust Enforcement
Event, of its obligation to exercise the rights and powers vested in it by
this Declaration;
(vii) the Asset Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Asset Property Trustee,
may make such further inquiry or investigation into such facts or matters
as it may see fit, and, if the Asset Property Trustee shall determine to
make such further inquiry or
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investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney;
(viii) the Asset Property Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by or
through agents, custodians, nominees or attorneys and the Asset Property
Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Asset Property Trustee or its agents
hereunder shall bind the Asset Trust and the Holders of the Asset Trust
Securities, and the signature of the Asset Property Trustee or its agents
alone shall be sufficient and effective to perform any such action and no
third party shall be required to inquire as to the authority of the Asset
Property Trustee to so act or as to its compliance with any of the terms
and provisions of this Declaration, both of which shall be conclusively
evidenced by the Asset Property Trustee's or its agent's taking such
action;
(x) whenever in the administration of this Declaration the Asset
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Asset Property Trustee (A) may request instructions from the
Holders of the Asset Trust Securities, the Trust Administrators or the
Sponsor which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Asset Trust Securities as would be
entitled to direct the Asset Property Trustee under the terms of the Asset
Trust Securities in respect of such remedy, right or action, (B) may
refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (C) shall be protected in
conclusively relying on or acting in or accordance with such instructions;
(xi) if no Asset Trust Enforcement Event has occurred and is
continuing and the Asset Property Trustee is required to decide between
alternative courses of action, construe ambiguous provisions in this
Declaration or is unsure of the application of any provision of this
Declaration, and the matter is not one on which Holders of Asset Trust
Preferred Securities are entitled under the Declaration to vote, then the
Asset Property Trustee shall take such action as it deems advisable and in
the best interests of the Holders of the Asset Trust Preferred Securities
and will have no liability except for its own bad faith, negligence or
willful misconduct;
(xii) except as otherwise expressly provided by this Declaration,
the Asset Property Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration;
(xiii) the Asset Property Trustee shall not be liable for any action
taken, suffered or omitted to be taken by it without negligence, in good
faith and reasonably believed by it to be authorized or within the
discretion, rights or powers conferred upon it by this Declaration; and
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(xiv) the Asset Property Trustee shall not be deemed to have notice
of any Asset Trust Enforcement Event unless a Responsible Officer of the
Asset Property Trustee has actual knowledge thereof or unless written
notice of any event which is in fact an Asset Trust Enforcement Event is
received by the Asset Property Trustee at the Corporate Trust Office of the
Asset Property Trustee, and such notice references the Asset Trust
Preferred Securities and this Declaration.
(b) No provision of this Declaration shall be deemed to impose any duty or
obligation on the Asset Property Trustee to perform any act or acts or exercise
any right, power, duty or obligation conferred or imposed on it, in any
jurisdiction in which it shall be illegal, or in which the Asset Property
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Asset Property
Trustee shall be construed to be a duty.
Section 3.11 DELAWARE TRUSTEE.
Notwithstanding any provision of this Declaration other than Section 6.2,
the Delaware Trustee shall not be entitled to exercise any powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the Trust
Administrators or the Asset Property Trustee described in this Declaration.
Except as set forth in Section 6.2, the Delaware Trustee shall be a Trustee for
the sole and limited purpose of fulfilling the requirements of Section 3807 of
the Business Trust Act.
Section 3.12 EXECUTION OF DOCUMENTS.
Unless otherwise determined by the Trust Administrators, and except as
otherwise required by the Business Trust Act, any Trust Administrator is
authorized to execute on behalf of the Asset Trust any documents that the Trust
Administrators have the power and authority to execute pursuant to Section 3.6;
provided, that any registration statement referred to in Section 3.6(b)(i),
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including any amendments thereto, shall be signed by or on behalf of a majority
of the Trust Administrators.
Section 3.13 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF ASSET TRUST
SECURITIES.
The recitals contained in this Declaration and the Asset Trust Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Asset Trust or any part
thereof. The Trustees make no representations as to the validity or sufficiency
of this Declaration or the Asset Trust Securities.
Section 3.14 DURATION OF ASSET TRUST.
The Asset Trust shall exist until terminated pursuant to the provisions of
Article VIII hereof.
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Section 3.15 MERGERS.
(a) The Asset Trust may not consolidate, amalgamate, merge with or into,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in Section 3.15(b) and (c).
(b) The Asset Trust may, at the request of the Sponsor, with the consent
of the Trust Administrators or, if there are more than two, a majority of the
Trust Administrators and without the consent of the Holders of the Asset Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties substantially as an entirety to a trust
organized as such under the laws of any State of the United States; provided
that:
(i) if the Asset Trust is not the successor, such successor
entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Asset Trust
under the Asset Trust Securities; or
(B) substitutes for the Asset Trust Preferred Securities other
securities having substantially the same terms as the Asset Trust
Preferred Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Asset Trust Preferred
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Company expressly acknowledges a trustee of such Successor
Entity that possesses the same powers and duties as the Asset Property
Trustee as the holder of the Asset Trust Preferred Securities;
(iii) the Asset Trust Preferred Securities shall continue to be
listed, or any Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or with any other organization on which the Asset Trust Preferred
Securities are then listed or quoted;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Asset Trust Preferred
Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Asset Trust Preferred
Securities (including any Successor Securities) in any material respect;
(vi) such Successor Entity has a purpose identical to that of the
Asset Trust;
(vii) the Company guarantees the obligations of such Successor Entity
under the Successor Asset Trust Securities at least to the extent provided
by the Asset Trust Guarantee; and
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(viii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease the Sponsor has received an
opinion of independent legal counsel to the Asset Trust experienced in such
matters to the effect that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the Holders of the Asset Trust Preferred
Securities (including any Successor Securities) in any material
respect other than with respect to any dilution of such Holders'
interest in the new entity;
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease neither the Asset Trust nor
the Successor Entity will be required to register as an investment
company under the Investment Company Act;
(C) following such merger, consolidation, amalgamation or
replacement, the Capital Trust (or the Successor Entity) will continue
to be classified as a grantor trust for United States Federal income
tax purposes and will not be classified as an association or a
publicly traded partnership taxable as a corporation; and
(D) following such merger, consolidation, amalgamation or
replacement, the Asset Trust will continue to be classified as a
partnership for United States Federal income tax purposes and not be
classified as an association or a publicly traded partnership taxable
as a corporation.
(c) Notwithstanding Section 3.15(b), the Asset Trust shall not, except
with the consent of Holders of 100% in liquidation amount of the Asset Trust
Preferred Securities, consolidate, amalgamate, merge with or into, or be
replaced by any other entity or permit any other entity to consolidate,
amalgamate, merge with or into, or replace it if such consolidation,
amalgamation, merger or replacement would cause the Capital Trust, Successor
Entity or the Asset Trust to be classified as an association or a publicly
traded partnership taxable as a corporation for United States Federal income tax
purposes.
Section 3.16 ASSET PROPERTY TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
similar judicial proceeding relative to the Asset Trust or any other obligor
upon the Asset Trust Securities or the property of the Asset Trust or of such
other obligor or their creditors, the Asset Property Trustee (irrespective of
whether any Distributions on the Asset Trust Securities shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Asset Property Trustee shall have made any demand on the Asset Trust
for the payment of any past due Distributions) shall be entitled and empowered,
to the fullest extent permitted by law, by intervention in such proceeding or
otherwise:
(a) to file and prove a claim for the whole amount of any Distributions
owing and unpaid in respect of the Asset Trust Securities and to file such other
papers or documents as may be
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necessary or advisable in order to have the claims of the Asset Property Trustee
(including any claim for the reasonable compensation, expenses, disbursements
and advances of the Asset Property Trustee, its agents, experts and counsel) and
of the Holders of Asset Trust Securities allowed in such judicial proceeding,
and
(b) 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, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder of Asset
Trust Securities to make such payments to the Asset Property Trustee and, in the
event the Asset Property Trustee shall consent to the making of such payments
directly to the Holders of Asset Trust Securities, to pay to the Asset Property
Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Asset Property Trustee, its agents and
counsel, and any other amounts due the Asset Property Trustee.
Nothing herein contained shall be deemed to authorize the Asset Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder of
Asset Trust Securities any plan of reorganization, arrangement adjustment or
compensation affecting the Asset Trust Securities or the rights of any Holder
thereof or to authorize the Asset Property Trustee to vote in respect of the
claim of any Holder Asset Trust Securities in any such proceeding.
ARTICLE IV
SPONSOR
Section 4.1 RESPONSIBILITIES OF THE SPONSOR
In connection with the issuances and sales of the Asset Trust Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare for filing by Asset Trust with the Commission one or
more registration statements on the applicable forms, including any
amendments thereto, as contemplated by the Registration Rights Agreement;
(b) to determine the states in which to take appropriate action to
qualify or register for sale all or part of the Asset Trust Preferred
Securities and to do any and all such acts, other than actions which must
be taken by Asset Trust, and advise Asset Trust of actions it must take,
and prepare for execution and filing any documents to be executed and filed
by Asset Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such states;
(c) to prepare any filing by Asset Trust of an application to the New
York Stock Exchange, Inc. or any other national stock exchange or the
Nasdaq National Market for listing upon notice of issuance of any Capital
Trust Preferred Securities, Asset Trust Preferred Securities, the Capital
Trust Guarantee and the Asset Trust Preferred Guarantee, if such filing is
determined to be necessary or desirable by the Sponsor;
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(d) to prepare any filing by Asset Trust with the Commission of a
registration statement on Form 8-A, including any amendments thereto, if
such filing is determined to be necessary or desirable by the Sponsor;
(e) to negotiate the terms, on behalf of Asset Trust, of one or more
purchase agreements and other related agreements providing for the sale of
the Series A Asset Trust Preferred Securities to Capital Trust;
(f) to negotiate the terms, on behalf of Asset Trust, of one or more
registration rights agreements including, without limitation, the
Registration Rights Agreement;
(g) to prepare on behalf of Asset Trust, the statement required by
Section 9.1(d);
(h) to negotiate the terms, on behalf of Asset Trust, of one or more
purchase agreements providing for the sale of the Asset Trust Common
Securities to the Asset Trust Common Securities Holder;
(i) to negotiate the terms, on behalf of Asset Trust, of one or more
purchase agreements providing for the purchase of the Debentures by Asset
Trust from the Debenture Issuer; and
(j) to negotiate the terms on behalf of Asset Trust of a purchase
agreement providing for the purchase of Series A Capital Trust Preferred
Securities by the Initial Purchaser.
Section 4.2 COMPENSATION, INDEMNIFICATION AND EXPENSES OF THE TRUSTEES.
The Asset Trust agrees, and to the extent the Asset Trust fails to do so,
the Sponsor agrees:
(a) to pay to the Trustees from time to time such compensation as the
Sponsor and the Trustees shall from time to time agree in writing for all
services rendered by them hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee
of an express trust);
(b) except as otherwise expressly provided herein, to reimburse the
Trustees for all reasonable expenses, disbursements and advances incurred
or made by the Trustees in accordance with any provision of this
Declaration (including the compensation and the expenses and disbursements
of its agent and counsel), except any such expense, disbursement or advance
as may be attributable to its gross negligence or willful misconduct; and
(c) to indemnify the Asset Property Trustee and the Delaware Trustee
and their authorized agents for, and to hold each of them harmless against,
any and all loss, liability, damage, claim or expense including taxes
(other than taxes based upon,
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measured by or determined by the income of any Trustee) incurred without
negligence or willful misconduct on the part of the Asset Property Trustee,
the Delaware Trustee or their respective authorized agents, as the case may
be, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses of
defending any of them against any claim, whether asserted by the Company, a
Holder of Asset Trust Securities or any other Person, or liability in
connection with the exercise or performance of any of their respective
powers or duties hereunder; the provisions of this Section 4.2 shall
survive the resignation or removal of the Delaware Trustee or the Asset
Property Trustee or the termination of this Declaration.
ARTICLE V
ASSET TRUST COMMON SECURITIES HOLDER
Section 5.1 COMPANY'S PURCHASES OF TRUST COMMON SECURITIES.
On each Closing Date, the Company will purchase all of the Asset Trust
Common Securities issued by the Asset Trust on such Closing Date for an amount
at least equal to (i) in the case of the initial Closing Date, 7% of the initial
capital of the Asset Trust, and (ii) in the case of any subsequent Closing Date,
7% of the additional capital added to the Asset Trust on such Closing Date, in
each case, at the same time as the related Asset Trust Securities are sold on
the Closing Date.
Section 5.2 COVENANTS OF THE ASSET TRUST COMMON SECURITIES HOLDER.
For so long as the Asset Trust Preferred Securities remain outstanding, the
Asset Trust Common Securities Holder will covenant (a) to maintain directly 100%
ownership of the Asset Trust Common Securities, (b) to cause the Asset Trust to
remain a statutory business trust and not to voluntarily dissolve, wind up,
liquidate or be terminated, except as permitted by this Declaration, (c) to use
its commercially reasonable efforts to ensure that the Asset Trust will not be
an investment company for purposes of the Investment Company Act, and (d) to
take no action which would be reasonably likely to cause the Trust to be
classified as (i) other than a partnership or (ii) as an association or a
publicly traded partnership taxable as a corporation for United States Federal
income tax purposes.
Section 5.3 TRANSFER OF ASSET TRUST COMMON SECURITIES.
The Holder of the Asset Trust Common Securities may transfer its interest
in the Asset Capital Trust Common Securities to a wholly-owned direct or
indirect subsidiary of the Company provided that (a) such entity expressly
accepts such transfer of the obligations as Asset Trust Common Securities Holder
and (b) prior to such transfer, the Company has received an opinion of
nationally recognized independent counsel to Asset Trust experienced in such
matters to the effect that (1) following such transfer, Asset Trust will be
treated as a partnership for United States Federal income tax purposes, (2) any
such transfer would not cause Asset Trust to be classified as an association or
a publicly traded partnership taxable as a corporation for United States Federal
income tax purposes, (3) following such transfer, the Company and such successor
entity will be in compliance with the Investment Company Act without registering
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thereunder as an "investment company," and (3) such transfer will not adversely
affect the limited liability of the Holders of the Asset Trust Preferred
Securities.
ARTICLE VI
TRUSTEES
Section 6.1 NUMBER OF TRUSTEES.
The number of Trustees initially shall be four (4), and:
(a) at any time before the issuance of any Asset Trust Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b) subject to Section 6.7(b)(ii) and (iii), after the issuance of
any Asset Trust Securities, the number of Trustees may be increased or
decreased by vote of the Holders of a Majority in Liquidation Amount of the
Asset Trust Common Securities voting as a class at a meeting of the Holders
of the Asset Trust Common Securities or by written consent in lieu of such
meeting; provided that, the number of Trustees shall in no event be less
than three (3); and provided, further, (i) if required by the Business
Trust Act, one Trustee is the Delaware Trustee; (ii) at least one Trust
Administrator is an employee or officer of, or is affiliated with, the
Sponsor; and (iii) one Trustee shall be the Asset Property Trustee for so
long as this Declaration is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if
it meets the applicable requirements.
Section 6.2 DELAWARE TRUSTEE.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place
of business in the State of Delaware, and otherwise meets the requirements
of applicable law, provided that, if the Asset Property Trustee has its
principal place of business in the State of Delaware and otherwise meets
the requirements of applicable law, then the Asset Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no application.
Section 6.3 ASSET PROPERTY TRUSTEE; ELIGIBILITY.
(a) There shall at all times be one Trustee (the "Asset Property
Trustee") which shall act as Asset Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or
of the District
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of Columbia, or a corporation or other Person permitted by the
Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate
trust owners, having a combined capital and surplus of at least
Fifty Million U.S. Dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred
to above, then for the purposes of this Section 6.3(a)(ii), the
combined capital and surplus of such corporation shall be deemed
to be its combined capital and surplus as set forth in its most
recent report of condition so published.
(b) If at any time the Asset Property Trustee shall cease to be eligible
to so act under Section 6.3(a), the Asset Property Trustee shall immediately
resign in the manner and with the effect set forth in Section 6.7(c).
(c) If the Asset Property Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Asset Property Trustee and the Holder of the Asset Trust Common Securities (as
if it were the obligor referred to in Section 310(b) of the Trust Indenture Act)
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Asset Trust Preferred Guarantee shall be deemed to be specifically
described in this Declaration for purposes of clause (i) of the first provision
contained in Section 310(b) of the Trust Indenture Act.
(e) The initial Asset Property Trustee shall be:
The Bank of New York.
Section 6.4 QUALIFICATIONS OF TRUST ADMINISTRATORS AND DELAWARE TRUSTEE
GENERALLY.
Each Trust Administrator and the Delaware Trustee (unless the Asset
Property Trustee also acts as Delaware Trustee) shall be either a natural person
who is at least 21 years of age or a legal entity that shall act through one or
more Authorized Officers.
Section 6.5 INITIAL TRUST ADMINISTRATORS.
The initial Trust Administrators shall be:
David M. Cronin and Robert F. Ray, the business address of whom is c/o
First Maryland Bancorp, 25 South Charles Street, Baltimore, Maryland 21201.
(a) Except as expressly set forth in this Declaration and except if a
meeting of the Trust Administrators is called with respect to any matter over
which the Trust Administrators have power to act, any power of the Trust
Administrators may be exercised by, or with the consent of, any one such Trust
Administrator.
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(b) Unless otherwise determined by the Trust Administrators, and except as
otherwise required by the Business Trust Act or applicable law, any Trust
Administrator is authorized to execute on behalf of the Asset Trust any
documents which the Trust Administrators have the power and authority to cause
the Asset Trust to execute pursuant to Section 3.6, provided, that, any
registration statement required to be executed in connection with any
registration rights agreement, including any amendments thereto, shall be
signed, if there is more than one Trust Administrator, by a majority of the
Trust Administrators.
(c) A Trust Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Trust
Administrators have power and authority to cause the Asset Trust to execute
pursuant to Section 3.6.
Section 6.6 DELAWARE TRUSTEE.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
Section 6.7 APPOINTMENT, REMOVAL AND RESIGNATION OF TRUSTEES.
(a) Subject to Section 6.7(b), Trustees may be appointed or removed
without cause at any time:
(i) until the issuance of any Asset Trust Securities, by written
instrument executed by the Sponsor;
(ii) unless an Asset Enforcement Event shall have occurred and be
continuing, after the issuance of any Asset Trust Securities, by vote of
the Holders of a Majority in Liquidation Amount of the Asset Trust Common
Securities; and
(iii) if an Asset Enforcement Event shall have occurred and be
continuing, with respect to:
(A) the Trust Administrators, by the Holder of the Asset Trust
Common Securities; and
(B) the Asset Property Trustee and the Delaware Trustee, by
vote of the Holders of a Majority in Liquidation Amount of the Asset
Trust Preferred Securities.
(b) (i) The Trustee that acts as Asset Property Trustee shall not be
removed in accordance with Section 6.7(a) until a successor Trustee possessing
the qualifications to act as Asset Property Trustee under Section 6.3 (a
"Successor Property Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Property Trustee
and delivered to the Trust Administrators and the Sponsor.
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(ii) The Trustee that acts as Delaware Trustee shall not be removed
in accordance with Section 6.7(a) until a successor Trustee possessing the
qualifications to act as Delaware Trustee under Sections 6.2 and 6.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Trust Administrators and the Sponsor.
(c) A Trustee appointed to office shall hold office until his or its
successor shall have been appointed, until his death or its dissolution or until
his or its removal or resignation. Any Trustee may resign from office (without
need for prior or subsequent accounting) by an instrument in writing signed by
the Trustee and delivered to the Sponsor and the Asset Trust, which resignation
shall take effect upon such delivery or upon such later date as is specified
therein; provided, however, that:
(i) No such resignation of the Trustee that acts as the Asset
Property Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and
has accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Asset Trust, the Sponsor and the
resigning Asset Property Trustee; or
(B) until the assets of the Asset Trust have been completely
liquidated and the proceeds thereof distributed to the holders of the
Asset Trust Securities; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Asset Trust, the Sponsor
and the resigning Delaware Trustee.
(d) The Asset Trust Common Securities Holder shall use its best efforts to
promptly appoint a Successor Delaware Trustee or Successor Property Trustee, as
the case may be, if the Asset Property Trustee or the Delaware Trustee delivers
an instrument of resignation in accordance with this Section 6.7.
(e) If no Successor Property Trustee or Successor Delaware Trustee, as the
case may be, shall have been appointed and accepted appointment as provided in
this Section 6.7 within 30 days after delivery to the Sponsor and the Asset
Trust of an instrument of resignation or removal, the resigning or removed Asset
Property Trustee or Delaware Trustee, as applicable, may petition, at the
expense of the Sponsor, any court of competent jurisdiction for appointment of a
Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Property Trustee or Successor Delaware Trustee, as
the case may be.
(f) No Asset Property Trustee or Delaware Trustee shall be liable for the
acts or omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
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Section 6.8 VACANCIES AMONG TRUSTEES.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 6.1, or if the number of Trustees is
increased pursuant to Section 6.1, a vacancy shall occur. The vacancy shall be
filled with a Trustee appointed in accordance with Section 6.7.
Section 6.9 EFFECT OF VACANCIES.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to annul the Asset Trust. Whenever a vacancy in the number of Trust
Administrators shall occur, until such vacancy is filled by the appointment of a
Trust Administrator in accordance with Section 6.7, the Trust Administrators in
office, regardless of their number, shall have all the powers granted to the
Trust Administrators and shall discharge all the duties imposed upon the Trust
Administrators by this Declaration.
Section 6.10 MEETINGS.
If there is more than one Trust Administrator, meetings of the Trust
Administrators shall be held from time to time upon the call of any Trust
Administrator. Regular meetings of the Trust Administrators may be held at a
time and place fixed by resolution of the Trust Administrators. Notice of any
in-person meetings of the Trust Administrators shall be hand delivered or
otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Trust Administrators or any committee thereof shall
be hand delivered or otherwise delivered in writing (including by facsimile,
with a hard copy by overnight courier) not less than 24 hours before a meeting.
Notices shall contain a brief statement of the time, place and anticipated
purposes of the meeting. The presence (whether in person or by telephone) of a
Trust Administrator at a meeting shall constitute a waiver of notice of such
meeting except where a Trust Administrator attends a meeting for the express
purpose of objecting to the transaction of any activity on the ground that the
meeting has not been lawfully called or convened. Unless provided otherwise in
this Declaration, any action of the Trust Administrators may be taken at a
meeting by vote of a majority of the Trust Administrators present (whether in
person or by telephone) and eligible to vote with respect to such matter;
provided, that a Quorum is present, or without a meeting by the unanimous
written consent of the Trust Administrators. Notwithstanding the foregoing, any
and all actions of the Trust Administrators may be taken by the unanimous
written consent of all Trust Administrators.
Section 6.11 DELEGATION OF POWER.
(a) Any Trust Administrator may, by power of attorney consistent
with applicable law, delegate to any natural person over the age of 21
his, her or its power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or
amendment thereto filed with the Commission, or making any other
governmental filing.
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(b) The Trust Administrators shall have power to delegate from
time to time to such of their number or to officers of the Asset Trust
the doing of such things and the execution of such instruments either in
the name of the Asset Trust or the names of the Trust Administrators or
otherwise as the Trust Administrators may deem expedient, to the extent
such delegation is not prohibited by applicable law or contrary to the
provisions of the Asset Trust, as set forth herein.
Section 6.12 MERGER, CONVERSION, CONSOLIDATION OR
SUCCESSION TO BUSINESS.
Any corporation into which the Asset Property Trustee or the Delaware
Trustee, as the case may be, may be merged or converted or with which either may
be consolidated, or any corporation resulting from an merger, conversion or
consolidation to which the Asset Property Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any corporation succeeding to all or
substantially all the corporate trust business of the Asset Property Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the Asset
Property Trustee or the Delaware Trustee, as the case may be, hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article without the execution or filing of any paper or any further act on the
part of any of the parties hereto.
ARTICLE VII
THE SECURITIES
Section 7.1 GENERAL PROVISIONS REGARDING SECURITIES.
(a) The Trust Administrators shall on behalf of the Asset Trust issue, (i)
as of the date hereof, a class of Asset Trust Preferred Securities representing
undivided beneficial ownership interests in the assets of the Asset Trust
designated as the "Floating Rate Non-Cumulative Subsidiary Trust Preferred
Securities, Series A" (the "Series A Asset Trust Preferred Securities"), (ii) a
class of Asset Trust Preferred Securities to be issued only in exchange for the
Series A Asset Trust Preferred Securities designated as the "Floating Rate Non-
Cumulative Subsidiary Trust Preferred Securities, Series B" (the "Series B Asset
Trust Preferred Securities," and together with the Series A Asset Trust
Preferred Securities, the "Asset Trust Preferred Securities"), and (iii) as of
the date hereof, one class of trust common securities representing undivided
beneficial ownership interests in the assets of the Asset Trust designated as
the "Floating Rate Non-Cumulative Subsidiary Trust Common Securities" (the
"Asset Trust Common Securities"). The maximum aggregate liquidation amount of
Series A Asset Trust Preferred Securities that may be issued by the Asset Trust
is $154,640,000. The maximum aggregate liquidation amount of Series B Asset
Trust Preferred Securities that may be issued by the Asset Trust is
$154,640,000. The maximum aggregate amount of the Asset Trust Common Securities
that may be issued is $11,640,000; provided, however, that the aggregate amount
of the Asset Trust Common Securities issued at any time shall not be less than
7% of the total capital of the Asset Trust, and provided, further, that nothing
in this Declaration shall prohibit or restrict any issuance of Asset Trust
Securities in connection with the exercise of the option granted by the Capital
Trust pursuant to the purchase agreement providing for the sale of the Series A
Capital Trust Preferred Securities to the Initial Purchaser.
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(i) Trust Preferred Securities. The aggregate liquidation amount of
--------------------------
the Series A Asset Trust Preferred Securities issued on the initial Closing
Date is $103,093,000. The Asset Trust Preferred Securities of the Asset
Trust will have a liquidation amount with respect to the assets of the
Asset Trust of $1,000 per Asset Trust Preferred Security. The Series A
Asset Trust Preferred Security Certificates and the Series B Asset Trust
Preferred Security Certificates evidencing the Asset Trust Preferred
Securities shall be substantially in the form of Exhibit A-1 to this
Declaration, provided, that the Series B Asset Trust Preferred Security
Certificate shall not contain the Restricted Securities Legend, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any stock
exchange on which the Asset Trust Preferred Securities are listed.
(ii) Asset Trust Common Securities. The aggregate liquidation amount
-----------------------------
of the Asset Trust Common Securities issued on the initial Closing Date is
$7,760,000. The Asset Trust Common Securities of the Asset Trust will have
a nominal liquidation amount with respect to the assets of the Asset Trust
of $1,000 per Asset Trust Common Security and upon liquidation of the Asset
Trust, will entitle the Holders thereof to all of the assets of the Asset
Trust after payment of all creditors of the Asset Trust and all amounts
distributable to Holders of the Asset Trust Preferred Securities. The Asset
Trust Common Security Certificates evidencing the Asset Trust Common
Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom
as may be required by ordinary usage, custom or practice.
(b) The Asset Trust shall issue no securities or other interests in the
assets of the Asset Trust other than the Asset Trust Preferred Securities and
the Asset Trust Common Securities.
(c) The Certificates shall be signed on behalf of the Asset Trust by a
Trust Administrator. Such signature shall be the manual or facsimile signature
of any present or any future Trust Administrator. In case a Trust Administrator
of the Asset Trust who shall have signed any of the Certificates shall cease to
be such Trust Administrator before the Certificates so signed shall be delivered
by the Asset Trust, such Certificates nevertheless may be delivered as though
the person who signed such Certificates had not ceased to be such Trust
Administrator; and any Certificate may be signed on behalf of the Asset Trust by
such persons who, at the actual date of execution of such Certificate, shall be
the Trust Administrators of the Asset Trust, although at the date of the
execution and delivery of the Declaration any such person was not such a Trust
Administrator. Certificates shall be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Trust
Administrators, as evidenced by their execution thereof, and may have such
letters, numbers or other marks of identification or designation and such
legends or endorsements as the Trust Administrators may deem appropriate, or as
may be required to comply with any law or with any rule or regulation of any
stock exchange on which Asset Trust Securities may be listed, or to conform to
usage.
An Asset Trust Preferred Security Certificate shall not be valid until
authenticated by the manual signature of an authorized signatory of the Asset
Property Trustee. Such signature shall be conclusive evidence that the Asset
Trust Preferred Security Certificate has been authenticated under this
Declaration.
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Upon a written order of the Asset Trust signed by one Trust Administrator,
the Asset Property Trustee shall authenticate the Certificates for original
issue.
The Asset Property Trustee may appoint an authenticating agent acceptable
to the Asset Trust to authenticate Certificates. An authenticating agent may
authenticate Certificates whenever the Asset Property Trustee may do so. Each
reference in this Declaration to authentication by the Asset Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Asset Property Trustee to deal with the Sponsor or an Affiliate of
the Sponsor.
(d) The consideration received by the Asset Trust for the issuance of the
Asset Trust Securities shall constitute a contribution to the capital of the
Asset Trust and shall not constitute a loan to the Asset Trust.
(e) Upon issuance of the Asset Trust Securities as provided in this
Declaration, the Asset Trust Securities so issued shall be deemed to be validly
issued, fully paid and non-assessable, subject to Section 9.1 with respect to
the Asset Trust Common Securities.
(f) Every Person, by virtue of having become a Holder or a beneficial
owner of a Asset Trust Preferred Security in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the terms of the Asset Trust
Securities and the Asset Trust Guarantee.
(g) The Asset Trust Securities shall have no preemptive rights.
Section 7.2 DISTRIBUTIONS ON ASSET TRUST SECURITIES.
(a) Subject to paragraphs (c) and (d) of this Section 7.2,
Distributions on each Asset Trust Preferred Security shall be payable at a
variable per annum rate on the stated liquidation amount of US$1,000 per
Asset Trust Preferred Security, which shall be equal to the variable
interest rate on the Debentures plus 0.07% . The amount of Distributions on
each Asset Trust Preferred Security payable for any Distribution Period
shall be computed on the basis of the actual number of days elapsed in a
year consisting of 360-days. "Distributions" shall mean ordinary quarterly
distributions.
(b) Subject to paragraphs (c) and (d) of this Section 7.2,
Distributions on the Asset Trust Preferred Securities shall be payable in
cash quarterly in arrears on each Preferred Distribution Payment Date,
commencing October 15, 1999. Distributions on the Asset Trust Preferred
Securities shall be payable to the Holders, as their names appear on the
books and records of the Asset Trust on the relevant record dates, which
relevant record dates shall be the Business Day immediately preceding each
Preferred Distribution Payment Date. In the event that the Asset Trust
Preferred Securities are not held by the Capital Property Trustee and are
not in book-entry form, the relevant record dates shall be the 15th day
preceding each Preferred Distribution Payment Date. If any Preferred
Distribution Payment Date is not a Business Day, then payment of the
Distribution payable on such date shall be made on the next succeeding day
that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made
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on the immediately preceding Business Day, in each case with the same force
and effect as if made on such Preferred Distribution Payment Date.
(c) The right of Holders of the Asset Trust Preferred Securities to
receive Distributions is non-cumulative. Accordingly, if the Asset Trust
does not pay a Distribution to Holders of the Asset Trust Preferred
Securities on any Preferred Distribution Payment Date in respect of the
Distribution Period ended immediately prior to such Distribution Date, the
Holders of Asset Trust Preferred Securities shall have no right to receive
such Distribution, and the Asset Trust shall have no obligation to pay a
Distribution in respect of such Distribution Period, whether or not
Distributions are paid by the Asset Trust in respect of any other
Distribution Period in the future.
(d) The Asset Property Trustee, on behalf of the Asset Trust, shall
make a Distribution to Holders of Asset Trust Preferred Securities on any
Preferred Distribution Payment Date pursuant to paragraphs (a) and (b) of
this Section 7.2 only out of funds in the Asset Property Account that
represent interest, other than Deferred Interest, paid with respect to the
interest payment date for the Debentures that corresponds to such Preferred
Distribution Payment (such funds referred to herein as, "Preferred
Distribution Funds"). In the event that Preferred Distribution Funds are
insufficient to pay a Distribution on the Asset Trust Preferred Securities
in full on any Preferred Distribution Payment Date in accordance with
paragraphs (a) and (b) of this Section 7.2, the Asset Trust shall, and the
Asset Property Trustee is directed to, pay such Distribution Pro Rata to
the extent of Preferred Distribution Funds then held in the Asset Property
Account to the Holders of the Asset Trust Preferred Securities. If the
Asset Property Trustee, as the holder of the Debentures for the benefit of
the Holders of the Asset Trust Securities, receives notice from the trustee
under the Indenture of any election or deemed election by the Company to
defer interest payments on the Debentures, the Asset Property Trustee shall
give notice of such election to the Holders of the Asset Trust Preferred
Securities.
(e) On each Common Distribution Payment Date, the Asset Property
Trustee, on behalf of the Asset Trust, shall make a Distribution to the
Asset Trust Common Securities Holder of available funds in the Asset
Property Account, other than Preferred Distribution Funds and funds
necessary for the payment of all amounts owing to creditors of the Asset
Trust prior to the next succeeding Common Distribution Payment Date (such
funds referred to herein as, "Eligible Common Distribution Funds"), an
amount equal to the maximum amount of Eligible Common Distribution Funds
that may be distributed to the Asset Trust Common Securities Holder in
accordance with the following guidelines (such amount being "Common
Distribution Funds"):
(i) The Asset Property Trustee shall not make any
Distribution to the Asset Trust Common Securities Holder if, on any
Common Distribution Payment Date, after giving effect to such
Distribution, such Distribution would cause the Book Value of the
Debentures to comprise more than 95% of the sum of the Book Values
of the Debentures and the Eligible Debt Securities then held by the
Asset Trust.
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(ii) So long as the Debenture Issuer has not deferred
interest payments on the Debentures, unless the failure to make
such Distribution to the Asset Trust Common Securities Holder would
cause the Book Value of the Debentures to comprise less than 92% of
the sum of the Book Values of the Debentures and the Eligible Debt
Securities then held by Asset Trust, the Asset Property Trustee
shall not make any such Distribution to such Holder. If the failure
to make such Distribution would cause the Debenture to comprise
less than 92% of the sum of the Book Values of the Debentures and
the Eligible Debt Securities then held by the Asset Trust, the
Asset Property Trustee shall distribute such Common Distribution
Funds to the Asset Trust Common Securities Holder only to the
extent necessary to ensure that the Book Value of the Debentures
comprises no less than 92% of the sum of the Book Values of the
Debentures and the Eligible Debt Securities then held by the Asset
Trust.
(iii) After the Debenture Issuer defers interest payments
on the Debentures, unless the failure to make such Distribution to
the Asset Trust Common Securities Holder would cause the Book Value
of the Debentures to comprise less than 85% of the sum of the Book
Values of the Debentures and the Eligible Debt Securities then held
by the Asset Trust, the Asset Property Trust shall not make any
such Distribution. If the failure to make such Distribution would
cause the Debenture to comprise less than 85% of the sum of the
Book Values of the Debentures and the Eligible Debt Securities then
held by the Asset Trust, the Asset Property Trustee shall
distribute such Common Distribution Funds to the Asset Trust Common
Securities Holder only to the extent necessary to ensure that the
Book Value of the Debentures comprises no less than 85% of the sum
of the Book Values of the Debentures and the Eligible Debt
Securities then held by the Asset Trust.
(iv) Notwithstanding the foregoing, the Asset Property
Trustee shall distribute to the Asset Trust Common Securities
Holder Common Distribution Funds in an amount equal to no greater
than 37% of the net income of Asset Trust for the calendar year in
which the related Common Distribution Payment Date falls (such
amount, a "Tax Amount"), that is attributable to Asset Trust's
assets other than payments of Deferred Interest made on the
Debentures to the extent such Tax Amount has not already been
distributed to such Holder for such calendar year.
The amount of such Common Distribution Funds to be distributed on each
Common Distribution Payment Date shall be certified by the Trust
Administrators in an Officers' Certificate which shall be delivered to the
Asset Property Trustee no later than the Business Day prior to each Common
Distribution Payment Date and on which the Asset Property Trustee, absent
bad faith, may conclusively rely.
(f) If any Common Distribution Payment Date is not a Business Day,
then payment of the Distribution payable on such date shall be made on the
next succeeding day that is a Business Day (and without any interest or
other payment in respect of any
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such delay) except that, if such Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such Common Distribution Payment Date.
(g) If the Capital Property Trustee on behalf of the Capital Trust is
the Holder of the Asset Trust Preferred Securities, all distributions of
cash shall be made by wire transfer of same day funds to such Holder by
10:00 a.m., New York City time, on the applicable Preferred Distribution
Payment Date.
Section 7.3 REDEMPTION OF ASSET TRUST PREFERRED SECURITIES.
(a) If the Company redeems the Debentures, in whole or in part, at any
time on or after July 15, 2009 or at any time a Debenture Special Event has
occurred and is continuing, the Asset Property Trustee shall, in accordance with
Section 7.4, redeem Asset Trust Preferred Securities having a total liquidation
amount equal to a like amount of the principal amount of the Debentures being
redeemed, at an amount per Asset Trust Preferred Security equal to $1,000 plus
accrued and unpaid distributions (the "Redemption Price"). In the event the
Capital Trust is liquidated in connection with a Capital Trust Special Event,
the Asset Trust may only redeem the Asset Trust Preferred Securities in whole
but not in part. Holders of Asset Trust Preferred Securities will be given not
less than 30 nor more than 60 days notice of such redemption.
(b) If fewer than all the outstanding Asset Trust Preferred Securities are
to be so redeemed, the Asset Trust Preferred Securities will be redeemed Pro
Rata and the Asset Trust Preferred Securities to be redeemed will be redeemed as
described in Section 7.4(b) below.
Section 7.4 REDEMPTION PROCEDURES.
(a) Notice of any redemption of the Asset Trust Preferred Securities (a
"Redemption Notice") will be given by the Asset Trust, or at the Asset Trust's
request, by the Asset Property Trustee in the name and at the expense of the
Asset Trust, by mail to each Holder of Asset Trust Preferred Securities to be
redeemed or exchanged not fewer than 30 nor more than 60 days before the date
fixed for redemption. In case of any redemption at the election of the Asset
Trust, the Asset Trust shall, at least 45 days and no more than 60 days prior to
any date fixed for redemption, notify the Asset Property Trustee of such date
and the aggregate liquidation amount of the Asset Trust Preferred Securities to
be redeemed and provide a copy of the Redemption Notice.
Each Redemption Notice shall identify the Asset Trust Preferred
Securities to be redeemed (including CUSIP numbers) and shall state:
(1) the date fixed for redemption;
(2) the Redemption Price;
(3) that on the date fixed for redemption, the Redemption Price will
become due and payable upon each Asset Trust Preferred Security to be
redeemed and that Distributions will cease to accrue on and after such
date;
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(4) the place or places where such Asset Trust Preferred Securities
are to be surrendered for payment of the Redemption Price; and
(5) any information required by Section 7.14.
For purposes of the calculation of the date of redemption and the
dates on which notices are given pursuant to this Section 7.4, a Redemption
Notice shall be deemed to be given on the day such notice is first mailed
by first-class mail, postage prepaid, to Holders of Asset Trust Preferred
Securities. Each Redemption Notice shall be addressed to the Holders of
Asset Trust Preferred Securities at the address of each such Holder
appearing in the books and records of the Asset Trust. No defect in the
Redemption Notice or in the mailing of either thereof with respect to any
Holder shall affect the validity of the redemption proceedings with respect
to any other Holder.
(b) In the event that fewer than all the outstanding Asset Trust Preferred
Securities are to be redeemed, the Asset Trust Preferred Securities to be
redeemed shall be redeemed Pro Rata from each Holder of Asset Trust Preferred
Securities, provided, that in respect of Asset Trust Preferred Securities
registered in the name of and held of record by DTC or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the distribution of
the proceeds of such redemption will be made to DTC or its nominee (or any
successor Clearing Agency or its nominee) or such nominee in accordance with the
procedures applied by such agency or nominee. In the event that the Asset Trust
Preferred Securities do not remain in book-entry only form and fewer than all of
the outstanding Asset Trust Preferred Securities are to be redeemed, the Asset
Trust Preferred Securities shall be redeemed Pro Rata or pursuant to the rules
of any securities exchange on which the Asset Trust Preferred Securities are
listed.
(c) If Asset Trust Preferred Securities are to be redeemed and the Asset
Trust gives a Redemption Notice, which notice may only be issued if the Asset
Trust Preferred Securities are redeemed as set out in this Section 7.4 (which
notice will be irrevocable), then (A) while the Trust Preferred Securities are
in book-entry only form, by 1:00 p.m., New York City time, on the redemption
date, the Asset Property Trustee, upon receipt of such funds, will deposit
irrevocably with the DTC (in the case of book-entry form Asset Trust Preferred
Securities) or its nominee (or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with respect to the Trust
Preferred Securities and (B) with respect to Asset Trust Preferred Securities
issued in definitive form, the Asset Property Trustee will pay the relevant
Redemption Price to the Holders of such Asset Trust Preferred Securities by
check mailed to the address of the relevant Holder appearing on the books and
records of the Asset Trust on the redemption date. If a Redemption Notice shall
have been given and funds deposited as required, then immediately prior to the
close of business on the date of such deposit, distributions will cease to
accrue on the Asset Trust Preferred Securities so called for redemption and all
rights of Holders of such Asset Trust Preferred Securities will cease, except
the right of the Holders of such Asset Trust Preferred Securities to receive the
Redemption Price, but without interest on such Redemption Price. If any date
fixed for redemption of Asset Trust Preferred Securities is not a Business Day,
then payment of the Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect of any such delay), except that, if such Business Day falls
in the next calendar year, such payment will be made on the immediately
preceding Business Day, in each case with the same
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force and effect as if made on such date fixed for redemption. If payment of the
Redemption Price in respect of any Asset Trust Preferred Securities is
improperly withheld or refused and not paid by the Sponsor as guarantor pursuant
to the Asset Trust Preferred Guarantee, Distributions on such Asset Trust
Preferred Securities will continue to accrue at the then applicable rate from
the original redemption date to the actual date of payment, in which case the
actual payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price. For these purposes, the applicable
Redemption Price shall not include Distributions which are being paid to Holders
who were Holders on a relevant record date. Upon satisfaction of the foregoing
conditions, then immediately prior to the close of business on the date of such
deposit or payment, all rights of Holders of such Asset Trust Preferred
Securities so called for redemption will cease, except the right of the Holders
to receive the Redemption Price, but without interest on such Redemption Price,
and from and after the date fixed for redemption, such Asset Trust Preferred
Securities will not accrue distributions or bear interest.
Neither the Trust Administrators nor the Asset Trust shall be
required to register or cause to be registered the transfer or exchange of
any Asset Trust Preferred Securities that have been called for redemption,
except in the case of any Asset Trust Preferred Securities being redeemed
in part, any portion thereof not to be redeemed.
(d) Subject to the provisions of this Section 7.4 and applicable law
(including, without limitation, federal securities laws), if Asset Trust
Preferred Securities have been distributed to the holders of Capital Trust
Preferred Securities, the Company or any of its subsidiaries may at any time and
from time to time purchase outstanding Asset Trust Preferred Securities by
tender, in the open market, or by private agreement.
Section 7.5 VOTING RIGHTS OF ASSET TRUST PREFERRED SECURITIES.
(a) Except as provided under this Article VII and as otherwise required by
the Business Trust Act, the Trust Indenture Act and other applicable law, the
Holders of the Asset Trust Preferred Securities will have no voting rights.
(b) The Holders of a Majority in Liquidation Amount of the Asset Trust
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Asset Property
Trustee, or to direct the exercise of any trust or power conferred upon the
Asset Property Trustee under the Declaration, including the right to direct the
Asset Property Trustee, as Holder of the Debentures, to (i) exercise the
remedies available to it under the Debentures (A) to enforce the Asset Trust's
creditors rights and other rights with respect to the Debentures, (B) to enforce
the rights of the Holders of the Asset Trust Preferred Securities under the
Asset Trust Preferred Guarantee, and (C) to enforce the rights of the Holders of
the Asset Trust Preferred Securities to receive Distributions (only if and to
the extent such distributions are due pursuant to Sections 7.2(c) and (d)) on
the Asset Trust Preferred Securities or (ii) to enforce the terms of the Asset
Trust Preferred Guarantee.
(c) If the Asset Property Trustee fails to enforce its rights under the
Debentures after a Holder of record of Asset Trust Preferred Securities has made
a written request, such Holder of record of Asset Trust Preferred Securities
may, to the extent permitted by applicable law, institute a legal proceeding
directly against the Company to enforce the Asset Property Trustee's
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rights under the Debentures. Notwithstanding the foregoing, if an Asset Trust
Enforcement Event has occurred and is continuing and such event is attributable
to the failure of the Debenture Issuer to make any required payment when due on
the Debenture or to terminate an Extension Period in accordance with the terms
of the Debentures, then a Holder of Asset Trust Preferred Securities may
directly institute a proceeding against the Debenture Issuer for enforcement of
such payment with respect to such Debenture.
In addition, the Asset Trust acknowledges that, for so long as the Capital
Property Trustee holds any Asset Trust Preferred Securities, if the Asset
Property Trustee fails to enforce its rights on behalf of the Asset Trust under
the Debentures after a holder of Capital Trust Preferred Securities has made a
written request, a holder of record of Capital Trust Preferred Securities may to
the fullest extent permitted by law on behalf of the Asset Trust directly
institute a legal proceeding against the Company under the Debentures, without
first instituting any legal proceeding against the Capital Property Trustee, the
Capital Trust, the Asset Property Trustee or the Asset Trust. In any event, for
so long as the Capital Trust is a Holder of any Asset Trust Preferred
Securities, if a Capital Trust Enforcement Event has occurred and is continuing
and such event is attributable to the failure of the Debenture Issuer to make
any required payment when due on the Debentures, then the Asset Trust
acknowledges that a holder of Capital Trust Preferred Securities may to the
fullest extent permitted by law on behalf of the Asset Trust directly institute
a proceeding against the Company with respect to the Debentures for enforcement
of payment. Under no circumstances shall the Asset Property Trustee, any holder
of Asset Trust Preferred Securities or any holder of Capital Trust Preferred
Securities have authority to cause Distributions on the Asset Trust Preferred
Securities to be made.
Solely for purposes of determining whether the Asset Trust has not declared
and paid Distributions on the Asset Trust Preferred Securities for more than
twenty (20) quarterly periods even though the Debenture Issuer has obtained
Regulatory Approval to resume interest payments on the Debentures, Distributions
shall be deemed to remain in arrears, notwithstanding any payments in respect
thereof, until Distributions in full have been or contemporaneously are paid
with respect to all quarterly periods terminating on or prior to the date of
payment of such Distributions in full.
(d) Any required approval or direction of Holders of Asset Trust Preferred
Securities may be given at a separate meeting of Holders of Asset Trust
Preferred Securities convened for such purpose, at a meeting of all of the
Holders of Asset Trust Securities or pursuant to written consent. The Trust
Administrators will cause a notice of any meeting at which Holders of Asset
Trust Preferred Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Asset Trust Preferred Securities. Each such notice will
include a statement setting forth the following information: (i) the date of
such meeting or the date by which such action is to be taken; (ii) a description
of any resolution proposed for adoption at such meeting on which such Holders
are entitled to vote or of such matter upon which written consent is sought; and
(iii) instructions for the delivery of proxies or consents.
(e) No vote or consent of the Holders of Trust Preferred Securities will
be required for the Trust to redeem and cancel Trust Preferred Securities in
accordance with the Declaration.
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(f) Notwithstanding that Holders of Asset Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Asset Trust Preferred Securities that are beneficially owned at such time
by the Company or any entity directly or indirectly controlled by, or under
direct or indirect common control with, the Company, shall not be entitled to
vote or consent and shall, for purposes of such vote or consent, be treated as
if such Asset Trust Preferred Securities were not outstanding; provided,
however, that persons (other than Affiliates of the Company) to whom the Company
or any of its subsidiaries have pledged Asset Trust Preferred Securities may
vote or consent with respect to such pledged Asset Trust Preferred Securities
pursuant to the terms of such pledge.
(g) Holders of the Asset Trust Preferred Securities will have no rights to
appoint or remove the Trust Administrators, who may be appointed, removed or
replaced solely by the Company, as the Asset Trust Common Securities Holder.
Section 7.6 VOTING RIGHTS OF TRUST COMMON SECURITIES.
(a) Except as provided under Section 6.1(b) or this Section 7.6 or as
otherwise required by the Business Trust Act, the Trust Indenture Act or other
applicable law or provided by the Declaration, the Holders of the Asset Trust
Common Securities will have no voting rights.
(b) The Holders of the Asset Trust Common Securities are entitled, in
accordance with Article VI of the Declaration, to vote to appoint, remove or
replace any Trustee or to increase or decrease the number of Trustees.
(c) No vote or consent of the Holders of the Asset Trust Common Securities
shall be required for the Asset Trust to redeem and cancel Asset Trust Common
Securities in accordance with the Declaration and the terms of the Asset Trust
Securities.
Section 7.7 PAYING AGENT.
In the event that any Asset Trust Preferred Securities are not in book-
entry only form, the Asset Trust shall maintain in the Borough of Manhattan,
City of New York, State of New York, an office or agency where the Asset Trust
Preferred Securities may be presented for payment ("Paying Agent"). The Asset
Trust may appoint the paying agent and may appoint one or more additional paying
agents in such other locations as it shall determine. The term "Paying Agent"
includes any additional paying agent. The Asset Trust may change any Paying
Agent without prior notice to the Holders. The Asset Trust shall notify the
Asset Property Trustee of the name and address of any Paying Agent not a party
to this Declaration. If the Asset Trust fails to appoint or maintain another
entity as Paying Agent, the Asset Property Trustee shall act as such. The Asset
Trust or any of its Affiliates may act as Paying Agent. The Bank of New York
shall initially act as Paying Agent for the Asset Trust Preferred Securities and
the Asset Trust Common Securities. In the event the Asset Property Trustee
shall no longer be the Paying Agent, the Asset Trust shall appoint a successor
(which shall be a bank or trust company acceptable to the Debenture Issuer) to
act as Paying Agent. The Paying Agent shall be permitted to resign as Paying
Agent upon 30 days' written notice to the Asset Property Trustee and the
Debenture Issuer.
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Section 7.8 TRANSFER OF SECURITIES.
(a) The Asset Trust shall cause to be kept at the Corporate Trust Office
of the Asset Property Trustee a register (the register maintained in such office
being herein sometimes referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Asset Trust shall
provide for the registration of Asset Trust Preferred Securities and of
transfers of Asset Trust Preferred Securities. The Asset Property Trustee is
hereby appointed "Security Registrar" for the purpose of registering Asset Trust
Preferred Securities and transfers of Asset Trust Preferred Securities as herein
provided.
(b) Upon surrender for registration of transfer of any Asset Trust
Preferred Security at an office or agency of the Trust designated for such
purpose, the Asset Trust shall execute, and the Asset Property Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Asset Trust Preferred Securities of any authorized
denominations and of a like aggregate principal amount.
(c) At the option of the Holder, Asset Trust Preferred Securities may be
exchanged for other Asset Trust Preferred Securities of any authorized
denominations and of a like aggregate liquidation amount, upon surrender of the
Asset Trust Preferred Securities to be exchanged at such office or agency.
Whenever any Asset Trust Preferred Securities are so surrendered for exchange,
the Asset Trust shall execute, and the Asset Property Trustee shall authenticate
and deliver, the Asset Trust Preferred Securities which the Holder making the
exchange is entitled to receive.
(d) Every Asset Trust Preferred Security presented or surrendered for
registration of transfer or for exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Asset Trust and the Security Registrar, duly executed, by the Holder thereof or
his attorney duly authorized in writing.
(e) No service charge shall be made for any registration of transfer or
exchange of Asset Trust Preferred Securities, but the Asset 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
Asset Trust Preferred Securities.
(f) If the Asset Trust Preferred Securities are to be redeemed in part,
the Asset Trust shall not be required (A) to issue, register the transfer of or
exchange any Asset Trust Securities during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of any
such Asset Trust Preferred Securities selected for redemption under Section 7.4
and ending at the close of business on the day of such mailing, or (B) to
register the transfer of or exchange any Asset Trust Preferred Security so
selected for redemption in whole or in part, except the unredeemed portion of
any Asset Trust Preferred Security being redeemed in part.
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Section 7.9 MUTILATED, DESTROYED, LOST OR STOLEN CERTIFICATES.
If:
(a) any mutilated Certificates should be surrendered to the Trust
Administrators, or if the Trust Administrators and the Asset Property Trustee
shall receive evidence to their satisfaction of the destruction, loss or theft
of any Certificate; and
(b) there shall be delivered to the Trust Administrators and the Asset
Property Trustee such security or indemnity as may be required by them to keep
each of them, the Sponsor and the Asset Trust harmless, then, in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
any Trust Administrator on behalf of the Asset Trust shall execute and deliver,
in exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like denomination. In connection with the
issuance of any new Certificate under this Section 7.9, the Trust Administrators
and the Asset Property Trustee may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in connection
therewith. Any duplicate Certificate issued pursuant to this Section shall
constitute conclusive evidence of an ownership interest in the relevant Asset
Trust Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 7.10 DEEMED SECURITY HOLDERS.
The Trustees may treat the Person in whose name any Certificate shall be
registered on the books and records of the Asset Trust as the sole holder of
such Certificate and of the Asset Trust Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Asset Trust Securities
represented by such Certificate on the part of any Person, whether or not the
Asset Trust shall have actual or other notice thereof.
Section 7.11 GLOBAL SECURITIES.
If the Asset Trust shall establish that the Asset Trust Preferred
Securities are to be issued in the form of one or more fully registered, global
Asset Trust Preferred Securities Certificates ("Global Securities") to be
delivered to DTC, the initial Depositary, by the Asset Trust, then a Trust
Administrator on behalf of the Asset Trust shall execute and the Asset Property
Trustee shall authenticate and deliver one or more Global Securities that (i)
shall represent and shall be denominated in an amount equal to the aggregate
liquidation amount of all of the Asset Trust Preferred Securities to be issued
in the form of Global Securities and not yet cancelled, (ii) shall be registered
in the name of the Depositary for such Global Security or Asset Trust Preferred
Securities or the nominee of such Depositary, and (iii) shall be delivered by
the Asset Property Trustee to such Depositary or pursuant to such Depositary's
instructions. Global Securities shall bear a legend substantially to the
following effect:
"This Trust Preferred Security is a Global Security within the meaning
of the Declaration hereinafter referred to and is registered in the name of
a
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Depositary or a nominee of a Depositary. Notwithstanding the provisions of
Section 7.8 of the Declaration, unless and until it is exchanged in whole
or in part for Trust Preferred Securities in definitive registered form, a
Global Security representing all or a part of the Trust Preferred
Securities may not be transferred in the manner provided in Section 7.8 of
the Declaration except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary or by such Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary. Every Trust
Preferred Security delivered upon registration or transfer of, or in
exchange for, or in lieu of, this Global Security shall be a Global
Security subject to the foregoing, except in the limited circumstances
described above. Unless this certificate is presented by an authorized
representative of 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 in such other name as is requested by an
authorized representative of DTC (and any payment is to be 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."
Definitive Asset Trust Preferred Securities issued in exchange for all or a
part of a Global Security pursuant to this Section 7.11 shall be registered in
such names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Asset Property Trustee. Upon execution and authentication, the
Asset Property Trustee shall deliver such definitive Asset Trust Preferred
Securities to the persons in whose names such definitive Asset Trust Preferred
Securities are so registered.
At such time as all interests in Global Securities have been redeemed,
repurchased or canceled, such Global Securities shall be, upon receipt thereof,
canceled by the Asset Property Trustee in accordance with standing procedures
and instructions existing between the Depositary and the Custodian. At any time
prior to such cancellation, if any interest in Global Securities is exchanged
for definitive Asset Trust Preferred Securities, redeemed, canceled or
transferred to a transferee who receives definitive Trust Preferred Securities
therefor or any definitive Asset Trust Preferred Security is exchanged or
transferred for part of Global Securities, the liquidation amount of such Global
Securities shall, in accordance with the standing procedures and instructions
existing between the Depositary and the Custodian, be reduced or increased, as
the case may be, and an endorsement shall be made on such Global Securities by
the Asset Property Trustee or the Custodian, at the direction of the Asset
Property Trustee, to reflect such reduction or increase.
The Asset Trust and the Asset Property Trustee may for all purposes,
including the making of payments due on the Asset Trust Preferred Securities,
deal with the Depositary as the authorized representative of the Holders for the
purposes of exercising the rights of Holders hereunder. The rights of the owner
of any beneficial interest in a Global Security shall be limited to those
established by law and agreements between such owners and depositary
participants; provided that no such agreement shall give any rights to any
person against the Asset Trust or the
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Asset Property Trustee without the written consent of the parties so affected.
Multiple requests and directions from and votes of the Depositary as Holder of
Asset Trust Preferred Securities in global form with respect to any particular
matter shall not be deemed inconsistent to the extent they do not represent an
amount of Asset Trust Preferred Securities in excess of those held in the name
of the Depositary or its nominee.
If at any time the Depositary for any Asset Trust Preferred Securities
represented by one or more Global Securities notifies the Asset Trust that it is
unwilling or unable to continue as Depositary for such Asset Trust Preferred
Securities or if at any time the Depositary for such Asset Trust Preferred
Securities shall no longer be eligible under this Section 7.11, the Asset Trust
shall appoint a successor Depositary with respect to such Asset Trust Preferred
Securities. If a successor Depositary for such Asset Trust Preferred Securities
is not appointed by the Asset Trust within 60 days after the Asset Trust
receives such notice or becomes aware of such ineligibility, the Asset Trust's
election that such Asset Trust Preferred Securities be represented by one or
more Global Securities shall no longer be effective and a Trust Administrator on
behalf of the Asset Trust shall execute, and the Asset Property Trustee will
authenticate and deliver Asset Trust Preferred Securities in definitive
registered form, in any authorized denominations, in an aggregate liquidation
amount equal to the liquidation amount of the Global Security or Asset Trust
Preferred Securities representing such Asset Trust Preferred Securities in
exchange for such Global Security or Asset Trust Preferred Securities.
The Asset Trust may at any time and in its sole discretion determine that
the Asset Trust Preferred Securities issued in the form of one or more Global
Securities shall no longer be represented by a Global Security or Asset Trust
Preferred Securities. In such event a Trust Administrator on behalf of the
Asset Trust shall execute, and the Asset Property Trustee, shall authenticate
and deliver, Asset Trust Preferred Securities in definitive registered form, in
any authorized denominations, in an aggregate liquidation amount equal to the
liquidation amount of the Global Security or Asset Trust Preferred Securities
representing such Asset Trust Preferred Securities, in exchange for such Global
Security or Asset Trust Preferred Securities.
If at any time an Asset Enforcement occurs and is continuing, if requested
by a Holder, a Trust Administrator on behalf of the Asset Trust shall execute,
and the Capital Property Trustee shall authenticate and deliver, Asset Trust
Preferred Securities in definitive registered form, in any authorized
denominations, in an aggregate liquidation amount equal to the aggregate
liquidation amount of the Asset Trust Preferred Securities requested by such
Holder, in exchange for the portion of the Global Security equal to such Asset
Trust Preferred Securities.
Notwithstanding any other provisions of this Declaration (other than the
provisions set forth in Section 7.13(a)), Global Securities may not be
transferred as a whole except by the Depositary to a nominee of the Depositary
or by a nominee of the Depositary to the Depositary or another nominee of the
Depositary or by the Depositary or any such nominee to a successor Depositary or
a nominee of such successor Depositary.
Interests of beneficial owners in Global Security may be transferred or
exchanged for definitive Asset Trust Preferred Securities and definitive Asset
Trust Preferred Securities may be transferred or exchange for Global Securities
in accordance with rules of the Depositary and the provisions of Section 7.13.
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Any Asset Trust Preferred Security in global form may be endorsed with or
have incorporated in the text thereof such legends or recitals or changes not
inconsistent with the provisions of this Declaration as may be required by the
Custodian or the Depositary or required to comply with any applicable law or any
regulation thereunder or with Regulation S or with the rules and regulations of
any securities exchange upon which the Asset Trust Preferred Securities may be
listed or traded or to conform with any usage with respect thereto, or to
indicate any special limitations or restrictions to which any particular Asset
Trust Preferred Securities are subject.
Section 7.12 RESTRICTIVE LEGEND.
(a) Each Global Security and definitive Asset Trust Preferred Security
that constitutes a Restricted Security shall bear a legend substantially in the
form of the following legend (the "Restricted Securities Legend") on the face
thereof until two years after the later of the date of original issue and the
last date on which the Sponsor or any affiliate of the Sponsor was the owner of
such Asset Trust Preferred Securities (or any predecessor thereto) (the "Resale
Restriction Termination Date"), unless otherwise agreed by the Asset Trust and
the Holder thereof:
"THE HOLDER OF THIS ASSET TRUST PREFERRED SECURITY BY ITS
ACCEPTANCE HEREOF IS DEEMED TO HAVE AGREED TO BE BOUND BY THE
PROVISIONS OF A REGISTRATION RIGHTS AGREEMENT AMONG FIRST MARYLAND
BANCORP, ALLFIRST PREFERRED ASSET TRUST, ALLFIRST PREFERRED CAPITAL
TRUST AND LEHMAN BROTHERS INC. DATED JULY 9, 1999 (THE "REGISTRATION
RIGHTS AGREEMENT"). FIRST MARYLAND BANCORP WILL PROVIDE A COPY OF THE
REGISTRATION RIGHTS AGREEMENT TO A HOLDER WITHOUT CHARGE UPON WRITTEN
REQUEST TO ALLFIRST PREFERRED ASSET TRUST AT ITS PRINCIPAL PLACE OF
BUSINESS.
THIS ASSET TRUST PREFERRED SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER
THIS ASSET TRUST PREFERRED SECURITY 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, SUCH REGISTRATION.
THE HOLDER OF THIS TRUST PREFERRED SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS ASSET TRUST
PREFERRED SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH FIRST MARYLAND
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BANCORP OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS ASSET TRUST
PREFERRED SECURITY (OR ANY PREDECESSOR OF THIS ASSET TRUST PREFERRED
SECURITY) ONLY (A) TO FIRST MARYLAND BANCORP, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT, (C) SO LONG AS THIS ASSET TRUST PREFERRED SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT 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 ON RULE 144A, (D) PURSUANT
TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED
STATES WHEN THE MEANING OF REGULATION 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 UNDER THE SECURITIES
ACT THAT IS ACQUIRING THIS TRUST PREFERRED 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 ANY OTHER AVAILABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE
RIGHT OF THE ASSET TRUST AND THE COMPANY 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, CERTIFICATIONS AND/OR OTHER
INFORMATION SATISFACTORY TO EACH OF THEM AND (ii) PURSUANT TO CLAUSE
(E) TO REQUIRE THAT THE TRANSFEROR DELIVER TO THE ASSET TRUST A LETTER
FROM THE TRANSFEREE SUBSTANTIALLY IN THE FORM OF ANNEX A TO THE
OFFERING MEMORANDUM DATED JULY 9, 1999 RELATING TO THIS ASSET TRUST
PREFERRED SECURITY. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS ASSET TRUST PREFERRED SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE ASSET TRUST PREFERRED SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT LESS
THAN $100,000 (100 ASSET TRUST PREFERRED SECURITIES). ANY ATTEMPTED
TRANSFER OF ASSET TRUST PREFERRED SECURITIES IN A BLOCK HAVING A
LIQUIDATION AMOUNT OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID
AND OF NO LEGAL EFFECT WHATSOEVER. ANY SUCH PURPORTED TRANSFEREE
SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH ASSET TRUST PREFERRED
SECURITIES FOR ANY
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PURPOSE, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS
ON SUCH ASSET TRUST PREFERRED SECURITIES, AND SUCH PURPORTED
TRANSFEREE SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH
ASSET TRUST PREFERRED SECURITIES."
THE HOLDER OF THIS ASSET TRUST PREFERRED SECURITY BY ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT IF IT IS A PURCHASER
IN A SALE THAT OCCURS OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATIONS OF THE SECURITIES ACT, IT ACKNOWLEDGES THAT, UNTIL
EXPIRATION OF THE `40-DAY DISTRIBUTION COMPLIANCE PERIOD' WITHIN THE
MEANING OF RULE 903 OF REGULATION S, ANY OFFER OR SALE OF THIS ASSET
TRUST PREFERRED SECURITY SHALL NOT BE MADE BY IT TO A U.S. PERSON TO
OR FOR THE ACCOUNT OR BENEFIT OF A U.S. PERSON WITHIN THE MEANING OF
RULE 902(o) UNDER THE SECURITIES ACT."
(b) In all circumstances, each Global Security and definitive Asset Trust
Preferred Security shall bear the following legend:
"THE HOLDER OF THIS ASSET TRUST PREFERRED SECURITY BY ITS
ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i)
IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR (ii) THE
ACQUISITION AND HOLDING OF THIS ASSET TRUST PREFERRED SECURITY BY IT
IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF
THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR IS EXEMPT FROM
ANY SUCH PROHIBITION."
Any Asset Trust Preferred Security (or security issued in exchange or
substitution therefor) as to which such restrictions on transfer shall have
expired in accordance with their terms may, upon satisfaction of the
requirements of Section 7.12(b) and surrender of such Asset Trust Preferred
Security for exchange to the Security Registrar in accordance with the
provisions of this Section 7.12(a), be exchanged for a new Asset Trust
Preferred Security or Asset Trust Preferred Securities, of like tenor and
aggregate liquidation amount, which shall not bear the restrictive legend
required by this Section 7.12(a).
(c) Upon any sale or transfer of any Restricted Security (including any
interest in a Global Security) (i) that is effected pursuant to an effective
registration statement under the Securities Act or (ii) in connection with which
the Asset Property Trustee receives certificates and other information
(including an opinion of counsel, if requested) reasonably acceptable to the
Sponsor to the effect that such security will no longer be subject to the resale
restrictions under federal and state securities laws, then (A) in the case of a
Restricted Security in definitive form, the Asset Trust Preferred Security
registrar or co-registrar shall permit the holder thereof to exchange such
Restricted Security for a security that does not bear the legend set forth in
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Section 7.12(a), and shall rescind any such restrictions on transfer and (B) in
the case of Restricted Securities represented by a Global Security, such
Security shall no longer be subject to the restrictions contained in the legend
set forth in Section 7.12(a) (but still subject to the other provisions hereof).
In addition, any Asset Trust Preferred Security (or security issued in exchange
or substitution therefor) as to which the restrictions on transfer described in
the legend set forth in Section 7.12(a) have expired by their terms, may, upon
surrender thereof (in accordance with the terms of this Indenture) together with
such certifications and other information (including an opinion of counsel
having substantial experience in practice under the Securities Act and otherwise
reasonably acceptable to the Sponsor, addressed to the Sponsor and the Asset
Property Trustee and in a form acceptable to the Sponsor, to the effect that the
transfer of such Restricted Security has been made in compliance with Rule 144
or such successor provision) acceptable to the Sponsor, be exchanged for a new
Asset Trust Preferred Security or Asset Trust Preferred Securities of like tenor
and aggregate liquidation amount, which shall not bear the restrictive legends
set forth in Section 7.12(a).
Section 7.13 SPECIAL TRANSFER PROVISIONS.
So long as the Asset Trust Preferred Securities are eligible for book-entry
settlement, or unless otherwise required by law, upon any transfer of a
definitive Asset Trust Preferred Security to a QIB in accordance with Rule 144A,
unless otherwise requested by the transferor, and upon receipt of the definitive
Asset Trust Preferred Security being so transferred, together with a
certification from the transferor that the transferor reasonably believes the
transferee is a QIB (or other evidence satisfactory to the Asset Property
Trustee), the Asset Property Trustee shall make an endorsement on the Restricted
Global Security to reflect an increase in the aggregate liquidation amount of
the Restricted Global Security, and the Asset Property Trustee shall cancel such
definitive Asset Trust Preferred Security and cause, in accordance with the
standing instructions and procedures existing between the Depositary and the
Asset Property Trustees, the aggregate liquidation amount of Asset Trust
Preferred Securities represented by the Restricted Global Security to be
increased accordingly.
Section 7.14 CUSIP NUMBERS.
In issuing the Asset Trust Securities, the Asset Trust may use "CUSIP"
numbers (if then generally in use), and if so, shall use "CUSIP" numbers in
Redemption Notices as a convenience to Holders; provided that such notice may
state that no representation is made as to the correctness of such numbers
either as printed on Certificates or as contained in any Redemption Notice and
that reliance may be placed only on the other identification numbers printed on
the Certificates, and any such redemption shall not be affected by any defect in
or omission of such numbers. The Asset Trust shall promptly notify the Asset
Property Trustee of any change in the "CUSIP" numbers.
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ARTICLE VIII
CAPITAL CONTRIBUTIONS; REPRESENTATION OF
ASSET TRUST PREFERRED SECURITIES
HOLDERS' INTEREST; CAPITAL ACCOUNTS
Section 8.1 CAPITAL CONTRIBUTIONS.
(a) On the initial Closing Date, the Company shall make a capital
contribution to the Asset Trust by purchasing the Asset Trust Common Securities
for $7,674,873, which amount is equal to at least 7% of the total capital
contributions to the Asset Trust. The Asset Trust Common Securities Holder
shall, from time to time, make such additional capital contributions as are
necessary to maintain at all times a positive Capital Account balance equal to
at least one percent (1%) of the aggregate positive Capital Account balances of
all Holders of Asset Trust Securities at the end of such period.
(b) On the initial Closing Date, the Capital Trust shall, in exchange for
a definitive Asset Trust Preferred Security Certificate, contribute to the
capital of the Asset Trust $101,962,070, the amount of the gross proceeds from
the initial sale of the Series A Capital Trust Preferred Securities and the
Capital Trust Common Securities. No Asset Trust Preferred Securities Holder
shall at any time be required to make any additional capital contributions to
the Asset Trust, except as may be required by law.
Section 8.2 ASSET TRUST PREFERRED SECURITIES HOLDERS' INTEREST
REPRESENTED BY ASSET TRUST PREFERRED SECURITIES.
An Asset Trust Preferred Securities Holder's Interest shall be represented
by the Asset Trust Preferred Securities held by or on behalf of such Asset
Trust. Each Asset Trust Preferred Securities Holder's respective ownership of
Asset Trust Preferred Securities shall be set forth on the books and records of
the Asset Trust. Each Holder of Asset Trust Securities hereby agrees that its
interest in the Asset Trust shall for all purposes be personal property.
Section 8.3 CAPITAL ACCOUNTS.
(a) Establishment and Maintenance of Capital Accounts. The Asset Property
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Trustee, on behalf of the Asset Trust, shall establish and maintain a separate
account (the "Capital Account") for each Holder of Asset Trust Securities. The
initial balance of the Capital Account for each Holder of Asset Trust Securities
shall be the amount as set out opposite the name of each of the Holders of Asset
Trust Securities on Schedule 1 attached hereto. The Capital Account of each
Holder of Asset Trust Securities shall be increased by (i) the dollar amount of
any additional contributions made by such Holder, and (ii) allocations to such
Holder of Asset Trust Securities of income and gain (including income exempt
from tax). The Capital Account of each Holder of Asset Trust Securities shall be
decreased by (i) the dollar amount of any distributions made to such Holder of
Asset Trust Securities, and (ii) allocations to such Holder of Asset Trust
Securities of loss and deduction (including noncapital, nondeductible
expenditures not deductible in computing the Asset Trust's income or loss for
United States Federal income tax purposes).
(b) Compliance with Regulations. Notwithstanding any other provision of
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this Declaration to the contrary, the provisions of Section 8.3(a) hereof
regarding the maintenance of
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Capital Accounts shall be construed so as to comply with the Treasury
Regulations promulgated under section 704 of the Code. The Asset Trust Common
Securities Holder will, if required, direct the Trust Administrators to modify
such provisions to the minimum extent necessary to comply with such Treasury
Regulations.
Section 8.4 INTEREST ON CAPITAL CONTRIBUTIONS.
Except as provided herein, no Holder of Asset Trust Securities shall be
entitled to interest on or with respect to any capital contribution to the Asset
Trust.
Section 8.5 WITHDRAWAL AND RETURN OF CAPITAL CONTRIBUTIONS.
After the Closing Date, no Holder of Asset Trust Securities shall be
entitled to withdraw any part of such Holder's capital contribution to the Asset
Trust. No Holder of Asset Trust Securities shall be entitled to receive any
distributions from the Asset Trust, except as provided in this Declaration.
ARTICLE IX
ALLOCATIONS
Section 9.1 PROFITS AND LOSSES.
After giving effect to the special allocation provisions set forth in
Section 9.2 which special allocations shall take precedence over any allocations
made pursuant to this Section 9.1,
(a) the Asset Trust's Net Income for each Fiscal Period of the
Asset Trust shall be allocated as follows:
(i) First, to each Asset Trust Preferred Securities Holder
in an amount equal to the excess, if any, of (x) all Net Losses, if
any, allocated to each such Asset Trust Preferred Securities Holder
from the date of issuance of the Series A Asset Trust Preferred
Securities through and including the close of such Fiscal Period
pursuant to Section 9.1(b)(ii) below over (y) the amount of Net
Income, if any, allocated to each such Holder pursuant to this Section
9.1(a)(i) in all prior Fiscal Periods.
(ii) Second, to the Asset Trust Preferred Securities
Holders, an amount of Net Income equal to the excess of (x)
Distributions made on the Asset Trust Preferred Securities from the
initial Closing Date through and including the last day of such Fiscal
Period over (y) the amount of Net Income allocated to the Asset Trust
Preferred Securities Holders pursuant to this Section 9.1(a)(ii) in
all prior Fiscal Periods. Amounts allocated to all Asset Trust
Preferred Securities Holders shall be allocated among such Asset Trust
Preferred Securities Holders in proportion to the number of Asset
Trust Preferred Securities held by such Asset Trust Preferred
Securities Holders.
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(iii) Any remaining Net Income shall be allocated to the
Asset Trust Common Securities Holder.
(b) The Asset Trust's Net Loss for any Fiscal Period shall be
allocated as follows:
(i) First, to the Asset Trust Common Securities Holder
until the balance of the Asset Trust Common Securities Holder's
Capital Account is reduced to zero, provided, however, that the
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aggregate amount of Net Losses allocated to the Asset Trust Common
Securities Holder pursuant to this Section 9.1(b)(i) shall not exceed
the sum of six percent (6%) of the total capital contributions of all
Holders Asset Trust Securities plus the aggregate Net Income allocated
to the Asset Trust Common Securities Holder pursuant to this Section
9.1.
(ii) Second, among the Asset Trust Preferred Securities
Holders in proportion to their respective aggregate Capital Account
balances, until the Capital Account balances of such Asset Trust
Preferred Securities Holders are reduced to zero.
(iii) Any remaining Net Loss shall be allocated to the
Asset Trust Common Securities Holders.
(c) Daily Determination. For purposes of determining the
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profits, losses or any other items allocable to any period, profits, losses
and any such other items shall be determined on a daily basis, unless the
Asset Trust Common Securities Holder determines that another method is
permissible under Section 704 of the Code and the Treasury Regulations
promulgated thereunder and directs the Trust Administrators to use such
other method. Unless otherwise specified, such profits, losses or other
items shall be determined for each Fiscal Period.
(d) No later than by the 20th Business Day after the end of each
Fiscal Period, the Trust Administrators shall provide the Asset Property
Trustee with a statement setting forth the profits, losses and any such
other items to be determined, including Capital Account balances, for such
Fiscal Period and on which the Asset Property Trustee, absent bad faith,
may conclusively rely.
Section 9.2 SPECIAL ALLOCATIONS.
(a) All expenditures that are (i) incurred by, or on behalf of,
the Asset Trust and (ii) paid, or otherwise reimbursed, by the Asset Trust
Common Securities Holder out of its own funds shall be allocated entirely
to the Asset Trust Common Securities Holder.
(b) In the event any Holder of Asset Trust Securities
unexpectedly receives any adjustments, allocations or distributions
described in Treasury Regulation Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6), items of the Asset Trust's income (including gross income) shall be
specially allocated to such Holder of Asset Trust Securities in a manner
sufficient to eliminate the deficit, if any, in the balance of the Capital
Account of
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such Holder of Asset Trust Securities as quickly as possible. The foregoing
is intended to be a "qualified income offset" provision as described in
Treasury Regulation Section 1.704-1(b)(2)(ii)(d) and shall be interpreted
and applied in all respects in accordance with such Treasury Regulation.
(c) Section 704 Compliance. While this Declaration does not
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specifically provide for certain provisions required by Treasury Regulation
Sections 1.704-1(b) and 1.704-2 because those provisions apply to
transactions that are not expected to occur as regards the Asset Trust, the
Holders of Asset Trust Securities intend that the allocations under Section
9.1 conform to Treasury Regulations Sections 1.704-1(b) and 1.704-2
(including, without limitation, the minimum gain chargeback, chargeback of
partner nonrecourse debt minimum gain and partner nonrecourse debt
provisions of such Treasury Regulations), and, to the extent necessary due
to the occurrence of unexpected events, the Asset Trust Common Securities
Holder shall provide written direction to the Asset Property Trustee to
make such changes in the allocations under Section 9.1 as the Asset Trust
Common Securities Holder believes are reasonably necessary to meet the
requirements of such Treasury Regulations.
(d) Adjustment of Allocations. If the allocations set forth in
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this Article IX are adjusted by the Internal Revenue Service and the Tax
Matters Partner agrees to such adjustments, such allocations shall be
amended to the minimum extent necessary to conform with such adjustments.
(e) Additional Allocations. Notwithstanding the foregoing, if,
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upon the final dissolution and termination of the Asset Trust and after
taking into account all allocations of Net Income and Net Losses (and other
tax items) under this Article IX, the distributions to be made in
accordance with the positive Capital Account balances would result in a
distribution that would be different from a distribution under Article
XIII, then gross items of income and gain (and other tax items) for the
taxable year of the final dissolution and termination (and, to the extent
permitted under section 761(c) of the Code, gross items of income and gain,
and other tax items, for the immediately preceding taxable year) shall be
allocated to the Holders of Asset Trust Securities to increase or decrease
their respective Capital Account balances so that the final distribution
will occur in the same manner as a distribution under Section 13.4.
Section 9.3 WITHHOLDING.
The Asset Trust shall comply with withholding requirements under Federal,
state and local law and shall remit amounts withheld to and file required forms
with applicable jurisdictions. To the extent that the Asset Trust is required
to withhold and pay over any amounts to any authority with respect to
distributions or allocations to any Holder of Asset Trust Securities, the amount
withheld shall be deemed to be a distribution in the amount of the withholding
to the Holder of Asset Trust Securities. In the event of any claimed over-
withholding, Holder of Asset Trust Securities shall be limited to an action
against the applicable jurisdiction. If the amount withheld was not withheld
from actual distributions, the Asset Trust may reduce subsequent distributions
by the amount of such withholding. Each Holder of Asset Trust Securities agrees
to furnish the Asset Trust with any representations and forms as shall
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reasonably be requested by the Asset Trust to assist it in determining the
extent of, and in fulfilling, its withholding obligations.
ARTICLE X
ASSET TRUST INVESTMENTS
Section 10.1 INITIAL ASSET TRUST INVESTMENTS.
(a) All funds received by the Asset Trust will be invested by
the Asset Property Trustee on behalf of the Trust in the Debentures and
Eligible Debt Securities. Of the Initial Proceeds, $104,154,749 will be
used by the Asset Trust to purchase the Series A Debentures having an
aggregate principal amount of $105,310,000. The remaining funds from the
Initial Asset Trust Proceeds will be used to purchase Eligible Debt
Securities in accordance with the terms of the investment guidelines set
forth as Annex 1 to this Declaration.
(b) The Asset Trust shall apply approximately 95% of the Initial
Proceeds to purchase the Series A Debenture. The Asset Trust may purchase
the Series A Debentures only upon receipt of an opinion of the Independent
Financial Adviser to the effect that (i) if such Series A Debentures were
to be rated, at least one rating agency would rate Series A Debentures
investment grade at the time such Series A Debentures are purchased by the
Asset Trust, (ii) the Company would have been capable of issuing and
selling debt instruments with the same terms and conditions as to unrelated
third party investors, (iii) the terms and conditions of the Series A
Debentures are consistent with the terms and conditions of a public
offering or a private placement pursuant to Rule 144A under the Securities
Act of such Series A Debentures and are no more favorable to the Company
than could have been obtained from unrelated third party investors pursuant
to such a public offering or private placement of such Series A Debentures.
On the Closing Date, the Asset Trust shall invest $5,482,193 of such
Initial Proceeds in Eligible Debt Securities in accordance with the terms
of the investment guidelines set forth as Annex 1 to this Declaration. The
terms of the Debentures will be as set forth in the Indenture attached
hereto as Exhibit B.
Section 10.2 REINVESTMENT OF PAYMENTS RECEIVED BY THE ASSET TRUST.
The Asset Trust must invest an amount equal to at least 5% of the Initial
Proceeds in Eligible Debt Securities. Any payments received by the Asset Trust
in respect of its investments that are not distributed to Asset Trust Preferred
Securities Holders and the Asset Trust Common Securities Holder pursuant to
Section 7.2 of this Declaration will be reinvested by the Asset Property Trustee
on behalf of the Asset Trust only in Eligible Debt Securities in accordance with
the terms of the investment guidelines set forth as Annex 1 to this Declaration,
subject to restrictions of applicable law, including the 1940 Act.
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ARTICLE XI
DISSOLUTION AND TERMINATION OF ASSET TRUST
Section 11.1 DISSOLUTION AND TERMINATION OF ASSET TRUST.
(a) The Asset Trust shall dissolve upon the earliest of:
(i) the bankruptcy of the Holder of the Asset Trust Common
Securities or the Sponsor;
(ii) the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor; the consent of the Holder of at
least a Majority in Liquidation Amount of the Asset Trust Securities to the
filing of a certificate of cancellation with respect to the Asset Trust or
the revocation of the Sponsor's charter and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iii) the entry of a decree of judicial dissolution of the
Sponsor or the Asset Trust;
(iv) the time when all of the Asset Trust Securities shall have
matured or been called for redemption and the amounts then due shall have
been paid to the Holders in accordance with the terms of the Asset Trust
Securities; or
(v) before the issuance of any Asset Trust Securities, with
the consent of all of the Trust Administrators and the Sponsor.
As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a) and upon completion of the winding up of the Asset Trust,
the Trustees shall terminate the Asset Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.
(b) The provisions of Section 3.9 and Article IX shall survive
the termination of the Asset Trust.
Section 11.2 LIQUIDATION DISTRIBUTION UPON TERMINATION AND DISSOLUTION OF
THE ASSET TRUST.
The proceeds of liquidation shall be applied in the following order of:
(a) first, to creditors of the Asset Trust, including Holders of Asset
Trust Securities who are creditors, to the extent otherwise permitted by law, in
satisfaction of the liabilities of the Asset Trust (whether by payment or the
making of reasonable provisions for payment thereof), other than liabilities for
distributions (including distributions) to Holders of Asset Trust Securities;
(b) second, to the Asset Trust Preferred Securities Holders, an amount
equal to the aggregate liquidation preference of their Asset Trust Preferred
Securities, plus the amount of Distributions that are accrued and unpaid as of
the date of such liquidating distribution; and
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(c) thereafter, to the Asset Trust Common Securities Holder.
ARTICLE XII
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
Section 12.1 LIABILITY.
(a) Except as expressly set forth in this Declaration, the Asset
Trust Guarantee and the terms of the Asset Trust Securities, the Sponsor:
(i) shall not be personally liable for the return of any
portion of the capital contributions (or any return thereon) of
the Holders of the Asset Trust Securities which shall be made
solely from assets of the Asset Trust; and
(ii) shall not be required to pay to the Asset Trust or to
any Holder of Asset Trust Securities any deficit upon dissolution of the
Asset Trust or otherwise.
(b) The Holder of the Asset Trust Common Securities shall be
liable for all of the debts and obligations of the Asset Trust (other than
with respect to the Asset Trust Securities) to the extent not satisfied out
of the Asset Trust's assets.
(c) Pursuant to Section 3803(a) of the Business Trust Act, the
Holders of the Asset Trust Preferred Securities shall be entitled to the
same limitation of personal liability extended to stockholders of private
corporations for profit organized under the General Corporation Law of the
State of Delaware.
Section 12.2 EXCULPATION.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Asset Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith on
behalf of the Asset Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of the authority conferred on
such Indemnified Person by this Declaration or by law, except that an
Indemnified Person shall be liable or any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Asset Trust and upon such information,
opinions, reports or statements presented to the Asset Trust by any Person
as to matters the Indemnified Person reasonably believes are within such
other Person's professional or expert competence and who has been selected
with reasonable care by or on behalf of the Asset Trust, including
information, opinions, reports or statements as to the value and amount of
the assets, liabilities, profits, losses or any other facts pertinent to
the existence and
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amount of assets from which Distributions to Holders of Asset Trust
Securities might properly be paid.
Section 12.3 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, an Indemnified
Person has duties (including fiduciary duties) and liabilities relating
thereto to the Trust or to any other Covered Person, an Indemnified Person
acting under this Declaration shall not be liable to the Trust or to an
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise
existing at law or in equity (other than the duties imposed on the Asset
Property Trustee under the Trust Indenture Act), are agreed by the parties
hereto to replace such other duties and liabilities of such Indemnified
Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between any Indemnified Persons and any Covered Persons; or
(ii) whenever this Declaration or any other agreement
contemplated herein or therein provides that an Indemnified
Person shall act in a manner that is, or provides terms that are,
fair and reasonable to the Trust or any Holder of Asset Trust
Securities,
the Indemnified Person shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict,
agreement, transaction or situation and the benefits and burdens relating
to such interests, any customary or accepted industry practices and any
applicable generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall not
constitute a breach of this Declaration or any other agreement contemplated
herein or of any duty or obligation of the Indemnified Person at law or in
equity or otherwise.
(c) Whenever in this Declaration an Indemnified Person is
permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider
such interests and factors as it desires, including its own
interests, and shall have no duty or obligation to give any
consideration to any interest of or factors affecting the Asset
Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and
shall not be subject to any other or different standard imposed
by this Declaration or by applicable law.
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Section 12.4 INDEMNIFICATION.
(a) (i) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Asset Trust)
by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorney fees and expenses), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Asset Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Asset Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Asset Trust to procure a judgment
in its favor by reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and expenses) actually
and reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Asset Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Company Indemnified
Person shall have been adjudged to be liable to the Asset Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in
which such action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such Court of Chancery or such other
court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 12.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees and expenses)
actually and reasonably incurred by him in connection therewith.
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(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 12.4(a) (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Trust Administrators by a majority vote of a quorum consisting of such
Trust Administrators who were not parties to such action, suit or
proceeding, (2) if such a quorum is not obtainable, or, even if obtainable,
if a quorum of disinterested Trust Administrators so directs, by
independent legal counsel in a written opinion, or (3) by the Asset Trust
Common Securities Holder.
(v) Expenses (including attorneys' fees and expenses ) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 12.4(a) shall be paid by the
Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Company
Indemnified Person to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Sponsor as
authorized in this Section 12.4(a). Notwithstanding the foregoing, no
advance shall be made by the Sponsor if a determination is reasonably and
promptly made (i) by the Trust Administrators by a majority vote of a
quorum of disinterested Trust Administrators, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested Trust
Administrators so directs, by independent legal counsel in a written
opinion or (iii) the Asset Trust Common Securities Holder, that, based upon
the facts known to the Trust Administrators, counsel or the Asset Trust
Common Securities Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of the
Asset Trust, or, with respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to believe his conduct
was unlawful. In no event shall any advance be made in instances where the
Trust Administrators, independent legal counsel or Asset Trust Common
Securities Holder reasonably determine that such person deliberately
breached his duty to the Asset Trust or the Asset Trust Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section 12.4(a)
shall not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of stockholders or disinterested directors of the Sponsor
or Asset Trust Preferred Securities Holders of the Trust or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office. All rights to indemnification under this Section
12.4(a) shall be deemed to be provided by a contract between the Sponsor
and each Company Indemnified Person who serves in such capacity at any time
while this Section 12.4(a) is in effect. Any repeal or
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modification of this Section 12.4(a) shall not affect any rights or
obligations then existing.
(vii) The Sponsor or the Asset Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him
in any such capacity, or arising out of his status as such, whether or
not the Sponsor would have the power to indemnify him against such
liability under the provisions of this Section 12.4(a).
(viii) For purposes of this Section 12.4(a), references to the
"Asset Trust" shall include, in addition to the resulting or surviving
entity, any constituent entity (including any constituent of a
constituent) absorbed in a consolidation or merger, so that any person
who is or was a director, trustee, officer or employee of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent
of another entity, shall stand in the same position under the
provisions of this Section 12.4(a) with respect to the resulting or
surviving entity as he would have with respect to such constituent
entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided
by, or granted pursuant to, this Section 12.4(a) shall, unless
otherwise provided when authorized or ratified, continue as to a
person who has ceased to be a Company Indemnified Person and shall
inure to the benefit of the heirs, executors and administrators of
such a person. The obligation to indemnify as set forth in this
Section 12.4(a) shall survive the satisfaction and discharge of this
Declaration.
(b) The Sponsor agrees to indemnify and hold harmless the (i) Asset
Property Trustee, (ii) the Delaware Trustee, (iii) an Affiliate of the
Asset Property Trustee and the Delaware Trustee, and (iv) any officers,
directors, shareholders, members, partners, employees, representatives,
custodians, nominees or agents of the Asset Property Trustee and the
Delaware Trustee (each of the Persons in (i) through (iv) being referred to
as a "Fiduciary Indemnified Person") for, and to hold each Fiduciary
Indemnified Person harmless against, any loss, liability or expense
incurred without negligence or willful misconduct on its part, arising out
of or in connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against or investigating any
claim, whether asserted by the Company, a Holder or any other Person, or
liability in connection with the exercise or performance of any of its
powers or duties hereunder. The obligation to indemnify as set forth in
this Section 12.4 shall survive the satisfaction and discharge of this
Declaration.
Section 12.5 OUTSIDE BUSINESSES.
Any Covered Person, the Sponsor, the Delaware Trustee and the Asset
Property Trustee may engage in or possess an interest in other business ventures
of any nature or description, independently or with others, similar or
dissimilar to the activities of the Asset Trust, and the
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Asset Trust and the Holders of Asset Trust Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the activities of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee or the Asset
Property Trustee shall be obligated to present any particular investment or
other opportunity to the Asset Trust even if such opportunity is of a character
that, if presented to the Trust, could be taken by the Asset Trust, and any
Covered Person, the Sponsor, the Delaware Trustee and the Asset Property Trustee
shall have the right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular investment or other
opportunity. Any Covered Person, the Delaware Trustee and the Asset Property
Trustee may engage or be interested in any financial or other transaction with
the Sponsor or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders of, securities
or other obligations of the Sponsor or its Affiliates.
ARTICLE XIII
ACCOUNTING
Section 13.1 FISCAL YEAR.
The fiscal year ("Fiscal Year") of the Asset Trust shall be the calendar
year, or such other year as is required by the Code.
Section 13.2 CERTAIN ACCOUNTING MATTERS.
(a) At all times during the existence of the Asset Trust, the
Trust Administrators shall keep, or cause to be kept, full books of
account, records and supporting documents, which shall reflect in
reasonable detail, each transaction of the Asset Trust. The books of
account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles. The Asset Trust
shall use the accrual method of accounting for United States Federal income
tax purposes. The books of account and the records of the Asset Trust shall
be examined by and reported upon as of the end of each Fiscal Year of the
Asset Trust by a firm of independent certified public accountants selected
by the Sponsor.
(b) The Trust Administrators shall cause to be prepared and
delivered to each of the Holders of Asset Trust Securities, within 90 days
after the end of each Fiscal Year of the Asset Trust, annual financial
statements of the Asset Trust, including a balance sheet of the Asset Trust
as of the end of such Fiscal Year, and the related statements of income or
loss.
(c) The Trust Administrators shall cause to be duly prepared and
delivered to
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Section 13.3 BANKING.
The Asset Trust shall maintain one or more bank accounts in the name and
for the sole benefit of the Asset Trust. The sole signatories for such accounts
shall be designated by the Trust Administrators.
ARTICLE XIV
AMENDMENTS AND MEETINGS
Section 14.1 AMENDMENTS.
(a) Except as otherwise provided in this Declaration or by any
applicable terms of the Asset Trust Securities, this Declaration may only
be amended by a written instrument approved and executed by (i) the Trust
Administrators (or, if there are more than two Trust Administrators, a
majority of the Trust Administrators) and (ii) by the Asset Property
Trustee if the amendment affects the rights, powers, duties, obligations or
immunities of the Asset Property Trustee; and (iii) by the Delaware Trustee
if the amendment affects the rights, powers, duties, obligations or
immunities of the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment
shall be void and ineffective :
(i) unless, in the case of any proposed amendment, the
Asset Property Trustee shall have first received an Officers'
Certificate from each of the Asset Trust and the Sponsor that
such amendment is permitted by, and conforms to, the terms of
this Declaration (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which
affects the rights, powers, duties, obligations or immunities of
the Asset Property Trustee, the Asset Property Trustee shall have
first received:
(A) an Officers' Certificate from each of the Asset Trust
and the Sponsor that such amendment is permitted by, and conforms
to, the terms of this Declaration (including the terms of the
Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Asset Trust) that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the
terms of the Securities); and
(iii) to the extent the result of such amendment would be
to:
(A) cause the Asset Trust to be classified other than as a
partnership for United States Federal income tax purposes;
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(B) cause the Asset Trust to be classified for purposes of
United States Federal income tax purposes as an association or
publicly traded partnership taxable as a corporation;
(C) reduce or otherwise adversely affect the powers of the
Asset Property Trustee in contravention of the Trust Indenture
Act;
(D) cause the Capital Trust or Asset Trust to be deemed to
be an investment company required to be registered under the
Investment Company Act; or
(E) cause the Series A or Series B Capital Trust Preferred
Securities or the Asset Trust Preferred Securities to fail to
qualify as Tier 1 capital of the Company or consolidated Tier 1
capital of Allied Irish Banks, p.l.c.
(c) At such time after the Trust has issued any Asset Trust
Securities that remain outstanding, if amendment would (i) adversely affect
the powers, preferences or special rights of the Asset Trust Securities,
whether by way of amendment to the Declaration or otherwise or (ii) result
in the dissolution, winding-up or termination of the Trust other than
pursuant to the terms of this Declaration or, (iii) change the amount or
timing of any distribution of the Asset Trust Securities or otherwise
adversely affect the amount of any distribution required to be made in
respect of the Asset Trust Securities as of a specified date or (iv)
restrict the right of a Holder of Asset Trust Securities to institute suit
for the enforcement of any such payment on or after such date, then the
Holders of the Asset Trust Securities voting together as a single class
will be entitled to vote on such amendment or proposal and such amendment
or proposal shall not be effective except with the approval of at least a
Majority in Liquidation Amount of the Asset Trust Securities affected
thereby; provided that, if any amendment or proposal referred to in clause
(i) above would adversely affect only the Asset Trust Preferred Securities
or the Asset Trust Common Securities, then only the affected class will be
entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority in
Liquidation Amount of such class of Asset Trust Securities.
(d) Section 7.8 and this Section 14.1 shall not be amended
without the consent of all of the Holders of the Asset Trust Securities.
(e) Article IV shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Asset Trust Common
Securities.
(f) The rights of the Holders of the Asset Trust Common
Securities under Article VI to increase or decrease the number of, and
appoint and remove Trustees shall not be amended without the consent of the
Holders of a Majority in Liquidation Amount of the Asset Trust Common
Securities.
(g) Notwithstanding Section 14.1(c), this Declaration may be
amended without the consent of the Holders of the Asset Trust Securities
to:
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(i) to cure any ambiguity, correct or supplement any
provisions in this Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to
matters or questions arising under this Declaration that shall
not be inconsistent with the other provisions of this
Declaration;
(ii) to add to the covenants, restrictions or obligations
of the Sponsor;
(iii) to conform to any change in the Trust Indenture Act
or written change in interpretation or application of the rules
and regulations promulgated thereunder by any legislative body,
court, government agency or regulatory authority;
(iv) to modify, eliminate or add to any provisions of this
Declaration to such extent as shall be necessary to ensure that
the Asset Trust will be classified as a partnership and will not
be taxable as a corporation for United States federal income tax
purposes at all times that any Asset Trust Securities are
outstanding or to ensure that the Asset Trust will not be
required to register as an "investment company" under the
Investment Company Act; or
(v) to conform to any change in Rule 3a-5 or written
change in interpretation or application of Rule 3a-5 by any
legislative body, court, government agency or regulatory
authority which amendment does not have a material adverse effect
on the rights, preferences or privileges of the Holders.
provided, however, that such action shall not adversely affect in any
material respect the interests of any Holder of Asset Trust Preferred
Securities or Asset Trust Common Securities, and any amendments of this
Declaration shall become effective when notice thereof is given to the
Holders of Asset Trust Securities.
(h) The issuance of an order by the Trust Administrators for
purposes of establishing the terms and form of the Asset Trust Securities
as contemplated by Section 7.1 shall not be deemed an amendment of this
Declaration subject to the provisions of this Section 14.1.
Section 14.2 MEETINGS OF THE HOLDERS OF SECURITIES; ACTION BY WRITTEN
CONSENT.
(a) Meetings of the Holders of any class of Asset Trust
Securities may be called at any time by the Asset Property Trustee (or as
provided in the terms of the Asset Trust Securities) to consider and act on
any matter on which Holders of such class of Asset Trust Securities are
entitled to act under the terms of this Declaration, the terms of the Asset
Trust Securities, or the rules of any stock exchange on which the Asset
Trust Preferred Securities are listed or admitted for trading. The Asset
Property Trustee shall call a meeting of the Holders of such class if
directed to do so by the Holders of at least 10% in Liquidation Amount of
such class of Asset Trust Securities. Such direction shall be given by
delivering to the Asset Property Trustee one or more calls in a writing
stating that the signing Holders of Securities wish to call a meeting and
indicating the general or
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specific purpose for which the meeting is to be called. Any Holders of
Asset Trust Securities calling a meeting shall specify in writing the
Certificates held by the Holders of Asset Trust Securities exercising the
right to call a meeting and only those Asset Trust Securities specified
shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
The Trust Administrators, the Sponsor, and the Asset Trust Common
Securities Holder may, in their sole discretion, submit for a vote,
approval, or consent of the holders of the Asset Trust Preferred Securities
any action or determination to be taken or made by the Trust
Administrators, the Sponsor, or the Asset Trust Common Securities Holders.
(b) Except to the extent otherwise provided in the terms of the
Asset Trust Securities, the following provisions shall apply to meetings of
Holders of Asset Trust Securities:
(i) notice of any such meeting shall be given to all the
Holders of Asset Trust Securities having a right to vote thereat
at least 7 days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the Holders of
Asset Trust Securities is permitted or required under this
Declaration or the rules of any stock exchange on which the Asset
Trust Preferred Securities are listed or admitted for trading,
such vote, consent or approval may be given at a meeting of the
Holders of Asset Trust Securities. Any action that may be taken
at a meeting of the Holders of Asset Trust Securities may be
taken without a meeting if a consent in writing setting forth the
action so taken is signed by the Holders of Asset Trust
Securities owning not less than the minimum amount of Asset Trust
Securities in liquidation amount that would be necessary to
authorize or take such action at a meeting at which all Holders
of Asset Trust Securities having a right to vote thereon were
present and voting. Prompt notice of the taking of action without
a meeting shall be given to the Holders of Asset Trust Securities
entitled to vote who have not consented in writing. The Asset
Property Trustee may specify that any written ballot submitted to
the Security Holders for the purpose of taking any action without
a meeting shall be returned to the Asset Trust within the time
specified by the Asset Property Trustee;
(ii) each Holder of an Asset Trust Security may authorize
any Person to act for it by proxy on all matters in which a
Holder of Asset Trust Securities is entitled to participate,
including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise
provided in the proxy. Every proxy shall be revocable at the
pleasure of the Holder of Asset Trust Securities executing such
proxy. Except as otherwise provided herein, all matters relating
to the giving, voting or validity of proxies shall be governed by
the General Corporation Law of the State of Delaware relating to
proxies, and judicial interpretations thereunder, as if the Asset
Trust were a Delaware corporation and the Holders of the Asset
Trust Securities were stockholders of a Delaware corporation;
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(iii) each meeting of the Holders of the Asset Trust
Securities shall be conducted by the Asset Property Trustee or by
such other Person that the Asset Property Trustee may designate;
and
(iv) consistent with the Business Trust Act, this
Declaration, the terms of the Asset Trust Securities, the Trust
Indenture Act or the listing rules of any stock exchange on which
the Asset Trust Preferred Securities are then listed for trading,
otherwise provides, the Asset Property Trustee, in its sole
discretion, shall establish all other provisions relating to
meetings of Holders of Asset Trust Securities, including notice
of the time, place or purpose of any meeting at which any matter
is to be voted on by any Holders of Asset Trust Securities,
waiver of any such notice, action by consent without a meeting,
the establishment of a record date, quorum requirements, voting
in person or by proxy or any other matter with respect to the
exercise of any such right to vote.
ARTICLE XV
REPRESENTATIONS OF ASSET PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 15.1 REPRESENTATIONS AND WARRANTIES OF THE ASSET PROPERTY
TRUSTEE.
The Trustee that acts as initial Asset Property Trustee represents and
warrants to the Asset Trust and to the Sponsor at the date of this Declaration,
and each Successor Property Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Property Trustee's acceptance of its
appointment as Asset Property Trustee that:
(a) the Asset Property Trustee is a corporation or bank duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with trust power and
authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Declaration;
(b) the Asset Property Trustee satisfies the requirements set
forth in Section 6.3(a);
(c) the execution, delivery and performance by the Asset
Property Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Asset Property Trustee;
(d) the execution, delivery and performance of this Declaration
by the Asset Property Trustee does not conflict with or constitute a breach
of the articles of association or incorporation, as the case may be, or the
by-laws (or other similar organizational documents) of the Asset Property
Trustee; and
(e) no consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is required for
the execution, delivery or performance by the Asset Property Trustee of
this Declaration.
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Section 15.2 REPRESENTATIONS AND WARRANTIES OF THE DELAWARE TRUSTEE.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Delaware Trustee represents and warrants to the Asset Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee that:
(a) the Delaware Trustee satisfies the requirements set forth in
Section 6.2 and has the power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration
and, if it is not a natural person, is duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation or
organization;
(b) the Delaware Trustee has been authorized to perform its
obligations under the Certificate of Trust and this Declaration; and
(c) no consent, approval or authorization of, or registration
with or notice to, any State or Federal banking authority is require for
the execution, delivery or performance by the Delaware Trustee of this
Declaration.
ARTICLE XVI
MISCELLANEOUS
Section 16.1 NOTICES.
All notices provided for in this Declaration shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by registered or certified mail, as follows:
(a) if given to the Asset Trust, in care of the Trust
Administrators at the Trust's mailing address set forth below (or such
other address as the Trust may give notice of to the Asset Property
Trustee, the Delaware Trustee and the Holders of the Asset Trust
Securities):
c/o First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
(b) if given to the Delaware Trustee, at the mailing address set
forth below (or such other address as the Delaware Trustee may give notice
of to the Trust Administrators, the Asset Property Trustee and the Holders
of the Asset Trust Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
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<PAGE>
Newark, Delaware 19711
(c) if given to the Asset Property Trustee, at its Corporate Trust
Office (or such other address as the Asset Property Trustee may give notice
of to the Trust Administrators, the Delaware Trustee and the Holders of the
Asset Trust Securities).
(d) if given to the Sponsor, at the mailing address set forth below
(or such other address as the Sponsor may give notice of to the Asset
Property Trustee, the Delaware Trustee and the Asset Trust):
First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
Attn: General Counsel
(e) if given to any Holder, at the address set forth on the books and
records of the Asset Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed or mailed by first class mail, postage
prepaid except that if a notice or other document is refused delivery or cannot
be delivered because of a changed address of which no notice was given, such
notice or other document shall be deemed to have been delivered on the date of
such refusal or inability to deliver.
Section 16.2 GOVERNING LAW.
THIS DECLARATION AND THE RIGHTS OF THE HOLDERS, THE ASSET TRUST, THE
SPONSOR AND THE TRUSTEES SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF DELAWARE AND ALL RIGHTS AND REMEDIES SHALL BE GOVERNED
BY SUCH LAWS WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS OF THE STATE
OF DELAWARE OR ANY OTHER JURISDICITON THAT WOULD CALL FOR THE APPLICATION OF THE
LAW OF ANY JURISDICTION OTHER THAN THE STATE OF DELAWARE; PROVIDED, HOWEVER,
THAT THERE SHALL NOT BE APPLICABLE TO THE HOLDERS, THE ASSET TRUST, THE SPONSOR,
THE TRUSTEES OR THIS DECLARATION, ANY PROVISION OF THE LAWS (STATUTORY OR
COMMON) OF THE STATE OF DELAWARE PERTAINING TO TRUSTS THAT RELATE TO OR
REGULATE, IN A MANNER INCONSISTENT WITH THE TERMS HEREOF (A) THE FILING WITH ANY
COURT OR GOVERNMENTAL BODY OR AGENCY OF TRUSTEE ACCOUNTS OR SCHEDULES OF TRUSTEE
FEES AND CHARGES, (B) AFFIRMATIVE REQUIREMENTS TO POST BONDS FOR TRUSTEES,
OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (C) THE NECESSITY FOR OBTAINING COURT
OR OTHER GOVERNMENTAL APPROVAL CONCERNING THE ACQUISITION, HOLDER OR DISPOSITION
OF REAL OR PERSONAL PROPERTY, (D) FEES OR OTHER SUMS PAYABLE TO TRUSTEES,
OFFICERS, AGENTS OR EMPLOYEES OF A TRUST, (E) THE ALLOCATION OF RECEIPTS AND
EXPENDITURES TO INCOME OR PRINCIPAL, (F) RESTRICTIONS OR LIMITATIONS ON THE
PERMISSIBLE NATURE, AMOUNT OR
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CONCENTRATION OF TRUST NVESTMENTS OR REQUIREMENTS RELATING TO THE TITLING,
STORAGE OR OTHER MANNER OF HOLDING OR INVESTING TRUST ASSETS, OR (G) THE
ESTABLISHMENT OF FIDUCIARY OR OTHER STANDARDS OF RESPONSIBILITY OR LIMITATIONS
ON THE ACTS OR POWERS OF TRUSTEES THAT ARE INCONSISTENT WITH THE LIMITATIONS OR
LIABILITIES OR AUTHORITIES AND POWERS OF THE TRUSTEES AS SET FORTH OR REFERENCED
IN THIS DECLARATION. SECTION 3540 OF TITLE 12 OF THE DELAWARE CODE SHALL NOT
APPLY TO THE ASSET TRUST.
Section 16.3 [INTENTIONALLY OMITTED]
Section 16.4 HEADINGS.
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 16.5 SUCCESSORS AND ASSIGNS.
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 16.6 PARTIAL ENFORCEABILITY.
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
Section 16.7 COUNTERPARTS.
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
Section 16.8 UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Declaration or in any suit against any Trustee for any action taken or omitted
by it as a Trustee, a court in its discretion may require the filing by any
party litigant in the suit of an undertaking to pay the costs of the suit, and
the court in its discretion may assess reasonable costs, including reasonable
attorney's fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 16.8 does not apply to a suit by a Trustee, a suit by a
Holder to enforce its right to payment or a suit by Holders of more than 10% in
Liquidation Amount of the then outstanding Asset Trust Securities.
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Section 16.9 TAX MATTERS.
(a) For purposes of section 6231(a)(7) of the Code, the "Tax Matters
Partner" shall be the Company as long as it remains the Asset Trust Common
Securities Holder.
(b) Neither the Asset Trust, nor the Tax Matters Partner on behalf of
the Asset Trust, shall make an election under section 754 of the Code.
(c) The Asset Trust Common Securities Holder and the Asset Trust
Preferred Security Holders acknowledge that they intend, for United States
Federal income tax purposes, that the Asset Trust shall be treated and
classified as a "partnership" (other than a publicly traded partnership
taxable as a corporation) and that the Asset Trust Common Securities Holder
and the Asset Trust Preferred Security Holders shall be treated as
"partners" of the Asset Trust. The provisions of this Declaration shall be
interpreted in a manner consistent with such classification.
(d) The Asset Trust Common Securities Holder shall retain, at the
expense of the Asset Trust and at its sole discretion, a nationally
recognized firm of certified public accountants which shall prepare all
United States Federal, State, local or other tax and information returns of
the Asset Trust, as required by law, and the Schedule K-1's or any
successor or similar forms or schedules.
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<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
FIRST MARYLAND BANCORP,
as Sponsor and Asset Trust Common Securities
Holder
By: /s/ DAVID M. CRONIN
------------------------------------------
Name:
Title Executive Vice President
THE BANK OF NEW YORK, as Asset Property Trustee
By: /s/ MARYBETH LEWICKI
------------------------------------------
Name:
Title Vice President
THE BANK OF NEW YORK (DELAWARE), as Delaware
Trustee
By: /s/ WALTER N. GITLIN
------------------------------------------
Name:
Title Authorized Signatory
/s/ David M. Cronin
---------------------------------------------
David M. Cronin, as Trust Administrator
/s/ Robert F. Ray
---------------------------------------------
Robert F. Ray, as Trust Administrator
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SCHEDULE 1
----------
-----------------------------------------------------------------------
Holder Initial Capital
Account Balance
-----------------------------------------------------------------------
First Maryland Bancorp $ 7,674,873
-----------------------------------------------------------------------
Allfirst Preferred Capital Trust 101,962,070
-----------------------------------------------------------------------
TOTAL 109,636,943
-----------------------------------------------------------------------
S-1
<PAGE>
EXHIBIT A-1
[IF THE ASSET TRUST PREFERRED SECURITY IS TO BE A GLOBAL CERTIFICATE,
INSERT: This Asset Trust Preferred Security is a Global Certificate within the
meaning of the Declaration hereinafter referred to and is registered in the name
of The Depository Trust Company, a New York corporation (the "Depository"), or a
nominee of the Depository. This Asset Trust Preferred Security is exchangeable
for Asset Trust Preferred Securities registered in the name of a person other
than the Depository or its nominee only in the limited circumstances described
in the Declaration and no transfer of this Asset Trust Preferred Security (other
than a transfer of this Asset Trust Preferred Security as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository) may be registered except in
limited circumstances.
Unless this Asset Trust Preferred Security Certificate is presented by an
authorized representative of the Depository to Allfirst Preferred Asset Trust or
its agent for registration of transfer, exchange or payment, and any Asset Trust
Preferred Security Certificate issued is registered in the name of Cede & Co.
or such other name as registered by an authorized representative of the
Depository (and any payment hereon is made to Cede & Co. or to such other
entity as is requested by an authorized representative of the Depository), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL since the registered owner hereof, Cede & Co., has an interest
herein.]
THE HOLDER OF THIS ASSET TRUST PREFERRED SECURITY BY ITS ACCEPTANCE HEREOF
ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE
BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS ASSET TRUST
PREFERRED SECURITY BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR
SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR IS
EXEMPT FROM ANY SUCH PROHIBITION.
[INSERT RESTRICTED SECURITIES LEGEND]
A-1-1
<PAGE>
CERTIFICATE NO. _____ NUMBER OF ASSET TRUST PREFERRED SECURITIES: _______
CUSIP NO. ____________ AGGREGATE LIQUIDATION AMOUNT: _______
CERTIFICATE EVIDENCING ASSET TRUST PREFERRED SECURITIES
OF
ALLFIRST PREFERRED ASSET TRUST
FLOATING RATE NON-CUMULATIVE SUBSIDIARY ASSET TRUST PREFERRED
SECURITIES, SERIES ___ (LIQUIDATION AMOUNT $1,000 PER ASSET TRUST
PREFERRED SECURITY)
ALLFIRST PREFERRED ASSET TRUST, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that Cede & Co.
(the "Holder") is the registered owner of _______ trust preferred securities
(with aggregate liquidation amount of $__________) of the Trust representing
undivided beneficial ownership interests in the assets of the Trust designated
the Floating Rate Non-Cumulative Subsidiary Trust Preferred Securities, Series
___ (liquidation amount $1,000 per Asset Trust Preferred Security) (the "Asset
Trust Preferred Securities"). The Asset Trust Preferred Securities are
transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in the Declaration (as defined below). The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Asset Trust Preferred Securities represented hereby are issued
and shall in all respects be subject to the provisions of the Amended and
Restated Declaration of Trust of the Trust, dated as of July 13, 1999 (as the
same may be amended from time to time (the "Declaration"), among First Maryland
Bancorp, as Sponsor (the "Company"), David M. Cronin and Robert F. Ray, as Trust
Administrators, The Bank of New York, as Asset Property Trustee, and The Bank of
New York (Delaware), as Delaware Trustee. Capitalized terms used herein but not
defined shall have the meaning given them in the Declaration. The Holder is
entitled to the benefits of the Asset Trust Guarantee to the extent described
therein. The Sponsor will provide a copy of the Declaration, the Asset Trust
Guarantee and the Indenture to a Holder without charge upon written request to
the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
A-1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this ____ day
of ____________, 199_.
ALLFIRST PREFERRED ASSET TRUST
By:_________________________________
Name:
Title:
This is one of the Asset Trust Securities referred to in the within-
mentioned Declaration.
THE BANK OF NEW YORK
By:_________________________________
Authorized Signatory
A-1-3
<PAGE>
[reverse of security]
The distribution rate payable on each Asset Trust Preferred Security will
be equal to the variable distribution rate per annum of the Debenture, plus
0.07% per annum. Distributions will be payable at such rate on the stated
liquidation preference of $1,000 per Asset Trust Preferred Security.
Distributions on the Asset Trust Preferred Securities will only be made to the
extent that the Trust has funds legally available for the payment of such
Distributions. Amounts available to the Trust for distribution to the holders
of the Asset Trust Preferred Securities will be limited to payments received by
the Trust from the Company on the Debentures or from the Company on the Asset
Trust Guarantees. Distributions on the Asset Trust Preferred Securities will be
paid only if, as and when declared in the sole discretion of the Trust. The
amount of distributions payable for any Distribution Period will be on the basis
of the actual number of days elapsed during the related Distribution Period and
360-day year.
Except as otherwise described herein, distributions on the Asset Trust
Preferred Securities will be non-cumulative, and will be payable quarterly, on
January 15, April 15, July 15 and October 15 of each year, commencing on October
15, 1999, if, as and when declared by the Trust. If the Asset Trust Preferred
Securities are in book-entry-only form, distributions will be payable to the
Holders of record as they appear on the books and records of the Security
Register on the relevant record dates, which will be one Business Day prior to
the relevant payment dates. If the Capital Trust or the Capital Property
Trustee is the Holder of the Asset Trust Preferred Securities, all distributions
of cash shall be made by wire transfer of same day funds to such Holder by 10:00
a.m., New York City time, on the applicable Distribution Payment Date.
Distributions payable on any Asset Trust Preferred Securities that are not
punctually paid on any Distribution Payment Date will cease to be payable to the
Person in whose name such Asset Trust Preferred Securities are registered on the
relevant record date, and such distribution will instead be payable to the
Person in whose name such Asset Trust Preferred Securities are registered on the
special record date or other specified date for payment of such defaulted or
accumulated Distribution. If the Asset Trust Preferred Securities are not in
book-entry-only form, the relevant record dates shall be the 15th day of the
month of the relevant payment dates. In the event that any date on which
distributions are payable is not a Business Day, payment of such distribution
shall be made on the next succeeding day which is a Business Day (without any
interest or other payment in respect of any such delay) except that, if such
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date.
The Asset Trust Preferred Securities shall be redeemable as provided in the
Declaration.
A-1-4
<PAGE>
___________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Asset Trust
Preferred Security Certificate to:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert assignee's social security or tax identification number)
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________________________________________________
________________________________________________________________________________
__________________________________ agent to transfer this Asset Trust Preferred
Security Certificate on the books of the Trust. The agent may substitute
another to act for him or her.
Date: ________________________
Signature: ____________________
(Sign exactly as your name appears on the other side of this Asset Trust
Preferred Security Certificate)
A-1-5
<PAGE>
Include the following if the Asset Trust Preferred Security bears a
Restricted Securities Legend:
In connection with any transfer of any of the Asset Trust Preferred
Securities evidenced by this Certificate, the undersigned confirms that such
Asset Trust Preferred Securities are being:
CHECK ONE BOX BELOW
(1) [_] exchanged for the undersigned's own account without transfer; or
(2) [_] transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) [_] transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the Securities Act of 1933 that is acquiring the Asset Trust
Preferred 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 in violation of the Securities
Act of 1933; or
(4) [_] transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(5) [_] transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(6) [_] transferred pursuant to an effective registration statement.
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Asset Trust Preferred Securities evidenced by this Certificate in the name
of any Person other than the Holder hereof; provided, however, that if box (3),
-------- -------
(4) or (5) is checked, the Registrar may require, prior to registering any such
transfer of the Asset Trust Preferred Securities, such legal opinions,
certifications and other information as the Trust has reasonably requested to
confirm that such transfer is being made pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities Act
of 1933, such as the exemption provided by Rule 144 under such Act; provided,
--------
further, that (i) if box (2) is checked, by acceptance of this Certificate, the
- -------
transferee shall be deemed to have certified that it is a "qualified
institutional buyer" (as defined in Rule 144A) acquiring the Asset Trust
Preferred Securities for its own account or for the account of another QIB over
which it exercises sole investment discretion and that it is aware that the
Holder is relying upon the exemption from registration afforded by Rule 144A in
respect of the Holder's transfer of Asset Trust Preferred Securities to it or
(ii) if box (3) is checked, the transferee must also provide to the Registrar a
Transferee Letter of Representation in the form attached to the Offering
Memorandum of the Allfirst Preferred Capital Trust dated July 9, 1999; provided,
--------
further, that after the date that a registration statement has been filed and so
- -------
long as such Registration Statement continues to be effective, only then may the
Registrar permit transfers for which box (6) has been checked.
_________________________________________
Signature
A-1-6
<PAGE>
EXHIBIT A-2
THIS CERTIFICATE IS NOT TRANSFERABLE
CERTIFICATE NO. ______ NUMBER OF TRUST COMMON SECURITIES: ______
CERTIFICATE EVIDENCING TRUST COMMON SECURITIES
OF
ALLFIRST PREFERRED ASSET TRUST
TRUST COMMON SECURITIES (LIQUIDATION
AMOUNT $1,000 PER TRUST COMMON SECURITY)
Allfirst Preferred Asset Trust, a statutory business trust formed under the
laws of the State of Delaware (the "Trust"), hereby certifies that First
Maryland Bancorp (the "Holder") is the registered owner of common securities of
the Trust representing an undivided beneficial ownership interest in the assets
of the Trust designated the Floating Rate Non-cumulative Subsidiary Trust Common
Securities (liquidation amount $1,000 per Trust Common Security) (the "Trust
Common Securities"). The Trust Common Securities are not transferable and any
attempted transfer thereof shall be void. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Trust Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust,
dated as of July 13, 1999 (as the same may be amended from time to time, the
"Declaration"), among First Maryland Bancorp, as Sponsor, David M. Cronin and
Robert F. Ray, as Trust Administrators, The Bank of New York, as Asset Property
Trustee, and The Bank of New York (Delaware), as Delaware Trustee. The Holder
is entitled to the benefits of the Asset Trust Guarantee to the extent described
therein. Capitalized terms used herein but not defined shall have the meaning
given them in the Declaration. The Sponsor will provide a copy of the
Declaration, the Asset Trust Guarantee and the Indenture to a Holder without
charge upon written request to the Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
IN WITNESS WHEREOF, the Trust has executed this certificate this ______ day
of _____________, 199_.
ALLFIRST PREFERRED ASSET TRUST
By:__________________________________
Name:
Title:
A-2-1
<PAGE>
Annex 1
Investment Guidelines
---------------------
1. On the Closing Date, on behalf of the Asset Trust, the Asset Property
Trustee shall invest $5,482,194 of the Initial Proceeds in Treasury securities
issued by the Government of the United States having a maturity of no greater
than one Business Day prior to the initial Common Distribution Payment Date.
2. During any Common Distribution Period, any interest or other payments
received in respect of the Debentures and the Eligible Debt Securities to the
extent not distributed to the Holders of the Asset Trust Preferred Securities
for on any Preferred Distribution Payment Date occurring during such Common
Distribution Period in accordance with Section 7.2 of the Declaration shall be
reinvested by the Asset Property Trustee, on behalf of the Asset Trust, in:
. Treasury securities issued by the Government of the United States having
maturities of no later than one Business Day prior to the Common
Distribution Payment Date immediately following such Common Distribution
Period;
. certificates of deposit of an Eligible Institution (which may include
The Bank of New York) which are fully insured by the FDIC, in no case
having a maturity greater than nine months; or
. any combination of the foregoing.
3. Upon the maturity or redemption of all Eligible Debt Securities prior to
any Common Distribution Payment Date and after making any required Distribution
to the Asset Trust Common Securities Holder on such Common Distribution Payment
Date, the Asset Property Trustee, on behalf of the Asset Trust, shall reinvest
all remaining available funds then held in the Asset Property Account in:
. Treasury securities issued by the Government of the United States having
maturities of no later than one Business Day prior to the immediately
succeeding Common Distribution Payment Date;
. certificates of deposit of an Eligible Institution (which may include
The Bank of New York) which are fully insured by the FDIC, in no case
having a maturity greater than nine months; or
. any combination of the foregoing.
4. In making any such investments in any certificates of deposits in
accordance with these guidelines, the Asset Property Trustee shall purchase such
certificates of deposits from one or more of the following Eligible Institutions
in the priority set forth below:
<PAGE>
The Bank of New York or any successor thereto
The Chase Manhattan Bank or any successor thereto
Morgan Guaranty or any successor thereto
Bank of America or any successor thereto
First Union or any successor thereto
Wells Fargo or any successor thereto
5. In the event the Asset Property Trustee is not able to invest all
available funds in Eligible Debt Securities in accordance with clauses 2 through
4 above, the Asset Property Trustee shall deposit such funds in a
non-interest-bearing account until the Asset Property Trustee is able to invest
such funds in Eligible Debt Securities in accordance with these guidelines.
6. For purposes of this Annex 1, "Common Distribution Period" means the
period from and including any Common Distribution Payment Date to but excluding
the Business Day immediately preceding the immediately preceding Common
Distribution Payment Dates, or in the case of the initial Common Distribution
Period, the period from and including the Closing Date to but excluding the
initial Common Distribution Payment Date.
2
<PAGE>
EXHIBIT 4.5
================================================================================
SERIES B CAPITAL TRUST GUARANTEE AGREEMENT
ALLFIRST PREFERRED CAPITAL TRUST
Dated as of _______, 1999
================================================================================
<PAGE>
CROSS REFERENCE TABLE/1/
Section of Trust Indenture Act
of 1939, as amended Section of Agreement
310(a)..................................................................4.1(a)
310(b)..................................................................4.1(c)
310(c)............................................................Inapplicable
311(a)..................................................................2.2(b)
311(b)..................................................................2.2(b)
311(c)............................................................Inapplicable
312(a)..................................................................2.2(a)
312(b)..................................................................2.2(b)
312(c).....................................................................2.9
313(a).....................................................................2.3
313(b).....................................................................2.3
313(c).....................................................................2.3
313(d).....................................................................2.3
314(a).....................................................................2.4
314(b)............................................................Inapplicable
314(c).....................................................................2.5
314(d)............................................................Inapplicable
314(e).....................................................................2.5
314(f)............................................................Inapplicable
315(a)..........................................................3.1(d);.3.2(a)
315(b)..................................................................2.7(a)
315(c)..................................................................3.1(c)
315(d)..................................................................3.1(d)
316(a)..............................................................2.6;5.4(a)
317(a)...............................................................2.10; 5.4
318(a)..................................................................2.1(b)
- -------------------------
/1/ This Cross-Reference Table does not constitute part of the Agreement
and shall not have any bearing upon the interpretation of any of its terms
or provisions.
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions....................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.................................... 6
SECTION 2.2 Lists of Holders of Capital Trust Securities........................ 6
SECTION 2.3 Reports by Capital Trust Guarantee Trustee.......................... 6
SECTION 2.4 Periodic Reports to Capital Trust Guarantee Trustee................. 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent.................... 7
SECTION 2.6 Capital Guarantee Event of Default; Waiver.......................... 7
SECTION 2.7 Capital Guarantee Event of Default; Notice.......................... 7
SECTION 2.8 Conflicting Interests............................................... 7
SECTION 2.9 Disclosure of Information........................................... 7
SECTION 2.10 Capital Trust Guarantee Trustee May File Proofs of Claim............ 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF CAPITAL TRUST GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Capital Trust Guarantee Trustee................ 8
SECTION 3.2 Certain Rights of Capital Trust Guarantee Trustee................... 10
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital Trust Guarantee. 12
ARTICLE IV
CAPITAL TRUST GUARANTEE TRUSTEE
SECTION 4.1 Capital Trust Guarantee Trustee; Eligibility........................ 12
SECTION 4.2 Appointment, Removal and Resignation of Capital Trust Guarantee
Trustee............................................................. 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee........................................................... 14
SECTION 5.2 Waiver of Notice and Demand......................................... 14
SECTION 5.3 Obligations Not Affected............................................ 15
SECTION 5.4 Rights of Holders................................................... 16
SECTION 5.5 Guarantee of Payment................................................ 16
SECTION 5.6 Subrogation......................................................... 16
SECTION 5.7 Independent Obligations............................................. 17
</TABLE>
i
<PAGE>
<TABLE>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
<S> <C>
SECTION 6.1 Limitation of Transactions............................................. 17
SECTION 6.2 Ranking................................................................ 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................................ 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................................ 18
SECTION 8.2 Indemnification........................................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................................. 19
SECTION 9.2 Amendments............................................................. 19
SECTION 9.3 Consolidations and Mergers............................................. 20
SECTION 9.4 Notices................................................................ 20
SECTION 9.5 Benefit................................................................ 21
SECTION 9.6 Governing Law.......................................................... 21
</TABLE>
ii
<PAGE>
SERIES B CAPITAL TRUST GUARANTEE AGREEMENT
This SERIES B CAPITAL TRUST GUARANTEE AGREEMENT (the "Capital Trust
Guarantee"), dated as of _______, 1999, is executed and delivered by Allfirst
Financial Inc., a Delaware corporation and the successor by merger to First
Maryland Bancorp (the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Capital Trust Guarantee Trustee"), for the benefit
of the Holders (as defined herein) of the Capital Trust Securities (as defined
herein) of Allfirst Preferred Capital Trust, a Delaware statutory business trust
(the "Capital Trust").
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to the Capital Trust Declaration (as defined herein), on
July 13, 1999, the Capital Trust issued $100,000,000 aggregate liquidation
amount of its Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities, Series A (the " Old Capital Trust Preferred Securities"), having a
liquidation amount of $1,000 per Capital Trust Preferred Security and $3,093,000
aggregate liquidation amount of its Floating Rate Non-Cumulative Subordinated
Capital Trust Common Securities, having a liquidation amount of $1,000 per
common security (the "Capital Trust Common Securities"; together with the Old
Capital Trust Preferred Securities, the "Capital Trust Securities");
WHEREAS, the Old Capital Trust Preferred Securities and the Capital Trust
Common Securities were irrevocably and unconditionally guaranteed by First
Maryland Bancorp, to the extent set forth in the Series A Capital Trust
Guarantee Agreement dated as of July 13, 1999 (the "First Maryland Guarantee")
WHEREAS, on September 15, 1999, First Maryland Bancorp was merged into the
Guarantor solely for purposes of changing the domicile of incorporation of First
Maryland Bancorp, and the Guarantor succeeded to all of the rights, privileges,
liabilities and obligations of First Maryland Bancorp, including without
limitation the First Maryland Guarantee, as fully and completely as if the
Guarantor has executed and delivered the First Maryland Guarantee, and the
Guarantor executed and delivered to the Capital Trust Guarantee Trustee its
Series A Capital Trust Guarantee Agreement dated as of September 15, 1999 (the
"Old Guarantee")
WHEREAS, pursuant to the Registration Rights Agreement (as defined in the
Capital Trust Declaration), the Capital Trust has offered to exchange up to
$100,000,000 aggregate liquidation amount of its Floating Rate Non-Cumulative
Subordinated Capital Trust Enhanced Securities, Series B (the "New Capital Trust
Preferred Securities" and, together with the Old Capital Trust Preferred
Securities, the "Capital Trust Preferred Securities"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Registration Rights Agreement (as defined in the
Capital Trust Declaration), the Guarantor and the Capital Trust Guarantee
Trustee wish to exchange the Old Guarantee for this Series B Capital Trust
Guarantee Agreement, which is substantially the same as the Old Guarantee except
that it has been registered under the Securities Act and qualified under the
Trust Indenture Act and does not contain restrictions on transfer, and which is
for the benefit of the Holders of New Capital Trust Preferred Securities, Old
Capital Trust Preferred Securities not exchanged for New Capital Trust Preferred
Securities and the Capital Trust Common Securities (collectively, the "Capital
Trust Securities");
WHEREAS, as incentive for the Holders to retain the Capital Trust
Securities (which the Guarantor agrees will benefit it), the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Guarantee, to pay to the Holders of the Capital Trust Securities the Capital
Guarantee Payments (as defined herein) and to make certain other payments on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the Guarantor executes
and delivers this Capital Trust Guarantee for the benefit of the Holders.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this Capital Trust
------------------------------
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Capital Trust Guarantee but not
defined in the preamble above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined anywhere in this Capital Trust Guarantee has the
same meaning throughout;
1
<PAGE>
(c) all references to "the Capital Trust Guarantee" or "this Capital
Trust Guarantee" are to this Capital Trust Guarantee as modified,
supplemented or amended from time to time;
(d) all references in this Capital Trust Guarantee to Articles and
Sections are to Articles and Sections of this Capital Trust Guarantee,
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Capital Trust Guarantee, unless otherwise defined in this
Capital Trust Guarantee or unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa
and a reference to the masculine includes, as applicable, the feminine.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Asset Trust" means Allfirst Preferred Asset Trust.
"Asset Trust Declaration" means the Amended and Restated Declaration
of Trust, dated as of July 13, 1999, as amended, modified or supplemented
from time to time, among the asset trustees of the Asset Trust named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial ownership interests in the assets of the Asset Trust.
"Asset Trust Preferred Guarantee" means the Series B Asset Trust
Preferred Guarantee Agreement, dated as of ________, 1999, entered into by
the Guarantor, for the benefit of the Holders of the Asset Trust Preferred
Securities.
"Asset Trust Preferred Securities" has the meaning set forth in the
Asset Trust Declaration.
"Business Day" has the meaning given to such term in the Indenture.
"Capital Guarantee Event of Default" means a default by the Guarantor
on any of its payment or other obligations under this Capital Trust
Guarantee.
"Capital Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Trust
Securities, to the extent not paid or made by the Capital Trust: (i) any
unpaid Distributions (as defined in the Capital Trust Declaration) for the
then current quarterly period that are required to be paid on such Capital
Trust Securities to the extent the Capital Trust shall have sufficient
funds available therefor at the time, (ii) the redemption price, including
all unpaid Distributions to the date of redemption for the then current
quarterly period, with respect to any Capital Trust Securities called for
redemption by the Capital Trust, to the extent the Capital Trust
2
<PAGE>
shall have sufficient funds available therefor at the time, and (iii) upon
a voluntary or involuntary dissolution, winding-up or termination of the
Capital Trust (other than in connection with the distribution of Asset
Trust Preferred Securities to the Holders in exchange for Capital Trust
Securities), the lesser of (a) the aggregate of the liquidation amount and
all accrued and unpaid Distributions on the Capital Trust Securities since
the immediately preceding Distribution Payment Date, and (b) the amount of
assets of the Capital Trust remaining available for distribution to Holders
in liquidation of the Capital Trust (in either case, the "Liquidation
Distribution"). If a Capital Trust Enforcement Event (as defined in the
Capital Trust Declaration) has occurred and is continuing, no Capital
Guarantee Payments under this Capital Trust Guarantee shall be made to
Holders of the Capital Trust Common Securities until Holders of the Capital
Trust Preferred Securities are paid in full any Capital Guarantee Payments
to which they are entitled to under this Capital Trust Guarantee.
"Capital Trust Declaration" means the Amended and Restated Declaration
of Trust, dated as of July 13, 1999, as amended, modified or supplemented
from time to time, among the capital trustees of the Capital Trust named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial ownership interests in the assets of the Capital
Trust.
"Capital Trust Guarantee Trustee" means The Bank of New York, until a
successor Capital Trust Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Capital Trust
Guarantee and thereafter means each such Successor Capital Trust Guarantee
Trustee.
"Capital Trust Preferred Securities" has the meaning set forth in the
recitals to this Capital Trust Guarantee.
"Capital Trust Special Event" has the meaning set forth in the Capital
Trust Declaration.
"Corporate Trust Office" means the office of the Capital Trust
Guarantee Trustee at which the corporate trust business of the Capital
Trust Guarantee Trustee shall at any particular time, be principally
administered, which office at the date of execution of this Capital Trust
Guarantee is located at The Bank of New York, 101 Barclay Street, Floor 21
West, New York, New York 10286, Attention: Corporate Trust Administration.
"Covered Person" means any Holder or beneficial owner of Capital Trust
Securities.
"Debenture Issuer" means Allfirst Financial Inc. in its capacity as
issuer of the Debentures under the Indenture.
3
<PAGE>
"Debentures" means the series of junior subordinated debentures to be
issued by the Guarantor, designated the Floating Rate Junior Subordinated
Debentures, Series B, due July 15, 2029, held by the Asset Property Trustee
(as defined in the Asset Trust Declaration).
"Distribution" has the meaning set forth in the Capital Trust
Declaration.
"Distribution Payment Date" has the meaning set forth in the Capital
Trust Declaration.
"Exchange Offer" has the meaning set forth in the Capital Trust
Declaration.
"Holder" shall mean any holder of Capital Trust Securities, as
registered on the books and records of the Capital Trust; provided,
however, that, in determining whether the Holders of the requisite
percentage of Capital Trust Preferred Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the
Guarantor or any Affiliate of the Guarantor or any other obligor on the
Capital Trust Securities; and provided further, that in determining whether
the Holders of the requisite liquidation amount of Capital Trust Preferred
Securities have voted on any matter provided for in this Capital Trust
Guarantee, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Capital Trust Preferred Securities remain
in the form of one or more Global Securities (as defined in the Capital
Trust Declaration), the term "Holders" shall mean the holder of the Global
Security acting at the direction of the beneficial owners of the Capital
Trust Preferred Securities.
"Indemnified Person" means the Capital Trust Guarantee Trustee, any
Affiliate of the Capital Trust Guarantee Trustee, and any officers,
directors, shareholders, members, partners, employees, representatives,
nominees, custodians or agents of the Capital Trust Guarantee Trustee.
"Indenture" means the Indenture, dated as of July 13, 1999, between
the Guarantor, as Debenture Issuer, and The Bank of New York, as trustee,
Supplemental Indenture No. 1 therefor dated as of September 15, 1999, and
any other indentures supplemental thereto pursuant to which the Debentures
are to be issued.
"Majority in Liquidation Amount of the Capital Trust Securities"
means, except as provided in the terms of the Capital Trust Securities or
by the Trust Indenture Act, Holder(s) of outstanding Capital Trust
Securities, voting together as a single class, or as the context may
require, Holders of outstanding Capital Trust Preferred Securities or
Holders of outstanding Capital Trust Common Securities, voting separately
as a class, who are the record holders of more than 50% of the aggregate
liquidation amount of all outstanding Capital Trust Securities. In
determining whether the Holders of the requisite amount of Capital Trust
Securities have voted, Capital Trust Securities which are owned by the
Guarantor or any Affiliate of the Guarantor shall be disregarded for the
purpose of any such determination.
4
<PAGE>
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Capital Trust Declaration) of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or
covenant provided for in this Capital Trust Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer on behalf of such Person to express an informed opinion
as to whether or not such covenant or condition has been complied
with;
(c) a statement as to whether, in the opinion of each such
officer acting on behalf of such Person, such condition or covenant
has been complied with; and
(d) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Regulatory Approval" has the meaning set forth in the Indenture.
"Responsible Officer" means, with respect to the Capital Trust
Guarantee Trustee, any officer within the Corporate Trust Office of the
Capital Trust Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer
or other officer of the Corporate Trust Office of the Capital Trust
Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Capital Trust Guarantee Trustee" means a successor Capital
Trust Guarantee Trustee possessing the qualifications to act as Capital
Trust Guarantee Trustee under Section 4.1.
5
<PAGE>
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Capital Trust Guarantee is subject to the provisions of
the Trust Indenture Act that are required to be part of this Capital Trust
Guarantee and shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Capital Trust
Guarantee limits, qualifies or conflicts with the duties imposed by Sections 310
to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Capital Trust Securities.
--------------------------------------------
(a) The Guarantor shall provide the Capital Trust Guarantee
Trustee with a list, in such form as the Capital Trust Guarantee Trustee may
reasonably require, of the names and addresses of the Holders of the Capital
Trust Securities ("List of Holders"), (i) semi-annually, not later than June 30
and December 31 of each year and current as of such date, and (ii) at such other
times as the Capital Trust Guarantee Trustee may request in writing, within 30
days of receipt by the Guarantor of a written request from the Capital Trust
Guarantee Trustee for a List of Holders as of a date no more than 15 days before
such List of Holders is given to the Capital Trust Guarantee Trustee; excluding
from any such list names and addresses received by the Capital Trust Guarantee
Trustee in its capacity as Security Registrar (as defined in the Indenture). The
Capital Trust Guarantee Trustee shall preserve, in as current a form as is
reasonably practicable, all information contained in Lists of Holders given to
it, provided that it may destroy any List of Holders previously given to it on
receipt of a new List of Holders .
(b) The Capital Trust Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by Capital Trust Guarantee Trustee. As of May 15 of
------------------------------------------
each year (commencing with the year of the first anniversary of the issuance of
the Capital Trust Securities), the Capital Trust Guarantee Trustee shall provide
to the Holders of the Capital Trust Securities such reports as are required by
the Trust Indenture Act (if any) in the form and in the manner provided therein.
The Capital Trust Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Capital Trust Guarantee Trustee. The
---------------------------------------------------
Guarantor shall provide to the Capital Trust Guarantee Trustee such documents,
reports and information as
6
<PAGE>
required by Section 314 (if any) of the Trust Indenture Act and the compliance
certificate required by Section 314 of the Trust Indenture Act in the form, in
the manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
------------------------------------------------
Guarantor shall provide to the Capital Trust Guarantee Trustee such evidence of
compliance with any conditions precedent, if any, provided for in this Capital
Trust Guarantee that relate to any of the matters set forth in Section 314(c) of
the Trust Indenture Act. Any certificate or opinion required to be given by an
officer pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.6 Capital Guarantee Event of Default; Waiver. The Holders of a
------------------------------------------
Majority in Liquidation Amount of the Capital Trust Securities may, by vote or
written consent, on behalf of the Holders of all of the Capital Trust
Securities, waive any past Capital Guarantee Event of Default and its
consequences. Upon such waiver, any such Capital Guarantee Event of Default
shall cease to exist, and any Capital Guarantee Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this Capital
Trust Guarantee, but no such waiver shall extend to any subsequent or other
default or Capital Guarantee Event of Default or impair any right consequent
thereon.
SECTION 2.7 Capital Guarantee Event of Default; Notice.
------------------------------------------
(a) The Capital Trust Guarantee Trustee shall, within 90 days after
the occurrence of a Capital Guarantee Event of Default, transmit by mail, first
class postage prepaid, to the Holders of the Capital Trust Securities, notices
of all Capital Guarantee Events of Default actually known to a Responsible
Officer of the Capital Trust Guarantee Trustee, unless such defaults have been
cured before the giving of such notice; provided, that the Capital Trust
Guarantee Trustee shall be protected in withholding such notice if and so long
as a Responsible Officer of the Capital Trust Guarantee Trustee in good faith
determines that the withholding of such notice is in the interests of the
Holders of the Capital Trust Securities.
(b) The Capital Trust Guarantee Trustee shall not be deemed to have
knowledge of any Capital Guarantee Event of Default unless the Capital Trust
Guarantee Trustee shall have received written notice thereof or a Responsible
Officer of the Capital Trust Guarantee Trustee charged with the administration
of the Capital Trust Declaration shall have obtained actual knowledge thereof.
SECTION 2.8 Conflicting Interests. The Capital Trust Declaration shall be
---------------------
deemed to be specifically described in this Capital Trust Guarantee for the
purposes of clause (i) of the first provision contained in Section 310(b) of the
Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure of information as
-------------------------
to the names and addresses of the Holders of the Capital Trust Securities in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, shall
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not be deemed to be a violation of any existing law, or any law hereafter
enacted which does not specifically refer to Section 312 of the Trust Indenture
Act, nor shall the Capital Trust Guarantee Trustee be held accountable by reason
of mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
SECTION 2.10 Capital Trust Guarantee Trustee May File Proofs of Claim.
--------------------------------------------------------
Upon the occurrence of a Capital Guarantee Event of Default, the Capital Trust
Guarantee Trustee is hereby authorized to (a) recover judgment, in its own name
and as trustee of an express trust, against the Guarantor for the whole amount
of any Capital Guarantee Payments remaining unpaid and (b) file such proofs of
claim and other papers or documents as may be necessary or advisable in order to
have its claims and those of the Holders of the Capital Trust Securities allowed
in any judicial proceedings relative to the Guarantor, its creditors or its
property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF CAPITAL TRUST
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Capital Trust Guarantee Trustee.
----------------------------------------------------
(a) This Capital Trust Guarantee shall be held by the Capital
Trust Guarantee Trustee on behalf of the Capital Trust for the benefit of the
Holders of the Capital Trust Securities, and the Capital Trust Guarantee Trustee
shall not transfer this Capital Trust Guarantee to any Person except a Holder of
Capital Trust Securities exercising his or her rights pursuant to Section 5.4(b)
or to a Successor Capital Trust Guarantee Trustee on acceptance by such
Successor Capital Trust Guarantee Trustee. The right, title and interest of the
Capital Trust Guarantee Trustee in and to this Capital Trust Guarantee shall
automatically vest in any Successor Capital Trust Guarantee Trustee, and such
vesting and succession of title shall be effective whether or not conveyancing
documents have been executed and delivered pursuant to the appointment of such
Successor Capital Trust Guarantee Trustee.
(b) If a Capital Guarantee Event of Default actually known to a
Responsible Officer of the Capital Trust Guarantee Trustee has occurred and is
continuing, the Capital Trust Guarantee Trustee shall enforce this Capital Trust
Guarantee for the benefit of the Holders of the Capital Trust Securities.
(c) The Capital Trust Guarantee Trustee, before the occurrence of
any Capital Guarantee Event of Default and after the curing of all Capital
Guarantee Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Capital Trust Guarantee,
and no implied covenants shall be read into this Capital Trust Guarantee against
the Capital Trust Guarantee Trustee. In case a Capital Guarantee Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
and is actually known to a Responsible Officer of the Capital Trust Guarantee
Trustee, the Capital Trust Guarantee Trustee shall exercise such of the rights
and powers vested in it by this Capital Trust
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Guarantee, and use the same degree of care and skill in its exercise thereof, as
a prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Capital Trust Guarantee shall be
construed to relieve the Capital Trust Guarantee Trustee from liability for its
own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Capital Guarantee Event of
Default and after the curing or waiving of all such Capital Guarantee Events of
Default that may have occurred:
(A) the duties and obligations of the Capital Trust
Guarantee Trustee shall be determined solely by the express
provisions of this Capital Trust Guarantee, and the Capital Trust
Guarantee Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set forth in
this Capital Trust Guarantee, and no implied covenants or
obligations shall be read into this Capital Trust Guarantee
against the Capital Trust Guarantee Trustee; and
(B) in the absence of willful misconduct on the part of
the Capital Trust Guarantee Trustee, the Capital Trust Guarantee
Trustee may conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Capital Trust Guarantee
Trustee and conforming to the requirements of this Capital Trust
Guarantee; but in the case of any such certificates or opinions
that by any provision hereof are specifically required to be
furnished to the Capital Trust Guarantee Trustee, the Capital
Trust Guarantee Trustee shall be under a duty to examine the same
to determine whether or not they conform to the requirements of
this Capital Trust Guarantee;
(ii) the Capital Trust Guarantee Trustee shall not be liable for
any error of judgment made in good faith by a Responsible Officer of the Capital
Trust Guarantee Trustee, unless it shall be proved that the Capital Trust
Guarantee Trustee was negligent in ascertaining the pertinent facts upon which
such judgment was made;
(iii) the Capital Trust Guarantee Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
Liquidation Amount of the Capital Trust Securities relating to the time, method
and place of conducting any proceeding for any remedy available to the Capital
Trust Guarantee Trustee, or exercising any trust or other power conferred upon
the Capital Trust Guarantee Trustee under this Capital Trust Guarantee; and
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(iv) no provision of this Capital Trust Guarantee shall require
the Capital Trust Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers.
SECTION 3.2 Certain Rights of Capital Trust Guarantee Trustee.
-------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Capital Trust Guarantee Trustee may conclusively rely,
and shall be fully protected in acting or refraining from acting upon, any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this
Capital Trust Guarantee shall be sufficiently evidenced by an Officers'
Certificate;
(iii) Whenever, in the administration of this Capital Trust
Guarantee, the Capital Trust Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any action
hereunder, the Capital Trust Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part, request
and conclusively rely upon an Officers' Certificate which, upon receipt of such
request, shall be promptly delivered by the Guarantor;
(iv) The Capital Trust Guarantee Trustee shall have no duty to
see to any recording, filing or registration or any instrument (or any
rerecording, refiling or registration thereof);
(v) The Capital Trust Guarantee Trustee may consult with
counsel of its selection, and the advice or opinion of such counsel with respect
to legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in accordance with such advice or opinion. Such counsel may be counsel to
the Guarantor or any of its Affiliates and may include any of its employees. The
Capital Trust Guarantee Trustee shall have the right at any time to seek
instructions concerning the administration of this Capital Trust Guarantee from
any court of competent jurisdiction;
(vi) The Capital Trust Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this Capital
Trust Guarantee at the request or direction of any Holder, unless such Holder
shall have provided to the Capital Trust Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Capital Trust Guarantee Trustee,
against the costs, expenses (including attorneys' fees and expenses and the
expenses of the Capital Trust Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in complying with such
request or direction, including such reasonable advances as may be requested by
the Capital Trust Guarantee Trustee; provided, that nothing
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contained in this Section 3.2(a)(vi) shall be taken to relieve the Capital Trust
Guarantee Trustee, upon the occurrence of a Capital Guarantee Event of Default,
of its obligation to exercise the rights and powers vested in it by this Capital
Trust Guarantee;
(vii) The Capital Trust Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or other
paper or document, but the Capital Trust Guarantee Trustee, may make such
further inquiry or investigation into such facts or matters as it may see fit,
and, if the Capital Trust Guarantee Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the books, records and
premises of the Guarantor, personally or by agent or attorney;
(viii) The Capital Trust Guarantee Trustee shall not be liable for
any action taken, suffered or omitted to be taken by it in good faith and
reasonably believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Capital Trust Guarantee;
(ix) The Capital Trust Guarantee Trustee shall not be deemed to
have notice of any default hereunder unless a Responsible Officer of the Capital
Trust Guarantee Trustee has actual knowledge thereof or unless a written notice
of any event which is in fact such a default is received by the Capital Trust
Guarantee Trustee at its Corporate Trust Office, and such notice references this
Capital Trust Guarantee;
(x) The rights, privileges, protections, immunities and benefits
given to the Capital Trust Guarantee Trustee, including, without limitation, its
right to be indemnified, are extended to, and shall be enforceable by the
Capital Trust Guarantee Trustee in its capacity hereunder, and to each agent or
other Person employed to act hereunder;
(xi) The Capital Trust Guarantee Trustee may execute any of the
trust or other powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the Capital
Trust Guarantee Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by it
hereunder;
(xii) Any action taken by the Capital Trust Guarantee Trustee or
its agents hereunder shall bind the Holders of the Capital Trust Securities, and
the signature of the Capital Trust Guarantee Trustee or its agents alone shall
be sufficient and effective to perform any such action. No third party shall be
required to inquire as to the authority of the Capital Trust Guarantee Trustee
to so act or as to its compliance with any of the terms and provisions of this
Capital Trust Guarantee, both of which shall be conclusively evidenced by the
Capital Trust Guarantee Trustee's or its agent's taking such action; and
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(xiii) Whenever in the administration of this Capital Trust
Guarantee the Capital Trust Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any other
action hereunder, the Capital Trust Guarantee Trustee (i) may request
instructions from the Holders of a Majority in Liquidation Amount of the Capital
Trust Securities, (ii) may refrain from enforcing such remedy or right or taking
such other action until such instructions are received, and (iii) shall be
protected in conclusively relying on or acting in accordance with such
instructions.
(b) No provision of this Capital Trust Guarantee shall be deemed to
impose any duty or obligation on the Capital Trust Guarantee Trustee to perform
any act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Capital Trust Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts or to exercise
any such right, power, duty or obligation. No permissive power or authority
available to the Capital Trust Guarantee Trustee shall be construed to be a
duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Capital Trust
---------------------------------------------------------
Guarantee. The recitals contained in this Capital Trust Guarantee shall be
- ---------
taken as the statements of the Guarantor, and the Capital Trust Guarantee
Trustee does not assume any responsibility for their correctness. The Capital
Trust Guarantee Trustee makes no representations as to the validity or
sufficiency of this Capital Trust Guarantee.
ARTICLE IV
CAPITAL TRUST GUARANTEE TRUSTEE
SECTION 4.1 Capital Trust Guarantee Trustee; Eligibility.
--------------------------------------------
(a) There shall be at all times a Capital Trust Guarantee Trustee
which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least Fifty Million U.S. Dollars
($50,000,000), and subject to supervision or examination by federal, State,
Territorial or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
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(b) If at any time the Capital Trust Guarantee Trustee shall cease
to be eligible to so act under Section 4.1(a), the Capital Trust Guarantee
Trustee shall immediately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Trust Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Capital Trust Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital Trust
-----------------------------------------------------
Guarantee Trustee.
- -----------------
(a) No resignation or removal of the Capital Trust Guarantee
Trustee and no appointment of a Successor Capital Trust Guarantee Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Capital Trust Guarantee Trustee by written
instrument executed by the Successor Capital Trust Guarantee Trustee and
delivered to the Holders and the Capital Trust Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, a Capital Trust
Guarantee Trustee may resign at any time by giving written notice thereof to the
Holders. In such event, the Guarantor shall appoint a successor to serve as the
Capital Trust Guarantee Trustee. If the instrument of acceptance by the
Successor Capital Trust Guarantee Trustee shall not have been delivered to the
Capital Trust Guarantee Trustee within 30 days after the giving of such notice
of resignation, the Capital Trust Guarantee Trustee may petition, at the expense
of the Guarantor, any court of competent jurisdiction for the appointment of a
Successor Capital Trust Guarantee Trustee.
(c) The Capital Trust Guarantee Trustee may be removed for cause at
any time by Act (within the meaning of Section 104 of the Indenture) of the
Holders of at least a Majority in Liquidation Amount of the Capital Trust
Securities, delivered to the Capital Trust Guarantee Trustee. If any instrument
of acceptance by a Successor Capital Trust Guarantee Trustee shall not have been
delivered to the Capital Trust Guarantee Trustee within 30 days after the giving
of such notice of removal, the removed Capital Trust Guarantee Trustee may
petition, at the expense of the Guarantor, any court of competent jurisdiction
for the appointment of a Successor Capital Trust Guarantee Trustee.
(d) If the Guarantor shall fail to appoint a successor, or if a
Capital Trust Guarantee Trustee shall be removed or become incapable of acting
as Capital Trust Guarantee Trustee, or if any vacancy shall occur in the office
of any Capital Trust Guarantee Trustee for any cause, the Holders of the Capital
Trust Securities, by Act of the Holders of record of not less than 25% in
aggregate liquidation amount of the Capital Trust Securities then outstanding
delivered to such Capital Trust Guarantee Trustee, shall promptly appoint a
successor Capital Trust Guarantee Trustee. If no Successor Capital Trust
Guarantee Trustee shall have been so appointed by the Holders of the Capital
Trust Securities and such appointment accepted by the
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Successor Capital Trust Guarantee Trustee, any Holder, on behalf of himself and
all others similarly situated, may petition any court of competent jurisdiction
for the appointment of a Successor Capital Trust Guarantee Trustee.
(e) No Capital Trust Guarantee Trustee shall be liable for the acts
or omissions to act of any Successor Capital Trust Guarantee Trustee.
(f) Upon termination of this Capital Trust Guarantee or removal or
resignation of the Capital Trust Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Capital Trust Guarantee Trustee all amounts owing
for fees and reimbursement of expenses which have accrued to the date of such
termination, removal or resignation.
(g) The Guarantor shall promptly notify the Holders of the
resignation, removal or appointment of the Capital Trust Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Capital Guarantee Payments (without duplication of amounts
theretofore paid by the Capital Trust), as and when due, regardless of any
defense, right of set-off or counterclaim that the Capital Trust may have or
assert; provided that the Guarantor may not make any Capital Guarantee Payment
under this Capital Trust Guarantee without obtaining Regulatory Approval. The
Guarantor's obligation to make a Capital Guarantee Payment may be satisfied by
direct payment of the required amounts by the Guarantor to the Holders or by
causing the Capital Trust to pay such amounts to the Holders. In addition
without in any way limiting the scope of this Article V, the Guarantor hereby
confirms that it has expressly assumed and is liable for the due and punctual
payment of the Capital Guarantee Payments payable pursuant to Section 5.1 of the
First Maryland Guarantee and the due and punctual performance and observance of
all of the convenants and conditions of the First Maryland Guarantee to be
performed by First Maryland Bancorp, as fully and completely as if the Guarantor
had executed and delivered the First Maryland Guarantee.
In addition, the Guarantor hereby irrevocably and unconditionally agrees to
cause the Capital Trust to deliver to the Holders, upon dissolution of the
Capital Trust as a result of a Capital Trust Special Event, one Asset Trust
Preferred Security per Capital Trust Security.
SECTION 5.2 Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this Capital Trust
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Capital
Trust or any other Person before proceeding against the Guarantor, protest,
notice of nonpayment, notice of dishonor, notice of redemption and all other
notices and demands.
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SECTION 5.3 Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor under
this Capital Trust Guarantee shall be absolute and unconditional and shall
remain in full force and effect until the entire liquidation amount of all
outstanding Capital Trust Securities shall have been paid and such obligation
shall in no way be affected or impaired by reason of the happening from time to
time of any event, including without limitation, the following, whether or not
with notice to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by the Capital Trust of any express or implied
agreement, covenant, term or condition relating to the Capital Trust Securities
to be performed or observed by the Capital Trust;
(b) The extension of time for the payment by the Capital Trust of all
or any portion of the Distributions, Redemption Price (as defined in the
Indenture), Liquidation Distribution or any other sums payable under the terms
of the Capital Trust Securities or the extension of time for the performance of
any other obligation under, arising out of, or in connection with the Capital
Trust Securities;
(c) Any failure, omission, delay or lack of diligence on the part of
the Capital Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Capital Property Trustee or
the Holders pursuant to the terms of the Capital Trust Securities, or any action
on the part of the Capital Trust granting indulgence or extension of any kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Capital Trust or any of the
assets of the Capital Trust;
(e) Any invalidity of, or defect or deficiency in, the Capital Trust
Securities;
(f) The settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Capital Trust Guarantee Trustee or the
Holders to give notice to, or obtain consent of the Guarantor or any other
Person with respect to the happening of any of the foregoing.
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No set-off, counterclaim, reduction or diminution of any obligation, or any
defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Capital Trust Guarantee.
SECTION 5.4 Rights of Holders.
-----------------
(a) The Holders of a Majority in Liquidation Amount of the
Capital Trust Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Capital Trust
Guarantee Trustee in respect of this Capital Trust Guarantee or exercising any
trust or other power conferred upon the Capital Trust Guarantee Trustee under
this Capital Trust Guarantee.
(b) If the Capital Trust Guarantee Trustee fails to enforce this
Capital Trust Guarantee, then any Holder of Capital Trust Securities may,
subject to the subordination provisions of Section 6.2, institute a legal
proceeding directly against the Guarantor to enforce the Capital Trust Guarantee
Trustee's rights under this Capital Trust Guarantee without first instituting a
legal proceeding against the Capital Trust, the Capital Trust Guarantee Trustee
or any other Person or entity. Notwithstanding the foregoing, if the Guarantor
has failed to make a Capital Trust Guarantee Payment, a Holder of Capital Trust
Securities may, subject to the subordination provisions of Section 6.2, directly
institute a proceeding against the Guarantor for enforcement of the Capital
Trust Guarantee for such Holder's pro rata share of such Capital Trust Guarantee
Payment. The Guarantor hereby waives any right or remedy to require that any
action on this Capital Trust Guarantee be brought first against the Capital
Trust or any other Person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment.
--------------------
This Capital Trust Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation.
-----------
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Capital Trust Securities against the Capital Trust in respect of any amounts
paid to such Holders by the Guarantor under this Capital Trust Guarantee;
provided, however, that the Guarantor shall not (except to the extent required
by mandatory provisions of law) be entitled to enforce or exercise any right
that it may acquire by way of subrogation of any indemnity, reimbursement or
other agreement, in all cases as a result of payment under this Capital Trust
Guarantee, if at the time of any such payment, any amounts are due and unpaid
under this Capital Trust Guarantee. If any amount shall be paid to the
Guarantor in violation of the preceding sentence, the Guarantor agrees to hold
such amount in trust for the Holders and to pay over such amount to the Capital
Trust Guarantee Trustee for the benefit of the Holders.
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SECTION 5.7 Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Capital Trust with respect to the Capital Trust
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Capital Guarantee Payments pursuant to the terms of this
Capital Trust Guarantee notwithstanding the occurrence of any event referred to
in subsections 5.3(a) through 5.3(g), inclusive, hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
--------------------------
So long as any Capital Trust Securities remain outstanding, if for any
period a Capital Guarantee Event of Default has occurred and is continuing,
then, unless and until, since the curing or waiver of any such default, the
Capital Trust has made Distributions on the Capital Trust Preferred Securities
in full on four consecutive Distribution Payment Dates, the Guarantor shall not,
and shall not permit any subsidiary of the Guarantor, (x) to declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, the Guarantor's capital stock or (y) to
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor that rank pari passu
with or junior in interest and right of payment to the Debentures or make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any Subsidiary if such guarantee ranks pari passu with or junior
in interest and right of payment to the Debentures (other than (1) any
declaration or payment of a dividend or distribution on, or any payment of
principal, premium, if any, or interest on any guarantee, debt security or
instrument of the Guarantor ranking pari passu with the Debentures that is made
on a pro rata basis with all other such guarantees, debt securities and
instruments, including the Debentures and the Asset Trust Preferred Guarantee,
(2) repurchases, redemptions or other acquisitions of shares of capital stock of
the Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants or in connection with a dividend reinvestment
or stockholder stock purchase plan, (3) as a result of an exchange or conversion
of any class or series of the Guarantor's capital stock (or any capital stock of
a subsidiary of the Guarantor) for any class or series of the Guarantor's
capital stock or of any class of series of the Guarantor `s indebtedness for any
class or series of the Guarantor's capital stock, (4) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (5) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (6) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the
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stock issuable upon exercise of such warrants, options or other rights is the
same stock as that on which the dividend is being paid (or pari passu with or
junior to such stock)).
SECTION 6.2 Ranking.
-------
This Capital Trust Guarantee will constitute an unsecured obligation of the
Guarantor and will rank pari passu with the Guarantor's obligations under the
Debentures, the Asset Trust Preferred Guarantee and equally with or junior to
the Guarantor's obligations under any other instrument or agreement of the
Guarantor which is stated to rank equally with or senior to, as the case may be,
the Guarantor's obligation under this Capital Trust Guarantee.
If a Capital Trust Enforcement Event (as defined in the Capital Trust
Declaration) has occurred and is continuing under the Capital Trust Declaration,
the rights of the holders of the Capital Trust Common Securities to receive
Capital Guarantee Payments hereunder shall be subordinated to the rights of the
holders of the Capital Trust Preferred Securities to receive payment of all
amounts due and owing hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
-----------
This Capital Trust Guarantee shall terminate upon (a) full payment of the
Redemption Price of all Capital Trust Securities, (b) the distribution of the
Asset Trust Preferred Securities to the Holders of all the Capital Trust
Securities as a result of a Capital Trust Special Event, and (c) upon full
payment of the amounts payable in accordance with the Capital Trust Declaration
upon liquidation of the Capital Trust. Notwithstanding the foregoing, this
Capital Trust Guarantee will continue to be effective or will be reinstated, as
the case may be, if at any time any Holder of Capital Trust Securities must
restore payment of any sums paid under the Capital Trust Securities or under
this Capital Trust Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered Person for
any loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in
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good faith in accordance with this Capital Trust Guarantee and in a manner that
such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Capital Trust Guarantee
or by law, except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's negligence or
willful misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in
good faith upon the records of the Guarantor and upon such information,
opinions, reports or statements presented to the Guarantor by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and who has been selected with
reasonable care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the assets,
liabilities, profits, losses, or any other facts pertinent to the existence and
amount of assets from which Distributions to Holders of Capital Trust Securities
might properly be paid.
SECTION 8.2 Indemnification.
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against any and all loss, liability, damage,
claim or expense , including taxes (other than taxes based on the income of such
Indemnified Person received as a result of its duties hereunder) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the Capital Trust hereunder, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against, or investigating, any claim (whether asserted by the
Guarantor, a Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Capital Trust Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
----------------------
All guarantees and agreements contained in this Capital Trust Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital Trust
Securities then outstanding.
SECTION 9.2 Amendments.
----------
Except with respect to any changes that do not adversely affect the rights
of the Holders (in which case no consent of the Holders will be required), this
Capital Trust Guarantee may only be amended with the prior approval of the
Holders of at least a Majority in Liquidation Amount of the Capital Trust
Securities. The provisions of Section 11.2 of the Capital Trust
19
<PAGE>
Declaration with respect to meetings of, and action by written consent of the
Holders of the Capital Trust Securities apply to the giving of such approval.
SECTION 9.3 Consolidations and Mergers.
--------------------------
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other corporation;
provided, that in any such case, (i) either the Guarantor shall be the
- --------
continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America thereof
and such successor corporation shall expressly assume the due and punctual
payment of the Capital Guarantee Payments payable pursuant to Section 5.1 hereof
and the due and punctual performance and observance of all of the covenants and
conditions of this Capital Trust Guarantee to be performed by the Guarantor by a
separate guarantee satisfactory to the Capital Trust Guarantee Trustee, executed
and delivered to the Capital Trust Guarantee Trustee by such corporation, and
(ii) the Guarantor or such successor corporation, as the case may be, shall not,
immediately after such merger or consolidation, or such sale, lease or
conveyance, be in default in the performance of any such covenant or condition.
SECTION 9.4 Notices.
-------
All notices provided for in this Capital Trust Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied (and promptly confirmed by mail) or mailed by registered or certified
mail (provided that notice to Holders may be by first-class mail, postage pre-
paid), as follows:
(a) If given to the Capital Trust Guarantee Trustee, at the Capital
TrustGuarantee Trustee's mailing address set forth below (or such other address
as the Capital Trust Guarantee Trustee may give notice of to the Guarantor and
the Holders of the Capital Trust Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Fax: (212815-5915
(b) If given to the Guarantor, at the Guarantor's mailing addresses
set forth below (or such other address as the Guarantor may give notice of to
the Capital Trust Guarantee Trustee and the Holders of the Capital Trust
Securities):
Allfirst Financial Inc.
25 South Charles Street,
Baltimore, Maryland 21201
Attn: General Counsel
20
<PAGE>
Fax: (410) 244-3817
(c) If given to any Holder of Capital Trust Securities, at the
address set forth on the books and records of the Capital Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.5 Benefit.
-------
This Capital Trust Guarantee is solely for the benefit of the Holders of
the Capital Trust Securities and, subject to Section 3.1(a), is not separately
transferable from the Capital Trust Securities.
SECTION 9.6 Governing Law.
-------------
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF.
21
<PAGE>
IN WITNESS WHEREOF, this Capital Trust Guarantee is executed as of the day
and year first above written.
ALLFIRST FINANCIAL INC.,
as Guarantor
By:________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Capital Trust Guarantee Trustee
By:________________________________
Name:
Title:
22
<PAGE>
EXHIBIT 4.6
================================================================================
SERIES B ASSET TRUST PREFERRED GUARANTEE AGREEMENT
ALLFIRST PREFERRED ASSET TRUST
Dated as of ________, 1999
================================================================================
<PAGE>
CROSS REFERENCE TABLE/1/
Section of Trust Indenture Act
of 1939, as amended Section of Agreement
310(a)................................................................ 4.1(a)
310(b)................................................................ 4.1(c)
310(c).......................................................... Inapplicable
311(a)................................................................ 2.2(b)
311(b)................................................................ 2.2(b)
311(c).......................................................... Inapplicable
312(a)................................................................ 2.2(a)
312(b)................................................................ 2.2(b)
312(c)................................................................... 2.9
313(a)................................................................... 2.3
313(b)................................................................... 2.3
313(c)................................................................... 2.3
313(d)................................................................... 2.3
314(a)................................................................... 2.4
314(b).......................................................... Inapplicable
314(c)................................................................... 2.5
314(d).......................................................... Inapplicable
314(e)................................................................... 2.5
314(f).......................................................... Inapplicable
315(a).........................................................3.1(d); 3.2(a)
315(b)................................................................ 2.7(a)
315(c)................................................................ 3.1(c)
315(d)................................................................ 3.1(d)
316(a)........................................................... 2.6; 5.4(a)
317(a)............................................................. 2.10; 5.4
318(a)................................................................ 2.1(b)
_________________________
/1/ This Cross-Reference Table does not constitute part of the Agreement and
shall not have any bearing upon the interpretation of any of its terms or
provisions.
<PAGE>
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions..................................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application................................................... 6
SECTION 2.2 Lists of Holders of Asset Trust Securities......................................... 6
SECTION 2.3 Reports by Asset Trust Preferred Guarantee Trustee................................. 6
SECTION 2.4 Periodic Reports to Asset Trust Preferred Guarantee Trustee........................ 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent................................... 7
SECTION 2.6 Asset Guarantee Event of Default; Waiver........................................... 7
SECTION 2.7 Asset Guarantee Event of Default; Notice........................................... 7
SECTION 2.8 Conflicting Interests.............................................................. 7
SECTION 2.9 Disclosure of Information.......................................................... 7
SECTION 2.10 Asset Trust Preferred Guarantee Trustee May File Proofs of Claim.................. 8
ARTICLE III
POWERS, DUTIES AND RIGHTS OF ASSET TRUST GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Asset Trust Preferred Guarantee Trustee....................... 8
SECTION 3.2 Certain Rights of Asset Trust Preferred Guarantee Trustee.......................... 10
SECTION 3.3 Not Responsible for Recitals or Issuance of Asset Trust Preferred Guarantee........ 12
ARTICLE IV
ASSET TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Asset Trust Preferred Guarantee Trustee; Eligibility............................... 13
SECTION 4.2 Appointment, Removal and Resignation of Asset Trust Preferred
Guarantee Trustee.................................................................. 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.......................................................................... 15
SECTION 5.2 Waiver of Notice and Demand........................................................ 15
SECTION 5.3 Obligations Not Affected........................................................... 15
SECTION 5.4 Rights of Holders.................................................................. 16
SECTION 5.5 Guarantee of Payment............................................................... 17
SECTION 5.6 Subrogation........................................................................ 17
SECTION 5.7 Independent Obligations............................................................ 17
</TABLE>
i
<PAGE>
<TABLE>
<S> <C>
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions............................................................ 17
SECTION 6.2 Ranking............................................................................... 18
ARTICLE VII
TERMINATION
SECTION 7.1 Termination........................................................................... 19
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation........................................................................... 19
SECTION 8.2 Indemnification....................................................................... 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................................................ 20
SECTION 9.2 Amendments............................................................................ 20
SECTION 9.3 Consolidations and Mergers............................................................ 20
SECTION 9.4 Notices............................................................................... 21
SECTION 9.5 Benefit............................................................................... 21
SECTION 9.6 Governing Law......................................................................... 22
</TABLE>
ii
<PAGE>
SERIES B ASSET TRUST PREFERRED GUARANTEE AGREEMENT
This SERIES B ASSET TRUST PREFERRED GUARANTEE AGREEMENT (the "Asset Trust
Preferred Guarantee"), dated as of _______, 1999, is executed and delivered by
Allfirst Financial Inc. (the "Guarantor"), a Delaware corporation and the
success or by merger to First Maryland Bancorp, and The Bank of New York (the
"Asset Trust Preferred Guarantee Trustee"), a New York banking corporation, as
trustee, for the benefit of the Holders (as defined herein) of the Asset Trust
Securities (as defined herein) of Allfirst Preferred Asset Trust (the "Asset
Trust"), a Delaware statutory business trust.
W I T N E S S E T H:
-------------------
WHEREAS, pursuant to the Asset Trust Declaration (as defined herein), on
July 13, 1999 the Asset Trust $103,093,000 aggregate liquidation amount of its
Floating Rate Non-Cumulative Subordinated Asset Trust Securities, Series A (the
"Old Asset Trust Preferred Securities"), having a liquidation amount of $1,000
per Asset Trust Preferred Security and $7,760,000 aggregate liquidation amount
of its Floating Rate Non-Cumulative Subordinated Asset Trust Common Securities,
having a liquidation amount of $1,000 per common security (the "Asset Trust
Common Securities");
WHEREAS, the Old Asset Trust Preferred Securities were irrevocably and
unconditionally guaranteed by First Maryland Bancorp, to the extent set forth
in the Series A Asset Trust Preferred Guarantee Agreement dated as of July 13,
1999 (the "First Maryland Guarantee");
WHEREAS, on September 15, 1999, First Maryland Bancorp was merged into the
Guarantor solely for purposes of changing the domicile of incorporation of First
Maryland Bancorp, and the Guarantor succeeded to all of the rights, privileges,
liabilities and obligations of First Maryland Bancorp, including without
limitation the First Maryland Guarantee, as fully and completely as if the
Guarantor has executed and delivered the First Maryland Guarantee, and the
Guarantor executed and delivered to the Asset Trust Preferred Guarantee Trustee
its Series A Asset Trust Preferred Guarantee Agreement dated as of September 15,
1999 (the "Old Guarantee");
WHEREAS, pursuant to the Registration Rights Agreement (as defined in the
Asset Trust Declaration), Allfirst Preferred Capital Trust and Asset Trust wish
to exchange the Old Asset Trust Preferred Securities for $103,093,000 aggregate
liquidation amount of Asset Trust's Floating Rate Non-Cumulative Subordinated
Asset Trust Securities, Series B, liquidation amount of $1,000 per asset trust
preferred security (the "Asset Trust Preferred Securities"), which have been
registered under the Securities Act of 1933, as amended (the "Securities Act");
WHEREAS, pursuant to the Registration Rights Agreement (as defined in the
Asset Trust Declaration), the Guarantor and the Asset Trust Preferred Guarantee
Trustee wish to exchange the Old Guarantee for this Series B Asset Trust
Preferred Guarantee Agreement, which is substantially the same as the Old
Guarantee except that it has been registered under the Securities Act and
qualified under the Trust Indenture Act and does not contain restrictions on
transfer, and which is for the benefit of the Holders of Asset Trust Preferred
Securities;
WHEREAS, as incentive for the Holders to retain the Asset Trust Preferred
Securities (which the Guarantor agrees will benefit it), the Guarantor desires
irrevocably and unconditionally to agree, to the extent set forth in this
Guarantee, to pay to the Holders of the Asset Trust Preferred Securities the
Asset Guarantee Payments (as defined herein) and to make certain other payments
of the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the premises, the Guarantor executes
and delivers this Asset Trust Preferred Guarantee for the benefit of the
Holders.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Interpretation and Definitions. In this Asset Trust Preferred
------------------------------
Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Asset Trust Preferred Guarantee
but not defined in the preamble above have the respective meanings assigned
to them in this Section 1.1;
(b) a term defined anywhere in this Asset Trust Preferred Guarantee
has the same meaning throughout;
1
<PAGE>
(c) all references to "the Asset Trust Preferred Guarantee" or "this
Asset Trust Preferred Guarantee" are to this Asset Trust Preferred
Guarantee as modified, supplemented or amended from time to time;
(d) all references in this Asset Trust Preferred Guarantee to
Articles and Sections are to Articles and Sections of this Asset Trust
Preferred Guarantee, unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning
when used in this Asset Trust Preferred Guarantee, unless otherwise defined
in this Asset Trust Preferred Guarantee or unless the context otherwise
requires; and
(f) a reference to the singular includes the plural and vice versa
and a reference to the masculine includes, as applicable, the feminine.
"Affiliate" has the same meaning as given to that term in Rule 405 of
the Securities Act of 1933, as amended, or any successor rule thereunder.
"Asset Guarantee Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Asset Trust Preferred
Guarantee.
"Asset Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Asset Trust
Preferred Securities, to the extent not paid or made by the Asset Trust:
(i) any Distributions (as defined in the Asset Trust Declaration) on such
Asset Trust Preferred Securities not paid on such Preferred Distribution
Payment Date (as defined in the Asset Trust Declaration) to the extent the
Asset Trust shall have at the time funds that represent interest, other
than Deferred Interest (as defined in the Indenture), paid to the Asset
Trust with respect to the Interest Payment Date (as defined in the
Indenture) that occurs on such Preferred Distribution Payment Date, (ii)
the redemption price, including all unpaid Distributions to the date of
redemption that have accrued since the immediately preceding Preferred
Distribution Payment Date, with respect to any Asset Trust Preferred
Securities called for redemption by the Asset Trust, to the extent the
Asset Trust shall have at the time funds that represent the redemption
price of the Debentures, other than Deferred Interest, paid to the Asset
Trust upon the redemption of the Debentures, in whole or in part, and,
(iii) upon a voluntary or involuntary dissolution, winding-up or
termination of the Asset Trust, the lesser of (a) the aggregate of the
liquidation amount and all accrued and unpaid Distributions on the Asset
Trust Preferred Securities that have accrued since the immediately
preceding Preferred Distribution Payment Date, and (b) the amount of assets
of the Asset Trust, after satisfaction of all liabilities, remaining
available for distribution to Holders of the Asset Trust Preferred
Securities in liquidation of the Asset Trust (in either case, the
"Liquidation Distribution").
2
<PAGE>
"Asset Trust Declaration" means the Amended and Restated Declaration
of Trust, dated as of July 13, 1999, as amended, modified or supplemented
from time to time, among the trustees of the Asset Trust named therein, the
Guarantor, as sponsor, and the holders from time to time of undivided
beneficial ownership interests in the assets of the Asset Trust.
"Asset Trust Preferred Guarantee Trustee" means The Bank of New York,
until a successor Asset Trust Preferred Guarantee Trustee has been
appointed and has accepted such appointment pursuant to the terms of this
Asset Trust Preferred Guarantee and thereafter means each such Successor
Asset Trust Preferred Guarantee Trustee.
"Asset Trust Preferred Securities" has the meaning set forth in the
recitals to this Asset Trust Preferred Guarantee.
"Asset Trust Special Event" has the meaning set forth in the Asset
Trust Declaration.
"Business Day" has the meaning given to such term in the Indenture.
"Capital Trust" means Allfirst Preferred Capital Trust.
"Capital Trust Declaration" means the Amended and Restated Declaration
of Trust, dated as of July 13, 1999, as amended, modified or supplemented
from time to time, among the Capital Trustees of the Capital Trust named
therein, the Guarantor, as sponsor, and the holders from time to time of
undivided beneficial ownership interests in the assets of the Capital
Trust.
"Capital Trust Guarantee" means the Series B Capital Trust Guarantee
Agreement, dated as of _______, 1999, entered into by the Guarantor, for
the benefit of the Holders of the Capital Trust Securities.
"Capital Trust Preferred Securities" has the meaning set forth in the
Capital Trust Declaration.
"Corporate Trust Office" means the office of the Asset Trust Preferred
Guarantee Trustee at which the corporate trust business of the Asset Trust
Preferred Guarantee Trustee shall at any particular time, be principally
administered, which office at the date of execution of this Asset Trust
Preferred Guarantee is located at The Bank of New York, 101 Barclay Street,
Floor 21 West, New York, New York 10286, Attention: Corporate Trust
Administration.
"Covered Person" means any Holder or beneficial owner of Asset Trust
Preferred Securities.
3
<PAGE>
"Debenture Issuer" means Allfirst Financial Inc. in its capacity as
issuer of the Debentures under the Indenture.
"Debentures" means the series of junior subordinated debentures to be
issued by the Guarantor, designated the Floating Rate Junior Subordinated
Debentures, Series B, due July 15, 2029, held by the Asset Property Trustee
(as defined in the Asset Trust Declaration).
"Exchange Offer" has the meaning set forth in the Asset Trust
Declaration.
"Holder" shall mean any holder of Asset Trust Preferred Securities, as
registered on the books and records of the Asset Trust; provided, however,
that, in determining whether the Holders of the requisite percentage of
Asset Trust Preferred Securities have given any request, notice, consent or
waiver hereunder, "Holder" shall not include the Guarantor or any Affiliate
of the Guarantor or any other obligor on the Asset Trust Preferred
Securities; and provided further, that in determining whether the Holders
of the requisite liquidation amount of Asset Trust Preferred Securities
have voted on any matter provided for in this Asset Trust Preferred
Guarantee, then for the purpose of such determination only (and not for any
other purpose hereunder), if the Asset Trust Preferred Securities remain in
the form of one or more Global Securities (as defined in the Asset Trust
Declaration), the term "Holders" shall mean the holder of the Global
Security acting at the direction of the beneficial owners of the Asset
Trust Preferred Securities.
"Indemnified Person" means the Asset Trust Preferred Guarantee
Trustee, any Affiliate of the Asset Trust Preferred Guarantee Trustee, and
any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Asset Trust
Preferred Guarantee Trustee.
"Indenture" means the Indenture, dated as of July 13, 1999, between
the Guarantor, as Debenture Issuer, and The Bank of New York, as trustee,
Supplemental Indenture No. 1 dated as of September 15, 1999, and any other
indentures supplemental thereto pursuant to which the Debentures are to be
issued.
"Majority in Liquidation Amount of the Asset Trust Preferred
Securities" means, except as provided in the terms of the Asset Trust
Preferred Securities or by the Trust Indenture Act, Holder(s) of
outstanding Asset Trust Preferred Securities, voting separately as a class,
who are the record holders of more than 50% of the aggregate liquidation
amount of all outstanding Asset Trust Preferred Securities. In determining
whether the Holders of the requisite amount of Asset Trust Preferred
Securities have voted, Asset Trust Preferred Securities which are owned by
the Guarantor or any Affiliate of the Guarantor shall be disregarded for
the purpose of any such determination.
"Officers' Certificate" means, with respect to any Person, a
certificate signed on behalf of such Person by two Authorized Officers (as
defined in the Asset Trust Declaration) of such Person. Any Officers'
Certificate delivered with respect to
4
<PAGE>
compliance with a condition or covenant provided for in this Asset Trust
Preferred Guarantee shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable
such officer on behalf of such Person to express an informed opinion
as to whether or not such covenant or condition has been complied
with;
(c) a statement as to whether, in the opinion of each such
officer acting on behalf of such Person, such condition or covenant
has been complied with; and
(d) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Officers'
Certificate.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company,
limited liability company, trust, unincorporated association, or government
or any agency or political subdivision thereof, or any other entity of
whatever nature.
"Regulatory Approval" has the meaning set forth in the Indenture.
"Responsible Officer" means, with respect to the Asset Trust Preferred
Guarantee Trustee, any officer within the Corporate Trust Office of the
Asset Trust Preferred Guarantee Trustee, including any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer
or other officer of the Corporate Trust Office of the Asset Trust Preferred
Guarantee Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Asset Trust Preferred Guarantee Trustee" means a successor
Asset Trust Preferred Guarantee Trustee possessing the qualifications to
act as Asset Trust Preferred Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended from time to time, or any successor legislation.
5
<PAGE>
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
--------------------------------
(a) This Asset Trust Preferred Guarantee is subject to the provisions
of the Trust Indenture Act that are required to be part of this Asset Trust
Preferred Guarantee and shall, to the extent applicable, be governed by such
provisions.
(b) If and to the extent that any provision of this Asset Trust
Preferred Guarantee limits, qualifies or conflicts with the duties imposed by
Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed duties
shall control.
SECTION 2.2 Lists of Holders of Asset Trust Securities.
------------------------------------------
(a) The Guarantor shall provide the Asset Trust Preferred Guarantee
Trustee with a list, in such form as the Asset Trust Preferred Guarantee Trustee
may reasonably require, of the names and addresses of the Holders of the Asset
Trust Preferred Securities ("List of Holders"), (i) semi-annually, not later
than June 30 and December 31 of each year and current as of such date, and (ii)
at such other times as the Asset Trust Preferred Guarantee Trustee may request
in writing, within 30 days of receipt by the Guarantor of a written request from
the Asset Trust Preferred Guarantee Trustee for a List of Holders as of a date
no more than 15 days before such List of Holders is given to the Asset Trust
Preferred Guarantee Trustee; excluding from any such list names and addresses
received by the Asset Trust Preferred Guarantee Trustee in its capacity as
Security Registrar (as defined in the Indenture). The Asset Trust Preferred
Guarantee Trustee shall preserve, in as current a form as is reasonably
practicable, all information contained in Lists of Holders given to it, provided
that it may destroy any List of Holders previously given to it on receipt of a
new List of Holders.
(b) The Asset Trust Preferred Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by Asset Trust Preferred Guarantee Trustee. As of May
--------------------------------------------------
15 of each year (commencing with the year of the first anniversary of the
issuance of the Asset Trust Securities), the Asset Trust Preferred Guarantee
Trustee shall provide to the Holders of the Asset Trust Securities such reports
as are required by the Trust Indenture Act (if any) in the form and in the
manner provided therein. The Asset Trust Preferred Guarantee Trustee shall also
comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Asset Trust Preferred Guarantee Trustee.
-----------------------------------------------------------
The Guarantor shall provide to the Asset Trust Preferred Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) of the
Trust Indenture Act and the compliance certificate required by Section 314 of
the Trust Indenture Act in the form, in the
6
<PAGE>
manner and at the times required by Section 314 of the Trust Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent. The
------------------------------------------------
Guarantor shall provide to the Asset Trust Preferred Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Asset Trust Preferred Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or opinion
required to be given by an officer pursuant to Section 314(c)(1) may be given in
the form of an Officers' Certificate.
SECTION 2.6 Asset Guarantee Event of Default; Waiver. The Holders of a
----------------------------------------
Majority in Liquidation Amount of the Asset Trust Preferred Securities may, by
vote or written consent, on behalf of the Holders of all of the Asset Trust
Preferred Securities, waive any past Asset Guarantee Event of Default and its
consequences. Upon such waiver, any such Asset Guarantee Event of Default shall
cease to exist, and any Asset Guarantee Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Asset Trust Preferred
Guarantee, but no such waiver shall extend to any subsequent or other default or
Asset Guarantee Event of Default or impair any right consequent thereon.
SECTION 2.7 Asset Guarantee Event of Default; Notice.
----------------------------------------
(a) The Asset Trust Preferred Guarantee Trustee shall, within 90 days
after the occurrence of an Asset Guarantee Event of Default, transmit by mail,
first class postage prepaid, to the Holders of the Asset Trust Preferred
Securities, notices of all Asset Guarantee Events of Default actually known to a
Responsible Officer of the Asset Trust Preferred Guarantee Trustee, unless such
defaults have been cured before the giving of such notice; provided, that the
Asset Trust Preferred Guarantee Trustee shall be protected in withholding such
notice if and so long as a Responsible Officer of the Asset Trust Preferred
Guarantee Trustee in good faith determines that the withholding of such notice
is in the interests of the Holders of the Asset Trust Preferred Securities.
(b) The Asset Trust Preferred Guarantee Trustee shall not be deemed
to have knowledge of any Asset Guarantee Event of Default unless the Asset Trust
Preferred Guarantee Trustee shall have received written notice thereof or a
Responsible Officer of the Asset Trust Preferred Guarantee Trustee charged with
the administration of the Asset Trust Declaration shall have obtained actual
knowledge thereof.
SECTION 2.8 Conflicting Interests. The Asset Trust Declaration shall be
---------------------
deemed to be specifically described in this Asset Trust Preferred Guarantee for
the purposes of clause (i) of the first provision contained in Section 310(b) of
the Trust Indenture Act.
SECTION 2.9 Disclosure of Information. The disclosure of information as
-------------------------
to the names and addresses of the Holders of the Asset Trust Preferred
Securities in accordance with Section 312 of the Trust Indenture Act, regardless
of the source from which such information was derived, shall not be deemed to be
a violation of any existing law, or any law hereafter enacted
7
<PAGE>
which does not specifically refer to Section 312 of the Trust Indenture Act, nor
shall the Asset Trust Preferred Guarantee Trustee be held accountable by reason
of mailing any material pursuant to a request made under Section 312(b) of the
Trust Indenture Act.
SECTION 2.10 Asset Trust Preferred Guarantee Trustee May File Proofs of
----------------------------------------------------------
Claim. Upon the occurrence of an Asset Guarantee Event of Default, the Asset
- -----
Trust Preferred Guarantee Trustee is hereby authorized to (a) recover judgment,
in its own name and as trustee of an express trust, against the Guarantor for
the whole amount of any Asset Guarantee Payments remaining unpaid and (b) file
such proofs of claim and other papers or documents as may be necessary or
advisable in order to have its claims and those of the Holders of the Asset
Trust Preferred Securities allowed in any judicial proceedings relative to the
Guarantor, its creditors or its property.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF ASSET TRUST
GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of Asset Trust Preferred Guarantee Trustee.
------------------------------------------------------------
(a) This Asset Trust Preferred Guarantee shall be held by the Asset
Trust Preferred Guarantee Trustee on behalf of the Asset Trust for the benefit
of the Holders of the Asset Trust Preferred Securities, and the Asset Trust
Preferred Guarantee Trustee shall not transfer this Asset Trust Preferred
Guarantee to any Person except a Holder of Asset Trust Preferred Securities
exercising his or her rights pursuant to Section 5.4(b) or to a Successor Asset
Trust Preferred Guarantee Trustee on acceptance by such Successor Asset Trust
Preferred Guarantee Trustee. The right, title and interest of the Asset Trust
Preferred Guarantee Trustee in and to this Asset Trust Preferred Guarantee shall
automatically vest in any Successor Asset Trust Preferred Guarantee Trustee, and
such vesting and succession of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Asset Trust Preferred Guarantee Trustee.
(b) If an Asset Guarantee Event of Default actually known to a
Responsible Officer of the Asset Trust Preferred Guarantee Trustee has occurred
and is continuing, the Asset Trust Preferred Guarantee Trustee shall enforce
this Asset Trust Preferred Guarantee for the benefit of the Holders of the Asset
Trust Preferred Securities.
(c) The Asset Trust Preferred Guarantee Trustee, before the
occurrence of any Asset Guarantee Event of Default and after the curing of all
Asset Guarantee Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this Asset Trust
Preferred Guarantee, and no implied covenants shall be read into this Asset
Trust Preferred Guarantee against the Asset Trust Preferred Guarantee Trustee.
In case an Asset Guarantee Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) and is actually known to a Responsible
Officer of the Asset Trust Preferred Guarantee
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Trustee, the Asset Trust Preferred Guarantee Trustee shall exercise such of the
rights and powers vested in it by this Asset Trust Preferred Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Asset Trust Preferred Guarantee shall be
construed to relieve the Asset Trust Preferred Guarantee Trustee from liability
for its own negligent action, its own negligent failure to act, or its own
willful misconduct, except that:
(i) prior to the occurrence of any Asset Guarantee Event of
Default and after the curing or waiving of all such Asset Guarantee Events
of Default that may have occurred:
(A) the duties and obligations of the Asset Trust
Preferred Guarantee Trustee shall be determined solely by the
express provisions of this Asset Trust Preferred Guarantee, and
the Asset Trust Preferred Guarantee Trustee shall not be liable
except for the performance of such duties and obligations as
are specifically set forth in this Asset Trust Preferred
Guarantee, and no implied covenants or obligations shall be
read into this Asset Trust Preferred Guarantee against the
Asset Trust Preferred Guarantee Trustee; and
(B) in the absence of willful misconduct on the part
of the Asset Trust Preferred Guarantee Trustee, the Asset Trust
Preferred Guarantee Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions
expressed therein, upon any certificates or opinions furnished
to the Asset Trust Preferred Guarantee Trustee and conforming
to the requirements of this Asset Trust Preferred Guarantee;
but in the case of any such certificates or opinions that by
any provision hereof are specifically required to be furnished
to the Asset Trust Preferred Guarantee Trustee, the Asset Trust
Preferred Guarantee Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Asset Trust Preferred Guarantee;
(ii) the Asset Trust Preferred Guarantee Trustee shall not be
liable for any error of judgment made in good faith by a Responsible
Officer of the Asset Trust Preferred Guarantee Trustee, unless it shall be
proved that the Asset Trust Preferred Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment was made;
(iii) the Asset Trust Preferred Guarantee Trustee shall not be
liable with respect to any action taken or omitted to be taken by it in
good faith in accordance with the direction of the Holders of not less than
a Majority in Liquidation Amount of the Asset Trust Preferred Securities
relating to the time, method and place of conducting any
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proceeding for any remedy available to the Asset Trust Preferred Guarantee
Trustee, or exercising any trust or other power conferred upon the Asset
Trust Preferred Guarantee Trustee under this Asset Trust Preferred
Guarantee; and
(iv) no provision of this Asset Trust Preferred Guarantee shall
require the Asset Trust Preferred Guarantee Trustee to expend or risk its
own funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers.
SECTION 3.2 Certain Rights of Asset Trust Preferred Guarantee Trustee.
---------------------------------------------------------
(a) Subject to the provisions of Section 3.1:
(i) The Asset Trust Preferred Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining
from acting upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or document
believed by it to be genuine and to have been signed, sent or presented by
the proper party or parties;
(ii) Any direction or act of the Guarantor contemplated by this
Asset Trust Preferred Guarantee shall be sufficiently evidenced by an
Officers' Certificate;
(iii) Whenever, in the administration of this Asset Trust
Preferred Guarantee, the Asset Trust Preferred Guarantee Trustee shall deem
it desirable that a matter be proved or established before taking,
suffering or omitting any action hereunder, the Asset Trust Preferred
Guarantee Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Guarantor;
(iv) The Asset Trust Preferred Guarantee Trustee shall have no
duty to see to any recording, filing or registration or any instrument (or
any rerecording, refiling or registration thereof);
(v) The Asset Trust Preferred Guarantee Trustee may consult
with counsel of its selection, and the advice or opinion of such counsel
with respect to legal matters shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice or opinion. Such
counsel may be counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Asset Trust Preferred Guarantee Trustee
shall have the right at any time to seek instructions concerning the
administration of this Asset Trust Preferred Guarantee from any court of
competent jurisdiction;
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(vi) The Asset Trust Preferred Guarantee Trustee shall be under
no obligation to exercise any of the rights or powers vested in it by this
Asset Trust Preferred Guarantee at the request or direction of any Holder,
unless such Holder shall have provided to the Asset Trust Preferred
Guarantee Trustee such security and indemnity, reasonably satisfactory to
the Asset Trust Preferred Guarantee Trustee, against the costs, expenses
(including attorneys' fees and expenses and the expenses of the Asset Trust
Preferred Guarantee Trustee's agents, nominees or custodians) and
liabilities that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by the
Asset Trust Preferred Guarantee Trustee; provided, that nothing contained
in this Section 3.2(a)(vi) shall be taken to relieve the Asset Trust
Preferred Guarantee Trustee, upon the occurrence of an Asset Guarantee
Event of Default, of its obligation to exercise the rights and powers
vested in it by this Asset Trust Preferred Guarantee;
(vii) The Asset Trust Preferred Guarantee Trustee shall not be
bound to make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document, but the Asset Trust Preferred
Guarantee Trustee, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Asset Trust Preferred
Guarantee Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Guarantor, personally or by agent or attorney;
(viii) The Asset Trust Preferred Guarantee Trustee shall not be
liable for any action taken, suffered or omitted to be taken by it in good
faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Asset Trust
Preferred Guarantee;
(ix) The Asset Trust Preferred Guarantee Trustee shall not be
deemed to have notice of any default hereunder unless a Responsible Officer
of the Asset Trust Preferred Guarantee Trustee has actual knowledge thereof
or unless a written notice of any event which is in fact such a default is
received by the Asset Trust Preferred Guarantee Trustee at its Corporate
Trust Office, and such notice references this Asset Trust Preferred
Guarantee;
(x) The rights, privileges, protections, immunities and
benefits given to the Asset Trust Preferred Guarantee Trustee, including,
without limitation, its right to be indemnified, are extended to, and shall
be enforceable by the Asset Trust Preferred Guarantee Trustee in its
capacity hereunder, and to each agent or other Person employed to act
hereunder;
(xi) The Asset Trust Preferred Guarantee Trustee may execute
any of the trust or other powers hereunder or perform any duties hereunder
either directly or by or
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through agents, nominees, custodians or attorneys, and the Asset
Trust Preferred Guarantee Trustee shall not be responsible for any
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder;
(xii) Any action taken by the Asset Trust Preferred Guarantee
Trustee or its agents hereunder shall bind the Holders of the Asset Trust
Securities, and the signature of the Asset Trust Preferred Guarantee
Trustee or its agents alone shall be sufficient and effective to perform
any such action. No third party shall be required to inquire as to the
authority of the Asset Trust Preferred Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this Asset Trust
Preferred Guarantee, both of which shall be conclusively evidenced by the
Asset Trust Preferred Guarantee Trustee's or its agent's taking such
action; and
(xiii) Whenever in the administration of this Asset Trust
Preferred Guarantee the Asset Trust Preferred Guarantee Trustee shall deem
it desirable to receive instructions with respect to enforcing any remedy
or right or taking any other action hereunder, the Asset Trust Preferred
Guarantee Trustee (i) may request instructions from the Holders of a
Majority in Liquidation Amount of the Asset Trust Preferred Securities,
(ii) may refrain from enforcing such remedy or right or taking such other
action until such instructions are received, and (iii) shall be protected
in conclusively relying on or acting in accordance with such instructions.
(b) No provision of this Asset Trust Preferred Guarantee shall be
deemed to impose any duty or obligation on the Asset Trust Preferred Guarantee
Trustee to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it in any jurisdiction in which it shall be
illegal, or in which the Asset Trust Preferred Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Asset Trust Preferred Guarantee
Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Asset Trust
-------------------------------------------------------
Preferred Guarantee. The recitals contained in this Asset Trust Preferred
- -------------------
Guarantee shall be taken as the statements of the Guarantor, and the Asset Trust
Preferred Guarantee Trustee does not assume any responsibility for their
correctness. The Asset Trust Preferred Guarantee Trustee makes no
representations as to the validity or sufficiency of this Asset Trust Preferred
Guarantee.
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ARTICLE IV
ASSET TRUST PREFERRED GUARANTEE TRUSTEE
SECTION 4.1 Asset Trust Preferred Guarantee Trustee; Eligibility.
----------------------------------------------------
(a) There shall be at all times an Asset Trust Preferred Guarantee
Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least Fifty
Million U.S. Dollars ($50,000,000), and subject to supervision or
examination by federal, State, Territorial or District of Columbia
authority. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the supervising or
examining authority referred to above, then, for the purposes of this
Section 4.1(a)(ii), the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b) If at any time the Asset Trust Preferred Guarantee Trustee shall
cease to be eligible to so act under Section 4.1(a), the Asset Trust Preferred
Guarantee Trustee shall immediately resign in the manner and with the effect set
out in Section 4.2(c).
(c) If the Asset Trust Preferred Guarantee Trustee has or shall
acquire any "conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Asset Trust Preferred Guarantee Trustee and Guarantor
shall in all respects comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Asset Trust Preferred
-------------------------------------------------------------
Guarantee Trustee.
- -----------------
(a) No resignation or removal of the Asset Trust Preferred Guarantee
Trustee and no appointment of a Successor Asset Trust Preferred Guarantee
Trustee pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Asset Trust Preferred Guarantee Trustee by written
instrument executed by the Successor Asset Trust Preferred Guarantee Trustee and
delivered to the Holders and the Asset Trust Preferred Guarantee Trustee.
(b) Subject to the immediately preceding paragraph, an Asset Trust
Preferred Guarantee Trustee may resign at any time by giving written notice
thereof to the Holders. In
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such event, the Guarantor shall appoint a successor to serve as the Asset Trust
Preferred Guarantee Trustee. If the instrument of acceptance by the Successor
Asset Trust Preferred Guarantee Trustee shall not have been delivered to the
Asset Trust Preferred Guarantee Trustee within 30 days after the giving of such
notice of resignation, the Asset Trust Preferred Guarantee Trustee may petition,
at the expense of the Guarantor, any court of competent jurisdiction for the
appointment of a Successor Asset Trust Preferred Guarantee Trustee.
(c) The Asset Trust Preferred Guarantee Trustee may be removed for
cause at any time by Act (within the meaning of Section 104 of the Indenture) of
the Holders of at least a Majority in Liquidation Amount of the Asset Trust
Preferred Securities, delivered to the Asset Trust Preferred Guarantee Trustee.
If any instrument of acceptance by a Successor Asset Trust Preferred Guarantee
Trustee shall not have been delivered to the Asset Trust Preferred Guarantee
Trustee within 30 days after the giving of such notice of removal, the removed
Asset Trust Preferred Guarantee Trustee may petition, at the expense of the
Guarantor, any court of competent jurisdiction for the appointment of a
Successor Asset Trust Preferred Guarantee Trustee.
(d) If the Guarantor shall fail to appoint a successor, or if an
Asset Trust Preferred Guarantee Trustee shall be removed or become incapable of
acting as Asset Trust Preferred Guarantee Trustee, or if any vacancy shall occur
in the office of any Asset Trust Preferred Guarantee Trustee for any cause, the
Holders of the Asset Trust Preferred Securities, by Act of the Holders of record
of not less than 25% in aggregate liquidation amount of the Asset Trust
Preferred Securities then outstanding delivered to such Asset Trust Preferred
Guarantee Trustee, shall promptly appoint a successor Asset Trust Preferred
Guarantee Trustee. If no Successor Asset Trust Preferred Guarantee Trustee shall
have been so appointed by the Holders of the Asset Trust Preferred Securities
and such appointment accepted by the Successor Asset Trust Preferred Guarantee
Trustee, any Holder, on behalf of himself and all others similarly situated, may
petition any court of competent jurisdiction for the appointment of a Successor
Asset Trust Preferred Guarantee Trustee.
(e) No Asset Trust Preferred Guarantee Trustee shall be liable for
the acts or omissions to act of any Successor Asset Trust Preferred Guarantee
Trustee.
(f) Upon termination of this Asset Trust Preferred Guarantee or
removal or resignation of the Asset Trust Preferred Guarantee Trustee pursuant
to this Section 4.2, the Guarantor shall pay to the Asset Trust Preferred
Guarantee Trustee all amounts owing for fees and reimbursement of expenses which
have accrued to the date of such termination, removal or resignation.
(g) The Guarantor shall promptly notify the Holders of the
resignation, removal or appointment of the Asset Trust Preferred Guarantee
Trustee.
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.
---------
The Guarantor irrevocably and unconditionally agrees to pay in full to the
Holders the Asset Guarantee Payments (without duplication of amounts theretofore
paid by the Asset Trust), as and when due, regardless of any defense, right of
set-off or counterclaim that the Asset Trust may have or assert; provided that
the Guarantor may not make any Asset Guarantee Payment under this Asset Trust
Preferred Guarantee without obtaining Regulatory Approval. The Guarantor's
obligation to make an Asset Guarantee Payment may be satisfied by direct payment
of the required amounts by the Guarantor to the Holders or by causing the Asset
Trust to pay such amounts to the Holders. In addition, without in any way
limiting the scope of this Article V, the Guarantor hereby confirms that it has
expressly assumed and is liable for the due and punctual payment of the Asset
Guarantee Payments payable pursuant to Section 5.1 of the First Maryland
Guarantee and the due and punctual performance and observance of all of the
covenants and conditions of the First Maryland Guarantee to be performed by
First Maryland Bancorp, as fully and completely as if the Guarantor had executed
and delivered the First Maryland Guarantee.
SECTION 5.2 Waiver of Notice and Demand.
---------------------------
The Guarantor hereby waives notice of acceptance of this Asset Trust
Preferred Guarantee and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Asset Trust or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected.
------------------------
The obligations, covenants, agreements and duties of the Guarantor under
this Asset Trust Preferred Guarantee shall be absolute and unconditional and
shall remain in full force and effect until the entire liquidation amount of all
outstanding Asset Trust Preferred Securities shall have been paid and such
obligation shall in no way be affected or impaired by reason of the happening
from time to time of any event, including without limitation, the following,
whether or not with notice to, or the consent of, the Guarantor:
(a) The release or waiver, by operation of law or otherwise, of the
performance or observance by the Asset Trust of any express or implied
agreement, covenant, term or condition relating to the Asset Trust Preferred
Securities to be performed or observed by the Asset Trust;
(b) The extension of time for the payment by the Asset Trust of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
or any other sums payable under the terms of the Asset Trust Preferred
Securities or the extension of time for the performance of any other obligation
under, arising out of, or in connection with the Asset Trust Preferred
Securities;
(c) Any failure, omission, delay or lack of diligence on the part of
the Asset Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or
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remedy conferred on the Asset Property Trustee or the Holders pursuant to the
terms of the Asset Trust Preferred Securities, or any action on the part of the
Asset Trust granting indulgence or extension of any kind;
(d) The voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Asset Trust or any of the assets
of the Asset Trust;
(e) Any invalidity of, or defect or deficiency in, the Asset Trust
Preferred Securities;
(f) The settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
(g) Any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defence of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Asset Trust Preferred Guarantee Trustee
or the Holders to give notice to, or obtain consent of the Guarantor or any
other Person with respect to the happening of any of the foregoing.
No set-off, counterclaim, reduction or diminution of any obligation, or any
defense of any kind or nature that the Guarantor has or may have against any
Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Asset Trust Preferred Guarantee.
SECTION 5.4 Rights of Holders.
-----------------
(a) The Holders of a Majority in Liquidation Amount of the Asset
Trust Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Asset Trust
Preferred Guarantee Trustee in respect of this Asset Trust Preferred Guarantee
or exercising any trust or other power conferred upon the Asset Trust Preferred
Guarantee Trustee under this Asset Trust Preferred Guarantee.
(b) If the Asset Trust Preferred Guarantee Trustee fails to enforce
this Asset Trust Preferred Guarantee, then any Holder of Asset Trust Preferred
Securities may, subject to the subordination provisions of Section 6.2,
institute a legal proceeding directly against the Guarantor to enforce the Asset
Trust Preferred Guarantee Trustee's rights under this Asset Trust Preferred
Guarantee without first instituting a legal proceeding against the Asset Trust,
the Asset Trust Preferred Guarantee Trustee or any other Person or entity.
Notwithstanding the foregoing, if the Guarantor has failed to make an Asset
Trust Preferred Guarantee Payment, a Holder of
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Asset Trust Preferred Securities may, subject to the subordination provisions of
Section 6.2, directly institute a proceeding against the Guarantor for
enforcement of the Asset Trust Preferred Guarantee for such Holder's pro rata
share of such Asset Trust Preferred Guarantee Payment. The Guarantor hereby
waives any right or remedy to require that any action on this Asset Trust
Preferred Guarantee be brought first against the Asset Trust or any other Person
or entity before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment.
--------------------
This Asset Trust Preferred Guarantee creates a guarantee of payment and not
of collection.
SECTION 5.6 Subrogation.
-----------
The Guarantor shall be subrogated to all (if any) rights of the Holders of
Asset Trust Preferred Securities against the Asset Trust in respect of any
amounts paid to such Holders by the Guarantor under this Asset Trust Preferred
Guarantee; provided, however, that the Guarantor shall not (except to the extent
required by mandatory provisions of law) be entitled to enforce or exercise any
right that it may acquire by way of subrogation of any indemnity, reimbursement
or other agreement, in all cases as a result of payment under this Asset Trust
Preferred Guarantee, if at the time of any such payment, any amounts are due and
unpaid under this Asset Trust Preferred Guarantee. If any amount shall be paid
to the Guarantor in violation of the preceding sentence, the Guarantor agrees to
hold such amount in trust for the Holders and to pay over such amount to the
Asset Trust Preferred Guarantee Trustee for the benefit of the Holders.
SECTION 5.7 Independent Obligations.
-----------------------
The Guarantor acknowledges that its obligations hereunder are independent
of the obligations of the Asset Trust with respect to the Asset Trust Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Asset Guarantee Payments pursuant to the terms of this Asset
Trust Preferred Guarantee notwithstanding the occurrence of any event referred
to in subsections 5.3(a) through 5.3(g), inclusive, hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.
--------------------------
So long as any Asset Trust Preferred Securities remain outstanding, if for
any period an Asset Guarantee Event of Default has occurred and is continuing,
then, unless and until, since the curing or waiver of any such default, the
Asset Trust has made Distributions on the Asset Trust Preferred Securities in
full on four consecutive Preferred Distribution Payment Dates, the Guarantor
shall not, and shall not permit any subsidiary of the Guarantor, (x) to declare
or pay
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any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, the Guarantor's capital stock or (y) to
make any payment of principal, interest or premium, if any, on or repay or
repurchase or redeem any debt securities of the Guarantor that rank pari passu
with or junior in interest and right of payment to the Debentures or make any
guarantee payments with respect to any guarantee by the Guarantor of the debt
securities of any Subsidiary if such guarantee ranks pari passu with or junior
in interest and right of payment to the Debentures (other than (1) any
declaration or payment of a dividend or distribution on, or any payment of
principal, premium, if any, or interest on any guarantee, debt security or
instrument of the Guarantor ranking pari passu with the Debentures that is made
on a pro rata basis with all other such guarantees, debt securities and
instruments, including the Debentures and the Capital Trust Guarantee, (2)
repurchases, redemptions or other acquisitions of shares of capital stock of the
Company in connection with any employment contract, benefit plan or other
similar arrangement with or for the benefit of any one or more employees,
officers, directors or consultants or in connection with a dividend reinvestment
or stockholder stock purchase plan, (3) as a result of an exchange or conversion
of any class or series of the Guarantor's capital stock (or any capital stock of
a subsidiary of the Guarantor) for any class or series of the Guarantor's
capital stock or of any class of series of the Guarantor's indebtedness for any
class or series of the Guarantor's capital stock, (4) the purchase of fractional
interests in shares of the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (5) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (6) any dividend in the form of stock, warrants, options or
other rights where the dividend stock or the stock issuable upon exercise of
such warrants, options or other rights is the same stock as that on which the
dividend is being paid (or pari passu with or junior to such stock)).
SECTION 6.2 Ranking.
-------
This Asset Trust Preferred Guarantee will constitute an unsecured
obligation of the Guarantor and will rank pari passu with the Guarantor's
obligations under the Debentures, the Capital Trust Guarantee and equally with
or junior to the Guarantor's obligations under any other instrument or agreement
of the Guarantor which is stated to rank equally with or senior to, as the case
may be, the Guarantor's obligation under this Asset Trust Preferred Guarantee.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.
-----------
This Asset Trust Preferred Guarantee shall terminate upon (a) full payment
of the Redemption Price of all Asset Trust Preferred Securities, and (b)
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full payment of the amounts payable in accordance with the Asset Trust
Declaration upon liquidation of the Asset Trust. Notwithstanding the foregoing,
this Asset Trust Preferred Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any Holder of Asset Trust
Preferred Securities must restore payment of any sums paid under the Asset Trust
Preferred Securities or under this Asset Trust Preferred Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.
-----------
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Asset Trust
Preferred Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Asset Trust Preferred Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders of Asset Trust Securities might properly be paid.
SECTION 8.2 Indemnification.
---------------
The Guarantor agrees to indemnify each Indemnified Person for, and to hold
each Indemnified Person harmless against any and all loss, liability, damage,
claim or expense , including taxes (other than taxes based on the income of such
Indemnified Person received as a result of its duties hereunder) incurred
without negligence or bad faith on its part, arising out of or in connection
with the acceptance or administration of the Asset Trust hereunder, including
the costs and expenses (including reasonable legal fees and expenses) of
defending itself against, or investigating, any claim (whether asserted by the
Guarantor, a Holder or any other Person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder. The
obligation to indemnify as set forth in this Section 8.2 shall survive the
termination of this Asset Trust Preferred Guarantee.
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ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns.
----------------------
All guarantees and agreements contained in this Asset Trust Preferred
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Guarantor and shall inure to the benefit of the Holders
of the Asset Trust Preferred Securities then outstanding.
SECTION 9.2 Amendments.
----------
Except with respect to any changes that do not adversely affect the rights
of the Holders (in which case no consent of the Holders will be required), this
Asset Trust Preferred Guarantee may only be amended with the prior approval of
the Holders of at least a Majority in Liquidation Amount of the Asset Trust
Preferred Securities. The provisions of Section 11.2 of the Asset Trust
Declaration with respect to meetings of, and action by written consent of the
Holders of the Asset Trust Preferred Securities apply to the giving of such
approval.
SECTION 9.3 Consolidations and Mergers.
--------------------------
The Guarantor may consolidate with, or sell, lease or convey all or
substantially all of its assets to, or merge with or into any other corporation;
provided, that in any such case, (i) either the Guarantor shall be the
- --------
continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America thereof
and such successor corporation shall expressly assume the due and punctual
payment of the Asset Guarantee Payments payable pursuant to Section 5.1 hereof
and the due and punctual performance and observance of all of the covenants and
conditions of this Asset Trust Preferred Guarantee to be performed by the
Guarantor by a separate guarantee satisfactory to the Asset Trust Preferred
Guarantee Trustee, executed and delivered to the Asset Trust Preferred Guarantee
Trustee by such corporation, and (ii) the Guarantor or such successor
corporation, as the case may be, shall not, immediately after such merger or
consolidation, or such sale, lease or conveyance, be in default in the
performance of any such covenant or condition.
SECTION 9.4 Notices.
-------
All notices provided for in this Asset Trust Preferred Guarantee shall be
in writing, duly signed by the party giving such notice, and shall be delivered,
telecopied (and promptly confirmed by mail) or mailed by registered or certified
mail (provided that notice to Holders may be by first-class mail, postage pre-
paid), as follows:
(a) If given to the Asset Trust Preferred Guarantee Trustee, at the
Asset Trust Preferred Guarantee Trustee's mailing address set forth below (or
such other address as the Asset
20
<PAGE>
Trust Preferred Guarantee Trustee may give notice of to the Guarantor and the
Holders of the Asset Trust Securities):
The Bank of New York
101 Barclay Street, Floor 21 West
New York, New York 10286
Attention: Corporate Trust Administration
Fax: (212) 815-5915
(b) If given to the Guarantor, at the Guarantor's mailing addresses
set forth below (or such other address as the Guarantor may give notice of to
the Asset Trust Preferred Guarantee Trustee and the Holders of the Asset Trust
Securities):
Allfirst Financial Inc.
25 South Charles Street,
Baltimore, Maryland 21201
Attn: General Counsel
Fax: (410) 244-3817
(c) If given to any Holder of Asset Trust Preferred Securities, at
the address set forth on the books and records of the Asset Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid, except that if a notice or other document is refused delivery
or cannot be delivered because of a changed address of which no notice was
given, such notice or other document shall be deemed to have been delivered on
the date of such refusal or inability to deliver.
SECTION 9.5 Benefit.
-------
This Asset Trust Preferred Guarantee is solely for the benefit of the
Holders of the Asset Trust Preferred Securities and, subject to Section 3.1(a),
is not separately transferable from the Asset Trust Preferred Securities.
SECTION 9.6 Governing Law.
-------------
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO ANY
CONFLICTS OF LAWS PRINCIPLES THEREOF.
21
<PAGE>
IN WITNESS WHEREOF, this Asset Trust Preferred Guarantee is executed as of
the day and year first above written.
ALLFIRST FINANCIAL INC.
as Guarantor
By:__________________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Asset Trust Preferred Guarantee Trustee
By:__________________________________________
Name:
Title:
22
<PAGE>
EXHIBIT 4.7
==========================================================================
REGISTRATION RIGHTS AGREEMENT
Dated as of July 9, 1999
Among
ALLFIRST PREFERRED CAPITAL TRUST,
ALLFIRST PREFERRED ASSET TRUST,
FIRST MARYLAND BANCORP
and
LEHMAN BROTHERS INC.
==========================================================================
<PAGE>
TABLE OF CONTENTS
Table of Contents
<TABLE>
<CAPTION>
Page
----
<S> <C>
Section 1. Definitions................................................................ 1
Section 2. Securities Subject to This Agreement....................................... 5
Section 3. Registered Exchange Offer.................................................. 5
Section 4. Shelf Registration......................................................... 6
Section 5. Additional Interest and Additional Distributions Under
Certain Circumstances...................................................... 8
Section 6. Registration Procedures.................................................... 9
Section 7. Registration Expenses...................................................... 18
Section 8. Indemnification and Contribution........................................... 18
Section 9. Rule 144A.................................................................. 21
Section 10. Participation in Underwritten Registrations................................ 21
Section 11. Selection of Underwriters.................................................. 22
Section 12. Miscellaneous.............................................................. 22
</TABLE>
i
<PAGE>
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of July 9, 1999 by and among Allfirst Preferred Capital Trust, a
Delaware statutory business trust (the "Capital Trust"), Allfirst Preferred
Asset Trust, a Delaware statutory business trust (the "Asset Trust"), First
Maryland Bancorp, a Maryland corporation ("the Company"), and Lehman Brothers
Inc. (the "Initial Purchaser").
This Agreement is entered into in connection with the Purchase
Agreement, dated as of July 9, 1999, among the Company, the Capital Trust, the
Asset Trust and the Initial Purchaser (the "Purchase Agreement") which provides
for the sale or sales by the Capital Trust to the Initial Purchaser of the
Capital Trust's Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced
Securities, Series A, liquidation amount $1,000 per security (the "Capital Trust
Preferred Securities"). The Company will be the owner of all of the beneficial
ownership interests represented by the common securities (the "Capital Trust
Common Securities") of the Capital Trust. The Capital Trust Preferred Securities
and the Capital Trust Common Securities will be guaranteed by a Series A Capital
Trust Guarantee (the "Capital Trust Guarantee") by the Company, to the extent
described in such Capital Trust Guarantee. Concurrently with the issuance of the
Capital Trust Preferred Securities, the Capital Trust Guarantee and the Capital
Trust Common Securities, the Capital Trust will invest the proceeds of each
thereof in the Asset Trust's Floating Rate Non-Cumulative Subsidiary Trust
Preferred Securities, Series A (the "Asset Trust Preferred Securities"),
representing preferred undivided beneficial ownership interests in the assets of
the Asset Trust. The Company will own all the common securities (the "Asset
Trust Common Securities"), representing undivided beneficial ownership interests
in the assets of the Asset Trust. The Asset Trust Preferred Securities will be
guaranteed by a Series A Asset Trust Guarantee (the "Asset Trust Guarantee") by
the Company, to the extent described in the Asset Trust Guarantee. The Asset
Trust will invest the proceeds of the issuance of the Asset Trust Preferred
Securities in the Company's Floating Rate Junior Subordinated Debentures due
July 15, 2029, Series A (the "Debentures" and, together with the Capital Trust
Preferred Securities, the Asset Trust Preferred Securities, the Capital Trust
Guarantee and the Asset Trust Guarantee, the "Securities") and other permitted
investments. In order to induce the Initial Purchaser to enter into the
Purchase Agreement, the Capital Trust, the Asset Trust and the Company have
agreed to provide the registration rights set forth in this Agreement for the
benefit of the Initial Purchaser and their direct and indirect transferees and
assigns. The execution and delivery of this Agreement is a condition to the
Initial Purchaser's obligations to purchase the Capital Trust Preferred
Securities under the Purchase Agreement.
The parties hereby agree as follows:
Section 1. Definitions. As used in this Agreement, the following
-----------
capitalized terms shall have the following meanings:
"Additional Distributions" has the meaning set forth in Section
5(a) of this Agreement.
"Additional Interest" has the meaning set forth in Section 5(a) of
this Agreement.
<PAGE>
"Asset Trust Declaration" means the Amended and Restated Declaration
of Trust, to be dated as of July 13, 1999, among the Company, as sponsor, The
Bank of New York, as Asset Property Trustee, The Bank of New York (Delaware), as
Asset Delaware Trustee, and the Asset Trust Administrators named therein,
pursuant to which the Asset Trust Preferred Securities and the Exchange Asset
Trust Preferred Securities may be issued, as amended or supplemented from time
to time in accordance with the terms thereof.
"Asset Trust Guarantee Agreement" has the meaning set forth in the
preamble to this Agreement.
"Broker-Dealer" means any broker or dealer registered under the
Exchange Act.
"Capital Trust Declaration" means the Amended and Restated Declaration
of Trust, dated as of July 13, 1999, among the Company, as Capital Sponsor, The
Bank of New York, as Capital Property Trustee, The Bank of New York (Delaware),
as Capital Delaware Trustee, and the Capital Trust Administrators named therein,
pursuant to which the Capital Trust Preferred Securities and the Exchange Trust
Preferred Securities may be issued, as amended or supplemented from time to time
in accordance with the terms thereof.
"Capital Trust Guarantee Agreement" has the meaning set forth in the
preamble to this Agreement.
"Closing Date" means the date on which the Securities were sold.
"Commission" means the Securities and Exchange Commission.
"Consummate" or "Consummation" means the Exchange Offer shall be
deemed "Consummated" for purposes of this Agreement upon the occurrence of (i)
the filing and effectiveness under the Securities Act of the Exchange Offer
Registration Statement, (ii) the maintenance of the effectiveness of the
Exchange Offer Registration Statement and the keeping of the Exchange Offer open
for a period not less than the minimum period required pursuant to Section 3(b)
of this Agreement, and (iii) the exchange of the Exchange Securities for the
Transfer Restricted Securities pursuant to the Exchange Offer.
"Debentures" has the meaning set forth in the preamble to this
Agreement.
"Distribution" has the meaning set forth in the Capital Trust
Declaration.
"Effectiveness Target Date" has the meaning set forth in Section 5 of
this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Asset Trust Preferred Securities" means the Asset Trust's
Floating Rate Non-Cumulative Subsidiary Trust Preferred Securities, Series B
issued by the Asset Trust
2
<PAGE>
pursuant to the Asset Trust Declaration and exchanged for the Asset Trust
Preferred Securities upon Consummation of the Exchange Offer.
"Exchange Capital Trust Preferred Securities" means the Series B
Floating Rate Non-Cumulative Subordinated Capital Trust Enhanced Securities,
Series B issued by the Capital Trust pursuant to the Capital Trust Declaration
and exchanged for the Capital Trust Preferred Securities pursuant to the
Exchange Offer.
"Exchange Debentures" means the Company's Floating Rate Junior
Subordinated Debentures due July 15, 2029, Series B to be issued pursuant to the
Indenture and exchanged for the Debentures upon Consummation of the Exchange
Offer.
"Exchange Guarantees" means, collectively, the Company's Series B
Capital Trust Guarantee and the Series B Asset Trust Guarantee to be exchanged
for the Capital Trust Guarantee and the Asset Trust Guarantee, respectively,
pursuant to the Exchange Offer.
"Exchange Offer" means the registration by the Company, the Capital
Trust and the Asset Trust under the Securities Act of the Exchange Securities
pursuant to an Exchange Offer Registration Statement pursuant to which the
Company, the Capital Trust and the Asset Trust will offer the Holders of all
outstanding Transfer Restricted Securities the opportunity to exchange all such
outstanding Transfer Restricted Securities held by such Holders for Exchange
Securities in an aggregate liquidation amount or principal amount, as
applicable, equal to the aggregate liquidation amount or principal amount, as
applicable, of the Transfer Restricted Securities tendered by such Holders.
"Exchange Offer Registration Statement" means the Registration
Statement relating to the Exchange Offer, including the Prospectus which forms a
part thereof.
"Exchange Securities" means, collectively, the Exchange Capital Trust
Preferred Securities, the Exchange Asset Trust Preferred Securities, the
Exchange Debentures and the Exchange Guarantees.
"Exempt Resales" means the transactions in which the Initial Purchaser
proposes to sell the Securities to certain "qualified institutional buyers," as
such term is defined in Rule 144A under the Securities Act, to certain
institutional "accredited investors," as such term is defined in Rule 501(a)(1),
(2), (3) and (7) of Regulation D under the Securities Act ("Accredited
Institutions") and to certain non-"U.S. persons" in "offshore transactions," as
such terms are defined in Regulation S under the Securities Act.
"Holders" has the meaning set forth in Section 2(b) of this Agreement.
"Indenture" means the Indenture, dated as of July 13, 1999, between
the Company and The Bank of New York, as trustee (the "Indenture Trustee"),
pursuant to which the Debentures and the Exchange Debentures are to be issued,
as such Indenture is amended or supplemented from time to time in accordance
with the terms thereof.
3
<PAGE>
"Initial Purchaser" has the meaning set forth in the preamble to this
Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"Person" means an individual, partnership, limited partnership,
corporation, limited liability company, trust or unincorporated organization, or
a government or agency or political subdivision thereof.
"Prospectus" means the prospectus included in a Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such Prospectus.
"Registration Default" has the meaning set forth in Section 5 of this
Agreement.
"Registration Statement" means any registration statement of the
Company, the Capital Trust and the Asset Trust relating to (a) an offering of
Exchange Securities pursuant to an Exchange Offer or (b) the registration for
resale of Transfer Restricted Securities pursuant to the Shelf Registration
Statement, which is filed pursuant to the provisions of this Agreement, in
either case, including the Prospectus included therein, all amendments and
supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.
"Securities Act" means the Securities Act of 1933, as amended.
"Shelf Filing Deadline" has the meaning set forth in Section 4 of this
Agreement.
"Shelf Registration Statement" has the meaning set forth in Section 4
of this Agreement.
"TIA" means the Trust Indenture Act of 1939, as amended.
"Transfer Restricted Securities" means each Security, until the
earliest to occur of (a) the date on which such Security has been exchanged by a
person other than a Broker-Dealer for Exchange Securities in the Exchange Offer,
(b) following the exchange by a Broker-Dealer in the Exchange Offer of such
Security for one or more Exchange Securities, the date on which such Exchange
Securities are sold to a purchaser who receives from such Broker-Dealer on or
prior to the date of such sale a copy of the prospectus contained in the
Exchange Offer Registration Statement, (c) the date on which such Security has
been effectively registered under the Securities Act and disposed of in
accordance with the Shelf Registration Statement or (d) the date on which such
Security is distributed to the public pursuant to Rule 144 under the Securities
Act;
4
<PAGE>
"Underwritten Registration" or "Underwritten Offering" means a
registration in which securities of the Company, the Capital Trust and the Asset
Trust are sold to an underwriter for reoffering to the public.
Section 2. Securities Subject to This Agreement.
------------------------------------
(a) Transfer Restricted Securities. The securities entitled to the
------------------------------
benefits of this Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
-----------------------------------------
to be a holder of Transfer Restricted Securities (each, a "Holder") whenever
such Person beneficially owns Transfer Restricted Securities.
Section 3. Registered Exchange Offer.
-------------------------
(a) Unless the Exchange Offer shall not be permissible under
applicable law or Commission policy (after the procedures set forth in Section
6(a) below have been complied with), the Company, the Capital Trust and the
Asset Trust shall (i) use their reasonable best efforts to cause to be filed
with the Commission as soon as practicable after the Closing Date, but in no
event later than 90 days after the date of this Agreement, a Registration
Statement under the Securities Act relating to the Exchange Securities and the
Exchange Offer, (ii) use their reasonable best efforts to cause such
Registration Statement to become effective at the earliest possible time, but in
no event later than 180 days after the date of this Agreement, (iii) in
connection with the foregoing, file (A) all pre-effective amendments to such
Registration Statement as may be necessary in order to cause such Registration
Statement to become effective, (B) if applicable, a post-effective amendment to
such Registration Statement pursuant to Rule 430A under the Securities Act and
(C) cause all necessary filings in connection with the registration and
qualification of the Exchange Securities to be made under the Blue Sky laws of
such jurisdictions as are necessary to permit Consummation of the Exchange
Offer, and (iv) unless the Exchange Offer would not be permitted by applicable
law or Commission policy, the Company will commence the Exchange Offer and use
their reasonable best efforts to issue, on or prior to 30 days after the date on
which such Registration Statement was declared effective by the Commission,
Exchange Securities in exchange for all Securities tendered and not withdrawn in
the Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the Exchange Securities to be offered in exchange for
the Transfer Restricted Securities and to permit resales of Exchange Securities
held by Broker-Dealers as contemplated by Section 3(c) below.
(b) The Company, the Capital Trust and the Asset Trust shall cause
the Exchange Offer Registration Statement to be effective continuously and shall
keep the Exchange Offer open for a period of not less than the minimum period
required under applicable federal and state securities laws to Consummate the
Exchange Offer; provided, however, that in no event shall such period be less
than 20 business days. The Company, the Capital Trust and the Asset Trust shall
cause the Exchange Offer to comply with all applicable federal and state
securities laws. No securities other than the Exchange Securities shall be
included in the Exchange Offer
5
<PAGE>
Registration Statement. The Company, the Capital Trust and the Asset Trust shall
use their reasonable best efforts to cause the Exchange Offer to be Consummated
on the earliest practicable date after the Exchange Offer Registration Statement
has become effective, but in no event later than 30 days thereafter.
(c) The Company, the Capital Trust and the Asset Trust shall
indicate in a "Plan of Distribution" section contained in the Prospectus
contained in the Exchange Offer Registration Statement that any Broker-Dealer
who holds Transfer Restricted Securities that were acquired for its own account
as a result of market-making activities or other trading activities (other than
Transfer Restricted Securities acquired directly from the Company, the Capital
Trust and the Asset Trust), may exchange such Securities pursuant to the
Exchange Offer; however, such Broker-Dealer may be deemed to be an "underwriter"
within the meaning of the Securities Act and must, therefore, deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resales of the Exchange Securities received by such Broker-Dealer in the
Exchange Offer, which prospectus delivery requirement may be satisfied by the
delivery by such Broker-Dealer of the Prospectus contained in the Exchange Offer
Registration Statement. Such "Plan of Distribution" section shall also contain
all other information with respect to such resales by Broker-Dealers that the
Commission may require in order to permit such resales pursuant thereto, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Exchange Securities held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy announced
after the date of this Agreement.
The Company, the Capital Trust and the Asset Trust shall use their
reasonable best efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented and amended as required by the provisions
of Section 6(c) below to the extent necessary to ensure that it is available for
resales of Exchange Securities acquired by Broker-Dealers for their own accounts
as a result of market-making activities or other trading activities, and to
ensure that it conforms with the requirements of this Agreement, the Securities
Act and the policies, rules and regulations of the Commission as announced from
time to time, for a period of 90 days from the date on which the Exchange Offer
Registration Statement is declared effective or such shorter period until all
Transfer Restricted Securities covered by the Exchange Offer Registration
Statement have been sold.
The Company, the Capital Trust and the Asset Trust shall provide
sufficient copies of the latest version of such Prospectus to Broker-Dealers
promptly upon request at any time during such 90-day period in order to
facilitate such resales.
Section 4. Shelf Registration.
------------------
(a) Shelf Registration. If (i) the Company, the Capital Trust and
------------------
the Asset Trust are not required to file an Exchange Offer Registration
Statement or to Consummate the Exchange Offer because the Exchange Offer is not
permitted by applicable law or Commission policy (after the procedures set forth
in Section 6(a) below have been complied with), (ii) the Company has received an
opinion of counsel, rendered by a law firm having a nationally
6
<PAGE>
recognized tax practice, to the effect that, as a result of the Consummation of
the Exchange Offer there is more than an insubstantial risk that (A) the Capital
Trust would be subject to United States Federal income tax with respect to
income received on the Asset Trust Preferred Securities or the Exchange Asset
Trust Preferred Securities, (B) the Capital Trust would be subject to more than
a minimal amount of other taxes, duties or other governmental charges, (C) the
Asset Trust would be subject to United States Federal income tax with respect to
income accrued or received on the Debentures, Exchange Debentures or its
permitted investments, (D) the Asset Trust would be subject to more than a
minimal amount of other taxes, duties or other governmental charges or (E)
interest payable by the Company with respect to the Debentures or the Exchange
Debentures would not be deductible by the Company, in whole or in part, for
United States Federal income tax purposes or (iii) if any Holder of Transfer
Restricted Securities that is a "qualified institutional buyer" (as defined in
Rule 144A under the Securities Act) or an "accredited investor" (as defined in
Rule 501(A)(1), (2), (3) or (7) under the Securities Act) or a non-U.S. person
that acquired Securities pursuant to Regulation S under the Securities Act shall
notify the Company at least 20 days prior to the Consummation of the Exchange
Offer (A) that such Holder is prohibited by applicable law or Commission policy
from participating in the Exchange Offer, or (B) that such Holder may not resell
the Exchange Securities acquired by it in the Exchange Offer to the public
without delivering a prospectus and that the Prospectus contained in the
Exchange Offer Registration Statement is not appropriate or available for such
resales by such Holder, or (C) that such Holder is a Broker-Dealer and holds
Securities acquired directly from the Capital Trust, the Asset Trust and the
Company or one of its affiliates, then, in addition to effecting the Exchange
Offer Registration Statement, the Capital Trust, the Asset Trust and the Company
shall use their reasonable best efforts to:
(x) cause to be filed a shelf registration statement pursuant to Rule
415 under the Securities Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "Shelf Registration
Statement"), on or prior to the earliest to occur of (1) the 90th day after
the date on which the Capital Trust, the Asset Trust and the Company
determines that they are not required to file the Exchange Offer
Registration Statement or (2) the 120th day after the date on which the
Capital Trust, the Asset Trust and the Company receive notice from a Holder
of Transfer Restricted Securities as contemplated by clause (iii) above
(such earliest date being the "Shelf Filing Deadline"), which Shelf
Registration Statement shall provide for resales of all Transfer Restricted
Securities the Holders of which shall have provided the information
required pursuant to Section 4(b) of this Agreement; and
(y) cause such Shelf Registration Statement to be declared effective
by the Commission on or before the 180th day after the Shelf Filing
Deadline.
The Capital Trust, the Asset Trust and the Company shall use their
reasonable best efforts to keep such Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions of Sections
6(b) and (c) of this Agreement to the extent necessary to ensure that it is
available for resales of Securities by the Holders of Transfer Restricted
Securities entitled to the benefit of this Section 4(a), and to ensure that it
conforms
7
<PAGE>
with the requirements of this Agreement, the Securities Act and the policies,
rules and regulations of the Commission as announced from time to time until the
earlier of two years after the date of this Agreement (or such shorter period
then required by Rule 144(k) under the Securities Act) or until one year after
its effective date if such Shelf Registration Statement is filed at the request
of the Initial Purchaser or such time as all of the applicable Securities have
been sold thereunder or otherwise cease to be Transfer Restricted Securities.
(b) Provision by Holders of Certain Information in Connection with
--------------------------------------------------------------
the Shelf Registration Statement. No Holder of Transfer Restricted Securities
- --------------------------------
may include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Capital Trust, the Asset Trust and the Company in writing, within 20 days
after receipt of a request therefor, such information as the Capital Trust, the
Asset Trust and the Company may reasonably request for use in connection with
any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled
to Additional Distributions pursuant to Section 5 of this Agreement unless and
until such Holder shall have used its best efforts to provide all such
reasonably requested information. Each Holder as to which any Shelf Registration
Statement is being effected agrees to furnish promptly to the Capital Trust, the
Asset Trust and the Company all information required to be disclosed in order to
make the information previously furnished to the Capital Trust, the Asset Trust
and the Company by such Holder not materially misleading.
Section 5. Additional Interest and Additional Distributions Under Certain
--------------------------------------------------------------
Circumstances.
- -------------
(a) If (i) any of the Registration Statements required by this
Agreement is not filed with the Commission on or prior to the date specified for
such filing in this Agreement, (ii) any of such Registration Statements has not
been declared effective by the Commission on or prior to the date specified for
such effectiveness in this Agreement (the "Effectiveness Target Date"), (iii)
the Exchange Offer has not been Consummated within 30 days after the
Effectiveness Target Date with respect to the Exchange Offer Registration
Statement or (iv) any Shelf Registration Statement required by this Agreement is
filed and declared effective but shall thereafter cease to be effective at any
time prior to two years after the date of this Agreement (or such shorter period
then required by Rule 144(k) under the Securities Act) (or one year if a Shelf
Registration Statement is filed at the request of the Initial Purchaser) other
than after such time as all Securities have been disposed of thereunder or
otherwise cease to be Transfer Restricted Securities (each such event referred
to in clauses (i) through (iv), a "Registration Default"), additional interest
(the "Additional Interest") shall become payable in respect of the Debentures
(including in respect of amounts accruing during any Extension Period (as
defined in the Indenture)) and corresponding additional Distributions (the
"Additional Distributions") shall become payable to each Holder of Asset Trust
Preferred Securities (in its capacity as such and not in its capacity as an
indirect holder of a pro rata share of the Debentures) and to each Holder of
Capital Trust Preferred Securities (in its capacity as such and not in its
capacity as an indirect holder of a pro rata share of the Asset Trust Preferred
Securities) with respect to the first 90-day period immediately following the
occurrence of such Registration Default at a rate per annum
8
<PAGE>
equal to 0.50% of the liquidation amount of the Capital Trust Preferred
Securities, 0.50% of the liquidation amount of the Asset Trust Preferred
Securities or 0.50% of the principal amount of the Debentures for each 90-day
period or portion thereof that the Registration Default continues, provided,
however, the rate at which any Additional Distributions are payable on the
liquidation amount of the Capital Trust Preferred Securities and the Asset Trust
Preferred Securities and the rate at which any Additional Interest is payable on
the Debentures may not exceed in the aggregate 0.50% per annum. All accrued
Additional Interest (and corresponding Additional Distributions) shall be paid
to Holders by the Capital Trust, the Asset Trust and the Company by wire
transfer of immediately available funds or by federal funds check on the last
day of each such 90-day period. Following the cure of all Registration Defaults
relating to any particular Transfer Restricted Securities, the accrual of
Additional Interest (and corresponding Additional Distributions) with respect to
such Transfer Restricted Securities will cease.
All obligations of the Capital Trust, the Asset Trust and the Company
set forth in the preceding paragraph that are outstanding with respect to any
Transfer Restricted Security at the time such security ceases to be a Transfer
Restricted Security shall survive until such time as all such obligations with
respect to such Transfer Restricted Security shall have been satisfied in full.
(b) The Capital Trust, the Asset Trust and the Company shall notify
the Capital Property Trustee within one business day after each and every date
on which an event occurs in respect of which Additional Distributions or
Additional Interest, as the case may be, are required to be paid. Additional
Distributions shall be paid by depositing Additional Interest with the Asset
Property Trustee for the benefit of the Holders thereof, on or before the
applicable Interest Payment Date (as defined in the Indenture) (whether or not
any payment other than Additional Distributions is payable on the Asset Trust
Preferred Securities or the Capital Trust Preferred Securities), in immediately
available funds in sums sufficient to pay the Additional Distributions then due
to Holders of Transfer Restricted Securities. Any Additional Distributions and
Additional Interest due will be payable in cash on January 15th, April 15th,
July 15th, and October 15th of each year to the holder of record entitled to
receive distributions or interest on the relevant payment date. Each obligation
to pay Additional Interest and Additional Distributions shall be deemed to
accrue from the applicable date of the occurrence of the Registration Default.
Section 6. Registration Procedures.
-----------------------
(a) Exchange Offer Registration Statement. In connection with the
-------------------------------------
Exchange Offer, the Capital Trust, the Asset Trust and the Company shall comply
with all of the provisions of Section 6(c) below, shall use their reasonable
best efforts to effect such exchange to permit the sale of Transfer Restricted
Securities being sold in accordance with the intended method or methods of
distribution thereof, and shall comply with all of the following provisions:
(i) If in the reasonable opinion of counsel to the Capital Trust,
the Asset Trust and the Company there is a question as to whether the
Exchange Offer is permitted by applicable law, the Capital Trust, the Asset
Trust and the Company hereby agree to seek a no-action letter from the
Commission allowing the Capital Trust, the Asset Trust and
9
<PAGE>
the Company to Consummate an Exchange Offer for such Securities. The
Capital Trust, the Asset Trust and the Company hereby agree to pursue the
issuance of such a decision to the Commission staff level but shall not be
required to take commercially unreasonable action to effect a change of
Commission policy. The Capital Trust, the Asset Trust and the Company
hereby agree, however, to (A) participate in telephonic conferences with
the Commission, (B) deliver to the Commission staff an analysis prepared by
counsel to the Capital Trust, the Asset Trust and the Company setting forth
the legal bases, if any, upon which such counsel has concluded that such an
Exchange Offer should be permitted and (C) diligently pursue a resolution
(which need not be favorable) by the Commission staff of such submission.
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer Restricted
Securities shall furnish, upon the request of the Capital Trust, the Asset
Trust or the Company, prior to the Consummation thereof, a written
representation to the Capital Trust, the Asset Trust or the Company (which
may be contained in the letter of transmittal contemplated by the Exchange
Offer Registration Statement) to the effect that (A) it is not an affiliate
of the Capital Trust, the Asset Trust or the Company, (B) it is not engaged
in, and does not intend to engage in, and has no arrangement or
understanding with any person to participate in, a distribution of the
Exchange Securities to be issued in the Exchange Offer and (C) it is
acquiring the Exchange Securities in its ordinary course of business. In
addition, all such Holders of Transfer Restricted Securities shall
otherwise cooperate in the Company's, the Capital Trust's and the Asset
Trust's preparations for the Exchange Offer. Each Holder hereby
acknowledges and agrees that any Broker-Dealer and any such Holder using
the Exchange Offer to participate in a distribution of the securities to be
acquired in the Exchange Offer (1) could not under Commission policy as in
effect on the date of this Agreement rely on the position of the Commission
enunciated in Morgan Stanley and Co., Inc. (available June 5, 1991) and
Exxon Capital Holdings Corporation (available May 13, 1988), as interpreted
in the Commission's letters to Shearman & Sterling dated July 2, 1993, and
to Brown & Wood llp (available February 7, 1997), and similar no-action
letters (including any no-action letter obtained pursuant to clause (i)
above), and (2) must comply with the registration and prospectus delivery
requirements of the Securities Act in connection with a secondary resale
transaction and that such a secondary resale transaction should be covered
by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of
Regulation S-K if the resales are of Exchange Securities obtained by such
Holder in exchange for Securities acquired by such Holder directly from the
Capital Trust, the Asset Trust or the Company.
(iii) Prior to effectiveness of the Exchange Offer Registration
Statement, the Company, the Capital Trust and the Asset Trust shall provide
a supplemental letter to the Commission (A) stating that the Company, the
Capital Trust and the Asset Trust are registering the Exchange Offer in
reliance on the position of the Commission enunciated in Exxon Capital
Holdings Corporation (available May 13, 1988), Morgan Stanley and
10
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Co., Inc. (available June 5, 1991), Brown & Wood llp (available February 7,
1997) and, if applicable, any no-action letter obtained pursuant to clause
(i) above and (B) including a representation that the Company, the Capital
Trust and the Asset Trust have not entered into any arrangement or
understanding with any Person to distribute the Exchange Securities to be
received in the Exchange Offer and that, to the best of the Company's, the
Capital Trust's and the Asset Trust's information and belief, based only on
written representations received under clause (ii) above, that each Holder
participating in the Exchange Offer is acquiring the Exchange Securities in
its ordinary course of business and has no arrangement or understanding
with any Person to participate in the distribution of the Exchange
Securities received in the Exchange Offer.
(b) Shelf Registration Statement. In connection with the Shelf
----------------------------
Registration Statement, the Company, the Capital Trust and the Asset Trust shall
comply with all the provisions of Section 6(c) below and shall use their
reasonable best efforts to effect such registration to permit the sale of the
Transfer Restricted Securities being sold in accordance with the intended method
or methods of distribution thereof, and pursuant thereto the Company, the
Capital Trust and the Asset Trust will as expeditiously as possible prepare and
file with the Commission a Registration Statement relating to the registration
on any appropriate form under the Securities Act, which form shall be available
for the sale of the Transfer Restricted Securities in accordance with the
intended method or methods of distribution thereof.
(c) General Provisions. In connection with any Registration Statement
------------------
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
Statement and the related Prospectus required to permit resales of Securities by
Broker-Dealers), the Company, the Capital Trust and the Asset Trust shall:
(i) use their reasonable best efforts to keep such Registration
Statement continuously effective and provide all requisite financial
statements for the period specified in Section 3 or 4 of this Agreement, as
applicable; upon the occurrence of any event that would cause any such
Registration Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and usable for
resale of Transfer Restricted Securities during the period required by this
Agreement, the Company, the Capital Trust and the Asset Trust shall file
promptly an appropriate amendment to such Registration Statement, in the
case of clause (A), correcting any such misstatement or omission, and, in
the case of either clause (A) or (B), use their reasonable best efforts to
cause such amendment to be declared effective and such Registration
Statement and the related Prospectus to become usable for their intended
purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such amendments and post-
effective amendments to the Registration Statement as may be necessary to
keep the Registration Statement effective for the applicable period set
forth in Section 3 or 4 of this Agreement, as applicable, or such shorter
period as will terminate when all Transfer Restricted
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<PAGE>
Securities covered by such Registration Statement have been sold; cause the
Prospectus to be supplemented by any required Prospectus supplement, and as
so supplemented to be filed pursuant to Rule 424 under the Securities Act,
and to comply fully with the applicable provisions of Rules 424 and 430A
under the Securities Act in a timely manner; and comply with the provisions
of the Securities Act with respect to the disposition of all securities
covered by such Registration Statement during the applicable period in
accordance with the intended method or methods of distribution by the
sellers thereof set forth in such Registration Statement or supplement to
the Prospectus;
(iii) advise the underwriter(s), if any, and selling Holders promptly
and, if requested by such Persons, to confirm such advice in writing, (A)
when the Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to any Registration Statement
or any post-effective amendment thereto, when the same has become
effective, (B) of any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or
for additional information relating thereto, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Securities Act or of the suspension by any
state securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes, and (D) of the existence
of any fact or the happening of any event that makes any statement of a
material fact made in the Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes
in the Registration Statement or the Prospectus in order to make the
statements therein not misleading; provided that the Company shall not be
required to disclose the nature or substance of any such fact or event as
long as it is acting in good faith. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration
Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from
qualification of the Transfer Restricted Securities under state securities
or Blue Sky laws, the Capital Trust, the Asset Trust and the Company shall
use their reasonable best efforts to obtain the withdrawal or lifting of
such order at the earliest possible time;
(iv) furnish to each of the selling or exchanging Holders and each
of the underwriter(s), if any, before filing with the Commission, copies of
any Shelf Registration Statement or any Prospectus included therein or any
amendments or supplements to any such Shelf Registration Statement or
Prospectus (excluding all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be
subject to the review of such Holders and underwriter(s), if any, for a
period of at least five business days, and the Capital Trust, the Asset
Trust and the Company will not file any such Registration Statement or
Prospectus or any amendment or supplement to any such Registration
Statement or Prospectus (excluding all documents incorporated by reference)
to which a selling Holder of Transfer Restricted Securities covered by such
Registration Statement or the
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<PAGE>
underwriter(s), if any, shall reasonably object within five business days
after the receipt thereof. A selling Holder or underwriter, if any, shall
be deemed to have reasonably objected to such filing if such Registration
Statement, amendment, Prospectus or supplement, as applicable, as proposed
to be filed, contains a material misstatement or omission;
(v) promptly after the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
provide copies of such document to the selling Holders and to the
underwriter(s), if any, make the Capital Trust's, the Asset Trust's and the
Company's representatives available for discussion of such document and
other customary due diligence matters;
(vi) make available at reasonable times for inspection by the
selling Holders, any underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and any attorney or accountant
retained by such selling Holders or any of the underwriter(s), all
financial and other records, pertinent corporate documents and properties
of the Capital Trust, the Asset Trust and the Company and cause the Capital
Trust's, the Asset Trust's and the Company's officers, directors, managers
and employees to supply all information reasonably requested by any such
Holder, underwriter, attorney or accountant in connection with such
Registration Statement subsequent to the filing thereof and prior to its
effectiveness;
(vii) if requested by any selling Holders under the Shelf
Registration Statement or the underwriter(s), if any, promptly incorporate
in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as such selling
Holders and underwriter(s), if any, may reasonably request to have included
therein, including, without limitation, information relating to the "Plan
of Distribution" of the Transfer Restricted Securities, information with
respect to the principal amount of Transfer Restricted Securities being
sold to such underwriter(s), the purchase price being paid therefor and any
other terms of the offering of the Transfer Restricted Securities to be
sold in such offering; and make all required filings of such Prospectus
supplement or post-effective amendment as soon as practicable after the
Capital Trust, the Asset Trust and the Company are notified of the matters
to be incorporated in such Prospectus supplement or post-effective
amendment;
(viii) cause the Transfer Restricted Securities covered by the
Registration Statement to be rated with the appropriate rating agencies, if
so requested by the Holders of a majority in aggregate liquidation amount
or principal amount of Securities covered thereby or the underwriter(s), if
any;
(ix) furnish to each selling Holder and each of the underwriter(s),
if any, without charge, at least one copy of the Registration Statement, as
first filed with the Commission, and of each amendment thereto, including
all documents incorporated by reference therein and all exhibits (including
exhibits incorporated therein by reference);
13
<PAGE>
(x) deliver to each selling Holder and each of the underwriter(s), if
any, without charge, as many copies of the Prospectus (including each
preliminary prospectus) and any amendment or supplement thereto as such
Persons reasonably may request; the Capital Trust, the Asset Trust and the
Company hereby consent to the use of the Prospectus and any amendment or
supplement thereto by each of the selling Holders and each of the
underwriter(s), if any, in connection with the offering and the sale of the
Transfer Restricted Securities covered by the Prospectus or any amendment
or supplement thereto;
(xi) enter into such agreements (including an underwriting agreement),
and make such representations and warranties, and take all such other
actions in connection therewith in order to expedite or facilitate the
disposition of the Transfer Restricted Securities pursuant to any Shelf
Registration Statement contemplated by this Agreement, all to such extent
as may be reasonably requested by any purchaser or by any Holder of
Transfer Restricted Securities or underwriter in connection with any sale
or resale pursuant to any Shelf Registration Statement contemplated by this
Agreement; and in connection with an Underwritten Registration, the Capital
Trust, the Asset Trust and the Company shall:
(A) upon request, furnish to each selling Holder and each
underwriter, if any, in such substance and scope as they may reasonably
request and as are customarily made by issuers to underwriters in primary
underwritten offerings, upon the date of the effectiveness of the Shelf
Registration Statement:
(1) a certificate, dated the date of the effectiveness of the
Shelf Registration Statement, signed by (x) the Chairman of the Board,
the President or a Vice President and (y) the Chief Financial Officer
of the Company, confirming, as of the date thereof, such matters as
are customarily made by issuers to underwriters in underwritten
offerings as such parties may reasonably request;
(2) an opinion, dated the date of the effectiveness of the Shelf
Registration Statement, of counsel for the Company (who may be
internal counsel), the Capital Trust and the Asset Trust, covering
such matters customarily covered in opinions requested in underwritten
offerings as such parties may reasonably request, and in any event
including a statement to the effect that such counsel has participated
in conferences with officers and other representatives of the Company,
the Capital Trust and the Asset Trust, representatives of the
independent public accountants for the Company, the Initial
Purchaser's representatives and the Initial Purchaser's counsel in
connection with the preparation of such Registration Statement and the
related Prospectus and have considered the matters required to be
stated therein and the statements contained therein, although such
counsel has not independently verified the accuracy, completeness or
fairness of such statements; and that such counsel advises that, on
the basis of the foregoing (relying as to materiality to a large
extent upon facts
14
<PAGE>
provided to such counsel by officers and other representatives of the
Company, the Capital Trust and the Asset Trust and without independent
check or verification), no facts came to such counsel's attention that
caused such counsel to believe that the applicable Registration
Statement, at the time such Registration Statement or any post-
effective amendment thereto became effective, contained an untrue
statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, or that the Prospectus contained in such
Registration Statement as of its date, contained an untrue statement
of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading. Without limiting the
foregoing, such counsel may state further that such counsel assumes no
responsibility for, and has not independently verified, the accuracy,
completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration
Statement contemplated by this Agreement or the related Prospectus;
and
(3) a customary comfort letter, dated the date of the
effectiveness of the Shelf Registration Statement, from the Company's
independent accountants, in the customary form and covering matters of
the type customarily covered in comfort letters by underwriters in
connection with primary underwritten offerings.
(B) set forth in full or incorporate by reference in the
underwriting agreement, if any, the indemnification provisions and
procedures of Section 8 of this Agreement with respect to all parties to be
indemnified pursuant to said Section; and
(C) deliver such other documents and certificates as may be
reasonably requested by such parties to evidence compliance with clause (A)
above and with any customary conditions contained in the underwriting
agreement or other agreement entered into by the Company, the Capital Trust
and the Asset Trust pursuant to this clause (xi), if any.
If at any time the representations and warranties of the Company
contemplated in clause (A)(1) above cease to be true and correct, the
Company shall so advise the Initial Purchaser and the underwriter(s), if
any, and each selling Holder promptly and, if requested by such Persons,
shall confirm such advice in writing;
(xii) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and their
respective counsel in connection with the registration and qualification of
the Transfer Restricted Securities under the securities or Blue Sky laws of
such jurisdictions as the selling Holders or underwriter(s) may reasonably
request and do any and all other acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Shelf Registration Statement; provided, however,
that neither the Company nor the Asset Trust or the Capital Trust shall not
be required to register or qualify as a foreign
15
<PAGE>
corporation where it is not now so qualified or to take any action that
would subject it to the service of process in suits or to taxation, other
than as to matters and transactions relating to the Registration Statement,
in any jurisdiction where it is not now so subject;
(xiii) shall issue, upon the request of any Holder of Securities
covered by the Shelf Registration Statement, Exchange Securities in the
same amount as the Securities surrendered to the Company, the Capital Trust
and the Asset Trust by such Holder in exchange therefor or being sold by
such Holder; such Exchange Securities to be registered in the name of such
Holder or in the name of the purchaser(s) of such Securities, as the case
may be; in return, the Securities held by such Holder shall be surrendered
to the Company, the Capital Trust and the Asset Trust for cancellation;
(xiv) cooperate with the selling Holders and the underwriter(s), if
any, to facilitate the timely preparation and delivery of certificates
representing Transfer Restricted Securities to be sold and not bearing any
restrictive legends; and enable such Transfer Restricted Securities to be
in such denominations and registered in such names as the Holders or the
underwriter(s), if any, may request at least two business days prior to any
sale of Transfer Restricted Securities made by such underwriter(s);
(xv) if any fact or event contemplated by clause (c)(iii)(D) above
shall exist or have occurred, as promptly as is practicable under the
circumstances in the good faith determination of the Company prepare a
supplement or post-effective amendment to the Registration Statement or
related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of Transfer Restricted Securities, the Registration Statement
will not contain an untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein not misleading;
and any Prospectus will not contain an untrue statement of a material fact
or omit to state any material fact necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading;
(xvi) provide CUSIP numbers for all Transfer Restricted Securities
not later than the effective date of the Registration Statement and provide
certificates for the Transfer Restricted Securities;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by any
underwriter (including any "qualified independent underwriter" that is
required to be retained in accordance with the rules and regulations of the
NASD), and use their reasonable best efforts to cause such Registration
Statement to become effective and approved by such governmental agencies or
authorities as may be necessary to enable the Holders selling Transfer
Restricted Securities to Consummate the disposition of such Transfer
Restricted Securities;
(xviii) otherwise use their reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make generally
available to its security
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<PAGE>
holders, as soon as practicable, a consolidated earnings statement meeting
the requirements of Rule 158 (which need not be audited) for the twelve-
month period (A) commencing at the end of any fiscal quarter in which
Transfer Restricted Securities are sold to underwriters in a firm or best
efforts Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration Statement;
(xix) cause the Indenture, the Capital Trust Declaration and the
Asset Trust Declaration to be qualified under the TIA not later than the
effective date of the first Registration Statement required by this
Agreement, and, in connection therewith, cooperate with the Trustee and the
Holders of Securities to effect such changes to the Indenture, the Capital
Trust Declaration and the Asset Trust Declaration as may be required for
such Indenture, Capital Trust Declaration and Asset Trust Declaration to be
so qualified in accordance with the terms of the TIA; and execute and use
their reasonable best efforts to cause the Indenture Trustee, the Capital
Trust Guarantee Trustee, the Asset Trust Guarantee Trustee, the Capital
Property Trustee and the Asset Property Trustee to execute, all documents
that may be required to effect such changes and all other forms and
documents required to be filed with the Commission to enable such Indenture
to be so qualified in a timely manner; and
(xx) provide promptly to each Holder upon request each document
filed with the Commission pursuant to the requirements of Section 13(a) and
Section 15(d) of the Exchange Act.
Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company, the Asset Trust or the
Capital Trust of the existence of any fact or event of the kind described in
Section 6(c)(iii)(D) of this Agreement, such Holder will forthwith discontinue
disposition of Transfer Restricted Securities pursuant to the applicable
Registration Statement until such Holder's receipt of the copies of the
supplemented or amended Prospectus contemplated by Section 6(c)(xvi) of this
Agreement, or until it is advised in writing (the "Advice") by the Company, the
Asset Trust or the Capital Trust that the use of the Prospectus may be resumed,
and has received copies of any additional or supplemental filings that are
incorporated by reference in the Prospectus. If so directed by the Company, the
Asset Trust or the Capital Trust, each Holder will deliver to the Company, the
Asset Trust or the Capital Trust (at the Company's, the Asset Trust's and the
Capital Trust's expense) all copies, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such notice. In the event
the Company, the Asset Trust or the Capital Trust shall give any such notice,
the time period regarding the effectiveness of such Registration Statement set
forth in Section 3 or 4 of this Agreement, as applicable, shall be extended by
the number of days during the period from and including the date of the giving
of such notice pursuant to Section 6(c)(iii)(D) of this Agreement to and
including the date when each selling Holder covered by such Registration
Statement shall have received the copies of the supplemented or amended
Prospectus contemplated by Section 6(c)(xvi) of this Agreement or shall have
received the Advice.
17
<PAGE>
Section 7. Registration Expenses.
---------------------
All expenses incident to the Company's, the Asset Trust's and the
Capital Trust's performance of or compliance with this Agreement, other than the
expenses of any Holder, will be borne by the Company, the Capital Trust and the
Asset Trust, regardless of whether a Registration Statement becomes effective,
including without limitation: (i) all registration and filing fees and expenses
under federal and state securities laws in connection with the Registration
Statement; (ii) all fees and expenses of compliance with federal securities and
state Blue Sky or securities laws; (iii) all expenses of printing (including
printing certificates for the Exchange Securities to be issued in the Exchange
Offer and printing of Prospectuses), and associated messenger and delivery
services and telephone; (iv) all fees and disbursements of counsel for the
Company, the Capital Trust and the Asset Trust; (v) all application and filing
fees in connection with listing Securities on a national securities exchange or
automated quotation system pursuant to the requirements of this Agreement; and
(vi) all fees and disbursements of independent certified public accountants of
the Company, the Capital Trust and the Asset Trust (including the expenses of
any special audit and comfort letters required by or incident to such
performance).
The Company, the Capital Trust and the Asset Trust will, in any
event, bear their internal expenses (including, without limitation, all salaries
and expenses of their officers and employees performing legal or accounting
duties), the expenses of any annual audit and the fees and expenses of any
Person, including special experts, retained by the Company, the Asset Trust or
the Capital Trust.
Section 8. Indemnification and Contribution.
--------------------------------
(a) In connection with a Shelf Registration Statement or in
connection with any delivery of a Prospectus contained in an Exchange Offer
Registration Statement by any participating Broker-Dealer or Initial Purchaser,
as applicable, who seeks to sell Exchange Securities, the Company, the Capital
Trust and the Asset Trust shall, jointly and severally, indemnify and hold
harmless each Holder of Transfer Restricted Securities included within any such
Shelf Registration Statement and each participating Broker-Dealer or Initial
Purchaser selling Exchange Securities, and each person, if any, who controls any
such person within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act (each, a "Participant") from and against any loss, claim,
damage or liability, or any action in respect thereof (including, but not
limited to, any loss, claim, damage, liability or action relating to purchases
and sales of Securities) to which such Participant or controlling person may
become subject, under the Securities Act or otherwise, insofar as such loss,
claim, damage, liability or action arises out of, or is based upon, (i) any
untrue statement or alleged untrue statement of a material fact contained in any
such Registration Statement or any prospectus forming part thereof or in any
amendment or supplement thereto or (ii) the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse each Participant
promptly upon demand for any legal or other expenses reasonably incurred by such
Participant in connection with investigating or
18
<PAGE>
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred; provided, however, that (i) the
Company, the Capital Trust and the Asset Trust shall not be liable in any such
case to the extent that any such loss, claim, damage, liability or action arises
out of, or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in any such Registration Statement or any
prospectus forming a part thereof or in any such amendment or supplement in
reliance upon and in conformity with written information furnished to the
Company, the Capital Trust and the Asset Trust by or on behalf of such
Participant specifically for inclusion therein; and provided further that (ii)
as to any preliminary Prospectus, the indemnity agreement contained in this
Section 8(a) shall not inure to the benefit of any such Participant or any
controlling person of such Participant on account of any loss, claim, damage,
liability or action arising from the sale of the Exchange Securities to any
person by that Participant if (i) that Participant failed to send or give a copy
of the Prospectus, as the same may be amended or supplemented, to that person
within the time required by the Securities Act and (ii) the untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact in such preliminary Prospectus was corrected in the
Prospectus, unless, in each case, such failure resulted from non-compliance by
the Company, the Capital Trust and the Asset Trust with Section 6(c). The
foregoing indemnity agreement is in addition to any liability which the Company,
the Capital Trust and the Asset Trust may otherwise have to any Participant or
to any controlling person of that Participant.
(b) Each Participant, severally and not jointly, shall indemnify and
hold harmless the Company, the Capital Trust and the Asset Trust, each of its
directors, officers, employees or agents and each person, if any, who controls
the Company, the Capital Trust and the Asset Trust within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
loss, claim, damage or liability, joint or several, or any action in respect
thereof, to which the Company, the Capital Trust and the Asset Trust or any such
director, officer, employees or agents or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
Prospectus, Registration Statement or Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission was made
in reliance upon and in conformity with written information furnished to the
Company, the Capital Trust and the Asset Trust by or on behalf of that
Participant specifically for inclusion herein, and shall reimburse the Company,
the Capital Trust and the Asset Trust and any such director, officer, employees
or agents or controlling person for any legal or other expenses reasonably
incurred by the Company, the Capital Trust and the Asset Trust or any such
director, officer, employees or agents or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred. The foregoing
indemnity agreement is in addition to any liability which any Participant may
otherwise have to the Company, the Capital Trust and the Asset Trust or any such
director, officer or controlling person.
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<PAGE>
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 8, notify the indemnifying party in
writing of the claim or the commencement of that action; provided, however, that
the failure to notify the indemnifying party shall not relieve it from any
liability which it may have under this Section 8 except to the extent it has
been materially prejudiced by such failure and, provided further, that the
failure to notify the indemnifying party shall not relieve it from any liability
which it may have to an indemnified party otherwise than under this Section 8.
If any such claim or action shall be brought against an indemnified party, and
it shall have notified the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume the
defense thereof with counsel satisfactory to the indemnified party. After notice
from the indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not be liable
to the indemnified party under this Section 8 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Initial Purchaser shall have the right to employ counsel to represent
jointly the Initial Purchaser and those other Participants and their respective
officers, employees and controlling persons who may be subject to liability
arising out of any claim in respect of which indemnity may be sought by the
Participants against the Company, the Capital Trust and the Asset Trust under
this Section 8 if, in the reasonable judgment of the Initial Purchaser it is
advisable for the Initial Purchaser and those Participants, officers, employees
and controlling persons to be jointly represented by separate counsel, and in
that event the fees and expenses of such separate counsel shall be paid by the
Capital Trust, the Asset Trust and the Company. Each indemnified party, as a
condition of the indemnity agreements contained in Section 8, shall use its best
efforts to cooperate with the indemnifying party in the defense of any such
action or claim. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or potential parties to such
claim or action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising out
of such claim, action, suit or proceeding, or (ii) be liable for any settlement
of any such action effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with its written consent or if there
be a final judgment of the plaintiff in any such action, the indemnifying party
agrees to indemnify and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment.
(d) If the indemnification provided for in this Section 8 shall for
any reason be unavailable to or insufficient to hold harmless an indemnified
party under Section 8(a) or 8(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss,
20
<PAGE>
claim, damage or liability, or action in respect thereof, in such proportion as
shall be appropriate to reflect the relative fault of the Capital Trust, the
Asset Trust and the Company on the one hand and the Participants on the other
with respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative fault shall be determined by reference to
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied by the
Capital Trust, the Asset Trust and the Company or the Participants, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Capital Trust and the Asset Trust and the Participants agree that it would not
be just and equitable if contributions pursuant to this Section 8(d) were to be
determined by pro rata allocation (even if the Participants were treated as one
entity for such purpose) or by any other method of allocation which does not
take into account the equitable considerations referred to herein. The amount
paid or payable by an indemnified party as a result of the loss, claim, damage
or liability, or action in respect thereof, referred to above in this Section
8(d) shall be deemed to include, for purposes of this Section 8(d), any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 8(d), no Participant shall be required to contribute
any amount in excess of the amount by which proceeds received by such
Participant from an offering of the Notes exceeds the amount of any damages
which such Participant has otherwise paid or become liable to pay by reason of
any untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The Participants'
obligations to contribute as provided in this Section 8(d) are several and not
joint.
Section 9. Rule 144A.
---------
The Company, the Capital Trust and the Asset Trust hereby agree
with each Holder, for so long as any Transfer Restricted Securities remain
outstanding, to make available to any Holder or beneficial owner of Transfer
Restricted Securities in connection with any sale thereof and any prospective
purchaser of such Transfer Restricted Securities from such Holder or beneficial
owner, upon request, the information required by Rule 144A(d)(4) under the
Securities Act in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144A.
Section 10. Participation in Underwritten Registrations.
-------------------------------------------
No Holder may participate in any Underwritten Registration
hereunder unless such Holder (a) agrees to sell such Holder's Transfer
Restricted Securities on the basis provided in any underwriting arrangements
approved by the Persons entitled hereunder to approve such arrangements and (b)
completes and executes all reasonable questionnaires, powers of attorney,
indemnities, underwriting agreements, lock-up letters and other documents
required under the terms of such underwriting arrangements.
21
<PAGE>
Section 11. Selection of Underwriters.
-------------------------
The Holders of Transfer Restricted Securities covered by the Shelf
Registration Statement who desire to do so may sell such Transfer Restricted
Securities in an Underwritten Offering. In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers that will
administer the offering will be selected by the Holders of a majority in
aggregate principal amount of the Transfer Restricted Securities included in
such offering; provided, that such investment bankers and managers must be
reasonably satisfactory to the Company. All expenses related to an Underwritten
Offering, other than those of the Company, the Capital Trust and the Asset Trust
described in Section 7, shall be borne by participating Holders.
Section 12. Miscellaneous.
-------------
(a) Remedies. The Company, the Capital Trust and the Asset Trust
--------
agree that monetary damages (including the Additional Interest and Additional
Distributions contemplated hereby) would not be adequate compensation for any
loss incurred by reason of a breach by it of the provisions of this Agreement
and hereby agree to waive the defense in any action for specific performance
that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company, the Capital Trust and
--------------------------
the Asset Trust will not on or after the date of this Agreement enter into any
agreement with respect to their securities that is inconsistent with the rights
granted to the Holders in this Agreement or otherwise conflicts with the
provisions of this Agreement. The Company, the Capital Trust and the Asset Trust
have not previously entered into any agreement granting any registration rights
with respect to their securities to any Person. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Capital Trust's, the Asset Trust's and
the Company's securities under any agreement in effect on the date of this
Agreement.
(c) Adjustments Affecting the Securities. The Company, the Capital
------------------------------------
Trust and the Asset Trust will not take any action, or permit any change to
occur, with respect to Securities that would materially and adversely affect the
ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may
----------------------
not be amended, modified or supplemented, and waivers or consents to or
departures from the provisions of this Agreement may not be given unless the
Company, the Capital Trust and the Asset Trust have obtained the written consent
of Holders of a majority of the outstanding principal amount of Transfer
Restricted Securities. Notwithstanding the foregoing, a waiver or consent to
departure from the provisions of this Agreement that relates exclusively to the
rights of Holders whose securities are being tendered pursuant to the Exchange
Offer and that does not affect directly or indirectly the rights of other
Holders whose securities are not being tendered pursuant to such Exchange Offer
may be given by the Holders of a majority of the outstanding principal amount of
Transfer Restricted Securities being tendered or registered.
22
<PAGE>
(e) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail
(registered or certified, return receipt requested), telex, telecopier, or air
courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Declaration; and
(ii) if to the Company, the Capital Trust and the Asset Trust:
First Maryland Bancorp
25 South Charles Street
Baltimore, Maryland 21201
General Counsel
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five business
days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if telecopied; and on the
next business day, if timely delivered to an air courier guaranteeing overnight
delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Indenture.
(f) Successors and Assigns. This Agreement shall inure to the
----------------------
benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities; provided,
however, that this Agreement shall not inure to the benefit of or be binding
upon a successor or assign of a Holder unless and to the extent such successor
or assign acquired Transfer Restricted Securities from such Holder.
(g) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
-------------
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD
TO THE CONFLICT OF LAW RULES THEREOF.
(j) Severability. In the event that any one or more of the
------------
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable,
23
<PAGE>
the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions contained herein shall not be affected
or impaired thereby.
(k) Entire Agreement. This Agreement together with the other
----------------
transaction documents is intended by the parties as a final expression of their
agreement and intended to be a complete and exclusive statement of the agreement
and understanding of the parties hereto in respect of the subject matter
contained herein. There are no restrictions, promises, warranties or
undertakings, other than those set forth or referred to herein with respect to
the registration rights granted by the Company, the Capital Trust and the Asset
Trust with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(l) Required Consents. Whenever the consent or approval of Holders
-----------------
of a specified percentage of Transfer Restricted Securities is required
hereunder, Transfer Restricted Securities held by the Company or its affiliates
(as such term is defined in Rule 405 under the Securities Act) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required
24
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
FIRST MARYLAND BANCORP
By:DAVID M.CRONIN
-----------------------------------------------
Name:
Title: Executive Vice President
ALLFIRST PREFERRED CAPITAL TRUST
By:DAVID M. CRONIN
-----------------------------------------------
Name:
Title: Capital Trust Administrator
ALLFIRST PREFERRED ASSET TRUST
By:DAVID M.CRONIN
-----------------------------------------------
Name:
Title: Asset Trust Administrator
LEHMAN BROTHERS INC.
By:/S/
-----------------------------------------------
Name:
Title:
25
<PAGE>
Exhibits 5.1 and 23.2
[Allfirst Financial Inc. letterhead]
October 5, 1999
Allfirst Financial Inc.
25 South Charles Street
Baltimore, Maryland 21201
Re: SKATES
------
Ladies and Gentlemen:
I am a Senior Vice President and the General Counsel of Allfirst
Financial Inc. (the "Company"), and in such capacity have represented the
Company in connection with the registration under the Securities Act of 1933, as
amended, on a Registration Statement on Form S-4 (the "Registration Statement")
of: (i) $105,310,0000 aggregate principal amount of the Company's Floating Rate
Junior Subordinated Debenture due July 15, 2029, Series B (the "Subordinated
Debenture"); (ii) the Series B Capital Trust Guarantee Agreement (the "Capital
Guarantee") from the Company to The Bank of New York, as Capital Trust Guaranty
Trustee for the benefit of holders of the Floating Rate Non-Cumulative
Subordinated Trust Enhanced Securities, Series B, of Allfirst Preferred Capital
Trust, a Delaware business trust; and (iii) the Series B Asset Trust Preferred
Guarantee Agreement (the "Asset Guarantee" and together with the Capital
Guarantee, the "Guarantees") from the Company to The Bank of New York, as Asset
Trust Preferred Guaranty Trustee for the benefit of holders of the Floating Rate
Subordinated Asset Trust Preferred Securities of Allfirst Preferred Asset Trust,
a Delaware business trust. I have also represented the Company in connection the
qualification under the Trust Indenture Act of 1939, as amended, of an Indenture
with respect to the Subordinated Debenture between the Company and The Bank of
New York, as Trustee (the "Indenture") and of the Guarantees. The Subordinated
Debenture and the Guarantees are being registered by the Company and qualified
under the Trust Indenture Act for purposes of exchanging such instruments for
like instruments previously issued by the Company.
In connection with the opinions contained herein, I have examined the
charter and bylaws of the Company, the corporate action taken by the Company
relating to the Subordinated Debenture and its issuance under the Indenture and
to the Guarantees, such other documents as I have deemed appropriate as a basis
for the opinions hereinafter expressed.
<PAGE>
Based upon the foregoing I am of the opinion as follows:
(a) The Subordinated Debenture to be issued by the Company have been
duly and validly authorized and, upon proper execution, authentication and
delivery thereof in accordance with the Indenture, will be legally issued and
will constitute the binding obligation of the Company entitled to the benefits
of the Indenture.
(b) The Capital Guaranty to be issued by the Company has been duly and
validly authorized and, upon proper execution and delivery thereof, will be
legally issued and will constitute the binding obligation of the Company.
(c) The Asset Guaranty to be issued by the Company has been duly and
validly authorized and, upon proper execution and delivery thereof, will be
legally issued and will constitute the binding obligation of the Company.
I hereby consent to the use of this opinion as an exhibit to the
Registration Statement and to the reference to me and this opinion in the
Registration Statement and the related prospectus.
Very truly yours,
/s/
Gregory K. Thoreson
Senior Vice President
and General Counsel
2
<PAGE>
[Letterhead of Morris, Nichols, Arsht & Tunnell]
October 5, 1999
Allfirst Preferred Asset Trust
Allfirst Preferred Capital Trust
25 South Charles Street
Baltimore, Maryland 21201
Re: Allfirst Preferred Asset Trust and Allfirst Preferred Capital Trust
-------------------------------------------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel to Allfirst Preferred Asset
Trust, a Delaware statutory business trust (the "Asset Trust"), and Allfirst
Preferred Capital Trust, a Delaware statutory business trust (the "Capital
Trust" and, collectively with the Asset Trust, the "Trusts"), in connection with
certain matters relating to the formation of the Trusts and the proposed
issuance of Series B Asset Trust Preferred Securities and Series B Capital Trust
Preferred Securities to beneficial owners pursuant to and as described in the
Registration Statement (and the prospectus forming a part thereof) on Form S-4
to be filed with the Securities and Exchange Commission by Allfirst Financial
Inc., a Delaware corporation (successor by merger to First Maryland Bancorp, a
Maryland corporation) (the "Company"), and the Trusts on or about the date
hereof (the "Registration Statement"). Capitalized terms used herein with
respect to each Trust and not otherwise herein defined are used with respect to
such Trust as defined in the Governing Instrument (as defined below) of such
Trust.
In rendering this opinion, we have examined and relied upon copies of
the following documents in the forms provided to us: the Certificate of Trust
of the Asset Trust as filed in the Office of the Secretary of the State of
Delaware (the "State Office") on June 29, 1999 (the "Asset Trust Certificate");
the Declaration of Trust of the Asset Trust dated as of June 29, 1999 (the
"Original Asset Trust Governing Instrument"); the Amended and Restated
Declaration of Trust of the Asset Trust dated as of July 13, 1999 (the "Asset
Trust Governing Instrument");
<PAGE>
the Certificate of Trust of the Capital Trust as filed in the State Office on
June 29, 1999 (the "Capital Trust Certificate" and, collectively with the Asset
Trust Certificate, the "Certificates"); the Declaration of Trust of the Capital
Trust dated as of June 29, 1999 (the "Original Capital Trust Governing
Instrument" and, collectively with the Original Asset Trust Governing
Instrument, the "Original Governing Instruments"); the Amended and Restated
Declaration of Trust of the Capital Trust dated as of July 13, 1999 (the
"Capital Trust Governing Instrument" and, collectively with the Asset Trust
Governing Instrument, the "Governing Instruments"); the Purchase Agreement dated
as of July 9, 1999 among the Company, the Trusts and Lehman Brothers Inc. (the
"Purchase Agreement"); the Indenture dated as of July 13, 1999 between the
Company and The Bank of New York, as trustee; the Series A Asset Trust Preferred
Guarantee dated as of July 13, 1999 by the Company and The Bank of New York, as
trustee (the "Series A Asset Trust Guarantee"); the Series A Capital Trust
Guarantee dated as of July 13, 1999 by the Company and The Bank of New York, as
trustee (the "Series A Capital Trust Guarantee"); the Series B Asset Trust
Preferred Guarantee to be entered into by the Company and The Bank of New York,
as trustee (the "Series B Asset Trust Guarantee"); the Series B Capital Trust
Guarantee to be entered into by the Company and The Bank of New York, as trustee
(the "Series B Capital Trust Guarantee"); the Registration Statement; the
Registration Rights Agreement dated as of July 9, 1999 among the Company, the
Trusts and Lehman Brothers Inc. (the "Registration Rights Agreement"); the
Debenture Purchase Agreement dated as of July 13, 1999 between the Asset Trust
and the Company (the "Debenture Purchase Agreement"); the Asset Trust Common
Securities Purchase Agreement dated as of July 13, 1999 between the Asset Trust
and the Company (the "Asset Trust Common Securities Purchase Agreement"); the
Asset Trust Preferred Securities Purchase Agreement dated as of July 13, 1999
between the Asset Trust and the Capital Trust (the "Asset Trust Preferred
Securities Purchase Agreement"); the Capital Trust Common Securities Purchase
Agreement dated as of July 13, 1999 between the Capital Trust and the Company
(the "Capital Trust Common Securities Purchase Agreement"); and certifications
of good standing of the Trusts obtained as of a recent date from the State
Office. In such examinations, we have assumed the genuineness of all signatures,
the conformity to original documents of all documents submitted to us as drafts
or copies or forms of documents to be executed and the legal capacity of natural
persons to complete the execution of documents. We have further assumed for
purposes of this opinion: (i) the due formation or organization, valid existence
and good standing of each entity (other than the Trusts) that is a party to any
of the documents reviewed by us under the laws of the jurisdiction of its
respective formation or organization; (ii) the due authorization, execution and
delivery by, or on behalf of, each of the parties thereto of the above
referenced documents with respect to each Trust; (iii) that each Person that
will acquire Series B Asset Trust Preferred Securities in the Exchange Offer
will validly tender Series A Asset Trust Preferred Securities in exchange
therefor, that such Series A Asset Trust Preferred Securities will be duly
accepted and that such Person will duly receive Series B Asset Trust Preferred
Securities in consideration thereof, all pursuant to and in accordance with the
terms and conditions of the Asset Trust Governing Instrument, and as
contemplated in the Purchase Agreement, the Registration Statement and the
Registration Rights Agreement, and that the Series B Asset Trust Preferred
Securities will be otherwise issued and sold in accordance with the terms,
<PAGE>
conditions, requirements and procedures set forth in the Asset Trust Governing
Instrument and as contemplated by the Purchase Agreement, the Registration
Statement and the Registration Rights Agreement; (iv) that each Person that will
acquire Series B Capital Trust Preferred Securities in the Exchange Offer will
validly tender Series A Capital Trust Preferred Securities in exchange therefor,
that such Series A Capital Trust Preferred Securities will be duly accepted and
that such Person will duly receive Series B Capital Trust Preferred Securities
in consideration thereof, all pursuant to and in accordance with the terms and
conditions of the Capital Trust Governing Instrument, and as contemplated in the
Purchase Agreement, the Registration Statement and the Registration Rights
Agreement, and that the Series B Capital Trust Preferred Securities will be
otherwise issued in accordance with the terms, conditions, requirements and
procedures set forth in the Capital Trust Governing Instrument and as
contemplated by the Purchase Agreement, the Registration Statement and the
Registration Rights Agreement; (v) that no event has occurred subsequent to the
filing of the Asset Trust Certificate that would cause a dissolution or
liquidation of the Asset Trust under the Original Asset Trust Governing
Instrument or the Asset Trust Governing Instrument, as applicable; (vi) that no
event has occurred subsequent to the filing of the Capital Trust Certificate
that would cause a dissolution or liquidation of the Capital Trust under the
Original Capital Trust Governing Instrument or the Capital Trust Governing
Instrument, as applicable; (vii) that the activities of the Asset Trust have
been and will be conducted in accordance with the Original Asset Trust Governing
Instrument or the Asset Trust Governing Instrument, as applicable, and the
Delaware Business Trust Act, 12 Del. C. (s)(s) 3801 et seq. (the "Delaware
------- -------
Act"); (viii) that the activities of the Capital Trust have been and will be
conducted in accordance with the Original Capital Trust Governing Instrument or
the Capital Trust Governing Instrument, as applicable, and the Delaware Act; and
(ix) that the documents examined by us, or contemplated hereby, express the
entire understanding of the parties thereto with respect to the subject matter
thereof and have not been amended, supplemented or otherwise modified, except as
herein referenced. We have not reviewed any documents other than those
identified above in connection with this opinion, and we have assumed that there
are no other documents that are contrary to or inconsistent with the opinions
expressed herein. No opinion is expressed with respect to the requirements of,
or compliance with, federal or state securities or blue sky laws. Further, we
express no opinion with respect to the Registration Statement or any other
offering materials relating to the Asset Trust Preferred Securities offered by
the Asset Trust or the Capital Trust Preferred Securities offered by the Capital
Trust and we assume no responsibility for their contents. As to any fact
material to our opinion, other than those assumed, we have relied without
independent investigation on the above referenced documents and on the accuracy,
as of the date hereof, of the matters therein contained.
Based on and subject to the foregoing, and limited in all respects to
matters of Delaware law, it is our opinion that:
1. Each of the Trusts is duly formed and validly existing in good standing
as a business trust under the Delaware Act.
<PAGE>
2. The Series B Capital Trust Preferred Securities have been duly
authorized for issuance by the Capital Trust Governing Instrument, and the
Series B Capital Trust Preferred Securities, when issued and delivered in the
Exchange Offer pursuant to and in accordance with the terms of the Capital Trust
Governing Instrument, as contemplated in the Registration Rights Agreement, the
Registration Statement and the Purchase Agreement, will be validly issued and,
subject to the qualifications set forth in paragraph 3, below, fully paid and
non-assessable undivided beneficial interests in the assets of the Capital
Trust.
3. Under the Delaware Act and the terms of the Capital Trust Governing
Instrument, the holders of the Series B Capital Trust Preferred Securities, as
beneficial owners of the Capital Trust, will be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware;
provided that we express no opinion as to any holder of a Series B Capital Trust
Preferred Security that is, was or becomes a named Capital Trustee of the
Capital Trust. We note that the holders of the Series B Capital Trust Preferred
Securities will be subject to the withholding provisions of Section 10.4 of the
Capital Trust Governing Instrument and may be required to make payment or
provide indemnity or security as set forth in the Capital Trust Governing
Instrument.
4. The Series B Asset Trust Preferred Securities have been duly authorized
for issuance by the Asset Trust Governing Instrument, and the Series B Asset
Trust Preferred Securities, when issued and delivered in the Exchange Offer
pursuant to and in accordance with the terms of the Asset Trust Governing
Instrument, as contemplated in the Registration Rights Agreement, the
Registration Statement and the Purchase Agreement, will be validly issued and,
subject to the qualifications set forth in paragraph 5, below, fully paid and
non-assessable undivided beneficial interests in the assets of the Asset Trust.
5. Under the Delaware Act and the terms of the Asset Trust Governing
Instrument, the holders of the Series B Asset Trust Preferred Securities, as
beneficial owners of the Asset Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of Delaware; provided
that we express no opinion as to any holder of a Series B Asset Trust Preferred
Security that is, was or becomes a named Asset Trustee of the Asset Trust. We
note that the holders of the Series B Asset Trust Preferred Securities will be
subject to the withholding provisions of Section 9.3 of the Asset Trust
Governing Instrument and may be required to make payment or provide indemnity or
security as set forth in the Asset Trust Governing Instrument.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of our name and reference to our opinion
under the heading "LEGAL MATTERS" in the prospectus forming a part thereof. In
giving this consent, we do not thereby admit that we come within the category of
persons whose consent is required under Section 7 of the
<PAGE>
Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. This opinion speaks only as of
the date hereof and is based on our understandings and assumptions as to present
facts, and our review of the above referenced documents and the application of
Delaware law as the same exist on the date hereof, and we undertake no
obligation to update or supplement this opinion after the date hereof for the
benefit of any person or entity with respect to any facts or circumstances that
may hereafter come to our attention or any changes in facts or law that may
hereafter occur or take effect. This opinion is intended solely for the benefit
of the addressees hereof in connection with the matters contemplated hereby and
may not be relied upon by any other person or entity or for any other purpose
without our prior written consent.
Very truly yours,
MORRIS, NICHOLS, ARSHT & TUNNELL
/s/ Morris, Nichols, Arsht & Tunnell
<PAGE>
Exhibit 8.1
[LETTERHEAD OF ARNOLD & PORTER APPEARS HERE]
October 5, 1999
Allfirst Financial Inc.
25 South Charles Street
Baltimore, MD 21201
Re: Allfirst Preferred Capital Trust --
$100,000,000 of Floating Rate Non-Cumulative
Subordinated Capital Trust Enhanced Securities
----------------------------------------------
Ladies and Gentlemen:
We have acted as special tax counsel to Allfirst Financial, Inc., in
connection with the preparation and filing with the Securities and Exchange
Commission of a Form S-4 Registration Statement relating to the offer (the
"Exchange Offer") to exchange all outstanding Floating Rate Non-Cumulative
Subordinated Capital Trust Enhanced Securities ("SKATES"), for new SKATES
registered under the Securities Act of 1933, as amended.
This opinion letter relates to the principal material federal income tax
consequences of the Exchange Offer and the ownership and disposition of the
SKATES. All capitalized terms used in this opinion letter and not otherwise
defined herein are used as defined in the Registration Statement.
The opinion set forth herein is subject to the assumptions and conditions
set forth in the Registration Statement under the heading "United States Federal
Income Taxation" and is premised on the assumption that all of the factual
information, descriptions, representations and assumptions set forth or referred
to in this letter and in the Registration Statement are accurate and complete.
Further, in preparing our opinion, you have directed us to assume that all the
factual information, representations and assumptions set forth in letters to us
from Allfirst Financial, Inc., Allfirst Preferred Asset Trust and Allfirst
Capital Trust dated July 13, 1999 and October 5, 1999 are accurate and complete.
We have not independently verified any factual matters relating to the
SKATES in connection with or apart from our preparation of this opinion and,
accordingly, our opinion does not take into account any matters not set forth
herein which might have been disclosed by independent verification. We have
examined the Registration Statement and such other documents as we have deemed
necessary to render our opinion expressed below. In our examination of such
material, we have relied upon the current and continued accuracy of the factual
matters we have considered, and we have assumed
<PAGE>
Allfirst Financial Inc.
October 5, 1999
Page 2
the genuineness of all signatures, the authenticity of all documents submitted
to us as originals and the conformity to original documents of all copies of
documents submitted to us. Should any of the facts, circumstances, or
assumptions on which we have relied subsequently be determined to be incorrect
or inaccurate, our conclusions may vary from those set forth below and such
variance could be material.
Based on representations made by Allfirst Financial, Inc., Allfirst Capital
Trust and Allfirst Preferred Asset Trust, and subject to the further assumptions
and conditions set forth in the Registration Statement and set forth herein, it
is our opinion that the statements in the Registration Statement under the
caption "United States Federal Income Taxation," to the extent such statements
constitute a summary of applicable United States federal income tax law, are a
true and correct discussion of the relevant and material provisions of present
United States federal income tax law and correctly set forth our opinions
concerning (a) the treatment of the Exchange Offer, (b) the classification of
Allfirst Capital Trust as a grantor trust for federal income tax purposes, (c)
the classification of Allfirst Preferred Asset Trust as a partnership for
federal income tax purposes, and (d) the classification of the junior
subordinated debenture issued by Allfirst Financial, Inc. to Allfirst Preferred
Asset Trust as debt of Allfirst Financial, Inc. for federal income tax purposes.
This opinion is based upon the Internal Revenue Code of 1986, as amended,
the Treasury regulations promulgated thereunder and other relevant authorities
and law, all as in effect on the date hereof. All of the above are subject to
change or modification by subsequent legislative, regulatory, administrative or
judicial decisions which could adversely affect our opinions. Consequently,
future changes in the law, or administrative or judicial interpretations
thereof, may cause the tax treatment of the transactions referred to herein to
be materially different from that described above.
Other than the specific tax opinions set forth in this letter, no other
opinion has been rendered with respect to the tax treatment of the Exchange
Offer and the ownership and disposition of the SKATES, including, but not
limited to, their tax treatment under other provisions of the Code and the
regulations, the tax treatment of any conditions existing at the time of, or
effects resulting from the Exchange Offer and the ownership and disposition of
the SKATES that are not specifically covered by the above opinions, or the tax
treatment under state, local, foreign or any other tax laws.
Very truly yours,
ARNOLD & PORTER
<PAGE>
Exhibit 12.1
First Maryland Bancorp
Computation of the Ratio of Earnings To Fixed Charges
<TABLE>
<CAPTION>
Six
Months
Ended
June 30, Years Ended December 31,
----------------------------------------------------
1999 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- --------
(dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Excluding interest on deposits
Fixed Charges:
Interest on long-term debt and short-term
borrowings (a).............................. $ 79,167 $143,898 $148,110 $110,149 $108,982 $ 71,908
Portion of rent deemed representative
of the interest factor (b).................. 3,899 8,219 8,388 6,564 6,873 7,058
-------- -------- -------- -------- -------- --------
Total fixed charges................... $ 83,066 $152,117 $156,498 $116,713 $115,855 $ 78,966
Earnings:
Net income.................................... $ 79,969 $218,123 $151,188 $132,337 $120,187 $111,140
Income taxes.................................. 46,655 124,467 84,301 74,850 63,992 59,288
Fixed charges................................... 83,066 152,117 156,498 116,713 115,855 78,966
-------- -------- -------- -------- -------- --------
Total earnings........................ $209,690 $494,707 $391,987 $323,900 $300,034 $249,394
Ratio of earnings to fixed charges.............. 2.52x 3.25x 2.50x 2.78x 2.59x 3.16x
Including interest on deposits
Fixed Charges:
Interest on long-term debt and short-term
borrowings and deposits (a)................. $259,708 $534,178 $445,754 $315,318 $314,548 $241,099
Portion of rent deemed representative
of the interest factor (b).................. 3,899 8,219 8,388 6,564 6,873 7,058
-------- -------- -------- -------- -------- --------
Total fixed charges................... $263,607 $542,397 $454,142 $321,882 $321,421 $248,157
Earnings:
Net income.................................... $ 79,969 $218,123 $151,188 $132,337 $120,187 $111,140
Income taxes.................................. 46,655 124,467 84,301 74,850 63,992 59,288
Fixed charges................................... 263,607 542,397 454,142 321,882 321,421 248,157
-------- -------- -------- -------- -------- --------
Total earnings........................ $390,231 $884,987 $689,631 $529,069 $505,600 $418,585
Ratio of earnings to fixed charges.............. 1.48x 1.63x 1.52x 1.64x 1.57x 1.69x
</TABLE>
_________________
(a) Includes the amortization of deferred note issue expenses.
(b) One third of rents is deemed representative of the interest factor.
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-4 of Allfirst Financial Inc. (formerly First Maryland
Bancorp), Allfirst Preferred Capital Trust, and Allfirst Preferred Asset Trust,
respectively, of our report dated January 27, 1999 relating to the financial
statements appearing in the Allfirst Financial Inc. Annual Report on Form 10-K
for the year ended December 31, 1998. We also consent to the reference to us
under the heading "Experts" in such Registration Statement.
PricewaterhouseCoopers LLP
Baltimore, Maryland
October 5, 1999
<PAGE>
Exhibit 24.1
------------
FIRST MARYLAND BANCORP
Power of Attorney
-----------------
Each of the undersigned persons, in his or her capacity as an officer or
director, or both, of First Maryland Bancorp (the "Company"), hereby appoints
Jeremiah E. Casey, Frank P. Bramble, Jerome W. Evans, David M. Cronin and Robert
F. Ray, and each of them, with full power of substitution and resubstitution and
with full power in each to act without the others, his or her attorney-in-fact
and agent for the following purposes:
1. To sign for him or her, in his or her name and in his or her capacity
as an officer or director, or both, of the Company, a Registration Statement on
Form S-3, and any amendments and post-effective amendments thereto
(collectively, the "Preferred Stock Registration Statement"), for the
registration under the Securities Act of 1933, as amended (the "Act") and Rule
415 thereunder (if applicable), of up to $250,000,000 in aggregate liquidation
amount of preferred stock that will qualify as Tier 1 capital of the Corporation
("Preferred Stock"), to be offered in one or more public offerings;
2. To sign for him or her, in his or her name and in his or her capacity
as an officer or director, or both, of the Company, a Registration Statement on
Form S-4 and, if necessary, a Registration Statement on Form S-3, and any
amendments and post-effective amendments thereto (collectively, the "Trust
Preferred Registration Statement" and, together with the Preferred Stock
registration Statement, the "Registration Statement"), for the registration
under the Securities Act of 1933, as amended (the "Act") and Rule 415 thereunder
(if applicable), of (i) up to $250,000,000 in aggregate liquidation amount of
trust preferred securities of a single purpose, pass through entity that may be
formed by the Company (the "Entity"), which may be issued in a registered
exchange offer for the identical trust preferred securities issued by the Entity
in a Rule 144A offering; (ii) up to $275,000,000 in aggregate prin-
<PAGE>
cipal amount of the Company's subordinated debentures, which will be issued in
the registered exchange offer for subordinated debentures issued by the Company
in the Rule 144A offering of the trust preferred securities; and (iii) the
Company's guarantee of the obligations of the single purpose, pass through
entity, which will be issued in the registered exchange offer for a like
guarantee issued by the Company in the Rule 144A offering of the trust preferred
securities;
3. To file or cause to be filed any such Registration Statement with the
Securities and Exchange Commission;
4. To take all such other action as any such attorney-in-fact, or his
substitute, may deem necessary or desirable in order to effect and maintain the
registration of the securities covered by any Registration Statement under the
Act; and
5. To sign for him or her, in his or her name and in his or her capacity
as an officer or director, or both, of the Company, all such documents and
instruments as any such attorney-in-fact, or his substitute, may deem necessary
or advisable in connection with the registration, qualification or exemption of
the securities covered by any Registration Statement under the securities laws
of any state or other jurisdiction.
2
<PAGE>
This power of attorney shall be effective as of the date written opposite
the signature of each of the undersigned and shall continue in full force and
effect until revoked by the undersigned in a writing filed with the Secretary of
the Company.
/s/ JEREMIAH E. CASEY December 15, 1998
- ------------------------------
Jeremiah E. Casey
Chairman of the Board and
Director
/s/ FRANK P. BRAMBLE December 15, 1998
- ------------------------------
Frank P. Bramble
President, Chief Executive
Officer and Director
/s/ JEROME W. EVANS December 15, 1997
- ------------------------------
Jerome W. Evans
Executive Vice President and
Chief Financial Officer
/s/ ROBERT L. CARPENTER December 15, 1998
- ------------------------------
Robert L. Carpenter
Senior Vice President and
Controller
/s/ JAMES T. BRADY December 15, 1998
- ------------------------------
James T. Brady
Director
/s/ BENJAMIN L. BROWN December 15, 1998
- ------------------------------
Benjamin L. Brown
Director
/s/ MICHAEL D. BUCKLEY December 15, 1998
- ------------------------------
Michael D. Buckley
Director
/s/ J. OWEN COLE December 15, 1998
- ------------------------------
J. Owen Cole
Director
3
<PAGE>
/s/ EDWARD A. CROOKE December 15, 1998
- ------------------------------
Edward A. Crooke
Director
/s/ JOHN F. DEALY December 15, 1998
- ------------------------------
John F. Dealy
Director
/s/ MATHIAS J. DEVITO December 15, 1998
- ------------------------------
Mathias J. DeVito
Director
/s/ JEROME W. GECKLE December 15, 1998
- ------------------------------
Jerome W. Geckle
Director
/s/ FRANK A. GUNTHER, JR. December 15, 1998
- ------------------------------
Frank A. Gunther, Jr.
Director
/s/ CURRAN W. HARVEY, JR. December 15, 1998
- ------------------------------
Curran W. Harvey, Jr.
Director
/s/ MARGARET M. HECKLER December 15, 1998
- ------------------------------
Margaret M. Heckler
Director
/s/ LEE H. JAVITCH December 15, 1998
- ------------------------------
Lee H. Javitch
Director
/s/ GARY KENNEDY December 15, 1998
- ------------------------------
Gary Kennedy
Director
4
<PAGE>
/s/ WILLIAM T. KIRCHHOFF December 15, 1998
- ------------------------------
William T. Kirchhoff
Director
/s/ HENRY J. KNOTT, JR. December 15, 1998
- ------------------------------
Henry J. Knott, Jr.
Director
/s/ ANDREW MAIER II December 15, 1998
- ------------------------------
Andrew Maier II
Director
/s/ THOMAS P. MULCAHY December 15, 1998
- ------------------------------
Thomas P. Mulcahy
Director
/s/ WILLIAM M. PASSANO, JR. December 15, 1998
- ------------------------------
William M. Passano, Jr.
Director
/s/ R. CHAMPLIN SHERIDAN December 15, 1998
- ------------------------------
R. Champlin Sheridan
Director
5
<PAGE>
EXHIBIT 25.1
========================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
_____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_____________
ALLFIRST FINANCIAL INC.
(Exact name of obligor as specified in its charter)
Maryland 52-0981378
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
_____________
Floating Rate Junior Subordinated Debenture due July 15, 2029, Series B
(Title of the indenture securities)
========================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- ---------------------------------------------------
Name Address
- ---------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed
with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1
filed with Registration Statement No. 33-21672 and Exhibit 1 to Form T-
1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of September, 1999.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.......... $ 5,597,807
Interest-bearing balances................................... 4,075,775
Securities:
Held-to-maturity securities................................. 785,167
Available-for-sale securities............................... 4,159,891
Federal funds sold and Securities purchased under 2,476,963
agreements to resell........................................
Loans and lease financing receivables:
Loans and leases, net of unearned income................... 38,028,772
LESS: Allowance for loan and lease losses................... 568,617
LESS: Allocated transfer risk reserve....................... 16,352
Loans and leases, net of unearned income, allowance, and
reserve.................................................... 37,443,803
Trading Assets............................................... 1,563,671
Premises and fixed assets (including capitalized leases)..... 683,587
Other real estate owned...................................... 10,995
Investments in unconsolidated subsidiaries and associated
companies................................................... 184,661
Customers' liability to this bank on acceptances 812,015
outstanding.................................................
Intangible assets............................................ 1,135,572
Other assets................................................. 5,607,019
------------
Total assets................................................. $64,536,926
============
LIABILITIES
Deposits:
In domestic offices......................................... $26,488,980
Noninterest-bearing......................................... 10,626,811
Interest-bearing............................................ 15,862,169
In foreign offices, Edge and Agreement subsidiaries, and
IBFs....................................................... 20,655,414
Noninterest-bearing......................................... 156,471
Interest-bearing............................................ 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase.................................... 3,729,439
Demand notes issued to the U.S.Treasury...................... 257,860
Trading liabilities.......................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less................. 496,235
With remaining maturity of more than one year through
three years................................................ 465
With remaining maturity of more than three years............ 31,080
Bank's liability on acceptances executed and
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
outstanding................................................. 822,455
Subordinated notes and debentures............................ 1,308,000
Other liabilities............................................ 2,846,649
-----------
Total liabilities............................................ 58,624,027
===========
EQUITY CAPITAL
Common stock................................................. 1,135,284
Surplus...................................................... 815,314
Undivided profits and capital reserves....................... 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities............................... (7,956)
Cumulative foreign currency translation adjustments.......... (31,510)
-----------
Total equity capital......................................... 5,912,899
-----------
Total liabilities and equity capital......................... $64,536,926
===========
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ] Directors
Alan R. Griffith ]
Gerald L. Hassell ]
<PAGE>
EXHIBIT 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
_________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_________________
ALLFIRST PREFERRED CAPITAL TRUST
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
_________________
Floating Rate Non-Cumulative Subordinated Capital Trust
Enhanced Securities, Series B
(liquidation amount $1,000 per capital trust security)
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------
Name Address
- ----------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of September, 1999.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
--------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
-3-
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
ASSETS Dollar Amounts
In Thousands
Cash and balances due from depository institutions:
<S> <C>
Noninterest-bearing balances and currency and coin.................... $ 5,597,807
Interest-bearing balances............................................. 4,075,775
Securities:
Held-to-maturity securities........................................... 785,167
Available-for-sale securities......................................... 4,159,891
Federal funds sold and Securities purchased under
agreements to resell.................................................. 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income.............................. 38,028,772
LESS: Allowance for loan and lease losses............................. 568,617
LESS: Allocated transfer risk reserve................................ 16,352
Loans and leases, net of unearned income,
allowance, and reserve.............................................. 37,443,803
Trading Assets......................................................... 1,563,671
Premises and fixed assets (including capitalized leases)............... 683,587
Other real estate owned................................................ 10,995
Investments in unconsolidated subsidiaries and
associated companies................................................. 184,661
Customers' liability to this bank on acceptances outstanding........... 812,015
Intangible assets...................................................... 1,135,572
Other assets........................................................... 5,607,019
-----------
Total assets........................................................... $64,536,926
===========
LIABILITIES
Deposits:
In domestic offices.................................................. $26,488,980
Noninterest-bearing.................................................. 10,626,811
Interest-bearing..................................................... 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................................. 20,655,414
Noninterest-bearing.................................................. 156,471
Interest-bearing..................................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase............................................. 3,729,439
Demand notes issued to the U.S.Treasury................................ 257,860
Trading liabilities.................................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less.......................... 496,235
With remaining maturity of more than one year
through three years................................................ 465
With remaining maturity of more than three years..................... 31,080
Bank's liability on acceptances executed and........................... 822,455
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
outstanding..
Subordinated notes and debentures......................... 1,308,000
Other liabilities......................................... 2,846,649
----------
Total liabilities......................................... 58,624,027
==========
EQUITY CAPITAL
Common stock.............................................. 1,135,284
Surplus................................................... 815,314
Undivided profits and capital reserves.................... 4,001,767
Net unrealized holding gains (losses) on available-
for-sale securities............................ ( 7,956)
Cumulative foreign currency translation adjustments....... ( 31,510)
----------
Total equity capital...................................... 5,912,899
----------
Total liabilities and equity capital...................... $64,536,926
==========
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Alan R. Griffith ] Directors
Gerald L. Hassell ]
- --------------------------------------------------------------------------------
-5-
<PAGE>
EXHIBIT 25.3
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
_______________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_______________
ALLFIRST PREFERRED ASSET TRUST
(Exact name of obligor as specified in its charter)
Delaware Applied for
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
_______________
Floating Rate Non-Cumulative Subsidiary Asset Trust Preferred Securities,
Series B
(liquidation amount $1,000 per asset trust preferred security)
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- ------------------------------------------------------------------------
Name Address
- ------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of September, 1999.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
-------------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin....... $ 5,597,807
Interest-bearing balances................................ 4,075,775
Securities:
Held-to-maturity securities.............................. 785,167
Available-for-sale securities............................ 4,159,891
Federal funds sold and Securities purchased under 2,476,963
agreements to resell.....................................
Loans and lease financing receivables:
Loans and leases, net of unearned
income...............38,028,772
LESS: Allowance for loan and
lease losses............568,617
LESS: Allocated transfer risk
reserve........................16,352
Loans and leases, net of unearned income, allowance, and
reserve................................................. 37,443,803
Trading Assets............................................ 1,563,671
Premises and fixed assets (including capitalized leases).. 683,587
Other real estate owned................................... 10,995
Investments in unconsolidated subsidiaries and associated
companies................................................ 184,661
Customers' liability to this bank on acceptances
outstanding.............................................. 812,015
Intangible assets......................................... 1,135,572
Other assets.............................................. 5,607,019
-------------
Total assets.............................................. $64,536,926
=============
LIABILITIES
Deposits:
In domestic offices...................................... $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement subsidiaries, and
IBFs.................................................... 20,655,414
Noninterest-bearing 156,471
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase................................. 3,729,439
Demand notes issued to the U.S.Treasury................... 257,860
Trading liabilities....................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less.............. 496,235
With remaining maturity of more than one year through
three years............................................. 465
With remaining maturity of more than three years......... 31,080
Bank's liability on acceptances executed and 822,455
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
outstanding.............................................
Subordinated notes and debentures......................... 1,308,000
Other liabilities......................................... 2,846,649
-------------
Total liabilities......................................... 58,624,027
=============
EQUITY CAPITAL
Common stock.............................................. 1,135,284
Surplus................................................... 815,314
Undivided profits and capital reserves.................... 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities............................ ( 7,956)
Cumulative foreign currency translation adjustments....... ( 31,510)
-------------
Total equity capital...................................... 5,912,899
-------------
Total liabilities and equity capital...................... $64,536,926
=============
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni Directors
Alan R. Griffith
Gerald L. Hassell
<PAGE>
EXHIBIT 25.4
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) __
_____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_____________
ALLFIRST FINANCIAL INC.
(Exact name of obligor as specified in its charter)
Delaware 52-0981378
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
_____________
Series B Capital Trust Guarantee Agreement
(Allfirst Preferred Capital Trust)
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which it
is subject.
- -----------------------------------------------
Name Address
- -----------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of September, 1999.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
-----------------------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
ASSETS In Thousands
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin....... $ 5,597,807
Interest-bearing balances................................ 4,075,775
Securities:
Held-to-maturity securities.............................. 785,167
Available-for-sale securities............................ 4,159,891
Federal funds sold and Securities purchased under
agreements to resell..................................... 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned
income................................................... 38,028,772
LESS: Allowance for loan and
lease losses............................................. 568,617
LESS: Allocated transfer risk
reserve.................................................. 16,352
Loans and leases, net of unearned income, allowance, and
reserve................................................. 37,443,803
Trading Assets............................................ 1,563,671
Premises and fixed assets (including capitalized leases).. 683,587
Other real estate owned................................... 10,995
Investments in unconsolidated subsidiaries and associated
companies................................................ 184,661
Customers' liability to this bank on acceptances
outstanding.............................................. 812,015
Intangible assets......................................... 1,135,572
Other assets.............................................. 5,607,019
-----------
Total assets.............................................. $64,536,926
===========
LIABILITIES
Deposits:
In domestic offices...................................... $26,488,980
Noninterest-bearing...................................... 10,626,811
Interest-bearing......................................... 15,862,169
In foreign offices, Edge and Agreement subsidiaries, and
IBFs.................................................... 20,655,414
Noninterest-bearing...................................... 156,471
Interest-bearing......................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase................................. 3,729,439
Demand notes issued to the U.S.Treasury................... 257,860
Trading liabilities....................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less.............. 496,235
With remaining maturity of more than one year through
three years............................................. 465
With remaining maturity of more than three years......... 31,080
Bank's liability on acceptances executed and outstanding.. 822,455
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
Subordinated notes and debentures......................... 1,308,000
Other liabilities......................................... 2,846,649
-----------
Total liabilities......................................... 58,624,027
===========
EQUITY CAPITAL
Common stock.............................................. 1,135,284
Surplus................................................... 815,314
Undivided profits and capital reserves.................... 4,001,767
Net unrealized holding gains (losses) on..................
available-for-sale securities............................ (7,956)
Cumulative foreign currency translation adjustments....... (31,510)
-----------
Total equity capital...................................... 5,912,899
-----------
Total liabilities and equity capital...................... $64,536,926
===========
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni
Alan R. Griffith Directors
Gerald L. Hassell
<PAGE>
EXHIBIT 25.5
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [_]
_____________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
_____________
ALLFIRST FINANCIAL INC.
(Exact name of obligor as specified in its charter)
Delaware 52-0981378
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
25 South Charles Street
Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
_____________
Series B Asset Trust Preferred Guarantee Agreement
(Allfirst Preferred Asset Trust)
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
<TABLE>
<CAPTION>
---------------------------------------------------------------------
Name Address
---------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule 7a-
29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit 1
to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-
44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 16th day of September, 1999.
THE BANK OF NEW YORK
By: /s/ MICHAEL CULHANE
------------------------
Name: MICHAEL CULHANE
Title: VICE PRESIDENT
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin....... $ 5,597,807
Interest-bearing balances................................ 4,075,775
Securities:
Held-to-maturity securities.............................. 785,167
Available-for-sale securities............................ 4,159,891
Federal funds sold and Securities purchased under 2,476,963
agreements to resell.....................................
Loans and lease financing receivables:
Loans and leases, net of unearned
income.................................................. 38,028,772
LESS: Allowance for loan and
lease losses............................................ 568,617
LESS: Allocated transfer risk
reserve................................................. 16,352
Loans and leases, net of unearned income, allowance, and
reserve................................................. 37,443,803
Trading Assets............................................ 1,563,671
Premises and fixed assets (including capitalized leases).. 683,587
Other real estate owned................................... 10,995
Investments in unconsolidated subsidiaries and associated
companies................................................ 184,661
Customers' liability to this bank on acceptances
outstanding.............................................. 812,015
Intangible assets......................................... 1,135,572
Other assets.............................................. 5,607,019
Total assets.............................................. $64,536,926
LIABILITIES
Deposits:
In domestic offices...................................... $26,488,980
Noninterest-bearing...................................... 10,626,811
Interest-bearing......................................... 15,862,169
In foreign offices, Edge and Agreement subsidiaries, and
IBFs.................................................... 20,655,414
Noninterest-bearing...................................... 156,471
Interest-bearing......................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase................................. 3,729,439
Demand notes issued to the U.S.Treasury................... 257,860
Trading liabilities....................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less.............. 496,235
With remaining maturity of more than one year through
three years............................................. 465
With remaining maturity of more than three years......... 31,080
Bank's liability on acceptances executed and outstanding.. 822,455
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
Subordinated notes and debentures......................... 1,308,000
Other liabilities......................................... 2,846,649
Total liabilities......................................... 58,624,027
EQUITY CAPITAL
Common stock.............................................. 1,135,284
Surplus................................................... 815,314
Undivided profits and capital reserves.................... 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities............................ ( 7,956)
Cumulative foreign currency translation adjustments....... ( 31,510)
Total equity capital...................................... 5,912,899
Total liabilities and equity capital...................... $64,536,926
</TABLE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the above-
named bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Thomas A. Reyni ]
Alan R. Griffith ] Directors
Gerald L. Hassell ]
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT 99.1
LETTER OF TRANSMITTAL
ALLFIRST PREFERRED CAPITAL TRUST
SKATES Exchange Offer
Allfirst Preferred Capital Trust's offer to exchange its Floating Rate Non-
Cumulative Subordinated Capital Trust Enhanced Securities,Series B or "SKATES"
(liquidation amount $1,000 per SKATES), which have been registered under the
Securities act of 1933 for any and all of its outstanding Floating Rate Non-
Cumulative Subordinated Capital Trust Enhanced Securities, Series A (liquidation
amount $1,000 per capital security) originally issued on July 13, 1999.
The exchange offer is being made pursuant to the Prospectus dated __________,
1999.
The exchange offer and withdrawal rights will expire at 5:00 p.m., New York City
time, on __________, 1999, unless the offer is extended. Tenders may be
withdrawn prior to 5:00 p.m., New York City time, on the expiration date.
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
BY HAND OR OVERNIGHT DELIVERY:
The Bank of New York
101 Barclay Street
New York, New York 10286
Corporate Trust Services Window
Ground Level
Attn: Reorganization Section
Arwen Gibbons
FACSIMILE TRANSMISSIONS (Eligible Institutions Only):
(212) 571-3080
To confirm by telephone or for information call:
(212) 815-6333
BY REGISTERED OR CERTIFIED MAIL:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attn: Reorganization Section
Arwen Gibbons
<PAGE>
Delivery of this letter of transmittal to an address other than as set
forth above or transmission of this letter of transmittal via facsimile to a
number other than as set forth above does not constitute a valid delivery.
Capitalized terms used in this letter of transmittal without definition
that are defined in the Prospectus have the meanings given them in the
Prospectus.
The undersigned acknowledges that he or she has received the Prospectus,
dated ____________, 1999 (as the same may be amended or supplemented from time
to time, the "Prospectus"), of Allfirst Financial Inc. ("Allfirst"), Allfirst
Preferred Capital Trust (Allfirst Capital Trust") and Allfirst Preferred Asset
Trust ("Allfirst Asset Trust" and together with Allfirst Capital Trust, the
"Trusts"), and this letter of transmittal, which together constitute Allfirst's
and the Trust's offer (the "exchange offer") to exchange an aggregate
liquidation amount of up to $100,000,000 of Floating Rate Non-Cumulative
Subordinated Capital Trust Enhanced Securities, Series A ("Old SKATES") in
exchange for a like aggregate liquidation amount of the Trust's Floating Rate
Non-Cumulative Subordinated Capital Trust Enhanced Securities, Series B ("New
SKATES") which have been registered under the Securities Act of 1933 (the "1933
Act").
The instructions contained herein should be read carefully before this
letter of transmittal is completed.
This letter of transmittal is to be completed by holders of Old SKATES
either if Old SKATES are to be forwarded herewith or if tenders of Old SKATES
are to be made by book-entry transfer to an account maintained by The Bank of
New York, the exchange agent, at The Depository Trust Company ("DTC") pursuant
to the procedures set forth under "The Exchange Offer--Procedures for Tendering
Old SKATES" in the Prospectus.
Holders whose certificates for Old SKATES are not immediately available or
who cannot deliver their certificates and all other required documents to the
exchange agent on or prior to the expiration date (as defined in the Prospectus)
or who cannot complete the procedures for book-entry transfer on a timely basis,
must tender their Old SKATES according to the guaranteed delivery procedures set
forth in "The Exchange Offer--Procedures for Tendering Old SKATES" in the
Prospectus.
Delivery of documents to DTC does not constitute delivery to the exchange agent.
NOTE: SIGNATURES MUST BE PROVIDED BELOW. PLEASE READ THE ACCOMPANYING
INSTRUCTIONS CAREFULLY.
2
<PAGE>
The undersigned has completed the appropriate boxes below and signed this
letter of transmittal to indicate the action the undersigned desires to take
with respect to the exchange offer.
ALL TENDERING HOLDERS COMPLETE THIS BOX
_______________________________________________________________________________
DESCRIPTION OF OLD SKATES TENDERED
Name(s) and Address(es) of Registered Holder(s):
Certificate Number(s):*
Aggregate Liquidation Amount of
Old SKATES:
Liquidation Amount of Old SKATES
Tendered:**
Total Amount Tendered:
- -------------------------------------------------------------------------------
* Need not be completed by book-entry holders.
** Old SKATES may be tendered in whole or in part in denominations of
$100,000 and integral multiples of $1,000 in excess thereof, provided that
if any Old SKATES are tendered for exchange in part, the untendered
liquidation amount thereof must be $100,000 or any integral multiple of
$1,000 in excess thereof. All Old SKATES held shall be deemed tendered
unless a lesser number is specified in this column.
_______________________________________________________________________________
3
<PAGE>
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[_] Check here if tendered Old SKATES are being delivered by book-entry
transfer made to the account maintained by the exchange agent with DTC and
complete the following:
Name of Tendering Institution: _________________________________________
DTC Account Number: ____________________________________________________
Transaction Code Number: _______________________________________________
[_] Check here and enclose a photocopy of the notice of guaranteed delivery
if tendered Old SKATES are being delivered pursuant to a notice of
guaranteed delivery previously sent to the exchange agent and complete the
following:
Name of Registered Holders(s): _________________________________________
Window Ticket Number (if any): _________________________________________
Date of Execution of Notice
of Guaranteed Delivery: ______________________________________________
Name of Institution which
Guaranteed Delivery: _________________________________________________
If guaranteed delivery is to be made by book-entry transfer:
Name of Tendering Institution: _________________________________________
DTC Account Number: ____________________________________________________
Transaction Code Number: _______________________________________________
[_] Check here if tendered by book-entry transfer and non-exchanged Old SKATES
are to be returned by crediting the DTC account number set forth above.
[_] Check here if you are a broker-dealer who acquired the old SKATES for
its own account as a result of market making or other trading activities (a
"participating broker-dealer") and wish to receive 10 additional copies of
the prospectus and 10 copies of any amendments or supplements thereto.
Name: __________________________________________________________________
Address: _______________________________________________________________
4
<PAGE>
Ladies and Gentlemen:
Upon the terms and subject to the conditions of the exchange offer, the
undersigned hereby tenders to Allfirst and Allfirst Capital Trust the above
described aggregate liquidation amount of Old SKATES in exchange for a like
aggregate liquidation amount of New SKATES.
Subject to and effective upon the acceptance for exchange of all or any
portion of the Old SKATES tendered herewith in accordance with the terms and
conditions of the exchange offer (including, if the exchange offer is extended
or amended, the terms and conditions of any such extension or amendment), the
undersigned hereby sells, assigns and transfers to or upon the order of Allfirst
Capital Trust all right, title and interest in and to such Old SKATES as are
being tendered herewith. The undersigned hereby irrevocably constitutes and
appoints the exchange agent as its agent and attorney-in-fact (with full
knowledge that the exchange agent is also acting as agent of Allfirst and the
Trusts in connection with the exchange offer) with respect to the tendered Old
SKATES, with full power of substitution (such power of attorney being deemed to
be an irrevocable power coupled with an interest), subject only to the right of
withdrawal described in the Prospectus, to: (i) deliver Certificates for Old
SKATES to Allfirst or Allfirst Capital Trust together with all accompanying
evidences of transfer and authenticity to, or upon the order of, Allfirst
Capital Trust, upon receipt by the exchange agent, as the undersigned's agent,
of the New SKATES to be issued in exchange for such Old SKATES; (ii) present
certificates for such Old SKATES for transfer, and to transfer the Old SKATES on
the books of Allfirst Capital Trust; and (iii) receive for the account of
Allfirst Capital Trust all benefits and otherwise exercise all rights of
beneficial ownership of such Old SKATES, all in accordance with the terms and
conditions of the exchange offer.
The undersigned hereby represents and warrants that: (a) the undersigned
have full power and authority to tender, exchange, sell, assign and transfer the
Old SKATES tendered hereby; (b) when the Old SKATES are accepted for exchange,
Allfirst Capital Trust will acquire good, marketable and unencumbered title
thereto, free and clear of all liens, restrictions, charges and encumbrances;
and (c) the Old SKATES tendered hereby are not subject to any adverse claims or
proxies.
The undersigned will, upon request, execute and deliver any additional
documents deemed by Allfirst, the Trusts or the exchange agent to be necessary
or desirable to complete the exchange, assignment and transfer of the Old SKATES
tendered hereby, and the undersigned will comply with its obligations
5
<PAGE>
under the registration rights agreement. The undersigned has read and agrees to
all of the terms of the exchange offer.
The name(s) and address(es) of the registered holder(s) of the Old SKATES
tendered hereby should be printed above, if they are not already set forth
above, as they appear on the certificates representing such Old SKATES. The
certificate number(s) and the Old SKATES that the undersigned wishes to tender
should be indicated in the appropriate boxes above.
If any tendered Old SKATES are not exchanged pursuant to the exchange offer
for any reason, or if certificates are submitted for more Old SKATES than are
tendered or accepted for exchange, certificates for such non-exchanged or non-
tendered Old SKATES will be returned (or, in the case of Old SKATES tendered by
book-entry transfer, such Old SKATES will be credited to an account maintained
at DTC), without expense to the tendering holder, promptly following the
expiration or termination of the exchange offer.
The undersigned understands that tenders of Old SKATES pursuant to any one
of the procedures described in "The Exchange Offer--Procedures for Tendering Old
SKATES" in the Prospectus and in the instruction, attached hereto will, upon
Allfirst's and the Trusts' acceptance for exchange of such tendered Old SKATES,
constitute a binding agreement between the undersigned, First Maryland and the
Trusts upon the terms and subject to the conditions of the exchange offer. The
undersigned recognizes that, under certain circumstances set forth in the
Prospectus, Allfirst and the Trusts may not be required to accept for exchange
any of the Old SKATES tendered hereby.
Unless otherwise indicated herein in the box entitled "Special Issuance
Instructions" below, the undersigned hereby directs that the New SKATES be
issued in the name(s) of the undersigned or, in the case of a book-entry
transfer of Old SKATES, that such New SKATES be credited to the account
indicated above maintained at DTC. If applicable, substitute certificates
representing Old SKATES not exchanged or not accepted for exchange will be
issued to the undersigned or, in the case of a book-entry transfer of Old
SKATES, will be credited to the account indicated above maintained at DTC.
Similarly, unless otherwise indicated under "Special Delivery Instructions,"
please deliver New SKATES to the undersigned at the address shown below the
undersigned's signature.
By tendering Old SKATES and executing this letter of transmittal, the
undersigned hereby represents and agrees that: (a) the undersigned is not an
"affiliate" of First Maryland or the Trusts; (b) any New SKATES to be received
by the undersigned are being acquired in the ordinary course of its business;
(c)
6
<PAGE>
the undersigned has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the 1933 Act) of New SKATES
to be received in the exchange offer; and (d) if the undersigned is not a
broker-dealer, the undersigned is not engaged in, and does not intend to engage
in, a distribution (within the meaning of the 1933 Act) of the New SKATES. By
tendering Old SKATES pursuant to the exchange offer and executing this letter of
transmittal, a holder of Old SKATES which is a broker-dealer represents and
agrees, consistent with certain interpretive letters issued by the staff of the
Division of Corporation Finance of the SEC to third parties, that (x) such Old
SKATES held by the broker-dealer are held only as a nominee, or (y) such Old
SKATES were acquired by such broker-dealer for its own account as a result of
market-making activities or other trading activities and it will deliver the
Prospectus (as amended or supplemented from time to time) meeting the
requirements of the 1933 Act in connection with any resale of its New SKATES
(provided that, by so acknowledging and by delivering a prospectus, such broker-
dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the 1933 Act).
Allfirst and the Trusts have agreed, subject to the provisions of the
registration rights agreement, that the Prospectus, as it may be amended or
supplemented from time to time, may be used by a participating broker-dealer (as
defined below) in connection with resales of New SKATES received in exchange for
Old SKATES, where the Old SKATES were acquired by such participating broker-
dealer for its own account as a result of market-making activities or other
trading activities, for a period ending 90 days after the expiration date
(subject to extension under certain limited circumstances described in the
prospectus) or, if earlier, when all such New SKATES have been disposed of by
such participating broker-dealer. In that regard, each broker-dealer who
acquired Old SKATES for its own account as a result of market-making or other
trading activities (a "participating broker-dealer"), by tendering such Old
SKATES and executing this letter of transmittal, agrees that, upon receipt of
notice from Allfirst or the Trusts of the occurrence of any event or the
discovery of any fact which makes any statement contained or incorporated by
reference in the Prospectus untrue in any material respect or which causes the
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference therein, in light of the
circumstances under which they were made, not misleading or of the occurrence of
certain other events specified in the registration rights agreement, such
participating broker-dealer will suspend the sale of New SKATES pursuant to the
Prospectus until Allfirst and the Trusts have amended or supplemented the
Prospectus to correct such misstatement or omission and has furnished copies of
the amended or supplemented Prospectus to the participating broker-dealer or
Allfirst or the Trusts have
7
<PAGE>
given notice that the sale of the New SKATES may be resumed, as the case may be.
If Allfirst or the Trusts give such notice to suspend the sale of the New
SKATES, it shall extend the 90-day period referred to above during which
participating broker-dealers are entitled to use the Prospectus in connection
with the resale of New SKATES by the number of days during the period from and
including the date of the giving of such notice to and including the date when
participating broker-dealers shall have received copies of the supplemented or
amended prospectus necessary to permit resales of the New SKATES or to and
including the date on which Allfirst or the Trusts has given notice that the
sale of New SKATES may be resumed, as the case may be.
Holders whose Old SKATES are accepted for exchange will not receive accrued
interest on the Old SKATES for any period from and after the last interest
payment date to which interest has been paid or duly provided for on such Old
SKATES prior to the original issue date of the New SKATES or, if no such
interest has been paid or duly provided for, will not receive any accrued
interest on such Old SKATES, and the undersigned waives the right to receive any
interest on such Old SKATES accrued from and after such Interest Payment Date
or, if no such interest has been paid or duly provided for, from and after July
13, 1999.
All authority herein conferred or agreed to be conferred in this letter of
transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned. Except as
stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION OF OLD SKATES"
ABOVE AND BY SIGNING THIS LETTER, WILL BE DEEMED TO HAVE TENDERED THE OLD SKATES
AS SET FORTH IN THAT BOX
HOLDER(S) SIGN HERE (SEE INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON PAGE 19)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED IF REQUIRED BY INSTRUCTION 2):
Must be signed by registered holder(s) exactly as name(s) appear(s) on
Certificate(s) for the Old SKATES hereby tendered or on a security position
listing, or by any person(s) authorized to become the registered holder(s) by
endorsements and documents transmitted herewith (including such opinions of
counsel, certifications and other information as may be required by the Trusts
or the Trustee for the Old SKATES to comply with the restrictions on transfer
applicable to the Old SKATES). If signature is by an attorney-in-fact, executor,
administrator, trustee, guardian, officer of a corporation or another acting in
8
<PAGE>
a fiduciary capacity or representative capacity, please set forth the signer's
full title. See Instruction 5.
________________________________________
________________________________________
(Signatures(s) of holders(s))
Date: ________________________, 1999
Name(s): _______________________________
________________________________
(Please Print)
Capacity (full title): _______________________________________________________
Address: ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(include Zip Code)
Area Code and Telephone Number: ______________________________________________
______________________________________________________________________________
(Tax Identification or Social Security Numbers(s))
GUARANTEE OF SIGNATURE(S)(SEE INSTRUCTIONS 2 AND 5):
_____________________________________
(Authorized Signature)
Date: ________________________, 1999
Name of Firm: ________________________________________________________________
Capacity (full title): _______________________________________________________
(Please Print)
Address: ____________________________________________________________________
____________________________________________________________________
____________________________________________________________________
(Include Zip Code)
Area Code and Telephone Number: ______________________________________________
9
<PAGE>
SPECIAL ISSUANCE INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6):
To be completed ONLY if New SKATES or Old SKATES not tendered are to be issued
in the name of someone other than the registered holder of the Old SKATES whose
name(s) appear(s) above.
Issue
[_] Old SKATES not tendered to:
[_] New SKATES, to:
Name(s): _______________________________
_______________________________
(Please Print)
Address: __________________________________________________________________
__________________________________________________________________
__________________________________________________________________
(include Zip Code)
Area Code and Telephone Number: ____________________________________________
____________________________________________________________________________
(Tax Identification or Social Security Numbers(s))
SPECIAL DELIVERY INSTRUCTIONS (SEE INSTRUCTIONS 1, 5 AND 6):
To be completed ONLY if New SKATES or Old SKATES not tendered are to be sent to
someone other than the registered holder of the Old SKATES whose name(s)
appear(s) above, or such registered holder(s) at an address other than that
shown above.
Mail
[_] Old SKATES not tendered to:
[_] New SKATES, to:
Name(s): _______________________________
________________________________
(Please Print)
10
<PAGE>
Address: ___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
(include Zip Code)
Area Code and Telephone Number: _____________________________________________
_____________________________________________________________________________
(Tax Identification or Social Security Numbers(s))
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. Delivery of letter of transmittal and certificates; guaranteed delivery
-----------------------------------------------------------------------
procedures. This letter of transmittal must be completed either if: (a)
- ----------
certificates are to be forwarded herewith; or (b) tenders are to be made
pursuant to the procedures for tender by book-entry transfer set forth in "The
Exchange Offer--Procedures for Tendering Old SKATES" in the Prospectus.
Certificates, or timely confirmation of a book-entry transfer of Old SKATES into
the exchange agent's account at DTC, as well as this letter of transmittal (or
facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by this letter of
transmittal, must be received by the Exchange Agent at its address set forth
herein on or prior to the expiration date. Old SKATES may be tendered in whole
or in part in the liquidation amount of $100,000 (100 SKATES) and integral
multiples of $1,000 in excess thereof; provided, that if any Old SKATES are
tendered for exchange in part, the un-tendered liquidation amount thereof must
be $100,000 (100 SKATES) or any integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Old SKATES and (i) whose Old SKATES are
not immediately available or (ii) who cannot deliver their Old SKATES, this
letter of transmittal and all other required documents to the exchange agent on
or prior to the expiration date or (iii) who cannot complete the procedures for
delivery by book-entry transfer on a timely basis, may tender their Old SKATES
by properly completing and duly executing a notice of guaranteed delivery
pursuant to the guaranteed delivery procedures set forth in "The Exchange
Offer--Procedures for Tendering Old SKATES" in the Prospectus. Pursuant to such
procedures: (a) such tender must be made by or through an Eligible Institution
(as defined below); (b) a properly completed and duly executed notice of
guaranteed delivery, substantially in the form made available by First Maryland,
must be received by the exchange agent on or prior to the expiration date; and
(c) the certificates (or a book- entry confirmation) representing all tendered
Old SKATES, in proper form for transfer, together with a
11
<PAGE>
Letter of Transmittal (or facsimile thereof), properly completed and duly
executed, with any required signature guarantees and any other documents
required by this Letter of Transmittal, must be received by the exchange agent
within five New York Stock Exchange, Inc. trading days after the date of
execution of such notice of guaranteed delivery, all as provided in "The
Exchange Offer--Procedures for Tendering Old SKATES" in the Prospectus.
The notice of guaranteed delivery may be delivered by hand or transmitted
by facsimile or mail to the exchange agent, and must include a guarantee by an
Eligible Institution in the form set forth in such Notice. For Old SKATES to be
properly tendered pursuant to the guaranteed delivery procedure, the exchange
agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration
Date. As used herein and in the Prospectus, "Eligible Institution" means a firm
or other entity identified in Rule 17Ad-15 under the 1934 Act as "an eligible
guarantor institution," including (as such terms are defined therein) (i) a
bank; (ii) a broker, dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a national securities
exchange, registered securities association or clearing agency; or (v) a savings
association that is a participant in a Securities Transfer Association.
The method of delivery of certificates, this letter of transmittal and all other
required documents is at the option and sole risk of the tendering holder and
the delivery will be deemed made only when actually received by the exchange
agent. If delivery is by mail, registered mail with return receipt requested,
properly insured, or overnight delivery service is recommended. in all cases,
sufficient time should be allowed to ensure timely delivery.
Neither Allfirst nor the Trusts will accept any alternative, conditional or
contingent tenders. Each tendering holder, by execution of a letter of
transmittal, waives any right to receive any notice of the acceptance of its
tender.
2. Guarantee of Signatures. No signature guarantee on this letter of
-----------------------
transmittal is required if:
(a) this letter of transmittal is signed by the registered holder (which
term, for purposes of this document, shall include any participant in DTC whose
name appears on a security position listing as the owner of the Old SKATES) of
Old SKATES tendered herewith, unless such holder(s) has completed either the box
entitled "Special Issuance Instructions" or the box entitled "Special Delivery
Instructions" above; or
(b) such Old SKATES are tendered for the account of a firm that is an
Eligible Institution.
12
<PAGE>
In all other cases, an Eligible Institution must guarantee the signature(s)
on this letter of transmittal. See Instruction 5.
3. Inadequate Space. If the space provided in the box captioned
----------------
"Description of Old SKATES" is inadequate, the certificate number(s) and/or the
principal amount of Old SKATES and any other required information should be
listed on a separate signed schedule which should be attached to this letter of
transmittal.
4. Partial Tenders and Withdrawal Rights. Tenders of Old SKATES will be
-------------------------------------
accepted only in the liquidation amount of $100,000 (100 SKATES) and integral
multiples of $1,000 in excess thereof; provided, that if any Old SKATES are
tendered for exchange in part, the un-tendered liquidation amount thereof must
be $100,000 (100 SKATES) or any integral multiple of $1,000 in excess thereof.
If less than all the Old SKATES evidenced by any certificate submitted are to be
tendered, fill in the principal amount of Old SKATES which are to be tendered in
the box entitled "Principal Amount of Old SKATES Tendered (if less than all)."
In such case, new certificate(s) for the remainder of the Old SKATES that were
evidenced by your old certificate(s) will only be sent to the holder of the Old
Capital Security, promptly after the Expiration Date. All Old SKATES
represented by certificates delivered to the exchange agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Old SKATES may be withdrawn
at any time on or prior to the expiration date. In order for a withdrawal to be
effective on or prior to that time, a written, telegraphic, telex or facsimile
transmission of such notice of withdrawal must be timely received by the
exchange agent at one of its addresses set forth above or in the Prospectus on
or prior to the expiration date. Any such notice of withdrawal must specify the
name of the person who tendered the Old SKATES to be withdrawn, the aggregate
principal amount of Old SKATES to be withdrawn, and (if certificates for Old
SKATES have been tendered) the name of the registered holder of the Old SKATES
as set forth on the certificate for the Old SKATES, if different from that of
the person who tendered such Old SKATES. If certificates for the Old SKATES have
been delivered or otherwise identified to the exchange agent, then prior to the
physical release of such Certificates for the Old SKATES, the tendering holder
must submit the serial numbers shown on the particular Certificates for the Old
SKATES to be withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of Old SKATES tendered
for the account of an Eligible Institution. If Old SKATES have been tendered
pursuant to the procedures for
13
<PAGE>
book-entry transfer set forth in "The Exchange Offer--Procedures for Tendering
Old SKATES," the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Old SKATES, in which case a
notice of withdrawal will be effective if delivered to the exchange agent by
written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of
Old SKATES may not be rescinded. Old SKATES properly withdrawn will not be
deemed validly tendered for purposes of the exchange offer, but may be re-
tendered at any subsequent time on or prior to the expiration date by following
any of the procedures described in the Prospectus under "The Exchange Offer--
Procedures for Tendering Old SKATES."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by Allfirst and the
Trusts, in their sole discretion, whose determination shall be final and binding
on all parties. Allfirst and the Trusts, any affiliates or assigns of Allfirst
and the Trusts, the exchange agent or any other person shall not be under any
duty to give any notification of any irregularities in any notice of withdrawal
or incur any liability for failure to give any such notification. Any Old SKATES
which have been tendered but which are withdrawn will be returned to the holder
thereof without cost to such holder promptly after withdrawal.
5. Signatures on Letter of Transmittal, Assignments and Endorsements. If
-----------------------------------------------------------------
this Letter of Transmittal is signed by the registered holder(s) of the Old
SKATES tendered hereby, the signature(s) must correspond exactly with the
name(s) as written on the face of the Certificate(s) without alteration,
enlargement or any change whatsoever.
If any of the Old SKATES tendered hereby are owned of record by two or more
joint owners, all such owners must sign this letter of transmittal.
If any tendered Old SKATES are registered in different name(s) on several
certificates, it will be necessary to complete, sign and submit as many separate
letters of transmittal (or facsimiles thereof) as there are different
registrations of certificates.
If this letter of transmittal or any certificates or bond powers are signed
by trustees, executors, administrators, guardians, attorneys-in-fact, officers
of corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing and must submit proper evidence
satisfactory to Allfirst and the Trusts, in their sole discretion, of each such
person's authority to so act.
14
<PAGE>
When this letter of transmittal is signed by the registered owner(s) of the
Old SKATES listed and transmitted hereby, no endorsement(s) of certificate(s) or
separate bond power(s) are required unless New SKATES are to be issued in the
name of a person other than the registered holder(s). Signature(s) on such
certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.
If this letter of transmittal is signed by a person other than the
registered owner(s) of the Old SKATES listed, the certificates must be endorsed
or accompanied by appropriate bond powers, signed exactly as the name or names
of the registered owner(s) appear(s) on the certificates, and also must be
accompanied by such opinions of counsel, certifications and other information as
Allfirst, the Trusts or the Trustee for the Old SKATES may require in accordance
with the restrictions on transfer applicable to the Old SKATES. Signatures on
such certificates or bond powers must be guaranteed by an Eligible Institution.
6. Special Issuance and Delivery Instructions. If New SKATES are to be
------------------------------------------
issued in the name of a person other than the signer of this letter of
transmittal, or if New SKATES are to be sent to someone other than the signer of
this letter of transmittal or to an address other than that shown above, the
appropriate boxes on this letter of transmittal should be completed.
Certificates for Old SKATES not exchanged will be returned by mail or, if
tendered by book-entry transfer, by crediting the account indicated above
maintained at DTC. See Instruction 4.
7. Irregularities. Allfirst and the Trusts will determine, in their sole
--------------
discretion, all questions as to the form of documents, validity, eligibility
(including time of receipt) and acceptance for exchange of any tender of Old
SKATES, which determination shall be final and binding on all parties. Allfirst
and the Trusts reserve the absolute right to reject any and all tenders
determined by either of them not to be in proper form or the acceptance of
which, or exchange for, may, in the view of counsel to First Maryland and the
Trusts, be unlawful. Allfirst and the Trusts also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the exchange offer
set forth in the Prospectus under "The Exchange Offer--Certain Conditions to the
Exchange Offer" or any conditions or irregularity in any tender of Old SKATES of
any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders. Allfirst's and the Trusts' interpretation
of the terms and conditions of the exchange offer (including this letter of
transmittal and the instructions hereto) will be final and binding. No tender of
Old SKATES will be deemed to have been
15
<PAGE>
validly made until all irregularities with respect to such tender have been
cured or waived. Allfirst, the Trusts, any affiliates or assigns of First
Maryland, the Trusts, the exchange agent, or any other person shall not be under
any duty to give notification of any irregularities in tenders or incur any
liability for failure to give such notification.
8. Questions, Requests for Assistance and Additional Copies. Questions
--------------------------------------------------------
and requests for assistance may be directed to the exchange agent at its address
and telephone number set forth on the front of this letter of transmittal.
Additional copies of the Prospectus, the notice of guaranteed delivery and the
letter of transmittal may be obtained from the exchange agent or from your
broker, dealer, commercial bank, trust company or other nominee.
9. 31% Backup Withholding; Substitute Form w-9. Under U.S. Federal income
------------------------------------------------------
tax law, a holder whose tendered Old SKATES are accepted for exchange is
required to provide the exchange agent with such holder's correct taxpayer
identification number ("TIN") on the Substitute Form W-9 below. If the exchange
agent is not provided with the correct TIN, then the Internal Revenue Service
(the "IRS") may subject the holder or other payee to a $50 penalty. In addition,
payments to such holders or other payees with respect to Old SKATES exchanged
pursuant to the exchange offer may be subject to 31% backup withholding.
The box in Part 2 of the Substitute Form W-9 may be checked if the
tendering holder has not been issued a TIN and has applied for a TIN or intends
to apply for a TIN in the near future. If the box in Part 2 is checked, the
holder or other payee must also complete the Certificate of Awaiting Taxpayer
Identification Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the Certificate of
Awaiting Taxpayer Identification Number is completed, the exchange agent will
withhold 31% of all payments made prior to the time a properly certified TIN is
provided to the exchange agent. The exchange agent will retain such amounts
withheld during the 60-day period following the date of the Substitute Form W-9.
If the holder furnishes the exchange agent with its TIN within 60 days after the
date of the Substitute Form W-9, the amounts retained during the 60 day period
will be remitted to the holder and no further amounts shall be retained or
withheld from payments made to the holder thereafter. If, however, the holder
has not provided the exchange agent with its TIN within such 60 day period,
amounts withheld will be remitted to the IRS as backup withholding. In addition,
31% of all payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
16
<PAGE>
The holder is required to give the exchange agent the TIN (e.g., social
security number or employer identification number) of the registered owner of
the Old SKATES or of the last transferee appearing on the transfers attached to,
or endorsed on, the Old SKATES. If the Old SKATES are registered in more than
one name or are not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9" for additional guidance on which number to report.
Certain holders (including, among others, corporations, financial
institutions and certain foreign persons) may not be subject to these backup
withholding and reporting requirements. Such holders should nevertheless
complete the attached Substitute Form W-9 below, and write "exempt" on the face
thereof, to avoid possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed IRS Form W-8,
signed under penalties of perjury, attesting to that holder's exempt status.
Please consult the enclosed "Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9" for additional guidance on which
holders are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income tax. Rather,
the U.S. Federal income tax liability of a person subject to backup withholding
will be reduced by the amount of tax withheld. If withholding results in an
overpayment of taxes, a refund may be obtained.
10. Waiver of Conditions. Allfirst and the Trusts reserve the absolute
--------------------
right to waive satisfaction of any or all conditions enumerated in the
Prospectus.
11. No Conditional Tenders. No alternative, conditional, irregular or
----------------------
contingent tenders will be accepted. All tendering holders of Old SKATES, by
execution and delivery of this Letter, shall waive any right to receive notice
of the acceptance of their Old SKATES for exchange.
12. Lost, Destroyed or Stolen Certificates. If any certificate(s)
--------------------------------------
representing Old SKATES have been lost, destroyed or stolen, the holder should
promptly notify the Exchange Agent. The holder will then be instructed as to the
steps that must be taken in order to replace the certificate(s). This Letter of
Transmittal and related documents cannot be processed until the procedures for
replacing lost, destroyed or stolen certificate(s) have been followed.
13. Security Transfer Taxes. Holders who tender their Old SKATES for
-----------------------
exchange will not be obligated to pay any transfer taxes in connection
therewith. If, however, New SKATES are to be
17
<PAGE>
delivered to, or are to be issued in the name of, any person other than the
registered holder of the Old SKATES tendered, or if a transfer tax is imposed
for any reason other than the exchange of Old SKATES in connection with the
exchange offer, then the amount of any such transfer tax (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the letter of transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Important: This letter of transmittal (or facsimile thereof) and all other
required documents must be received by the exchange agent on or prior to the
expiration date.
_____________________________
(Letter of Transmittal continued on next page)
18
<PAGE>
TO BE COMPLETED BY ALL TENDERING SKATES HOLDERS
(SEE INSTRUCTION 9):
PAYER'S NAME: THE BANK OF NEW YORK
________________________________________________________________________________
SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY, INTERNAL REVENUE SERVICE
PAYER'S REQUEST FOR TAXPAYER IDENTIFICATION NUMBER (TIN) AND CERTIFICATION
- --------------------------------------------------------------------------------
PART 1-PLEASE PROVIDE YOUR TIN ON THE LINE AT RIGHT AND CERTIFY BY SIGNING AND
DATING BELOW
TIN: __________________________________________________________________________
Social Security Number or Employer Identification Number
- --------------------------------------------------------------------------------
PART 2 Awaiting TIN [_]
- --------------------------------------------------------------------------------
CERTIFICATION: UNDER THE PENALTIES OF PERJURY, I CERTIFY THAT:
(1) the number shown on this form is my correct taxpayer identification number
(or I am waiting for a number to be issued to me);
(2) I am not subject to backup withholding either because (i) I am exempt from
backup withholding, (ii) I have not been notified by the Internal Revenue
Service ("IRS") that I am subject to backup withholding as a result of a
failure to report all interest or dividends, or (iii) the IRS has notified
me that I am no longer subject to backup withholding, and
(3) any other information provided on this form is true and correct.
Signature: _____________________________
Date: ______________, 1999
- --------------------------------------------------------------------------------
You must cross out item (iii) in Part (2) above if you have been notified by the
IRS that you are subject to backup withholding because of underreporting
interest or dividends on your tax return and you have not been notified by the
IRS that you are no longer subject to backup withholding.
________________________________________________________________________________
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN CIRCUMSTANCES
RESULT IN BACKUP WITHHOLDING OF 31% OF ANY AMOUNTS PAID TO YOU PURSUANT TO THE
EXCHANGE OFFER. PLEASE REVIEW THE
19
<PAGE>
ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON
SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED THE BOX IN PART
2 OF SUBSTITUTE W-9
________________________________________________________________________________
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number
has not been issued to me, and either (i) I have mailed or delivered an
application to receive a taxpayer identification number to the appropriate
Internal Revenue Service Center or Social Security Administration Office or (ii)
I intend to mail or deliver an application in the near future. I understand that
if I do not provide a taxpayer identification number by the time of payment, 31%
of all payments made to me on account of the New SKATES shall be retained until
I provide a taxpayer identification number to the Exchange Agent and that, if I
do not provide my taxpayer identification number within 60 days, such retained
amounts shall be remitted to the Internal Revenue Service as backup withholding
and 31% of all reportable payments made to me thereafter will be withheld and
remitted to the Internal Revenue Service until I provide a taxpayer
identification number.
Signature: ___________________________________
Date: ____________________, 1999
20
<PAGE>
Exhibit 99.2
Allfirst Preferred Capital Trust
SKATES Exchange Offer
Notice of Guaranteed Delivery for tender of any and all of its outstanding
Floating Rate Non-Cumulative Subsidiary Capital Enhanced Trust Securities
("SKATES") of Allfirst Preferred Capital Trust
This Notice of Guaranteed Delivery, or one substantially equivalent to this
form, must be used to accept the exchange offer (as defined below) if: (i)
certificates for SKATES originally issued on July 13, 1999 ("Old SKATES") are
not immediately available; (ii) Old SKATES, the letter of transmittal and all
other required documents cannot be delivered to The Bank of New York, as
exchange agent, on or prior to the expiration date of the exchange offer (as
specified in the Prospectus referred to below); or (iii) the procedures for
delivery by book-entry transfer cannot be completed on a timely basis. This
notice of guaranteed delivery may be delivered by hand, overnight courier or
mail, or transmitted by facsimile transmission, to the exchange agent. See "The
Exchange Offer--Procedures for Tendering Old SKATES" in the Prospectus. In
addition, in order to utilize the guaranteed delivery procedure to tender Old
SKATES in the exchange offer, a completed, signed and dated letter of
transmittal relating to the Old SKATES must also be received by the exchange
agent prior to 5:00 p.m., New York City time, on the expiration date.
Capitalized terms used in this Notice without definition that are defined
in the Prospectus have the meanings given them in the Prospectus.
The Exchange Agent for the Exchange Offer is:
THE BANK OF NEW YORK
BY HAND OR OVERNIGHT DELIVERY:
The Bank of New York
101 Barclay Street
New York, New York 10286
Corporate Trust Services Window
Ground Level
Attn: Reorganization Section
Arwen Gibbons
FACSIMILE TRANSMISSIONS (Eligible Institutions Only):
(212) 571-3080
To confirm by telephone or for information call:
(212) 815-6333
<PAGE>
BY REGISTERED OR CERTIFIED MAIL:
The Bank of New York
101 Barclay Street, 7E
New York, New York 10286
Attn: Reorganization Section
Arwen Gibbons
Delivery of this notice of guaranteed delivery to an address other than as set
forth above or transmission of this notice of guaranteed delivery via facsimile
to a number other than as set forth above will not constitute a valid delivery.
This notice of guaranteed delivery is not to be used to guarantee
signatures. If a signature on a letter of transmittal is required to be
guaranteed by an "eligible institution" under the instructions thereto, such
signature guarantee must appear in the applicable space provided in the
signature box on the letter of transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders to Allfirst Preferred Capital Trust
("Allfirst Capital Trust"), upon the terms and subject to the conditions set
forth in the Prospectus dated __________, 1999 (as the same may be amended or
supplemented from time to time, the "Prospectus"), and the related letter of
transmittal (which together constitute the "exchange offer"), receipt of which
is hereby acknowledged, the aggregate principal amount of Old SKATES set forth
below pursuant to the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer--Procedures for Tendering Old SKATES."
Aggregate Liquidation Amount Tendered: $_______________________________________
Name(s) of Registered Holder(s): ______________________________________________
_______________________________________________________________________________
Certificate No.(s)(if available): _____________________________________________
Total Liquidation Amount represented
by Old SKATES Certificate(s): $____________________
2
<PAGE>
If Old SKATES will be tendered by book-entry transfer, provide the following
information:
DTC Account Number: ____________________
Date: _____________, 199
All authority herein conferred or agreed to be conferred in this letter of
transmittal shall survive the death or incapacity of the undersigned and any
obligation of the undersigned hereunder shall be binding upon the heirs,
executors, administrators, personal representatives, trustees in bankruptcy,
legal representatives, successors and assigns of the undersigned.
PLEASE SIGN HERE:
______________________________ __________, 1999
______________________________ __________, 1999
(Signature(s) of Owner(s) or
Authorized Signatory)
Area Code and telephone number: ______________________________________
Must be signed by the holder(s) of the Old SKATES exactly as their name(s)
appear(s) on certificate(s) for the Old SKATES or on a security position
listing, or by person(s) authorized to become registered holder(s) by
endorsements and documents transmitted with this notice of guaranteed delivery.
If signature is by an attorney-in-fact, executor, administrator, trustee,
guardian, officer of a corporation or other person acting in a fiduciary or
representative capacity, please set forth the signer's full title.
Please print name(s) and address(es)
Names: ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
Capacity: ______________________________________________________________________
Address: ______________________________________________________________________
______________________________________________________________________
______________________________________________________________________
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED.
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GUARANTEE (NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule 17Ad-15 under
the Securities Exchange Act of 1934, as amended, as an "eligible guarantor
institution," including (as such terms are defined therein): (i) a bank; (ii) a
broker, dealer, municipal securities broker, municipal securities dealer,
government securities broker, government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities association or
clearing agency; or (v) a savings association that is a participant in a
Securities Transfer Association recognized program (each of the foregoing being
referred to as an "Eligible Institution"), hereby guarantees to deliver to the
exchange agent, at one of its addresses set forth above, either the Old SKATES
tendered hereby in proper form for transfer, or confirmation of the book-entry
transfer of such Old SKATES to the exchange agent's account at The Depositary
Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set
forth in the Prospectus, in either case together with one or more properly
completed and duly executed letter(s) of transmittal (or facsimile thereof) and
any other required documents within five business days after the date of
execution of this notice of guaranteed delivery.
The undersigned acknowledges that it must deliver the letter(s) of
transmittal and the Old SKATES tendered hereby to the exchange agent within the
time period set forth above and that failure to do so could result in a
financial loss to the undersigned.
Name of Firm: __________________________________________
Authorized Signature: ___________________________________
Print name and title: ___________________________________
Address: _______________________________________________________________
(Zip code)
Area code and telephone number: _________________________________________
Date: _____________, 1997
NOTE: Do not send certificates for old skates with this notice of guaranteed
delivery. certificates for old skates should only be sent with your
letter of transmittal.
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<PAGE>
EXHIBIT 99.3
September ___, 1999
EXCHANGE AGENT AGREEMENT
------------------------
The Bank of New York
Corporate Trust Trustee Administration
101 Barclay Street - 21st Floor
New York, New York 10286
Ladies and Gentlemen:
Allfirst Preferred Capital Trust (the "Trust") proposes to make an offer
(the "Exchange Offer") to exchange its Floating Rate Non-Cumulative Subordinated
Capital Trust Enhanced Securities previously issued on July 13, 1999 ("Old
SKATES") for its new Floating Rate Non-Cumulative Subordinated Capital Trust
Enhanced Securities that have been registered under the Securities Act of 1933,
as amended ("New SKATES"). The terms and conditions of the Exchange Offer as
currently contemplated are set forth in a prospectus, dated [September] ___,
1999 (the "Prospectus"), proposed to be distributed to all record holders of the
Old SKATES. The Old SKATES and the New SKATES are collectively referred to
herein as the "Securities".
The Trust hereby appoints The Bank of New York to act as exchange agent
(the "Exchange Agent") in connection with the Exchange Offer. References
hereinafter to "you" shall refer to The Bank of New York.
The Exchange Offer is expected to be commenced by the Trust on or about
[September] ___, 1999. The Letter of Transmittal accompanying the Prospectus
(or in the case of book entry securities, the ATOP system) is to be used by the
holders of the Old SKATES to accept the Exchange Offer and contains instructions
with respect to the delivery of certificates for Old SKATES tendered in
connection therewith.
The Exchange Offer shall expire at 5:00 P.M., New York City time, on
[October] ___, 1999, or on such later date or time to which the Trust may extend
the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions
set forth in the Prospectus, the Trust expressly reserves the right to extend
the Exchange Offer from time to time and may extend the Exchange Offer by giving
oral (confirmed in writing) or written notice to you before 9:00 A.M., New York
City time, on the business day following the previously scheduled Expiration
Date.
The Trust expressly reserves the right to amend or terminate the Exchange
Offer, and not to accept for exchange any Old SKATES not theretofore accepted
for exchange, upon the occurrence of any
<PAGE>
of the conditions of the Exchange Offer specified in the Prospectus under the
caption "The Exchange Offer -- Certain Conditions to the Exchange Offer." The
Trust will give oral (confirmed in writing) or written notice of any amendment,
termination or non-acceptance to you as promptly as practicable.
In carrying out your duties as Exchange Agent, you are to act in accordance
with the following instructions:
1. You will perform such duties and only such duties as are specifically
set forth in the section of the Prospectus captioned "The Exchange Offer" or as
specifically set forth herein; provided, however, that in no way will your
general duty to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the Old SKATES at The
Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of
the Exchange Offer within two business days after the date of the Prospectus,
and any financial institution that is a participant in the Book-Entry Transfer
Facility's systems may make book-entry delivery of the Old SKATES by causing the
Book-Entry Transfer Facility to transfer such Old SKATES into your account in
accordance with the Book-Entry Transfer Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal and certificates
for Old SKATES (or confirmation of book-entry transfer into your account at the
Book-Entry Transfer Facility) and any other documents delivered or mailed to you
by or for holders of the Old SKATES to ascertain whether: (i) the Letters of
Transmittal and any such other documents are duly executed and properly
completed in accordance with instructions set forth therein; and (ii) the Old
SKATES have otherwise been properly tendered. In each case where the Letter of
Transmittal or any other document has been improperly completed or executed or
any of the certificates for Old SKATES are not in proper form for transfer or
some other irregularity in connection with the acceptance of the Exchange Offer
exists, you will endeavor to inform the presenters of the need for fulfillment
of all requirements and to take any other action as may be necessary or
advisable to cause such irregularity to be corrected.
4. With the approval of any Administrator of the Trust (such approval, if
given orally, to be confirmed in writing) or any other party designated by such
an officer in writing, you are authorized to waive any irregularities in
connection with any tender of Old SKATES pursuant to the Exchange Offer.
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<PAGE>
5. Tenders of Old SKATES may be made only as set forth in the Letter of
Transmittal and in the section of the Prospectus captioned "The Exchange Offer
-- Procedures for Tendering Old Capital Securities", and Old SKATES shall be
considered properly tendered to you only when tendered in accordance with the
procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Old SKATES which any
Administrator of the Trust shall approve as having been properly tendered shall
be considered to be properly tendered (such approval, if given orally, shall be
confirmed in writing).
6. You shall advise the Trust with respect to any Old SKATES received
subsequent to the Expiration Date and accept its instructions with respect to
disposition of such Old SKATES.
7. You shall accept tenders:
(a) in cases where the Old SKATES are registered in two or more names, only
if signed by all named holders;
(b) in cases where the signing person (as indicated on the Letter of
Transmittal) is acting in a fiduciary or a representative capacity, only when
proper evidence of his or her authority so to act is submitted;
(c) in a minimum liquidation amount of $100,000 (100 SKATES) or any
integral multiple of $1,000 in excess thereof; and
(d) from persons other than the registered holder of Old SKATES, provided
that customary transfer requirements, including payment of any applicable
transfer taxes, are fulfilled.
You shall accept partial tenders of Old SKATES where so indicated and as
permitted in the Letter of Transmittal and deliver certificates for Old SKATES
to the transfer agent for split-up and return any untendered Old SKATES to the
holder (or such other person as may be designated in the Letter of Transmittal)
as promptly as practicable after expiration or termination of the Exchange
Offer.
8. Upon satisfaction or waiver of all of the conditions to the Exchange
Offer, the Trust will notify you (such notice if given orally, to be confirmed
in writing) of its acceptance, promptly after the Expiration Date, of all Old
SKATES properly tendered and you, on behalf of the Trust, will exchange such Old
SKATES for New SKATES and cause such Old SKATES to be cancelled. Delivery of New
SKATES will be made on behalf of the Trust by you
3
<PAGE>
at the rate of $1,000 liquidation amount of New SKATES for each $1,000
liquidation amount of the corresponding series of Old SKATES tendered promptly
after notice (such notice if given orally, to be confirmed in writing) of
acceptance of said Old SKATES by the Trust; provided, however, that in all
-------- -------
cases, Old SKATES tendered pursuant to the Exchange Offer will be exchanged only
after timely receipt by you of certificates for such Old SKATES (or confirmation
of book-entry transfer into your account at the Book-Entry Transfer Facility), a
properly completed and duly executed Letter of Transmittal (or facsimile
thereof) with any required signature guarantees and any other required
documents. You shall issue New SKATES only in denominations of $100,000 or any
integral multiple of $1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable, except that,
subject to the terms and upon the conditions set forth in the Prospectus and the
Letter of Transmittal, Old SKATES tendered pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date.
10. The Trust shall not be required to exchange any Old SKATES tendered if
any of the conditions set forth in the Exchange Offer are not met. Notice of
any decision by the Trust not to exchange any Old SKATES tendered shall be given
(and confirmed in writing) by the Trust to you.
11. If, pursuant to the Exchange Offer, the Trust does not accept for
exchange all or part of the Old SKATES tendered because of an invalid tender,
the occurrence of certain other events set forth in the Prospectus under the
caption "The Exchange Offer -- Conditions to the Exchange Offer" or otherwise,
you shall as soon as practicable after the expiration or termination of the
Exchange Offer return those certificates for unaccepted Old SKATES (or effect
appropriate book-entry transfer), together with any related required documents
and the Letters of Transmittal relating thereto that are in your possession, to
the persons who deposited them.
12. All certificates for reissued Old SKATES, unaccepted Old SKATES or for
New SKATES shall be forwarded: (a) by first-class certified mail, return receipt
requested under a blanket surety bond protecting you and the Trust from loss or
liability arising out of the non-receipt or non-delivery of such certificates;
or (b) by registered mail insured separately for the replacement value of each
of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer,
4
<PAGE>
bank or other person or to engage or utilize any person to solicit tenders.
14. As Exchange Agent hereunder you:
(a) shall have no duties or obligations other than those specifically set
forth herein or as may be subsequently agreed to in writing by you and the
Trust;
(b) will be regarded as making no representations and having no
responsibilities as to the validity, sufficiency, value or genuineness of any of
the certificates or the Old SKATES represented thereby deposited with you
pursuant to the Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the Exchange Offer;
(c) shall not be obligated to take any legal action hereunder which might
in your reasonable judgement involve any expense or liability, unless you shall
have been furnished with reasonable indemnity;
(d) may reasonably rely on and shall be protected in acting in reliance
upon any certificate, instrument, opinion, notice, letter, telegram or other
document or security delivered to you and reasonably believed by you to be
genuine and to have been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement, request, comment,
agreement or other instrument whatsoever not only as to its due execution and
validity and effectiveness of its provisions, but also as to the truth and
accuracy of any information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a proper person
or persons;
(f) may rely on and shall be protected in acting upon written or oral
instructions from any Administrator of the Trust;
(g) may consult with your counsel with respect to any questions relating
to your duties and responsibilities and the advice or opinion of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel; and
(h) shall not advise any person tendering Old SKATES pursuant to the
Exchange Offer as to the wisdom of making such
5
<PAGE>
tender or as to the market value or decline or appreciation in market value of
any Old SKATES.
15. You shall take such action as may from time to time be requested by
the Trust or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Prospectus, Letter of Transmittal and the
Notice of Guaranteed Delivery (as defined in the Prospectus) or such other forms
as may be approved from time to time by the Trust, to all persons requesting
such documents and to accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information shall relate only
to the procedures for accepting (or withdrawing from) the Exchange Offer. The
Trust will furnish you with copies of such documents at your request. All other
requests for information relating to the Exchange Offer shall be directed to the
Trust, Attention: David M. Cronin, Administrator.
16. You shall advise by facsimile transmission or telephone, and promptly
thereafter confirm in writing to David M. Cronin, Administrator, of the Trust
and such other person or persons as it may request, daily (and more frequently
during the week immediately preceding the Expiration Date and if otherwise
requested) up to and including the Expiration Date, as to the number of Old
SKATES which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to this Agreement, separately reporting and giving
cumulative totals as to items properly received and items improperly received.
In addition, you will also inform, and cooperate in making available to, the
Trust or any such other person or persons upon oral request made from time to
time prior to the Expiration Date of such other information as it or he or she
reasonably requests. Such cooperation shall include, without limitation, the
granting by you to the Trust and such person as the Trust may request of access
to those persons on your staff who are responsible for receiving tenders, in
order to ensure that immediately prior to the Expiration Date the Trust shall
have received information in sufficient detail to enable it to decide whether to
extend the Exchange Offer. You shall prepare a final list of all persons whose
tenders were accepted, the aggregate principal amount of Old SKATES tendered,
the aggregate principal amount of Old SKATES accepted and deliver said list to
the Trust.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
preserve other records pertaining to the transfer of securities. You shall
6
<PAGE>
dispose of unused Letters of Transmittal and other surplus materials by
returning them to the Trust.
18. You hereby expressly waive any lien , encumbrance or right of set-off
whatsoever that you may have with respect to funds deposited with you for the
payment of transfer taxes by reasons of amounts, if any, borrowed by the Trust,
or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you shall be
entitled to such compensation as set forth on Schedule I attached hereto.
20. You hereby acknowledge receipt of the Prospectus and the Letter of
Transmittal and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus and
the Letter of Transmittal (as they may be amended from time to time), on the
other hand, shall be resolved in favor of the latter two documents, except with
respect to the duties, liabilities and indemnification of you as Exchange Agent,
which shall be controlled by this Agreement.
21. The Trust covenants and agrees to indemnify and hold you harmless in
your capacity as Exchange Agent hereunder against any loss, liability, cost or
expense, including attorneys' fees and expenses, arising out of or in connection
with any act, omission, delay or refusal made by you in reliance upon any
signature, endorsement, assignment, certificate, order, request, notice,
instruction or other instrument or document reasonably believed by you to be
valid, genuine and sufficient and in accepting any tender or effecting any
transfer of Old SKATES reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept any tenders or
effect any transfer of Old SKATES; provided, however, that the Trust shall not
-------- -------
be liable for indemnification or otherwise for any loss, liability cost or
expense to the extent arising out of your gross negligence or willful
misconduct. In no case shall the Trust be liable under this indemnity with
respect to any claim against you unless the Trust shall be notified by you, by
letter or cable or by facsimile confirmed by letter, of the written assertion of
a claim against you or of any other action commenced against you, promptly after
you shall have received any such written assertion or notice of commencement of
action. The Trust shall be entitled to participate at its own expense in the
defense of any such claim or other action, and, if the Trust so elects, the
Trust shall assume the defense of any suit brought to enforce any such claim. In
the event that the Trust shall assume
7
<PAGE>
the defense of any such suit, the Trust shall not be liable for the fees and
expenses of any additional counsel thereafter retained by you so long as the
Trust shall retain counsel satisfactory to you to defend such suit.
22. You shall arrange to comply with all requirements under the tax laws
of the United States, including those relating to missing Tax Identification
Numbers, and shall file any appropriate reports with the Internal Revenue
Service. The Trust understands that you are required to deduct 31% on payments
to holders who have not supplied their correct Taxpayer Identification Number or
required certification. Such funds will be turned over to the Internal Revenue
Service in accordance with applicable regulations.
23. You shall deliver or cause to be delivered, in a timely manner to each
governmental authority to which any transfer taxes are payable in respect of the
exchange of Old SKATES, your check in the amount of all transfer taxes so
payable, and the Trust shall reimburse you for the amount of any and all
transfer taxes payable in respect of the exchange of Old SKATES; provided,
--------
however, that you shall reimburse the Trust for amounts refunded to you in
- -------
respect of your payment of any such transfer taxes, at such time as such refund
is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder shall
be construed and enforced in accordance with the laws of the State of New York
applicable to agreements made and to be performed entirely within such state,
and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto.
25. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement 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.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, cancelled or waived, in whole or in part, except by a
written instrument signed by a duly authorized representative of the party to be
charged. This Agreement may not be modified orally.
8
<PAGE>
28. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given to such party, addressed to it, at its
address or telecopy number set forth below:
If to the Trust:
Allfirst Preferred Capital Trust
25 S. Charles Street
Mailcode 101-870
Baltimore, Maryland 21201
Facsimile: (410) 244-4459
Attention: David M. Cronin
If to the Exchange Agent:
The Bank of New York
101 Barclay Street
Floor 21 West
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Trustee Administration
29. Unless terminated earlier by the parties hereto, this Agreement shall
terminate 90 days following the Expiration Date. Notwithstanding the foregoing,
Paragraphs 19, 21 and 23 shall survive the termination of this Agreement. Upon
any termination of this Agreement, you shall promptly deliver to the Trust any
certificates for Securities, funds or property then held by you as Exchange
Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date hereof.
9
<PAGE>
Please acknowledge receipt of this Agreement and confirm the arrangements
herein provided by signing and returning the enclosed copy.
ALLFIRST PREFERRED CAPITAL TRUST
By: ______________________________
David M. Cronin
Administrator
Accepted as the date
first above written:
THE BANK OF NEW YORK, as Exchange Agent
By: _________________________
Name:
Title:
10
