SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
February 19, 1997
BANPONCE CORPORATION
(Exact Name of registrant as specified in charter)
COMMONWEALTH OF PUERTO RICO NO. 0-13818 NO. 66-0416582
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(State or other jurisdiction (Commission (IRS employer
of incorporation) File Number) Identification No.)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(787) 765-9800
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(Former name or former address, if changed since last report)
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Item 5. OTHER EVENTS.
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The documents filed as exhibits to this Current Report on Form 8-K are
final versions of the documents filed as exhibits to Registration Statement Nos.
333-19969, 333-19969-01, 333-19969-02 and 333-19969-03. The exhibits listed in
Item 7 below are hereby incorporated herein by reference.
Item 7. FINANCIAL STATEMENTS AND EXHIBITS.
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(1)(a) Underwriting Agreement, dated January 31, 1997, among
BanPonce Corporation, BanPonce Financial Corp.,
BanPonce Trust I, and Credit Suisse First Boston
Corporation, as representative of the Several
Underwriters.
(4)(a) Junior Subordinated Indenture, among BanPonce
Financial Corp., BanPonce Corporation and The First
National Bank of Chicago, as Debenture Trustee.
(4)(f) Amended and Restated Trust Agreement of BanPonce
Trust I, among BanPonce Financial Corp., as
Depositor, BanPonce Corporation, as Guarantor, The
First National Bank of Chicago, as Property Trustee,
First Chicago Delaware Inc., as Delaware Trustee, and
the Administrative Trustees named therein.
(4)(g) Form of Capital Security Certificate for BanPonce Trust I.
(4)(h) Guarantee Agreement relating to BanPonce Trust I, by
and among BanPonce Financial Corp., as Guarantor,
BanPonce Corporation, as Additional Guarantor, and
the First National Bank of Chicago, as Guarantee
Trustee.
(4)(i) Form of Junior Subordinated Deferrable Interest
Debenture for BanPonce Financial Corp.
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SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
BANPONCE CORPORATION
(Registrant)
Date: February 19, 1997 By:/s/ Amilcar Jordan
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Name: Amilcar Jordan
Title: Senior Vice President
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EXHIIBIT INDEX
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EXHIBIT DESCRIPTION
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(1)(a) Underwriting Agreement, dated January 31, 1997, among
BanPonce Corporation, BanPonce Financial Corp.,
BanPonce Trust I, and Credit Suisse First Boston
Corporation, as representative of the Several
Underwriters.
(4)(a) Junior Subordinated Indenture, among BanPonce
Financial Corp., BanPonce Corporation and The First
National Bank of Chicago, as Debenture Trustee.
(4)(f) Amended and Restated Trust Agreement of BanPonce
Trust I, among BanPonce Financial Corp., as
Depositor, BanPonce Corporation, as Guarantor, The
First National Bank of Chicago, as Property Trustee,
First Chicago Delaware Inc., as Delaware Trustee, and
the Administrative Trustees named therein.
(4)(g) Form of Capital Security Certificate for BanPonce Trust I.
(4)(h) Guarantee Agreement relating to BanPonce Trust I, by
and among BanPonce Financial Corp., as Guarantor,
BanPonce Corporation, as Additional Guarantor, and
the First National Bank of Chicago, as Guarantee
Trustee.
(4)(i) Form of Junior Subordinated Deferrable Interest
Debenture for BanPonce Financial Corp.
$150,000,000
BANPONCE TRUST I
8.327% Capital Securities
UNDERWRITING AGREEMENT
January 31, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
As Representatives of the Several Underwriters,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Ladies and Gentlemen:
1. Introductory. BanPonce Trust I (the "Issuer"), a statutory business
trust created under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. Section 3801 et
seq.), proposes, subject to the terms and conditions stated herein, to issue and
sell to the several Underwriters ("Underwriters") 150,000 of its 8.327% Capital
Securities, Liquidation Amount $1,000 per Capital Security (the "Capital
Securities").
The Capital Securities will be guaranteed by BanPonce Financial Corp.
(the "Corporation") and BanPonce Corporation (the "Guarantor"), to the extent
set forth in the Prospectus (as defined below), with respect to distributions
and amounts payable upon liquidation or redemption (the "Guarantees"), pursuant
to the Guarantee Agreement (the "Guarantee Agreement"), to be dated as of the
Closing Date (as defined below), executed and delivered by the Corporation, the
Guarantor and The First National Bank of Chicago, a national banking
association, as trustee (the "Guarantee Trustee"). The proceeds from the sale of
the Capital Securities to the Underwriters will be aggregated with the entire
proceeds from the sale by the Issuer to the Corporation of the common securities
of the Issuer (the "Common Securities") and will be used by the Issuer to
purchase the 8.327% Junior Subordinated Deferrable Interest Debentures (the
"Debentures"), issued by the Corporation and guaranteed (the "Debenture
Guarantee") by the Guarantor. The Capital Securities and the Common Securities
will be issued pursuant to the Amended and Restated Declaration of Trust of the
Issuer, to be dated as of the Closing Date (the "Declaration"), among the
Corporation, as Depositor, the Guarantor and the trustees named therein (the
"Trustees") and the holders from time to time of the Capital Securities and the
Common Securities, which represent undivided beneficial interests in the assets
of the Issuer. The Debentures and the Debenture Guarantees will be issued
pursuant to a Junior Subordinated Indenture, to be dated as of the Closing Date
(the "Indenture"), among the Guarantor, the Corporation and The First National
Bank of Chicago, as trustee (the "Debenture Trustee"). The Capital Securities,
the Guarantees, the Debentures and the Debenture Guarantee are collectively
referred to herein as the "Securities." This Agreement, the Indenture, the
Declaration, the Guarantee Agreement and the Expense Agreement (as defined
herein) are referred to collectively as the "Operative Documents."
The Issuer, the Corporation and the Guarantor, jointly and severally,
hereby agree with the Underwriters as follows:
2. Representations and Warranties. Each of the Issuer, the Corporation
and the Guarantor, jointly and severally, represents and warrants to, and agrees
with, the Underwriters that:
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(a) The Guarantor, the Corporation and the Issuer have filed
with the Securities and Exchange Commission (the "Commission") a
registration statement, and may have filed an amendment or amendments
thereto, on Form S-3, for the registration of the Securities under the
Securities Act of 1933, as amended (the "Act"), and such registration
statement has become effective under the Act. Such Registration
Statement (including all documents incorporated therein by reference)
is hereinafter referred to as the "Registration Statement." Any
post-effective amendment to such registration statement has been filed
with the Commission prior to the execution and delivery of this
Agreement and the most recent such amendment has been declared
effective by the Commission. For purposes of this Agreement, "Effective
Time" of the Registration Statement means (i) the date and time as of
which such registration statement was declared effective by the
Commission or (ii) the later of (A) the date on which the most recent
post-effective amendment or amendments thereto, if any, became or
become effective and (B) the date of filing of the Guarantor's most
recent Annual Report on Form 10-K, if such filing occurs after the date
set forth in clause (i) above. "Effective Date" means the date of the
Effective Time. "Base Prospectus" means the prospectus (including all
documents incorporated therein by reference) relating to the
Registration Statement, in the form in which such prospectus has most
recently been filed, or transmitted for filing, with the Commission on
or prior to the date hereof (but without regard to any prospectus
supplement relating specifically to securities other than the
Securities); and "Prospectus" means the Base Prospectus together with
the prospectus supplement (including all documents incorporated therein
by reference) specifically relating to the Securities, as such
prospectus supplement is first filed with the Commission on or after
the date hereof pursuant to Rule 424(b) under the Act; provided
however, that if a previously unfiled form of prospectus with an issue
date later than the issue date of the Base Prospectus is to be filed
with the Commission together with the prospectus supplement relating to
the Securities, then "Prospectus" means such new form of prospectus
(including all documents incorporated therein by reference) together
with such prospectus supplement (including all documents incorporated
therein by reference) as first filed with the Commission on or after
the date hereof pursuant to Rule 424(b) under the Act. Any reference
herein to the terms "amend," "amendment" or "supplement" with respect
to the Registration Statement or the Prospectus shall be deemed to
refer to and include the filing under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), on or after the date hereof of
any document deemed to be incorporated therein by reference.
(b) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
Commonwealth of Puerto Rico with corporate power and authority to own,
lease and operate its properties and to conduct its business as
described in the Prospectus; the Guarantor is duly registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended
(the "Bank Holding Company Act"); and the Guarantor is not required to
register as a foreign corporation in any jurisdiction in order to
conduct the business presently conducted by it.
(c) The Corporation has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State
of Delaware, with corporate power and authority to own, lease and
operate its properties and conduct its business as described in the
Prospectus; and the Corporation is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business
requires such qualification.
(d) Each subsidiary of the Guarantor which is a significant
subsidiary as defined in Rule 405 of Regulation C of the rules and
regulations under the Act (each, a "Significant Subsidiary") has been
<PAGE>
duly incorporated and is validly existing as a corporation or a bank in
good standing under the laws of the jurisdiction of its incorporation,
has corporate power and authority to own, lease and operate its
properties and conduct its business as described in the Prospectus and
is duly qualified as a foreign corporation to transact business and is
in good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to so qualify and be
in good standing would not have a material adverse effect on the
condition, financial or otherwise, or the earnings, business affairs or
business prospects of the Guarantor and its subsidiaries considered as
one enterprise; and all of the issued and outstanding capital stock of
each such Significant Subsidiary has been duly authorized and validly
issued, is fully paid and non-assessable (subject to the provisions of
Section 55 of Title 12 of the United States Code in the case of
Significant Subsidiaries which are national banking associations) and,
except as otherwise disclosed in the Prospectus and except for
directors' qualifying shares, is owned by the Guarantor, directly or
through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity or, if such is not
the case, that any such security interest, mortgage pledge, lien,
encumbrance, claim or equity, when exercised, enforced or otherwise
asserted, will not have a material adverse effect on the condition,
financial or otherwise, or the earnings, business affairs or business
prospects of the Guarantor and its subsidiaries considered as one
enterprise.
(e) The Issuer has been duly formed and is validly existing in
good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described
in the Prospectus.
(f) All of the outstanding beneficial interests of the Issuer
have been duly authorized and validly issued and are fully paid and
nonassessable undivided beneficial interests in the assets of the
Issuer; the holders of such beneficial interests of the Issuer have no
preemptive or other rights to acquire Capital Securities or Common
Securities; and there are no restrictions on transfers of the
Securities.
(g) (i) On the Effective Date, the Registration Statement
conformed in all material respects to the requirements of the Act, the
Trust Indenture Act of 1939, as amended ("Trust Indenture Act"), and
the rules and regulations of the Commission ("Rules and Regulations")
and did not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading, (ii) the Registration
Statement, on the date of this Agreement, and at the time of filing of
the Prospectus pursuant to Rule 424(b), the Prospectus and any
amendments and supplements to the Registration Statement or the
Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) as of
the Closing Date, the Registration Statement, the Prospectus and any
amendments or supplements to the Registration Statement or the
Prospectus will not include any untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading. The preceding
sentence does not apply to statements in or omissions from the
Registration Statement or Prospectus made in reliance upon and in
conformity with written information furnished to the Guarantor by any
Underwriter specifically for use therein.
(h) The accountants who certified the financial statements
included or incorporated by reference in the Prospectus are independent
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public accountants within the meaning of the Act and the Rules and
Regulations.
(i) The consolidated financial statements and any supporting
schedules included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the consolidated financial
position of the Guarantor and its consolidated subsidiaries as of the
dates indicated and the consolidated results of their operations for
the periods specified; except as stated therein, said financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis during the periods involved; and the supporting schedules
included in the Registration Statement present fairly the information
required to be stated therein.
(j) This Agreement has been duly authorized, executed and
delivered by each of the Guarantor, the Corporation and the Issuer.
(k) The Declaration has been duly authorized by the Guarantor
and the Corporation; and when the Capital Securities are delivered and
paid for pursuant to this Agreement on the Closing Date, the
Declaration will have been duly executed and delivered by the Guarantor
and the Corporation and will constitute a valid and legally binding
instrument of the Guarantor and the Corporation enforceable against the
Guarantor and the Corporation in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(l) The Guarantee Agreement has been duly authorized by the
Guarantor and the Corporation; and when the Capital Securities are
delivered and paid for pursuant to this Agreement on the Closing Date,
the Guarantee Agreement will have been duly executed and delivered by
the Guarantor and the Corporation, and will constitute a valid and
legally binding instrument of the Guarantor and the Corporation,
enforceable against the Guarantor and the Corporation in accordance
with its terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles.
(m) The Capital Securities have been duly authorized; when the
Capital Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, such Capital Securities will (i) have
been validly issued and fully paid, (ii) represent nonassessable
undivided beneficial interests in the assets of the Issuer, (iii) be
entitled to the benefits of the Declaration and (iv) conform to the
description thereof contained in the Prospectus; the issuance of the
Capital Securities is not subject to preemptive or other similar
rights; and the holders of the Capital Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit incorporated under the General
Corporation Law of the State of Delaware.
(n) The Common Securities have been duly authorized; when the
Common Securities are delivered and paid for on the Closing Date, such
Common Securities will (i) have been validly issued and fully paid,
(ii) represent nonassessable undivided beneficial interests in the
assets of the Issuer, (iii) be entitled to the benefits of the
Declaration and (iv) conform to the description thereof contained in
the Prospectus; the issuance of the Common Securities is not subject to
preemptive or other similar rights; and at the Closing Date, all of the
issued and outstanding Common Securities of the Issuer will be directly
owned by the Corporation free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity.
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(o) The Indenture has been duly authorized by the Corporation
and the Guarantor; and when the Debentures and the Debenture Guarantees
are delivered and paid for on the Closing Date, the Indenture will have
been duly executed and delivered by the Corporation and the Guarantor,
such Debentures will have been duly executed, authenticated, issued and
delivered, such Debenture Guarantees will have been duly executed,
issued and delivered and such Debentures and Debenture Guarantees will
conform to the description thereof contained in the Prospectus and the
Indenture, such Debentures and the Debenture Guarantees will constitute
valid and legally binding obligations of the Corporation and the
Guarantor, respectively, enforceable in accordance with their terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(p) The Expense Agreement to be entered into by the Guarantor,
the Corporation and the Property Trustee (the "Expense Agreement") has
been duly authorized by the Corporation and the Guarantor; and when the
Capital Securities are delivered and paid for pursuant to this
Agreement on the Closing Date, the Expense Agreement will have been
duly executed and delivered by the Corporation and the Guarantor and
will constitute a valid and legally binding instrument of the
Corporation and the Guarantor enforceable in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or
affecting creditors' rights and to general equity principles.
(q) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as may
otherwise be stated therein or contemplated thereby, there has been no
material adverse change in the condition, financial or otherwise, or in
the earnings, business affairs or business prospects of the Guarantor
and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business.
(r) Neither the Guarantor, the Corporation nor any of the
Significant Subsidiaries is in violation of its charter or in default
in the performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which it is a party
or by which it or any of them or their properties may be bound; the
execution, delivery and performance of the Operative Documents by the
Guarantor, the Corporation or the Issuer and the consummation of the
transaction contemplated thereby will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Guarantor, the Corporation, the Issuer or any of the Significant
Subsidiaries pursuant to any contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Guarantor, the
Corporation, the Issuer or any of its subsidiaries is a party or by
which it or any of them may be bound or to which any of the property or
assets of the Guarantor, the Corporation, the Issuer or any such
subsidiary is subject, nor will such action result in any violation of
the provisions of the charter or by-laws of the Guarantor, the
Corporation or any such subsidiary or any law, administrative
regulation or administrative or court order or decree which breach,
default, imposition or violation would, in each case, have a material
adverse effect on the Guarantor and its subsidiaries taken as a whole;
and no consent, approval, authorization, order or decree of any court
or governmental agency or body is required for the consummation by the
Guarantor, the Corporation or the Issuer of the transactions
contemplated by the Operative Documents, except such as have already
been obtained or as may be required under the Act or the rules and
regulations thereunder (which have been obtained), the Trust Indenture
Act or state securities or Blue Sky laws.
<PAGE>
(s) Except as may be set forth in the Prospectus, there is no
action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge
of the Guarantor, threatened against or affecting, the Guarantor or any
of its subsidiaries, which might result in any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Guarantor and its subsidiaries
considered as one enterprise, or might materially and adversely affect
the consummation of this Agreement; and there are no contracts or
documents of the Guarantor or any of its subsidiaries which are
required to be filed or incorporated by reference as exhibits to the
Registration Statement by the Act or by the Rules and Regulations which
have not been so filed or incorporated by reference.
(t) The Guarantor, the Corporation and the Significant
Subsidiaries possess adequate certificates, authorities or permits
issued by the appropriate state, federal or foreign regulatory agencies
or bodies necessary to conduct the business now operated by them except
for such certificates, authorities or permits as are not material to
the business, operations, financial condition or income of the
Guarantor, the Corporation or the Significant Subsidiaries; and neither
the Guarantor, the Corporation nor any of the Significant Subsidiaries
has received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling
or finding, would materially adversely affect the conduct of the
business, operations, financial condition or income of the Guarantor
and its subsidiaries considered as one enterprise.
(u) Neither the Issuer, the Guarantor nor the Corporation is
and, after giving effect to the offering and sale of the Securities and
the application of the proceeds thereof as described in the Prospectus,
none of them will be, an "investment company" or a company "controlled"
by an investment company as defined in the United States Investment
Company Act of 1940 (the "Investment Company Act").
3. Purchase, Sale and Delivery of Securities. On the basis of the
representations, warranties and agreements herein contained, but subject to the
terms and conditions herein set forth, the Issuer agrees to sell to the
Underwriters, and the Underwriters agree, severally and not jointly, to purchase
from the Issuer, at a purchase price of U.S.$1,000 per Capital Security plus
accumulated distributions, if any, from February 5, 1997 to the Closing Date,
the respective liquidation amounts of Securities set forth opposite the names of
the Underwriters in Schedule A hereto.
The Corporation will deliver against payment of the purchase price the
Capital Securities in the form of one or more permanent global securities in
definitive form (the "Global Securities") deposited with the Property Trustee as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in the limited
circumstances described in the Prospectus. Payment for the Capital Securities
shall be made by the Underwriters in Federal (same day) funds by official check
or checks or wire transfer to an account previously designated to Credit Suisse
First Boston Corporation ("CSFBC") by the Corporation at a bank acceptable to
CSFBC drawn to the order of the Issuer at the office of Simpson Thacher &
Bartlett, 425 Lexington Avenue, New York New York 10017, at 10:00 A.M. (New York
time), on February 5, 1997 or at such other time not later than seven full
business days thereafter as CSFBC and the Corporation determine, such time being
herein referred to as the "Closing Date," against delivery to the Property
Trustee as custodian for DTC of the Global Securities representing all of the
Capital Securities. The Global Securities will be made available for checking at
the above office at least 24 hours prior to the Closing Date.
<PAGE>
As compensation for the Underwriters' commitment and in view of the
fact that the proceeds of the sale of the Capital Securities and the Common
Securities will be used to purchase the Debentures, the Corporation will pay, on
the Closing Date, to each Underwriter a commission of $10.00 per Capital
Security purchased by such underwriter on the Closing Date by wire transfer of
immediately available funds to bank accounts designated by CSFBC.
4. Offering by Underwriters. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Prospectus.
5. Certain Agreements of the Guarantor, the Corporation and the Issuer.
Each of the Guarantor, the Corporation and the Issuer, jointly and severally,
agree with the Underwriters that:
(a) The Guarantor will file the Prospectus (or if permitted by
Rule 424(c) under the Act, the prospectus supplement relating to the
Securities which forms a part thereof) with the Commission pursuant to
and in accordance with Rule 424(b)(4) within the time periods
prescribed. The Guarantor will advise you promptly of any such filing
pursuant to Rule 424(b).
(b) The Guarantor will furnish the each Underwriter, without
charge, a certified copy of the Registration Statement including
exhibits and materials, if any, incorporated by reference therein and,
during the period mentioned in paragraph (d) below, as many copies of
the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as CSFBC may reasonably request.
(c) The Guarantor will advise you promptly of any proposal to
amend or supplement the Registration Statement or the Prospectus (other
than a supplement relating solely to an offering of securities other
than the Securities), and prior to amending or supplementing the Regis-
tration Statement or the Prospectus with respect to the Securities, the
Guarantor will furnish CSFBC with a copy of each such proposed
amendment or supplement.
(d) If at any time after the public offering of the
Securities, in the opinion of counsel for the Underwriters the
Prospectus is required by law to be delivered, any event shall occur as
a result of which it is necessary to amend or supplement the Prospectus
in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it is
necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense, to the
Underwriters, either amendments or supplements to the Prospectus so
that the statements in the Prospectus as so amended or supplemented
will not, in the light of the circumstances under which they were made,
be misleading or so that the Prospectus will comply with law, as the
case may be. Neither your consent to, nor your delivery of, any such
amendment or supplement shall constitute a waiver of any of the
conditions set forth in Section 6.
(e) As soon as practicable, but not later than the
Availability Date (as defined below), the Guarantor will make generally
available to its security holders an earnings statement covering a
period of at least 12 months beginning after the Effective Date which
will satisfy the provisions of Section 11(a) of the Act. For the
purpose of the preceding sentence, "Availability Date" means the 45th
day after the end of the fourth fiscal quarter following the fiscal
quarter that includes the Closing Date, except that, if such fourth
fiscal quarter is the last quarter of the Guarantor's fiscal year,
"Availability Date" means the 90th day after the end of such fourth
fiscal quarter.
(f) The Guarantor will arrange for the qualification of the
Securities for offer and sale under the securities or Blue Sky laws of
<PAGE>
such jurisdictions as CSFBC shall reasonably request and to pay all
reasonable expenses (including fees and disbursements of counsel) in
connection with such qualification, the determination of the
eligibility of the Securities for investment under the laws of such
jurisdictions as CSFBC may reasonably designate, the printing of any
memoranda concerning the aforesaid qualification or eligibility and the
rating of the Securities by securities rating services.
(g) During the period of five years hereafter, the Guarantor
will furnish to CSFBC, as soon as practicable after the end of each
fiscal year, a copy of its annual report to stockholders for such year;
and the Guarantor will furnish to CSFBC (i) as soon as available, a
copy of each report and any definitive proxy statement of the Guarantor
filed with the Commission under the Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information
concerning the Guarantor or the Corporation as CSFBC may reasonably
request.
(h) The Corporation will pay all expenses incident to the
performance of its obligations under this Agreement and will reimburse
the Underwriters for any expenses (including fees and disbursements of
counsel) incurred by them in connection with qualification of the
Securities for sale and determination of their eligibility for
investment under the laws of such jurisdictions as CSFBC designates and
the printing of memoranda relating thereto, for any fees charged by
investment rating agencies for the rating of the Securities, for the
filing fee incident to, and the fees and disbursements of counsel to
the Underwriters in connection with, the review by the National
Association of Securities Dealers, Inc. of the Securities, for any
travel expenses of the Corporation's officers and employees and any
other expenses of the Corporation in connection with attending or
hosting meetings with prospective purchasers of the Securities and for
expenses incurred in distributing preliminary prospectuses and the
Prospectus (including any amendments and supplements thereto) to the
Underwriters.
(i) During the period beginning from the date of this
Agreement and continuing to and including the earlier of (i) the
Closing Date or (ii) the termination of trading restrictions on the
Securities, as determined by CSFBC, not to offer, sell, contract to
sell or otherwise dispose of any Securities, any other beneficial
interests in the assets of the Issuer or any preferred securities or
any other securities of any issuer trust or the Corporation which are
substantially similar to the Securities, including any guarantees of
such securities, or any securities convertible or exchangeable for or
representing the right to receive preferred securities or any such
substantially similar securities of either any issuer trust or the
Corporation, without the prior written consent of the CSFBC, except for
the Securities offered in connection with this Agreement.
6. Conditions of the Obligation of the Underwriters. The obligation of
the Underwriters to purchase and pay for the Capital Securities will be subject
to the accuracy of the representations and warranties on the part of the
Guarantor, the Corporation and the Issuer herein, to the accuracy of the
statements of officers of the Guarantor, the Corporation and the Issuer made
pursuant to the provisions hereof, to the performance by the Guarantor, the
Corporation and the Issuer of their respective obligations hereunder and to the
following additional conditions precedent:
(a) CSFBC shall have received a letter, dated the Closing
Date, of Price Waterhouse confirming that they are independent public
accountants within the meaning of the Act and the applicable published
Rules and Regulations thereunder and stating to the effect that:
(i) In their opinion the financial statements
examined by them and included in the Registration Statements
comply as to form in all material respects with the applicable
accounting
<PAGE>
requirements of the Act and the related published Rules and
Regulations;
(ii) they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in
Statement of Auditing Standards No. 71, Interim Financial
Information, on any unaudited financial statements included in
the Registration Statements;
(iii) on the basis of the review referred to in
clause (ii) above, a reading of the latest available interim
financial statements of the Guarantor, inquiries of officials
of the Guarantor who have responsibility for financial and
accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) any unaudited financial statements included in the
Registration Statements do not comply as to form in
all material respects with the applicable accounting
requirements of the Securities Act, the Exchange Act
and the related published Rules and Regulations or any
material modifications should be made to such
unaudited financial statements for them to be in
conformity with generally accepted accounting
principles;
(B) at the date of the latest available balance sheet
read by such accountants, or at a subsequent specified
date not more than three business days prior to the
Closing Date, there was any decrease in the capital
stock or any increase in long-term debt of the
Guarantor and its consolidated subsidiaries or, at the
date of the latest available balance sheet read by
such accountants, there was anydecrease in
consolidated total assets, as compared with amounts
shown on the latest balance sheet included in the
Prospectus; or
(C) for the period from the date of the latest income
statement included in the Prospectus to the closing
date of the latest available income statement read
by such accountants and to a subsequent specified date
not more than three business days prior to the Closing
Date there were any decreases, as compared with the
corresponding periods of the previous year, in
consolidated revenues, net interest income,
consolidated net income or in the ratio of earnings
to fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which the Prospectus disclose
have occurred or may occur or which are described in such
letter; and
(iv) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other
financial information contained in the Registration Statements
(in each case to the extent that such dollar amounts,
percentages and other financial information are derived from
the general accounting records of the Guarantor and its
subsidiaries subject to the internal controls of the
Guarantor's accounting system or are derived directly from
such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting
records and other procedures specified in such letter and have
found such dollar amounts, percentages and other financial
information to be in agreement with such results, except as
otherwise specified in such letter.
<PAGE>
For purposes of this subsection all financial statements and schedules included
in material incorporated by reference into the Prospectus shall be deemed
included in the Registration Statement for purposes of this subsection.
(b) Prior to the Closing Date, no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or, to the knowledge of
the Guarantor, the Corporation or CSFBC, shall be contemplated by the
Commission.
(c) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) any change, or any development or event involving a
prospective change, in the condition (financial or other), business, properties
or results of operations of the Guarantor or its subsidiaries considered as one
enterprise which, in the judgment of a majority in interest of the Underwriters,
is material and adverse and makes it impractical or inadvisable to proceed with
completion of the public offering or the sale of and payment for the Securities;
(ii) any downgrading in the rating of any debt securities of the Guarantor by
any "nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act), or any public announcement that any such
organization has under surveillance or review its rating of any debt securities
of the Guarantor (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of such
rating); (iii) any suspension or limitation of trading in securities generally
on the New York Stock Exchange, or any setting of minimum prices for trading on
such exchange, or any suspension of trading of any securities of the Guarantor
on any exchange or in the over-the-counter market; (iv) any banking moratorium
declared by U.S. Federal, Puerto Rico or New York authorities; or (v) any
outbreak or escalation of major hostilities in which the United States is
involved, any declaration of war by Congress or any other substantial national
or international calamity or emergency if, in the judgment of a majority in
interest of the Underwriters, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable to
proceed with completion of the public offering or the sale of and payment for
the Securities.
(d) CSFBC shall have received an opinion, dated the Closing Date, of
Puerto Rican counsel for the Guarantor, in form and substance reasonably
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Guarantor has been duly incorporated and is validly
existing as a corporation in good standing under the laws of Puerto
Rico;
(ii) The Guarantor has corporate power and authority to own,
lease and operate its properties and conduct its business as described
in the Prospectus;
(iii) The Guarantor is not required to register as a
foreign corporation in any jurisdiction in order to conduct
the business presently conducted by it;
(iv) Each Significant Subsidiary has been duly incorporated
and is validly existing as a corporation or a bank in good standing
under the laws of the jurisdiction of its incorporation, has corporate
power and authority to own, lease and operate its properties and
conduct its business as described in the Prospectus, and, to the best
of such counsel's knowledge and information, is duly qualified as a
foreign corporation to transact business and is in good standing in
each jurisdiction in which it owns or leases substantial properties or
in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business; except
where the failure to so qualify and be in good standing would not have
a material adverse effect on the Guarantor and its subsidiaries taken
as a whole;
<PAGE>
and all of the issued and outstanding capital stock of each such
Significant Subsidiary has been duly authorized and validly issued and
is fully paid and non-assessable (subject to the provisions of Section
55 of Title 12 of the United States Code in the case of Significant
Subsidiaries which are national banking associations) and, except for
directors' qualifying shares, is owned, directly or through such
subsidiaries, by the Guarantor free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity;
(v) The Indenture has been duly authorized, executed and
delivered by the Corporation and the Guarantor; the Debentures have
been duly authorized, executed, authenticated, issued and delivered,
the Debenture Guarantees have been duly authorized, executed, issued
and delivered; and (x) the Indenture and the Debentures constitute
valid and legally obligations of the Corporation and (y) the Indenture
and the Debenture Guarantees constitute valid and legally binding
obligations of the Guarantor, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles;
(vi) Each of the Declaration, the Guarantee Agreement and the
Expense Agreement has been duly authorized, executed and delivered by
the Guarantor and the Corporation, respectively, and each of the
Guarantee Agreement and the Expense Agreement constitutes a valid and
legally binding obligation of the Corporation and the Guarantor,
respectively, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(vii) This Agreement has been duly authorized, executed and
delivered by the Guarantor, the Corporation and the Issuer;
(viii) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Guarantor under the
federal laws of the United States and the laws of the Commonwealth of
Puerto Rico for the issuance, sale and delivery of the Capital
Securities to or through the Underwriters have been obtained or made;
provided, however, that, for purposes of this paragraph (viii), such
counsel need express no opinion with respect to state securities laws;
(ix) To the best of such counsel's knowledge, neither the
Guarantor, the Corporation nor any of the Significant Subsidiaries is
in violation of its charter or in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any contract, indenture, mortgage, loan agreement, note or
lease known to such counsel to which it or any of them is a party or by
which their properties may be bound;
(x) The issuance of the Capital Securities in accordance with
the Operative Documents does not, and the sale of the Capital
Securities to the Underwriters pursuant to this Agreement and the
performance by the Guarantor, the Corporation or the Issuer of their
respective obligations under the Operative Documents will not (a)
violate the articles of incorporation or by-laws of the Guarantor or
(b) violate any existing Federal law of the United States or any law of
the Commonwealth of Puerto Rico or any administrative regulation or
administrative or court decree applicable to the Guarantor or (c)
conflict with or constitute a breach of, or a default under, or result
in the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Guarantor, pursuant to any contract,
indenture, mortgage, loan agreement, note, lease or other instrument
known to such counsel to which the Guarantor is a party or by which it
may be bound, or to which any of the property or assets of the
Guarantor is subject, which breach,
<PAGE>
default, imposition or violation would, in each case, have a material
adverse effect on the Guarantor and its subsidiaries taken as a whole;
provided, however, that, for purposes of this paragraph (x), such
counsel need express no opinion with respect to Federal or state
securities laws, other anti-fraud laws, fraudulent transfer laws, the
Employee Retirement Income Security Act of 1974 and related laws, and
laws that restrict transactions between United States persons and
citizens or residents of certain foreign countries; provided, further,
that insofar as performance by the Guarantor, the Corporation or the
Issuer of their respective obligations under the Operative Documents
and the Securities are concerned, such counsel need express no opinion
as to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights or general equity principles;
(xi) To the best of such counsel's knowledge and information,
there are no legal or governmental proceedings pending or threatened
which are required to be disclosed in the Prospectus, other than those
disclosed therein, and all pending legal or governmental proceedings to
which the Guarantor or any of its subsidiaries is a party or to which
any of its property or assets is subject which are not described in the
Prospectus, including ordinary routine litigation incidental to the
business of the Guarantor or any such subsidiary, are, considered in
the aggregate, not material;
(xii) To the best of such counsel's knowledge, there are no
contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments or documents required to be described or referred to
in the Prospectus or to be filed as exhibits to the Registration
Statement other than those described or referred to therein or filed or
incorporated by reference as exhibits thereto; and the descriptions
thereof or references thereto are correct in all material respects;
(xiii) The Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, (i) no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and (ii) no proceedings therefor have been
initiated or threatened by the Commission;
(xiv) At the time the Registration Statement became effective,
the Registration Statement (other than the financial statements,
schedules and other financial data included or incorporated by
reference therein as to which no opinion need be rendered by such
counsel) complied as to form in all material respects with the
requirements of the Act, the Trust Indenture Act and the regulations
under each of those acts;
(xv) Each document filed pursuant to the Exchange Act and
incorporated by reference in the Prospectus complied when filed as to
form in all material respects with the Exchange Act and the rules and
regulations thereunder; and
(xvi) Such counsel confirms that, in her opinion, nothing has
come to her attention in the course of her review that has caused her
to believe that any part of the Registration Statement, when such part
became effective (within the meaning of the Act) or at the Closing
Date, as the case may be, contains or contained any untrue statement of
a material fact or omits or omitted to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; or that the Prospectus, at the time of filing of the
Prospectus pursuant to Rule 424(b) or at the Closing Date, contains or
contained any untrue statement of a material fact or omits or omitted
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading. Such counsel may say that the limitations inherent in
the
<PAGE>
independent verification of factual matters and the character of
determinations involved in the registration process are such that she
does not assume any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration Statement or
the Prospectus except for those made under the captions "ERISA
Considerations," "Supervision and Regulation" and the appropriate
sections in the Prospectus describing the Securities offered thereby,
insofar as they relate to provisions of documents therein described and
that she does not express any opinion or belief as to the financial
statements or other financial data contained in the Registration
Statement and the Prospectus, as to the statement of the eligibility
and qualification of the Trustee under the Indenture; and that her
letter is furnished as counsel for the Guarantor to the Underwriters
and is solely for the benefit of the Underwriters.
Such counsel may base her opinions, as to certain questions of fact, on
certificates of officers of the Guarantor, the Corporation or the Issuer and may
rely as to all matters relating to the laws of the State of New York upon the
opinion of Sullivan & Cromwell.
(e) CSFBC shall have received an opinion, dated the Closing Date, of
Sullivan & Cromwell, counsel for the Guarantor, in form and substance reasonably
satisfactory to counsel to the Underwriters, to the effect that:
(i) The Guarantor is duly registered as a bank holding company
under the Bank Holding Company Act of 1956;
(ii) The Indenture has been duly authorized, executed and
delivered by the Corporation and duly qualified under the Trust
Indenture Act; the Debentures have been duly authorized, executed,
authenticated, issued and delivered; the Debenture Guarantees have been
duly authorized, executed, issued and delivered; and (x) the Indenture
and the Debentures constitute valid and legally binding obligations of
the Corporation and (y) the Indenture and the Debenture Guarantees
constitute valid and legally binding obligations of the Guarantor,
enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(iii) Each of the Declaration, the Guarantee Agreement and the
Expense Agreement has been duly authorized, executed and delivered by
the Guarantor or the Corporation, respectively, and each of the
Guarantee Agreement and the Expense Agreement constitutes a valid and
legally binding obligation of the Corporation and the Guarantor,
respectively, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles;
(iv) This Agreement has been duly authorized, executed and
delivered by the Guarantor, the Corporation and the Issuer;
(v) All regulatory consents, authorizations, approvals and
filings required to be obtained or made by the Guarantor under the
federal laws of the United States and the laws of the State of New York
for the issuance, sale and delivery of the Capital Securities to or
through the Underwriters have been obtained or made;
(vi) The issuance of the Securities in accordance with the
Operative Documents and the sale of the Capital Securities to the
Underwriters pursuant to this Agreement do not, and the performance by
the Guarantor, the Corporation and the Issuer of their respective
obligations under the Operative Documents and the Capital Securities
will not, violate any existing federal law of the United States
<PAGE>
applicable to the Guarantor, the Corporation or the Issuer; provided,
however, that, for the purposes of this paragraph (vi), such counsel
need express no opinion with respect to federal or state securities
laws, other anti-fraud laws, fraudulent transfer laws, the Employee
Retirement Income Security Act of 1974 and related laws, and laws that
restrict transactions between United States persons and citizens or
residents of certain foreign countries; provided, further, that insofar
as performance by the Guarantor, the Corporation and the Issuer of
their respective obligations under the Operative Documents and the
Capital Securities is concerned, such counsel need express no opinion
as to bankruptcy, insolvency, reorganization, moratorium and similar
laws of general applicability relating to or affecting creditors'
rights;
(vii) The Registration Statement is effective under the Act
and, to the best of such counsel's knowledge, (i) no stop order
suspending the effectiveness of the Registration Statement has been
issued under the Act and (ii) no proceedings therefor have been
initiated or threatened by the Commission;
(viii) Neither the Guarantor, the Corporation nor the Issuer
is, and after giving effect to the offering and sale of the Securities
and the application of the proceeds thereof as described in the
Prospectus will be, an "investment company" or a company "controlled"
by an investment company as defined in the Investment Company Act; and
(ix) As counsel to the Guarantor, the Corporation and the
Issuer such counsel has reviewed the Registration Statement and the
Prospectus, participated in discussions with representatives of the
Underwriters and those of the Guarantor, the Corporation and the Issuer
and its accountants, and advised the Guarantor as to the requirements
of the Act and the applicable rules and regulations thereunder, and on
the basis of the information that such counsel gained in the course of
the performance of their services considered in the light of their
understanding of the applicable law, including the requirements of Form
S-3 and the character of the prospectus contemplated thereby, and the
experience they have gained through their practice under the Act, such
counsel confirm that, in their opinion, each part of the Registration
Statement, when such part became effective, and the Prospectus, at the
time of filing of the Prospectus pursuant to Rule 424(b), appeared on
their face to be appropriately responsive, in all material respects, to
the requirements of the Act, the Trust Indenture Act, and the
applicable rules and regulations of the Commission thereunder; and that
nothing that came to their attention in the course of their review that
has caused them to believe that any part of the Registration Statement,
when such part became effective, contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, as of the date of the Prospectus,
contained any untrue statement of a material fact or omitted to state
any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Also, that nothing has come to their attention in the
course of the procedures described in the second sentence of this
paragraph that has caused them to believe that the Prospectus, as of
the date and time of delivery of this letter, contained any untrue
statement of a material fact or omitted to state any material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
Such counsel may say that the limitations inherent in the independent
verification of factual matters and the character of determinations involved in
the registration process are such that they do not assume any responsibility for
the accuracy, completeness or fairness of the statements contained in the
Registration Statement or the Prospectus except (i) for those made under the
appropriate sections in the Prospectus describing
<PAGE>
the Securities offered thereby, insofar as they relate to provisions of
documents therein described, and (ii) the accuracy of the descriptions of the
Federal laws of the United States contained in the Registration Statement and
the Prospectus under the captions "ERISA Considerations," "Certain Federal
Income Tax Consequences" and "Supervision and Regulation" and that they do not
express any opinion or belief as to the financial statements or other financial
data contained in the Registration Statement, the Prospectus, as to the
statement of the eligibility and qualification of the Trustee under the
Indenture under which the Securities are being issued and that their letter is
furnished as counsel for the Guarantor to the Underwriters and is solely for the
benefit of the Underwriters.
Such counsel may base their opinions, as to certain questions of fact,
on certificates of officers of the Guarantor, the Corporation or the Issuer and
may rely as to all matters relating to the laws of the Commonwealth of Puerto
Rico upon the opinion of Brunilda Santos de Alvarez, Esq.
(f) CSFBC shall have received an opinion, dated the Closing Date, of
Sullivan & Cromwell, special United States tax counsel to the Guarantor, the
Corporation and the Issuer, in form and substance reasonably satisfactory to
counsel for the Underwriters, to the effect that it confirms its opinion set
forth in the Prospectus under the caption "Certain Federal Income Tax
Consequences."
(g) CSFBC shall have received an opinion, dated the Closing Date, of
Richards, Layton & Finger, special counsel to the Guarantor and special counsel
to the Issuer, in form and substance reasonably satisfactory to counsel for the
Underwriters, to the effect set forth below.
(i) The Issuer has been duly created and is validly existing
in good standing as a business trust under the Delaware Act, and all
filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Issuer as a business trust
have been made.
(ii) Under the Delaware Act and the Declaration, the Issuer
has the trust power and authority to own its property and conduct its
business, all as described in the Prospectus.
(iii) The Declaration constitutes a valid and binding
obligation of the Guarantor, the Corporation and the Trustees, and is
enforceable against the Guarantor, the Corporation and the Trustees in
accordance with its terms, subject, as to enforcement, to the effect
upon the Declaration of (i) bankruptcy, insolvency, moratorium,
receivership, reorganization, liquidation, fraudulent transfer and
other similar laws relating to the rights and remedies of creditors
generally, (ii) principles of equity, including applicable law relating
to fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (iii) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(iv) Under the Delaware Act and the Declaration, the Issuer
has the trust power and authority (i) to execute and deliver, and to
perform its obligations under, this Agreement and (ii) to issue and
perform its obligations under the Capital Securities and the Common
Securities.
(v) Under the Delaware Act and the Declaration, the execution
and delivery by the Issuer of this Agreement, and the performance by
the Issuer of its obligations hereunder, have been duly authorized by
all necessary trust action on the part of the Issuer.
(vi) The Capital Securities have been duly authorized by the
Declaration and are duly and validly issued and, subject to the
qualifications set forth herein, fully paid and nonassessable
beneficial
<PAGE>
interests in the assets of the Issuer and are entitled to the benefits
of the Declaration. The holders of the Capital Securities, as
beneficial owners of the Issuer, 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. Such counsel may note that the holders of
Capital Securities may be obligated, pursuant to the Declaration, (i)
to provide indemnity and/or security in connection with and pay taxes
or governmental charges arising from transfers or exchanges of
certificates for Capital Securities and the issuance of replacement
certificates for Capital Securities, and (ii) to provide security or
indemnity in connection with requests of or directions to the Property
Trustee to exercise its rights and powers under the Declaration.
(vii) Under the Delaware Act and the Declaration, the issuance
of the Capital Securities is not subject to preemptive rights.
(viii) The issuance and sale by the Issuer of the Capital
Securities, the execution, delivery and performance by the Issuer of
this Agreement, the consummation by the Issuer of the transactions
contemplated hereby and compliance by the Issuer with its obligations
hereunder, and the performance by the Corporation, as sponsor, of its
obligations under the Declaration (A) do not violate (i) any of the
provisions of the certificate of trust of the Issuer or the Declaration
or (ii) any applicable Delaware law or administrative regulation
(except that such counsel need express no opinion with respect to the
securities laws of the State of Delaware) and (B) do not require any
filing with, or authorization, approval, consent, license, order,
registration, qualification or decree of, any Delaware court or
Delaware governmental authority or Delaware agency.
(ix) Assuming that the Issuer derives no income from or in
connection with sources within the State of Delaware and has no assets,
activities (other than maintaining the Delaware Trustee and the filing
of documents with the Secretary of State of the State of Delaware) or
employees in the State of Delaware, the holders of the Capital
Securities (other than those holders of Capital Securities who reside
or are domiciled in the State of Delaware) will have no liability for
income taxes imposed by the State of Delaware solely as a result of
their participation in the Issuer, and the Issuer will not be liable
for any income tax imposed by the State of Delaware.
(h) CSFBC shall have received from Simpson Thacher & Bartlett, counsel
for the Underwriters, such opinion or opinions, dated such Closing Date, with
respect to the incorporation of the Guarantor and the Corporation, the validity
of the Securities delivered on such Closing Date, the Registration Statements,
the Prospectus and other related matters as the Underwriters may require, and
the Guarantor and the Corporation shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon such
matters.
(i) Each Underwriter shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal financial
or accounting officer of the Guarantor in which such officers, to the best of
their knowledge after reasonable investigation, shall state that the
representations and warranties of the Guarantor, the Corporation and the Issuer
in this Agreement are true and correct, that each of the Guarantor, the
Corporation and the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and that, subsequent to the date of the most recent financial
statements included in or incorporated by reference in the Prospectus there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the
<PAGE>
Guarantor and its subsidiaries taken as a whole except as set forth in
or contemplated by the Prospectus or as described in such certificate.
The Guarantor will furnish the Underwriter with such conformed copies
of such opinions, certificates, letters and documents as the Underwriters
reasonably request.
7. Indemnification and Contribution. (a) Each of the Guarantor, the
Corporation and the Issuer will, jointly and severally, indemnify and hold
harmless each Underwriter against any losses, claims, damages or liabilities,
joint or several, to which such Underwriter may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any Registration Statement, the Prospectus, or any amendment or
supplement thereto, or any related preliminary prospectus or preliminary
prospectus supplement, or arise out of or are based upon 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 will reimburse each
Underwriter for any legal or other expenses reasonably incurred by such
Underwriter in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that neither the Guarantor, the Corporation nor the Issuer will be liable in any
such case to the extent that any such loss, claim, damage or liability arises
out of or is based upon an untrue statement or alleged untrue statement in or
omission or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Guarantor by any
Underwriter specifically for use therein; and provided, further, that with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from any preliminary prospectus the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any
Underwriter from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities concerned, to the extent that a prospectus
relating to such Securities was required to be delivered by such Underwriter
under the Act in connection with the purchase and any such loss, claim, damage
or liability of such Underwriter results from the fact that there was not sent
or given to such person, at or prior to the time the written confirmation of the
sale of such Securities to such person, a copy of the Prospectus (exclusive of
material incorporated by reference) if the Company had previously furnished
copies thereof to such Underwriter.
(b) Each Underwriter will severally and not jointly indemnify and hold
harmless each of the Guarantor, the Corporation and the Issuer against any
losses, claims, damages or liabilities to which any of them may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement, the Prospectus, or any amendment or supplement
thereto, or any related preliminary prospectus or preliminary prospectus
supplement, or arise out of or are based upon the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such 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 Guarantor by such
Underwriter specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof, but the omission to so notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the
<PAGE>
commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, be counsel to the indemnifying party), and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party under this Section for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Guarantor, the
Corporation and the Issuer on the one hand and the Underwriters on the other
from the offering of the Securities or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the Guarantor, the Corporation and the
Issuer on the one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Guarantor, the Corporation and the Issuer on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Guarantor bear to the total underwriting discounts and
commissions received by the Underwriters from the Guarantor under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Guarantor, the Corporation, the Issuer or the Underwriters and
the parties' relative intent, knowledge, access to information and opportunity
to correct or prevent such untrue statement or omission. The amount paid by an
indemnified party as a result of the losses, claims, damages or liabilities
referred to in the first sentence of this subsection (d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such 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 Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
<PAGE>
(e) The obligations of the Guarantor, the Corporation and the Issuer
under this Section shall be in addition to any liability which they may
otherwise have and shall extend, upon the same terms and conditions, to each
person, if any, who controls any Underwriter within the meaning of the Act; and
the obligations of the Underwriters under this Section shall be in addition to
any liability which the respective Underwriter may otherwise have and shall
extend, upon the same terms and conditions, to each director of the Guarantor
and the Corporation, to each officer of the Guarantor or the Corporation who has
signed a Registration Statement and to each person, if any, who controls the
Guarantor, the Corporation or the Issuer within the meaning of the Act.
8. Default of Underwriters. If any Underwriter or Underwriters default
in their obligations to purchase Securities hereunder and the aggregate
liquidation amount of the Securities that such defaulting Underwriter or
Underwriters agreed but failed to purchase does not exceed 10% of the total
liquidation amount of the Securities, you may make arrangements satisfactory to
the Guarantor for the purchase of such Securities by other persons, including
any of the Underwriters, but if no such arrangements are made by the Closing
Date, the non-defaulting Underwriters shall be obligated severally, in
proportion to their respective commitments hereunder, to purchase the Securities
that such defaulting Underwriters agreed but failed to purchase. If any
Underwriter or Underwriters so default and the aggregate principal amount of the
Securities with respect to which such default or defaults occur exceeds 10% of
the total principal amount of the Securities and arrangements satisfactory to
you and the Guarantor for the purchase of such Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non- defaulting Underwriter, the Guarantor,
the Corporation or the Issuer, except as provided in Section 9. As used in this
Agreement, the term "Underwriter" includes any person substituted for an
Underwriter under this Section. Nothing herein will relieve a defaulting
Underwriter from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Guarantor, the Corporation or the Issuer or their respective officers and of the
several Underwriters set forth in or made pursuant to this Agreement will remain
in full force and effect, regardless of any investigation, or statement as to
the results thereof, made by or on behalf of any Underwriter, the Guarantor, the
Corporation, the Issuer or any of their respective representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Securities. If this Agreement is terminated pursuant to Section 8 or for
any reason the purchase of the Securities by the Underwriters is not
consummated, the Guarantor shall remain responsible for the expenses to be paid
or reimbursed by it pursuant to Section 5 and the respective obligations of the
Guarantor, the Corporation, the Issuer and the Underwriters pursuant to Section
7 shall remain in effect. If the purchase of the Securities by the Underwriters
is not consummated for any reason other than solely because of the termination
of this Agreement pursuant to Section 8 or the occurrence of any event specified
in clause (iii), (iv) or (v) of Section 6(c), the Guarantor will reimburse the
Underwriters for all out-of-pocket expenses (including fees and disbursements of
counsel) incurred by them in connection with the offering of the Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Underwriters, will be mailed, delivered or telegraphed and confirmed
to them c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue, New
York, NY 10010-3629, Attention: Investment Banking Department -- Transactions
Advisory Group or, if sent to the Guarantor, will be mailed, delivered or
telegraphed and confirmed to it at 209 Munoz Rivera Avenue, Hato Rey, Puerto
Rico 00918, Attention: Controller or, if sent to the Corporation or the Issuer,
will be mailed, delivered or telegraphed and confirmed to it care of BanPonce
Financial Corp., 521 Fellowship Road, Mt. Laurel, New Jersey 08054, with a copy
to the Guarantor at the address stated herein.
<PAGE>
11. Representation of Underwriters. Any action under this Agreement
taken by you jointly or by CSFBC will be binding upon all the Underwriters.
12. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without regard to
principles of conflicts of laws.
The Guarantor hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
<PAGE>
If the foregoing is in accordance with your understanding of our
agreement, kindly sign and return to the Guarantor one of the counterparts
hereof, whereupon it will become a binding agreement among the Guarantor, the
Corporation, the Issuer and the several Underwriters in accordance with its
terms.
Very truly yours,
BANPONCE CORPORATION
By: /s/ Jorge A. Junquera
-------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice
President
BANPONCE FINANCIAL CORP.
By: /s/ Jorge A. Junquera
-------------------------------
Name: Jorge A. Junquera
Title: President
BANPONCE TRUST I
By BANPONCE FINANCIAL CORP.,
Depositor
By: /s/ Jorge A. Junquera
-------------------------------
Name: Jorge A. Junquera
Title: President
The foregoing Underwriting Agreement
is hereby confirmed and accepted
as of the date first above
written.
CREDIT SUISSE FIRST BOSTON
CORPORATION
By: /s/ Oliver Sarkozy
--------------------------------
Name: Oliver Sarkozy
Title: Director
<PAGE>
SCHEDULE A
Underwriter
-----------
Number of
Securities
-----------
Credit Suisse First Boston Corporation..................... 75,000
Merrill Lynch, Pierce, Fenner & Smith Incorporated 75,000
-----------------
Total............................................. 150,000
-----------------
-----------------
================================================================================
BANPONCE FINANCIAL CORP.,
as Issuer
and
BANPONCE CORPORATION,
as Guarantor
to
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
---------------------------
JUNIOR SUBORDINATED INDENTURE
Dated as of February 5, 1997
---------------------------
================================================================================
<PAGE>
BANPONCE FINANCIAL CORP.
Reconciliation and tie between the Trust Indenture Act of 1939 (including
cross-references to provisions of Sections 310 to and including 317 which,
pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended by the
Trust Reform Act of 1990, are a part of and govern the Indenture whether or not
physically contained therein) and the Junior Subordinated Indenture, dated as of
February 5, 1997.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ---------
<S> <C>
ss. 310 (a) (1), (2) and (5)...................................... 6.9
(a) (3)................................................... Not Applicable
(a) (4)................................................... Not Applicable
(b)....................................................... 6.8
.......................................................... 6.10
(c)....................................................... Not Applicable
ss.311 (a)....................................................... 6.13
(b)....................................................... 6.13
(b) (2)................................................... 7.3(a)(2)
ss.312 (a)....................................................... 7.1
.......................................................... 7.2(a)
(b)....................................................... 7.2(b)
(c)....................................................... 7.2(c)
ss.313 (a)....................................................... 7.3(a)
(b)....................................................... 7.3(b)
(c)....................................................... 7.3(a), 7.3(b)
(d)....................................................... 7.3(c)
ss.314 (a) (1), (2) and (3)...................................... 7.4
(a) (4)................................................... 10.4
(b)....................................................... Not Applicable
(c) (1)................................................... 1.2
(c) (2)................................................... 1.2
(c) (3)................................................... Not Applicable
(d)....................................................... Not Applicable
(e)....................................................... 1.2
(f)....................................................... Not Applicable
ss.315 (a)....................................................... 6.1(a)
(b)....................................................... 6.2
.......................................................... 7.3(a)
(c)....................................................... 6.1(b)
(d)....................................................... 6.1(c)
(d) (1)................................................... 6.1(a) (1)
(d) (2)................................................... 6.1(c) (2)
(d) (3)................................................... 6.1(c) (3)
(e)....................................................... 5.14
ss.316 (a)....................................................... 1.1
(a) (1) (A)............................................... 5.12
(a) (1) (B)............................................... 5.13
(a) (2)................................................... Not Applicable
(b)....................................................... 5.8
(c)....................................................... 1.4(f)
ss.317 (a) (1).................................................. 5.3
(a) (2)................................................... 5.4
(b)....................................................... 10.3
ss.318 (a)....................................................... 1.7
<FN>
- ----------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Junior Subordinated Indenture.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions................................................... 1
SECTION 1.2. Compliance Certificate and Opinions........................... 12
SECTION 1.3. Forms of Documents Delivered to Trustee....................... 13
SECTION 1.4. Acts of Holders............................................... 14
SECTION 1.5. Notices, Etc. to Trustee, Corporation and the Guarantor....... 16
SECTION 1.6. Notice to Holders; Waiver..................................... 16
SECTION 1.7. Conflict with Trust Indenture Act............................. 17
SECTION 1.8. Effect of Headings and Table of Contents...................... 17
SECTION 1.9. Successors and Assigns........................................ 17
SECTION 1.10. Separability Clause........................................... 17
SECTION 1.11. Benefits of Indenture......................................... 17
SECTION 1.12. Governing Law................................................. 18
SECTION 1.13. Non-Business Days............................................. 18
SECTION 1.14. Appointment of Agent for Service.............................. 19
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally................................................ 19
SECTION 2.2. Form of Face of Security....................................... 20
SECTION 2.3. Form of Reverse of Security.................................... 24
SECTION 2.4. Additional Provisions Required in Global Security.............. 29
SECTION 2.5. Form of Trustee's Certificate of Authentication................ 29
SECTION 2.6. Form of Guarantee.............................................. 29
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms................................................ 31
SECTION 3.2. Denominations.................................................. 35
SECTION 3.3. Execution, Authentication, Delivery and Dating................. 35
SECTION 3.4. Temporary Securities........................................... 36
SECTION 3.5. Global Securities.............................................. 37
SECTION 3.6. Registration, Transfer and Exchange Generally.................. 39
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities............... 40
SECTION 3.8. Payment of Interest and Additional Interest;
Interest Rights Preserved.................................... 41
SECTION 3.9. Persons Deemed Owners.......................................... 42
-i-
<PAGE>
Page
----
SECTION 3.10. Cancellation.................................................. 43
SECTION 3.11. Computation of Interest....................................... 43
SECTION 3.12. Deferrals of Interest Payment Dates........................... 43
SECTION 3.13. Right of Set-Off.............................................. 45
SECTION 3.14. Agreed Tax Treatment.......................................... 45
SECTION 3.15. Shortening or Extension of Stated Maturity.................... 45
SECTION 3.16. CUSIP Numbers................................................. 46
SECTION 3.17. Guarantee of Debt Securities.................................. 46
SECTION 3.18. Execution of Guarantees....................................... 48
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture........................ 48
SECTION 4.2. Application of Trust Money..................................... 50
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default............................................. 50
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment............ 51
SECTION 5.3. Collection of Indebtedness and Suits for
Enforcement by Trustee...................................... 53
SECTION 5.4. Trustee May File Proofs of Claim.............................. 53
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.... 54
SECTION 5.6. Application of Money Collected................................ 55
SECTION 5.7. Limitation on Suits........................................... 55
SECTION 5.8. Unconditional Right of Holders to Receive
Principal, Premium and Interest; Direct Action
by Holders of Capital Securities............................ 56
SECTION 5.9. Restoration of Rights and Remedies............................ 56
SECTION 5.10. Rights and Remedies Cumulative................................ 57
SECTION 5.11. Delay or Omission Not Waiver.................................. 57
SECTION 5.12. Control by Holders............................................ 57
SECTION 5.13. Waiver of Past Defaults....................................... 58
SECTION 5.14. Undertaking for Costs......................................... 58
SECTION 5.15. Waiver of Usury, Stay or Extension Laws....................... 59
-ii-
<PAGE>
ARTICLE VI
THE TRUSTEE
Page
----
SECTION 6.1. Certain Duties and Responsibilities........................... 59
SECTION 6.2. Notice of Defaults............................................ 60
SECTION 6.3. Certain Rights of Trustee..................................... 60
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities........ 61
SECTION 6.5. May Hold Securities........................................... 62
SECTION 6.7. Compensation and Reimbursement................................ 62
SECTION 6.8. Disqualification; Conflicting Interests....................... 63
SECTION 6.9. Corporate Trustee Required; Eligibility....................... 63
SECTION 6.10. Resignation and Removal; Appointment of Successor............. 64
SECTION 6.11. Acceptance of Appointment by Successor........................ 65
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business... 66
SECTION 6.13. Preferential Collection of Claims Against
Corporation or Guarantor..................................... 67
SECTION 6.14. Appointment of Authenticating Agent........................... 67
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of Holders.. 69
SECTION 7.2. Preservation of Information, Communications to Holders......... 69
SECTION 7.3. Reports by Trustee............................................. 70
SECTION 7.4. Reports by Corporation......................................... 70
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Corporation and Guarantor May Consolidate, Etc.,
Only on Certain Terms........................................ 71
SECTION 8.2. Successor Corporation Substituted.............................. 71
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders............. 72
SECTION 9.2. Supplemental Indentures with Consent of Holders................ 74
SECTION 9.3. Execution of Supplemental Indentures........................... 75
SECTION 9.4. Effect of Supplemental Indentures.............................. 75
SECTION 9.5. Conformity with Trust Indenture Act............................ 76
SECTION 9.6. Reference in Securities to Supplemental Indentures............. 76
-iii-
<PAGE>
Page
----
ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.................... 76
SECTION 10.2. Maintenance of Office or Agency............................... 76
SECTION 10.3. Money for Security Payments to be Held in Trust............... 77
SECTION 10.4. Statement as to Compliance.................................... 78
SECTION 10.5. Waiver of Certain Covenants................................... 79
SECTION 10.6. Additional Sums............................................... 79
SECTION 10.7. Additional Covenants.......................................... 80
SECTION 10.8. Original Issue Discount....................................... 81
ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 Applicability of This Article.................................. 81
SECTION 11.2. Election to Redeem; Notice to Trustee......................... 82
SECTION 11.3. Selection of Securities to be Redeemed........................ 82
SECTION 11.4. Notice of Redemption.......................................... 82
SECTION 11.5. Deposit of Redemption Price................................... 83
SECTION 11.6. Payment of Securities Called for Redemption................... 84
SECTION 11.7. Right of Redemption of Securities Initially
Issued to an Issuer Trust.................................... 84
ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article...................................... 85
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities......... 85
SECTION 12.3. Redemption of Securities for Sinking Fund..................... 86
ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Debt......................... 87
SECTION 13.2. No Payment When Senior Debt in Default; Payment
Over of Proceeds Upon Dissolution, Etc....................... 88
SECTION 13.3. Payment Permitted If No Default............................... 90
SECTION 13.4. Subrogation to Rights of Holders of Senior Debt............... 90
SECTION 13.5. Provisions Solely to Define Relative Rights................... 91
SECTION 13.6. Trustee to Effectuate Subordination........................... 92
SECTION 13.7. No Waiver of Subordination Provisions......................... 92
-iv-
<PAGE>
Page
----
SECTION 13.8. Notice to Trustee............................................ 93
SECTION 13.9. Reliance on Judicial Order or Certificate
of Liquidating Agent....................................... 93
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Debt............. 94
SECTION 13.11. Rights of Trustee as Holder of Senior Debt;
Preservation of Trustee's Rights........................ 94
SECTION 13.12. Article Applicable to Paying Agents.......................... 94
</TABLE>
-v-
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of February 5, 1997, among
BANPONCE FINANCIAL CORP., a Delaware corporation (the "Corporation"), having its
principal office at 521 Fellowship Road, Mt. Laurel, New Jersey 08054, BANPONCE
CORPORATION, a Puerto Rico corporation (the "Guarantor") having its principal
office at 209 Munoz Rivera Avenue, Hato Rey, Puerto Rico 00918, and THE FIRST
NATIONAL BANK OF CHICAGO, a national banking association, as Trustee (the
"Trustee").
RECITALS OF THE CORPORATION AND THE GUARANTOR
WHEREAS, the Corporation has duly authorized the execution and delivery
of this Indenture to provide for the issuance from time to time of its unsecured
junior subordinated debt securities in series (hereinafter called the
"Securities") of substantially the tenor hereinafter provided, including
Securities issued to evidence loans made to the Corporation of the proceeds from
the issuance from time to time by one or more business trusts (each an "Issuer
Trust") of undivided preferred beneficial interests in the assets of such Issuer
Trusts (the "Capital Securities") and undivided common beneficial interests in
the assets of such Issuer Trusts (the "Common Securities" and, collectively with
the Capital Securities, the "Trust Securities"), and to provide the terms and
conditions upon which the Securities are to be authenticated, issued and
delivered; and
WHEREAS, the Guarantor has duly authorized the execution and delivery
of this Indenture to provide for the issuance of Guarantees with respect to the
Securities; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Corporation and the Guarantor, in accordance with its terms, have been
done.
NOW THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities or of any
series thereof, as follows:
ARTICLE I
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 1.1. Definitions.
For all purposes of this Indenture, except as otherwise 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;
(2) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(3) The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation";
<PAGE>
(4) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles;
(5) Whenever the context may require, any gender shall be
deemed to include the others;
(6) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case
may be, of this Indenture; and
(7) The words "hereby", "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.
"Act" when used with respect to any Holder has the meaning specified
in Section 1.4.
"Additional Guarantee Payments" has the meaning specified in
Section 3.17.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and which shall accrue at the rate
per annum specified or determined as specified in such Security.
"Additional Sums" has the meaning specified in Section 10.6.
"Additional Taxes" means any additional taxes, duties and other
governmental charges to which an Issuer Trust has become subject from time to
time as a result of a Tax Event.
"Administrative Trustees" means, in respect of any Issuer Trust, each
Person identified as an "Administrative Trustee" in the related Trust Agreement,
solely in such Person's capacity as Administrative Trustee of such Issuer Trust
under such Trust Agreement and not in such Person's individual capacity, or any
successor administrative trustee appointed as therein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Allocable Amounts," when used with respect to any Senior Subordinated
Indebtedness of the Corporation or the Guarantor, as the case may be, means the
amount necessary to pay all principal of (and premium, if any) and interest, if
any, on such Senior Subordinated Indebtedness of the Corporation or the
Guarantor, as the case may be, in full less, if applicable, any portion of such
amounts which would have been paid to, and retained by, the holders of such
Senior Subordinated Indebtedness (whether as a result of the receipt of payments
by the holders of such Senior Subordinated Indebtedness from the Corporation or
the Guarantor, as the case may be, or any other obligor thereon or from any
holders of, or trustee in respect of, other indebtedness that is subordinate and
junior in right of payment to such Senior Subordinated Indebtedness pursuant to
any provision of such indebtedness for the payment over of amounts received on
account of such indebtedness to the
-2-
<PAGE>
holders of such Senior Subordinated Indebtedness) but for the fact that such
Senior Subordinated Indebtedness is subordinate or junior in right of payment to
trade accounts payable or accrued liabilities arising in the ordinary course of
business.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Banco Popular" means Banco Popular de Puerto Rico and its successors
and assigns.
"Bankruptcy Code" means Title 11 of the United States Code or any
successor statute thereto, in each case as amended from time to time.
"Board of Directors" means, with respect to the Corporation and the
Guarantor, the board of directors of the Corporation or the Guarantor, or the
Executive Committee of the board of directors of the Corporation or the
Guarantor (or any other committee of the board of directors of the Corporation
or the Guarantor performing similar functions) or a committee designated by the
board of directors of the Corporation or the Guarantor (or such committee),
comprised of two or more members of the board of directors or officers, or both,
of the Corporation or the Guarantor, in each case as the context requires.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Corporation or the Guarantor, as the
case may be, to have been duly adopted by the Board of Directors, or officers of
the Corporation or the Guarantor, as the case may be, to which authority to act
on behalf of the Board of Directors has been delegated, 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 (i) a Saturday or Sunday, (ii)
a day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (iii) a day on which the
Corporate Trust Office of the Trustee, or, with respect to the Securities of a
series initially issued to an Issuer Trust for so long as such Securities are
held by such Issuer Trust, the "Corporate Trust Office" (as defined in the
related Trust Agreement) of the Property Trustee under the related Trust
Agreement, is closed for business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means, in respect of any Issuer Trust, the
reasonable determination by the Corporation (as evidenced by an Officers'
Certificate delivered to the Trustee) that, as a result of the occurrence of any
amendment to, or change (including any announced proposed change) in, the laws
(or any rules or regulations thereunder) of the United States or any political
subdivision thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws,
rules or regulations, which amendment or change is effective or such
pronouncement, action or decision is announced on or after the date of the
issuance of the Capital Securities of such Issuer Trust, there is more than an
insubstantial risk that the Corporation or the Guarantor will not be entitled to
treat an amount equal to the aggregate Liquidation Amount (as such term is
defined in the related Trust Agreement) of such Capital Securities as "Tier 1
Capital" (or the then equivalent thereof) for purposes of the capital adequacy
guidelines of the Board of Governors of the Federal Reserve System, as then in
effect and applicable to the Corporation or the Guarantor.
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"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or if at any time after the
execution of this 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 on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
"Common Stock" means the common stock of the Corporation or the
Guarantor, as the case may be.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered.
"corporation" includes a corporation, association, company, limited
liability company, joint-stock company or business trust.
"Corporation" means the Person named as the "Corporation" in the first
paragraph of this Indenture until a successor corporation shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Corporation" shall mean such successor corporation.
"Corporation Request" and "Corporation Order" mean, respectively, the
written request or order signed in the name of the Corporation by its Chairman
of the Board of Directors, its Vice Chairman of the Board of Directors, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Defaulted Interest" has the meaning specified in Section 3.8.
"Delaware Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Delaware Trustee" in the related Trust Agreement, solely in
its capacity as Delaware Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Delaware Trustee appointed as therein provided.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Corporation pursuant to
Section 3.1 with respect to such series (or any successor thereto).
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.2.
"Distributions," with respect to the Trust Securities issued by an
Issuer Trust, means amounts payable in respect of such Trust Securities as
provided in the related Trust Agreement and referred to therein as
"Distributions."
"Dollar" or "$" means the currency of the United States of America
that, as at the time of payment, is legal tender for the payment of public and
private debts.
"Event of Default", unless otherwise specified with respect to a series
of Securities as contemplated by Section 3.1, has the meaning specified in
Article V.
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"Exchange Act" means the Securities Exchange Act of 1934 or any statute
successor thereto, in each case as amended from time to time.
"Expiration Date" has the meaning specified in Section 1.4.
"Extension Period" has the meaning specified in Section 3.12.
"Global Security" means a Security in the form prescribed in Section
2.4 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantees" means the guarantees of the Guarantor to be endorsed on
the Securities authenticated and delivered hereunder.
"Guarantee Agreement" means, with respect to any Issuer Trust, the
Guarantee Agreement executed by the Corporation and the Guarantor for the
benefit of the Holders of the Capital Securities issued by such Issuer Trust as
modified, amended or supplemented from time to time.
"Guarantor" means the Person named as the "Guarantor" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
"Guarantor" shall mean such successor corporation.
"Guarantor Request" and "Guarantor Order" mean, respectively, the
written request or order signed in the name of the Guarantor by its Chairman of
the Board of Directors, its Vice Chairman of the Board of Directors, its
President or a Vice President, and by its Treasurer, an Assistant Treasurer, its
Secretary or an Assistant Secretary, and delivered to the Trustee.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"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
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.1.
"Interest Payment Date" means, as to each series of Securities, the
Stated Maturity of an installment of interest on such Securities.
"Investment Company Act" means the Investment Company Act of 1940 or
any successor statute thereto, in each case as amended from time to time.
"Issuer Trust" has the meaning specified in the first recital of this
Indenture.
"Maturity" when used with respect to any Security means the date on
which the principal of such Security or any installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in
Section 5.1(3).
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, a Vice Chairman of the Board, the President or a Vice President, and
by the Treasurer, an Assistant
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Treasurer, the Secretary or an Assistant Secretary, of the Corporation or the
Guarantor, as the context requires, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Corporation or the Guarantor, or any Affiliate
of the Corporation or the Guarantor.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid
pursuant to Section 3.7, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Corporation;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Corporation or any other obligor upon the Securities or any Affiliate of
the Corporation or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities that the Trustee knows to be so owned shall
be so disregarded. Securities so owned that have been pledged in good faith may
be regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Corporation or any other obligor upon the Securities or
any Affiliate of the Corporation or such other obligor. Upon the written request
of the Trustee, the Corporation shall furnish to the Trustee promptly an
Officers' Certificate listing and identifying all Securities, if any, known by
the Corporation to be owned or held by or for the account of the Corporation, or
any other obligor on the Securities or any Affiliate of the Corporation or such
obligor, and subject to the provisions of Section 6.1, the Trustee shall be
entitled to accept such Officers' Certificate as conclusive evidence of the
facts therein set forth and of the fact that all Securities not listed therein
are Outstanding for the purpose of any such determination. Notwithstanding
anything herein to the contrary, Securities of any series initially issued to an
Issuer Trust that are owned by such Issuer Trust shall be deemed to be
Outstanding notwithstanding the ownership by the Corporation or an Affiliate of
any beneficial interest in such Issuer Trust.
"Paying Agent" means the Trustee or any Person authorized by the
Corporation to pay the principal of (or premium, if any) or interest on, or
other amounts in respect of, any Securities on behalf of the Corporation.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
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"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of (and premium, if any) and interest on
the Securities of such series are payable pursuant to Section 3.1.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security. For the purposes of this definition, any security
authenticated and delivered under Section 3.7 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 13.2.
"Property Trustee" means, with respect to any Issuer Trust, the Person
identified as the "Property Trustee" in the related Trust Agreement, solely in
its capacity as Property Trustee of such Issuer Trust under such Trust Agreement
and not in its individual capacity, or its successor in interest in such
capacity, or any successor Property Trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture or the terms of such Security.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.1 with respect to Securities of such series, the date that
is fifteen days next preceding such Interest Payment Date (whether or not a
Business Day).
"Responsible Officer", when used with respect to the Trustee, means the
chairman or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Rights Plan" means a plan of the Corporation or the Guarantor, as the
case may be, providing for the issuance by the Corporation or the Guarantor, as
the case may be, to all holders of its Common Stock of rights entitling the
holders thereof to subscribe for or purchase shares of any class or series of
capital stock of the Corporation or Guarantor, as the case may be, which rights
(i) are deemed to be transferred with such shares of such Common Stock, and (ii)
are also issued in respect of future issuances of such Common Stock, in each
case until the occurrence of a specified event or events.
"Securities" or "Security" means any debt securities or debt security,
as the case may be, authenticated and delivered under this Indenture.
"Securities Act" means the Securities Act of 1933 or any successor
statute thereto, in each case as amended from time to time.
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"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.6.
"Senior Debt" of the Corporation or the Guarantor, as the case may be,
means (i) Senior Indebtedness of the Corporation or the Guarantor, respectively
(but excluding trade accounts payable and accrued liabilities arising in the
ordinary course of business), and (ii) the Allocable Amounts of Senior
Subordinated Indebtedness of the Corporation or Guarantor, respectively.
"Senior Indebtedness" means any obligation of the Corporation or the
Guarantor, as the case may be, to its creditors, whether now outstanding or
subsequently incurred, other than any obligation as to which, in the instrument
creating or evidencing the obligation or pursuant to which the obligation is
outstanding, it is provided that such obligation is not Senior Indebtedness.
Senior Indebtedness does not include Senior Subordinated Indebtedness or the
Securities.
"Senior Subordinated Indebtedness" means any obligation of the
Corporation or the Guarantor, as the case may be, to its creditors, whether now
outstanding or subsequently incurred, where the instrument creating or
evidencing the obligation or pursuant to which the obligation is outstanding,
provides that it is subordinate and junior in right of payment to Senior
Indebtedness (including, with respect to the Guarantor, the Subordinated
Indenture, dated as of November 30, 1995, between the Guarantor and The First
National Bank of Chicago, as Trustee), but does not include the Securities or
any junior subordinated debt securities issued in the future by the Corporation
or the Guarantor, as the case may be, with subordination terms substantially
similar to those of the Securities.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity", when used with respect to any Security or any
installment of principal thereof (or premium, if any) or interest (including any
Additional Interest) thereon, means the date specified pursuant to the terms of
such Security as the fixed date on which the principal of such Security or such
installment of principal (or premium, if any) or interest (including any
Additional Interest) is due and payable, as such date may, in the case of the
stated maturity of the principal on any security, be shortened or extended as
provided pursuant to the terms of such Security and this Indenture and, in the
case of any installment of interest, subject to the deferral of any such date in
the case of any Extension Period.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Corporation or
the Guarantor, as the context requires, or by one or more other Subsidiaries, or
by the Corporation or the Guarantor, as the context requires, and one or more
other Subsidiaries. For purposes of this definition, "voting stock" means stock
that 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.
"Successor Security" of any particular Security means every Security
issued after, and evidencing all or a portion of the same debt as that evidenced
by, such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 3.7 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Tax Event" means the receipt by an Issuer Trust of an Opinion of
Counsel (as defined in the relevant Trust Agreement) experienced in such matters
to the effect that, as a result of any
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amendment to, or change (including any announced proposed change) in, the laws
(or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance of
the Capital Securities of such Issuer Trust, there is more than an insubstantial
risk that (i) such Issuer Trust is, or will be within 90 days of the delivery of
such Opinion of Counsel, subject to United States Federal income tax with
respect to income received or accrued on the corresponding series of Securities
issued by the Corporation to such Issuer Trust, (ii) interest payable by the
Corporation on such corresponding series of Securities is not, or within 90 days
of the delivery of such Opinion of Counsel will not be, deductible by the
Corporation, in whole or in part, for United States Federal income tax purposes,
or (iii) such Issuer Trust is, or will be within 90 days of the delivery of such
Opinion of Counsel, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
"Taxes" has the meaning specified in Section 3.17.
"Trust Agreement" means, with respect to any Issuer Trust, the trust
agreement or other governing instrument of such Issuer Trust.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, solely in its capacity as such and not in its
individual capacity, until a successor Trustee shall have become such pursuant
to the applicable provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder and, if at any time
there is more than one such Person, "Trustee" as used with respect to the
Securities of any series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbb), as amended and as in effect on the date as of this
Indenture, except as provided in Section 9.5.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Vice President," when used with respect to the Corporation or the
Guarantor, means any duly appointed vice president, whether or not designated by
a number or a word or words added before or after the title "vice president," of
the Corporation or the Guarantor, respectively.
SECTION 1.2. Compliance Certificate and Opinions.
Upon any application or request by the Corporation or the Guarantor to
the Trustee to take any action under any provision of this Indenture, the
Corporation or the Guarantor, as the case may be, shall furnish to the Trustee
an Officers' Certificate stating that all conditions precedent (including
covenants compliance with which constitutes a condition precedent), if any,
provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent (including covenants compliance with which
constitutes a condition precedent), if any, have been complied with, except that
in the case of any such application or request as to which the furnishing of
such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided pursuant to Section 10.4) shall include:
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(1) a statement by each individual signing such certificate or opinion
that such individual has read such covenant or condition and the definitions
herein relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions of such individual contained
in such certificate or opinion are based;
(3) a statement that, in the opinion of such individual, he or she has
made such examination or investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether, in the opinion of such individual, such
condition or covenant has been complied with.
SECTION 1.3. Forms 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 Corporation or the
Guarantor 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 matters upon which his or her
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
Corporation or the Guarantor, as the case may be, stating that the information
with respect to such factual matters is in the possession of the Corporation or
the Guarantor, as the case may be, 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 1.4. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given to 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 otherwise expressly provided, such
action shall become effective when such instrument or instruments is or are
delivered to the Trustee, and, where it is hereby expressly required, to the
Corporation and the Guarantor. 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 6.1)
conclusive in favor of the Trustee, the Corporation and the Guarantor, if made
in the manner provided in this Section.
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(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 the certificate of any 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 or her the execution thereof.
Where such execution is by a Person acting in other than his or her individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his or her authority.
(c) The fact and date of the execution by any Person of any such
instrument or writing, or the authority of the Person executing the same, may
also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the Securities
Register.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind every future
Holder of the same Security and the Holder of every Security issued upon the
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee, the Corporation or the
Guarantor in reliance thereon, whether or not notation of such action is made
upon such Security.
(f) The Corporation may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
Corporation may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next succeeding paragraph.
If any record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of the relevant series on such record date, and no other Holders,
shall be entitled to take the relevant action, whether or not such Holders
remain Holders after such record date, provided that no such action shall be
effective hereunder unless taken on or prior to the applicable Expiration Date
(as defined below) by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Corporation from setting a new record date for any
action for which a record date has previously been set pursuant to this
paragraph (whereupon the record date previously set shall automatically and with
no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of the relevant
series on the date such action is taken. Promptly after any record date is set
pursuant to this paragraph, the Corporation, at its own expense, shall cause
notice of such record date, the proposed action by Holders and the applicable
Expiration Date to be given to the Trustee in writing and to each Holder of
Securities of the relevant series in the manner set forth in Section 1.6.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of any series entitled to join
in the giving or making of (i) any Notice of Default, (ii) any declaration of
acceleration referred to in Section 5.2, (iii) any request to institute
proceedings referred to in Section 5.7(2), or (iv) any direction referred to in
Section 5.12, in each case with respect to Securities of such series. If any
record date is set pursuant to this paragraph, the Holders of Outstanding
Securities of such series on such record date, and no other Holders, shall be
entitled to join in such notice, declaration, request or direction, whether or
not such Holders remain Holders after such record date, provided that no such
action shall be effective hereunder unless taken on or prior to the applicable
Expiration Date by Holders of the requisite principal amount of Outstanding
Securities of such series on such record date. Nothing in this paragraph shall
be construed to prevent the Trustee from setting a new record date for any
action for which a record date
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has previously been set pursuant to this paragraph (whereupon the record date
previously set shall automatically and with no action by any Person be cancelled
and of no effect), and nothing in this paragraph shall be construed to render
ineffective any action taken by Holders of the requisite principal amount of
Outstanding Securities of the relevant series on the date such action is taken.
Promptly after any record date is set pursuant to this paragraph, the Trustee,
at the Corporation's expense, shall cause notice of such record date, the
proposed action by Holders and the applicable Expiration Date to be given to the
Corporation in writing and to each Holder of Securities of the relevant series
in the manner set forth in Section 1.6.
With respect to any record date set pursuant to this Section, the party
that sets such record date may designate any day as the "Expiration Date" and
from time to time may change the Expiration Date to any earlier or later day,
provided that no such change shall be effective unless notice of the proposed
new Expiration Date is given to the other party hereto in writing, and to each
Holder of Securities of the relevant series in the manner set forth in Section
1.6, on or prior to the existing Expiration Date. If an Expiration Date is not
designated with respect to any record date set pursuant to this Section, the
party hereto that set such record date shall be deemed to have initially
designated the 180th day after such record date as the Expiration Date with
respect thereto, subject to its right to change the Expiration Date as provided
in this paragraph. Notwithstanding the foregoing, no Expiration Date shall be
later than the 180th day after the applicable record date.
(g) Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.5. Notices, Etc. to Trustee, Corporation and the Guarantor.
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder, any holder of Capital Securities, the
Corporation or the Guarantor 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, or
(2) the Corporation or the Guarantor by the Trustee, any Holder or any
holder of Capital Securities shall be sufficient for every purpose (except as
otherwise provided in Section 5.1) hereunder if in writing and mailed, first
class, postage prepaid, to the Corporation or the Guarantor, as the case may be,
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 Corporation or Guarantor.
SECTION 1.6. 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 the address of such Holder as it appears in the Securities
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. If, by reason of the suspension
of or irregularities in regular mail service or for any other reason, it shall
be impossible or impracticable to mail notice of any event to Holders when said
notice is required to be given pursuant to any provision of this Indenture or of
the
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relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. 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.
SECTION 1.7. Conflict with Trust Indenture Act.
If any provision of this Indenture limits, qualifies or conflicts with
another provision hereof which is required or deemed to be included in this
Indenture by any of the provisions of the Trust Indenture Act, such required or
deemed provision shall control. If any provision of this Indenture modifies or
excludes any provision of the Trust Indenture Act which may be so modified or
excluded, the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 1.8. 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 1.9. Successors and Assigns.
All covenants and agreements in this Indenture by the Corporation or
the Guarantor shall bind their respective successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause.
If any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns, the holders of Senior Debt, the Holders of the Securities and, to the
extent expressly provided in Sections 5.1, 5.2, 5.8, 5.9, 5.11, 5.13, 9.1 and
9.2, the holders of Capital Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND WHOLLY TO BE PERFORMED IN SUCH STATE.
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SECTION 1.13. Non-Business Days.
If any Interest Payment Date, Redemption Date or Stated Maturity of any
Security shall not be a Business Day, then (notwithstanding any other provision
of this Indenture or the Securities) payment of interest or principal (and
premium, if any) or other amounts in respect of such Security need not be made
on such date, but may be made on the next succeeding Business Day (and no
interest shall accrue in respect of the amounts whose payment is so delayed for
the period from and after such Interest Payment Date, Redemption Date or Stated
Maturity, as the case may be, until such next succeeding Business Day) except
that, if such Business Day falls in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day (in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity).
ARTICLE II
SECURITY FORMS
SECTION 2.1. Forms Generally.
The Securities of each series and the Trustee's certificate of
authentication shall be in substantially the forms set forth in this Article, or
in such other form or forms as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in each case with
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 applicable tax laws or the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such securities, as evidenced by their execution of the
Securities. If the form of Securities of any series is established by action
taken pursuant to a Board Resolution, a copy of an appropriate record of such
action shall be certified by the Secretary or an Assistant Secretary of the
Corporation and delivered to the Trustee at or prior to the delivery of the
Corporation Order contemplated by Section 3.3 with respect to the authentication
and delivery of such Securities.
The Guarantees to be endorsed on the Securities of each series shall be
in substantially the form set forth in this Article, or in such other form as
shall be established by or pursuant to a Board Resolution of the Guarantor or in
one or more indentures supplemental hereto, in each case with 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 and 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 Guarantees,
as evidenced by their execution of such Guarantees.
The definitive Securities shall be typewritten, printed, lithographed
or engraved or produced by any combination of these methods, if required by any
securities exchange on which the Securities may be listed, on a steel engraved
border or steel engraved borders or may be produced in any other manner
permitted by the rules of any securities exchange on which the Securities may be
listed, all as determined by the officers executing such Securities, as
evidenced by their execution of such Securities.
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SECTION 2.2. Form of Face of Security.
BANPONCE FINANCIAL CORP.
[Title of Security]
No. $
BANPONCE FINANCIAL CORP., a corporation organized and existing under
the laws of Delaware (hereinafter called the "Corporation", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to _______________, or registered assigns, the
principal sum of __________ Dollars on __________ __, [if the Security is a
Global Security, then insert, if applicable--, or such other principal amount
represented hereby as may be set forth in the records of the Securities
Registrar hereinafter referred to in accordance with the Indenture,] [; provided
that the Corporation may (i) shorten the Stated Maturity of the principal of
this Security to a date not earlier than __________, in the circumstances
described on the reverse hereof. The Corporation further promises to pay
interest on said principal sum from , or from the most recent Interest Payment
Date to which interest has been paid or duly provided for, [monthly] [quarterly]
[semi-annually] [if applicable, insert--(subject to deferral as set forth
herein)] in arrears on [insert applicable Interest Payment Dates] of each year,
commencing _____________, ___, at the rate of % per annum, [if applicable
insert--together with Additional Sums, if any, as provided in Section 10.6 of
the Indenture] until the principal hereof is paid or duly provided for or made
available for payment [if applicable, insert-- ; provided that any overdue
principal, premium or Additional Sums and any overdue installment of interest
shall bear Additional Interest at the rate of ___% per annum (to the extent that
the payment of such interest shall be legally enforceable), compounded [monthly]
[quarterly] [semi-annually], from the dates such amounts are due until they are
paid or made available for payment, and such interest shall be payable on
demand]. The amount of interest payable for any period less than a full interest
period shall be computed on the basis of a 360-day year of twelve 30-day months
and the actual days elapsed in a partial month in such period. The amount of
interest payable for any full interest period shall be computed by dividing the
applicable rate per annum by [twelve/four/two]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on
the Regular Record Date for such interest installment [if applicable insert--,
which shall be the [____________ or ____________] (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date]. Any such
interest 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 this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice whereof shall be
given to Holders of Securities of this series 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
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Corporation shall have the right, at any time during the term
of this Security, from time to time to defer the payment of interest on this
Security for up to consecutive [monthly] [quarterly] [semi-annual] interest
payment periods with respect to each deferral period (each an "Extension
Period") [If applicable, insert--, during which Extension Periods the
Corporation shall have the right to make partial payments of interest on any
Interest Payment Date, and] at the end of which the Corporation shall pay all
interest then accrued and unpaid including any Additional Interest, as provided
below;
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provided, however, that no Extension Period shall extend beyond the Stated
Maturity of the principal of this Security [If Stated Maturity can be shortened
or extended, insert--, as then in effect,] and no such Extension Period may end
on a date other than an Interest Payment Date; and provided, further, however,
that during any such Extension Period, the Corporation shall not, and shall not
permit any of its subsidiaries 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 Corporation's capital stock, (ii) make any payment
of principal of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Corporation that rank pari passu in all
respects with or junior in interest to this Security or (iii) make any guarantee
payments with respect to any guarantee by the Corporation of the debt securities
of any Subsidiary of the Corporation if such guarantee ranks pari passu with or
junior in interest to this Security (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Corporation in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of any one or more employees, officers, directors or
consultants, in connection with a dividend reinvestment or stockholder stock
purchase plan or in connection with the issuance of capital stock of the
Corporation (or securities convertible into or exercisable for such capital
stock) as consideration in an acquisition transaction entered into prior to the
applicable Extension Period, (b) as a result of an exchange or conversion of any
class or series of the Corporation's capital stock (or any capital stock of a
Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or repurchase of rights pursuant thereto, or
(e) 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
ranks pari passu with or junior to such stock). Prior to the termination of any
such Extension Period, the Corporation may further defer the payment of
interest, provided that no Extension Period shall exceed ___ consecutive
[monthly] [quarterly] [semi-annual] interest payment periods, extend beyond the
Stated Maturity of the principal of this Security or end on a date other than an
Interest Payment Date. Upon the termination of any such Extension Period and
upon the payment of all accrued and unpaid interest and any Additional Interest
then due on any Interest Payment Date, the Corporation may elect to begin a new
Extension Period, subject to the above conditions. No interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest (to the extent that the
payment of such interest shall be legally enforceable) at the rate of ____% per
annum, compounded [monthly] [quarterly] [semi- annually] and calculated as set
forth in the first paragraph of this Security, from the dates on which amounts
would otherwise have been due and payable until paid or made available for
payment. The Corporation shall give the Holder of this Security and the Trustee
notice of its election to begin any Extension Period at least one Business Day
prior to the next succeeding Interest Payment Date on which interest on this
Security would be payable but for such deferral [if applicable, insert--or so
long as such Securities are held by [insert name of applicable Issuer Trust], at
least one Business Day prior to the earlier of (i) the next succeeding date on
which Distributions on the Capital Securities of such Issuer Trust would be
payable but for such deferral, and (ii) the date on which the Property Trustee
of such Issuer Trust is required to give notice to any securities exchange or
other applicable self-regulatory organization or to holders of such Capital
Securities of the record date or the date such Distributions are payable].
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Corporation maintained for
that purpose in the [insert Place of
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Payment], 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 [if
applicable, insert--; provided, however, that at the option of the Corporation
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 Securities Register, or
(ii) by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register].
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided, and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, 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 this Security set
forth 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 Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
BANPONCE FINANCIAL CORP.
By:
Name:
Title:
Attest:
- -----------------------------------
[Secretary or Assistant Secretary]
SECTION 2.3. Form of Reverse of Security.
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of _________ ___,
___ (herein called the "Indenture"), among the Corporation, BanPonce
Corporation, as Guarantor, and The First National Bank of Chicago, 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 Corporation, the Trustee, the
holders of Senior Debt and the Holders of the Securities, and of the terms upon
which the Securities are, and are
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to be, authenticated and delivered. This Security is one of the series
designated on the face hereof [if applicable, insert--, limited in aggregate
principal amount to $___________].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--or in the Amended and Restated Trust Agreement, dated as of
___________, _____ (as modified, amended or supplemented from time to time, the
"Trust Agreement"), relating to [insert name of Issuer Trust] (the "Issuer
Trust") among the Corporation, as Depositor, the Trustees named therein and the
Holders from time to time of the Trust Securities issued pursuant thereto, shall
have the meanings assigned to them in the Indenture [if applicable, insert--or
the Trust Agreement, as the case may be].
[If applicable, insert--The Corporation may at any time, at its option,
on or after _________, ____, and subject to the terms and conditions of Article
XI of the Indenture, redeem this Security in whole at any time or in part from
time to time, at the following Redemption Prices (expressed as per- centages of
the principal amount hereof), if redeemed during the 12-month period beginning
_____________:
Redemption
Year Price
---- ----------
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest [if
applicable, insert--, including any Additional Interest,] to but excluding the
date fixed for redemption.]
[If applicable, insert--Prior to __________ __, ____, if a Tax Event or
Capital Treatment Event shall occur and be continuing, the Corporation shall
have the right, subject to the terms and conditions of Article XI of the
Indenture, to redeem this Security at the option of the Corporation, in whole
but not in part, at a Redemption Price equal to the greater of (i) ___% of the
principal amount thereof or (ii) as determined by a Quotation Agent (as defined
below), the sum of the present values of the principal amount and premium
payable with respect to an optional redemption on such Securities on __________
__, ____, together with scheduled payments of interest from the Redemption Date
to __________ __, _____ (the "Remaining Life") discounted to the Redemption Date
on a semi-annual basis (assuming a 360-day year consisting of 30-day months) at
the Adjusted Treasury Rate (as defined below), plus, in each case, accrued
interest thereon to the Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the Treasury Rate (as defined below) plus (i) ____% if such Redemption Date
occurs on or before _________ __, ____ or (ii) _____% if such Redemption Date
occurs after __________ __, _____.
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life (if
no maturity is within three months before or after the Remaining Life, yields
for the two published maturities most closely corresponding to the
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Remaining Life shall be determined and the Treasury Rate shall be interpolated
or extrapolated from such yields on a straight-line basis, rounding to the
nearest month) or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, calculated using a price of the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such redemption date, The Treasury
Rate shall be calculated on the third Business Day preceding the Redemption
Date.
"Comparable Treasury Issue" means with respect to any Redemption Date
the United States Treasury security selected by the Quotation Agent as having a
maturity comparable to the Remaining Life that would be utilized, at the time of
selection and in accordance with customary financial practice, in pricing new
issues of corporate debt securities of comparable maturity to the Remaining
Life. If no United States Treasury security has a maturity which is within a
period from three months before to three months after __________ __, ____, the
two most closely corresponding United States Treasury securities shall be used
as the Comparable Treasury Issue, and the Treasury Rate shall be interpolated or
extrapolated on a straight-line basis, rounding to the nearest month using such
securities.
"Quotation Agent" means ___________________ and its successors;
provided, however, that if the foregoing shall cease to be a primary U.S.
Government securities dealer in New York City (a "Primary Treasury Dealer"), the
Corporation shall substitute therefor another Primary Treasury Dealer.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any other
Primary Treasury Dealer selected by the Trustee after consultation with the
Corporation.
"Comparable Treasury Price" means (A) the average of five Reference
Treasury Dealer Quotations for such Redemption Date, after excluding the highest
and lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee
obtains fewer then three such Reference Treasury Dealer Quotations, the average
of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any Redemption Dealer, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m., New York
City time, on the third Business Day preceding such Redemption Date.]
[If applicable, insert--In addition, upon the occurrence and during the
continuation of a Tax Event or a Capital Treatment Event in respect of the
Issuer Trust, the Corporation may, at its option, at any time within 90 days of
the occurrence and during the continuation of such Tax Event Capital Treatment
Event, as the case may be, redeem this Security, in whole but not in part,
subject to the terms and conditions of Article XI of the Indenture, at a
redemption price equal to [insert formula]].
[If the Security is subject to redemption of any kind, insert--In the
event of redemption of this Security in part only, a new Security or Securities
of this series for the unredeemed portion hereof will be issued in the name of
the Holder hereof upon the cancellation hereof.]
[If applicable, insert--If at any time a Tax Event or a Capital
Treatment Event occurs and (i) in the opinion of counsel to the Corporation
experienced in such matters, there would in all cases, after effecting the
termination of any Trust which holds this Security and the distribution of this
Security to the holders of the Trust Securities of such Trust in exchange
therefor, be more than an insubstantial risk that an Adverse Tax Consequence (as
defined below) would continue to exist, (ii) in
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the reasonable determination of the Corporation, there would in all cases, after
effecting the termination of any Trust which holds this Security and the
distribution of this Security to the holders of the Trust Securities of such
Trust in exchange therefor, be more than an insubstantial risk that the
Corporation would not be entitled to treat an amount equal to the Liquidation
Amount of such Trust Securities as "Tier 1 Capital" (or the then equivalent
thereof) for purposes of the capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Corporation, or (iii) this Security is
not held by a Trust, then the Corporation shall have the right (a) to shorten
the Stated Maturity of this Security to the minimum extent required, but in any
event to a date not earlier than ____________ (the action referred to in this
clause (a) being referred to herein as a "Maturity Advancement"), such that, in
the opinion of counsel to the Corporation experienced in such matters, after
advancing the Stated Maturity, interest paid hereon will be deductible for
United States federal income tax purposes, or (b) if either (x) in the opinion
of counsel to the Corporation experienced in such matters, there would in all
cases, after effecting a Maturity Advancement, be more than an insubstantial
risk that an Adverse Tax Consequence would continue to exist or (y) in the
reasonable determination of the Corporation, there would in all cases, after
effecting a Maturity Advancement, be more than an insubstantial risk that the
Corporation would not be entitled to treat an amount equal to the Liquidation
Amount of the Trust Securities of a Trust holding this Security, if any, as
"Tier 1 Capital" (or the then equivalent thereof) for purposes of the capital
adequacy guidelines of the Federal Reserve, as then in effect and applicable to
the Corporation, to redeem this Security, in whole but not in part, at any time
within 90 days following the occurrence of the Tax Event or Capital Treatment
Event, at a Redemption Price equal to [insert formula]. "Adverse Tax
Consequence" means any of the following circumstances: (i) a Trust which holds
this Security is, or will be, within 90 days of the Opinion of Counsel giving
rise to a Tax Event, subject to United States federal income tax with respect to
income received or accrued to this Security, (ii) interest payable by the
Corporation on this Security is not, or within 90 days of the date of such
Opinion of Counsel will not be, deductible by the Corporation, in whole or in
part, for United States federal income tax purposes or (iii) a Trust which holds
this Security is, or will be within 90 days of the date of such Opinion of
Counsel, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.]
[If applicable, insert--The provisions of Section 11.7 of the Indenture
shall not apply to this Security.]
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
Corporation, the Guarantor and the Trustee at any time to enter into a
supplemental indenture or indentures for the purpose of modifying in any manner
the rights and obligations of the Corporation, the Guarantor and of the Holders
of the Securities, with the consent of the Holders of not less than a majority
in principal amount of the Outstanding Securities of each series to be affected
by such supplemental indenture. The Indenture also contains provisions
permitting Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Corporation and the
Guarantor with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time
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Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Corporation (and to the Trustee if given by Holders) [if
applicable, insert--, provided that, if upon an Event of Default, the Trustee or
such Holders fail to declare the principal of all the Outstanding Securities of
this series to be immediately due and payable, the holders of at least 25% in
aggregate Liquidation Amount of the Capital Securities then Outstanding shall
have the right to make such declaration by a notice in writing to the
Corporation and the Trustee]; and upon any such declaration the principal amount
of and the accrued interest (including any Additional Interest) on all the
Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
XIII of the Indenture.]
[If the Security is a Discount Security, insert--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare an amount of principal of the Securities of this series to be
due and payable immediately, by a notice in writing to the Corporation (and to
the Trustee if given by Holders) [if applicable, insert--, provided that, if
upon an Event of Default, the Trustee or such Holders fail to declare such
principal amount of the Outstanding Securities of this series to be immediately
due and payable, the holders of at least 25% in aggregate Liquidation Amount of
the Capital Securities then Outstanding shall have the right to make such
declaration by a notice in writing to the Corporation and the Trustee]. The
principal amount payable upon such acceleration shall be equal to--insert
formula for determining the amount]. Upon any such declaration, such amount of
the principal of and the accrued interest (including any Additional Interest) on
all the Securities of this series shall become immediately due and payable,
provided that the payment of such principal and interest (including any
Additional Interest) on all the Securities of this series shall remain
subordinated to the extent provided in Article XIII of the Indenture. Upon
payment (i) of the amount of principal so declared due and payable and (ii) of
interest on any overdue principal, premium and interest (in each case to the
extent that the payment of such interest shall be legally enforceable), all of
the Corporation's obligations in respect of the payment of the principal of and
premium and interest, if any, on this Security shall terminate.]
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest [insert if applicable--including any Additional Interest)] on
this Security 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 Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation maintained under Section 10.2 of the
Indenture for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation and the
Securities Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $________ and any integral multiple of
$____________ in excess thereof. As provided in the Indenture and subject to
certain limitations therein set forth, Securities of this series
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are exchangeable for a like aggregate principal amount of Securities of this
series and of like tenor of a different authorized denomination, as requested by
the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation 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 Security for registration of transfer,
the Corporation, the Trustee and any agent of the Corporation or the Trustee may
treat the Person in whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue, and neither the
Corporation, the Trustee nor any such agent shall be affected by notice to the
contrary.
The Corporation and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that acquires a beneficial
interest in, this Security agree that for United States Federal, state and local
tax purposes it is intended that this Security constitute indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND WHOLLY TO BE
PERFORMED IN SUCH STATE.
SECTION 2.4. Additional Provisions Required in Global Security.
Unless otherwise specified as contemplated by Section 3.1, any Global
Security issued hereunder shall, in addition to the provisions contained in
Sections 2.2 and 2.3, bear a legend in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE AND MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE
DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY,
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
SECTION 2.5. Form of Trustee's Certificate of Authentication.
The Trustee's certificates of authentication shall be in substantially
the following form:
This is one of the Securities of the series designated therein referred
to in the within- mentioned Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: -------------------------------
Authorized officer
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SECTION 2.6. Form of Guarantee.
BANPONCE CORPORATION (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if any,
of (including any amount in respect of original issue discount), and interest,
if any (together with any Additional Interest and Additional Sums payable
pursuant to the terms of this Security), on this Security and the due and
punctual payment of the sinking fund payments, if any, and analogous
obligations, if any, provided for pursuant to the terms of this Security, when
and as the same shall become due and payable, whether at Stated Maturity or on
redemption, repayment or upon declaration of acceleration or otherwise according
to the terms of this Security and of the Indenture. In case of default by the
Corporation in the payment of any such principal (including any amount in
respect of original issue discount), and any premium or interest (together with
any Additional Interest and Additional Sums payable pursuant to the terms of
this Security), sinking fund payment, or analogous obligation, the Guarantor
agrees duly and punctually to pay the same when and as the same shall become due
and payable. The Guarantor hereby agrees that its obligations hereunder shall be
as principal and not merely as surety, and shall be absolute and unconditional
irrespective of any circumstances which may constitute a legal or equitable
discharge of a surety or guarantor, including, without limitation, any
modification of this Security, any invalidity, irregularity or unenforceability
of this Security or the Indenture, any failure to enforce the same or any
waiver, modification, consent or indulgence granted to the Corporation with
respect thereto by the Holder of this Security or the Trustee. The Guarantor
hereby waives diligence, presentment, demand or payment, filing of claims with a
court in the event of merger or bankruptcy of the Corporation, any right to
require a demand or proceeding first against the Corporation, protest or notice
with respect to this Security or the indebtedness evidenced thereby and all
demands whatsoever, and covenants that this guarantee will not be discharged as
to this Security except by payment in full of the principal of (including any
amount payable in respect of original issue discount), and any premium or
interest (together with any Additional Interest and Additional Sums payable
pursuant to the terms of this Security), thereon.
The indebtedness evidenced by this Guarantee is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt, and this Guarantee is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Guarantee,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such actions as
may be necessary or appropriate to effectuate the subordination so provided, and
(c) appoints the Trustee his or her attorney-in-fact for any and all such
purposes. Each Holder hereof, by his or her acceptance hereof, waives all notice
of the acceptance of the subordination provisions contained herein and in the
Indenture by each holder of Senior Debt, whether now outstanding or hereafter
incurred, and waives reliance by each such holder upon said provisions.
Payments pursuant to this Guarantee shall be made without set-off,
counterclaim, fees, liabilities or similar deductions, and free and clear of,
and without deduction or withholding for, taxes, levies, imposts, duties,
charges or fees of whatsoever nature now or hereafter imposed, levied,
collected, deducted, withheld or assessed by or on behalf of the Commonwealth of
Puerto Rico or any political subdivision or taxing authority thereof or therein,
as provided for in Section 3.17 of the Indenture.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, by making any payment hereunder (i)
to be subrogated to the rights of a Holder against the Corporation with respect
to such payment or otherwise to be reimbursed, indemnified or
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exonerated by the Corporation in respect thereof or (ii) to receive any payment,
in the nature of contribution or for any other reason, from any other obligor
with respect to such payment.
This guarantee shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND WHOLLY TO BE
PERFORMED IN SUCH STATE.
IN WITNESS WHEREOF, BanPonce Corporation has caused this Guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
BANPONCE CORPORATION
By: _____________________________
Authorized officer
ARTICLE III
THE SECURITIES
SECTION 3.1. Title and Terms.
The aggregate principal amount of Securities that may be authenticated
and delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution and, subject to Section 3.3,
set forth or determined in the manner provided in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior to the issuance
of Securities of a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount of
the Securities of such series that may be authenticated and delivered
under this Indenture (except for Securities authenticated and delivered
upon registration of transfer of, or in exchange for, or in lieu of,
other Securities of the series pursuant to Section 3.4, 3.6, 3.7, 9.6
or 11.6 and except for any Securities that, pursuant to Section 3.3,
are deemed never to have been authenticated and delivered hereunder);
provided, however, that the authorized aggregate principal amount of
such series may be increased above such amount by a Board Resolution to
such effect;
(c) the Person to whom any interest on a Security of the
series shall be payable, if other than the Person in whose name that
security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest;
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(d) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of
determination thereof, and any dates on which or circumstances under
which, the Corporation shall have the right to extend or shorten such
Stated Maturity or Maturities;
(e) the rate or rates, if any, at which the Securities of such
series shall bear interest, if any, the rate or rates and extent to
which Additional Interest, if any, shall be payable in respect of any
Securities of such series, the date or dates from which any such
interest or Additional Interest shall accrue, the Interest Payment
Dates on which such interest shall be payable, the right, pursuant to
Section 3.12 or as otherwise set forth therein, of the Corporation to
defer or extend an Interest Payment Date, and the Regular Record Date
for the interest payable on any Interest Payment Date or the method by
which any of the foregoing shall be determined;
(f) the place or places where the principal of (and premium,
if any) and interest (including any Additional Interest) on the
Securities of such series shall be payable, the place or places where
the Securities of such series may be presented for registration of
transfer or exchange, any restrictions that may be applicable to any
such transfer or exchange in addition to or in lieu of those set forth
herein, and the place or places where notices and demands to or upon
the Corporation in respect of the Securities of such series may be
made;
(g) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms and
conditions upon which the Securities of such series may be redeemed, in
whole or in part, at the option of the Corporation, and if other than
by a Board Resolution, the manner in which any election by the
Corporation to redeem such Securities shall be evidenced;
(h) the obligation or the right, if any, of the Corporation to
redeem, repay or purchase the Securities of such series pursuant to any
sinking fund, amortization or analogous provisions, or at the option of
a Holder thereof, and the period or periods within which, the price or
prices at which, the currency or currencies (including currency unit or
units) in which and the other terms and conditions upon which
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligation;
(i) the denominations in which any Securities of such series
shall be issuable, if other than denominations of $1,000 and any
integral multiple thereof;
(j) if other than Dollars, the currency or currencies
(including any currency unit or units) in which the principal of (and
premium, if any) and interest and Additional Interest, if any, on the
Securities of the series shall be payable, or in which the Securities
of the series shall be denominated and the manner of determining the
equivalent thereof in Dollars for purposes of the definition of
Outstanding;
(k) the additions, modifications or deletions, if any, in the
Events of Default or covenants of the Corporation set forth herein with
respect to the Securities of such series;
(l) if other than the principal amount thereof, the portion of
the principal amount of Securities of such series that shall be payable
upon declaration of acceleration of the Maturity thereof;
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(m) if the principal amount payable at the Stated Maturity of
any Securities of the series will not be determinable as of any one or
more dates prior to the Stated Maturity, the amount which shall be
deemed to be the principal amount of such Securities as of any such
date for any purpose thereunder or hereunder, including the principal
amount thereof which shall be due and payable upon any Maturity other
than the Stated Maturity or which shall be deemed to be Outstanding as
of any date prior to the Stated Maturity (or, in any such case, the
manner in which such amount deemed to be the principal amount shall be
determined);
(n) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
(o) any index or indices used to determine the amount of
payments of principal of and premium, if any, on the Securities of such
series or the manner in which such amounts will be determined;
(p) if applicable, that any Securities of the series shall be
issuable in whole or in part in the form of one or more Global
Securities and, in such case, the respective Depositaries for such
Global Securities, the form of any legend or legends that shall be
borne by any such Global Security in addition to or in lieu of that set
forth in Section 2.4 and any circumstances in addition to or in lieu of
those set forth in Section 3.6 in which any such Global Security may be
exchanged in whole or in part for Securities registered, and any
transfer of such Global Security in whole or in part may be registered,
in the name or names of Persons other than the Depositary for such
Global Security or a nominee thereof;
(q) the appointment of any Paying Agent or agents for the
Securities of such series;
(r) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the
Corporation, and the additions or changes, if any, to this Indenture
with respect to the Securities of such series to permit or facilitate
such conversion or exchange;
(s) if such Securities are to be issued to an Issuer Trust,
the form or forms of the Trust Agreement, Guarantee Agreement and
Expense Agreement relating thereto;
(t) if other than as set forth herein, the relative degree, if
any, to which the Securities of the series shall be senior to or be
subordinated to other series of Securities in right of payment, whether
such other series of Securities are Outstanding or not;
(u) any addition to or change in the Events of Default which
applies to any Securities of the series and any change in the right of
the Trustee or the requisite Holders of such Securities to declare the
principal amount thereof due and payable pursuant to Section 5.2;
(v) any addition to or change in the covenants set forth in
Article X which applies to Securities of the series; and
(w) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture,
except as permitted by Section 9.1(6)).
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All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth, or determined in the manner
provided, in such Officers' Certificate or in any indenture supplemental hereto.
If any of the terms of the series are established by action taken
pursuant to a Board Resolution, a copy of an appropriate record of such action
shall be certified by the Secretary or an Assistant Secretary of the Corporation
and delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
The Securities shall be subordinated in right of payment to Senior Debt
as provided in Article XIII.
SECTION 3.2. Denominations.
The Securities of each series shall be in registered form without
coupons and shall be issuable in denominations of $1,000 and any integral
multiple thereof, unless otherwise specified as contemplated by Section 3.1.
SECTION 3.3. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Corporation by its
Chairman of the Board, its Vice Chairman of the Board, its President or one of
its Vice Presidents, under its corporate seal reproduced or impressed thereon
and attested by its Secretary or one of its Assistant Secretaries. The signature
of any of these officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Corporation shall bind the
Corporation, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Securities or
did not hold such offices at the date of such Securities. At any time and from
time to time after the execution and delivery of this Indenture, the Corporation
may deliver Securities of any series executed by the Corporation, having
endorsed thereon Guarantees duly executed by the Guarantor, to the Trustee for
authentication, together with a Corporation Order for the authentication and
delivery of such Securities, and the Trustee in accordance with the Corporation
Order shall authenticate and deliver such Securities. If the form or terms of
the Securities of the series have been established by or pursuant to one or more
Board Resolutions as permitted by Sections 2.1 and 3.1, in authenticating such
Securities, and accepting the additional responsibilities under this Indenture
in relation to such Securities, the Trustee shall be entitled to receive, and
(subject to Section 6.1) shall be fully protected in relying upon, an Opinion of
Counsel stating,
(1) if the form of such Securities has been established by or
pursuant to Board Resolution as permitted by Section 2.1, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by
or pursuant to Board Resolution as permitted by Section 3.1, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by
the Trustee and issued by the Corporation in the manner and subject to
any conditions specified in such Opinion of Counsel, will constitute
valid and legally binding obligations of the Corporation, subject to
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bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner that
is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Corporation Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the
authentication of each Security of such series if such documents are delivered
at or prior to the authentication upon original issuance of the first Security
of such series to be issued.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and
delivered hereunder. Notwithstanding the foregoing, if any Security shall have
been authenticated and delivered hereunder but never issued and sold by the
Corporation, and the Corporation shall deliver such Security to the Trustee for
can- cellation as provided in Section 3.10, for all purposes of this Indenture
such Security shall be deemed never to have been authenticated and delivered
hereunder and shall never be entitled to the benefits of this Indenture.
SECTION 3.4. Temporary Securities.
Pending the preparation of definitive Securities of any series, the
Corporation may execute, and upon Corporation Order the Trustee shall
authenticate and deliver, temporary Securities, having endorsed thereon
Guarantees duly executed by the Guarantor, that are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any denomination,
substantially of the tenor of the definitive Securities of such series in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Corporation will
cause definitive Securities of such series, having endorsed thereon Guarantees
duly executed by the Guarantor, to be prepared without unreasonable delay. After
the preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities, having endorsed thereon Guarantees duly
executed by the Guarantor, upon surrender of the temporary Securities at the
office or agency of the Corporation designated for that purpose without charge
to the Holder. Upon surrender for cancellation of any one or more temporary
Securities, the Corporation shall execute and the Trustee shall authenticate and
deliver in exchange therefor one or more definitive Securities of the same
series, having endorsed thereon Guarantees duly executed by the Guarantor, of
any authorized denominations having the same Original Issue Date and Stated
Maturity and having the same terms as such temporary Securities. Until so
exchanged, the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
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SECTION 3.5. Global Securities.
(a) Each Global Security issued under this Indenture shall be
registered in the name of the Depositary designated by the Corporation for such
Global Security or a nominee thereof and delivered to such Depositary or a
nominee thereof or custodian therefor, and each such Global Security shall
constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture, no Global
Security may be exchanged in whole or in part for Securities registered, and no
transfer of a Global Security in whole or in part may be registered, in the name
of any Person other than the Depositary for such Global Security or a nominee
thereof unless (i) such Depositary advises the Trustee in writing that such
Depositary is no longer willing or able to properly discharge its
responsibilities as Depositary with respect to such Global Security, and the
Corporation is unable to locate a qualified successor, (ii) the Corporation
executes and delivers to the Trustee a Corporation Order stating that the
Corporation elects to terminate the book-entry system through the Depositary, or
(iii) there shall have occurred and be continuing an Event of Default.
(c) If any Global Security is to be exchanged for other Securities or
cancelled in whole, it shall be surrendered by or on behalf of the Depositary or
its nominee to the Securities Registrar for exchange or cancellation as provided
in this Article III. If any Global Security is to be exchanged for other
Securities or cancelled in part, or if another Security is to be exchanged in
whole or in part for a beneficial interest in any Global Security, then either
(i) such Global Security shall be so surrendered for exchange or cancellation as
provided in this Article III or (ii) the principal amount thereof shall be
reduced, subject to Section 3.6(b)(v), or increased by an amount equal to the
portion thereof to be so exchanged or cancelled, or equal to the principal
amount of such other Security to be so exchanged for a beneficial interest
therein, as the case may be, by means of an appropriate adjustment made on the
records of the Securities Registrar, whereupon the Trustee, in accordance with
the Applicable Procedures, shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions, the Trustee shall, subject to Section 3.5(b) and as
otherwise provided in this Article III, authenticate and deliver any Securities
issuable in exchange for such Global Security (or any portion thereof) in
accordance with the instructions of the Depositary. The Trustee shall not be
liable for any delay in delivery of such instructions and may conclusively rely
on, and shall be fully protected in relying on, such instructions.
(d) Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security or any portion
thereof, whether pursuant to this Article III, Section 9.6 or 11.6 or otherwise,
shall be authenticated and delivered in the form of, and shall be, a Global
Security, unless such Security is registered in the name of a Person other than
the Depositary for such Global Security or a nominee thereof.
(e) Securities distributed to holders of Book-Entry Capital Securities
(as defined in the applicable Trust Agreement) upon the dissolution of an Issuer
Trust shall be distributed in the form of one or more Global Securities
registered in the name of a Depositary or its nominee, and deposited with the
Securities Registrar, as custodian for such Depositary, or with such Depositary,
for credit by the Depositary to the respective accounts of the beneficial owners
of the Securities represented thereby (or such other accounts as they may
direct). Securities distributed to holders of Capital Securities other than
Book-Entry Capital Securities upon the dissolution of an Issuer Trust shall not
be issued in the form of a Global Security or any other form intended to
facilitate book-entry trading in beneficial interests in such Securities.
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(f) The Depositary or its nominee, as the registered owner of a Global
Security, shall be the Holder of such Global Security for all purposes under
this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interests pursuant to the Applicable Procedures.
Accordingly, any such owner's beneficial interest in a Global Security shall be
shown only on, and the transfer of such interest shall be effected only through,
records maintained by the Depositary or its nominee or its Agent Members.
Neither the Trustee nor the Securities Registrar shall have any liability in
respect of any transfers effected by the Depositary.
(g) The rights of owners of beneficial interests in a Global Security
shall be exercised only through the Depositary and shall be limited to those
established by law and agreements between such owners and the Depositary and/or
its Agent Members.
SECTION 3.6. Registration, Transfer and Exchange Generally.
The Corporation shall cause to be kept at the Corporate Trust Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Corporation shall provide for the registration of Securities
and of transfers of Securities. Such register is herein sometimes referred to as
the "Securities Register." The Trustee is hereby appointed "Securities
Registrar" for the purpose of registering Securities and transfers of Securities
as herein provided.
Upon surrender for registration of transfer of any Security at the
offices or agencies of the Corporation designated for that purpose the
Corporation shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series, having endorsed thereon Guarantees duly executed by the
Guarantor, of any authorized denominations of like tenor and aggregate principal
amount.
At the option of the Holder, Securities may be exchanged for other
Securities of the same series, having endorsed thereon Guarantees duly executed
by the Guarantor, of any authorized denominations, of like tenor and aggregate
principal amount, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any securities are so surrendered for exchange, the
Corporation shall execute, and the Trustee shall authenticate and deliver, the
Securities (having Guarantees duly endorsed thereon) that the Holder making the
exchange is entitled to receive.
All Securities and the Guarantees endorsed thereon issued upon any
transfer or exchange of Securities shall be the valid obligations of the
Corporation and the Guarantor, respectively, evidencing the same debt and
guarantee thereon, and entitled to the same benefits under this Indenture, as
the Securities and Guarantees surrendered upon such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Corporation or the Trustee) be duly endorsed, or be
accompanied by a written instrument of transfer in form satisfactory to the
Corporation and the Securities Registrar, duly executed by the Holder thereof or
such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any transfer or exchange of Securities.
Neither the Corporation nor the Trustee shall be required, pursuant to
the provisions of this Section, (i) to issue, register the transfer of or
exchange any Security of any series during a period beginning at the opening of
business 15 days before the day of selection for redemption of Securities of
that series pursuant to Article XI and ending at the close of business on the
day of mailing of the
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notice of redemption, or (ii) to register the transfer of or exchange any
Security so selected for redemption in whole or in part, except, in the case of
any such Security to be redeemed in part, any portion thereof not to be
redeemed.
SECTION 3.7. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee together with
such security or indemnity as may be required by the Corporation or the Trustee
to save each of them harmless, the Corporation shall execute and the Trustee
shall authenticate and deliver in exchange therefor a new Security of the same
series (having Guarantees duly endorsed thereon), of like tenor and aggregate
principal amount, and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Corporation and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to save
each of them, the Guarantor and any agent of any of them harmless, then, in the
absence of notice to the Corporation or the Trustee that such Security has been
acquired by a bona fide purchaser, the Corporation shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series (having
Guarantees duly endorsed thereon), of like tenor and aggregate principal amount
as such destroyed, lost or stolen Security, and bearing a number not
contemporaneously outstanding.
If any such mutilated, destroyed, lost or stolen Security has become or
is about to become due and payable, the Corporation in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security and the related Guarantees issued pursuant to this
Section in lieu of any destroyed, lost or stolen Security shall constitute an
original additional contractual obligation of the Corporation and the Guarantor,
respectively, whether or not the destroyed, lost or stolen Security 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 Securities of
the same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.8. Payment of Interest and Additional Interest; Interest
Rights Preserved.
Interest and Additional Interest on any Security of any series that 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 Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest in respect of Securities of such series, except
that, unless otherwise provided in the Securities of such series, interest and
any Additional Interest payable on the Stated Maturity of the principal of a
Security shall be paid to the Person to whom principal is paid. The initial
payment of interest on any Security of any series that is issued between a
Regular Record Date and the related Interest Payment Date shall be payable as
provided in such Security or in the Board Resolution pursuant to Section 3.1
with respect to the related series of Securities.
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Any interest on any Security that is due and payable, but is not timely
paid or duly provided for, on any Interest Payment Date for Securities of such
series (herein called "Defaulted Interest"), shall forthwith cease to be payable
to the registered Holder on the relevant Regular Record Date by virtue of having
been such Holder, and such Defaulted Interest may be paid by the Corporation, at
its election in each case, as provided in Clause (1) or (2) below:
(1) The Corporation may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series in respect of which
interest is in default (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the following manner. The
Corporation shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Corporation 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
Corporation of such Special Record Date and, in the name and at the expense of
the Corporation, 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 of a Security of such series at the address of such
Holder as it appears in the Securities Register not less than 10 days prior to
such Special Record Date. The Trustee may, in its discretion, in the name and at
the expense of the Corporation, cause a similar notice to be published at least
once in a newspaper, customarily published in the English language on each
Business Day and of general circulation in the Borough of Manhattan, The City of
New York, but such publication shall not be a condition precedent to the
establishment of such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names the Securities of such series (or their respective Predecessor Securities)
are registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Corporation may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of the series in respect of which interest is
in default may be listed and, upon such notice as may be required by such
exchange (or by the Trustee if the Securities are not listed), if, after notice
given by the Corporation to the Trustee of the proposed payment pursuant to this
Clause, such payment shall be deemed practicable by the Trustee.
Any interest on any Security which is deferred or extended pursuant to
Section 3.11 shall not be Defaulted Interest for purposes of this Section 3.8
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security.
SECTION 3.9. Persons Deemed Owners.
The Corporation, the Guarantor, the Trustee and any agent of the
Corporation, the Guarantor or the Trustee shall treat the Person in whose name
any Security is registered as the owner of such
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Security for the purpose of receiving payment of principal of and (subject to
Section 3.8) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the
Corporation, the Guarantor, the Trustee nor any agent of the Corporation, the
Guarantor or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Corporation,
the Trustee and any agent of the Corporation or the Trustee as the owner of such
Global Security for all purposes whatsoever. Notwithstanding the foregoing,
nothing herein shall prevent the Corporation, the Trustee or any agent of the
Corporation or the Trustee from giving effect to any written certification,
proxy or other authorization furnished by a Depositary or impair, as between a
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of any Security.
SECTION 3.10. Cancellation.
All Securities surrendered for payment, redemption, transfer or
exchange shall, if surrendered to any Person other than the Trustee, be
delivered to the Trustee, and any such Securities and Securities surrendered
directly to the Trustee for any such purpose shall be promptly canceled by it.
The Corporation may at any time deliver to the Trustee for cancellation any
Securities previously authenticated and delivered hereunder that the Corporation
may have acquired in any manner whatsoever, and all Securities so delivered
shall be promptly canceled by the Trustee. No Securities shall be authenticated
in lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities shall be destroyed by the Trustee and the Trustee shall deliver to
the Corporation a certificate of such destruction.
SECTION 3.11. Computation of Interest.
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series for any
partial period shall be computed on the basis of a 360-day year of twelve
30-day months and the actual number of days elapsed in any partial month in such
period, and interest on the Securities of each series for a full period shall be
computed by dividing the rate per annum by the number of interest periods that
together constitute a full twelve months.
SECTION 3.12. Deferrals of Interest Payment Dates.
If specified as contemplated by Section 2.1 or Section 3.1 with respect
to the Securities of a particular series, so long as no Event of Default has
occurred and is continuing, the Corporation shall have the right, at any time
during the term of such series, from time to time to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.1 (each, an "Extension Period"), during which
Extension Periods the Corporation shall, if so specified as contemplated by
Section 3.1, have the right to make partial payments of interest on any Interest
Payment Date. No Extension Period shall end on a date other than an Interest
Payment Date. At the end of any such Extension Period the Corporation shall pay
all interest then accrued and unpaid on the Securities (together with Additional
Interest thereon, if any, at the rate specified for the Securities of such
series to the extent permitted by applicable law); provided, however, that no
Extension Period shall extend beyond the Stated Maturity of the principal of the
Securities of such series; and provided further, however that during any such
Extension Period, the Corporation and the Guarantor shall not (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's capital stock,
(ii) make any
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payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Corporation that rank pari passu in all
respects with or junior in interest to the Securities of such series or (iii)
make any guarantee payments with respect to any guarantee by the Corporation or
the Guarantor of the debt securities of any Subsidiary of the Corporation or the
Guarantor if such guarantee ranks pari passu with or junior in interest to the
Securities of such series (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Corporation or the Guarantor in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Corporation's or the Guarantor's capital stock (or
any capital stock of a Subsidiary of the Corporation or the Guarantor) for any
class or series of the Corporation's or the Guarantor's capital stock,
respectively, or of any class or series of the Corporation's or the Guarantor's
indebtedness for any class or series of the Corporation's or the Guarantor's
capital stock, respectively, (c) the purchase of fractional interests in shares
of the Corporation's or the Guarantor's capital stock pursuant to the conversion
or exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any Rights Plan,
or the issuance of rights, stock or other property under any Rights Plan, or the
redemption or repurchase of rights pursuant thereto, or (e) 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 ranks pari passu with
or junior to such stock). Prior to the termination of any such Extension Period,
the Corporation may further defer the payment of interest, provided that no
Extension Period shall exceed the period or periods specified in such
Securities, extend beyond the Stated Maturity of the principal of such
Securities or end on a date other than an Interest Payment Date. Upon the
termination of any such Extension Period and upon the payment of all accrued and
unpaid interest and any Additional Interest then due on any Interest Payment
Date, the Corporation may elect to begin a new Extension Period, subject to the
above conditions. No interest or Additional Interest shall be due and payable
during an Extension Period, except at the end thereof, but each installment of
interest that would otherwise have been due and payable during such Extension
Period shall bear Additional Interest as and to the extent as may be specified
as contemplated by Section 3.1. The Corporation shall give the Holders of the
Securities of such series and the Trustee notice of its election to begin any
such Extension Period at least one Business Day prior to the next succeeding
Interest Payment Date on which interest on Securities of such series would be
payable but for such deferral or, with respect to any Securities of a series
issued to an Issuer Trust, so long as any such Securities are held by such
Issuer Trust, at least one Business Day prior to the earlier of (i) the next
succeeding date on which Distributions on the Capital Securities of such Issuer
Trust would be payable but for such deferral, and (ii) the date on which the
Property Trustee of such Issuer Trust is required to give notice to any
securities exchange or other applicable self-regulatory organization or to
holders of such Capital Securities of the record date or the date such
Distributions are payable.
The Trustee shall promptly give notice of the Corporation's election to
begin any such Extension Period to the Holders of the Outstanding Securities of
such series.
SECTION 3.13. Right of Set-Off.
With respect to the Securities of a series initially issued to an
Issuer Trust, notwithstanding anything to the contrary herein, the Corporation
and the Guarantor shall have the right to set off any payment it is otherwise
required to make in respect of any such Security or the related Guarantee,
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respectively, to the extent the Corporation or the Guarantor has theretofore
made, or is concurrently on the date of such payment making, a payment under the
Guarantee Agreement relating to such Security or to a holder of Capital
Securities pursuant to an action undertaken under Section 5.8 of this Indenture.
SECTION 3.14. Agreed Tax Treatment.
Each Security issued hereunder shall provide that the Corporation and,
by its acceptance of a Security or a beneficial interest therein, the Holder of,
and any Person that acquires a beneficial interest in, such Security agree that
for United States Federal, state and local tax purposes it is intended that such
Security constitutes indebtedness.
SECTION 3.15. Shortening or Extension of Stated Maturity.
[RESERVED]
SECTION 3.16. CUSIP Numbers.
The Corporation in issuing the Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Trustee shall use "CUSIP" numbers in
notices of redemption and other similar or related materials as a convenience to
Holders; provided that any such notice or other materials may state that no
representation is made as to the correctness of such numbers either as printed
on the Securities or as contained in any notice of redemption or other materials
and that reliance may be placed only on the other identification numbers printed
on the Securities, and any such redemption shall not be affected by any defect
in or omission of such numbers.
SECTION 3.17. Guarantee of Debt Securities.
The Guarantor hereby unconditionally guarantees to each Holder of a
Security of each series authenticated and delivered by the Trustee, the due and
punctual payment of the principal of (including any amount in respect of
original issue discount), and any premium and interest (together with any
Additional Interest and Additional Sums payable pursuant to the terms of such
Security), on such Security and the due and punctual payment of the sinking fund
payments, if any, and analogous obligations, if any, provided for pursuant to
the terms of such Security, when and as the same shall become due and payable,
whether at Stated Maturity or upon redemption or upon declaration of
acceleration or otherwise according to the terms of such Security and of this
Indenture. In case of default by the Corporation in the payment of any such
principal (including any amount in respect of original issue discount), any
premium and interest (together with any Additional Interest and Additional Sums
payable pursuant to the terms of such Security), sinking fund payment, or
analogous obligation, the Guarantor agrees duly and punctually to pay the same.
The Guarantor hereby agrees that its obligations hereunder shall rank pari passu
with all other unsecured and junior subordinated obligations of the Guarantor,
shall be as principal and not merely as surety, and shall be absolute and
unconditional irrespective of any invalidity, irregularity or unenforceability
of any such Security or this Indenture, any failure to enforce the same or any
waiver, modification, consent or indulgence granted to the Corporation with
respect thereto by the Holder of such Security or the Trustee, or any other
circumstances which may otherwise constitute a legal or equitable discharge of a
surety or guarantor. The Guarantor hereby waives diligence, presentment, demand
of payment, filing of claims with a court in the event of merger or bankruptcy
of the Corporation, any right to require a demand or proceeding first against
the Corporation, protest or notice with respect to any such Security or the
indebtedness evidenced thereby and all demands whatsoever, and covenants that
this guarantee will not be discharged as to any such Security except by payment
in full of the principal of (including any
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amount payable in respect of original issue discount), and any premium and
interest (together with any Additional Interest and Additional Sums payable
pursuant to the terms of such Security), thereon.
All payments pursuant to the Guarantee shall be made without set-off,
counterclaim, fees, liabilities or similar deductions, and free and clear of,
and without deduction or withholding for, taxes, levies, imposts, duties,
charges or fees of whatsoever nature now or hereafter imposed, levied,
collected, deducted, withheld or assessed by or on behalf of the Commonwealth of
Puerto Rico or any political subdivision or taxing authority thereof or therein
("Taxes"). If the Guarantor or any agent thereof is required by law or
regulation to make any deduction or withholding for or on account of Taxes, the
Guarantor shall pay such additional amounts ("Additional Guarantee Payments") as
shall be necessary in order that the net amounts received pursuant to the
Guarantee by the Holders of the Securities of any series or the holders or
beneficial owners of any interest therein or rights in respect thereof after
such deduction or withholding shall equal the amount that would have been
receivable thereunder in the absence of such deduction or withholding, except
that no such Additional Guarantee Payments shall be payable:
(a) to any Holder of a Security or any interest therein or
rights in respect thereof where such deduction or withholding is
required by reason of such Holder having some connection with the
Commonwealth of Puerto Rico or any political subdivision or taxing
authority thereof or thereon other than the mere holding of a payment
in respect of such security;
(b) in respect of any deduction or withholding that would not
have been required but for the presentation by the Holder of a Security
for payment on a date more than 30 days after the Stated Maturity or
the date on which payment thereof is duly provided for, whichever
occurs later; or
(c) in respect of any deduction or withholding that would not
have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
Commonwealth of Puerto Rico, or any political subdivision or taxing
authority thereof or therein, of the Holder of a Security or any
interest therein or rights in respect thereof, if compliance is
required by the Commonwealth of Puerto Rico, or any political
subdivision or taxing authority thereof or therein, as a precondition
to exemption from such deduction or withholding.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, upon making payment hereunder (i) to
be subrogated to the rights of a Holder against the Corporation with respect to
such payment or otherwise to be reimbursed, indemnified or exonerated by the
Corporation in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other obligor with respect to
such payment.
The guarantee set forth in this Section shall not be valid or become
obligatory for any purpose with respect to a Security of any series until the
certificate of authentication on such Security shall have been signed by the
Trustee.
SECTION 3.18. Execution of Guarantees.
To evidence its guarantee specified in Section 3.17 to the Holders of
Securities of any series, the Guarantor hereby agrees to execute the Guarantees
in substantially the form above recited to be endorsed on each Security of such
series authenticated and delivered by the Trustee. Such Guarantees shall be
executed on behalf of the Guarantor by its Chairman or its Vice Chairman or its
President or
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any Vice President prior to the authentication of the Security on which it is
endorsed, and the delivery of such Security by the Trustee, after the
authentication thereof hereunder, shall constitute due delivery of such
Guarantees on behalf of the Guarantor. Typographical and other minor errors or
defects in any such reproduction of any signature shall not affect the validity
or enforceability of any Guarantee that has been duly authenticated and
delivered by the Trustee.
Such signatures may be the manual or facsimile signatures of such
officers and may be imprinted or otherwise reproduced on the Guarantees. In case
any officer of the Guarantor who shall have signed any of the Guarantees shall
cease to be an officer before the Security on which such Guarantees are endorsed
shall have been authenticated and delivered by the Trustee or disposed of by the
Corporation, such Security nevertheless may be authenticated and delivered or
disposed of as though the person who signed such Guarantees had not ceased to be
such officer, and any Guarantees may be signed on behalf of the Guarantor by
such persons as, at the actual date of the execution of such Guarantees, shall
be the proper officers of the Guarantor, although at the date of such Security
or of the execution of this Indenture any such person was not such an officer.
ARTICLE IV
SATISFACTION AND DISCHARGE
SECTION 4.1. Satisfaction and Discharge of Indenture.
This Indenture shall, upon Corporation Request, cease to be of further
effect (except as to any surviving rights of registration of transfer or
exchange of Securities herein expressly provided for and as otherwise provided
in this Section 4.1) and the Trustee, on demand of and at the expense of the
Corporation, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities that have been destroyed, lost or stolen and
that have been replaced or paid as provided in Section 3.7 and (ii)
Securities for whose payment money has theretofore been deposited in
trust or segregated and held in trust by the Corporation and thereafter
repaid to the Corporation or discharged from such trust, as provided in
Section 10.3) have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year of the date of deposit, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the
name, and at the expense, of the Corporation,
and the Corporation, in the case of subclause (B)(i), (ii) or (iii)
above, has irrevocably deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose
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an amount in the currency or currencies in which the Securities of such
series are payable sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to the
Trustee for cancellation, for principal (and premium, if any) and
interest (including any Additional Interest) to the date of such
deposit (in the case of Securities that have become due and payable) or
to the Stated Maturity or Redemption Date, as the case may be;
(2) the Corporation or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Corporation; and
(3) the Corporation 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 Corporation and the Guarantor to the Trustee under Section
6.7, the obligations of the Trustee to any Authenticating Agent under Section
6.14 and, if money shall have been irrevocably deposited with the Trustee
pursuant to subclause (B) of Clause (1) of this Section, the obligations of the
Trustee under Section 4.2 and the last paragraph of Section 10.3 shall survive.
SECTION 4.2. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 10.3, all
money deposited with the Trustee pursuant to Section 4.1 shall be held in trust
and applied by the Trustee, in accordance with the provisions of the Securities
and Guarantees and this Indenture, to the payment, either directly or through
any Paying Agent (including the Corporation acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of the principal
(and premium, if any) and interest (including any Additional Interest) for the
payment of which such money or obligations have been deposited with or received
by the Trustee.
ARTICLE V
REMEDIES
SECTION 5.1. Events of Default.
"Event of Default", wherever used herein with respect to the Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body) except as may be specified pursuant to Section 3.1:
(1) default in the payment of any interest upon any Security of that
series, including any Additional Interest in respect thereof, when it becomes
due and payable, and continuance of such default for a period of 30 days
(subject to the deferral of any due date in the case of an Extension Period); or
(2) default in the payment of the principal of (or premium, if any, on)
any Security of that series at its Maturity; or
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(3) failure on the part of the Corporation or the Guarantor duly to
observe or perform any other of the covenants or agreements on the part of the
Corporation or the Guarantor, respectively, in the Securities of that series or
the Guarantees endorsed thereon or in this Indenture for a period of 90 days
after the date on which written notice of such failure, requiring the
Corporation or the Guarantor, as the case may be, to remedy the same, shall have
been given to the Corporation and the Guarantor by the Trustee by registered or
certified mail or to the Corporation, the Guarantor and the Trustee by the
Holders of at least 25% in aggregate principal amount of the Outstanding
Securities of that series; or
(4) the entry of a decree or order by a court having jurisdiction in
the premises adjudging the Corporation or the Guarantor a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization of the
Corporation or the Guarantor under the Bankruptcy Code or any other similar
applicable Federal or State law, which decree or order shall have continued
undischarged and unstayed for a period of 60 days; or the entry of a decree or
order of a court having jurisdiction in the premises for the appointment of a
receiver or liquidator or trustee or assignee in bankruptcy or insolvency of the
Corporation or the Guarantor or of its property, or for the winding up or
liquidation of its affairs, which decree or order shall have continued
undischarged and unstayed for a period of 60 days; or
(5) the commencement by the Corporation or the Guarantor of voluntary
proceedings to be adjudicated a bankrupt, or consent by the Corporation or the
Guarantor to the filing of a bankruptcy proceeding against it, or the filing by
the Corporation or the Guarantor of a petition or answer or consent seeking
reorganization under the Bankruptcy Code or any other similar Federal or State
law, or consent by the Corporation or the Guarantor to the filing of any such
petition, or the consent by the Corporation or the Guarantor to the appointment
of a receiver or liquidator or trustee or assignee in bankruptcy or insolvency
of it or of its property, or the making by the Corporation or the Guarantor of
an assignment for the benefit of creditors, or the admission by the Corporation
or the Guarantor in writing of its inability to pay its debts generally as they
become due; or
(6) any other Event of Default provided with respect to Securities of
that series.
SECTION 5.2. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default (other than an Event of Default specified in
Section 5.1(4) or 5.1(5)) with respect to Securities of any series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the principal amount (or, if
the Securities of that series are Discount Securities, such portion of the
principal amount as may be specified in the terms of that series) of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Corporation and the Guarantor (and to the Trustee if given by
Holders), provided that, in the case of the Securities of a series issued to an
Issuer Trust, if, upon such Event of Default, the Trustee or the Holders of not
less than 25% in principal amount of the Outstanding Securities of such series
fail to declare the principal of all the Outstanding Securities of such series
to be immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount (as defined in the related Trust Agreement) of the related
series of Capital Securities issued by such Issuer Trust then outstanding shall
have the right to make such declaration by a notice in writing to the
Corporation, the Guarantor and the Trustee; and upon any such declaration such
principal amount (or specified portion thereof) of and the accrued interest
(including any Additional Interest) on all the Securities of such series shall
become immediately due and payable. If an Event of Default specified in Section
5.1(4) or 5.1(5) with respect to Securities of any series at the time
Outstanding occurs, the principal amount of all the Securities of such series
(or, if the Securities of such series are Discount
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Securities, such portion of the principal amount of such Securities as may be
specified by the terms of that series) shall automatically, and without any
declaration or other action on the part of the Trustee or any Holder, become
immediately due and payable. Payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIII notwithstanding that such amount shall become
immediately due and payable as herein provided.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Corporation, the
Guarantor and the Trustee, may rescind and annul such declaration and its
consequences if:
(1) the Corporation or the Guarantor has paid or deposited with the
Trustee a sum sufficient to pay:
(A) all overdue installments of interest on all Securities of such
series,
(B) any accrued Additional Interest on all Securities of such series,
(C) the principal of (and premium, if any, on) any Securities of such
series that have become due otherwise than by such declaration of acceleration
and interest and Additional Interest thereon at the rate borne by the
Securities, 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 with respect to Securities of that series,
other than the non-payment of the principal of Securities of that series that
has become due solely by such acceleration, have been cured or waived as
provided in Section 5.13.
In the case of Securities of a series initially issued to an Issuer
Trust, if the Holders of such Securities fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount
(as defined in the related Trust Agreement) of the related series of Capital
Securities issued by such Issuer Trust then outstanding shall also have the
right to rescind and annul such declaration and its consequences by written
notice to the Corporation, the Guarantor and the Trustee, subject to the
satisfaction of the conditions set forth in Clauses (1) and (2) above of this
Section 5.2.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
SECTION 5.3. Collection of Indebtedness and Suits for Enforcement by
Trustee.
Each of the Corporation and the Guarantor covenants that if:
(1) default is made in the payment of any installment of interest
(including any Additional Interest) on any Security of any series when such
interest becomes due and payable and such default continues for a period of 30
days, or
(2) default is made in the payment of the principal of (and premium, if
any, on) any Security at the Maturity thereof,
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the Corporation and the Guarantor will, upon demand of the Trustee, pay to the
Trustee, for the benefit of the Holders of such Securities, the whole amount
then due and payable on such Securities for principal, including any sinking
fund payment or analogous obligations (and premium, if any) and interest
(including any Additional Interest), and, in addition thereto, all amounts owing
the Trustee under Section 6.7.
If the Corporation and the Guarantor fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an express
trust, may institute a judicial proceeding for the collection of the sums so due
and unpaid, and may prosecute such proceeding to judgment or final decree, and
may enforce the same against the Corporation and the Guarantor or any other
obligor upon such Securities and collect the moneys adjudged or decreed to be
payable in the manner provided by law out of the property of the Corporation and
the Guarantor or any other obligor upon the Securities, wherever situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series 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 5.4. Trustee May File Proofs of Claim.
In case of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Corporation or the Guarantor (or any other obligor
upon the Securities), or the property of the Corporation or the Guarantor or of
such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of the
Securities of any series shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether
the Trustee shall have made any demand on the Corporation or the
Guarantor for the payment of overdue principal (and premium, if any) or
interest (including any Additional Interest)) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of
principal (and premium, if any) and interest (including any
Additional Interest) owing and unpaid in respect to the
Securities and to file such other papers or documents as may
be necessary or advisable and to take any and all actions as
are authorized under the Trust Indenture Act in order to have
the claims of the Holders and any predecessor to the Trustee
under Section 6.7 allowed in any such judicial proceedings;
and
(ii) 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 in
accordance with Section 5.6; and
(b) 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 for distribution in accordance with Section 5.6, 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 to it and
any predecessor Trustee under Section 6.7.
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Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding; provided, however,
that the Trustee may, on behalf of the Holders, vote for the election of a
trustee in bankruptcy or similar official and be a member of a creditors' or
other similar committee.
SECTION 5.5. Trustee May Enforce Claim Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities
or the Guarantees may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the Guarantees 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 an express trust, and any
recovery of judgment shall, subject to Article XIII and after provision for the
payment of all the amounts owing the Trustee and any predecessor Trustee under
Section 6.7, its agents and counsel, be for the ratable benefit of the Holders
of the Securities in respect of which such judgment has been recovered.
SECTION 5.6. Application of Money Collected.
Any money or property collected or to be applied by the Trustee with
respect to a series of Securities or the Guarantees thereon 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 or property on
account of principal (or premium, if any) or interest (including any Additional
Interest), upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.7;
SECOND: Subject to Article XIII, to the payment of the amounts then due
and unpaid upon Securities of such series for principal (and premium, if any)
and interest (including any Additional Interest) in respect of which or for the
benefit of which such money has been collected, ratably, without preference or
priority of any kind, according to the amounts due and payable on such series of
Securities for principal (and premium, if any) and interest (including any
Additional Interest), respectively; and
THIRD: The balance, if any, to the Person or Persons entitled thereto.
SECTION 5.7. Limitation on Suits.
Subject to Section 5.8, no Holder of any Securities of any series shall
have any right to institute any proceeding, judicial or otherwise, with respect
to this Indenture or for the appointment of a receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) or for any other remedy
hereunder, unless:
(1) such Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
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(2) the Holders of not less than 25% in aggregate principal amount of
the Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
SECTION 5.8. Unconditional Right of Holders to Receive Principal,
Premium and Interest; Direct Action by Holders of Capital Securities.
Notwithstanding any other provision in this Indenture, the Holder of
any Security of any series shall have the right, which is absolute and
unconditional, to receive payment of the principal of (and premium, if any) and
(subject to Sections 3.8 and 3.12) interest (including any Additional Interest)
on such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. In the case of Securities of a series issued
to an Issuer Trust, any registered holder of the series of Capital Securities
issued by such Issuer Trust shall have the right, upon the occurrence of an
Event of Default described in Section 5.1(1) or 5.1(2), to institute a suit
directly against the Corporation or the Guarantor for enforcement of payment to
such holder of principal of (premium, if any) and (subject to Sections 3.8 and
3.12) interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount (as defined in the
related Trust Agreement) of such Capital Securities held by such holder.
SECTION 5.9. Restoration of Rights and Remedies.
If the Trustee, any Holder or any holder of Capital Securities issued
by any Issuer Trust 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, such Holder or such
holder of Capital Securities, then and in every such case the Corporation, the
Guarantor, the Trustee, such Holders and such holder of Capital Securities
shall, subject to any determination in such proceeding, be restored severally
and respectively to their former positions hereunder, and thereafter all rights
and remedies of the Trustee, such Holder and such holder of Capital Securities
shall continue as though no such proceeding had been instituted.
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SECTION 5.10. Rights and Remedies Cumulative.
Except as otherwise provided in the last paragraph of Section 3.7, no
right or remedy herein conferred upon or reserved to the Trustee or 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 5.11. Delay or Omission Not Waiver.
No delay or omission of the Trustee, any Holder of any Security with
respect to the Securities of the related Series or any holder of any Capital
Security to exercise any right or remedy accruing upon any Event of Default with
respect to the Securities of the related series 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 and the right and remedy given to the holders of Capital
Securities by Section 5.8 may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee, the Holders or the holders of Capital
Securities, as the case may be.
SECTION 5.12. Control by Holders.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series 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, with
respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
(2) the Trustee may take any other action deemed proper by the Trustee
that is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.1, the Trustee shall have
the right to decline to follow such direction if a Responsible Officer or
Officers of the Trustee shall, in good faith, determine that the proceeding so
directed would be unjustly prejudicial to the Holders not joining in any such
direction or would involve the Trustee in personal liability.
SECTION 5.13. Waiver of Past Defaults.
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of any series affected thereby and, in the case of
any Securities of a series initially issued to an Issuer Trust, the holders of a
majority in aggregate Liquidation Amount (as defined in the related Trust
Agreement) of the Capital Securities issued by such Issuer Trust, may waive any
past default hereunder and its consequences with respect to such series except a
default:
(1) in the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security of such series (unless such
default has been cured and the Corporation or Guarantor has paid to or deposited
with the Trustee a sum sufficient to pay all matured installments of interest
(including any Additional Interest) and all principal of (and premium, if any,
on) all Securities of that series due otherwise than by acceleration), or
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(2) in respect of a covenant or provision hereof that under Article IX
cannot be modified or amended without the consent of each Holder of any
Outstanding Security of such series affected.
Any such waiver shall be deemed to be on behalf of the Holders of all
the Securities of such series or, in the case of a waiver by holders of Capital
Securities issued by such Issuer Trust, by all holders of Capital Securities
issued by such Issuer Trust.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in aggregate principal amount of the Outstanding
Securities of any series, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of (or premium, if any) or interest
(including any Additional Interest) on any Security on or after the respective
Stated Maturities expressed in such Security.
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.
Each of the Corporation and the Guarantor covenants (to the extent that
it may lawfully do so) that it will not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any usury, 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 each of the
Corporation and the Guarantor (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 VI
THE TRUSTEE
SECTION 6.1. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such duties
as are specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
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(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificates or opinions that by any provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they conform to the requirements of
this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own willful misconduct except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of
Holders pursuant to Section 5.12 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture with respect
to the Securities of a series.
(d) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(e) 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 6.2. Notice of Defaults.
Within 90 days after actual knowledge by a Responsible Officer of the
Trustee of the occurrence of any default hereunder with respect to the
Securities of any series, the Trustee shall transmit by mail to all Holders of
Securities of such series, as their names and addresses appear in the Securities
Register, notice of such default, unless such default shall have been cured or
waived; provided, however, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee or a trust committee of directors and/or Responsible Officers of the
Trustee in good faith determines that the withholding of such notice is in the
interests of the Holders of Securities of such series; and provided, further,
that, in the case of any default of the character specified in Section 5.1(3),
no such notice to Holders of Securities of such series shall be given until at
least 30 days after the occurrence thereof. For the purpose of this Section, the
term "default"
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means any event that is, or after notice or lapse of time or both would become,
an Event of Default with respect to Securities of such series.
SECTION 6.3. Certain Rights of Trustee.
Subject to the provisions of Section 6.1:
(a) the Trustee may 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, Security 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 Corporation or the Guarantor
mentioned herein shall be sufficiently evidenced by a Corporation or Guarantor
Request or Corporation or Guarantor Order and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution;
(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 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 reasonable security or indemnity against the costs,
expenses and liabilities that 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, indenture,
Security or other paper or document, but the Trustee in its discretion may make
such inquiry or investigation into such facts or matters as it may see fit, and,
if the Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Corporation,
personally or by agent or attorney; and
(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.
SECTION 6.4. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Corporation and the Guarantor, and neither the Trustee nor any
Authenticating Agent assumes any responsibility for their correctness. The
Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any Authenticating Agent
shall be accountable for the use or application by the Corporation of the
Securities or the proceeds thereof.
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SECTION 6.5. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any Securities
Registrar or any other agent of the Corporation or the Guarantor, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.8 and 6.13, may otherwise deal with the Corporation
or the Guarantor with the same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Securities Registrar or such other agent.
SECTION 6.6. 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 with the Corporation or the Guarantor.
SECTION 6.7. Compensation and Reimbursement.
Each of the Corporation and the Guarantor agrees
(1) to pay to the Trustee from time to time reasonable compensation for
all services rendered by it hereunder in such amounts as the Corporation and the
Trustee shall agree from time to time (which compensation shall not be limited
by any provision of law in regard to the compensation of a trustee of an express
trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the reasonable
compensation and the expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be attributable to its
negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless against, any
loss, liability or expense (including the reasonable compensation and the
expenses and disbursements of its agents and counsel) incurred without
negligence or bad faith, arising out of or in connection with the acceptance or
administration of this trust or the performance of its duties hereunder,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties hereunder. This indemnification shall survive the termination of this
Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.1(4) or 5.1(5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Reform Act of 1978 or any successor statute.
SECTION 6.8. Disqualification; Conflicting Interests.
(a) The Trustee for the Securities of any series issued hereunder shall
be subject to the provisions of Section 310(b) of the Trust Indenture Act.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of said Section 310(b).
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(b) The Trust Agreement and the Guarantee Agreement with respect to
each Issuer Trust shall be deemed to be specifically described in this Indenture
for the purposes of clause (i) of the first proviso contained in Section 310(b)
of the Trust Indenture Act.
SECTION 6.9. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be:
(a) a corporation organized and doing business under the laws of the
United States of America or of any State or Territory or the District of
Columbia or the Commonwealth of Puerto Rico, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
Federal, State, Territorial, District of Columbia or Puerto Rican authority, or
(b) a corporation or other Person organized and doing business under
the laws of a foreign government that is permitted to act as Trustee pursuant to
a rule, regulation or order of the Commission, authorized under such laws to
exercise corporate trust powers, and subject to supervision or examination by
authority of such foreign government or a political subdivision thereof
substantially equivalent to supervision or examination applicable to United
States institutional trustees, in either case having a combined capital and
surplus of at least $50,000,000, subject to supervision or examination by
Federal or State authority. If such corporation publishes reports of condition
at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then, for the purposes of this Section 6.9,
the combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.9, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article VI.
Neither the Corporation, the Guarantor nor any Person directly or indirectly
controlling, controlled by or under common control with the Corporation or the
Guarantor shall serve as Trustee for the Securities of any series issued
hereunder.
SECTION 6.10. 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 VI shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities
of one or more series by giving written notice thereof to the Corporation and
the Guarantor. 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 any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of a majority in aggregate
principal amount of the Outstanding Securities of such series, delivered to the
Trustee and to the Corporation and the Guarantor.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 6.8 after written
request therefor by the Corporation, the Guarantor or by any Holder who has been
a bona fide Holder of a Security for at least six months, or
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(2) the Trustee shall cease to be eligible under Section 6.9 and shall
fail to resign after written request therefor by the Corporation, the Guarantor
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 Corporation, acting pursuant to the authority of
a Board Resolution, may remove the Trustee with respect to the Securities of all
series issued hereunder, or (ii) subject to Section 5.14, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf of
such Holder and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to the Securities of
all series issued hereunder and the appointment of a successor Trustee or
Trustees.
(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 with
respect to the Securities of one or more series, the Corporation, by a Board
Resolution, shall promptly appoint a successor Trustee with respect to the
Securities of that or those series. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in aggregate principal amount of the Outstanding
Securities of such series delivered to the Corporation, the Guarantor and the
retiring Trustee, the successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment, become the successor Trustee with respect to the
Securities of such series and supersede the successor Trustee appointed by the
Corporation. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Corporation or the Holders and
accepted appointment in the manner hereinafter provided, any Holder who has been
a bona fide Holder of a Security of such series for at least six months may,
subject to Section 5.14, on behalf of such Holder and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such series.
(f) The Corporation shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any series and each
appointment of a successor Trustee with respect to the Securities of any series
by mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of Securities of such series as their names and addresses appear in
the Securities Register. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the address of its
Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee so appointed shall
execute, acknowledge and deliver to the Corporation, the Guarantor and to the
retiring Trustee an instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Corporation, the Guarantor 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.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Corporation,
the Guarantor, the retiring Trustee and each successor Trustee with respect to
the Securities of one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall accept such appointment
and which (1) shall contain such provisions as shall be necessary or desirable
to transfer and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates, (2) if the retiring Trustee is not retiring with respect to all
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Corporation, the Guarantor or
any successor Trustee, such retiring Trustee shall duly assign, transfer and
deliver to such successor Trustee all property and money held by such retiring
Trustee hereunder with respect to the Securities of that or those series to
which the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Corporation and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) 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 6.12. Merger, Conversion, Consolidation or Succession to
Business.
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under 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 Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such successor Trustee, and in all cases the certificate of
authentication shall have the full force which it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
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SECTION 6.13. Preferential Collection of Claims Against Corporation or
Guarantor.
If and when the Trustee shall be or become a creditor of the
Corporation or the Guarantor (or any other obligor upon the Securities), the
Trustee shall be subject to the provisions of the Trust Indenture Act regarding
the collection of claims against the Corporation or the Guarantor (or any such
other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents with respect
to one or more series of Securities, which shall be authorized to act on behalf
of the Trustee to authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial redemption thereof
or pursuant to Section 3.6, and Securities so authenticated shall be entitled to
the benefits of this Indenture and shall be valid and obligatory for all
purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Corporation and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any State or Territory
thereof or the District of Columbia or the Commonwealth of Puerto Rico,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by Federal, State, Territorial, District of Columbia or Puerto Rican
authority. If such Authenticating Agent 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 Authenticating Agent shall be deemed to be its combined
capital and surplus as set forth in its most recent report of condition so
published. If at any time an Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section, such Authenticating Agent shall
resign immediately in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Corporation and the Guarantor. The Trustee may
at any time terminate the agency of an Authenticating Agent by giving written
notice thereof to such Authenticating Agent and to the Corporation and the
Guarantor. Upon receiving such a notice of resignation or upon such a
termination, or in case at any time such Authenticating Agent shall cease to be
eligible in accordance with the provisions of this Section, the Trustee may
appoint a successor Authenticating Agent, which shall be acceptable to the
Corporation and shall give notice of such appointment in the manner provided in
Section 1.6 to all Holders of Securities of the series with respect to which
such Authenticating Agent will serve. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all the rights,
powers and duties of its predecessor hereunder, with like effect as if
originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provision of this Section.
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The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
Dated:
THE FIRST NATIONAL BANK OF CHICAGO,
As Trustee
By: ,
As Authenticating Agent
By:
Authorized Officer
ARTICLE VII
HOLDER'S LISTS AND REPORTS BY TRUSTEE AND CORPORATION
SECTION 7.1. Corporation to Furnish Trustee Names and Addresses of
Holders.
The Corporation will furnish or cause to be furnished to the Trustee:
(a) semi-annually, on or before June 30 and December 31 of
each year, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders 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 Corporation of any such
request, a list of similar form and content as of a date not more than
15 days prior to the time such list is furnished,
in each case to the extent such information is in the possession or control of
the corporation and has not otherwise been received by the Trustee in its
capacity as Securities Registrar.
SECTION 7.2. 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 7.1 and the names and
addresses of Holders received by the Trustee in its capacity as
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Securities Registrar. The Trustee may destroy any list furnished to it as
provided in Section 7.1 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 Securities, and the
corresponding rights and privileges of the Trustee, shall be as provided in the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Corporation, the Guarantor and the Trustee that none of the
Corporation, the Guarantor nor the Trustee nor any agent of any of them shall be
held accountable by reason of the disclosure of information as to the names and
addresses of the Holders made pursuant to the Trust Indenture Act.
SECTION 7.3. Reports by Trustee.
(a) The Trustee shall transmit to Holders 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) Reports so required to be transmitted at stated intervals of not
more than 12 months shall be transmitted no later than January 31 in each
calendar year.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each securities exchange upon which any
Securities are listed and also with the Commission. The Corporation will notify
the Trustee when any Securities are listed on any securities exchange.
SECTION 7.4. Reports by Corporation.
The Corporation and the Guarantor shall file with the Trustee and with
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 in the Trust Indenture
Act; provided that any such information, documents or reports required to be
filed with the Commission pursuant to Section 13 or Section 15(d) of the
Exchange Act shall be filed with the Trustee within 15 days after the same is
required to be filed with the Commission. Notwithstanding that the Guarantor may
not be required to remain subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, the Guarantor shall continue to file with the
Commission and provide the Trustee with the annual reports and the information,
documents and other reports which are specified in Sections 13 and 15(d) of the
Exchange Act. The Corporation and the Guarantor also shall comply with the other
provisions of Trust Indenture Act Section 314(a).
ARTICLE VIII
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 8.1. Corporation and Guarantor May Consolidate, Etc., Only on
Certain Terms.
Neither the Guarantor nor the Corporation shall consolidate with or
merge into any other Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Guarantor or the Corporation or convey,
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transfer or lease its properties and assets substantially as an entirety to the
Guarantor or the Corporation, unless:
(1) if the Guarantor or the Corporation shall consolidate with or merge
into another Person or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Guarantor or the Corporation is merged or the
Person that acquires by conveyance or transfer, or that leases, the properties
and assets of the Guarantor or the Corporation substantially as an entirety
shall be a corporation, partnership or trust organized and existing under the
laws of the United States of America or any State or Territory thereof or the
District of Columbia or the Commonwealth of Puerto Rico and shall, by an
indenture supplemental hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, (i) in the case of the Guarantor, expressly
guarantee, or (ii) in the case of the Corporation, expressly assume, the due and
punctual payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on all the Securities of every series and
the performance of every covenant of this Indenture on the part of the Guarantor
or the Corporation, as the case may be, to be performed or observed;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event that, after notice or lapse of time, or both, would
constitute an Event of Default, shall have happened and be continuing; and
(3) the Guarantor or the Corporation, as the case may be, 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 comply 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 6.1, may rely upon such Officers'
Certificate and Opinion of Counsel as conclusive evidence that such transaction
complies with this Section 8.1.
SECTION 8.2. Successor Corporation Substituted.
Upon any consolidation or merger by the Guarantor or the Corporation,
as the case may be, with or into any other Person, or any conveyance, transfer
or lease by the Guarantor or the Corporation of its properties and assets
substantially as an entirety to any Person in accordance with Section 8.1, the
successor corporation formed by such consolidation or into which the Guarantor
or the Corporation, as the case may be, 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 Guarantor or the Corporation, as the case
may be, under this Indenture with the same effect as if such successor Person
had been named as the Guarantor or the Corporation, as the case may be, herein;
and in the event of any such conveyance, transfer or lease the Guarantor or the
Corporation, as the case may be, shall be discharged from all obligations and
covenants under this Indenture and the Securities and the Guarantees, as the
case may be.
Such successor Person may cause to be executed, and may issue either in
its own name or in the name of the Corporation, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the
Corporation, and having endorsed thereon Guarantees duly executed by the
Guarantor, and delivered to the Trustee; and, upon the order of such successor
Person instead of the Corporation and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall authenticate and
shall deliver any Securities having endorsed thereon Guarantees duly executed by
the Guarantor, that previously shall have been signed and delivered by the
officers of the Corporation to the Trustee for authentication pursuant to such
provisions and any Securities that such successor Person thereafter shall cause
to be executed and delivered to the Trustee on its behalf for
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the purpose pursuant to such provisions. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.1. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Corporation and the Guarantor,
when authorized by Board Resolutions, 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:
(1) to evidence the succession of another Person to the
Corporation or the Guarantor, and the assumption by any such successor
of the covenants of the Corporation or Guarantor herein and in the
Securities and Guarantees contained; or
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Corporation or Guarantor; or
(3) to establish the form or terms of Securities of any
series as permitted by Sections 2.1 or 3.1; or
(4) to add to the covenants of the Corporation or the
Guarantor for the benefit of the Holders of all or any series of
Securities (and if such covenants are to be for the benefit of less
than all series of Securities, stating that such covenants are
expressly being included solely for the benefit of the series
specified) or to surrender any right or power herein conferred upon the
Corporation or the Guarantor; or
(5) to add any additional Events of Default for the benefit of
the Holders of all or any series of Securities (and if such additional
Events of Default are to be for the benefit of less than all series of
Securities, stating that such additional Events of Default are
expressly being included solely for the benefit of the series
specified); or
(6) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall (a)
become effective only when there is no Security Outstanding of any
series created prior to the execution of such supplemental indenture
that is entitled to the benefit of such provision or (b) not apply to
any Outstanding Securities; or
(7) to cure any ambiguity, to correct or supplement any
provision herein that may be defective or inconsistent with any other
provision herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided that such
action pursuant to this clause (7) shall not adversely affect the
interest of the Holders of Securities of any series in any material
respect or, in the case of the Securities of a series issued to an
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Issuer Trust and for so long as any of the corresponding series of
Capital Securities issued by such Issuer Trust shall remain
outstanding, the holders of such Capital Securities; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one
or more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee,
pursuant to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in order
to effect or maintain qualification of this Indenture under the Trust
Indenture Act.
SECTION 9.2. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in
aggregate principal amount of the Outstanding Securities of each series affected
by such supplemental indenture, by Act of said Holders delivered to the
Corporation, the Guarantor and the Trustee, the Corporation, when authorized by
a Board Resolution, the Guarantor, 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 of Securities of such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security of each series affected thereby,
(1) change the Stated Maturity of the principal of, or any installment
of interest (including any Additional Interest) on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of principal of a Discount
Security that would be due and payable upon a declaration of acceleration of the
Maturity thereof pursuant to Section 5.2, or change the place of payment where,
or the coin or currency in which, any Security 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
(2) reduce the percentage in aggregate principal amount of the
Outstanding Securities of any series, 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
(3) modify any of the provisions of this Section, Section 5.13 or
Section 10.5, 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 Security affected thereby;
provided, further, that, in the case of the Securities of a series issued to an
Issuer Trust, so long as any of the corresponding series of Capital Securities
issued by such Issuer Trust remains outstanding, (i) no such amendment shall be
made that adversely affects the holders of such Capital Securities in any
material respect, 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 Amount (as defined in the related
Trust Agreement) of such Capital Securities then outstanding unless and until
the principal of (and premium, if any, on) the Securities of such series and all
accrued and (subject to Section 3.8) unpaid interest (including any Additional
Interest) thereon have been paid in full, and (ii) no
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amendment shall be made to Section 5.8 of this Indenture that would impair the
rights of the holders of Capital Securities issued by any Issuer Trust provided
therein without the prior consent of the holders of each such Capital Security
then outstanding unless and until the principal of (and premium, if any, on) the
Securities of such series and all accrued and (subject to Section 3.12) unpaid
interest (including any Additional Interest) thereon have been paid in full.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities or any corresponding
series of Capital Securities of an Issuer Trust that holds the Securities of any
series, or that modifies the rights of the Holders of Securities of such series
or holders of such Capital Securities of such corresponding series with respect
to such covenant or other provision, shall be deemed not to affect the rights
under this Indenture of the Holders of Securities of any other series or holders
of Capital Securities of any other such corresponding series.
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 9.3. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Officers' Certificate and an Opinion of Counsel stating that the execution of
such supplemental indenture is authorized or permitted by this Indenture, and
that all conditions precedent herein provided for relating to such action have
been complied with. The Trustee may, but shall not be obligated to, enter into
any such supplemental indenture that affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
SECTION 9.4. 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 Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.5. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 9.6. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and shall if required by
the Corporation, bear a notation in form approved by the Corporation as to any
matter provided for in such supplemental indenture. If the Corporation shall so
determine, new Securities of any series so modified as to conform, in the
opinion of the Corporation, to any such supplemental indenture may be prepared
and executed by the Corporation and authenticated and delivered by the Trustee
in exchange for Outstanding Securities of such series.
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ARTICLE X
COVENANTS
SECTION 10.1. Payment of Principal, Premium and Interest.
The Corporation covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of (and premium,
if any) and interest (including any Additional Interest) on the Securities of
that series in accordance with the terms of such Securities and this Indenture.
SECTION 10.2. Maintenance of Office or Agency.
The Corporation will maintain in each Place of Payment for any series
of Securities an office or agency where Securities of that series may be
presented or surrendered for payment, where Securities of that series may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Corporation in respect of the Securities of that series
and this Indenture may be served. The Corporation initially appoints the
Trustee, acting through its Corporate Trust Office, as its agent for said
purposes. The Corporation will give prompt written notice to the Trustee of any
change in the location of any such office or agency. If at any time the
Corporation shall fail to maintain such 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 Corporation hereby appoints the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
The Corporation may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of 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 Corporation of its obligation to maintain an office or agency in
each Place of Payment for Securities of any series for such purposes. The
Corporation will give prompt written notice to the Trustee of any such
designation and any change in the location of any such office or agency.
SECTION 10.3. Money for Security Payments to be Held in Trust.
If the Corporation shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any, on) or interest on any of the Securities of
such series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal (and premium, if any) or interest
so becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided, and will promptly notify the Trustee of its
failure so to act.
Whenever the Corporation shall have one or more Paying Agents, it will,
prior to 10:00 a.m., New York City time, on each due date of the principal of
(or premium, if any) or interest (including any Additional Interest) on any
Securities, deposit with a Paying Agent a sum sufficient to pay the principal
(and premium, if any) or interest (including any Additional Interest) so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal (and premium, if any) or interest (including any
Additional Interest), and (unless such Paying Agent is the Trustee) the
Corporation will promptly notify the Trustee of its failure so to act.
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The Corporation will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums held by it for the payment of the principal
of (and premium, if any) or interest (including any Additional
Interest) on the Securities of a series in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Corporation
(or any other obligor upon such Securities) in the making of any
payment of principal (and premium, if any) or interest (including any
Additional Interest) in respect of any Security of any Series;
(3) at any time during the continuance of any default with
respect to a series of Securities, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent with respect to such series; and
(4) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Corporation may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Corporation Order direct any Paying Agent to pay, to the Trustee all sums
held in trust by the Corporation 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
Corporation or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Corporation in trust for the payment of the principal of (and premium, if
any) or interest (including any Additional Interest) on any Security and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall (unless otherwise required by
mandatory provision of applicable escheat or abandoned or unclaimed property
law) be paid on Corporation Request to the Corporation, or (if then held by the
Corporation) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Corporation for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Corporation as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Corporation cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, The City of New York, notice that such money remains unclaimed and
that, after a date specified therein, which shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Corporation.
SECTION 10.4. Statement as to Compliance.
Each of the Corporation and the Guarantor shall deliver to the Trustee,
within 120 days after the end of each fiscal year of the Corporation or the
Guarantor, respectively, ending after the date hereof, an Officers' Certificate
covering the preceding calendar year, stating whether or not to the best
knowledge of the signers thereof the Corporation or the Guarantor, respectively,
is in default in
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the performance, observance or fulfillment of or compliance with any of the
terms, provisions, covenants and conditions of this Indenture, and if the
Corporation or the Guarantor, respectively, shall be in default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.4, compliance shall be determined
without regard to any grace period or requirement of notice provided pursuant to
the terms of this Indenture.
SECTION 10.5. Waiver of Certain Covenants.
Subject to the rights of holders of Capital Securities specified in
Section 9.2, if any, the Corporation or the Guarantor, as the case may be, may
omit in any particular instance to comply with any covenant or condition
provided pursuant to Section 3.1, 9.1(3) or 9.1(4) with respect to the
Securities of any series, if before or after the time for such compliance the
Holders of at least a majority in aggregate principal amount of the Outstanding
Securities of such series shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with such covenant or
condition, but no such waiver shall extend to or affect such covenant or
condition except to the extent so expressly waived, and, until such waiver shall
become effective, the obligations of the Corporation or the Guarantor, as the
case may be, in respect of any such covenant or condition shall remain in full
force and effect.
SECTION 10.6. Additional Sums.
In the case of the Securities of a series initially issued to an Issuer
Trust, so long as no Event of Default has occurred and is continuing and except
as otherwise specified as contemplated by Section 2.1 or Section 3.1, if (i) an
Issuer Trust is the Holder of all of the Outstanding Securities of such series,
and (ii) a Tax Event has occurred and is continuing in respect of such Issuer
Trust, the Corporation shall pay to such Issuer Trust (and its permitted
successors or assigns under the related Trust Agreement) for so long as such
Issuer Trust (or its permitted successor or assignee) is the registered holder
of the Outstanding Securities of such series, such additional sums as may be
necessary in order that the amount of Distributions (including any Additional
Amounts (as defined in such Trust Agreement)) then due and payable by such
Issuer Trust on the related Capital Securities and Common Securities that at any
time remain outstanding in accordance with the terms thereof shall not be
reduced as a result of any Additional Taxes arising from such Tax Event (the
"Additional Sums"). Whenever in this Indenture, the Securities or the Guarantees
there is a reference in any context to the payment of principal of or interest
on the Securities, such mention shall be deemed to include mention of the
payments of the Additional Sums provided for in this paragraph to the extent
that, in such context, Additional Sums are, were or would be payable in respect
thereof pursuant to the provisions of this paragraph and express mention of the
payment of Additional Sums (if applicable) in any provisions hereof shall not be
construed as excluding Additional Sums in those provisions hereof where such
express mention is not made; provided, however, that the deferral of the payment
of interest pursuant to Section 3.12 or the Securities shall not defer the
payment of any Additional Sums that may be due and payable.
SECTION 10.7. Additional Covenants.
Each of the Corporation and the Guarantor covenants and agrees with
each Holder of Securities of each series that it shall not, and shall not permit
any of its subsidiaries, (x) declare or pay any dividends or distributions on,
or redeem purchase, acquire or make a liquidation payment with respect to, any
shares of the Corporation's or the Guarantor's capital stock, or (y) make any
payment of principal of or interest or premium, if any, on or repay, repurchase
or redeem any debt securities of the Corporation or the Guarantor (including
other Securities) that rank pari passu in all respects with or junior in
interest to the Securities of such series or the Guarantees, respectively, or
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(z) make any guarantee payments with respect to any guarantee by the Corporation
or the Guarantor of the debt securities of any Subsidiary of the Corporation or
the Guarantor if such guarantee ranks pari passu with or junior in interest to
the Securities of such series (other than (a) repurchases, redemptions or other
acquisitions of shares of capital stock of the Corporation or the Guarantor in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation or the Guarantor (or securities convertible into or
exercisable for such capital stock) as consideration in an acquisition
transaction entered into prior to the applicable Extension Period, (b) as a
result of an exchange or conversion of any class or series of the Corporation's
or the Guarantor's capital stock (or any capital stock of a Subsidiary of the
Corporation or the Guarantor) for any class or series of the Corporation's or
the Guarantor's capital stock, respectively, or of any class or series of the
Corporation's or the Guarantor's indebtedness for any class or series of the
Corporation's or the Guarantor's capital stock, respectively, (c) the purchase
of fractional interests in shares of the Corporation's or the Guarantor's
capital stock, respectively, pursuant to the conversion or exchange provisions
of such capital stock or the security being converted or exchanged, (d) any
declaration of a dividend in connection with any Rights Plan, or the issuance of
rights, stock or other property under any Rights Plan, or the redemption or
repurchase of rights pursuant thereto, or (e) 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 ranks pari passu with or junior to
such stock) if at such time (i) there shall have occurred any event (A) of which
the Corporation or the Guarantor has actual knowledge that with the giving of
notice or the lapse of time, or both, would constitute an Event of Default with
respect to the Securities of such series, and (B) which the Corporation and the
Guarantor shall not have taken reasonable steps to cure, (ii) if the Securities
of such series are held by an Issuer Trust, the Corporation or the Guarantor
shall be in default with respect to its payment of any obligations under the
Guarantee Agreement relating to the Capital Securities issued by such Issuer
Trust, or (iii) the Corporation shall have given notice of its election to begin
an Extension Period with respect to the Securities of such series as provided
herein and shall not have rescinded such notice, or such Extension Period, or
any extension thereof, shall be continuing.
The Corporation also covenants with each Holder of Securities of a
series issued to an Issuer Trust (i) to hold, directly or indirectly, 100% of
the Common Securities of such Issuer Trust, provided that any permitted
successor of the Corporation hereunder may succeed to the Corporation's
ownership of such Common Securities, (ii) as holder of such Common Securities,
not to voluntarily terminate, wind-up or liquidate such Issuer Trust, other than
(a) in connection with a distribution of the Securities of such series to the
holders of the related Capital Securities in liquidation of such Issuer Trust,
or (b) in connection with certain mergers, consolidations or amalgamations
permitted by the related Trust Agreement, and (iii) to use its reasonable
efforts, consistent with the terms and provisions of such Trust Agreement, to
cause such Issuer Trust to continue not to be taxable as a corporation for
United States federal income tax purposes.
SECTION 10.8. Original Issue Discount.
For each year during which any Securities that were issued with
original issue discount are Outstanding, the Corporation shall furnish to each
Paying Agent in a timely fashion such information as may be reasonably requested
by each Paying Agent in order that each Paying Agent may prepare the information
which it is required to report for such year on Internal Revenue Service Forms
1096 and 1099 pursuant to Section 6049 of the Internal Revenue Code of 1986, as
amended. Such information shall include the amount of original issue discount
includible in income for each $1,000 of principal amount at Stated Maturity of
outstanding Securities during such year.
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ARTICLE XI
REDEMPTION OF SECURITIES
SECTION 11.1 Applicability of This Article.
Redemption of Securities of any series (whether by operation of a
sinking fund or otherwise) as permitted or required by any form of Security
issued pursuant to this Indenture shall be made in accordance with such form of
Security and this Article; provided, however, that if any provision of any such
form of Security shall conflict with any provision of this Article, the
provision of such form of Security shall govern. Except as otherwise set forth
in the form of Security for such series, each Security of a series shall be
subject to partial redemption only in the amount of $1,000 or any integral
multiples thereof.
SECTION 11.2. Election to Redeem; Notice to Trustee.
The election of the Corporation to redeem any Securities shall be
evidenced by or pursuant to a Board Resolution. In case of any redemption at the
election of the Corporation, the Corporation shall, at least 45 days prior to
the Redemption Date (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee and, in the case of Securities of a series held by
an Issuer Trust, the Property Trustee under the related Trust Agreement, of such
date and of the principal amount of Securities of the applicable series to be
redeemed and provide the additional information required to be included in the
notice or notices contemplated by Section 11.4; provided that in the case of any
series of Securities initially issued to an Issuer Trust, for so long as such
Securities are held by such Issuer Trust, such notice shall be given not less
than 45 nor more than 75 days prior to such Redemption Date (unless a shorter
notice shall be satisfactory to the Property Trustee under the related Trust
Agreement). In the case of any redemption of Securities prior to the expiration
of any restriction on such redemption provided in the terms of such Securities,
the Corporation shall furnish the Trustee with an Officers' Certificate and an
Opinion of Counsel evidencing compliance with such restriction.
SECTION 11.3. Selection of Securities to be Redeemed.
If less than all the Securities of any series are to be redeemed, the
particular Securities to be redeemed shall be selected not more than 60 days
prior to the Redemption Date by the Trustee, from the Outstanding Securities of
such series not previously called for redemption, by such method as the Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of a portion of the principal amount of any Security of such series,
provided that the unredeemed portion of the principal amount of any Security
shall be in an authorized denomination (which shall not be less than the minimum
authorized denomination) for such Security.
The Trustee shall promptly notify the Corporation in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed.
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SECTION 11.4. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not later than the thirtieth day, and not earlier than the
sixtieth day, prior to the Redemption Date, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register, provided that in the case of any series of Securities initially issued
to an Issuer Trust, for so long as such Securities are held by such Issuer
Trust, such notice shall be given not less than 45 nor more than 75 days prior
to such Redemption Date (unless a shorter notice shall be satisfactory to the
Property Trustee under the related Trust Agreement).
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price or, if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, the estimate of
the Redemption Price together with a statement that it is an estimate and that
the actual Redemption Price will be calculated on the third Business Day prior
to the Redemption Date (and if an estimate is provided, a further notice shall
be sent of the actual Redemption Price on the date that such Redemption Price is
calculated);
(c) if less than all Outstanding Securities of such particular series
are to be redeemed, the identification (and, in the case of partial redemption,
the respective principal amounts) of the particular Securities to be redeemed;
(d) that on the Redemption Date, the Redemption Price will become due
and payable upon each such Security or portion thereof, and that interest
(including any Additional Interest) thereon, if any, shall cease to accrue on
and after said date;
(e) the place or places where such Securities are to be surrendered for
payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is the case;
(g) such other provisions as may be required in respect of the terms of
a particular series of Securities.
Notice of redemption of Securities to be redeemed at the election of
the Corporation shall be given by the Corporation or, at the Corporation's
request, by the Trustee in the name and at the expense of the Corporation and
shall be irrevocable. The notice if mailed in the manner provided above shall be
conclusively presumed to have been duly given, whether or not the Holder
receives such notice. In any case, a failure to give such notice by mail or any
defect in the notice to the Holder of any Security designated for redemption as
a whole or in part shall not affect the validity of the proceedings for the
redemption of any other Security.
SECTION 11.5. Deposit of Redemption Price.
Prior to 10:00 a.m., New York City time, on the Redemption Date
specified in the notice of redemption given as provided in Section 11.4, the
Corporation will deposit with the Trustee or with one or more Paying Agents (or
if the Corporation is acting as its own Paying Agent, the Corporation will
segregate and hold in trust as provided in Section 10.3) an amount of money
sufficient to pay the
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Redemption Price of, and any accrued interest (including any Additional
Interest) on, all the Securities (or portions thereof) that are to be redeemed
on that date.
SECTION 11.6. Payment of Securities Called for Redemption.
If any notice of redemption has been given as provided in Section 11.4,
the Securities or portion of Securities with respect to which such notice has
been given shall become due and payable on the date and at the place or places
stated in such notice at the applicable Redemption Price, together with accrued
interest (including any Additional Interest) to the Redemption Date. On
presentation and surrender of such Securities at a Place of Payment in said
notice specified, the said Securities or the specified portions thereof shall be
paid and redeemed by the Corporation at the applicable Redemption Price,
together with accrued interest (including any Additional Interest) to the
Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1, installments of interest (including any Additional
Interest) whose Stated Maturity is on or prior to the Redemption Date will be
payable to the Holders of such Securities, or one or more Predecessor
Securities, registered as such at the close of business on the relevant record
dates according to their terms and the provisions of Section 3.8.
Upon presentation of any Security redeemed in part only, the
Corporation shall execute and the Trustee shall authenticate and deliver to the
Holder thereof, at the expense of the Corporation, a new Security or Securities
of the same series, of authorized denominations, in aggregate principal amount
equal to the unredeemed portion of the Security so presented and having the same
Original Issue Date, Stated Maturity and terms.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of and premium, if any, on such
Security shall, until paid, bear interest from the Redemption Date at the rate
prescribed therefor in the Security.
SECTION 11.7. Right of Redemption of Securities Initially Issued to an
Issuer Trust.
In the case of the Securities of a series initially issued to an Issuer
Trust, except as otherwise specified as contemplated by Section 3.1, the
Corporation, at its option, may redeem such Securities (i) on or after the date
specified in such Security, in whole at any time or in part from time to time,
or (ii) upon the occurrence and during the continuation of a Tax Event or a
Capital Treatment Event, at any time within 90 days following the occurrence and
during the continuation of such Tax Event or Capital Treatment Event, in whole
(but not in part), in each case at a Redemption Price of 100% unless specified
in such Security, together with accrued interest (including any Additional
Interest) to the Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Trust Agreement related to the Issuer Trust to which such Securities were
issued, including any requirement in such Trust Agreement as to the minimum
Liquidation Amount (as defined in such Trust Agreement) of Capital Securities
that may be held by a holder of Capital Securities thereunder.
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ARTICLE XII
SINKING FUNDS
SECTION 12.1. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund
for the retirement of Securities of any series except as otherwise specified as
contemplated by Section 3.1 for such Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the cash amount of any sinking
fund payment may be subject to reduction as provided in Section 12.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of such Securities.
SECTION 12.2. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment
with respect to any Securities of a series in cash, the Corporation may at its
option, at any time no more than 16 months and no less than 45 days prior to the
date on which such sinking fund payment is due, deliver to the Trustee
Securities of such series (together with the unmatured coupons, if any,
appertaining thereto) theretofore purchased or otherwise acquired by the
Corporation, except Securities of such series that have been redeemed through
the application of mandatory or optional sinking fund payments pursuant to the
terms of the Securities of such series, accompanied by a Corporation Order
instructing the Trustee to credit such obligations and stating that the
Securities of such series were originally issued by the Corporation by way of
bona fide sale or other negotiation for value; provided that the Securities to
be so credited have not been previously so credited. The Securities to be so
credited shall be received and credited for such purpose by the Trustee at the
redemption price for such Securities, as specified in the Securities so to be
redeemed, for redemption through operation of the sinking fund and the amount of
such sinking fund payment shall be reduced accordingly.
SECTION 12.3. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund payment date for any
series of Securities, the Corporation will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
such Securities pursuant to the terms of such Securities, the portion thereof,
if any, which is to be satisfied by payment of cash in the currency in which the
Securities of such series are payable (except as provided pursuant to Section
3.1) and the portion thereof, if any, that is to be satisfied by delivering and
crediting Securities pursuant to Section 12.2 and will also deliver to the
Trustee any Securities to be so delivered. Such Officers' Certificate shall be
irrevocable and upon its delivery the Corporation shall be obligated to make the
cash payment or payments therein referred to, if any, on or before the
succeeding sinking fund payment date. In the case of the failure of the
Corporation to deliver such Officers' Certificate (or, as required by this
Indenture, the Securities and coupons, if any, specified in such Officers'
Certificate) by the due date therefor, the sinking fund payment due on the
succeeding sinking fund payment date for such series shall be paid entirely in
cash and shall be sufficient to redeem the principal amount of the Securities of
such series subject to a mandatory sinking fund payment without the right to
deliver or credit securities as
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provided in Section 12.2 and without the right to make the optional sinking fund
payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Corporation if the Corporation is acting as its own Paying
Agent) on the sinking fund payment date on which such payment is made (or, if
such payment is made before a sinking fund payment date, on the sinking fund
payment date immediately following the date of such payment) to the redemption
of Securities of such series at the Redemption Price specified in such
Securities with respect to the sinking fund. Any and all sinking fund moneys
with respect to the Securities of any particular series held by the Trustee (or
if the Corporation is acting as its own Paying Agent, segregated and held in
trust as provided in Section 10.3) on the last sinking fund payment date with
respect to Securities of such series and not held for the payment or redemption
of particular Securities of such series shall be applied by the Trustee (or by
the Corporation if the Corporation is acting as its own Paying Agent), together
with other moneys, if necessary, to be deposited (or segregated) sufficient for
the purpose, to the payment of the principal of the Securities of such series at
Maturity. The Trustee shall select the Securities to be redeemed upon such
sinking fund payment date in the manner specified in Section 11.3 and cause
notice of the redemption thereof to be given in the name of and at the expense
of the Corporation in the manner provided in Section 11.4. Such notice having
been duly given, the redemption of such Securities shall be made upon the terms
and in the manner stated in Section 11.6. On or before each sinking fund payment
date, the Corporation shall pay to the Trustee (or, if the Corporation is acting
as its own Paying Agent, the Corporation shall segregate and hold in trust as
provided in Section 10.3) in cash a sum in the currency in which Securities of
such series are payable (except as provided pursuant to Section 3.1) equal to
the principal (and premium, if any) and any interest (including any Additional
Interest) accrued to the Redemption Date for Securities or portions thereof to
be redeemed on such sinking fund payment date pursuant to this Section 12.3.
Neither the Trustee nor the Corporation shall redeem any Securities of
a series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series, except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Corporation, if the
Corporation is then acting as its own Paying Agent) shall redeem such Securities
if cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Corporation) for that purpose in accordance with the terms of
this Article XII. Except as aforesaid, any moneys in the sinking fund for such
series at the time when any such default or Event of Default shall occur and any
moneys thereafter paid into such sinking fund shall, during the continuance of
such default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.3.
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ARTICLE XIII
SUBORDINATION OF SECURITIES
SECTION 13.1. Securities Subordinate to Senior Debt.
Each of the Corporation and the Guarantor covenants and agrees, and
each Holder of a Security, by its acceptance thereof, likewise covenants and
agrees, that, to the extent and in the manner hereinafter set forth in this
Article, the payment of the principal of (and premium, if any) and interest
(including any Additional Interest) on each and all of the Securities of each
and every series and payments under the Guarantees are hereby expressly made
subordinate and subject in right of payment to the prior payment in full of all
Senior Debt of the Corporation and the Guarantor, respectively.
SECTION 13.2. No Payment When Senior Debt in Default; Payment Over of
Proceeds Upon Dissolution, Etc.
If the Corporation or the Guarantor shall default in the payment of any
principal of (or premium, if any) or interest on any of its respective Senior
Debt when the same becomes due and payable, whether at maturity or at a date
fixed for prepayment or by declaration of acceleration or otherwise, then, upon
written notice of such default to the Corporation or the Guarantor, as the case
may be, by the holders of Senior Debt or any trustee therefor, unless and until
such default shall have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the principal of (or
premium, if any) or interest (including any Additional Interest) on any of the
Securities or the Guarantees, respectively, or in respect of any redemption,
repayment, retirement, purchase or other acquisition of any of the Securities.
In the event of (a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other similar
proceedings relating to either of the Corporation or the Guarantor, its
creditors or its property, (b) any proceeding for the liquidation, dissolution
or other winding up of the Corporation or the Guarantor, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings, (c)
any assignment by the Corporation or the Guarantor for the benefit of creditors
or (d) any other marshalling of the assets of the Corporation or the Guarantor
(each such event, if any, herein sometimes referred to as a "Proceeding"), all
Senior Debt of the Corporation or the Guarantor, as the case may be (including
any interest thereon accruing after the commencement of any such proceedings),
shall first be paid in full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any of the
Securities on account thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the Corporation or the
Guarantor or any other corporation provided for by a plan of reorganization or
readjustment the payment of which is subordinate, at least to the extent
provided in these subordination provisions with respect to the indebtedness
evidenced by the Securities and the Guarantees, as the case may be, to the
payment of all Senior Debt of the Corporation or the Guarantor, respectively, at
the time outstanding and to any securities issued in respect thereof under any
such plan of reorganization or readjustment), which would otherwise (but for
these subordination provisions) be payable or deliverable in respect of the
Securities of any series or the Guarantees thereon, as the case may be, shall be
paid or delivered directly to the holders of Senior Debt of the Corporation or
the Guarantor, respectively, in accordance with the priorities then existing
among such holders until all such Senior Debt (including any interest thereon
accruing after the commencement of any Proceeding) shall have been paid in full.
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In the event of any Proceeding, after payment in full of all sums owing
with respect to the Corporation's or the Guarantor's Senior Debt, as the case
may be, the Holders of the Securities, together with the holders of any
obligations of the Corporation or the Guarantor, as the case may be, ranking on
a parity with the Securities or the Guarantees, respectively (which for this
purpose only shall include the Allocable Amounts of Senior Subordinated
Indebtedness), shall be entitled to be paid from the remaining assets of the
Corporation or the Guarantor, as the case may be, the amounts at the time due
and owing on account of unpaid principal of (and premium, if any) and interest
on the Securities or the Guarantees, as the case may be, and such other
obligations before any payment or other distribution, whether in cash, property
or otherwise, shall be made on account of any capital stock or any obligations
of the Corporation or the Guarantor, respectively, ranking junior to the
Securities or the Guarantees, as the case may be, and such other obligations.
If, notwithstanding the foregoing, any payment or distribution of any character
or any security, whether in cash, securities or other property (other than
securities of the Corporation or the Guarantor or any other corporation provided
for by a plan of reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these subordination provisions
with respect to the indebtedness evidenced by the Securities and the Guarantees,
as the case may be, to the payment of all Senior Debt of the Corporation or the
Guarantor, respectively, at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or readjustment), shall be
received by the Trustee or any Holder in contravention of any of the terms
hereof and before all Senior Debt of the Corporation or the Guarantor, as the
case may be, shall have been paid in full, such payment or distribution or
security shall be received in trust for the benefit of, and shall be paid over
or delivered and transferred to, the holders of the Senior Debt of the
Corporation or the Guarantor, as the case may be, at the time outstanding in
accordance with the priorities then existing among such holders for application
to the payment of all Senior Debt of the Corporation or the Guarantor, as the
case may be, remaining unpaid, to the extent necessary to pay all such Senior
Debt of the Corporation or the Guarantor, as the case may be, in full. In the
event of the failure of the Trustee or any Holder to endorse or assign any such
payment, distribution or security, each holder of Senior Debt of the Corporation
or the Guarantor, as the case may be, is hereby irrevocably authorized to
endorse or assign the same.
The Trustee and the Holders shall take such action (including, without
limitation, the delivery of this Indenture to an agent for the holders of Senior
Debt of the Corporation or the Guarantor, as the case may be, or consent to the
filing of a financing statement with respect hereto) as may, in the opinion of
counsel designated by the holders of a majority in principal amount of the
Senior Debt of the Corporation or the Guarantor, as the case may be, at the time
outstanding, be necessary or appropriate to assure the effectiveness of the
subordination effected by these provisions.
The provisions of this Section 13.2 shall not impair any rights,
interests, remedies or powers of any secured creditor of the Corporation or the
Guarantor in respect of any security interest the creation of which is not
prohibited by the provisions of this Indenture.
The securing of any obligations of the Corporation or the Guarantor, as
the case may be, otherwise ranking on a parity with the Securities or
Guarantees, respectively, or ranking junior to the Securities or Guarantees,
respectively, shall not be deemed to prevent such obligations from constituting,
respectively, obligations ranking on a parity with the Securities or Guarantees,
as the case may be, or ranking junior to the Securities or the Guarantees, as
the case may be.
SECTION 13.3. Payment Permitted If No Default.
Nothing contained in this Article or elsewhere in this Indenture or in
any of the Securities or Guarantees shall prevent (a) the Corporation or the
Guarantor, at any time, except during the
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pendency of the conditions described in the first paragraph of Section 13.2 or
of any Proceeding referred to in Section 13.2, from making payments at any time
of principal of (and premium, if any) or interest (including any Additional
Interest) on the Securities or the Guarantees, respectively, or (b) the
application by the Trustee of any moneys deposited with it hereunder to the
payment of or on account of the principal of (and premium, if any) or interest
(including any Additional Interest) on the Securities or the Guarantees, as the
case may be, or the retention of such payment by the Holders, if, at the time of
such application by the Trustee, it did not have knowledge that such payment
would have been prohibited by the provisions of this Article.
SECTION 13.4. Subrogation to Rights of Holders of Senior Debt.
Subject to the payment in full of all amounts due or to become due on
all Senior Debt of the Corporation or the Guarantor, as the case may be, or the
provision for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt of the Corporation or the Guarantor,
as the case may be, the Holders of the Securities shall be subrogated to the
extent of the payments or distributions made to the holders of such Senior Debt
pursuant to the provisions of this Article (equally and ratably with the holders
of all indebtedness of the Corporation or the Guarantor, as the case may be,
that by its express terms is subordinated to Senior Debt of the Corporation or
the Guarantor, as the case may be, to substantially the same extent as the
Securities and the Guarantees, respectively, are subordinated to the Senior Debt
of the Corporation or the Guarantor, as the case may be, and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt of the Corporation or the Guarantor, as the case may be, until the
principal of (and premium, if any) and interest (including any Additional
Interest) on the Securities or the Guarantees, respectively, shall be paid in
full. For purposes of such subrogation, no payments or distributions to the
holders of the Senior Debt of the Corporation or the Guarantor, as the case may
be, of any cash, property or securities to which the Holders of the Securities
or the Guarantees, as the case may be, or the Trustee would be entitled except
for the provisions of this Article, and no payments over pursuant to the
provisions of this Article to the holders of Senior Debt of the Corporation or
the Guarantor, as the case may be, by Holders of the Securities, or the Trustee,
shall, as among the Corporation or the Guarantor, as the case may be, its
creditors other than holders of its Senior Debt, and the Holders of the
Securities, be deemed to be a payment or distribution by the Corporation or the
Guarantor, as the case may be, to or on account of its Senior Debt.
SECTION 13.5. Provisions Solely to Define Relative Rights.
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Debt of the Corporation and the Guarantor,
respectively, on the other hand. Nothing contained in this Article or elsewhere
in this Indenture or in the Securities or Guarantees, as the case may be, is
intended to or shall (a) impair, as between the Corporation or the Guarantor, as
the case may be, and the Holders of the Securities, the obligations of the
Corporation or the Guarantor, as the case may be, which are absolute and
unconditional, to pay to the Holders of the Securities the principal of (and
premium, if any) and interest (including any Additional Interest) on the
Securities or the Guarantees, as the case may be, as and when the same shall
become due and payable in accordance with their terms; or (b) affect the
relative rights against the Corporation or the Guarantor, as the case may be, of
the Holders of the Securities and creditors of the Corporation and the
Guarantor, respectively, other than their rights in relation to the holders of
Senior Debt of the Corporation or the Guarantor, as the case may be; or (c)
prevent the Trustee or the Holder of any Security (or to the extent expressly
provided herein, the holder of any Capital Security) from exercising all
remedies otherwise permitted by
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applicable law upon default under this Indenture, including filing and voting
claims in any Proceeding, subject to the rights, if any, under this Article of
the holders of Senior Debt of the Corporation or the Guarantor, as the case may
be, to receive cash, property and securities otherwise payable or deliverable to
the Trustee or such Holder.
SECTION 13.6. Trustee to Effectuate Subordination.
Each Holder of a Security by his or her acceptance thereof authorizes
and directs the Trustee on his or her behalf to take such action as may be
necessary or appropriate to acknowledge or effectuate the subordination provided
in this Article and appoints the Trustee his or her attorney-in- fact for any
and all such purposes.
SECTION 13.7. No Waiver of Subordination Provisions.
No right of any present or future holder of any of the Corporation's or
the Guarantor's Senior Debt, as the case may be, 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 Corporation or the Guarantor, as the
case may be, or by any act or failure to act, in good faith, by any such holder,
or by any noncompliance by the Corporation or the Guarantor, as the case may be,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or be otherwise charged with.
Without in any way limiting the generality of the immediately preceding
paragraph, the holders of the Corporation's or the Guarantor's Senior Debt, as
the case may be, may, at any time and from to time, without the consent of or
notice to the Trustee or the Holders of the Securities of any series, without
incurring responsibility to such Holders of the Securities and without impairing
or releasing the subordination provided in this Article or the obligations
hereunder of such Holders of the Securities to the holders of the Corporation's
and the Guarantor's Senior Debt, respectively, 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, Senior Debt of the Corporation or the
Guarantor, as the case may be, or otherwise amend or supplement in any manner
such Senior Debt or any instrument evidencing the same or any agreement under
which such Senior Debt is outstanding; (ii) sell, exchange, release or otherwise
deal with any property pledged, mortgaged or otherwise securing Senior Debt of
the Corporation or the Guarantor, as the case may be; (iii) release any Person
liable in any manner for the collection of Senior Debt of the Corporation or the
Guarantor, as the case may be; and (iv) exercise or refrain from exercising any
rights against the Corporation, the Guarantor and any other Person.
SECTION 13.8. Notice to Trustee.
The Corporation or the Guarantor, as the case may be, shall give prompt
written notice to the Trustee of any fact known to the Corporation or the
Guarantor, as the case may be, that would prohibit the making of any payment to
or by the Trustee in respect of the Securities and the Guarantees, respectively.
Notwithstanding the provisions of this Article 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 to or by the Trustee in
respect of the Securities or the Guarantees, unless and until the Trustee shall
have received written notice thereof from the Corporation or the Guarantor, as
the case may be, or a holder of the Corporation's or the Guarantor's Senior
Debt, as the case may be, or from any trustee, agent or representative therefor;
provided, however, that if the Trustee shall not have received the notice
provided for in this Section at least two Business Days prior to the date upon
which by the terms hereof any monies may become payable for
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any purpose (including, the payment of the principal of (and premium, if any,
on) or interest (including any Additional Interest) on any Security or any
Guarantee), then, anything herein contained to the contrary notwithstanding, the
Trustee shall have full power and authority to receive such monies and to apply
the same to the purpose for which they were received and shall not be affected
by any notice to the contrary that may be received by it within two Business
Days prior to such date.
Subject to the provisions of Section 6.1, the Trustee shall be entitled
to rely on the delivery to it of a written notice by a Person representing
himself or herself to be a holder of Senior Debt of the Corporation or the
Guarantor, as the case may be (or a trustee or attorney-in-fact therefor), to
establish that such notice has been given by a holder of Senior Debt of the
Corporation or the Guarantor, as the case may be (or a trustee or
attorney-in-fact therefor). 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 Senior Debt of the Corporation or the Guarantor, as the case may
be, to participate in any payment or distribution pursuant to this Article, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt of the Corporation
or the Guarantor, as the case may be, 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, 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 13.9. Reliance on Judicial Order or Certificate of Liquidating
Agent.
Upon any payment or distribution of assets of the Corporation or the
Guarantor referred to in this Article, the Trustee, subject to the provisions of
Section 6.1, and the Holders of the Securities shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such payment or distribution, delivered to the Trustee or to
the Holders of Securities for the purpose of ascertaining the Persons entitled
to participate in such payment or distribution, the holders of the Senior Debt
and other indebtedness of the Corporation or the Guarantor, as the case may be,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article.
SECTION 13.10. Trustee Not Fiduciary for Holders of Senior Debt.
The Trustee, in its capacity as trustee under this Indenture, shall not
be deemed to owe any fiduciary duty to the holders of the Corporation's or the
Guarantor's Senior Debt and shall not be liable to any such holders if it shall
in good faith mistakenly pay over or distribute to Holders of Securities or
Guarantees, as the case may be, or to the Corporation or the Guarantor, as the
case may be, or to any other Person cash, property or securities to which any
holders of Corporation's or the Guarantor's Senior Debt, as the case may be,
shall be entitled by virtue of this Article or otherwise.
SECTION 13.11. Rights of Trustee as Holder of Senior Debt; Preservation
of Trustee's Rights.
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Debt of the
Corporation or the Guarantor, as the case may be, that may at any time be held
by it, to the same extent as any other holder of Senior Debt of the Corporation
and the Guarantor, respectively, and nothing in this Indenture shall deprive the
Trustee of any of its rights as such holder.
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SECTION 13.12. Article Applicable to Paying Agents.
If at any time any Paying Agent other than the Trustee shall have been
appointed by the Corporation and be then acting hereunder, the term "Trustee" as
used in this Article shall in such case (unless the context otherwise requires)
be construed as extending to and including such Paying Agent within its meaning
as fully for all intents and purposes as if such Paying Agent were named in this
Article in addition to or in place of the Trustee.
* * * *
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This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
BANPONCE FINANCIAL CORP.
By: /s/ Jorge A. Junquera
-------------------------------------
Name: Jorge A. Junquera
Title: President
BANPONCE CORPORATION
By: /s/ Jorge A. Junquera
-------------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice
President
Attest: /s/ Brunilda Santos De Alvarez
------------------------------
THE FIRST NATIONAL BANK OF CHICAGO,
as Trustee
By: /s/ Melissa Weisman
-------------------------------------
Name: Melissa G. Weisman
Title: Vice President
Attest: /s/ John F. Silane
-------------------------------
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AMENDED AND RESTATED TRUST AGREEMENT
among
BANPONCE FINANCIAL CORP.,
as Depositor
BANPONCE CORPORATION,
as Guarantor
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
---------------------------
Dated as of February 5, 1997
---------------------------
BANPONCE TRUST I
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<PAGE>
BANPONCE TRUST I
Certain Sections of this Trust Agreement relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Trust Agreement
Act Section Section
- --------------- ------------
(ss.) 310 (a)(1)................................... 8.7
(a)(2)................................... 8.7
(a)(3)................................... 8.9
(a)(4)................................... 2.7(a)(ii)
(b)...................................... 8.8
(ss.) 311 (a)...................................... 8.13
(b)...................................... 8.13
(ss.) 312 (a)...................................... 5.8
(b)...................................... 5.8
(c)...................................... 5.8
(ss.) 313 (a)...................................... 8.15(a)
(a)(4)................................... 8.15(b)
(b)...................................... 8.15(b)
(c)...................................... 10.8
(d)...................................... 8.15(c)
(ss.) 314 (a)...................................... 8.16
(b)...................................... Not Applicable
(c)(1)................................... 8.17
(c)(2)................................... 8.17
(c)(3)................................... Not Applicable
(d)...................................... Not Applicable
(e)...................................... 1.1, 8.17
(ss.) 315 (a)...................................... 8.1(a), 8.3(a)
(b)...................................... 8.2, 10.8
(c)...................................... 8.1(a)
(d)...................................... 8.1, 8.3
(e)...................................... Not Applicable
(ss.) 316 (a)...................................... Not Applicable
(a)(1)(A)................................ Not Applicable
(a)(1)(B)................................ Not Applicable
(a)(2)................................... Not Applicable
(b)...................................... 5.15
(c)...................................... 6.7
(ss.) 317 (a)(1)................................... Not Applicable
(a)(2)................................... Not Applicable
(b)...................................... 5.10
(ss.) 318 (a)...................................... 10.10
Note: This reconciliation and tie sheet shall not, for any purpose, be deemed
to be a part of the TrustAgreement.
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<PAGE>
TABLE OF CONTENTS
ARTICLE I.
DEFINED TERMS
SECTION 1.1. Definitions...................................... 1
ARTICLE II.
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.............................................. 10
SECTION 2.2. Office of the Delaware Trustee;
Principal Place of Business...................... 10
SECTION 2.3. Initial Contribution of Trust
Property; Organizational Expenses................. 10
SECTION 2.4. Issuance of the Capital Securities................ 10
SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of
Debentures........................................ 10
SECTION 2.6. Continuation of Trust............................. 11
SECTION 2.7. Authorization to Enter into Certain
Transactions.................................. 11
SECTION 2.8. Assets of Trust................................... 15
SECTION 2.9. Title to Trust Property........................... 15
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.1. Payment Account................................... 15
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions...................................... 15
SECTION 4.2. Redemption......................................... 16
SECTION 4.3. Subordination of Common Securities................. 18
SECTION 4.4. Payment Procedures................................. 19
SECTION 4.5. Tax Returns and Reports............................ 19
SECTION 4.6. Payment of Taxes, Duties, Etc. of the
Issuer Trust.................................... 19
SECTION 4.7. Payments under Indenture or Pursuant
to Direct Actions............................... 19
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ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership........................... 20
SECTION 5.2. The Trust Securities Certificates........... 20
SECTION 5.3. Execution and Delivery of Trust
Securities Certificates.................... 20
SECTION 5.4. Book-Entry Capital Securities............... 20
SECTION 5.5. Registration of Transfer and Exchange
of Capital Securities Certificates.......... 22
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates............... 23
SECTION 5.7. Persons Deemed Holders...................... 24
SECTION 5.8. Access to List of Holders' Names and
Addresses................................... 24
SECTION 5.9. Maintenance of Office or Agency............. 24
SECTION 5.10. Appointment of Paying Agent................. 24
SECTION 5.11. Ownership of Common Securities by
Depositor................................... 25
SECTION 5.12. Notices to Clearing Agency.................. 25
SECTION 5.13. Rights of Holders; Waivers of Past
Defaults.................................. 25
ARTICLE VI.
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights................ 27
SECTION 6.2. Notice of Meetings.......................... 28
SECTION 6.3. Meetings of Holders of the Capital
Securities................................. 28
SECTION 6.4. Voting Rights............................... 29
SECTION 6.5. Proxies, etc................................ 29
SECTION 6.6. Holder Action by Written Consent............ 29
SECTION 6.7. Record Date for Voting and Other
Purposes................................... 29
SECTION 6.8. Acts of Holders............................. 30
SECTION 6.9. Inspection of Records....................... 31
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the
Property Trustee and the Delaware
Trustee..................................... 31
SECTION 7.2. Representations and Warranties of
Depositor.................................. 32
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ARTICLE VIII.
THE ISSUER TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities................. 32
SECTION 8.2. Certain Notices..................................... 35
SECTION 8.3. Certain Rights of Property Trustee.................. 35
SECTION 8.4. Not Responsible for Recitals or
Issuance of Securities.............................. 37
SECTION 8.5. May Hold Securities................................. 37
SECTION 8.6. Compensation; Indemnity; Fees....................... 37
SECTION 8.7. Corporate Property Trustee Required;
Eligibility of Issuer Trustees...................... 38
SECTION 8.8. Conflicting Interests............................... 39
SECTION 8.9. Co-Trustees and Separate Trustee.................... 39
SECTION 8.10. Resignation and Removal; Appointment
of Successor........................................ 40
SECTION 8.11. Acceptance of Appointment by
Successor........................................... 41
SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business.............................. 42
SECTION 8.13. Preferential Collection of Claims
Against Depositor or Issuer Trust................... 42
SECTION 8.14. Property Trustee May File Proofs of
Claim............................................... 42
SECTION 8.15. Reports by Property Trustee......................... 43
SECTION 8.16. Reports to the Property Trustee..................... 44
SECTION 8.17. Evidence of Compliance with
Conditions Precedent................................ 44
SECTION 8.18. Number of Issuer Trustees........................... 44
SECTION 8.19. Delegation of Power................................. 44
SECTION 8.20. Appointment of Administrative
Trustees............................................ 45
ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date................... 45
SECTION 9.2. Early Termination.................................. 45
SECTION 9.3. Termination........................................ 46
SECTION 9.4. Liquidation........................................ 46
SECTION 9.5. Mergers, Consolidations,
Amalgamations or Replacements of
Issuer Trust....................................... 47
ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders................... 48
SECTION 10.2. Amendment......................................... 48
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SECTION 10.3. Separability...................................... 49
SECTION 10.4. Governing Law..................................... 50
SECTION 10.5. Payments Due on Non-Business Day.................. 50
SECTION 10.6. Successors........................................ 50
SECTION 10.7. Headings.......................................... 50
SECTION 10.8. Reports, Notices and Demands...................... 50
SECTION 10.9. Agreement Not to Petition......................... 51
SECTION 10.10. Trust Indenture Act; Conflict with
Trust Indenture Act............................ 51
SECTION 10.11. Acceptance of Terms of Trust
Agreement, Guarantee Agreement and
Indenture...................................... 52
Exhibit A Certificate of Trust
Exhibit B Form of Letter of Representations
Exhibit C Form of Common Securities Certificate
Exhibit D Form of Expense Agreement
Exhibit E Form of Capital Securities Certificate
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AMENDED AND RESTATED TRUST AGREEMENT, dated as of February 5, 1997,
among (i) BanPonce Financial Corp., a Delaware corporation (including any
successors or assigns, the "Depositor"), (ii) BanPonce Corporation, a Puerto
Rico corporation (including any successors or assigns, the "Guarantor"), (iii)
The First National Bank of Chicago, a national banking association, as property
trustee (in such capacity, the "Property Trustee" and, in its separate corporate
capacity and not in its capacity as Property Trustee, the "Bank"), (iv) First
Chicago Delaware Inc., a Delaware corporation, as Delaware trustee (in such
capacity, the "Delaware Trustee"), (v) Jorge A. Junquera, an individual, Roberto
R. Herencia, an individual, Javier F. Ubarri, an individual, and Alberto
Paracchini, Jr., an individual, each of whose address is c/o BanPonce Financial
Corp., 521 Fellowship Road, Mt. Laurel, New Jersey 08054 (each an
"Administrative Trustee" and collectively the "Administrative Trustees") (the
Property Trustee, the Delaware Trustee and the Administrative Trustees being
referred to collectively as the "Issuer Trustees"), and (vi) the several
Holders, as hereinafter defined.
WITNESSETH
WHEREAS, the Depositor, the Guarantor, the Property Trustee, the
Delaware Trustee and certain of the Administrative Trustees have heretofore duly
declared and established a business trust pursuant to the Delaware Business
Trust Act by entering into the Trust Agreement, dated as of January 16, 1997
(the "Original Trust Agreement"), and by the execution and filing by the
Delaware Trustee with the Secretary of State of the State of Delaware of the
Certificate of Trust, filed on January 16, 1997, attached as Exhibit A; and
WHEREAS, the Depositor, the Guarantor and the Issuer Trustees desire to
amend and restate the Original Trust Agreement in its entirety as set forth
herein to provide for, among other things, (i) the issuance of the Common
Securities by the Issuer Trust to the Depositor, (ii) the issuance and sale of
the Capital Securities by the Issuer Trust pursuant to the Underwriting
Agreement, (iii) the acquisition by the Issuer Trust from the Depositor of all
of the right, title and interest in the Debentures, and (iv) the appointment of
certain Property Trustee and the Administrative Trustees;
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, each party, for the benefit of the
other parties and for the benefit of the Holders, hereby amends and restates the
Original Trust Agreement in its entirety and agrees as follows:
ARTICLE I.
DEFINED TERMS
SECTION 1.1. Definitions.
For all purposes of this Trust Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
<PAGE>
(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) The words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without
limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an
"Article", a "Section" or an "Exhibit" refers to an Article, a Section or an
Exhibit, as the case may be, of or to this Trust Agreement; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Trust Agreement as a whole and not to any
particular Article, Section or other subdivision.
"Act" has the meaning specified in Section 6.8.
"Additional Amount" means, with respect to Trust Securities of a given
Liquidation Amount and/or a given period, the amount of Additional Interest (as
defined in the Indenture) paid by the Depositor on a Like Amount of Debentures
for such period.
"Additional Sums" has the meaning specified in
Section 10.6 of the Indenture.
"Administrative Trustee" means each of the Persons appointed in
accordance with Section 8.20 solely in such Person's capacity as Administrative
Trustee of the Issuer Trust heretofore formed and continued hereunder and not in
such Person's individual capacity, or any successor Administrative Trustee
appointed as herein provided.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Book-Entry Capital Security, the rules and procedures of
the Clearing Agency for such Book-Entry Capital Security, in each case to the
extent applicable to such transaction and as in effect from time to time.
"Bank" has the meaning specified in the preamble to
this Trust Agreement.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having jurisdiction in
the premises judging such Person a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjudication or
composition of or in respect of such Person under any applicable Federal
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<PAGE>
or State bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of such Person or of any substantial part of its property or
ordering the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 consecutive
days; or
(b) the institution by such Person of proceedings to be adjudicated a
bankrupt or insolvent, or the consent by it to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or answer
or consent seeking reorganization or relief under any applicable Federal or
State bankruptcy, insolvency, reorganization or other similar law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or similar official) of
such Person or of any substantial part of its property, or the making by it of
an assignment for the benefit of creditors, or the admission by it in writing of
its inability to pay its debts generally as they become due and its willingness
to be adjudicated a bankrupt, or the taking of corporate action by such Person
in furtherance of any such action.
"Bankruptcy Laws" has the meaning specified in
Section 10.9.
"Board of Directors" means the board of directors of the Depositor or
the Executive Committee of the board of directors of the Depositor (or any other
committee of the board of directors of the Depositor performing similar
functions) or a committee designated by the board of directors of the Depositor
(or any such committee), comprised of two or more members of the board of
directors of the Depositor or officers of the Depositor, or both.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Depositor to have been duly adopted
by the Depositor's Board of Directors, or officers of the Depositor to which
authority to act on behalf of the Board of Directors has been delegated and to
be in full force and effect on the date of such certification, and delivered to
the Issuer Trustees.
"Book-Entry Capital Securities Certificate" means a
Capital Securities Certificate evidencing ownership of
Book-Entry Capital Securities.
"Book-Entry Capital Security" means a Capital Security, the ownership
and transfers of which shall be made through book entries by a Clearing Agency
as described in Section 5.4.
"Business Day" means a day other than (a) a Saturday or Sunday, (b) a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed, or (c) a day on which the
Property Trustee's Corporate Trust Office or the Corporate Trust Office of the
Debenture Trustee is closed for business.
"Capital Securities Certificate" means a certificate evidencing
ownership of Capital Securities, substantially in the form attached as Exhibit
E.
"Capital Security" means a preferred undivided beneficial interest in
the Issuer Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution to the extent provided herein.
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"Clearing Agency" means an organization registered as a "clearing
agency" pursuant to Section 17A of the Securities Exchange Act of 1934, as
amended. DTC will be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank, other
financial institution or other Person for whom from time to time a Clearing
Agency effects book-entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Date" has the meaning specified in the Underwriting Agreement,
which date is also the date of execution and delivery of this Trust Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act or, if at any time after the
execution of this 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.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Common Security" means a common undivided beneficial interest in the
Issuer Trust, having a Liquidation Amount of $1,000 and having the rights
provided therefor in this Trust Agreement, including the right to receive
Distributions and a Liquidation Distribution to the extent provided herein.
"Corporate Trust Office" means (i) when used with respect to the
Property Trustee, the principal office of the Property Trustee located in
Chicago, Illinois, and (ii) when used with respect to the Debenture Trustee, the
principal office of the Debenture Trustee located in Chicago, Illinois.
"Debenture Event of Default" means any "Event of Default" specified in
Section 5.1 of the Indenture.
"Debenture Redemption Date" means, with respect to any Debentures to be
redeemed under the Indenture, the date fixed for redemption of such Debentures
under the Indenture.
"Debenture Tax Event" means a "Tax Event" as defined
in the Indenture.
"Debenture Trustee" means the Person identified as the "Trustee" in the
Indenture, solely in its capacity as Trustee pursuant to the Indenture and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Trustee appointed as provided in the Indenture.
"Debentures" means the Depositor's 8.327% Junior
Subordinated Deferrable Interest Debentures, Series A,
issued pursuant to the Indenture.
"Definitive Capital Securities Certificates" means either or both (as
the context requires) of (i) Capital Securities Certificates issued as
Book-Entry Capital Securities Certificates as provided in
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Section 5.2 or 5.4, and (ii) Capital Securities Certificates issued in
certificated, fully registered form as provided in Section 5.2, 5.4 or 5.5.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of the
Delaware Code, 12 Del. Code ss. 3801 et seq., as it may be amended from time to
time.
"Delaware Trustee" means the Person identified as the "Delaware
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Delaware Trustee of the trust heretofore formed and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Delaware Trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble
to this Trust Agreement.
"Distribution Date" has the meaning specified in
Section 4.1(a).
"Distributions" means amounts payable in respect of
the Trust Securities as provided in Section 4.1.
"DTC" means The Depository Trust Company.
"Early Termination Event" has the meaning specified in
Section 9.2.
"Event of Default" means any one of the following events (whatever the
reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the occurrence of a Debenture Event of Default; or
(b) default by the Issuer Trust in the payment of any Distribution when
it becomes due and payable, and continuation of such default for a
period of 30 days; or
(c) default by the Issuer Trust in the payment of any
Redemption Price of any Trust Security when it becomes
due and payable; or
(d) default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in this Trust Agreement
(other than those specified in clause (b) or (c) above) and
continuation of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
defaulting Issuer Trustees by the Holders of at least 25% in aggregate
Liquidation Amount of the Outstanding Capital Securities a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the Property
Trustee if a successor Property Trustee has not been appointed within
90 days thereof.
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"Exchange Act" means the Securities Exchange Act of 1934, and any
successor statute thereto, in each case as amended from time to time.
"Expense Agreement" means the Agreement as to Expenses and Liabilities,
dated as of the Closing Date, between the Depositor, in its capacity as holder
of the Common Securities, and the Issuer Trust, substantially in the form
attached as Exhibit D, as amended from time to time.
"Expiration Date" has the meaning specified in
Section 9.1.
"Guarantee Agreement" means the Guarantee Agreement executed and
delivered by the Depositor, the Guarantor and The First National Bank of
Chicago, as guarantee trustee, contemporaneously with the execution and delivery
of this Trust Agreement, for the benefit of the holders of the Capital
Securities, as amended from time to time.
"Guarantor" has the meaning specified in the preamble
to this Trust Agreement.
"Holder" means a Person in whose name a Trust Security or Trust
Securities are registered in the Securities Register; any such Person shall be
deemed to be a beneficial owner within the meaning of the Delaware Business
Trust Act.
"Indenture" means the Junior Subordinated Indenture, dated as of
February 5, 1997, among the Depositor, the Guarantor and the Debenture Trustee,
as trustee, as amended or supplemented from time to time.
"Issuer Trust" means the Delaware business trust known as "BanPonce
Trust I" which was formed on January 16, 1997 under the Delaware Business Trust
Act pursuant to the Original Trust Agreement and the filing of the Certificate
of Trust, and continued pursuant to this Trust Agreement.
"Issuer Trustees" has the meaning specified in the
preamble to this Trust Agreement.
"Investment Company Act" means the Investment Company Act of 1940, or
any successor statute thereto, in each case as amended from time to time.
"Letter of Representations" means the agreement among the Issuer Trust,
the Property Trustee and DTC, as the initial Clearing Agency, dated as of the
Closing Date, substantially in the form attached as Exhibit B, as the same may
be amended and supplemented from time to time.
"Lien" means any lien, pledge, charge, encumbrance, mortgage, deed of
trust, adverse ownership interest, hypothecation, assignment, security interest
or preference, priority or other security agreement or preferential arrangement
of any kind or nature whatsoever.
"Like Amount" means (a) with respect to a redemption of any Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Debentures to be contemporaneously redeemed in accordance with the
Indenture, the proceeds of which will be used to pay the Redemption Price of
such Trust Securities, (b) with respect to a distribution of Debentures to
Holders of Trust Securities in connection with a dissolution or liquidation of
the Issuer Trust, Debentures having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such
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Debentures are distributed, and (c) with respect to any distribution of
Additional Amounts to Holders of Trust Securities, Debentures having a principal
amount equal to the Liquidation Amount of the Trust Securities in respect of
which such distribution is made.
"Liquidation Amount" means the stated amount of $1,000
per Trust Security.
"Liquidation Date" means the date of the dissolution, winding- up or
termination of the Issuer Trust pursuant to Section 9.4.
"Liquidation Distribution" has the meaning specified
in Section 9.4(d).
"Majority in Liquidation Amount of the Capital Securities" or "Majority
in Liquidation Amount of the Common Securities" means, except as provided by the
Trust Indenture Act, Capital Securities or Common Securities, as the case may
be, representing more than 50% of the aggregate Liquidation Amount of all then
Outstanding Capital Securities or Common Securities, as the case may be.
"Officers' Certificate" means a certificate signed by the Chairman of
the Board, the President, a Senior Executive Vice President, an Executive Vice
President, a Senior Vice President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Secretary or an Assistant Secretary, of the Depositor,
and delivered to the Issuer Trustees. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this Trust
Agreement shall include:
(a) a statement by each officer signing the Officers' Certificate that
such officer has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such
officer in rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable
such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for or an employee of the Depositor or any Affiliate of the Depositor.
"Original Trust Agreement" has the meaning specified
in the recitals to this Trust Agreement.
"Outstanding", when used with respect to Trust Securities, means, as of
the date of determination, all Trust Securities theretofore executed and
delivered under this Trust Agreement, except:
(a) Trust Securities theretofore cancelled by the
Property Trustee or delivered to the Property Trustee
for cancellation;
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(b) Trust Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Property
Trustee or any Paying Agent; provided that, if such Trust Securities
are to be redeemed, notice of such redemption has been duly given
pursuant to this Trust Agreement; and
(c) Trust Securities that have been paid or in exchange for or in lieu
of which other Trust Securities have been executed and delivered
pursuant to Sections 5.4, 5.5, 5.6 and 5.11;
provided, however, that in determining whether the Holders of the requisite
Liquidation Amount of the Outstanding Capital Securities have given any request,
demand, authorization, direction, notice, consent or waiver hereunder, Capital
Securities owned by the Depositor, any Issuer Trustee or any Affiliate of the
Depositor or of any Issuer Trustee shall be disregarded and deemed not to be
Outstanding, except that (a) in determining whether any Issuer Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Capital Securities that such Issuer Trustee
knows to be so owned shall be so disregarded, and (b) the foregoing shall not
apply at any time when all of the outstanding Capital Securities are owned by
the Depositor, one or more of the Issuer Trustees and/or any such Affiliate.
Capital Securities so owned that have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the
Administrative Trustees the pledgee's right so to act with respect to such
Capital Securities and that the pledgee is not the Depositor or any Affiliate of
the Depositor.
"Owner" means each Person who is the beneficial owner of Book- Entry
Capital Securities as reflected in the records of the Clearing Agency or, if a
Clearing Agency Participant is reflected in such records as the beneficial owner
but is not the actual beneficial owner, then as reflected in the records of a
Person maintaining an account with such Clearing Agency (directly or indirectly,
in accordance with the rules of such Clearing Agency).
"Paying Agent" means any paying agent or co-paying agent appointed
pursuant to Section 5.10 and shall initially be the Bank.
"Payment Account" means a segregated
non-interest-bearing corporate trust account maintained by the Property Trustee
for the benefit of the Holders in which all amounts paid in respect of the
Debentures will be held and from which the Property Trustee, through the Paying
Agent, shall make payments to the Holders in accordance with Sections 4.1 and
4.2.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, company,
limited liability company, trust, unincorporated association, or government or
any agency or political subdivision thereof, or any other entity of whatever
nature.
"Property Trustee" means the Person identified as the "Property
Trustee" in the preamble to this Trust Agreement, solely in its capacity as
Property Trustee of the trust heretofore formed and continued hereunder and not
in its individual capacity, or its successor in interest in such capacity, or
any successor Property Trustee appointed as herein provided.
"Redemption Date" means, with respect to any Trust Security to be
redeemed, the date fixed for such redemption by or pursuant to this Trust
Agreement; provided that each Debenture Redemption Date
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and the stated maturity of the Debentures shall be a Redemption Date for a Like
Amount of Trust Securities.
"Redemption Price" means, with respect to any Trust Security, the
Liquidation Amount of such Trust Security, plus accumulated and unpaid
Distributions to the Redemption Date, plus the related amount of the premium, if
any, paid by the Depositor upon the concurrent redemption of a Like Amount of
Debentures.
"Relevant Trustee" has the meaning specified in
Section 8.10.
"Responsible Officer", when used with respect to the Property Trustee,
means the chairman or any vice-chairman of the board of directors, the chairman
or any vice-chairman of the executive committee of the board of directors, the
chairman of the trust committee, the president, any vice president, the
secretary, any assistant secretary, the treasurer, any assistant treasurer, the
cashier, any assistant cashier, any trust officer or assistant trust officer,
the controller or any assistant controller or any other officer of the 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 his knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933, and any successor
statute thereto, in each case as amended from time to time.
"Securities Register" and "Securities Registrar" have
the respective meanings specified in Section 5.5.
"Successor Securities" has the meaning specified in
Section 9.5.
"Trust Agreement" means this Amended and Restated Trust Agreement, as
the same may be modified, amended or supplemented in accordance with the
applicable provisions hereof, including (i) all exhibits, and (ii) for all
purposes of this Trust Agreement and any such modification, amendment or
supplement, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this Trust Agreement and any such modification, amendment or
supplement, respectively.
"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.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
or owing to, the Payment Account, and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Property Trustee pursuant to the trusts of this Trust
Agreement.
"Trust Security" means any one of the Common
Securities or the Capital Securities.
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"Trust Securities Certificate" means any one of the
Common Securities Certificates or the Capital Securities
Certificates.
"Underwriting Agreement" means the Underwriting Agreement, dated as of
January 31, 1997, among the Issuer Trust, the Depositor and the Underwriters
named therein, as the same may be amended from time to time.
"Vice President," when used with respect to the Depositor, means any
duly appointed vice president, whether or not designated by a number or a word
or words added before or after the title "vice president."
ARTICLE II.
CONTINUATION OF THE ISSUER TRUST
SECTION 2.1. Name.
The trust continued hereby shall be known as "BanPonce Trust I", as
such name may be modified from time to time by the Administrative Trustees
following written notice to the Holders of Trust Securities and the other Issuer
Trustees, in which name the Issuer Trustees may conduct the business of the
Issuer Trust, make and execute contracts and other instruments on behalf of the
Issuer Trust and sue and be sued.
SECTION 2.2. Office of the Delaware Trustee; Principal
Place of Business.
The address of the Delaware Trustee in the State of
Delaware is 300 King Street, Wilmington, Delaware 19801,
Attention: [________________], or such other address in the
State of Delaware as the Delaware Trustee may designate by
written notice to the Holders, the Depositor, the Property
Trustee and the Administrative Trustees. The principal
executive office of the Issuer Trust is c/o BanPonce
Financial Corp., 521 Fellowship Road, Mt. Laurel, New
Jersey 08054, Attention: Secretary.
SECTION 2.3. Initial Contribution of Trust Property;
Organizational Expenses.
The Property Trustee acknowledges receipt in trust from the Depositor
in connection with the Original Trust Agreement of the sum of $10, which
constituted the initial Trust Property. The Depositor shall pay organizational
expenses of the Issuer Trust as they arise or shall, upon request of any Issuer
Trustee, promptly reimburse such Issuer Trustee for any such expenses paid by
such Issuer Trustee. The Depositor shall make no claim upon the Trust Property
for the payment of such expenses.
SECTION 2.4. Issuance of the Capital Securities.
On January 31, 1997, the Depositor, both on its own behalf and on
behalf of the Issuer Trust pursuant to the Original Trust Agreement, executed
and delivered the Underwriting Agreement. Contemporaneously with the execution
and delivery of this Trust Agreement, an Administrative Trustee, on behalf of
the Issuer Trust, shall manually execute in accordance with Sections 5.2, 5.3
and 8.9(a) and the Property Trustee shall deliver to the Underwriters, Capital
Securities Certificates, registered in the
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names requested by the Underwriters, evidencing an aggregate of 150,000 Capital
Securities having an aggregate Liquidation Amount of $150,000,000, against
receipt of the aggregate purchase price of such Capital Securities of
$150,000,000, by the Property Trustee.
SECTION 2.5. Issuance of the Common Securities;
Subscription and Purchase of Debentures.
Contemporaneously with the execution and delivery of this Trust
Agreement, an Administrative Trustee, on behalf of the Issuer Trust, shall
execute in accordance with Sections 5.2, 5.3 and 8.9(a) and the Property Trustee
shall deliver to the Depositor, Common Securities Certificates, registered in
the name of the Depositor, evidencing an aggregate of 4,640 Common Securities
having an aggregate Liquidation Amount of $4,640,000, against receipt of the
aggregate purchase price of such Common Securities of $4,640,000, to the
Property Trustee. Contemporaneously therewith, an Administrative Trustee, on
behalf of the Issuer Trust, shall subscribe for and purchase from the Depositor
the Debentures, registered in the name of the Property Trustee on behalf of the
Issuer Trust and having an aggregate principal amount equal to $154,640,000,
and, in satisfaction of the purchase price for such Debentures, the Property
Trustee, on behalf of the Issuer Trust, shall deliver to the Depositor the sum
of $154,640,000 (being the sum of the amounts delivered to the Property Trustee
pursuant to (i) the second sentence of Section 2.4, and (ii) the first sentence
of this Section 2.5).
SECTION 2.6. Continuation of Trust.
The exclusive purposes and functions of the Issuer Trust are (a) to
issue and sell Trust Securities and use the proceeds from such sale to acquire
the Debentures, and (b) to engage in those activities necessary or incidental
thereto. The Depositor hereby reaffirms the appointment of the Property Trustee
and the Delaware Trustee and appoints and reaffirms the appointment of, as the
case may be, the Administrative Trustees as trustees of the Issuer Trust, to
have all the rights, powers and duties to the extent set forth herein, and the
respective Issuer Trustees hereby accept such appointment. The Property Trustee
hereby declares that it will hold the Trust Property in trust upon and subject
to the conditions set forth herein for the benefit of the Issuer Trust and the
Holders. The Administrative Trustees shall have all rights, powers and duties
set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Issuer Trust. The Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware Trustee have any of
the duties and responsibilities, of the Property Trustee, the Administrative
Trustees or of the Issuer Trustees generally (except as may be required under
the Delaware Business Trust Act) set forth herein. The Delaware Trustee shall be
one of the trustees of the Issuer Trust for the sole and limited purpose of
fulfilling the requirements of Section 3807 of the Delaware Business Trust Act
and for taking such actions as are required to be taken by a Delaware trustee
under the Delaware Business Trust Act.
SECTION 2.7. Authorization to Enter into Certain
Transactions.
(a) The Issuer Trustees shall conduct the affairs of the Issuer Trust
in accordance with the terms of this Trust Agreement. Subject to the limitations
set forth in paragraph (b) of this Section, and in accordance with the following
provisions (i) and (ii), the Issuer Trustees shall have the authority to enter
into all transactions and agreements determined by the Issuer Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Issuer Trustees, as the case may be, under this Trust Agreement, and to
perform all acts in furtherance thereof, including, without limitation, the
following:
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(i) As among the Issuer Trustees, each Administrative Trustee
shall have the power and authority to act on behalf of the Issuer Trust
with respect to the following matters:
(A) the issuance and sale of the Trust
Securities;
(B) causing the Issuer Trust to enter into, and to
execute, deliver and perform, the Expense Agreement and the
Letter of Representations and such other agreements as may be
necessary or desirable in connection with the purposes and
function of the Issuer Trust;
(C) assisting in the registration of the Capital
Securities under the Securities Act of 1933, as amended, and
under applicable state securities or blue sky laws and the
qualification of this Trust Agreement as a trust indenture
under the Trust Indenture Act;
(D) assisting in the listing of the Capital
Securities upon such securities exchange or exchanges as shall
be determined by the Depositor, with the registration of the
Capital Securities under the Exchange Act and with the
preparation and filing of all periodic and other reports and
other documents pursuant to the foregoing;
(E) assisting in the sending of notices (other
than notices of default) and other information regarding the
Trust Securities and the Debentures to the Holders in
accordance with this Trust Agreement;
(F) the consent to the appointment of a Paying
Agent, authenticating agent and Securities Registrar in
accordance with this Trust Agreement (which consent shall not
be unreasonably withheld);
(G) the execution of the Trust Securities on
behalf of the Issuer Trust in accordance with this Trust
Agreement;
(H) the execution and delivery of closing
certificates, if any, pursuant to the Underwriting Agreement
and application for a taxpayer identification number for the
Issuer Trust;
(I) unless otherwise determined by the Property
Trustee or Holders of at least a Majority in Liquidation
Amount of the Capital Securities or as otherwise required by
the Delaware Business Trust Act or the Trust Indenture Act,
executing on behalf of the Issuer Trust (either acting alone
or together with any or all of the Administrative Trustees)
any documents that the Administrative Trustees have the power
to execute pursuant to this Trust Agreement; and
(J) the taking of any action incidental to the
foregoing as the Issuer Trustees may from time to time
determine to be necessary or advisable to give effect to the
terms of this Trust Agreement.
(ii) As among the Issuer Trustees, the Property Trustee shall
have the power, duty and authority to act on behalf of the Issuer Trust
with respect to the following matters:
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(A) the establishment of the Payment
Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures and the
holding of such amounts in the Payment Account;
(D) the distribution through the Paying
Agent of amounts distributable to the Holders in
respect of the Trust Securities;
(E) the exercise of all of the rights,
powers and privileges of a holder of the
Debentures;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Debentures
to the Holders in accordance with this Trust Agreement;
(G) the distribution of the Trust
Property in accordance with the terms of this
Trust Agreement;
(H) to the extent provided in this Trust
Agreement, the winding up of the affairs of and liquidation of
the Issuer Trust and the preparation, execution and filing of
the certificate of cancellation with the Secretary of State of
the State of Delaware;
(I) performing the duties of the
Property Trustee set forth in this Trust
Agreement; and
(J) after an Event of Default (other than under
paragraph (b), (c), (d) or (e) of the definition of such term
if such Event of Default is by or with respect to the Property
Trustee) the taking of any action incidental to the foregoing
as the Property Trustee may from time to time determine is
necessary or advisable to give effect to the terms of this
Trust Agreement and protect and conserve the Trust Property
for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder).
(b) So long as this Trust Agreement remains in effect, the Issuer Trust
(or the Issuer Trustees acting on behalf of the Issuer Trust) shall not
undertake any business, activities or transaction except as expressly provided
herein or contemplated hereby. In particular, the Issuer Trustees (acting on
behalf of the Issuer Trust) shall not (i) acquire any investments or engage in
any activities not authorized by this Trust Agreement, (ii) sell, assign,
transfer, exchange, mortgage, pledge, set-off or otherwise dispose of any of the
Trust Property or interests therein, including to Holders, except as expressly
provided herein, (iii) take any action that would reasonably be expected to
cause the Issuer Trust to become taxable as a corporation or classified as other
than a grantor trust for United States Federal income tax purposes, (iv) incur
any indebtedness for borrowed money or issue any other debt, or (v) take or
consent to any action that would result in the placement of a Lien on any of the
Trust Property. The Administrative Trustees shall defend all claims and demands
of all Persons at any time claiming any Lien on any of the Trust Property
adverse to the interest of the Issuer Trust or the Holders in their capacity as
Holders.
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(c) In connection with the issue and sale of the Capital Securities,
the Depositor shall have the right and responsibility to assist the Issuer Trust
with respect to, or effect on behalf of the Issuer Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Trust Agreement are hereby ratified and confirmed in all respects):
(i) the preparation and filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on the appropriate form in relation to the
Capital Securities, including any amendments thereto and the taking of
any action necessary or desirable to sell the Capital Securities in a
transaction or a series of transactions pursuant thereto;
(ii) the determination of the States in which to take
appropriate action to qualify or register for sale all or part of the
Capital Securities and the taking of any and all such acts, other than
actions that must be taken by or on behalf of the Issuer Trust, and
advice to the Issuer Trust of actions that must be taken by or on
behalf of the Issuer Trust, and the preparation for execution and
filing of any documents to be executed and filed by the Issuer Trust or
on behalf of the Issuer Trust, as the Depositor deems necessary or
advisable in order to comply with the applicable laws of any such
States in connection with the sale of the Capital Securities;
(iii) the preparation for filing by the Issuer Trust and
execution on behalf of the Issuer Trust of an application to the New
York Stock Exchange or any other national stock exchange or the Nasdaq
National Market for listing upon notice of issuance of any Capital
Securities;
(iv) the preparation for filing by the Issuer Trust with the
Commission and the execution on behalf of the Issuer Trust of a
registration statement on Form 8-A relating to the registration of the
Capital Securities under Section 12(b) or 12(g) of the Exchange Act,
including any amendments thereto;
(v) the negotiation of the terms of, and the
execution and delivery of, the Underwriting Agreement
providing for the sale of the Capital Securities; and
(vi) the taking of any other actions necessary or
desirable to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Issuer
Trustees are authorized and directed to conduct the affairs of the Issuer Trust
and to operate the Issuer Trust so that the Issuer Trust will not be deemed to
be an "investment company" required to be registered under the Investment
Company Act, and will not be taxable as a corporation or classified as other
than a grantor trust for United States Federal income tax purposes and so that
the Debentures will be treated as indebtedness of the Depositor for United
States Federal income tax purposes. In this connection, each Administrative
Trustee, the Property Trustee and the Holders of at least a Majority in
Liquidation Amount of the Common Securities are authorized to take any action,
not inconsistent with applicable law, the Certificate of Trust or this Trust
Agreement, that such Administrative Trustee, the Property Trustee or Holders of
Common Securities determine in their discretion to be necessary or desirable for
such purposes, as long as such action does not adversely affect in any material
respect the interests of the Holders of the Outstanding Capital Securities. In
no event shall the Issuer Trustees be liable to the Issuer Trust or the Holders
for any failure to comply with this section that results from a change in law or
regulation or in the interpretation thereof.
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SECTION 2.8. Assets of Trust.
The assets of the Issuer Trust shall consist of the Trust Property.
SECTION 2.9. Title to Trust Property.
Legal title to all Trust Property shall be vested at all times in the
Property Trustee (in its capacity as such) and shall be held and administered by
the Property Trustee in trust for the benefit of the Issuer Trust and the
Holders in accordance with this Trust Agreement.
ARTICLE III.
PAYMENT ACCOUNT
SECTION 3.1. Payment Account.
(a) On or prior to the Closing Date, the Property Trustee shall
establish the Payment Account. The Property Trustee and its agents shall have
exclusive control and sole right of withdrawal with respect to the Payment
Account for the purpose of making deposits in and withdrawals from the Payment
Account in accordance with this Trust Agreement. All monies and other property
deposited or held from time to time in the Payment Account shall be held by the
Property Trustee in the Payment Account for the exclusive benefit of the Holders
and for distribution as herein provided, including (and subject to) any priority
of payments provided for herein.
(b) The Property Trustee shall deposit in the Payment Account, promptly
upon receipt, all payments of principal of or interest on, and any other
payments or proceeds with respect to, the Debentures. Amounts held in the
Payment Account shall not be invested by the Property Trustee pending
distribution thereof.
ARTICLE IV.
DISTRIBUTIONS; REDEMPTION
SECTION 4.1. Distributions.
(a) The Trust Securities represent undivided beneficial interests in
the Trust Property, and Distributions (including of Additional Amounts) will be
made on the Trust Securities at the rate and on the dates that payments of
interest (including of Additional Interest, as defined in the Indenture) are
made on the Debentures. Accordingly:
(i) Distributions on the Trust Securities shall be cumulative,
and will accumulate whether or not there are funds of the Issuer Trust
available for the payment of Distributions. Distributions shall
accumulate from February 5, 1997, and, except in the event (and to the
extent) that the Depositor exercises its right to defer the payment of
interest on the Debentures pursuant to the Indenture, shall be payable
semi-annually in arrears on February 1 and August 1 of each
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year, commencing on August 1, 1997. If any date on which a Distribution
is otherwise payable on the Trust Securities is not a Business Day,
then the payment of such Distribution shall be made on the next
succeeding 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, the payment of
such Distribution shall be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on the date
on which such payment was originally payable (each date on which
distributions are payable in accordance with this Section 4.1(a), a
"Distribution Date").
(ii) The Trust Securities shall be entitled to Distributions
payable at a rate of 8.327% per annum of the Liquidation Amount of the
Trust Securities. The amount of Distributions payable for any period
shall be computed on the basis of a 360-day year of twelve 30-day
months. The amount of Distributions payable for any period shall
include any Additional Amounts in respect of such period.
(iii) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on
each Distribution Date only to the extent that the Issuer Trust has
funds then on hand and available in the Payment Account for the payment
of such Distributions.
(b) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders thereof as they appear on the
Securities Register for the Trust Securities at the close of business on the
relevant record date, which shall be at the close of business on the fifteenth
day (whether or not a Business Day) next preceding the relevant Distribution
Date.
SECTION 4.2. Redemption.
(a) On each Debenture Redemption Date and on the stated maturity of the
Debentures, the Issuer Trust will be required to redeem a Like Amount of Trust
Securities at the Redemption Price.
(b) Notice of redemption shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days
prior to the Redemption Date to each Holder of Trust Securities to be redeemed,
at such Holder's address appearing in the Security Register.
All notices of redemption shall state:
(i) the Redemption Date;
(ii) the Redemption Price or if the Redemption Price cannot be
calculated prior to the time the notice is required to be sent, an
estimate of the Redemption Price together with a statement that it is
an estimate and that the actual Redemption Price will be calculated on
the third Business Day prior to the Redemption Date (and if an estimate
is provided, a further notice shall be sent of the actual Redemption
Price on the date that such Redemption Price is calculated);
(iii) the CUSIP number or CUSIP numbers of the
Capital Securities affected (if applicable);
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(iv) if less than all the Outstanding Trust Securities are to
be redeemed, the identification and the aggregate Liquidation Amount of
the particular Trust Securities to be redeemed;
(v) that on the Redemption Date the Redemption Price will
become due and payable upon each such Trust Security to be redeemed and
that Distributions thereon will cease to accumulate on and after said
date, except as provided in Section 4.2(d) below; and
(vi) the place or places where the Trust
Securities are to be surrendered for the payment of
the Redemption Price.
The Issuer Trust in issuing the Trust Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Property Trustee shall
indicate the "CUSIP" numbers of the Trust Securities in notices of redemption
and related materials as a convenience to Holders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Trust Securities or as contained in any notice of
redemption and related materials.
(c) The Trust Securities redeemed on each Redemption Date shall be
redeemed at the Redemption Price with the proceeds from the contemporaneous
redemption of Debentures. Redemptions of the Trust Securities shall be made and
the Redemption Price shall be payable on each Redemption Date only to the extent
that the Issuer Trust has funds then on hand and available in the Payment
Account for the payment of such Redemption Price.
(d) If the Property Trustee gives a notice of redemption in respect of
any Capital Securities, then, by 12:00 noon, New York City time, on the
Redemption Date, subject to Section 4.2(c), the Property Trustee will, with
respect to Book-Entry Capital Securities, irrevocably deposit with the Clearing
Agency for such Book-Entry Capital Securities, to the extent available therefor,
funds sufficient to pay the applicable Redemption Price and will give such
Clearing Agency irrevocable instructions and authority to pay the Redemption
Price to the Holders of the Capital Securities. With respect to Capital
Securities that are not Book-Entry Capital Securities, the Property Trustee,
subject to Section 4.2(c), will irrevocably deposit with the Paying Agent, to
the extent available therefor, funds sufficient to pay the applicable Redemption
Price and will give the Paying Agent irrevocable instructions and authority to
pay the Redemption Price to the Holders of the Capital Securities upon surrender
of their Capital Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register for the Trust Securities on
the relevant record dates for the related Distribution Dates. If notice of
redemption shall have been given and funds deposited as required, then upon the
date of such deposit, all rights of Holders holding Trust Securities so called
for redemption will cease, except the right of such Holders to receive the
Redemption Price and any Distribution payable in respect of the Trust Securities
on or prior to the Redemption Date, but without interest, and such Securities
will cease to be outstanding. In the event that any date on which any Redemption
Price is payable is not a Business Day, then payment of the Redemption Price
payable on such date will be made on the next succeeding day that 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 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. In the event that payment of the
Redemption Price in respect of any Trust Securities called for redemption is
improperly withheld or refused and not paid either by the Issuer Trust or by the
Depositor pursuant to the Guarantee Agreement, Distributions on such Trust
Securities will continue to
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accumulate, as set forth in Section 4.1, from the Redemption Date originally
established by the Issuer Trust for such Trust Securities to the date such
Redemption Price is actually paid, in which case the actual payment date will be
the date fixed for redemption for purposes of calculating the Redemption Price.
(e) Subject to Section 4.3(a), if less than all the Outstanding Trust
Securities are to be redeemed on a Redemption Date, then the aggregate
Liquidation Amount of Trust Securities to be redeemed shall be allocated pro
rata to the Common Securities and the Capital Securities based upon the relative
Liquidation Amounts of such classes. The particular Capital Securities to be
redeemed shall be selected on a pro rata basis based upon their respective
Liquidation Amounts not more than 60 days prior to the Redemption Date by the
Property Trustee from the Outstanding Capital Securities not previously called
for redemption, provided that so long as the Capital Securities are in
book-entry-only form, such selection shall be made in accordance with the
customary procedures for the Clearing Agency for the Capital Securities. The
Property Trustee shall promptly notify the Securities Registrar in writing of
the Capital Securities selected for redemption and, in the case of any Capital
Securities selected for partial redemption, the Liquidation Amount thereof to be
redeemed. For all purposes of this Trust Agreement, unless the context otherwise
requires, all provisions relating to the redemption of Capital Securities shall
relate, in the case of any Capital Securities redeemed or to be redeemed only in
part, to the portion of the aggregate Liquidation Amount of Capital Securities
that has been or is to be redeemed.
SECTION 4.3. Subordination of Common Securities.
(a) Payment of Distributions (including any Additional Amounts) on, the
Redemption Price of, and the Liquidation Distribution in respect of the Trust
Securities, as applicable, shall be made, subject to Section 4.2(e), pro rata
among the Common Securities and the Capital Securities based on the Liquidation
Amount of the Trust Securities; provided, however, that if on any Distribution
Date, Redemption Date or Liquidation Date any Event of Default resulting from a
Debenture Event of Default specified in Section 5.1(1) or 5.1(2) of the
Indenture shall have occurred and be continuing, no payment of any Distribution
(including any Additional Amounts) on, Redemption Price of, or Liquidation
Distribution in respect of any Common Security, and no other payment on account
of the redemption, liquidation or other acquisition of Common Securities, shall
be made unless payment in full in cash of all accumulated and unpaid
Distributions (including any Additional Amounts) on all Outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or in
the case of payment of the Redemption Price the full amount of such Redemption
Price on all Outstanding Capital Securities then called for redemption, or in
the case of payment of the Liquidation Distribution the full amount of such
Liquidation Distribution on all Outstanding Capital Securities, shall have been
made or provided for, and all funds immediately available to the Property
Trustee shall first be applied to the payment in full in cash of all
Distributions (including any Additional Amounts) on, or the Redemption Price of,
the Capital Securities then due and payable.
(b) In the case of the occurrence of any Event of Default resulting
from any Debenture Event of Default, the Holders of the Common Securities shall
have no right to act with respect to any such Event of Default under this Trust
Agreement until the effect of all such Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated. Until all
such Events of Default under this Trust Agreement with respect to the Capital
Securities have been so cured, waived or otherwise eliminated, the Property
Trustee shall act solely on behalf of the Holders of the Capital Securities and
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not on behalf of the Holders of the Common Securities, and only the Holders of
the Capital Securities will have the right to direct the Property Trustee to act
on their behalf.
SECTION 4.4. Payment Procedures.
Payments of Distributions (including any Additional Amounts) in respect
of the Capital Securities shall be made by check mailed to the address of the
Person entitled thereto as such address shall appear on the Securities Register
or, if the Capital Securities are held by a Clearing Agency, such Distributions
shall be made to the Clearing Agency in immediately available funds. Payments in
respect of the Common Securities shall be made in such manner as shall be
mutually agreed between the Property Trustee and the Holders of the Common
Securities.
SECTION 4.5. Tax Returns and Reports.
The Administrative Trustees shall prepare (or cause to be prepared), at
the Depositor's expense, and file all United States Federal, state and local tax
and information returns and reports required to be filed by or in respect of the
Issuer Trust. In this regard, the Administrative Trustees shall (a) prepare and
file (or cause to be prepared and filed) all Internal Revenue Service forms
required to be filed in respect of the Issuer Trust in each taxable year of the
Issuer Trust, and (b) prepare and furnish (or cause to be prepared and
furnished) to each Holder all Internal Revenue Service forms required to be
provided by the Issuer Trust. The Administrative Trustees shall provide the
Depositor and the Property Trustee with a copy of all such returns and reports
promptly after such filing or furnishing. The Issuer Trustees shall comply with
United States Federal withholding and backup withholding tax laws and
information reporting requirements with respect to any payments to Holders under
the Trust Securities.
SECTION 4.6. Payment of Taxes, Duties, Etc. of the
Issuer Trust.
Upon receipt under the Debentures of Additional Sums, the Property
Trustee shall promptly pay any taxes, duties or governmental charges of
whatsoever nature (other than withholding taxes) imposed on the Issuer Trust by
the United States or any other taxing authority, which were included in such
Additional Sums.
SECTION 4.7. Payments under Indenture or Pursuant to
Direct Actions.
Any amount payable hereunder to any Holder of Capital Securities (or
any Owner with respect thereto) shall be reduced by the amount of any
corresponding payment such Holder (or Owner) has directly received pursuant to
Section 5.8 of the Indenture or Section 5.13 of this Trust Agreement.
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ARTICLE V.
TRUST SECURITIES CERTIFICATES
SECTION 5.1. Initial Ownership.
Upon the formation of the Issuer Trust and the contribution by the
Depositor pursuant to Section 2.3 and until the issuance of the Trust
Securities, and at any time during which no Trust Securities are outstanding,
the Depositor shall be the sole beneficial owner of the Issuer Trust.
SECTION 5.2. The Trust Securities Certificates.
(a) The Capital Securities Certificates shall be issued in minimum
denominations of $1,000 Liquidation Amount and integral multiples of $1,000 in
excess thereof, and the Common Securities Certificates shall be issued in
denominations of $1,000 Liquidation Amount and integral multiples thereof. The
Trust Securities Certificates shall be executed on behalf of the Issuer Trust by
manual signature of at least one Administrative Trustee. Trust Securities
Certificates bearing the manual signatures of individuals who were, at the time
when such signatures shall have been affixed, authorized to sign on behalf of
the Issuer Trust, shall be validly issued and entitled to the benefits of this
Trust Agreement, notwithstanding that such individuals or any of them shall have
ceased to be so authorized prior to the delivery of such Trust Securities
Certificates or did not hold such offices at the date of delivery of such Trust
Securities Certificates. A transferee of a Trust Securities Certificate shall
become a Holder, and shall be entitled to the rights and subject to the
obligations of a Holder hereunder, upon due registration of such Trust
Securities Certificate in such transferee's name pursuant to Section 5.5.
(b) Upon their original issuance, Capital Securities Certificates shall
be issued in the form of one or more Book-Entry Capital Securities Certificates
registered in the name of DTC, as Clearing Agency, or its nominee and deposited
with DTC or a custodian for DTC for credit by DTC to the respective accounts of
the Owners thereof (or such other accounts as they may direct).
(c) A single Common Securities Certificate representing the Common
Securities shall be issued to the Depositor in the form of a definitive Common
Securities Certificate.
SECTION 5.3. Execution and Delivery of Trust
Securities Certificates.
On the Closing Date, the Administrative Trustees shall cause Trust
Securities Certificates, in an aggregate Liquidation Amount as provided in
Sections 2.4 and 2.5, to be executed on behalf of the Issuer Trust and delivered
to or upon the written order of the Depositor, executed by one authorized
officer thereof, without further corporate action by the Depositor, in
authorized denominations.
SECTION 5.4. Book-Entry Capital Securities.
(a) Each Book-Entry Capital Securities Certificate issued under this
Agreement shall be registered in the name of the Clearing Agency or a nominee
thereof and delivered to such Clearing Agency or a nominee thereof or custodian
therefor, and each such Book-Entry Capital Securities Certificate shall
constitute a single Capital Securities Certificate for all purposes of this
Agreement.
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(b) Notwithstanding any other provision in this Trust Agreement, no
Book-Entry Capital Securities Certificate may be exchanged in whole or in part
for Capital Securities Certificates registered, and no transfer of a Book-Entry
Capital Securities Certificate in whole or in part may be registered, in the
name of any Person other than the Clearing Agency for such Book-Entry Capital
Securities Certificates or a nominee thereof unless (i) the Clearing Agency
advises the Issuer Trust in writing that the Clearing Agency is no longer
willing or able to properly discharge its responsibilities with respect to the
Book-Entry Capital Securities Certificates, and is unable to locate a qualified
successor shall not have been appointed, or the Clearing Agency ceases to be a
clearing agency registered under the Exchange Act at a time when it is required
to be so registered to act as such clearing agent, (ii) the Issuer Trust at its
option determines that a Book Entry Capital Securities Certificate shall be so
exchangeable, or (iii) a Debenture Event of Default has occurred and is
continuing. Upon the occurrence of any event specified in clause (i), (ii) or
(iii) above, the Property Trustee shall notify the Clearing Agency and instruct
the Clearing Agency to notify all Owners of Book-Entry Capital Securities, the
Delaware Trustee and the Administrative Trustees of the occurrence of such event
and of the availability of the Definitive Capital Securities Certificates to
Owners of such class or classes, as applicable, requesting the same.
(c) If any Book-Entry Capital Securities Certificate is to be exchanged
for other Capital Securities Certificates or cancelled in part, or if any other
Capital Securities Certificate is to be exchanged in whole or in part for
Book-Entry Capital Securities represented by a Book-Entry Capital Securities
Certificate, then either (i) such Book-Entry Capital Securities Certificate
shall be so surrendered for exchange or cancellation as provided in this Article
V or (ii) the aggregate Liquidation Amount represented by such Book-Entry
Capital Securities Certificate shall be reduced, subject to Section 5.2, or
increased by an amount equal to the Liquidation Amount represented by that
portion of the Book-Entry Capital Securities Certificate to be so exchanged or
cancelled, or equal to the Liquidation Amount represented by such other Capital
Securities Certificates to be so exchanged for Book-Entry Capital Securities
represented thereby, as the case may be, by means of an appropriate adjustment
made on the records of the Securities Registrar, whereupon the Property Trustee,
in accordance with the Applicable Procedures, shall instruct the Clearing Agency
or its authorized representative to make a corresponding adjustment to its
records. Upon surrender to the Administrative Trustees or the Securities
Registrar of the Book-Entry Capital Securities Certificate or Certificates by
the Clearing Agency, accompanied by registration instructions, the
Administrative Trustees, or any one of them, shall execute the Definitive
Capital Securities Certificates in accordance with the instructions of the
Clearing Agency. None of the Securities Registrar, the Issuer Trustees or the
Administrative Trustees shall be liable for any delay in delivery of such
instructions and may conclusively rely on, and shall be protected in relying on,
such instructions. Upon the issuance of Definitive Capital Securities
Certificates, the Issuer Trustees shall recognize the Holders of the Definitive
Capital Securities Certificates as Holders. The Definitive Capital Securities
Certificates shall be typewritten, printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by the execution thereof by the Administrative Trustees
or any one of them.
(d) Every Capital Securities Certificate executed and delivered upon
registration of transfer of, or in exchange for or in lieu of, a Book-Entry
Capital Securities Certificate or any portion thereof, whether pursuant to this
Article V or Article IV or otherwise, shall be executed and delivered in the
form of, and shall be, a Book-Entry Capital Securities Certificate, unless such
Capital Securities Certificate is registered in the name of a Person other than
the Clearing Agency for such Book-Entry Capital Securities Certificate or a
nominee thereof.
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(e) The Clearing Agency or its nominee, as registered owner of a
Book-Entry Capital Securities Certificate, shall be the Holder of such
Book-Entry Capital Securities Certificate for all purposes under this Agreement
and the Book-Entry Capital Securities Certificate, and Owners with respect to a
Book-Entry Capital Securities Certificate shall hold such interests pursuant to
the Applicable Procedures. The Securities Registrar and the Issuer Trustees
shall be entitled to deal with the Clearing Agency for all purposes of this
Trust Agreement relating to the Book-Entry Capital Securities Certificates
(including the payment of the Liquidation Amount of and Distributions on the
Book-Entry Capital Securities represented thereby and the giving of instructions
or directions by Owners of Book-Entry Capital Securities represented thereby) as
the sole Holder of the Book-Entry Capital Securities represented thereby and
shall have no obligations to the Owners thereof. Solely for the purpose of
determining whether the Holders of the requisite amount of Capital Securities
have voted on any matter provided for in this Trust Agreement, so long as
Definitive Capital Securities Certificates have not been issued, the Issuer
Trustees may conclusively rely on, and shall be protected in relying on, any
written instrument (including a proxy) delivered to the Issuer Trustees by the
Clearing Agency setting forth the Owners' votes or assigning the right to vote
on any matter to any other Persons in whole or in part. None of the Issuer
Trustees nor the Securities Registrar shall have any liability in respect of any
transfers effected by the Clearing Agency.
The rights of the Owners of the Book-Entry Capital Securities shall be
exercised only through the Clearing Agency and shall be limited to those
established by law, the Applicable Procedures and agreements between such Owners
and the Clearing Agency and/or the Clearing Agency Participants. Pursuant to the
Letter of Representations, unless and until Definitive Capital Securities
Certificates are issued pursuant to Section 5.4(b), the initial Clearing Agency
will make book-entry transfers among the Clearing Agency Participants and
receive and transmit payments on the Capital Securities to such Clearing Agency
Participants, and none of the Depositor or the Issuer Trustees shall have any
responsibility or obligation with respect thereto.
SECTION 5.5. Registration of Transfer and Exchange of
Capital Securities Certificates.
(a) The Property Trustee shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 5.9, a register or registers for the
purpose of registering Trust Securities Certificates and transfers and exchanges
of Trust Securities Certificates (the "Securities Register") in which the
registrar and transfer agent with respect to the Trust Securities (the
"Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Capital Securities Certificates
and Common Securities Certificates (subject to Section 5.11 in the case of the
Common Securities Certificates) and registration of transfers and exchanges of
Capital Securities Certificates as herein provided. The Person acting as the
Property Trustee shall at all times also be the Securities Registrar.
Upon surrender for registration of transfer of any Capital Securities
Certificate at the office or agency maintained pursuant to Section 5.9, the
Administrative Trustees or any one of them shall execute and deliver to the
Property Trustee, and the Property Trustee shall deliver, in the name of the
designated transferee or transferees, one or more new Capital Securities
Certificates in authorized denominations of a like aggregate Liquidation Amount
dated the date of execution by such Administrative Trustee or Trustees.
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The Securities Registrar shall not be required, (i) to issue, register
the transfer of or exchange any Capital Security during a period beginning at
the opening of business 15 days before the day of selection for redemption of
such Capital Securities pursuant to Article IV and ending at the close of
business on the day of mailing of the notice of redemption, or (ii) to register
the transfer of or exchange any Capital Security so selected for redemption in
whole or in part, except, in the case of any such Capital Security to be
redeemed in part, any portion thereof not to be redeemed.
Every Capital Securities Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer in form satisfactory to an Administrative Trustee and the
Securities Registrar duly executed by the Holder or its attorney duly authorized
in writing. Each Capital Securities Certificate surrendered for registration of
transfer or exchange shall be cancelled and subsequently disposed of by the
Property Trustee in accordance with its customary practice.
No service charge shall be made for any registration of transfer or
exchange of Capital Securities Certificates, but the Securities Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer or exchange of Capital Securities
Certificates.
(b) Notwithstanding any other provision of this Agreement, transfers
and exchanges of Capital Securities Certificates and beneficial interests in a
Book-Entry Capital Securities Certificate of the kinds specified in this Section
5.5(b) shall be made only in accordance with this Section 5.5(b).
(i) Non-Book-Entry Capital Securities Certificate to
Book-Entry Capital Securities Certificate. If the Holder of a Capital
Securities Certificate (other than a Book-Entry Capital Securities
Certificate) wishes at any time to transfer all or any portion of such
Capital Securities Certificate to a Person who wishes to take delivery
thereof in the form of a beneficial interest in a Book-Entry Capital
Securities Certificate, such transfer may be effected only in
accordance with the provisions of this Clause (b)(i) and subject to the
Applicable Procedures. Upon receipt by the Securities Registrar of (A)
such Capital Securities Certificate as provided in Section 5.5(a) and
instructions satisfactory to the Securities Registrar directing that a
beneficial interest in the Book-Entry Capital Securities Certificate of
a specified number of Capital Securities not greater than the number of
Capital Securities represented by such Capital Securities Certificate
be credited to a specified Clearing Agency Participant's account, then
the Securities Registrar shall cancel such Capital Securities
Certificate (and issue a new Capital Securities Certificate in respect
of any untransferred portion thereof) as provided in Section 5.5(a) and
increase the aggregate Liquidation Amount of the Book- Entry Capital
Securities Certificate by the Liquidation Amount represented by such
Capital Securities so transferred as provided in Section 5.4(c).
(ii) Non-Book-Entry Capital Securities Certificate to
Non-Book-Entry Capital Securities Certificate. A Capital Securities
Certificate that is not a Book-Entry Capital Securities Certificate may
be transferred, in whole or in part, to a Person who takes delivery in
the form of another Capital Securities Certificate that is not a
Book-Entry Capital Securities Certificate as provided in Section
5.5(a).
(iii) Exchanges between Book-Entry Capital
Securities Certificate and Non-Book-Entry Capital
Securities Certificate. A beneficial interest in a
Book-Entry Capital Securities Certificate
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may be exchanged for a Capital Securities Certificate that is not a Book-Entry
Capital Securities Certificate as provided in Section 5.4.
SECTION 5.6. Mutilated, Destroyed, Lost or Stolen
Trust Securities Certificates.
If (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate, and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Issuer Trust shall execute and make available for delivery, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Trust Securities
Certificate, a new Trust Securities Certificate of like class, tenor and
denomination. In connection with the issuance of any new Trust Securities
Certificate under this Section 5.6, the Administrative Trustees or the
Securities Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith.
Any duplicate Trust Securities Certificate issued pursuant to this Section shall
constitute conclusive evidence of an undivided beneficial interest in the assets
of the Issuer Trust corresponding to that evidenced by the lost, stolen or
destroyed Trust Securities Certificate, as if originally issued, whether or not
the lost, stolen or destroyed Trust Securities Certificate shall be found at any
time.
SECTION 5.7. Persons Deemed Holders.
The Issuer Trustees and the Securities Registrar shall each treat the
Person in whose name any Trust Securities Certificate shall be registered in the
Securities Register as the owner of such Trust Securities Certificate for the
purpose of receiving Distributions and for all other purposes whatsoever, and
none of the Issuer Trustees and the Securities Registrar shall be bound by any
notice to the contrary.
SECTION 5.8. Access to List of Holders' Names and
Addresses.
Each Holder and each Owner shall be deemed to have agreed not to hold
the Depositor, the Property Trustee, the Delaware Trustee or the Administrative
Trustees accountable by reason of the disclosure of its name and address,
regardless of the source from which such information was
derived.
SECTION 5.9. Maintenance of Office or Agency.
The Property Trustee shall designate, with the consent of the
Administrative Trustees, which consent shall not be unreasonably withheld, an
office or offices or agency or agencies where Capital Securities Certificates
may be surrendered for registration of transfer or exchange and where notices
and demands to or upon the Issuer Trustees in respect of the Trust Securities
Certificates may be served. The Administrative Trustees initially designate The
First National Bank of Chicago, One First National Plaza, Suite 0126, Chicago,
Illinois 60670, Attention: Corporate Trust Administration, as its office and
agency for such purposes. The Property Trustee shall give prompt written notice
to the Depositor, the Administrative Trustees and to the Holders of any change
in the location of the Securities Register or any such office or agency.
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SECTION 5.10. Appointment of Paying Agent.
The Paying Agent shall make Distributions to Holders from the Payment
Account and shall report the amounts of such Distributions to the Property
Trustee and the Administrative Trustees. Any Paying Agent shall have the
revocable power to withdraw funds from the Payment Account solely for the
purpose of making the Distributions referred to above. The Administrative
Trustees may revoke such power and remove the Paying Agent in their sole
discretion. The Paying Agent shall initially be the Bank. Any Person acting as
Paying Agent shall be permitted to resign as Paying Agent upon 30 days' written
notice to the Administrative Trustees and the Property Trustee. If the Bank
shall no longer be the Paying Agent or a successor Paying Agent shall resign or
its authority to act be revoked, the Administrative Trustees shall appoint a
successor (which shall be a bank or trust company) to act as Paying Agent. Such
successor Paying Agent or any additional Paying Agent appointed by the
Administrative Trustees shall execute and deliver to the Issuer Trustees an
instrument in which such successor Paying Agent or additional Paying Agent shall
agree with the Issuer Trustees that as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Holders in trust for the benefit of the Holders entitled thereto until such
sums shall be paid to such Holders. The Paying Agent shall return all unclaimed
funds to the Property Trustee and upon removal of a Paying Agent such Paying
Agent shall also return all funds in its possession to the Property Trustee. The
provisions of Sections 8.1, 8.3 and 8.6 herein shall apply to the Bank also in
its role as Paying Agent, for so long as the Bank shall act as Paying Agent and,
to the extent applicable, to any other paying agent appointed hereunder. Any
reference in this Agreement to the Paying Agent shall include any co-paying
agent unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by
Depositor.
On the Closing Date, the Depositor shall acquire, and thereafter shall
retain, beneficial and record ownership of the Common Securities. The Depositor
may not transfer the Common Securities except (i) in connection with a
consolidation or merger of the Depositor into another corporation, or any
conveyance, transfer or lease by the Depositor of its properties and assets
substantially as an entirety to any Person, pursuant to Section 8.1 of the
Indenture, or (ii) to the Depositor or an Affiliate thereof in compliance with
applicable law (including the Securities Act of 1933, as amended, and applicable
state securities and blue sky laws). To the fullest extent permitted by law, any
attempted transfer of the Common Securities other than as set forth in the next
proceeding sentence shall be void. The Administrative Trustees shall cause each
Common Securities Certificate issued to the Depositor to contain a legend
stating substantially "THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE
DEPOSITOR OR AN AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND
SECTION 5.11 OF THE TRUST AGREEMENT."
SECTION 5.12. Notices to Clearing Agency.
To the extent that a notice or other communication to the Holders is
required under this Trust Agreement, for so long as Capital Securities are
represented by a Book-Entry Capital Securities Certificate, the Issuer Trustees
shall give all such notices and communications specified herein to be given to
the Clearing Agency, and shall have no obligations to the Owners.
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SECTION 5.13. Rights of Holders; Waivers of Past
Defaults.
(a) The legal title to the Trust Property is vested exclusively in the
Property Trustee (in its capacity as such) in accordance with Section 2.9, and
the Holders shall not have any right or title therein other than the undivided
beneficial interest in the assets of the Issuer Trust conferred by their Trust
Securities and they shall have no right to call for any partition or division of
property, profits or rights of the Issuer Trust except as described below. The
Trust Securities shall be personal property giving only the rights specifically
set forth therein and in this Trust Agreement. The Trust Securities shall have
no preemptive or similar rights and when issued and delivered to Holders against
payment of the purchase price therefor will be fully paid and nonassessable by
the Issuer Trust. The Holders of the Trust Securities, in their capacities as
such, shall be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
(b) For so long as any Capital Securities remain Outstanding, if, upon
a Debenture Event of Default, the Debenture Trustee fails or the holders of not
less than 25% in principal amount of the outstanding Debentures fail to declare
the principal of all of the Debentures to be immediately due and payable, the
Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have the right to make such declaration by a notice in writing
to the Property Trustee, the Depositor and the Debenture Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as in the Indenture
provided, if the Property Trustee fails to annul any such declaration and waive
such default, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities, by written notice to the Property Trustee, the Depositor and
the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
(i) the Depositor has paid or deposited with the
Debenture Trustee a sum sufficient to pay
(A) all overdue installments of interest
on all of the Debentures,
(B) any accrued Additional Interest on
all of the Debentures,
(C) the principal of (and premium, if any, on) any
Debentures that have become due otherwise than by such
declaration of acceleration and interest and Additional
Interest thereon at the rate borne by the Debentures, and
(D) all sums paid or advanced by the Debenture
Trustee under the Indenture and the reasonable compensation,
expenses, disbursements and advances of the Debenture Trustee
and the Property Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures,
other than the non-payment of the principal of the Debentures that has
become due solely by such acceleration, have been cured or waived as
provided in Section 5.13 of the Indenture.
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The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default under the Indenture, 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 the Debenture Trustee) or a default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Property Trustee of written notice declaring such
an acceleration, or rescission and annulment thereof, by Holders of any part of
the Capital Securities a record date shall be established for determining
Holders of Outstanding Capital Securities entitled to join in such notice, which
record date shall be at the close of business on the day the Property Trustee
receives such notice. The Holders on such record date, or their duly designated
proxies, and only such Persons, shall be entitled to join in such notice,
whether or not such Holders remain Holders after such record date; provided,
that, unless such declaration of acceleration, or rescission and annulment, as
the case may be, shall have become effective by virtue of the requisite
percentage having joined in such notice prior to the day that is 90 days after
such record date, such notice of declaration of acceleration, or rescission and
annulment, as the case may be, shall automatically and without further action by
any Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new written notice of declaration of acceleration, or
rescission and annulment thereof, as the case may be, that is identical to a
written notice that has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 5.13(b).
(c) For so long as any Capital Securities remain Outstanding, to the
fullest extent permitted by law and subject to the terms of this Trust Agreement
and the Indenture, upon a Debenture Event of Default specified in Section 5.1(1)
or 5.1(2) of the Indenture, any Holder of Capital Securities shall have the
right to institute a proceeding directly against the Depositor, pursuant to
Section 5.8 of the Indenture, for enforcement of payment to such Holder of any
amounts payable in respect of Debentures having an aggregate principal amount
equal to the aggregate Liquidation Amount of the Capital Securities of such
Holder (a "Direct Action"). Except as set forth in Section 5.13(b) and this
Section 5.13(c), the Holders of Capital Securities shall have no right to
exercise directly any right or remedy available to the holders of, or in respect
of, the Debentures.
(d) Except as otherwise provided in clauses (a), (b) and (c) of this
Section 5.13, the Holders of at least a Majority in Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Trust Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
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ARTICLE VI.
ACTS OF HOLDERS; MEETINGS; VOTING
SECTION 6.1. Limitations on Voting Rights.
(a) Except as expressly provided in this Trust Agreement and in the
Indenture and as otherwise required by law, no Holder of Capital Securities
shall have any right to vote or in any manner otherwise control the
administration, operation and management of the Issuer Trust or the obligations
of the parties hereto, nor shall anything herein set forth, or contained in the
terms of the Trust Securities Certificates, be construed so as to constitute the
Holders from time to time as partners or members of an association.
(b) So long as any Debentures are held by the Property Trustee on
behalf of the Issuer Trust, the Property Trustee shall not (i) direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee, or execute any trust or power conferred on the Property
Trustee with respect to the Debentures, (ii) waive any past default that may be
waived under Section 5.13 of the Indenture, (iii) exercise any right to rescind
or annul a declaration that the principal of all the Debentures shall be due and
payable, or (iv) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities, provided, however, that where a
consent under the Indenture would require the consent of each Holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior written consent of each Holder of Capital Securities.
The Property Trustee shall not revoke any action previously authorized or
approved by a vote of the Holders of the Capital Securities, except by a
subsequent vote of the Holders of the Capital Securities. The Property Trustee
shall notify all Holders of the Capital Securities of any notice of default
received with respect to the Debentures. In addition to obtaining the foregoing
approvals of the Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Property Trustee shall, at the expense of the Depositor,
obtain an Opinion of Counsel experienced in such matters to the effect that such
action shall not cause the Issuer Trust to be taxable as a corporation or
classified as other than a grantor trust for United States Federal income tax
purposes.
(c) If any proposed amendment to the Trust Agreement provides for, or
the Issuer Trustees otherwise propose to effect, (i) any action that would
adversely affect in any material respect the powers, preferences or special
rights of the Capital Securities, whether by way of amendment to this Trust
Agreement or otherwise, or (ii) the dissolution, winding-up or termination of
the Issuer Trust, other than pursuant to the terms of this Trust Agreement, then
the Holders of Outstanding Capital Securities as a class will be entitled to
vote on such amendment or proposal and such amendment or proposal shall not be
effective except with the approval of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities. Notwithstanding any other
provision of this Trust Agreement, no amendment to this Trust Agreement may be
made if, as a result of such amendment, it would cause the Issuer Trust to be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes.
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SECTION 6.2. Notice of Meetings.
Notice of all meetings of the Holders of the Capital Securities,
stating the time, place and purpose of the meeting, shall be given by the
Property Trustee pursuant to Section 10.8 to each Holder of Capital Securities,
at such Holder's registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.3. Meetings of Holders of the Capital
Securities.
No annual meeting of Holders is required to be held. The Administrative
Trustees, however, shall call a meeting of the Holders of the Capital Securities
to vote on any matter upon the written request of the Holders of at least 25% in
aggregate Liquidation Amount of the Outstanding Capital Securities and the
Administrative Trustees or the Property Trustee may, at any time in their
discretion, call a meeting of the Holders of the Capital Securities to vote on
any matters as to which such Holders are entitled to vote.
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities, present in person or by proxy, shall constitute a quorum at any
meeting of the Holders of the Capital Securities.
If a quorum is present at a meeting, an affirmative vote by the Holders
present, in person or by proxy, holding Capital Securities representing at least
a Majority in aggregate Liquidation Amount of the Capital Securities held by the
Holders present, either in person or by proxy, at such meeting shall constitute
the action of the Holders of the Capital Securities, unless this Trust Agreement
requires a greater number of affirmative votes.
SECTION 6.4. Voting Rights.
Holders shall be entitled to one vote for each $1,000 of Liquidation
Amount represented by their Outstanding Trust Securities in respect of any
matter as to which such Holders are entitled to vote.
SECTION 6.5. Proxies, etc.
At any meeting of Holders, any Holder entitled to vote thereat may vote
by proxy, provided that no proxy shall be voted at any meeting unless it shall
have been placed on file with the Administrative Trustees, or with such other
officer or agent of the Issuer Trust as the Administrative Trustees may direct,
for verification prior to the time at which such vote shall be taken. Pursuant
to a resolution of the Property Trustee, proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Holders of record shall be entitled to vote. When Trust Securities are held
jointly by several persons, any one of them may vote at any meeting in person or
by proxy in respect of such Trust Securities, but if more than one of them shall
be present at such meeting in person or by proxy, and such joint owners or their
proxies so present disagree as to any vote to be cast, such vote shall not be
received in respect of such Trust Securities. A proxy purporting to be executed
by or on behalf of a Holder shall be deemed valid unless challenged at or prior
to its exercise, and the burden of proving invalidity shall rest on the
challenger. No proxy shall be valid more than three years after its date of
execution.
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SECTION 6.6. Holder Action by Written Consent.
Any action that may be taken by Holders at a meeting may be taken
without a meeting if Holders holding at least a Majority in Liquidation Amount
of all Capital Securities entitled to vote in respect of such action (or such
larger proportion thereof as shall be required by any other provision of this
Trust Agreement) shall consent to the action in writing.
SECTION 6.7. Record Date for Voting and Other Purposes.
For the purposes of determining the Holders who are entitled to notice
of and to vote at any meeting or by written consent, or to participate in any
Distribution on the Trust Securities in respect of which a record date is not
otherwise provided for in this Trust Agreement, or for the purpose of any other
action, the Administrative Trustees or Property Trustee may from time to time
fix a date, not more than 90 days prior to the date of any meeting of Holders or
the payment of a Distribution or other action, as the case may be, as a record
date for the determination of the identity of the Holders of record for such
purposes.
SECTION 6.8. Acts of Holders.
Any request, demand, authorization, direction, notice, consent, waiver
or other action provided or permitted by this Trust Agreement to be given, made
or taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by an agent
duly appointed in writing; and, except as otherwise expressly provided herein,
such action shall become effective when such instrument or instruments are
delivered to an Administrative Trustee. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to
as the "Act" of the Holders signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Trust Agreement and (subject to Section
8.1) conclusive in favor of the Issuer Trustees, if made in the manner provided
in this Section.
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 that any Issuer Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the Securities
Register.
Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Trust Security shall bind every future Holder
of the same Trust Security and the Holder of every Trust Security issued upon
the registration of transfer thereof or in exchange therefor or in lieu thereof
in respect of anything done, omitted or suffered to be done by the Issuer
Trustees or the Issuer Trust in reliance thereon, whether or not notation of
such action is made upon such Trust Security.
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Without limiting the foregoing, a Holder entitled hereunder to take any
action hereunder with regard to any particular Trust Security may do so with
regard to all or any part of the Liquidation Amount of such Trust Security or by
one or more duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any part of such Liquidation Amount.
If any dispute shall arise among the Holders or the Issuer Trustees
with respect to the authenticity, validity or binding nature of any request,
demand, authorization, direction, consent, waiver or other Act of such Holder or
Issuer Trustee under this Article VI, then the determination of such matter by
the Property Trustee shall be conclusive with respect to such matter.
A Holder may institute a legal proceeding directly against the
Depositor or the Guarantor under the Guarantee Agreement to enforce its rights
under the Guarantee Agreement without first instituting a legal proceeding
against the Guarantee Trustee (as defined in the Guarantee Agreement), the
Issuer Trust, any Issuer Trustee or any Person or entity.
SECTION 6.9. Inspection of Records.
Upon reasonable notice to the Administrative Trustees and the Property
Trustee, the records of the Issuer Trust shall be open to inspection by Holders
during normal business hours for any purpose reasonably related to such Holder's
interest as a Holder.
ARTICLE VII.
REPRESENTATIONS AND WARRANTIES
SECTION 7.1. Representations and Warranties of the
Property Trustee and the Delaware Trustee.
The Property Trustee and the Delaware Trustee, each severally on behalf
of and as to itself, hereby represents and warrants for the benefit of the
Depositor and the Holders that:
(a) the Property Trustee is a national banking association, duly
organized, validly existing and in good standing under the laws of the United
States;
(b) the Property Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(c) the Delaware Trustee is a Delaware corporation;
(d) the Delaware Trustee has full corporate power, authority and legal
right to execute, deliver and perform its obligations under this Trust Agreement
and has taken all necessary action to authorize the execution, delivery and
performance by it of this Trust Agreement;
(e) this Trust Agreement has been duly authorized, executed and
delivered by the Property Trustee and the Delaware Trustee and constitutes the
valid and legally binding agreement of each of the
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Property Trustee and the Delaware Trustee enforceable against each of them in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
(f) the execution, delivery and performance of this Trust Agreement has
been duly authorized by all necessary corporate or other action on the part of
the Property Trustee and the Delaware Trustee and does not require any approval
of stockholders of the Property Trustee or the Delaware Trustee and such
execution, delivery and performance will not (i) violate the Charter or By- laws
of the Property Trustee or the Delaware Trustee, (ii) violate any provision of,
or constitute, with or without notice or lapse of time, a default under, or
result in the creation or imposition of, any Lien on any properties included in
the Trust Property pursuant to the provisions of, any indenture, mortgage,
credit agreement, license or other agreement or instrument to which the Property
Trustee or the Delaware Trustee is a party or by which it is bound, or (iii)
violate any law, governmental rule or regulation of the United States or the
State of Delaware, as the case may be, governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee (as appropriate in
context) or any order, judgment or decree applicable to the Property Trustee or
the Delaware Trustee;
(g) neither the authorization, execution or delivery by the Property
Trustee or the Delaware Trustee of this Trust Agreement nor the consummation of
any of the transactions by the Property Trustee or the Delaware Trustee (as the
case may be) contemplated herein requires the consent or approval of, the giving
of notice to, the registration with or the taking of any other action with
respect to any governmental authority or agency under any existing law of the
United States or the State of Delaware governing the banking, trust or general
powers of the Property Trustee or the Delaware Trustee, as appropriate in
context; and
(h) there are no proceedings pending or, to the best of each of the
Property Trustee's and the Delaware Trustee's knowledge, threatened against or
affecting the Property Trustee or the Delaware Trustee in any court or before
any governmental authority, agency or arbitration board or tribunal that,
individually or in the aggregate, would materially and adversely affect the
Issuer Trust or would question the right, power and authority of the Property
Trustee or the Delaware Trustee, as the case may be, to enter into or perform
its obligations as one of the Issuer Trustees under this Trust Agreement.
SECTION 7.2. Representations and Warranties of
Depositor.
The Depositor hereby represents and warrants for the benefit of the
Holders that:
(a) the Trust Securities Certificates issued at the Closing Date on
behalf of the Issuer Trust have been duly authorized and will have been duly and
validly executed, issued and delivered by the Issuer Trustees pursuant to the
terms and provisions of, and in accordance with the requirements of, this Trust
Agreement and the Holders will be, as of each such date, entitled to the
benefits of this Trust Agreement; and
(b) there are no taxes, fees or other governmental charges payable by
the Issuer Trust (or the Issuer Trustees on behalf of the Issuer Trust) under
the laws of the State of Delaware or any political subdivision thereof in
connection with the execution, delivery and performance by the Property Trustee
or the Delaware Trustee, as the case may be, of this Trust Agreement.
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ARTICLE VIII.
THE ISSUER TRUSTEES
SECTION 8.1. Certain Duties and Responsibilities.
(a) The duties and responsibilities of the Issuer Trustees shall be as
provided by this Trust Agreement and, in the case of the Property Trustee,
subject to Section 10.10 hereof. Notwithstanding the foregoing, no provision of
this Trust Agreement shall require any of the Issuer Trustees to expend or risk
its own funds or otherwise incur any financial liability in the performance of
any of its duties hereunder, or in the exercise of any of its rights or powers,
if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Trust Agreement relating to the conduct or affecting the liability of or
affording protection to the Issuer Trustees shall be subject to the provisions
of this Section 8.1. Nothing in this Trust Agreement shall be construed to
release an Administrative Trustee from liability for his or her own negligent
action, his or her own negligent failure to act, or his or her own willful
misconduct. To the extent that, at law or in equity, an Issuer Trustee has
duties and liabilities relating to the Issuer Trust or to the Holders, such
Issuer Trustee shall not be liable to the Issuer Trust or to any Holder for such
Issuer Trustee's good faith reliance on the provisions of this Trust Agreement.
The provisions of this Trust Agreement, to the extent that they restrict the
duties and liabilities of the Issuer Trustees otherwise existing at law or in
equity, are agreed by the Depositor and the Holders to replace such other duties
and liabilities of the Issuer Trustees.
(b) All payments made by the Property Trustee or a Paying Agent in
respect of the Trust Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Property Trustee or a
Paying Agent to make payments in accordance with the terms hereof. Each Holder,
by its acceptance of a Trust Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Issuer Trustees are not
personally liable to it for any amount distributable in respect of any Trust
Security or for any other liability in respect of any Trust Security. This
Section 8.1(b) does not limit the liability of the Issuer Trustees expressly set
forth elsewhere in this Trust Agreement or, in the case of the Property Trustee,
in the Trust Indenture Act.
(c) The Property Trustee, before the occurrence of any Event of Default
and after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Trust Agreement (including pursuant to Section 10.10), and no implied covenants
shall be read into this Trust Agreement against the Property Trustee. If an
Event of Default has occurred (that has not been cured or waived pursuant to
Section 5.13, the Property Trustee shall exercise such of the rights and powers
vested in it by this Trust Agreement, and use the same degree of care and skill
in its exercise 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 Trust Agreement shall be construed to relieve
the Property Trustee or the Delaware Trustee from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Property
Trustee shall be determined solely by the express provisions
of this Trust Agreement (including pursuant to Section 10.10),
and the Property Trustee shall not be liable except for the
performance of such duties and obligations as are specifically
set forth in this Trust Agreement (including pursuant to
Section 10.10); and
(B) in the absence of bad faith on the part of the
Property Trustee, the 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 Property Trustee and conforming to the
requirements of this Trust Agreement; but in the case of any
such certificates or opinions that by any provision hereof or
of the Trust Indenture Act are specifically required to be
furnished to the Property Trustee, the Property Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Trust Agreement.
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by an authorized officer of the Property
Trustee, unless it shall be proved that the Property Trustee was
negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable with respect to
any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of at least a Majority in
Liquidation Amount of the Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy available
to the Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iv) the Property Trustee's sole duty with respect to the
custody, safe keeping and physical preservation of the Debentures and
the Payment Account shall be to deal with such property in a similar
manner as the Property Trustee deals with similar property for its own
account, subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement and the
Trust Indenture Act;
(v) the Property Trustee shall not be liable for any interest
on any money received by it except as it may otherwise agree with the
Depositor; and money held by the Property Trustee need not be
segregated from other funds held by it except in relation to the
Payment Account maintained by the Property Trustee pursuant to Section
3.1 and except to the extent otherwise required by law;
(vi) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or the
Depositor with their respective duties under this Trust Agreement, nor
shall the Property Trustee be liable for the default or misconduct of
any other Issuer Trustee or the Depositor; and
(vii) No provision of this Trust Agreement shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
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its duties or in the exercise of any of its rights or powers, if the
Property Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Trust Agreement or adequate indemnity against
such risk or liability is not reasonably assured to it.
(e) The Administrative Trustees shall not be responsible for monitoring
the compliance by the other Issuer Trustees or the Depositor with their
respective duties under this Trust Agreement, nor shall either Administrative
Trustee be liable for the default or misconduct of any other Administrative
Trustee, the other Issuer Trustees or the Depositor.
SECTION 8.2. Certain Notices.
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit, in
the manner and to the extent provided in Section 10.8, notice of such Event of
Default to the Holders, the Administrative Trustees and the Depositor, unless
such Event of Default shall have been cured or waived.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the
Debentures pursuant to the Indenture, the Administrative Trustees shall
transmit, in the manner and to the extent provided in Section 10.8, notice of
such exercise to the Holders, unless such exercise shall have been revoked.
The Property Trustee shall not be deemed to have knowledge of any Event
of Default unless the Property Trustee shall have received written notice or a
Responsible Officer of the Property Trustee charged with the administration of
this Trust Agreement shall have obtained actual knowledge of such Event of
Default.
SECTION 8.3. Certain Rights of Property Trustee.
Subject to the provisions of Section 8.1:
(a) the Property Trustee may rely and shall be protected in acting or
refraining from acting in good faith upon any resolution, Opinion of Counsel,
certificate, written representation of a Holder or transferee, certificate of
auditors or any other certificate, statement, instrument, opinion, report,
notice, request, consent, order, appraisal, bond, debenture, note, other
evidence of indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Trust Agreement the
Property Trustee is required to decide between alternative courses of action,
(ii) in construing any of the provisions of this Trust Agreement the Property
Trustee finds the same ambiguous or inconsistent with any other provisions
contained herein, or (iii) the Property Trustee is unsure of the application of
any provision of this Trust Agreement, then, except as to any matter as to which
the Holders of the Capital Securities are entitled to vote under the terms of
this Trust Agreement, the Property Trustee shall deliver a notice to the
Depositor requesting the Depositor's opinion as to the course of action to be
taken and the Property
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Trustee shall take such action, or refrain from taking such action, as the
Property Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor; provided, however, that if the Property Trustee does
not receive such instructions of the Depositor within ten Business Days after it
has delivered such notice, or such reasonably shorter period of time set forth
in such notice (which to the extent practicable shall not be less than two
Business Days), it may, but shall be under no duty to, take or refrain from
taking such action not inconsistent with this Trust Agreement as it shall deem
advisable and in the best interests of the Holders, in which event the Property
Trustee shall have no liability except for its own bad faith, negligence or
willful misconduct;
(c) any direction or act of the Depositor contemplated
by this Trust Agreement shall be sufficiently evidenced by
an Officers' Certificate;
(d) any direction or act of an Administrative Trustee contemplated by
this Trust Agreement shall be sufficiently evidenced by a certificate executed
by such Administrative Trustee and setting forth such direction or act;
(e) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or re-registration thereof;
(f) the Property Trustee may consult with counsel (which counsel may be
counsel to the Depositor or any of its Affiliates, and may include any of its
employees) and the advice of such counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
by it hereunder in good faith and in reliance thereon and in accordance with
such advice; the Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(g) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request or
direction of any of the Holders pursuant to this Trust Agreement, unless such
Holders shall have offered to the Property Trustee reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction; provided that, nothing
contained in this Section 8.3(g) shall be taken to relieve the Property Trustee,
upon the occurrence of an Event of Default, of its obligation to exercise the
rights and powers vested in it by this Trust Agreement;
(h) the Property Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond,
debenture, note or other evidence of indebtedness or other paper or document,
unless requested in writing to do so by one or more Holders, but the Property
Trustee may make such further inquiry or investigation into such facts or
matters as it may see fit;
(i) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys, provided that the Property Trustee shall be responsible for
its own negligence or misconduct with respect to selection of any agent or
attorney appointed by it hereunder;
(j) whenever in the administration of this Trust Agreement the Property
Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders (which instructions may
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only be given by the Holders of the same proportion in Liquidation Amount of the
Trust Securities as would be entitled to direct the Property Trustee under the
terms of the Trust Securities in respect of such remedy, right or action), (ii)
may refrain from enforcing such remedy or right or taking such other action
until such instructions are received, and (iii) shall be protected in acting in
accordance with such instructions; and
(k) except as otherwise expressly provided by this Trust Agreement, the
Property Trustee shall not be under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement.
No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on any Issuer Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which such Person shall be unqualified or
incompetent in accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No permissive power or
authority available to any Issuer Trustee shall be construed to be a duty.
SECTION 8.4. Not Responsible for Recitals or Issuance
of Securities.
The recitals contained herein and in the Trust Securities Certificates
shall be taken as the statements of the Issuer Trust and the Depositor, and the
Issuer Trustees do not assume any responsibility for their correctness. The
Issuer Trustees shall not be accountable for the use or application by the
Depositor of the proceeds of the Debentures.
The Property Trustee may conclusively assume that any funds held by it
hereunder are legally available unless an officer of the Property Trustee
assigned to its Corporate Trust Administration department shall have received
written notice from the Depositor, any Holder or any other Issuer Trustee that
such funds are not legally available.
SECTION 8.5. May Hold Securities.
Any Issuer Trustee or any other agent of any Issuer Trustee or the
Issuer Trust, in its individual or any other capacity, may become the owner or
pledgee of Trust Securities and, subject to Sections 8.8 and 8.13, and except as
provided in the definition of the term "Outstanding" in Article I, may otherwise
deal with the Issuer Trust with the same rights it would have if it were not an
Issuer Trustee or such other agent.
SECTION 8.6. Compensation; Indemnity; Fees.
The Depositor agrees:
(a) to pay to the Issuer Trustees from time to time such reasonable
compensation for all services rendered by them hereunder as may be agreed by the
Depositor and the Issuer Trustees from time to time (which compensation shall
not be limited by any provision of law in regard to the compensation of a
trustee of an express trust);
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(b) except as otherwise expressly provided herein, to reimburse the
Issuer Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Issuer Trustees in accordance with any
provision of this Trust Agreement (including the reasonable compensation and the
expenses and disbursements of their agents and counsel), except any such
expense, disbursement or advance as may be attributable to their negligence, bad
faith or wilful misconduct; and
(c) to the fullest extent permitted by applicable law, to indemnify and
hold harmless (i) each Issuer Trustee, (ii) any Affiliate of any Issuer Trustee,
(iii) any officer, director, shareholder, employee, representative or agent of
any Issuer Trustee, and (iv) any employee or agent of the Issuer Trust (referred
to herein as an "Indemnified Person") from and against any loss, damage,
liability, tax, penalty, expense or claim of any kind or nature whatsoever
incurred by such Indemnified Person by reason of the creation, operation or
termination of the Issuer Trust or any act or omission performed or omitted by
such Indemnified Person on behalf of the Issuer Trust, except that no
Indemnified Person shall be entitled to be indemnified in respect of any loss,
damage or claim incurred by such Indemnified Person by reason of negligence, bad
faith or wilful misconduct with respect to such acts or omissions.
The provisions of this Section 8.6 shall survive the termination of
this Trust Agreement and the removal or resignation of any Issuer Trustee.
No Issuer Trustee may claim any Lien on any Trust Property as a result
of any amount due pursuant to this Section 8.6.
SECTION 8.7. Corporate Property Trustee Required;
Eligibility of Issuer Trustees.
(a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank and eligible pursuant to the Trust Indenture
Act to act as such and that has a combined capital and surplus of at least
$50,000,000. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section and to the extent permitted by
the Trust Indenture Act, the combined capital and surplus of such Person shall
be deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. If at any time the Property Trustee with
respect to the Trust Securities 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. At the time of
appointment, the Property Trustee must have securities rated in one of the three
highest rating categories by a nationally recognized statistical rating
organization.
(b) There shall at all times be one or more Administrative Trustees
hereunder with respect to the Trust Securities. Each Administrative Trustee
shall be either a natural person who is at least 21 years of age or a legal
entity that shall act through one or more persons authorized to bind that
entity.
(c) There shall at all times be a Delaware Trustee with respect to the
Trust Securities. The Delaware Trustee shall either be (i) a natural person who
is at least 21 years of age and a resident of the State of Delaware, or (ii) a
legal entity with its principal place of business in the State of Delaware and
that otherwise meets the requirements of applicable Delaware law and that shall
act through one or more persons authorized to bind such entity.
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SECTION 8.8. Conflicting Interests.
(a) If the Property Trustee has or shall acquire a conflicting interest
within the meaning of the Trust Indenture Act, the Property 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 Trust
Agreement.
(b) The Guarantee Agreement and the Indenture shall be deemed to be
specifically described in this Trust Agreement for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
SECTION 8.9. Co-Trustees and Separate Trustee.
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such Person or Persons in the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. Any co-trustee or
separate trustee appointed pursuant to this Section shall either be (i) a
natural person who is at least 21 years of age and a resident of the United
States, or (ii) a legal entity with its principal place of business in the
United States that shall act through one or more persons authorized to bind such
entity. In case an Event of Default under the Indenture shall have occurred and
be continuing, the Property Trustee alone shall have the power to make such
appointment.
Should any written instrument from the Depositor be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right, or power, any and
all such instruments shall, on request, be executed, acknowledged and delivered
by the Depositor.
Every co-trustee or separate trustee shall, to the extent permitted by
law, but to such extent only, be appointed subject to the following terms,
namely:
(a) The Trust Securities shall be executed by one or more
Administrative Trustees, and the Trust Securities shall be delivered by the
Property Trustee, and all rights, powers, duties, and obligations hereunder in
respect of the custody of securities, cash and other personal property held by,
or required to be deposited or pledged with, the Property Trustee specified
hereunder shall be exercised solely by the Property Trustee and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties, and obligations hereby conferred or
imposed upon the Property Trustee in respect of any property covered by such
appointment shall be conferred or imposed upon and exercised or performed by the
Property Trustee or by the Property Trustee and such co-trustee or separate
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trustee jointly, as shall be provided in the instrument appointing such
co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Property
Trustee shall be incompetent or unqualified to perform such act, in which event
such rights, powers, duties and obligations shall be exercised and performed by
such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in writing
executed by it, with the written concurrence of the Depositor, may accept the
resignation of or remove any co-trustee or separate trustee appointed under this
Section, and, in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee shall have power to accept the resignation of,
or remove, any such co-trustee or separate trustee without the concurrence of
the Depositor. Upon the written request of the Property Trustee, the Depositor
shall join with the Property Trustee in the execution, delivery and performance
of all instruments and agreements necessary or proper to effectuate such
resignation or removal. A successor to any co-trustee or separate trustee so
resigning or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Property Trustee or any other
trustee hereunder.
(e) The Property Trustee shall not be liable by reason
of any act of a co-trustee or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee shall be
deemed to have been delivered to each such co-trustee and separate trustee.
SECTION 8.10. Resignation and Removal; Appointment of
Successor.
No resignation or removal of any Issuer Trustee (the "Relevant
Trustee") and no appointment of a successor Issuer Trustee pursuant to this
Article shall become effective until the acceptance of appointment by the
successor Issuer Trustee in accordance with the applicable requirements of
Section 8.11.
Subject to the immediately preceding paragraph, the Relevant Trustee
may resign at any time by giving written notice thereof to the Holders. If the
instrument of acceptance by the successor Trustee required by Section 8.11 shall
not have been delivered to the Relevant Trustee within 30 days after the giving
of such notice of resignation, the Relevant Trustee may petition, at the expense
of the Trust, any court of competent jurisdiction for the appointment of a
successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Issuer Trustee may be removed at any time by Act of the Holders
of Common Securities. If a Debenture Event of Default shall have occurred and be
continuing, the Property Trustee or the Delaware Trustee, or both of them, may
be removed at such time by Act of the Holders of a majority in Liquidation
Amount of the Capital Securities, delivered to the Relevant Trustee (in its
individual capacity and on behalf of the Trust). An Administrative Trustee may
be removed by the Holders of Common Securities at any time. In no event will the
Holders of the Capital Securities have a right to vote to appoint, remove or
replace the Administrative Trustees.
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If any Issuer Trustee shall resign, be removed or become incapable of
acting as Issuer Trustee, or if a vacancy shall occur in the office of any
Issuer Trustee for any reason, at a time when no Debenture Event of Default
shall have occurred and be continuing, the Holders of Common Securities, by Act
of the Holders of Common Securities, shall promptly appoint a successor Issuer
Trustee or Issuer Trustees, and the retiring Issuer Trustee shall comply with
the applicable requirements of Section 8.11. If the Property Trustee or the
Delaware Trustee shall resign, be removed or become incapable of continuing to
act as the Property Trustee or the Delaware Trustee, as the case may be, at a
time when a Debenture Event of Default shall have occurred and be continuing,
the Holders of Capital Securities, by Act of the Holders of a majority in
Liquidation Amount of the Capital Securities then Outstanding, shall promptly
appoint a successor Relevant Trustee or Trustees, and such successor Trustee
shall comply with the applicable requirements of Section 8.11. If an
Administrative Trustee shall resign, be removed or become incapable of acting as
Administrative Trustee, at a time when a Debenture Event of Default shall have
occurred and be continuing, the Holders of Common Securities by Act of the
Holders of Common Securities shall promptly appoint a successor Administrative
Trustee or Administrative Trustees and such successor Administrative Trustee or
Trustees shall comply with the applicable requirements of Section 8.11. If no
successor Relevant Trustee shall have been so appointed by the Holders of Common
Securities or the Holders of Capital Securities and accepted appointment in the
manner required by Section 8.11, any Holder who has been a Holder of Trust
Securities 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 Relevant Trustee.
The Property Trustee shall give notice of each resignation and each
removal of an Issuer Trustee and each appointment of a successor Issuer Trustee
to all Holders in the manner provided in Section 10.8 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this Trust
Agreement, in the event any Administrative Trustee or a Delaware Trustee who is
a natural person dies or becomes, in the opinion of the Depositor, incompetent
or incapacitated, the vacancy created by such death, incompetence or incapacity
may be filled by (a) the unanimous act of the remaining Administrative Trustees
if there are at least two of them or (b) otherwise by the Depositor (with the
successor in each case being a Person who satisfies the eligibility requirement
for Administrative Trustees or Delaware Trustee, as the case may be, set forth
in Section 8.7).
SECTION 8.11. Acceptance of Appointment by Successor.
In case of the appointment hereunder of a successor Issuer Trustee such
successor Issuer Trustee so appointed shall execute, acknowledge and deliver to
the Issuer Trust and to the retiring Issuer Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Issuer
Trustee shall become effective and such successor Issuer Trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Issuer Trustee; but, on the request of
the Depositor or the successor Issuer Trustee, such retiring Issuer Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Issuer Trustee all the rights, powers and trusts
of the retiring Issuer Trustee and if the Property Trustee is the resigning
Issuer Trustee shall duly assign, transfer and deliver to the successor Issuer
Trustee all property and money held by such retiring Property Trustee hereunder.
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In case of the appointment hereunder of a successor Relevant Trustee,
the retiring Relevant Trustee and each successor Relevant Trustee with respect
to the Trust Securities shall execute and deliver an amendment hereto wherein
each successor Relevant Trustee shall accept such appointment and which (a)
shall contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Issuer Trust, and (b) shall add to or change any of the
provisions of this Trust Agreement as shall be necessary to provide for or
facilitate the administration of the Issuer Trust by more than one Relevant
Trustee, it being understood that nothing herein or in such amendment shall
constitute such Relevant Trustees co-trustees and upon the execution and
delivery of such amendment the resignation or removal of the retiring Relevant
Trustee shall become effective to the extent provided therein and each such
successor Relevant Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the retiring
Relevant Trustee; but, on request of the Issuer Trust or any successor Relevant
Trustee such retiring Relevant Trustee shall duly assign, transfer and deliver
to such successor Relevant Trustee all Trust Property, all proceeds thereof and
money held by such retiring Relevant Trustee hereunder with respect to the Trust
Securities and the Issuer Trust.
Upon request of any such successor Relevant Trustee, the Issuer Trust
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such successor Relevant Trustee all such rights, powers and
trusts referred to in the first or second preceding paragraph, as the case may
be.
No successor Relevant Trustee shall accept its appointment unless at
the time of such acceptance such successor Relevant Trustee shall be qualified
and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or
Succession to Business.
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural Person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such Relevant Trustee shall be a party, or
any Person, succeeding to all or substantially all the corporate trust business
of such Relevant Trustee, shall be the successor of such Relevant Trustee
hereunder, provided that such Person 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.
SECTION 8.13. Preferential Collection of Claims
Against Depositor or Issuer Trust.
If and when the Property Trustee shall be or become a creditor of the
Depositor or the Issuer Trust (or any other obligor upon the Capital
Securities), the Property Trustee shall be subject to the provisions of the
Trust Indenture Act regarding the collection of claims against the Depositor or
the Issuer Trust (or any such other obligor).
SECTION 8.14. Property 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 Issuer Trust or any other obligor upon the Trust
Securities or the property of the Issuer Trust or of such other obligor or their
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creditors, the Property Trustee (irrespective of whether any Distributions on
the Trust Securities shall then be due and payable and irrespective of whether
the Property Trustee shall have made any demand on the Issuer 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 Trust Securities and to file such other
papers or documents as may be necessary or advisable in order to have the claims
of the Property Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Property Trustee, its agents and
counsel) and of the Holders allowed in such judicial proceeding, and
(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 to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or compensation affecting
the Trust Securities or the rights of any Holder thereof or to authorize the
Property Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 8.15. Reports by Property Trustee.
(a) Not later than February 28 of each year (commencing in 1998), the
Property Trustee shall transmit to all Holders in accordance with Section 10.8,
and to the Depositor, a brief report dated as of the immediately preceding
December 31 with respect to:
(i) its eligibility under Section 8.7 or, in lieu thereof, if
to the best of its knowledge it has continued to be eligible under said
Section, a written statement to such effect;
(ii) a statement that the Property Trustee has complied with
all of its obligations under this Trust Agreement during the
twelve-month period (or, in the case of the initial report, the period
since the Closing Date) ending with such December 31 or, if the
Property Trustee has not complied in any material respect with such
obligations, a description of such noncompliance; and
(iii) any change in the property and funds in its possession
as Property Trustee since the date of its last report and any action
taken by the Property Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Trust Securities.
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(b) In addition the Property Trustee shall transmit to Holders such
reports concerning the Property Trustee and its actions under this Trust
Agreement as may be required pursuant to the Trust Indenture Act at the times
and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such transmission
to Holders, be filed by the Property Trustee with each national stock exchange,
the Nasdaq National Market or such other interdealer quotation system or
self-regulatory organization upon which the Trust Securities are listed or
traded, with the Commission and with the Depositor.
SECTION 8.16. Reports to the Property Trustee.
Each of the Depositor and the Administrative Trustees shall provide to
the Property Trustee such documents, reports and information as required by
Section 314 of the Trust Indenture Act (if any) and the compliance certificate
required by Section 314(a) of the Trust Indenture Act in the form, in the manner
and at the times required by Section 314 of the Trust Indenture Act. The
Depositor and the Administrative Trustees shall annually file with the Property
Trustee a certificate specifying whether such Person is in compliance with all
of the terms and covenants applicable to such Person hereunder.
SECTION 8.17. Evidence of Compliance with Conditions
Precedent.
Each of the Depositor and the Administrative Trustees shall provide to
the Property Trustee such evidence of compliance with any conditions precedent,
if any, provided for in this Trust Agreement 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) of the
Trust Indenture Act shall be given in the form of an Officers' Certificate.
SECTION 8.18. Number of Issuer Trustees.
(a) The number of Issuer Trustees initially shall be six, provided that
the Property Trustee and the Delaware Trustee may be the same Person, in which
case the number of Issuer Trustees may be less than six.
(b) If an Issuer Trustee ceases to hold office for any reason, a
vacancy shall occur. The vacancy shall be filled with an Issuer Trustee
appointed in accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of an Issuer Trustee shall not
operate to annul, dissolve or terminate the Issuer Trust.
SECTION 8.19. Delegation of Power.
(a) Any Administrative Trustee 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 purpose of executing any documents contemplated in Section
2.7(a), including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) The Administrative Trustees shall have power to delegate from time
to time to such of their number or to the Depositor the doing of such things and
the execution of such instruments either in the
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name of the Issuer Trust or the names of the Administrative Trustees or
otherwise as the Administrative Trustees may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
this Trust Agreement.
SECTION 8.20. Appointment of Administrative Trustees.
(a) The Administrative Trustees shall initially be Jorge A. Junquera,
an individual, Roberto R. Herencia, an individual, Javier F. Ubarri, an
individual, and Alberto Paracchini, Jr., an individual, and their successors
shall be appointed by the Holders of a Majority in Liquidation Amount of the
Common Securities and resign or be may be removed by the Holders of a Majority
in Liquidation Amount of the Common Securities at any time. Upon any resignation
or removal, the Depositor shall appoint a successor Administrative Trustee. Each
Administrative Trustee shall sign an agreement agreeing to comply with the terms
of this Trust Agreement. If at any time there is no Administrative Trustee, the
Property Trustee or any Holder who has been a Holder of Trust Securities for at
least six months may petition any court of competent jurisdiction for the
appointment of one or more Administrative Trustees.
(b) Whenever a vacancy in the number of Administrative Trustees shall
occur, until such vacancy is filled by the appointment of an Administrative
Trustee in accordance with this Section 8.20, the Administrative Trustees in
office, regardless of their number (and not withstanding any other provision of
this Agreement), shall have all the powers granted to the Administrative
Trustees and shall discharge all the duties imposed upon the Administrative
Trustees by this Trust Agreement.
(c) Notwithstanding the foregoing or any other provision of this Trust
Agreement, if any Administrative Trustee who is a natural person dies or
becomes, in the opinion of the Depositor, incompetent or incapacitated, the
vacancy created by such death, incompetence or incapacity may be filled by the
unanimous acts of the remaining Administrative Trustees, if there were at least
two of them prior to such vacancy, and by the Depositor, if there were not two
such Administrative Trustees immediately prior to such vacancy (with the
successor being a Person who satisfies the eligibility requirement for
Administrative Trustees set forth in Section 8.7).
SECTION 8.21. Outside Business.
The Depositor and any Issuer 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 business of the Issuer Trust, and
the Issuer Trust and the Holders of Capital Securities shall have no rights by
virtue of this Trust Agreement in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Issuer Trust, shall not be deemed wrongful
or improper. Neither the Depositor, nor any Issuer Trustee, shall be obligated
to present any particular investment or other opportunity to the Issuer Trust
even if such opportunity is of a character that, if presented to the Issuer
Trust, could be taken by the Issuer Trust, and the Depositor or any Issuer
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 Issuer Trustee may engage or be interested in any
financial or other transaction with the Depositor or any Affiliate of the
Depositor, 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
Depositor or its Affiliates.
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ARTICLE IX.
TERMINATION, LIQUIDATION AND MERGER
SECTION 9.1. Termination Upon Expiration Date.
Unless earlier terminated, the Issuer Trust shall automatically
terminate on January 16, 2052 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.4.
SECTION 9.2. Early Termination.
The first to occur of any of the following events is an "Early
Termination Event":
(a) the occurrence of a Bankruptcy Event in respect
of, or the dissolution or liquidation of, the Depositor;
(b) the written direction to the Property Trustee from all of the
Holders of the Common Securities at any time to terminate the Issuer Trust and
to distribute the Debentures to Holders in exchange for the Capital Securities
(which direction is optional and wholly within the discretion of the Holders of
the Common Securities);
(c) the redemption of all of the Capital Securities in
connection with the redemption of all the Debentures; and
(d) the entry of an order for dissolution of the
Issuer Trust by a court of competent jurisdiction.
SECTION 9.3. Termination.
The respective obligations and responsibilities of the Issuer Trustees
and the Issuer Trust created and continued hereby shall terminate upon the
latest to occur of the following: (a) the distribution by the Property Trustee
to Holders of all amounts required to be distributed hereunder upon the
liquidation of the Issuer Trust pursuant to Section 9.4, or upon the redemption
of all of the Trust Securities pursuant to Section 4.2; (b) the payment of any
expenses owed by the Issuer Trust; and (c) the discharge of all administrative
duties of the Administrative Trustees, including the performance of any tax
reporting obligations with respect to the Issuer Trust or the Holders.
SECTION 9.4. Liquidation.
(a) If an Early Termination Event specified in clause (a), (b) or (d)
of Section 9.2 occurs or upon the Expiration Date, the Issuer Trust shall be
liquidated by the Issuer Trustees as expeditiously as the Issuer Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Issuer Trust as provided by applicable law, to each Holder a
Like Amount of Debentures, subject to Section 9.4(d). Notice of liquidation
shall be given by the Property Trustee by first-class mail, postage prepaid
mailed not less than 30 nor more than 60 days prior to the Liquidation Date to
each Holder of Trust Securities at such Holder's address appearing in the
Securities Register. All such notices of liquidation shall:
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(i) state the Liquidation Date;
(ii) state that from and after the Liquidation Date, the Trust
Securities will no longer be deemed to be Outstanding and any Trust
Securities Certificates not surrendered for exchange will be deemed to
represent a Like Amount of Debentures; and
(iii) provide such information with respect to the procedures
by which Holders may exchange Trust Securities Certificates for
Debentures, or if Section 9.4(d) applies receive a Liquidation
Distribution, as Administrative Trustees or the Property Trustee shall
deem appropriate.
(b) Except where Section 9.2(c) or 9.4(d) applies, in order to effect
the liquidation of the Issuer Trust and distribution of the Debentures to
Holders, the Property Trustee, either itself acting as exchange agent or through
the appointment of a separate exchange agent, shall establish a record date for
such distribution (which shall be not more than 30 days prior to the Liquidation
Date) and, establish such procedures as it shall deem appropriate to effect the
distribution of Debentures in exchange for the Outstanding Trust Securities
Certificates.
(c) Except where Section 9.2(c) or 9.4(d) applies, after the
Liquidation Date, (i) the Trust Securities will no longer be deemed to be
Outstanding, (ii) certificates representing a Like Amount of Debentures will be
issued to Holders of Trust Securities Certificates, upon surrender of such
Certificates to the exchange agent for exchange, (iii) the Depositor shall use
its best efforts to have the Debentures listed on the national stock exchange,
the Nasdaq National Market or on such other exchange, interdealer quotation
system or self-regulatory organization as the Capital Securities are then listed
(it being understood that the Depositor has no current intention of listing the
Capital Securities on any national stock exchange, the Nasdaq National Market or
on any other exchange, interdealer quotation system or self-regulatory
organization), (iv) any Trust Securities Certificates not so surrendered for
exchange will be deemed to represent a Like Amount of Debentures bearing accrued
and unpaid interest in an amount equal to the accumulated and unpaid
Distributions on such Trust Securities Certificates until such certificates are
so surrendered (and until such certificates are so surrendered, no payments of
interest or principal will be made to Holders of Trust Securities Certificates
with respect to such Debentures) and (v) all rights of Holders holding Trust
Securities will cease, except the right of such Holders to receive Debentures
upon surrender of Trust Securities Certificates.
(d) If, notwithstanding the other provisions of this Section 9.4,
whether because of an order for dissolution entered by a court of competent
jurisdiction or otherwise, distribution of the Debentures in the manner provided
herein is determined by the Property Trustee not to be practical, or if an Early
Termination Event specified in Section 9.2(c) occurs, the Trust Property shall
be liquidated, and the Issuer Trust shall be dissolved, wound-up or terminated,
by the Property Trustee in such manner as the Property Trustee determines. In
such event, on the date of the dissolution, winding-up or other termination of
the Issuer Trust, Holders will be entitled to receive out of the assets of the
Issuer Trust available for distribution to Holders, after satisfaction of
liabilities to creditors of the Issuer Trust as provided by applicable law, an
amount equal to the Liquidation Amount per Trust Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"). If, upon any such dissolution, winding up or
termination, the Liquidation Distribution can be paid only in part because the
Issuer Trust has insufficient assets available to pay in full the aggregate
Liquidation Distribution, then, subject to the next succeeding sentence, the
amounts payable by the Issuer
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Trust on the Trust Securities shall be paid on a pro rata basis (based upon
Liquidation Amounts). The Holders of the Common Securities will be entitled to
receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Capital
Securities, except that, if a Debenture Event of Default specified in Section
5.1(1) or 5.1(2) of the Indenture has occurred and is continuing, the Capital
Securities shall have a priority over the Common Securities as provided in
Section 4.3.
SECTION 9.5. Mergers, Consolidations, Amalgamations or
Replacements of Issuer Trust.
The Issuer Trust may not merge with or into, consolidate, amalgamate,
or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except pursuant
to this Section 9.5. At the request of the Holders of the Common Securities,
with the consent of the Administrative Trustees (the consent of the Property
Trustee and the Delaware Trustee not being required), the Issuer Trust may merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets substantially as an entirety to a trust
organized as such under the laws of any State; provided, that (i) such successor
entity either (a) expressly assumes all of the obligations of the Issuer Trust
with respect to the Capital Securities, or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor Securities have
the same priority as the Capital Securities with respect to distributions and
payments upon liquidation, redemption and otherwise, (ii) a trustee of such
successor entity possessing the same powers and duties as the Property Trustee
is appointed to hold the Debentures, (iii) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not cause the
Capital Securities (including any Successor Securities) to be downgraded by any
nationally recognized statistical rating organization which assigns ratings to
the Capital Securities, (iv) the Successor Securities are listed, or any
Successor Securities will be listed upon notice of issuance, on the national
securities exchange, the Nasdaq National Market or on such other exchange,
interdealer quotation system or self regulatory organization as the Capital
Securities are then listed, if any (it being understood that the Depositor has
no current intention of listing the Capital Securities on any national stock
exchange, the Nasdaq National Market or on any other exchange, interdealer
quotation system or self-regulatory 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 Securities (including any Successor Securities) in any material respect,
(vi) such successor entity has a purpose substantially identical to that of the
Issuer Trust, (vii) prior to such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, the Depositor has received an
Opinion of Counsel 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
Securities (including any Successor Securities) in any material respect, and (b)
following such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, neither the Issuer Trust nor such successor entity will be
required to register as an "investment company" under the Investment Company
Act, and (viii) the Depositor or its permitted transferee owns all of the Common
Securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee Agreement. Notwithstanding the foregoing, the Issuer Trust
shall not, except with the consent of Holders of all of the Capital Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Issuer Trust or the successor
entity to be taxable as a corporation or classified as other than a grantor
trust for United States Federal income tax purposes.
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ARTICLE X.
MISCELLANEOUS PROVISIONS
SECTION 10.1. Limitation of Rights of Holders.
Except as set forth in Section 9.2, the death or incapacity of any
person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Trust Agreement, nor entitle the legal
representatives or heirs of such person or any Holder for such person, to claim
an accounting, take any action or bring any proceeding in any court for a
partition or winding up of the arrangements contemplated hereby, nor otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 10.2. Amendment.
(a) This Trust Agreement may be amended from time to time by the
Property Trustee, the Administrative Trustees and the Holders of all of the
Common Securities, without the consent of any Holder of the Capital Securities,
(i) to cure any ambiguity, correct or supplement any provision herein that may
be inconsistent with any other provision herein, or to make any other provisions
with respect to matters or questions arising under this Trust Agreement, which
shall not be inconsistent with the other provisions of this Trust Agreement, or
(ii) to modify, eliminate or add to any provisions of this Trust Agreement to
such extent as shall be necessary to ensure that the Issuer Trust will not be
taxable as a corporation or classified as other than a grantor trust for United
States Federal income tax purposes at all times that any Trust Securities are
outstanding or to ensure that the Issuer Trust will not be required to register
as an "investment company" under the Investment Company Act, provided, however,
that in the case of either clause (i) or clause (ii) such action shall not
adversely affect in any material respect the interests of any Holder, and any
such amendment of this Trust Agreement shall become effective when notice
thereof is given to the Holders.
(b) Except as provided in Section 10.2(c), any provision of this Trust
Agreement may be amended by the Issuer Trustees and the Holders of all of the
Common Securities and with (i) the consent of Holders of at least a Majority in
Liquidation Amount of the Trust Securities, and (ii) receipt by the Issuer
Trustees of an Opinion of Counsel to the effect that such amendment or the
exercise of any power granted to the Issuer Trustees in accordance with such
amendment will not cause the Issuer Trust to be taxable as a corporation or as
other than a grantor trust for United States Federal income tax purposes or
affect the Issuer Trust's exemption from status as an "investment company" under
the Investment Company Act.
(c) In addition to and notwithstanding any other provision in this
Trust Agreement, without the consent of each affected Holder (such consent being
obtained in accordance with Section 6.3 or 6.6), this Trust Agreement may not be
amended to (i) change the amount or timing of any Distribution on the Trust
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Trust Securities as of a specified date, or (ii)
restrict the right of a Holder to institute suit for the
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enforcement of any such payment on or after such date; and notwithstanding any
other provision herein, without the unanimous consent of the Holders (such
consent being obtained in accordance with Section 6.3 or 6.6), this Section
10.2(e) may not be amended.
(d) Notwithstanding any other provisions of this Trust Agreement, no
Issuer Trustee shall enter into or consent to any amendment to this Trust
Agreement that would cause the Issuer Trust to fail or cease to qualify for the
exemption from status as an "investment company" under the Investment Company
Act or to be taxable as a corporation or to be classified as other than a
grantor trust for United States Federal income tax purposes.
(e) Notwithstanding anything in this Trust Agreement to the contrary,
without the consent of the Depositor and the Administrative Trustees, this Trust
Agreement may not be amended in a manner that imposes any additional obligation
on the Depositor or the Administrative Trustees.
(f) In the event that any amendment to this Trust Agreement is made,
the Administrative Trustees or the Property Trustee shall promptly provide to
the Depositor a copy of such amendment.
(g) Neither the Property Trustee nor the Delaware Trustee shall be
required to enter into any amendment to this Trust Agreement that affects its
own rights, duties or immunities under this Trust Agreement. The Property
Trustee shall be entitled to receive an Opinion of Counsel and an Officers'
Certificate stating that any amendment to this Trust Agreement is in compliance
with this Trust Agreement.
SECTION 10.3. Separability.
In case any provision in this Trust Agreement or in the Trust
Securities Certificates shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 10.4. Governing Law.
THIS TRUST AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF EACH OF THE
HOLDERS, THE ISSUER TRUST, THE DEPOSITOR, THE GUARANTOR AND THE ISSUER TRUSTEES
WITH RESPECT TO THIS TRUST AGREEMENT AND THE TRUST SECURITIES SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF DELAWARE APPLICABLE
TO AGREEMENTS MADE AND WHOLLY TO BE PERFORMED IN SUCH STATE.
SECTION 10.5. Payments Due on Non-Business Day.
If the date fixed for any payment on any Trust Security shall be a day
that is not a Business Day, then such payment need not be made on such date but
may be made on the next succeeding day that is a Business Day (except as
otherwise provided in Sections 4.1(a) and 4.2(d)), with the same force and
effect as though made on the date fixed for such payment, and no Distributions
shall accumulate on such unpaid amount for the period after such date.
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SECTION 10.6. Successors.
This Trust Agreement shall be binding upon and shall inure to the
benefit of any successor to the Depositor, the Issuer Trust and any Issuer
Trustee, including any successor by operation of law. Except in connection with
a consolidation, merger or sale involving the Depositor that is permitted under
Article Eight of the Indenture and pursuant to which the assignee agrees in
writing to perform the Depositor's obligations hereunder, the Depositor shall
not assign its obligations hereunder.
SECTION 10.7. Headings.
The Article and Section headings are for convenience only and shall not
affect the construction of this Trust Agreement.
SECTION 10.8. Reports, Notices and Demands.
Any report, notice, demand or other communication that by any provision
of this Trust Agreement is required or permitted to be given or served to or
upon any Holder, the Depositor or the Guarantor may be given or served in
writing by deposit thereof, first-class postage prepaid, in the United States
mail, hand delivery or facsimile transmission, in each case, addressed, (a) in
the case of a Holder of Capital Securities, to such Holder as such Holder's name
and address may appear on the Securities Register; and (b) in the case of the
Holder of the Common Securities, the Depositor or the Guarantor, to BanPonce
Financial Corp., 521 Fellowship Road, Mt. Laurel, New Jersey, 08054, Attention:
Secretary, facsimile no.: [_________], or to such other address as may be
specified in a written notice by the Holder of the Common Securities or the
Depositor, as the case may be to the Property Trustee. Such notice, demand or
other communication to or upon a Holder shall be deemed to have been
sufficiently given or made, for all purposes, upon hand delivery, mailing or
transmission. Such notice, demand or other communication to or upon the
Depositor shall be deemed to have been sufficiently given or made only upon
actual receipt of the writing by the Depositor.
Any notice, demand or other communication that by any provision of this
Trust Agreement is required or permitted to be given or served to or upon the
Property Trustee, the Delaware Trustee, the Administrative Trustees or the
Issuer Trust shall be given in writing addressed to such Person as follows: (a)
with respect to the Property Trustee to The First National Bank of Chicago, One
First National Plaza, Suite 0126, Chicago, Illinois 60670, Attention: [Corporate
Trust Administration]; (b) with respect to the Delaware Trustee, to First
Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801, Attention:
[Michael J. Majchrzak]; (c) with respect to the Administrative Trustees, to them
at the address above for notices to the Depositor, marked "Attention:
Administrative Trustees of BanPonce Trust I"; and (d) with respect to the Issuer
Trust, to its principal office specified in Section 2.1, with a copy to the
Property Trustee. Such notice, demand or other communication to or upon the
Issuer Trust, the Property Trustee or the Administrative Trustees shall be
deemed to have been sufficiently given or made only upon actual receipt of the
writing by the Issuer Trust, the Property Trustee or such Administrative
Trustee.
SECTION 10.9. Agreement Not to Petition.
Each of the Issuer Trustees and the Depositor agree for the benefit of
the Holders that, until at least one year and one day after the Issuer Trust has
been terminated in accordance with Article IX, they shall not file, or join in
the filing of, a petition against the Issuer Trust under any bankruptcy,
insolvency,
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reorganization or other similar law (including the United States Bankruptcy
Code) (collectively, "Bankruptcy Laws") or otherwise join in the commencement of
any proceeding against the Issuer Trust under any Bankruptcy Law. If the
Depositor takes action in violation of this Section 10.9, the Property Trustee
agrees, for the benefit of Holders, that at the expense of the Depositor, it
shall file an answer with the bankruptcy court or otherwise properly contest the
filing of such petition by the Depositor against the Issuer Trust or the
commencement of such action and raise the defense that the Depositor has agreed
in writing not to take such action and should be stopped and precluded therefrom
and such other defenses, if any, as counsel for the Issuer Trustees or the
Issuer Trust may assert.
SECTION 10.10. Trust Indenture Act; Conflict with
Trust Indenture Act.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement and shall, to
the extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Issuer Trustee that is a
trustee for the purposes of the Trust Indenture Act.
(c) If any provision hereof limits, qualifies or conflicts with another
provision hereof which is required or deemed to be included in this Trust
Agreement by any of the provisions of the Trust Indenture Act, such required or
deemed provisions shall control. If any provision of this Trust Agreement
modifies or excludes any provision of the Trust Indenture Act which may be so
modified or excluded, the latter provision shall be deemed to apply to this
Trust Agreement as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this Trust Agreement
shall not affect the nature of the Trust Securities as equity securities
representing undivided beneficial interests in the assets of the Issuer Trust.
SECTION 10.11. Acceptance of Terms of Trust Agreement,
Guarantee Agreement and Indenture.
THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY INTEREST THEREIN
BY OR ON BEHALF OF A HOLDER OR ANY BENEFICIAL OWNER, WITHOUT ANY SIGNATURE OR
FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE UNCONDITIONAL ACCEPTANCE
BY THE HOLDER AND ALL OTHERS HAVING A BENEFICIAL INTEREST IN SUCH TRUST SECURITY
OF ALL THE TERMS AND PROVISIONS OF THIS TRUST AGREEMENT, THE GUARANTEE AGREEMENT
AND THE INDENTURE, AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND OTHER TERMS
OF THE GUARANTEE AGREEMENT AND THE INDENTURE, AND SHALL CONSTITUTE THE AGREEMENT
OF THE ISSUER TRUST, SUCH HOLDER AND SUCH OTHERS THAT THE TERMS AND PROVISIONS
OF THIS TRUST AGREEMENT SHALL BE BINDING, OPERATIVE AND EFFECTIVE AS BETWEEN THE
ISSUER TRUST AND SUCH HOLDER AND SUCH OTHERS.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this Amended and
Restated Trust Agreement.
BANPONCE FINANCIAL CORP.,
as Depositor
By: /s/ Jorge A. Junquera
------------------------------------------
Name: Jorge A. Junquera
Title: President
BANPONCE CORPORATION,
as Guarantor
By: /s/ Jorge A. Junquera
------------------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Property Trustee
By: /s/ Melissa Weisman
------------------------------------------
Name: Melissa G. Weisman
Title: Vice President
FIRST CHICAGO DELAWARE INC.,
as Delaware Trustee
By: /s/ Melissa Weisman
------------------------------------------
Name: Melissa G. Weisman
Title: Vice President
/s/ Jorge A. Junquera
---------------------------------------------
Name: Jorge A. Junquera, an individual,
as Administrative Trustee
/s/ Roberto R. Herencia
---------------------------------------------
Name: Roberto R. Herencia, an individual,
as Administrative Trustee
/s/ Javier F. Ubarri
---------------------------------------------
Name: Javier F. Ubarri, an individual,
as Administrative Trustee
/s/ Alberto J. Paracchini
---------------------------------------------
Name: Alberto Paracchini, Jr., an individual,
as Administrative Trustee
<PAGE>
Exhibit A
CERTIFICATE OF TRUST
OF
BANPONCE TRUST I
This Certificate of Trust of BanPonce Trust I (the "Trust"),
dated January 15, 1997, is being duly executed and filed by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
C. ss. 3801 et seq.)
1. Name. The name of the business trust being formed hereby
is BanPonce Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of Delaware
is First Chicago Delaware Inc., 300 King Street, Wilmington, Delaware 19801.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first-above
written.
FIRST CHICAGO DELAWARE INC.,
as Trustee
By:_________________________
Name:
Title:
______________________________
Javier F. Ubarri, as Trustee
______________________________
Alberto Paracchini, as Trustee
A-1
<PAGE>
Exhibit B
[FORM OF LETTER OF REPRESENTATIONS]
_______ ___, ____
The Depository Trust Company,
55 Water Street, 49th Floor,
New York, New York 10041-0099.
Attention: General Counsel's Office
Re: BanPonce Trust __
____% Capital Securities, Series __
CUSIP _____________
Ladies and Gentlemen:
The purpose of this letter is to set forth certain matters
relating to the issuance and deposit with The Depository Trust Company ("DTC")
of the book-entry-only portion of the ____% Capital Securities, Series __ (the
"Capital Securities"), of BanPonce Trust __, a statutory business trust formed
under the laws of the State of Delaware (the "Issuer"), governed by the Amended
and Restated Trust Agreement, dated as of _______ __, ____, [among] BanPonce
Financial Corp. ("the Corporation"), as Sponsor, [BanPonce Corporation (the
"Guarantor"), as Guarantor,] The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware Inc., as Delaware Trustee, and the
Administrative Trustees named therein. The payment of distributions on the
Capital Securities and payments due upon liquidation of the Issuer or redemption
of the Capital Securities, to the extent the Issuer has funds available for the
payment thereof, are guaranteed by the Corporation and the Guarantor to the
extent set forth in a Guarantee Agreement, dated as of ___________ __, ____,
among the Corporation, the Guarantor and The First National Bank of Chicago, as
Guarantee Trustee with respect to the Capital Securities. The Corporation and
the Issuer propose to sell the Capital Securities to the Underwriters (the
"Underwriters") pursuant to an Underwriting Agreement, dated as of _______ __,
____, by and among the Underwriters, the Issuer and the Corporation, and the
Underwriters wish to take delivery of the Capital Securities through DTC. The
First National Bank of Chicago is acting as transfer agent and registrar with
respect to the Capital Securities (the "Transfer Agent and Registrar").
To induce DTC to accept the Capital Securities as eligible for
deposit at DTC, and to act in accordance with DTC's rules with respect to the
Capital Securities, the Issuer and the Transfer Agent and Registrar make the
following representations to DTC:
1. Prior to the closing of the sale of the Capital Securities
to the Underwriters on ______ __, ____, there shall be deposited with, or held
by the Transfer Agent and Registrar as custodian for, DTC one or more global
certificates (individually and collectively, the "Global Certificate")
registered in the name of DTC's nominee, Cede & Co., representing an aggregate
of _________ Capital Securities and bearing the following legend:
B-1
<PAGE>
Unless this certificate is presented by an authorized representative of
The Depository Trust Company, a New York corporation ("DTC"), to Issuer
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 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.
2. The Amended and Restated Trust Agreement of the Issuer
provides for the voting by holders (with no provision for revocation of consents
or votes by subsequent holders) of the Capital Securities under certain limited
circumstances. The Issuer shall establish a record date for such purposes and
shall, to the extent possible, give DTC notice of such record date not less than
15 calendar days in advance of such record date.
3. In the event of a stock split, conversion,
recapitalization, reorganization or any other similar transaction resulting in
the cancellation of all or any part of the Capital Securities outstanding, the
Issuer or the Transfer Agent and Registrar shall send DTC a notice of such event
as soon as possible but, at least 5 business days prior to the effective date of
such event.
4. In the event of any distribution on, or an offering or
issuance of rights with respect to, the Capital Securities outstanding, the
Issuer or the Transfer Agent and Registrar shall send DTC a notice specifying:
(a) the amount of and conditions, if any, applicable to the payment of any such
distribution or any such offering or issuance of rights; (b) any applicable
expiration or deadline date, or any date by which any action on the part of the
holders of Capital Securities is required; and (c) the date any required notice
is to be mailed by or on behalf of the Issuer to holders of Capital Securities
or published by or on behalf of the Issuer (whether by mail or publication, the
"Publication Date"). Such notice shall be sent to DTC by a secure means (e.g.,
legible telecopy, registered or certified mail, overnight delivery) in a timely
manner designed to assure that such notice is in DTC's possession no later than
the close of business on the business day before the Publication Date. The
Issuer or the Transfer Agent and Registrar will forward such notice either in a
separate secure transmission for each CUSIP number or in a secure transmission
of multiple CUSIP numbers (if applicable) that includes a manifest or list of
each CUSIP number submitted in that transmission. (The party sending such notice
shall have a method to verify subsequently the use of such means and the
timeliness of such notice.) The Publication Date shall be not less than 30
calendar days nor more than 60 calendar days prior to the payment of any such
distribution or any such offering or issuance of rights with respect to the
Capital Securities. After establishing the amount of payment to be made on the
Capital Securities, the Issuer or the Transfer Agent and Registrar will notify
DTC's [Dividend Department] of such payment 5 business days prior to payment
date. Notices to DTC's [Dividend Department] by telecopy shall be sent to [(212)
709-1723]. Such notices by mail or by any other means shall be sent to:
[Manager, Announcements
Dividend Department
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695]
The Issuer or the Transfer Agent and Registrar shall confirm
DTC's receipt of such telecopy by telephoning the [Dividend Department] at
[(212) 709-1270].
5. In the event of a redemption by the Issuer of the Capital
Securities, notice specifying the terms of the redemption and the Publication
Date of such notice shall be sent by the Issuer or the Transfer Agent and
Registrar to DTC not less than 30 calendar days prior to such event by a
B-2
<PAGE>
secure means in the manner set forth in paragraph 4. Such redemption notice
shall be sent to DTC's Call [Notification Department] at [(516) 227-4164 or
(516) 227-4190], and receipt of such notice shall be confirmed by telephoning
[(516) 227-4070]. Notice by mail or by any other means shall be sent to:
[Call Notification Department
The Depository Trust Company
711 Stewart Avenue
Garden City, New York 11530-4719]
6. In the event of any invitation to tender the Capital
Securities, notice specifying the terms of the tender and the Publication Date
of such notice shall be sent by the Issuer or the Transfer Agent and Registrar
to DTC by a secure means and in a timely manner as described in paragraph 4.
Notices to DTC pursuant to this paragraph and notices of other corporate actions
(including mandatory tenders, exchanges and capital changes), shall be sent,
unless notification to another department is expressly provided for herein, by
telecopy to DTC's [Reorganization Department] at [(212) 709-1093 or (212)
709-1094] and receipt of such notice shall be confirmed by telephoning [(212)
709-6884], or by mail or any other means to:
[Manager, Reorganization Department
Reorganization Window
The Depository Trust Company
7 Hanover Square, 23rd Floor
New York, New York 10004-2695]
7. All notices and payment advices sent to DTC shall contain
the CUSIP number or numbers of the Capital Securities and the accompanying
designation of the Capital Securities, which, as of the date of this letter, is
"BanPonce Trust __, ____% Capital Securities, Series __".
8. Distribution payments or other cash payments with respect
to the Capital Securities shall be governed by DTC's current Principal and
Income Payments Rider, a copy of which is attached hereto as Annex I. For
purposes of this letter, the term "Agent" used in Annex I shall be deemed to
refer to The First National Bank of Chicago or any successor Property Trustee
under the Amended and Restated Trust Agreement.
9. DTC may direct the Issuer and the Transfer Agent and
Registrar to use any other telecopy number or address of DTC as the number or
address to which notices or payments may be sent.
10. In the event of a conversion, redemption, or any other
similar transaction (e.g., tender made and accepted in response to the Issuer's
or the Transfer Agent and Registrar's invitation) necessitating a reduction in
the aggregate number of Capital Securities outstanding evidenced by the Global
Certificate, DTC, in its discretion: (a) may request the Issuer or the Transfer
Agent and Registrar to issue and countersign a new Global Certificate; or (b)
may make an appropriate notation on the Global Certificate indicating the date
and amount of such reduction.
11. DTC may discontinue its services as a securities
depositary with respect to the Capital Securities at any time by giving
reasonable prior written notice to the Issuer and the Transfer Agent and
Registrar (at which time DTC will confirm with the Issuer or the Transfer Agent
and Registrar the aggregate number of Capital Securities deposited with it) and
discharging its responsibilities with respect thereto under applicable law.
Under such circumstances, the Issuer may determine to make alternative
arrangements for book-entry settlement for the Capital Securities, make
available one or more separate global certificates evidencing Capital Securities
to any Participant having Capital Securities credited to its DTC account, or
issue definitive Capital Securities to the beneficial holders thereof, and in
any such case, DTC agrees to cooperate fully with the Issuer and the Transfer
Agent and Registrar and
B-3
<PAGE>
to return the Global Certificate, duly endorsed for transfer as directed by the
Issuer or the Transfer Agent and Registrar, together with any other documents of
transfer reasonably requested by the Issuer or the Transfer Agent and Registrar.
12. In the event that the Issuer determines that beneficial
owners of Capital Securities shall be able to obtain definitive Capital
Securities, the Issuer or the Transfer Agent and Registrar shall notify DTC of
the availability of certificates. In such event, the Issuer or the Transfer
Agent and Registrar shall issue, transfer and exchange certificates in
appropriate amounts, as required by DTC and others, and DTC agrees to cooperate
fully with the Issuer and the Transfer Agent and Registrar and to return the
Global Certificate, duly endorsed for transfer as directed by the Issuer or the
Transfer Agent and Registrar, together with any other documents of transfer
reasonably requested by the Issuer or the Transfer Agent and Registrar.
13. This letter may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
B-4
<PAGE>
Nothing herein shall be deemed to require the Transfer Agent and
Registrar to advance funds on behalf of BanPonce Trust __.
Very truly yours,
BANPONCE TRUST __
(As Issuer)
By:__________________________
__________________________
Administrator
THE FIRST NATIONAL BANK OF CHICAGO
(As Transfer Agent and Registrar)
By:__________________________
Name:
Title:
RECEIVED AND ACCEPTED:
THE DEPOSITORY TRUST COMPANY
By:__________________________
Authorized Officer
B-5
<PAGE>
Exhibit C
[FORM OF COMMON SECURITIES CERTIFICATE]
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT TO THE DEPOSITOR OR AN
AFFILIATE OF THE DEPOSITOR IN COMPLIANCE WITH APPLICABLE LAW AND SECTION
5.11 OF THE TRUST AGREEMENT AND ONLY IN CONNECTION WITH A SIMULTANEOUS
DELEGATION AND ASSIGNMENT OF THE EXPENSE AGREEMENT REFERRED TO
THEREIN
Certificate Number Number of Common Securities
CI-
Certificate Evidencing Common Securities
of
BanPonce Trust I
8.327% Common Securities
(liquidation amount $1,000 per Common Security)
BanPonce Trust I, a statutory business trust formed under the laws of
the State of Delaware (the "Issuer Trust"), hereby certifies that [NAME OF
HOLDER] (the "Holder") is the registered owner of common securities of the
Issuer Trust representing common undivided beneficial interests in the assets of
the Issuer Trust and designated the 8.327% Common Securities (liquidation amount
$1,000 per Common Security) (the "Common Securities"). Except in accordance with
Section 5.11 of the Trust Agreement (as defined below) the Common Securities are
not transferable and any attempted transfer hereof other than in accordance
therewith shall be void. The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities are set
forth in, and this certificate and the Common Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of, the
Amended and Restated Trust Agreement of the Issuer Trust, dated as of February
5, 1997, as the same may be amended from time to time (the "Trust Agreement"),
among BanPonce Financial Corp., as Depositor, BanPonce Corporation, as
Guarantor, The First National Bank of Chicago, as Property Trustee, First
Chicago Delaware Inc., as Delaware Trustee, and the Administrative Trustees
named therein, including the designation of the terms of the Common Securities
as set forth therein. The Issuer Trust will furnish a copy of the Trust
Agreement to the Holder without charge upon written request to the Issuer Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
Terms used but not defined herein have the meanings set forth in the
Trust Agreement.
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer
Trust has executed this certificate this 5th day of February, 1997.
BANPONCE TRUST I
By:_____________________________
Name:
Administrative Trustee
C-1
<PAGE>
Exhibit D
[FORM OF EXPENSE AGREEMENT]
AGREEMENT AS TO EXPENSES AND LIABILITIES
AGREEMENT AS TO EXPENSES AND LIABILITIES, dated as of February 5, 1997,
among BanPonce Financial Corp., a Delaware corporation (the "Corporation"),
BanPonce Corporation, a Puerto Rico corporation (the "Guarantor") and BanPonce
Trust I, a Delaware business trust (the "Issuer Trust").
WHEREAS, the Issuer Trust intends to issue its Common Securities (the
"Common Securities") to and acquire Debentures from the Corporation and to issue
and sell 8.327% Capital Securities, Series A (the "Capital Securities") with
such powers, preferences and special rights and restrictions as are set forth in
the Amended and Restated Trust Agreement of the Issuer Trust, dated as of
February 5, 1997 among the Corporation, as Depositor, the Guarantor, BanPonce
Corporation, as Guarantor, The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware Inc., as Delaware Trustee, and the
Administrative Trustees named therein, as the same may be amended from time to
time (the "Trust Agreement");
WHEREAS, the Corporation will own all of the Common Securities of the
Trust;
WHEREAS, terms used but not defined herein have the meanings set forth
in the Trust Agreement;
NOW, THEREFORE, for good and valid consideration, the receipt and
sufficiency of which are hereby acknowledged:
ARTICLE I
SECTION 1.1. Guarantee by the Corporation. Subject to the terms and
conditions hereof, the Corporation and the Guarantor hereby irrevocably and
unconditionally guarantee to each person or entity to whom the Issuer Trust is
now or hereafter becomes indebted or liable (the "Beneficiaries") the full
payment, when and as due, of any and all Obligations (as hereinafter defined) to
such Beneficiaries. As used herein, "Obligations" means any costs, expenses or
liabilities of the Issuer Trust, other than obligations of the Issuer Trust to
pay to holders of any Trust Securities the amounts due such holders pursuant to
the terms of the Trust Securities. This Agreement is intended to be for the
benefit of, and to be enforceable by, all such Beneficiaries, whether or not
such Beneficiaries have received notice hereof.
SECTION 1.2. Subordination of Guarantee. The guarantee and other
liabilities and obligations of the Corporation and the Guarantor under this
Agreement shall constitute unsecured obligations of the Corporation and the
Guarantor, respectively, and shall rank subordinate and junior in right of
payment to all Senior Debt (as defined in the Indenture) of the Corporation and
the Guarantor, as the case may be, to the extent and in the manner set forth in
the Indenture with respect to the Debentures, and the provisions of Article XIII
of the Indenture will apply, mutatis mutandis, to the obligations of the
Corporation and the Guarantor hereunder. The obligations of the Corporation and
the Guarantor hereunder do not constitute Senior Debt (as defined in the
Indenture) of the Corporation or the Guarantor.
SECTION 1.3. Term of Agreement. This Agreement shall terminate and be
of no further force and effect upon the dissolution of the Issuer Trust,
provided, however, that this Agreement shall continue to be effective or shall
be reinstated, as the case may be, if at any time any holder of Capital
Securities or any Beneficiary must restore payment of any sums paid under the
Capital Securities, under any Obligation, under the Guarantee Agreement dated
the date hereof among the Depositor, the Guarantor and The First National Bank
of Chicago as guarantee trustee, or under this Agreement for any reason
whatsoever. This Agreement is continuing, irrevocable, unconditional and
absolute.
D-1
<PAGE>
SECTION 1.4. Waiver of Notice. The Corporation and the Guarantor hereby
waive notice of acceptance of this Agreement and of any Obligation to which it
applies or may apply, and the Corporation and the Guarantor hereby waive
presentment, demand for payment, protest, notice of nonpayment, notice of
dishonor, notice of redemption and all other notices and demands.
SECTION 1.5. No Impairment. The obligations, covenants, agreements and
duties of the Corporation and the Guarantor under this Agreement shall in no way
be affected or impaired by reason of the happening from time to time of any of
the following:
(a) the extension of time for the payment by the Issuer Trust of
all or any portion of the Obligations or for the performance of any other
obligation under, arising out of, or in connection with, the Obligations;
(b) any failure, omission, delay or lack of diligence on the part of
the Beneficiaries to enforce, assert or exercise any right, privilege, power or
remedy conferred on the Beneficiaries with respect to the Obligations or any
action on the part of the Issuer Trust granting indulgence or extension of any
kind; or
(c) 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 Issuer Trust or any of the assets of
the Issuer Trust (other than the liquidation of the Issuer Trust in accordance
with the terms thereof).
There shall be no obligation of the Beneficiaries to give notice to, or obtain
the consent of, the Corporation or the Guarantor with respect to the happening
of any of the foregoing.
SECTION 1.6. Enforcement. A Beneficiary may enforce this Agreement
directly against the Corporation or the Guarantor and the each of the
Corporation and the Guarantor waives any right or remedy to require that any
action be brought against the Issuer Trust or any other person or entity before
proceeding against the Corporation.
SECTION 1.7. Subrogation. Each of the Corporation shall be subrogated
to all rights (if any) of the Issuer Trust in respect of any amounts paid to the
Beneficiaries by the Corporation or the Guarantor, respectively, under this
Agreement; provided, however, that each of the Corporation and the Guarantor
shall not (except to the extent required by mandatory provisions of law) be
entitled to enforce or exercise any rights which it may acquire by way of
subrogation or any indemnity, reimbursement or other agreement, in all cases as
a result of payment under this Agreement, if, at the time of any such payment,
any amounts are due and unpaid under this Agreement.
ARTICLE II
SECTION 2.1. Assignment. This Agreement may not be assigned by either
party hereto without the consent of the other, and any purported assignment
without such consent shall be void;
SECTION 2.2. Binding Effect. All guarantees and agreements contained in
this Agreement shall bind the successors, assigns, receivers, trustees and
representatives of each of the Corporation and the Guarantor and shall inure to
the benefit of the Beneficiaries.
SECTION 2.3. Amendment. So long as there remains any Beneficiary or any
Capital Securities are outstanding, this Agreement shall not be modified or
amended in any manner adverse to such Beneficiary or to the holders of the
Capital Securities without the consent of such Beneficiary or the holders of the
Capital Securities, as the case may be.
D-2
<PAGE>
SECTION 2.4. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be given in writing by
delivering the same against receipt therefor by facsimile transmission
(confirmed by mail), telex or by registered or certified mail, addressed as
follows (and if so given, shall be deemed given when mailed or upon receipt of
an answer-back, if sent by telex):
If given to the Issuer Trust:
BanPonce Trust I
c/o BanPonce Financial Corp.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Facsimile No.: [_____________]
Attention: Secretary
With a copy to:
BanPonce Financial Corp.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Facsimile No.: [_____________]
Attention: Secretary
SECTION 2.4. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND WHOLLY TO BE PERFORMED IN SUCH STATE.
D-3
<PAGE>
THIS AGREEMENT is executed as of the day and year first above written.
BANPONCE FINANCIAL CORP.
By:
Name:
Title:
BANPONCE CORPORATION
By:
Name:
Title:
BANPONCE TRUST I
By:
Name:
Administrative Trustee
D-4
<PAGE>
Exhibit E
[FORM OF Capital Securities CERTIFICATE]
[IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE EVIDENCED BY A
BOOK-ENTRY CAPITAL SECURITIES CERTIFICATE, INSERT--This Capital Securities
Certificate is a Book-Entry Capital Securities Certificate within the meaning of
the Trust Agreement hereinafter referred to and is registered in the name of a
Depositary or a nominee of a Depositary. This Capital Securities Certificate is
exchangeable for Capital Securities Certificates registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Trust Agreement and may not be transferred except
as a whole by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary, except in
the limited circumstances described in the Trust Agreement.
Unless this Capital Security Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to BanPonce Trust I or its agent for registration of transfer, exchange or
payment, and any Capital Security Certificate issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.]
E-1
<PAGE>
Certificate Number Number of Capital Securities
CAI-
CUSIP NO. 066915AA7
Certificate Evidencing Capital Securities
of
BanPonce Trust I
8.327% Capital Securities, Series A
(liquidation amount $1,000 per Capital Security)
BanPonce Trust I, a statutory business trust formed under the laws of the
State of Delaware (the "Issuer Trust"), hereby certifies that
(the "Holder") is the registered owner of ( )
Capital Securities of the Issuer Trust representing an undivided preferred
beneficial interest in the assets of the Issuer Trust and designated the
BanPonce Trust I 8.327% Capital Securities, Series A (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Issuer 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 Section 5.5 of the Trust
Agreement (as defined below). The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities are set forth in, and this certificate and the Capital Securities
represented hereby are issued and shall in all respects be subject to the terms
and provisions of, the Amended and Restated Trust Agreement of the Issuer Trust,
dated as of February 5, 1997, as the same may be amended from time to time (the
"Trust Agreement"), among BanPonce Financial Corp., as Depositor, BanPonce
Corporation, as Guarantor, The First National Bank of Chicago, as Property
Trustee, First Chicago Delaware Inc., as Delaware Trustee, and the
Administrative Trustees named therein, including the designation of the terms of
the Capital Securities as set forth therein. The Holder is entitled to the
benefits of the Guarantee Agreement entered into by BanPonce Financial Corp., a
Delaware corporation, BanPonce Corporation, a Puerto Rico corporation, and The
First National Bank of Chicago, as guarantee trustee, dated as of February 5,
1997 (the "Guarantee Agreement"), to the extent provided therein. The Issuer
Trust will furnish a copy of the Issuer Trust Agreement and the Guarantee
Agreement to the Holder without charge upon written request to the Issuer Trust
at its principal place of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
E-2
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust
has executed this certificate this 5th day of February, 1997.
BANPONCE TRUST I
By:
Name:
Administrative Trustee
E-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital
Security 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 Security Certificate on the books of the Issuer
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 Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
E-4
This Capital Securities Certificate is a Book-Entry Capital Securities
Certificate within the meaning of the Trust Agreement hereinafter referred to
and is registered in the name of a Depositary or a nominee of a Depositary. This
Capital Securities Certificate is exchangeable for Capital Securities
Certificates registered in the name of a person other than the Depositary or its
nominee only in the limited circumstances described in the Trust Agreement and
may not be transferred except as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary, except in the limited circumstances described in the
Trust Agreement.
Unless this Capital Security Certificate is presented by an authorized
representative of The Depository Trust Company, a New York Corporation ("DTC"),
to BanPonce Trust I or its agent for registration of transfer, exchange or
payment, and any Capital Security Certificate issued is registered in the name
of Cede & Co. or such other name as is requested by an authorized representative
of DTC (and any payment is made to Cede & Co. or to such other entity as is
requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO A PERSON IS WRONGFUL inasmuch as the
registered owner hereof, Cede & Co., has an interest herein.
<PAGE>
Certificate Number Aggregate Liquidation Amount of Capital Securities
CAI-1 $150,000,000
CUSIP NO. 066915AA7
Certificate Evidencing Capital Securities
of
BanPonce Trust I
8.327% Capital Securities, Series A
(liquidation amount $1,000 per Capital Security)
BanPonce Trust I, a statutory business trust formed under the laws of the
State of Delaware (the "Issuer Trust"), hereby certifies that Cede & Co. (the
"Holder") is the registered owner of an aggregate liquidation amount of
$150,000,000 of Capital Securities of the Issuer Trust representing an undivided
preferred beneficial interest in the assets of the Issuer Trust and designated
the BanPonce Trust I 8.327% Capital Securities, Series A (liquidation amount
$1,000 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Issuer 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 Section 5.5 of the Trust Agreement
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities represented hereby are
issued and shall in all respects be subject to the terms and provisions of the
Amended and Restated Trust Agreement of the Issuer Trust, dated as of February
5, 1997, as the same may be amended from time to time (the "Trust Agreement"),
among BanPonce Financial Corp., as Depositor, BanPonce Corporation, as
Guarantor, The First National Bank of Chicago, as Property Trustee, First
Chicago Delaware Inc., as Delaware Trustee, and the Administrative Trustees
named therein, including the designation of the terms of the Capital Securities
as set forth therein. The Holder is entitled to the benefits of the Guarantee
Agreement entered into by BanPonce Financial Corp., a Delaware corporation,
BanPonce Corporation, a Puerto Rico corporation, and The First National Bank of
Chicago, as guarantee trustee, dated as of February 5, 1997 (the "Guarantee
Agreement"), to the extent provided therein. The Issuer Trust will furnish a
copy of the Issuer Trust Agreement and the Guarantee Agreement to the Holder
without charge upon written request to the Issuer Trust at its principal place
of business or registered office.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the Issuer Trust
has executed this certificate this day of , 1997.
BANPONCE TRUST I
By:
Name:
Administrative Trustee
<PAGE>
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned assigns and transfers
this Capital Security 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 Security Certificate on the books of the Issuer
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 Security Certificate)
The signature(s) should be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee medallion program), pursuant to
S.E.C. Rule 17Ad-15.
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
GUARANTEE AGREEMENT
by and among
BANPONCE FINANCIAL CORP.,
as Guarantor
BANPONCE CORPORATION,
as Additional Guarantor
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Guarantee Trustee
relating to
BANPONCE TRUST I
---------------------------
Dated as of February 5, 1997
---------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Guarantee Agreement
310(a)..................................................4.1(a)
310(b)..................................................4.1(c), 2.8
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)
313.....................................................2.3
314(a)..................................................2.4
314(b)..................................................Inapplicable
314(c)..................................................2.5
314(d)..................................................Inapplicable
314(e)..................................................1.1, 2.5, 3.2
314(f)..................................................2.1, 3.2
315(a)..................................................3.1(d)
315(b)..................................................2.7
315(c)..................................................3.1
315(d)..................................................3.1(d)
316(a)..................................................1.1, 2.6, 5.4
316(b)..................................................5.3
316(c)..................................................8.2
317(a)..................................................Inapplicable
317(b)..................................................Inapplicable
318(a)..................................................2.1
318(b)..................................................2.1
318(c)..................................................2.1
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
-i-
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.............. 5
SECTION 2.2. List of Holders............................... 5
SECTION 2.3. Reports by the Guarantee Trustee.............. 5
SECTION 2.4. Periodic Reports to the Guarantee Trustee..... 5
SECTION 2.5. Evidence of Compliance with Conditions
Precedent.................................. 6
SECTION 2.6. Events of Default; Waiver..................... 6
SECTION 2.7. Event of Default; Notice...................... 6
SECTION 2.8. Conflicting Interests......................... 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.... 7
SECTION 3.2. Certain Rights of Guarantee Trustee........... 8
SECTION 3.3. Compensation; Indemnity; Fees................. 10
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility................ 10
SECTION 4.2. Appointment, Removal and Resignation of
the Guarantee Trustee...................... 11
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee..................................... 11
SECTION 5.2. Waiver of Notice and Demand................... 12
SECTION 5.3. Obligations Not Affected...................... 12
-ii-
<PAGE>
SECTION 5.4. Rights of Holders............................ 13
SECTION 5.5. Guarantee of Payment......................... 13
SECTION 5.6. Subrogation.................................. 13
SECTION 5.7. Independent Obligations...................... 13
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination................................ 14
SECTION 6.2. Pari Passu Guarantees........................ 14
ARTICLE VII
TERMINATION
SECTION 7.1. Termination................................. 14
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns...................... 15
SECTION 8.2. Amendments.................................. 15
SECTION 8.3. Notices..................................... 15
SECTION 8.4. Benefit..................................... 16
SECTION 8.5. Governing Law............................... 16
SECTION 8.6. Counterparts................................ 17
-iii-
<PAGE>
GUARANTEE AGREEMENT, dated as of February 5, 1997, by and among
BANPONCE FINANCIAL CORP., a Delaware corporation (the "Guarantor"), having its
principal office at 521 Fellowship Road, Mt. Laurel, New Jersey 08054, BANPONCE
CORPORATION, a Puerto Rico corporation (the "Additional Guarantor", and together
with the Guarantor, the "Guarantors"), having its principal office at 209 Munoz
Rivera Avenue, Hato Rey, Puerto Rico 00918, and THE FIRST NATIONAL BANK OF
CHICAGO, a national banking association, as trustee (the "Guarantee Trustee"),
for the benefit of the Holders (as defined herein) from time to time of the
Capital Securities (as defined herein) of BANPONCE TRUST I, a Delaware statutory
business trust (the "Issuer Trust").
RECITALS OF THE CORPORATION
WHEREAS, pursuant to an Amended and Restated Trust Agreement, dated as
of February 5, 1997 (the "Trust Agreement"), among BanPonce Financial Corp., as
Depositor, BanPonce Corporation, as Guarantor, the Property Trustee, the
Delaware Trustee and the Administrative Trustees named therein, the Issuer Trust
is issuing $150,000,000 aggregate Liquidation Amount (as defined in the Trust
Agreement) of its 8.327% Capital Securities, Series A (liquidation amount $1,000
per Capital Security) (the "Capital Securities"), representing preferred
undivided beneficial interests in the assets of the Issuer Trust and having the
terms set forth in the Trust Agreement; and
WHEREAS, the Capital Securities will be issued by the Issuer Trust and
the proceeds thereof, together with the proceeds from the issuance of the Issuer
Trust's Common Securities (as defined herein), will be used to purchase the
Debentures (as defined in the Trust Agreement) of the Guarantor, which
Debentures will be deposited with The First National Bank of Chicago, as
Property Trustee under the Trust Agreement, as trust assets; and
WHEREAS, as an incentive for the Holders to purchase Capital
Securities, the Guarantors desire irrevocably and unconditionally to agree, to
the extent set forth herein, to pay to the Holders of the Capital Securities the
Guarantee Payments and Additional Guarantee Payments (as defined herein), as the
case may be, and to make certain other payments on the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of the purchase of Capital Securities
by each Holder, which purchase the Guarantors hereby acknowledge shall benefit
the Guarantors, the Guarantors execute and deliver this Guarantee Agreement for
the benefit of the Holders from time to time.
ARTICLE I
DEFINITIONS
SECTION 1.1. Definitions.
For all purposes of this Guarantee Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
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(b) All other terms used herein that are defined in the Trust Indenture
Act, either directly or by reference therein, have the meanings assigned to them
therein;
(c) The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation";
(d) All accounting terms used but not defined herein have the meanings
assigned to them in accordance with United States generally accepted accounting
principles;
(e) Unless the context otherwise requires, any reference to an
"Article" or a "Section" refers to an Article or a Section, as the case may be,
of this Guarantee Agreement; and
(f) The words "hereby", "herein", "hereof" and "hereunder" and other
words of similar import refer to this Guarantee Agreement as a whole and not to
any particular Article, Section or other subdivision.
"Additional Guarantee Payments" means payments by the Additional
Guarantor with respect to the Guarantee Payments owed by the Guarantor.
"Additional Guarantor" has the meaning specified in the
preamble of this Guarantee Agreement.
"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.
"Board of Directors" means, as the context requires, the board of
directors of either of the Guarantors or the Executive Committee of the board of
directors of either of the Guarantors (or any other committee of the board of
directors of either of the Guarantors performing similar functions) or a
committee designated by the board of directors of either of the Guarantors (or
such committee), comprised of two or more members of the board of directors of
either of the Guarantors or officers of either of the Guarantors, or both.
"Capital Securities" has the meaning specified in the
recitals to this Guarantee Agreement.
"Common Securities" means the securities representing common undivided
beneficial interests in the assets of the Issuer Trust.
"Event of Default" means (i) a default by either of the Guarantors in
any of its payment obligations under this Guarantee Agreement or (ii) a default
by either of the Guarantors in any other obligation hereunder that remains
unremedied for 30 days.
"Guarantee Agreement" means this Guarantee Agreement, as modified,
amended or supplemented from time to time.
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"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Capital Securities, to the extent not
paid or made by or on behalf of the Issuer Trust: (i) any accumulated and unpaid
Distributions (as defined in the Trust Agreement) required to be paid on the
Capital Securities, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; (ii) the Redemption Price (as defined in the
Trust Agreement) with respect to any Capital Securities called for redemption by
the Issuer Trust, to the extent the Issuer Trust shall have funds on hand
available therefor at such time; and (iii) upon a voluntary or involuntary
termination, winding-up or liquidation of the Issuer Trust, unless Debentures
are distributed to the Holders, the lesser of (a) the Liquidation Distribution
(as defined in the Trust Agreement) with respect to the Capital Securities, to
the extent that the Issuer Trust shall have funds on hand available therefor at
such time, and (b) the amount of assets of the Issuer Trust remaining available
for distribution to Holders on liquidation of the Issuer.
"Guarantee Trustee" means The First National Bank of Chicago, solely in
its capacity as Guarantee Trustee and not in its individual capacity, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee Agreement, and thereafter means each
such Successor Guarantee Trustee.
"Guarantor" has the meaning specified in the preamble of
this Guarantee Agreement.
"Guarantors" has the meaning specified in the preamble of
this Guarantee Agreement.
"Holder" means any Holder (as defined in the Trust Agreement) of any
Capital Securities; provided, however, that in determining whether the holders
of the requisite percentage of Capital Securities have given any request,
notice, consent or waiver hereunder, "Holder" shall not include the Guarantors,
the Guarantee Trustee, or any Affiliate of the Guarantors or the Guarantee
Trustee.
"Indenture" means the Junior Subordinated Indenture, dated as of
February 5, 1997, among the Guarantor, the Additional Guarantor and The First
National Bank of Chicago, as trustee, as the same may be modified, amended or
supplemented from time to time.
"Issuer Trust" has the meaning specified in the preamble of
this Guarantee Agreement.
"List of Holders" has the meaning specified in Section
2.2(a).
"Majority in Liquidation Amount of the Capital Securities" means,
except as provided by the Trust Indenture Act, Capital Securities representing
more than 50% of the aggregate Liquidation Amount (as defined in the Trust
Agreement) of all Capital Securities then Outstanding (as defined in the Trust
Agreement).
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman or a Vice Chairman of the Board of Directors
of such Person or the President or a Vice President of such Person, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of
such Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement shall include:
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(a) a statement by each officer signing the Officers' Certificate that
such officer has read the covenant or condition and the definitions relating
thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by such officer in
rendering the Officers' Certificate;
(c) a statement that such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of such officer, such
condition or covenant has been complied with.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint-stock company, company,
limited liability company, trust, business trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Guarantee Trustee, any
Senior Vice President, any Vice President, any Assistant Vice President, the
Secretary, any Assistant Secretary, the Treasurer, any Assistant Treasurer, any
Trust Officer or Assistant Trust Officer or any other officer of the Corporate
Trust Department of the Guarantee Trustee and also means, with respect to a
particular matter, any other officer to whom such matter is referred because of
that officer's knowledge of and familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.1.
"Trust Agreement" means the Amended and Restated Trust Agreement of the
Issuer Trust referred to in the recitals to this Guarantee Agreement, as
modified, amended or supplemented from time to time.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force
at the date as of which this Guarantee Agreement 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.
"Vice President," when used with respect to either of the Guarantors,
means any duly appointed vice president, whether or not designated by a number
or a word or words added before or after the title "vice president."
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ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1. Trust Indenture Act; Application.
(a) This Guarantee Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Guarantee Agreement and
shall, to the extent applicable, be governed by such provisions.
(b) If and to the extent that any provision of this Guarantee Agreement
limits, qualifies or conflicts with another provision hereof which is required
or deemed to be included in this Guarantee Agreement by any of the provisions of
the Trust Indenture Act, such required or deemed provision shall control. If any
provision of this Guarantee Agreement modifies or excludes any provision of the
Trust Indenture Act which may be so modified or excluded, the latter provision
shall be deemed to apply to this Guarantee Agreement as so modified or to be
excluded, as the case may be.
SECTION 2.2. List of Holders.
(a) The Guarantors shall furnish or cause to be furnished to the
Guarantee Trustee (a) semi-annually, on or before January 31 and July 31 of each
year, a list, in such form as the Guarantee Trustee may reasonably require, of
the names and addresses of the Holders (a "List of Holders") as of a date not
more than 15 days prior to the delivery thereof, and (b) at such other times as
the Guarantee Trustee may request in writing, within 30 days after the receipt
by the Guarantors of any such request, a List of Holders as of a date not more
than 15 days prior to the time such list is furnished, in each case to the
extent such information is in the possession or control of the Guarantors and
has not otherwise been received by the Guarantee Trustee in its capacity as
such. The Guarantee Trustee may destroy any List of Holders previously given to
it on receipt of a new List of Holders.
(b) The Guarantee Trustee shall comply with the requirements of Section
311(a), Section 311(b) and Section 312(b) of the Trust Indenture Act.
SECTION 2.3. Reports by the Guarantee Trustee.
Not later than February 28 of each year, commencing in 1998, the
Guarantee Trustee shall provide to the Holders such reports as are required by
Section 313 of the Trust Indenture Act, if any, in the form and in the manner
provided by Section 313 of the Trust Indenture Act. The Guarantee Trustee shall
also comply with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4. Periodic Reports to the Guarantee Trustee.
The Guarantors shall provide to the Guarantee Trustee, the Securities
and Exchange Commission and the Holders such documents, reports and information,
if any, as required by Section 314 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.
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SECTION 2.5. Evidence of Compliance with Conditions
Precedent.
Each of the Guarantors shall provide to the Guarantee Trustee such
evidence of compliance with such conditions precedent, if any, provided for in
this Guarantee Agreement 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 of either of the Guarantors pursuant to Section 314(c)(1)
may be given in the form of an Officers' Certificate.
SECTION 2.6. Events of Default; Waiver.
The Holders of at least a Majority in Liquidation Amount of the Capital
Securities may, by vote, on behalf of the Holders of all the Capital Securities,
waive any past default or Event of Default and its consequences. Upon such
waiver, any such default or Event of Default shall cease to exist, and any
default or Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Guarantee Agreement, but no such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7. Event of Default; Notice.
(a) The Guarantee Trustee shall, within 90 days after the occurrence of
an Event of Default known to the Guarantee Trustee, transmit by mail, first
class postage prepaid, to the Holders notice of any such Event of Default,
unless such Event of Default has been cured before the giving of such notice,
provided that, except in the case of a default in the payment of a Guarantee
Payment, the Guarantee Trustee shall be protected in withholding such notice if
and so long as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Guarantee Trustee in
good faith determines that the withholding of such notice is in the interests of
the Holders.
(b) The Guarantee Trustee shall not be deemed to have knowledge of any
Event of Default unless the Guarantee Trustee shall have received written
notice, or a Responsible Officer charged with the administration of this
Guarantee Agreement shall have obtained actual knowledge, of such Event of
Default.
SECTION 2.8. Conflicting Interests.
The Trust Agreement and the Indenture shall be deemed to be
specifically described in this Guarantee Agreement for the purposes of clause
(i) of the first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF THE GUARANTEE TRUSTEE
SECTION 3.1. Powers and Duties of the Guarantee Trustee.
(a) This Guarantee Agreement shall be held by the Guarantee Trustee for
the benefit of the Holders, and the Guarantee Trustee shall not transfer this
Guarantee Agreement to any Person except to a Successor Guarantee Trustee on
acceptance by such Successor Guarantee Trustee of its appointment to act as
Guarantee Trustee hereunder. The right, title and interest of the Guarantee
Trustee, as such, hereunder shall automatically vest in any Successor Guarantee
Trustee, upon acceptance by such Successor Guarantee Trustee of its appointment
hereunder, and such vesting of title shall be effective whether or not
conveyancing documents have been executed and delivered pursuant to the
appointment of such Successor Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of the
Holders.
(c) The Guarantee Trustee, before the occurrence of any Event of
Default and after the curing of all Events of Default that may have occurred,
shall undertake to perform only such duties as are specifically set forth in
this Guarantee Agreement, and no implied covenants shall be read into this
Guarantee Agreement against the Guarantee Trustee. The Guarantee Trustee shall
exercise such of the rights and powers vested in it by this Guarantee Agreement,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Guarantee Agreement shall be construed to
relieve the Guarantee Trustee from liability for its own negligent action, its
own negligent failure to act or its own wilful misconduct, except that:
(i) Prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement (including pursuant to Section
2.1), and the Guarantee Trustee shall not be liable except for
the performance of such duties and obligations as are
specifically set forth in this Guarantee Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the Guarantee Trustee may conclusively
rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or
opinions furnished to the Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement.
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(ii) The Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made.
(iii) The Guarantee Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a
Majority in Liquidation Amount of the Capital Securities relating to
the time, method and place of conducting any proceeding for any remedy
available to the Guarantee Trustee, or exercising any trust or power
conferred upon the Guarantee Trustee under this Guarantee Agreement.
(iv) No provision of this Guarantee Agreement shall require
the Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers, if the
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Guarantee Agreement or adequate indemnity
against such risk or liability is not reasonably assured to it.
SECTION 3.2. Certain Rights of Guarantee Trustee.
(a) Subject to the provisions of Section 3.1:
(i) The Guarantee Trustee may 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 reasonably 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 either of the Guarantors
contemplated by this Guarantee Agreement shall be sufficiently
evidenced by an Officers' Certificate unless otherwise prescribed
herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the Guarantee Trustee (unless other evidence is
herein specifically prescribed) may, in the absence of bad faith on its
part, request and rely upon an Officers' Certificate which, upon
receipt of such request from the Guarantee Trustee, shall be promptly
delivered by either of or both of the Guarantors.
(iv) The Guarantee Trustee may consult with legal counsel, and
the written advice or opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel
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may be legal counsel to either of the Guarantors or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration of this Guarantee Agreement from any court of competent
jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder unless such Holder
shall have provided to the Guarantee Trustee such adequate security and
indemnity as would satisfy a reasonable person in the position of the
Guarantee Trustee against the costs, expenses (including attorneys'
fees and expenses) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Guarantee Trustee; provided that
nothing contained in this Section 3.2(a)(v) shall be taken to relieve
the Guarantee Trustee, upon the occurrence of an Event of Default, of
its obligation to exercise the rights and powers vested in it by this
Guarantee Agreement.
(vi) The Guarantee Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed by it with due care hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (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 acting in accordance with such
instructions.
(b) No provision of this Guarantee Agreement shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or acts or
exercise any right, power, duty or obligation conferred or imposed on it in any
jurisdiction in which it shall be illegal, or in which the Guarantee Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
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SECTION 3.3. Compensation; Indemnity; Fees.
Each of the Guarantors agrees:
(a) to pay to the Guarantee Trustee from time to time such
reasonable compensation for all services rendered by it hereunder as
may be agreed by the Guarantors and the Guarantee Trustee from time to
time (which compensation shall not be limited by any provision of law
in regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to
reimburse the Guarantee Trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Guarantee
Trustee in accordance with any provision of this Guarantee Agreement
(including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(c) to indemnify the Guarantee Trustee for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence, wilful misconduct or bad faith on the part of the Guarantee
Trustee, arising out of or in connection with the acceptance or
administration of this Guarantee Agreement, including the costs and
expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The Guarantee Trustee will not claim or exact any lien or charge on any
Guarantee Payments as a result of any amount due to it under this Guarantee
Agreement. The provisions of this Section 3.3 shall survive the termination of
this Guarantee Agreement or the resignation or removal of the Guarantee Trustee.
ARTICLE IV
GUARANTEE TRUSTEE
SECTION 4.1. Guarantee Trustee; Eligibility.
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of either of the Guarantors;
and
(ii) 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 shall be a corporation meeting the
requirements of Section 310(a) of the Trust Indenture Act. If such
corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of its supervising or examining
authority, then, for the purposes of this Section 4.1 and to the extent
permitted by the Trust Indenture Act, the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
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(b) If at any time the Guarantee Trustee shall cease to be eligible to
so act under Section 4.1(a), the Guarantee Trustee shall immediately resign in
the manner and with the effect set out in Section 4.2.
(c) If the Guarantee Trustee has or shall acquire any "conflicting
interest" within the meaning of Section 310(b) of the Trust Indenture Act, the
Guarantee Trustee and Guarantors 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 the
Guarantee Trustee.
(a) Subject to Section 4.2(b), the Guarantee Trustee may be appointed
or removed without cause at any time by either of the Guarantors.
(b) The Guarantee Trustee shall not be removed until a Successor
Guarantee Trustee has been appointed and has accepted such appointment by
written instrument executed by such Successor Guarantee Trustee and delivered to
the Guarantors.
(c) The Guarantee Trustee appointed hereunder shall hold office until a
Successor Guarantee Trustee shall have been appointed or until its removal or
resignation. The Guarantee Trustee may resign from office (without need for
prior or subsequent accounting) by an instrument in writing executed by the
Guarantee Trustee and delivered to the Guarantors, which resignation shall not
take effect until a Successor Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantors and the resigning Guarantee
Trustee.
(d) If no Successor Guarantee Trustee shall have been appointed and
accepted appointment as provided in this Section 4.2 within 60 days after
delivery to the Guarantors of an instrument of resignation, the resigning
Guarantee Trustee may petition, at the expense of the Guarantors, any court of
competent jurisdiction for appointment of a Successor Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Guarantee Trustee.
ARTICLE V
GUARANTEE
SECTION 5.1. Guarantee.
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by or on behalf of the Issuer Trust or the Additional Guarantor), as and
when due, regardless of any defense, right of set-off or counterclaim that the
Issuer Trust may have or assert, except the defense of payment. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by either of the Guarantors to the Holders or by causing the
Issuer Trust to pay such amounts to the Holders.
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The Additional Guarantor irrevocably and unconditionally agrees to pay
in full to the Holders the Additional Guarantee Payments (without duplication of
amounts theretofore paid by or on behalf of the Issuer Trust or the Guarantor),
as and when due, regardless of any defense, right of set-off or counterclaim
that the Issuer Trust or the Guarantor may have or assert, except the defense of
payment. The Additional Guarantor's obligation to make an Additional Guarantee
Payment may be satisfied by direct payment of the required amounts by either of
the Guarantors to the Holders or by causing the Issuer Trust to pay such amounts
to the Holders.
SECTION 5.2. Waiver of Notice and Demand.
Each of the Guarantors hereby waives notice of acceptance of this
Guarantee Agreement and of any liability to which it applies or may apply,
presentment, demand for payment, any right to require a proceeding first against
the Guarantee Trustee, the Issuer Trust or any other Person before proceeding
against either of the Guarantors, 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 each of the
Guarantors under this Guarantee Agreement shall in no way be affected or
impaired by reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer Trust of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer Trust;
(b) the extension of time for the payment by the Issuer Trust
of all or any portion of the Distributions (other than an extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Debentures as provided in the
Indenture), Redemption Price, Liquidation Distribution or any other
sums payable under the terms of the Capital Securities or the extension
of time for the performance of any other obligation under, arising out
of, or in connection with, the Capital Securities;
(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Capital Securities, or any action on the part of the
Issuer Trust granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
receivership, insolvency, bankruptcy, assignment for the benefit of
creditors, reorganization, arrangement, composition or readjustment of
debt of, or other similar proceedings affecting, the Issuer Trust or
any of the assets of the Issuer Trust;
(e) any invalidity of, or defect or deficiency in, the
Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
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(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor
(other than payment of the underlying obligation), it being the intent
of this Section 5.3 that the obligations of each of the Guarantors
hereunder shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give notice to, or obtain the
consent of, either of the Guarantors with respect to the happening of any of the
foregoing.
SECTION 5.4. Rights of Holders.
Each of the Guarantors expressly acknowledges that: (i) this Guarantee
Agreement will be deposited with the Guarantee Trustee to be held for the
benefit of the Holders; (ii) the Guarantee Trustee has the right to enforce this
Guarantee Agreement on behalf of the Holders; (iii) the Holders of a Majority in
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Guarantee Trustee in respect of this Guarantee Agreement or exercising any trust
or power conferred upon the Guarantee Trustee under this Guarantee Agreement;
and (iv) any Holder may institute a legal proceeding directly against either of
the Guarantors to enforce its rights under this Guarantee Agreement without
first instituting a legal proceeding against the Guarantee Trustee, the Issuer
Trust or any other Person.
SECTION 5.5. Guarantee of Payment.
This Guarantee Agreement creates a guarantee of payment and not of
collection. This Guarantee Agreement will not be discharged except by payment of
the Guarantee Payments in full (without duplication of amounts theretofore paid
by the Issuer Trust) or upon the distribution of Debentures to Holders as
provided in the Trust Agreement.
SECTION 5.6. Subrogation.
Each of the Guarantors shall be subrogated to all rights (if any) of
the Holders against the Issuer Trust in respect of any amounts paid to the
Holders by such Guarantors under this Guarantee Agreement; provided, however,
that the Guarantors shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any rights which they may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee Agreement,
if, at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. If any amount shall be paid to either of the Guarantors in
violation of the preceding sentence, the Guarantor or the Additional Guarantor,
as the case may be, agrees to hold such amount in trust for the Holders and to
pay over such amount to the Holders.
SECTION 5.7. Independent Obligations.
Each of the Guarantors acknowledges that its obligations hereunder are
independent of the obligations of the Issuer Trust with respect to the Capital
Securities and that it shall be liable as principal and as debtor hereunder to
make Guarantee Payments or Additional Guarantee Payments, as the case may be,
pursuant to the terms of this Guarantee Agreement notwithstanding the occurrence
of any event referred to in subsections (a) through (g), inclusive, of Section
5.3 hereof.
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<PAGE>
SECTION 5.8. Additional Guarantee Payments Free of Puerto
Rico Tax.
All Additional Guarantee Payments shall be made without set-off,
counterclaim, fees, liabilities or similar deductions, and free and clear of,
and without deduction or withholding for, taxes, levies, imposts, duties,
charges or fees of whatsoever nature now or hereafter imposed, levied,
collected, deducted, withheld or assessed by or on behalf of the Commonwealth of
Puerto Rico or any political subdivision or taxing authority thereof or therein
("Taxes"). If the Additional Guarantor or any agent thereof is required by law
or regulation to make any deduction or withholding for or on account of Taxes,
the Guarantor shall pay such additional amounts (the "Tax Gross-Up Amounts") as
shall be necessary in order that the net amounts received pursuant to the
Additional Guarantee by the Holders of the Capital Securities or the holders or
beneficial owners of any interest therein or rights in respect thereof after
such deduction or withholding shall equal the amount that would have been
receivable thereunder in the absence of such deduction or withholding, except
that no such Tax Gross-Up Amounts shall be payable:
(a) to any Holder of a Capital Security or any interest
therein or rights in respect thereof where such deduction or
withholding is required by reason of such Holder having some connection
with the Commonwealth of Puerto Rico or any political subdivision or
taxing authority thereof or thereon other than the mere holding of a
payment in respect of such security; or
(b) in respect of any deduction or withholding that would not
have been required but for the failure to comply with any
certification, identification or other reporting requirements
concerning the nationality, residence, identity or connection with the
Commonwealth of Puerto Rico, or any political subdivision or taxing
authority thereof or therein, of the Holder of a Capital Security or
any interest therein or rights in respect thereof, if compliance is
required by the Commonwealth of Puerto Rico, or any political
subdivision or taxing authority thereof or therein, as a precondition
to exemption from such deduction or withholding.
ARTICLE VI
COVENANTS AND SUBORDINATION
SECTION 6.1. Subordination.
The obligations of each of the Guarantors under this Guarantee
Agreement will constitute unsecured obligations of each of the Guarantors and
will rank subordinate and junior in right of payment to all Senior Debt (as
defined in the Indenture) of each of the Guarantors, respectively, to the extent
and in the manner set forth in the Indenture with respect to the Debentures, and
the provisions of Article XIII of the Indenture will apply, mutatis mutandis, to
the obligations of each of the Guarantors hereunder. The obligations of each of
the Guarantors hereunder do not constitute Senior Debt (as defined in the
Indenture) of each of the Guarantors, respectively.
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<PAGE>
SECTION 6.2. Pari Passu Guarantees.
The obligations of each of the Guarantors under this Guarantee
Agreement shall rank pari passu with the obligations of each of the Guarantors,
respectively, under (i) any similar guarantee agreements issued by the Guarantor
or the Additional Guarantor, as the case may be, on behalf of the holders of
preferred or capital securities issued by any Issuer Trust (as defined in the
Indenture), (ii) the Indenture and the Securities (as defined therein) issued
thereunder; (iii) the Expense Agreement (as defined in the Trust Agreement) and
any similar expense agreements entered into by the Guarantor or the Additional
Guarantor, as the case may be, in connection with the offering of Capital
Securities (as defined in the Indenture) by any Issuer Trust (as defined in the
Indenture), and (iv) any other security, guarantee or other agreement or
obligation that is expressly stated to rank pari passu with the obligations of
the Guarantor or the Additional Guarantor, as the case may be, under this
Guarantee Agreement or with any obligation that ranks pari passu with the
obligations of the Guarantor or the Additional Guarantor, as the case may be,
under this Guarantee Agreement.
ARTICLE VII
TERMINATION
SECTION 7.1. Termination.
This Guarantee Agreement shall terminate and be of no further force and
effect upon (i) full payment of the Redemption Price (as defined in the Trust
Agreement) of all Capital Securities, (ii) the distribution of Debentures to the
Holders in exchange for all of the Capital Securities or (iii) full payment of
the amounts payable in accordance with Article IX of the Trust Agreement upon
liquidation of the Issuer Trust. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder is required to repay any sums paid with respect to
Capital Securities or this Guarantee Agreement.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. Successors and Assigns.
All guarantees and agreements contained in this Guarantee Agreement
shall bind the successors, assigns, receivers, trustees and representatives of
each of the Guarantors, respectively, and shall inure to the benefit of the
Holders of the Capital Securities then outstanding. Except in connection with a
consolidation, merger or sale involving either of the Guarantors that is
permitted under Article VIII of the Indenture and pursuant to which the
successor or assignee agrees in writing to perform such Guarantor's obligations
hereunder, each of the Guarantors shall not assign its obligations hereunder,
and any purported assignment other than in accordance with this provision shall
be void.
-15-
<PAGE>
SECTION 8.2. Amendments.
Except with respect to any changes that do not adversely affect the
rights of the Holders in any material respect (in which case no consent of the
Holders will be required), this Guarantee Agreement may only be amended with the
prior approval of the Holders of not less than a Majority in Liquidation Amount
of the Capital Securities. The provisions of Article VI of the Trust Agreement
concerning meetings of the Holders shall apply to the giving of such approval.
SECTION 8.3. Notices.
Any notice, request or other communication required or permitted to be
given hereunder shall be in writing, duly signed by the party giving such
notice, and delivered, telecopied or mailed by first class mail as follows:
(a) if given to the Guarantor, to the address or telecopy number set
forth below (with a copy to the Additional Guarantor) or such other address or
telecopy number as the Guarantor may give notice to the Guarantee Trustee and
the Holders:
BanPonce Financial Corp.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Attention: ___________
Telecopy: ____________
(b) if given to the Additional Guarantor, to the address or telecopy
number set forth below or such other address or telecopy number as the
Additional Guarantor may give notice to the Guarantee Trustee and the Holders:
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
Attention: ___________
Telecopy: ____________
(c) if given to the Guarantee Trustee, at the address or telecopy
number set forth below or such other address or telecopy number as the Guarantee
Trustee may give notice to the Guarantor and Holders:
The First National Bank of Chicago
One First National Bank Plaza, Suite 0126
Chicago, Illinois 60670
Attention: Corporate Trust Administration
Telecopy: 312-407-1708
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<PAGE>
with a copy to:
BanPonce Trust I
c/o BanPonce Financial Corp.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Attention: ___________
Telecopy: ____________
(c) if given to any Holder, at the address set forth on the
books and records of the Issuer Trust.
All notices hereunder 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 8.4. Benefit.
This Guarantee Agreement is solely for the benefit of the Holders and
is not separately transferable from the Capital Securities.
SECTION 8.5. Governing Law.
THIS GUARANTEE AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE
AND WHOLLY TO BE PERFORMED IN SUCH STATE.
SECTION 8.6. Counterparts.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-17-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Guarantee
Agreement as of the day and year first above written.
BANPONCE FINANCIAL CORP.
By: /s/ Jorge A. Junquera
-------------------------------------------
Name: Jorge A. Junquera
Title: President
BANPONCE CORPORATION
By: /s/ Jorge A. Junquera
-------------------------------------------
Name: Jorge A. Junquera
Title: Senior Executive Vice President
THE FIRST NATIONAL BANK OF CHICAGO,
as Guarantee Trustee
By: /s/ Melissa Weisman
-------------------------------------------
Name: Melissa G. Weisman
Title: Vice President
BANPONCE FINANCIAL CORP.
8.327% Junior Subordinated Deferrable Interest Debenture
No. 1 $154,640,000
BANPONCE FINANCIAL CORP., a corporation organized and existing under
the laws of Delaware (hereinafter called the "Corporation", which term includes
any successor Person under the Indenture hereinafter referred to), for value
received, hereby promises to pay to The First National Bank of Chicago, as
Property Trustee for BanPonce Trust I, a statutory business trust created under
the laws of the State of Delaware, or registered assigns, the principal sum of
ONE HUNDRED AND FIFTY-FOUR MILLION, SIX HUNDRED FORTY THOUSAND DOLLARS on
February 1, 2027. The Corporation further promises to pay interest on said
principal sum from February 5, 1997, or from the most recent payment date (each
such date, an "Interest Payment Date") to which interest has been paid or duly
provided for, semi-annually (subject to deferral as set forth herein) in arrears
on February 1 and August 1 of each year, commencing August 1, 1997, at the rate
of 8.327% per annum, together with Additional Sums, if any, as provided in
Section 10.6 of the Indenture, until the principal hereof is paid or duly
provided for or made available for payment; provided that any overdue principal,
premium or Additional Sums and any overdue installment of interest shall bear
Additional Interest at the rate of 8.327% per annum (to the extent that the
payment of such interest shall be legally enforceable), compounded
semi-annually, from the dates such amounts are due until they are paid or made
available for payment, and such interest shall be payable on demand. The amount
of interest payable for any period shall be computed on the basis of a 360-day
year of twelve 30-day months. The interest so payable, and punctually paid or
duly provided for, on any Interest Payment Date will, as provided in the
Indenture, be paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on the Regular
Record Date for such interest installment, which will be, if the Securities of
this Series are in book-entry form, one Business Day prior to the relevant
interest payment date and, if the Securities of this Series are not in
book-entry form, January 17 or July 17 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date. Any such interest 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 this Security (or one or more Predecessor Securities) is registered at the
close of business on a Special Record Date for the payment of such Defaulted
Interest to be fixed by the Trustee, notice whereof shall be given to Holders of
Securities of this series not less than 10 days prior to such Special Record
Date, or be paid at any time in any
<PAGE>
other lawful manner not inconsistent with the requirements of any securities
exchange on which the Securities of this series may be listed, and upon such
notice as may be required by such exchange, all as more fully provided in said
Indenture.
So long as no Event of Default has occurred and is continuing, the
Corporation shall have the right, at any time during the term of this Security,
from time to time to defer the payment of interest on this Security for up to 10
consecutive semi-annual interest payment periods with respect to each deferral
period (each an "Extension Period") at the end of which the Corporation shall
pay all interest then accrued and unpaid including any Additional Interest, as
provided below; provided, however, that no Extension Period shall extend beyond
the Stated Maturity of the principal of this Security and no such Extension
Period may end on a date other than an Interest Payment Date; and provided,
further, however, that during any such Extension Period, the Corporation shall
not, and shall cause its subsidiaries not 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 Corporation's capital stock, (ii) make any payment
of principal of or interest or premium, if any, on or repay, repurchase or
redeem any debt securities of the Corporation that rank pari passu in all
respects with or junior in interest to this Security, or (iii) make any
guarantee payments with respect to any guarantee by the Corporation of the debt
securities of any Subsidiary of the Corporation if such guarantee ranks pari
passu with or junior in interest to this Security (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Corporation
in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of any one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Corporation (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the applicable Extension Period, (b) as a result of an exchange or conversion
of any class or series of the Corporation's capital stock (or any capital stock
of a Subsidiary of the Corporation) for any class or series of the Corporation's
capital stock or of any class or series of the Corporation's indebtedness for
any class or series of the Corporation's capital stock, (c) the purchase of
fractional interests in shares of the Corporation's capital stock pursuant to
the conversion or exchange provisions of such capital stock or the security
being converted or exchanged, (d) any declaration of a dividend in connection
with any Rights Plan, or the issuance of rights, stock or other property under
any Rights Plan, or the redemption or
<PAGE>
repurchase of rights pursuant thereto, or (e) 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 ranks pari passu with or junior to
such stock). Prior to the termination of any such Extension Period, the
Corporation may further defer the payment of interest, provided that no
Extension Period shall exceed 10 consecutive semi-annual interest payment
periods, extend beyond the Stated Maturity of the principal of this Security or
end on a date other than an Interest Payment Date. Upon the termination of any
such Extension Period and upon the payment of all accrued and unpaid interest
and any Additional Interest then due on any Interest Payment Date, the
Corporation may elect to begin a new Extension Period, subject to the above
conditions. No interest shall be due and payable during an Extension Period,
except at the end thereof, but each installment of interest that would otherwise
have been due and payable during such Extension shall bear Additional Interest
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of 8.327% per annum, compounded semi-annually and calculated as set
forth in the first paragraph of this Security, from the dates on which amounts
would otherwise have been due and payable until paid or made available for
payment. The Corporation shall give the Holder of this Security and the Trustee
notice of its election to begin any Extension Period at least one Business Day
prior to the next succeeding Interest Payment Date on which interest on this
Security would be payable but for such deferral or so long as such Securities
are held by BanPonce Trust I at least one Business Day prior to the earlier of
(i) the next succeeding date on which Distributions on the Capital Securities of
such Issuer Trust would be payable but for such deferral, and (ii) the date on
which the Property Trustee of such Issuer Trust is required to give notice to
any securities exchange or other applicable self-regulatory organization or to
holders of such Capital Securities of the record date or the date such
Distributions are payable.
Payment of the principal of (and premium, if any) and interest on this
Security will be made at the office or agency of the Trustee maintained for that
purpose in Chicago, Illinois, 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 Corporation 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 Securities Register, or
(ii) by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register.
<PAGE>
The indebtedness evidenced by this Security is, to the extent provided
in the Indenture, subordinate and junior in right of payment to the prior
payment in full of all Senior Debt of the Corporation, and this Security is
issued subject to the provisions of the Indenture with respect thereto. Each
Holder of this Security, by accepting the same, (a) agrees to and shall be bound
by such provisions, (b) authorizes and directs the Trustee on his or her behalf
to take such actions as may be necessary or appropriate to effectuate the
subordination so provided, and (c) appoints the Trustee his or her
attorney-in-fact for any and all such purposes. Each Holder hereof, by his or
her acceptance hereof, waives all notice of the acceptance of the subordination
provisions contained herein and in the Indenture by each holder of Senior Debt
of the Corporation, 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 this Security set
forth 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 Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
<PAGE>
IN WITNESS WHEREOF, the Corporation has caused this instrument to be
duly executed under its corporate seal.
BANPONCE FINANCIAL CORP.
By: ______________________________
Name:
Title:
Attest: ______________________
<PAGE>
This is one of the Securities of the series designated therein referred
to in the within mentioned Indenture.
Dated: ___________________
THE FIRST NATIONAL BANK OF CHICAGO
By:_______________________________
Authorized Officer
<PAGE>
Reverse of Security
This Security is one of a duly authorized issue of securities of the
Corporation (herein called the "Securities"), issued and to be issued in one or
more series under the Junior Subordinated Indenture, dated as of February 5,
1997 (herein called the "Indenture"), among the Corporation, BanPonce
Corporation, as Guarantor (the "Guarantor") and The First National Bank of
Chicago, 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
Corporation, the Guarantor, the Trustee, the holders of Senior Debt and the
Holders of the Securities, and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof limited in aggregate principal amount to
$154,640,000.
All terms used in this Security that are defined in the Indenture or in
the Amended and Restated Trust Agreement, dated as of February 5, 1997 (as
modified, amended or supplemented from time to time, the "Trust Agreement"),
relating to BanPonce Trust I (the "Issuer Trust") among the Corporation, as
Depositor, the Guarantor, as Guarantor, and the Trustees named therein and the
Holders from time to time of the Trust Securities issued pursuant thereto, shall
have the meanings assigned to them in the Indenture or the Trust Agreement, as
the case may be.
The Corporation may at any time, at its option, on or after February 1,
2007, and subject to the terms and conditions of Article XI of the Indenture,
redeem this Security in whole at any time or in part from time to time, at the
following Redemption Prices (expressed as percentages of the principal amount
hereof), if redeemed during the 12-month period beginning February 1:
Year Redemption Price
- ---- ---------- -----
2007............................................................104.1635%
2008............................................................103.7472
2009............................................................103.3308
2010............................................................102.9145
2011............................................................102.4981
2012............................................................102.0818
2013............................................................101.6654
2014............................................................101.2491
2015............................................................100.8327
2016............................................................100.4164
<PAGE>
and thereafter at a Redemption Price equal to 100% of the principal amount
hereof, together, in the case of any such redemption, with accrued interest,
including any Additional Interest, to but excluding the date fixed for
redemption.
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
Prior to February 1, 2007, if a Tax Event or Capital Treatment Event
shall occur and be continuing, the Corporation shall have the right, subject to
the terms and conditions of Article XI of the Indenture, to redeem this Security
at the option of the Corporation, in whole but not in part, at a Redemption
Price equal to the greater of (i) 100% of the principal amount thereof or (ii)
as determined by a Quotation Agent (as defined below), the sum of the present
values of the principal amount and premium payable with respect to an optional
redemption on such Securities on February 1, 2007, together with scheduled
payments of interest from the Redemption Date to February 1, 2007 (the
"Remaining Life") discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury
Rate (as defined below), plus, in each case, accrued interest thereon to the
Redemption Date.
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate (as defined below) plus (i) 1.20% if such Redemption
Date occurs on or before February 1, 1998 or (ii) 0.50% if such Redemption Date
occurs after February 1, 1998.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the immediately prior week, appearing in the most
recently published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price of the Comparable Treasury Issue (expressed as a
<PAGE>
percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date, The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Comparable Treasury Issue" means with respect to any
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from three months before to three months after
February 1, 2007, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Quotation Agent" means Credit Suisse First Boston Corporation
and its successors; provided, however, that if the foregoing shall cease to be a
primary U.S. Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Corporation shall substitute therefor another Primary Treasury
Dealer. "Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
other Primary Treasury Dealer selected by the Trustee after consultation with
the Corporation.
"Comparable Treasury Price" means (A) the average of five
Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest such Reference Treasury Dealer Quotations, or (B) if the
Trustee obtains fewer then three such Reference Treasury Dealer Quotations, the
average of all such Quotations.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Dealer, the average, as
determined by the Trustee, of the bid and asked prices for the Comparable
Treasury Issue (expressed in each case as a percentage of its principal amount)
quoted in writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m.,
New York City time, on the third Business Day preceding such Redemption Date.
The provisions of Section 11.7 of the Indenture shall not apply to this
Security.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Corporation with
certain conditions set forth in the Indenture.
<PAGE>
The Indenture permits, with certain exceptions as therein provided, the
Corporation, the Guarantor and the Trustee at any time to enter into a
supplemental indenture or indentures for the purpose of modifying in any manner
the rights and obligations of the Corporation, the Guarantor and of the Holders
of the Securities, with the consent of the Holders of not less than a majority
in principal amount of the Outstanding Securities of each series to be affected
by such supplemental indenture. The Indenture also contains provisions
permitting Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders of
all Securities of such series, to waive compliance by the Corporation or the
Guarantor with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, if an
Event of Default with respect to the Securities of this series at the time
Outstanding occurs and is continuing, then and in every such case the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series may declare the principal amount of all
the Securities of this series to be due and payable immediately, by a notice in
writing to the Corporation and the Guarantor (and to the Trustee if given by
Holders) provided that, if upon an Event of Default, the Trustee or such Holders
fail to declare the principal of all the Outstanding Securities of this series
to be immediately due and payable, the holders of at least 25% in aggregate
Liquidation Amount of the Capital Securities then Outstanding shall have the
right to make such declaration by a notice in writing to the Corporation, the
Guarantor and the Trustee; and upon any such declaration the principal amount of
and the accrued interest (including any Additional Interest) on all the
Securities of this series shall become immediately due and payable, provided
that the payment of principal and interest (including any Additional Interest)
on such Securities shall remain subordinated to the extent provided in Article
XIII of the Indenture.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Corporation,
which is absolute and unconditional, to pay the principal of (and premium, if
any) and interest (including any Additional Interest) on this
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Security 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 Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Corporation maintained under Section 10.2 of the
Indenture for such purpose, duly endorsed by, or accompanied by a written
instrument of transfer in form satisfactory to the Corporation and the
Securities Registrar duly executed by, the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Securities of
this series, of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series 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,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Corporation 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 Security for registration of transfer,
the Corporation, the Guarantor, the Trustee and any agent of the Corporation or
the Trustee may treat the Person in whose name this Security is registered as
the owner hereof for all purposes, whether or not this Security be overdue, and
neither the Corporation, the Guarantor, the Trustee nor any such agent shall be
affected by notice to the contrary.
The Corporation, the Guarantor and, by its acceptance of this Security
or a beneficial interest therein, the Holder of, and any Person that acquires a
beneficial interest in, this Security agree that for United States Federal,
state and local tax purposes it is intended that this Security constitute
indebtedness.
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND WHOLLY TO BE
PERFORMED IN SUCH STATE.
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GUARANTEE
OF
BANPONCE CORPORATION
BANPONCE CORPORATION (the "Guarantor") hereby unconditionally
guarantees to the Holder of this Security duly authenticated and delivered by
the Trustee, the due and punctual payment of the principal, and premium, if any,
of (including any amount in respect of original issue discount), and interest,
if any (together with any Additional Interest and Additional Sums payable
pursuant to the terms of this Security), on this Security and the due and
punctual payment of the sinking fund payments, if any, and analogous
obligations, if any, provided for pursuant to the terms of this Security, when
and as the same shall become due and payable, whether at Stated Maturity or on
redemption, repayment or upon declaration of acceleration or otherwise according
to the terms of this Security and of the Indenture and covenants that it will
comply with its obligations under the Indenture, including Section 10.7 thereof.
In case of default by the Corporation in the payment of any such principal
(including any amount in respect of original issue discount), and any premium or
interest (together with any Additional Interest and Additional Sums payable
pursuant to the terms of this Security), sinking fund payment, or analogous
obligation, the Guarantor agrees duly and punctually to pay the same when and as
the same shall become due and payable. The Guarantor hereby agrees that its
obligations hereunder shall be as principal and not merely as surety, and shall
be absolute and unconditional irrespective of any circumstances which may
constitute a legal or equitable discharge of a surety or guarantor, including,
without limitation, any modification of this Security, any invalidity,
irregularity or unenforceability of this Security or the Indenture, any failure
to enforce the same or any waiver, modification, consent or indulgence granted
to the Corporation with respect thereto by the Holder of this Security or the
Trustee. The Guarantor hereby waives diligence, presentment, demand or payment,
filing of claims with a court in the event of merger or bankruptcy of the
Corporation, any right to require a demand or proceeding first against the
Corporation, protest or notice with respect to this Security or the indebtedness
evidenced thereby and all demands whatsoever, and covenants that this guarantee
will not be discharged as to this Security except by payment in full of the
principal of (including any amount payable in respect of original issue
discount), and any premium or interest (together with any Additional Interest
and Additional Sums payable pursuant to the terms of this Security), thereon.
The indebtedness evidenced by this Guarantee is, to the extent provided
in the Indenture, subordinate and junior in
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right of payment to the prior payment in full of all Senior Debt of the
Guarantor, and this Guarantee is issued subject to the provisions of the
Indenture with respect thereto. Each Holder of this Guarantee, by accepting the
same, (a) agrees to and shall be bound by such provisions, (b) authorizes and
directs the Trustee on his or her behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided, and (c)
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
Each Holder hereof, by his or her acceptance hereof, waives all notice of the
acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt of the Guarantor, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon said
provisions.
Payments pursuant to this Guarantee shall be made without set-off,
counterclaim, fees, liabilities or similar deductions, and free and clear of,
and without deduction or withholding for, taxes, levies, imposts, duties,
charges or fees of whatsoever nature now or hereafter imposed, levied,
collected, deducted, withheld or assessed by or on behalf of the Commonwealth of
Puerto Rico or any political subdivision or taxing authority thereof or therein,
as provided for in Section 3.17 of the Indenture.
The Guarantor irrevocably waives any and all rights to which it may be
entitled, by operation of law or otherwise, by making any payment hereunder (i)
to be subrogated to the rights of a Holder against the Corporation with respect
to such payment or otherwise to be reimbursed, indemnified or exonerated by the
Corporation in respect thereof or (ii) to receive any payment, in the nature of
contribution or for any other reason, from any other obligor with respect to
such payment.
This guarantee shall not be valid or become obligatory for any purpose
with respect to this Security until the certificate of authentication on this
Security shall have been signed by the Trustee.
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND WHOLLY TO BE
PERFORMED IN SUCH STATE.
<PAGE>
IN WITNESS WHEREOF, Banponce Corporation has caused this Guarantee to
be signed by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
BANPONCE CORPORATION
By: __________________________
Name:
Title:
