FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM____________ TO ____________.
COMMISSION FILE NUMBER: 0-16234
CENTURY BANCSHARES, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 52-1489098
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1275 PENNSYLVANIA AVENUE, N.W.
WASHINGTON, D. C. 20004
(Address of Principal Executive Offices)
(Zip Code)
(202) 496-4100
(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _____
At May 1, 2000, there were 2,722,685 shares of the registrant's Common Stock,
par value $1.00 per share outstanding.
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CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
For The Quarter Ended March 31, 2000
TABLE OF CONTENTS
PAGE
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 3. Quantitative and Qualitative Disclosures About Market
Risk 22
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 23
Item 2. Changes in Securities and Use of Proceeds 23
Item 3. Defaults Upon Senior Securities 23
Item 4. Submission of Matters to a Vote of Security Holders 23
Item 5. Other Information 23
Item 6. Exhibits and Reports on Form 8-K 23
Signatures 24
Exhibit Index 25
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<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Financial Information
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CENTURY BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Financial Condition
March 31, 2000, and December 31, 1999
March 31,
2000 December 31,
(Unaudited) 1999
<S> <C> <C>
Assets:
Cash and due from banks $ 8,444,712 $ 9,222,005
Federal funds sold 22,811,955 11,015,000
Interest bearing deposits in other banks 17,686,117 19,667,075
Investment securities available-for-sale, at fair value 18,399,122 16,495,049
Investment securities held-to-maturity, at cost, fair value
of $7,673,161 and $5,837,867 at March 31, 2000
and December 31, 1999, respectively 7,921,457 5,966,403
Loans, net of unearned income 142,230,691 138,076,486
Less: allowance for credit losses (1,551,590) (1,518,911)
Loans, net 140,679,101 136,557,575
Leasehold improvements, furniture, and equipment, net 1,295,090 1,372,267
Accrued interest receivable 1,112,220 1,034,270
Loans held for sale - 439,600
Deposit premium, net 1,618,211 1,675,813
Net deferred taxes 801,776 767,893
Other assets 868,059 595,948
Total Assets $221,637,820 $204,808,898
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits:
Noninterest-bearing $ 37,405,409 $ 36,571,508
Interest-bearing 133,424,161 117,328,222
Total deposits 170,829,570 153,899,730
Federal funds purchased and securities sold under
agreements to repurchase 7,679,990 6,358,654
Long term debt:
Federal Home Loan Bank Advances 16,098,397 11,301,355
Preferred securities of subsidiary trust 8,800,000 -
Other borrowings 260,898 15,598,868
Other liabilities 1,954,332 1,982,184
Total Liabilities 205,623,187 189,140,791
Stockholders' Equity:
Common stock, $1 par value; 5,000,000 shares authorized;
2,859,185 and 2,858,402 shares issued at
March 31, 2000 and December 31, 1999, respectively 2,859,185 2,858,402
Additional paid in capital 13,701,577 13,700,452
Retained earnings 407,544 -
Treasury stock, at cost, 136,500 shares (789,863) (789,863)
Other comprehensive income (loss), net of tax effect (163,810) (100,884)
Total Stockholders' Equity 16,014,633 15,668,107
Commitments and contingencies
Total Liabilities and Stockholders' Equity $221,637,820 $204,808,898
See accompanying notes to consolidated financial statements.
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<CAPTION>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CENTURY BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Operations (Unaudited)
Three Months Ended March 31, 2000 and 1999
Three Months Ended
March 31,
2000 1999
<S> <C> <C>
Interest income:
Interest and fees on loans $ 3,204,616 $ 2,649,950
Interest on federal funds sold 132,291 47,470
Interest on deposits in other banks 108,148 123,928
Interest on securities available-for-sale 206,044 100,109
Interest on securities held-to-maturity 127,210 37,583
Total interest income 3,778,309 2,959,040
Interest expense:
Interest on deposits:
Savings accounts 206,972 215,121
NOW accounts 54,885 60,387
Money market accounts 168,615 164,140
Certificates under $100,000 359,622 286,368
Certificates $100,000 and over 335,062 208,988
Total interest on deposits 1,125,156 935,004
Interest on borrowings 304,089 128,663
Total interest expense 1,429,245 1,063,667
Net interest income 2,349,064 1,895,373
Provision for credit losses 180,000 180,000
Net interest income after provision for credit losses 2,169,064 1,715,373
Noninterest income:
Service charges on deposit accounts 203,990 153,575
Other operating income 325,883 236,406
Total noninterest income 529,873 389,981
Noninterest expense:
Salaries and employee benefits 812,591 664,960
Occupancy and equipment expense 233,451 206,375
Professional fees 178,223 164,232
Depreciation and amortization 111,471 117,415
Amortization of deposit premiums 57,602 47,384
Data processing 385,451 261,169
Communications 89,115 78,992
Federal deposit insurance premiums 7,015 4,351
Other operating expenses 154,475 218,812
Total noninterest expense 2,029,394 1,763,690
Income before income tax expense 669,543 341,664
Income tax expense 261,999 130,317
Net income $ 407,544 $ 211,347
Basic income per common share $.15 $.07
Diluted income per common share $.15 $.07
Weighted average common shares outstanding 2,722,418 2,844,239
Diluted weighted average common shares outstanding 2,743,770 2,871,334
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
<CAPTION>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CENTURY BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Unaudited)
Three Months Ended March 31, 2000 and 1999
Other
Common Additional Treasury Comprehensive Total
Stock Paid in Retained Stock, Income (Loss), Stockholders'
$1.00 par Capital Earnings at cost net of tax effect Equity
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 $ 2,574,219 $ 12,343,631 $ 392,384 $ $ 6,440 $ 15,316,674
Comprehensive income:
Net income 211,347 211,347
Unrealized loss on
investment securities,
net of tax effect (10,264) (10,264)
Comprehensive income 201,083
Exercise of common stock
options - 9,243 shares 9,243 23,842 33,085
Balance, March 31, 1999 $ 2,583,462 $ 12,367,473 $ 603,731 $ $ (3,824) $ 15,550,842
Other
Common Additional Treasury Comprehensive Total
Stock Paid in Retained Stock, Income (Loss), Stockholders'
$1.00 par Capital Earnings at cost net of tax effect Equity
Balance, December 31, 1999 $ 2,858,402 $ 13,700,452 $ $ (789,863) $ (100,884) $ 15,668,107
Comprehensive income:
Net income 407,544 407,544
Unrealized loss on
investment securities,
net of tax effect (62,926) (62,926)
Comprehensive income 344,618
Exercise of common stock
options - 783 shares 783 1,125 1,908
Balance, March 31, 2000 $ 2,859,185 $ 13,701,577 $ 407,544 $ (789,863) $ (163,810) $ 16,014,633
See accompanying notes to consolidated financial statements.
</TABLE>
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<CAPTION>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CENTURY BANCSHARES, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows (Unaudited)
Three Months Ended March 31, 2000 and 1999
2000 1999
Cash flows from operating activities:
<S> <C> <C>
Net income $ 407,544 $ 211,347
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization of premises and equipment 111,471 117,415
Amortization of deposit premiums 57,602 47,384
Provision for credit losses 180,000 180,000
(Increase) decrease in accrued interest receivable (77,950) (57,073)
(Increase) decrease in other assets (8,111) (57,848)
Increase (decrease) in other liabilities (27,852) 65,170
Total adjustments 235,160 295,048
Net cash provided by operating activities 642,704 506,395
Cash flows from investing activities:
Net decrease (increase) in loans (3,861,926) (10,732,089)
Net decrease (increase) in interest bearing deposits
in other banks 1,980,958 1,045,166
Purchases of securities available-for-sale (4,594,721) (3,170,000)
Purchases of securities held-to-maturity (2,000,000) -
Repayments and maturities of securities available-for-sale 2,593,839 410,391
Repayments and maturities of securities held-to-maturity 44,946 227,405
Net purchase of leasehold improvements, furniture
and equipment (34,294) (17,645)
Net cash provided by (used in) investing activities (5,871,198) (12,236,772)
Cash flows from financing activities:
Net increase (decrease) in demand, savings, NOW and
money market deposit accounts 14,334,232 4,940,095
Net increase (decrease) in certificates of deposit 2,595,608 7,508,410
Net increase in customer repurchase accounts 1,321,305 108,917
Net increase (decrease) in other borrowings (15,337,939) (249,817)
Net proceeds from issuance of long-term debt 5,000,000 -
Proceeds from issuance of preferred securities of
Repayment of long-term debt (466,958) (201,784)
Net proceeds from issuance of common stock 1,908 33,085
Net cash provided by (used in) financing activities 16,248,156 12,138,906
Net increase (decrease) in cash and cash equivalents 11,019,662 408,529
Cash and cash equivalents, beginning of period 20,237,005 13,235,733
Cash and cash equivalents, end of period $ 31,256,667 $ 13,644,262
Supplemental disclosures of cash flow information:
Interest paid on deposits and borrowings $ 1,434,040 $ 1,055,008
Income taxes paid 139,750 75,000
See accompanying notes to consolidated financial statements.
</TABLE>
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CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(1) Basis of Presentation
In the opinion of management the unaudited consolidated financial
statements as of March 31, 2000, and for the three months ended March 31, 2000
and 1999 contain all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position and results of
operations of the Company as of such dates and for such periods. The unaudited
consolidated financial statements should be read in conjunction with the
Consolidated Financial Statements of the Company and the Notes thereto appearing
in the Company's 1999 Annual Report on Form 10-K filed with the Securities and
Exchange Commission. The results of operations for the three months ended March
31, 2000 are not necessarily indicative of the results of operations that may be
expected for the year ending December 31, 2000 or any future periods. Certain
prior period balances have been reclassified to conform with the current period.
(2) Investment Securities
<TABLE>
<CAPTION>
Investment securities available-for-sale, and their contractual
maturities, at March 31, 2000 and December 31, 1999 are summarized as follows:
Amortized Gross unrealized Gross unrealized
March 31, 2000 Cost gains Losses Fair value
Obligations of U.S. government agencies:
<S> <C> <C> <C> <C>
Within one year $ 995,380 $ - $ 4,957 $ 990,423
After one, but within five years 10,203,501 - 218,350 9,985,151
After five, but within ten years 4,564,752 - 1,252 4,563,500
After ten years 411,487 451 14,632 397,306
Total 16,175,120 451 239,191 15,936,380
Collateralized mortgage obligations:
After five, but within ten years 279,309 - 6,431 272,878
After ten years 176,196 - 6,844 169,352
Federal Reserve Bank stock 311,350 - - 311,350
Federal Home Loan Bank stock 805,000 - - 805,000
Atlantic Central Bankers Bank stock 30,000 - - 30,000
Other 874,162 - - 874,162
Total investment securities available-for-sale $ 18,651,137 $ 451 $ 252,466 $ 18,399,122
Amortized Gross unrealized Gross unrealized
December 31, 1999 Cost gains Losses Fair value
Obligations of U.S. government agencies:
Within one year $ 1,999,974 $ - $ 612 $ 1,999,362
After one, but within five years 11,241,574 - 129,979 11,111,595
After ten years 427,851 301 12,946 415,206
Total 13,669,399 301 143,537 13,526,163
Collateralized mortgage obligations:
After five, but within ten years 294,482 - 6,068 288,414
After ten years 183,162 - 5,902 177,260
Federal Reserve Bank stock 311,350 - - 311,350
Federal Home Loan Bank stock 1,317,700 - - 1,317,700
Other 874,162 - - 874,162
Total investment securities available-for-sale $ 16,650,255 $ 301 $ 155,507 $ 16,495,049
</TABLE>
Expected maturities may differ from contractual maturities of
mortgage-backed securities and collateralized mortgage obligations because
borrowers have the right to prepay their obligations at any time.
As a member of the Federal Reserve and Federal Home Loan Bank systems,
Century National Bank is required to hold shares of stock in the Federal Reserve
Bank of Richmond and the Federal Home Loan Bank of Atlanta. In March 2000,
Century National Bank became a member of the Atlantic Central Bankers Bank and
purchased $30,000 of its stock. Those shares, which have no stated maturity, are
carried at cost since no active trading markets exist.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(2) Investment Securities, continued
Investment securities totaling $18,606,097 and $14,278,188 at March 31,
2000 and 1999, respectively, were pledged to secure FHLBA borrowing, public
deposits, customer repurchase accounts, and other borrowing. No investment
securities were sold during 2000 or 1999.
<TABLE>
<CAPTION>
Investment securities held-to-maturity at March 31, 2000 and December
31,1999 are summarized as follows:
Amortized Gross unrealized Gross unrealized
March 31, 2000 cost gains losses Fair value
Obligations of U.S. Treasury, municipals, and
government agencies:
<S> <C> <C> <C> <C>
After one, but within five years $ 5,999,186 $ - $ 129,211 $ 5,869,975
After ten years 1,922,271 69 119,154 1,803,186
Total investment securities held-to-maturity $ 7,921,457 $ 69 $ 248,365 $ 7,673,161
Amortized Gross unrealized Gross unrealized
December 31, 1999 cost gains Losses Fair value
Obligations of U.S. Treasury, municipals, and
government agencies:
Within one year $ 3,999,138 $ - $ 37,572 $ 3,961,566
After ten years 1,967,265 260 91,224 1,876,301
Total investment securities held-to-maturity $ 5,966,403 $ 260 $ 128,796 $ 5,837,867
</TABLE>
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(3) Income per Common Share
Basic income per share is calculated by dividing net income by the
weighted-average common shares outstanding. Diluted income per share is
calculated by dividing net income by the sum of weighted-average common shares
and dilutive potential common shares. On February 18, 2000, the Company declared
a 5 percent stock dividend payable on April 17, 2000, to common stock
shareholders of record as of March 15, 2000, resulting in the issuance of
129,650 shares and a corresponding increase in the number of shares of common
stock issuable upon the exercise of stock options outstanding. The effect of the
April 17, 2000, stock dividend was recognized retroactively in the stockholders'
equity accounts in the consolidated statements of financial condition as of
December 31, 1999, and in all share and per share data. On April 14, 1999, the
Company declared a 5 percent stock dividend payable on May 28, 1999, to common
stock shareholders of record as of April 28, 1999, resulting in the issuance of
129,173 shares and a corresponding increase in stock options outstanding.
Weighted-average shares outstanding and income per common share have been
restated for the effect of the stock dividends.
<TABLE>
<CAPTION>
In accordance with SFAS No. 128, the calculation of basic income per
common share and diluted income per common share is detailed below:
Three Months Ended March 31,
2000 1999
Basic Income Per Share:
<S> <C> <C>
Net income $ 407,544 $ 211,347
Weighted average common shares outstanding 2,722,418 2,844,239
Basic income per share $ 0.15 $ 0.07
Diluted Income Per Share:
Net income $ 407,544 $ 211,347
Weighted average common shares outstanding 2,722,418 2,844,239
Dilutive effect of stock options 21,352 27,095
Diluted weighted average
common shares outstanding 2,743,770 2,871,334
Diluted income per share $ 0.15 $ 0.07
</TABLE>
(4) New Financial Accounting Standards
In June 1998, SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities," was issued. SFAS 133 requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
position and measure these instruments at fair value. In certain circumstances a
derivative may be specifically designed as a hedge of the exposure to changes in
the fair values of a recognized asset or liability or an unrecognized firm
commitment, the exposure to variable cash flows of a forecasted transaction, or
the exposure to fluctuations in foreign currency. SFAS No. 133 will be effective
for all periods beginning after June 15, 2000. Earlier application is permitted,
but the statement shall not be applied retroactively to financial statements of
prior periods. The Company does not anticipate any material impact from the
implementation of SFAS No. 133.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview
Century Bancshares, Inc., a Delaware corporation ("Company"), and a
registered bank holding company under the Bank Holding Company Act of 1956, as
amended ("BHCA"), was incorporated and organized in 1985. The Company began
active operations in 1986 with the acquisition of its subsidiary, Century
National Bank ("Bank"), a full service bank which opened for business in 1982.
The Bank provides a broad line of financial products and services to small and
middle market businesses and individuals in the greater Washington, DC
metropolitan area. With the addition of a new Prince William County branch
office in Dumfries, Virginia, in October 1999, and the establishment of a new
loan production office in Rockville, Maryland in February 2000, the Company
operates six full service banking offices and one loan production office, as
follows:
International Square Branch (Main office of bank)
-1875 Eye Street, NW, Washington, DC 20006
Pennsylvania Avenue Branch (Executive offices of Company)
-1275 Pennsylvania Avenue, NW, Washington, DC 20004 McLean
Branch - 6832 Old Dominion Drive, McLean, Virginia 22101
Tysons Corner Branch - 8251 Greensboro Drive, McLean, Virginia 22102
Bethesda Branch - 7625 Wisconsin Avenue, Bethesda, Maryland 20814
Dumfries Branch - 18116 Triangle Shopping Plaza, Dumfries, Virginia 22026
Rockville (Loan production office) 1680 E. Gude Drive, Rockville, MD 20851
The Company's principal executive offices are located at 1275
Pennsylvania Avenue, NW, Washington, DC 20004, and its phone number at that
address is (202) 496-4100.
The Company derives substantially all of its revenue and income from
the operation of the Bank, which provides a full range of commercial and
consumer banking services to small and middle market businesses and individuals
in the Washington, DC metropolitan area. As of March 31, 2000, the Company had
total assets of $221.6 million, total deposits of $170.8 million, and
stockholders' equity of $16.0 million. At March 31, 2000, there were
approximately 1,000 shareholders of the Company's common stock, par value $1.00
per share ("Common Stock").
Items 2 and 3 of this report contain certain forward-looking statements
regarding future financial condition and results of operations and the Company's
business operations. The words "may," "intend," "will," "believe," "expect,"
"estimate," "anticipate," "predict" and similar expressions, the negatives of
those words and other variations on those words or comparable terminology, are
intended to identify forward-looking statements. Such statements involve risks,
uncertainties and assumptions and, although the Company believes that such
assumptions are reasonable, it can give no assurance that its expectations
regarding these matters will be achieved. Our actual results may differ
materially from what we expect. The important factors that could cause actual
results to differ materially from the forward-looking statements include,
without limitation, the factors discussed in the Company's Form 10-K for the
year ended December 31, 1999 under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" as well as the
following factors: general economic conditions in the Washington, DC
metropolitan area; changes in interest rates; changes in asset quality; the
effect on the Company of the extensive scheme of regulation by several federal
agencies; the departure of certain key executives; delayed effects of the year
2000 problem; and competition from other providers of financial services. Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, such actual outcomes may vary materially from those
indicated.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Net Income
For the three months ended March 31, 2000, the Company's net income was
$408 thousand, or $0.15 per diluted share, compared with $211 thousand for the
first quarter of 1999, or $0.07 per diluted share. The 93 percent increase in
net income was primarily attributable to a $454 thousand increase in net
interest income resulting from a significant increase in earning assets, and a
$140 thousand increase in noninterest income, which were partially offset by a
$265 thousand increase in noninterest expense. Service charges on deposit
accounts increased 33 percent to $204 thousand, and other operating income
increased 38 percent to $326 thousand, primarily as a result of an increase in
bank card revenues. Increases in noninterest expenses included a 22 percent
increase in salaries and benefits, and a 48 percent increase in data processing
expense due largely to the increased costs of bank card processing of merchant
accounts. Return on average assets was 0.86 percent in the first quarter of 2000
compared to 0.56 percent for the same period in 1999. Return on average
stockholders' equity was 10.17 percent for the three months ended March 31,
2000, compared with 5.56 percent for the same period in 1999. The ratio of
stockholders' equity to total assets was 7.23 percent at March 31, 2000 compared
to 9.50 percent at March 31, 1999.
Net Interest Income
For the quarter ended March 31, 2000, net interest income was $2.3
million compared with $1.9 million for the quarter ended March 31, 1999, an
increase of $454 thousand, or 24 percent. The increase in net interest income
between the periods was primarily the result of a 26 percent increase in average
interest earning assets, offset slightly by a 12 basis point reduction in the
net interest margin. The Company's net interest margin declined by 12 basis
points to 5.27 percent in the first quarter of 2000 compared to the same period
in 1999.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Net Interest Income, continued
The following tables set forth the average yields and rates for
interest earned and paid for significant categories of interest earning assets
and interest bearing liabilities for the three month periods ended March 31,
2000 and 1999.
<TABLE>
<CAPTION>
AVERAGE BALANCES AND INTEREST YIELDS/RATES
(Dollars in Thousands)
Three Months Ended March 31,
2000 1999
Interest Average Interest Average
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate
Interest-Earning Assets
<S> <C> <C> <C> <C> <C> <C>
Loans, net (1) $140,134 $ 3,205 9.20% $118,858 $ 2,650 9.04%
Investment securities (2) 22,135 333 6.05 10,023 138 5.58
Federal funds sold 9,272 132 5.73 3,811 47 5.00
Interest bearing deposits
with other banks 7,812 108 5.56 9,949 124 5.05
Total interest-earning assets 179,353 3,778 8.47% 142,641 2,959 8.41%
Cash and due from banks 7,691 6,841
Other assets 4,067 3,768
Total Assets $191,111 $153,250
Interest-Bearing Liabilities
Interest-Bearing Deposits:
NOW accounts $ 21,702 55 1.02% $ 19,216 61 1.29%
Savings accounts 20,249 207 4.11 20,680 215 4.22
Money market accounts 20,479 169 3.32 21,191 164 3.14
Time deposits 53,870 694 5.18 38,404 495 5.23
Borrowings and
notes payable 19,986 304 6.11 8,463 129 6.18
Total interest-bearing
liabilities 136,286 1,429 4.22% 107,954 1,064 4.00%
Non-interest bearing 35,417 28,130
Other liabilities 3,284 1,744
Total liabilities 174,987 137,828
Stockholders' equity 16,124 15,422
Total liabilities and
stockholders' equity $191,111 $153,250
Net interest income and spread $ 2,349 4.26% $1,895 4.41%
Net interest margin 5.27% 5.39%
</TABLE>
(1) Non-accrual loan balances are included in the calculation of Average
Balances - Loans, Net. Interest income on non-accrual loan balances is included
in interest income to the extent that it has been collected. (2) Average balance
and average rate for investment securities are computed based on book value of
securities held-to-maturity and cost basis of securities available-for-sale.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Noninterest Income
Noninterest income was $530 thousand in the first quarter of 2000, a
$140 thousand increase when compared with the same quarter of 1999, which was
$390 thousand (see table below). The increase between the periods was primarily
due to increases in deposit service charges, credit card and merchant fees
caused by increased volumes, and a new mortgage loan origination program which
commenced operations in the second quarter of 1999.
<TABLE>
<CAPTION>
NONINTEREST INCOME
(Dollars in Thousands)
Three Months Ended March 31,
2000 1999 $ Change % Change
<S> <C> <C> <C> <C>
Service charges on deposit accounts $ 203,990 $ 153,575 $ 50,415 32.8 %
Credit card and merchant fees 256,975 189,635 67,340 35.5
Mortgage loan origination fees 9,983 - 9,983 -
Commission and other fee income 47,958 32,984 14,974 45.4
Other income 10,967 13,787 (2,820) (20.5)
Total noninterest income $ 529,873 $ 389,981 $ 139,892 35.9 %
</TABLE>
Noninterest Expense
Noninterest expense was $2.0 million in the first quarter of 2000, an
increase of $266 thousand, or 15 percent, when compared to 1999 when total
noninterest expense was $1.8 million. The increase in noninterest expense
included a $124 thousand (48 percent) increase in data processing expense, which
corresponds with the growth in the bank's operations, and the increase in the
volume of bank card processing of merchant accounts. An increase in the scope of
the Company's operations was accompanied by increases in several noninterest
expense categories, including salaries and benefits which increased by $148
thousand (22 percent), occupancy and equipment which increased by $27 thousand
(13%), and communications which increased by $10 thousand (13 percent). The
decrease in other expenses by $65 thousand is due primarily to the refund of
1998 and 1999 Delaware franchise taxes.
The following table sets forth the various categories of, and changes
in, noninterest expense for the three months ended March 31, 2000 and 1999:
<TABLE>
<CAPTION>
NONINTEREST EXPENSE
(Dollars in Thousands)
Three Months Ended March 31,
2000 1999 $ Change % Change
<S> <C> <C> <C> <C>
Salaries and employee benefits $ 812,591 $ 664,960 $ 147,631 22.2 %
Occupancy and equipment expense 233,451 206,375 27,076 13.1
Professional fees 178,223 164,232 13,991 8.5
Data processing 385,451 261,169 124,282 47.6
Depreciation and amortization 111,471 117,415 (5,944) (5.1)
Amortization of deposit premiums 57,602 47,384 10,218 21.6
Communications 89,115 78,992 10,123 12.8
Federal deposit insurance premiums 7,015 4,351 2,664 61.2
Other expenses 154,475 218,812 (64,337) (29.4)
Total noninterest expense $2,029,394 $1,763,690 $ 265,704 15.1 %
</TABLE>
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Investments
The Company's investment portfolio of $26.3 million as of March 31,
2000 consisted mostly of U.S. Government Agency obligations. This represented an
increase of $3.9 million, or 17 percent, compared with the investment portfolio
total of $22.5 million at December 31, 1999. The increase during the first three
months of 2000 provided additional liquidity and collateral available for
borrowing and customer repurchase agreements. (see Note 2-- "Investment
Securities").
Investment securities held-to-maturity are stated at cost, adjusted for
amortization of premium and accretion of discount. Investment securities
available-for-sale are stated at fair value.
Loans
The Company presently is, and in the future expects to remain, a middle
market banking organization serving professionals and businesses with interests
in and around the Washington, DC metropolitan area. Most of the Company's loan
portfolio is collateralized by first mortgages on commercial and residential
real estate and home equity lines of credit on residential real estate. Most of
the Company's commercial real estate loans are secured by owner-occupied
properties with borrowers that are also banking customers of the Company. As of
March 31, 2000 and 1999, approximately $93.2 million (65 percent) and $85.3
million (68 percent) of the Company's total loan portfolio, respectively,
consisted of loans secured by real estate. As of March 31, 2000 and 1999,
one-to-four family residential mortgage loans and home equity lines of credit
represented $34.2 million (24 percent) and $36.2 million (29 percent),
respectively, of the Company's total loan portfolio.
The following table sets forth the composition of the Company's loan
portfolio by type of loan on the dates indicated:
<TABLE>
<CAPTION>
LOAN PORTFOLIO ANALYSIS
(Dollars in Thousands)
March 31,
2000 1999
Aggregate Principal Amount
Type of loan:
<S> <C> <C>
1-4 family residential mortgage $ 24,785 $ 29,612
Home equity loans 9,379 6,604
Multifamily residential 2,621 2,903
Construction 4,394 3,566
Commercial real estate 51,978 42,589
Commercial loans 39,561 30,106
Installment and credit card loans 9,510 10,347
Other loans 66 246
Gross loans 142,294 125,973
Unearned income and deferred costs (63) (10)
Total loans, net of unearned $142,231 $125,963
Percentage of Loan Portfolio
Type of loan:
1-4 family residential mortgage 17.4% 23.5%
Home equity loans 6.6 5.2
Multifamily residential 1.8 2.3
Construction 3.1 2.9
Commercial real estate 36.5 33.8
Commercial loans 27.8 23.9
Installment and credit card loans 6.7 8.2
Other loans 0.1 0.2
Gross loans 100.0% 100.0%
</TABLE>
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Asset Quality
In originating loans, the Company recognizes that credit losses will be
experienced and the risk of loss will vary with, among other things, general
economic conditions, the type of loan being made, the creditworthiness of the
borrower over the term of the loan and, in the case of a collateralized loan,
the quality of the collateral for such loan. The Company maintains an allowance
for credit losses based upon, among other things, such factors as historical
experience, the volume and type of lending conducted by the Company, the amount
of nonperforming assets, regulatory policies, generally accepted accounting
principles, general economic conditions, and other factors related to the
collectibility of loans in the Company's portfolios. In addition to unallocated
allowances, specific allowances are provided for individual loans when ultimate
collection is considered questionable by management after reviewing the current
status of loans that are contractually past due and after considering the net
realizable value of the collateral for the loan.
Management actively monitors the Company's asset quality in a
continuing effort to charge off loans against the allowance for credit losses
when appropriate and to provide specific loss allowances when necessary.
Although management believes it uses the best information available to make
determinations with respect to the allowance for credit losses, future
adjustments may be necessary if actual economic conditions and other assumptions
differ from those used in making the initial determinations. At March 31, 2000,
the allowance for credit losses was $1.6 million, or 1.09 percent of total
loans. This represents an increase in the allowance compared to $1.3 million, or
1.04 percent of total loans as of March 31, 1999. The Company has increased the
allowance, as a percentage of total loans outstanding, to reflect the upward
trend in loan charge-offs experienced during the previous two years. The
allowance for credit losses as a percentage of nonperforming loans was 267
percent at March 31, 2000, compared to 135 percent at March 31, 1999.
Total nonperforming loans were $582 thousand at March 31, 2000,
compared with $968 thousand at March 31, 1999. At March 31, 2000, most of the
non-accrual loan balance ($486,000 of $501,000) consisted of one borrowing
relationship. The Company has real property collateral at acceptable margins and
has maintained a good working relationship with the borrower. Where appropriate,
the Company has established reserves which management believes are sufficient to
absorb future losses.
Provisions for credit losses are charged to income to bring the total
allowance for loan losses to a level deemed appropriate by management, based on
the factors identified above. The provision for credit losses during the first
three months of 2000 was $180 thousand, while the allowance for credit losses
increased from $1.5 million (1.10 percent of loans) to $1.6 million (1.09
percent of loans) and net charge-offs were $147 thousand. During the first three
months of 1999, the provision for credit losses was $180 thousand, as the
allowance for credit losses increased from $1.1 million (0.98 percent of loans)
to $1.3 million (1.04 percent of loans) and net recoveries were $2 thousand. The
increases in the valuation allowance for credit losses reflect the $4.2 million
(3 percent) increase in loans outstanding during the first three months of 2000
and the $27.0 million (23 percent) increase in loans since the end of 1998.
These trends, taken into consideration with other factors in the Company's
internal analysis of the valuation allowance for credit loss, have led to
increased reserve requirements and a resulting provision expense to maintain the
allowance at a level deemed appropriate by management of the Company (see table
on the following page).
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Nonperforming Loans
The following table sets forth certain information with respect to the
Company's non-accrual loans, OREO, and accruing loans which are contractually
past due 90 days or more as to principal or interest, for the periods indicated:
<TABLE>
<CAPTION>
NONPERFORMING ASSETS
(Dollars in Thousands)
March 31,
2000 1999
<S> <C> <C>
Non-accrual loans $ 501 $ 721
Accruing past due 90 days or more 81 247
Total nonperforming loans 582 968
Other real estate owned - -
Total nonperforming assets $ 582 $ 968
Nonperforming assets to total assets 0.26% 0.59%
Nonperforming loans to total loans 0.41% 0.77%
</TABLE>
Allowance for Credit Losses
The Company maintains an allowance for credit losses based upon, among
other things, such factors as historical experience, the volume and type of
lending conducted by the Company, the amount of nonperforming assets, regulatory
policies, generally accepted accounting principles, general economic conditions,
and other factors related to the collectibility of loans in the Company's
portfolio. Although management believes it uses the best information available
to make determinations with respect to the allowance for credit losses, future
adjustments may be necessary if such factors and conditions differ from the
assumptions used in making the initial determinations. Based upon criteria
consistently applied during the periods, the Company's allowance for credit
losses was $1,551,590 (1.09% of total loans) as of March 31, 2000.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Allowance for Credit Losses, continued
The following table sets forth an analysis of the Company's allowance
for credit losses for the periods indicated:
<TABLE>
<CAPTION>
ALLOWANCE FOR CREDIT LOSSES
(Dollars in Thousands)
Three Months Ended March 31,
2000 1999
<S> <C> <C>
Average net loans outstanding $ 140,134 $ 118,858
Loans outstanding at period-end 142,231 125,963
Total nonperforming loans 582 968
Beginning balance of allowance $ 1,519 $ 1,128
Loans charged-off:
1-4 family residential mortgage - -
Home equity loans - -
Commercial loans 150 6
Installment and credit card loans 21 1
Total loans charged off 171 7
Recoveries of previous charge-offs:
1-4 family residential mortgage 1 1
Home equity loans 1 -
Commercial loans 20 -
Installment and credit card loans 2 8
Total recoveries 24 9
Net loans charged-off 147 (2)
Provision for credit losses 180 180
Balance at end of period $ 1,552 $ 1,310
Net charge-offs to average loans .10% -
Allowance as % of total loans 1.09% 1.04%
Nonperforming loans as % of total loans .41% .77%
Allowance as % of nonperforming loans 267% 135%
</TABLE>
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Deposits
The Company's total deposits at March 31, 2000, were $170.8 million, an
increase of $32.2 million, or 23 percent, over the balance at March 31, 1999.
Total average deposits were $151.7 million for the three months ended March 31,
2000, an increase of $24.1 million, or 19 percent, compared to the first three
months of 1999. The Company views deposit growth as a significant challenge in
its effort to increase its asset size. Thus, the Company is focusing on its
branching program with increased emphasis on commercial accounts, and the
offering of more competitive interest rates and products to stimulate deposit
growth. This strategy has and will continue to result in a relatively higher
cost of funds in addition to lower fee income as many of these commercial
customers may utilize accounts with lower transaction costs and have a lower
number of transactions than retail customers.
The following table sets forth the average balances and weighted
average rates for the Company's categories of deposits for the periods
indicated:
<TABLE>
<CAPTION>
AVERAGE DEPOSITS
(Dollars In Thousands)
Three Months Ended March 31,
2000 1999
Weighted Weighted
Average Average % of Average Average % of
Balance Rate Total Balance Rate Total
<S> <C> <C> <C> <C> <C> <C>
Noninterest-Bearing Deposits $ 35,417 0.00% 23.4% $ 28,130 0.00% 22.0%
Interest-Bearing Deposits:
NOW accounts 21,702 1.02 14.3 19,216 1.29 15.1
Savings accounts 20,249 4.11 13.3 20,680 4.22 16.2
Money market accounts 20,479 3.32 13.5 21,191 3.14 16.6
Time deposits 53,870 5.18 35.5 38,404 5.23 30.1
Total $151,717 100.0% $127,621 100.0%
Weighted Average Rate 2.98% 2.97%
</TABLE>
Preferred Securities of Subsidiary Trust
During the first quarter of 2000, the Company formed a new, wholly
owned statutory business trust, Century Capital Trust I (the "Trust"), which
issued $8.8 million of 10.875% capital securities to a third party. The Trust
invested the proceeds in an equivalent amount of junior subordinated debt
securities of the Company bearing an interest rate equal to the rate on the
capital securities. These debt securities, which are the only assets of the
Trust, are subordinate and junior in right of payment to all present and future
senior indebtedness (as defined in the indenture) and certain other financial
obligations of the Company. The Company has fully and unconditionally guaranteed
the Trust's obligations under the capital securities. For financial reporting
purposes, the Trust is treated as a subsidiary of the Company and consolidated
in the corporate financial statements. The capital securities are presented as a
separate category of long term debt on the Condensed Consolidated Statement of
Financial Condition entitled " Preferred Securities of Subsidiary Trust." The
capital securities are not included as a component of stockholders' equity in
the Condensed Consolidated Statement of Financial Condition. The capital
securities are, however, treated as Tier I capital by the Federal Reserve Board.
The treatment of the capital securities as Tier I capital, in addition to the
ability to deduct the expense of the junior subordinated debt securities for
federal income tax purposes, provided the Company with a cost-effective method
of raising capital. The Company received net proceeds of $8,536,000, which will
be used for the general corporate purposes of the Company and the Bank,
including supporting continued expansion activities in the Washington, DC
metropolitan area through the establishment and/or acquisition of additional
branch offices and possible corporate acquisitions
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Preferred Securities of Subsidiary Trust, continued
The capital securities pay cash distributions semiannually at a rate
of 10.875% of the liquidation preference. Distributions to the holders of the
capital securities are included in interest expense, within the category
entitled "Interest on borrowings." Under the provisions of the subordinated
debt, the Corporation has the right to defer payment of interest on the
subordinated debt at any time, or from time to time, for periods not exceeding
five years. If interest payments on the subordinated debt are deferred, the
distributions on the capital securities are also deferred. Interest on the
subordinated debt is cumulative.
Subject to the prior approval of the Federal Reserve Board, the
securities, the assets of the Trust and the common securities issued by the
Trust are redeemable at the option of the Company in whole or in part on or
after March 8, 2010, or at any time, in whole but not in part, from the date of
issuance, on the occurrence of certain events.
Capital Resources
Total stockholders' equity at March 31, 2000, was $16.0 million,
virtually unchanged when compared to total stockholders' equity of $15.7 million
at December 31, 1999. Stockholders' equity was increased during the first three
months of 2000 by net income of $408 thousand and by $2 thousand received from
the exercise of stock options, and was reduced by $63 thousand attributable to
the decline in the market value of investment securities available for sale net
of the tax effect.
The Office of the Comptroller of the Currency has established certain
minimum risk-based capital standards that apply to national banks, and the
Company is subject to certain capital requirements imposed on bank holding
companies by the Federal Reserve Board. At March 31, 2000, Century National Bank
exceeded all applicable regulatory capital requirements for classification as a
"well capitalized" bank, and the Company satisfied all applicable regulatory
requirements imposed on it by the Federal Reserve Board.
At March 31, 2000, the Company's risk based capital ratios for Tier I
Capital to risk weighted assets, Total Capital to risk weighted assets, and Tier
1 Capital to average assets were 12.74 percent, 16.34 percent and 10.25 percent,
respectively.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Year 2000 Compliance
General. The "Year 2000 problem" arose because many existing computer
programs use only the last two digits to refer to a year. Therefore, these
computer programs do not properly recognize a year that begins with "20" instead
of the familiar "19." If not corrected, many computer applications could fail or
create erroneous results. The failure of the Company, its vendors or its
borrowers to address these issues could have a material effect on the Company's
business, results of operations, or financial condition. In December 1997, the
Company adopted a plan for the assessment of its exposure to the Year 2000
problem, completion of any required remediation, and testing of systems
compliance. The costs to address the Company's Year 2000 issues have not had a
significant impact on the financial position or results of operations of the
Company.
Transition Into the Year 2000. The Company suffered no failures in any
system or product upon the date change from December 31, 1999 to January 1,
2000. Management is not aware of any vendor used by the Company for data
processing or related services that experienced a material failure of its
product or service due to a Year 2000 related problem. In addition, management
is not aware of any customer which suffered losses related to a Year 2000
problem which would adversely affect that customer's financial condition or its
ability to repay any outstanding loan it has from the Bank.
Ongoing Plans. Although many of the critical dates have passed, some
experts predict that Year 2000 related failures could occur throughout the year.
Accordingly, the Company's project team will continue to monitor the Company's
systems and attempt to identify any potential problems during the course of the
year. In addition, the Company will continue to monitor the Year 2000 compliance
of the third parties with which the Company transacts business. The Company
continues to maintain its contingency plans with respect to Year 2000 related
issues and believes that if its own systems should fail, it could temporarily
convert to a manual systems for mission critical business functions.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS, CONTINUED
Liquidity
The Company's Asset/Liability Management Policy is intended to maintain
adequate liquidity for the Company and thereby enhance its ability to raise
funds to support asset growth, meet deposit withdrawals and lending needs,
maintain reserve requirements and otherwise sustain operations. The Company
accomplishes this primarily through management of the maturities of its
interest-earning assets and interest-bearing liabilities. The Company believes
that its present liquidity position is adequate to meet its current and future
needs.
Asset liquidity is provided by cash and assets which are readily
marketable, or which can be pledged, or which will mature in the near future.
The asset liquidity of the Bank is maintained in the form of vault cash, demand
deposits with commercial banks, federal funds sold, interest bearing deposits
with other financial institutions, short-term investment securities, other
investment securities available-for-sale, and short-term loans. The Company has
defined "cash and cash equivalents" as those amounts included in cash and due
from banks and federal funds sold. At March 31, 2000, the Company had cash and
cash equivalents of $31.2 million, an increase of $11.0 million, when compared
with the $20.2 million at December 31, 1999.
Liability liquidity is provided by access to core funding sources,
principally customers' deposit accounts in the Company's market area. As a
member of the Federal Home Loan Bank of Atlanta ("FHLBA"), the Company is able
to borrow on a short-term or long-term basis secured by a blanket pledge of its
1-to-4-family residential mortgage loans, investment securities, and other
collateral. The Company also has lines of credit from larger correspondent banks
to borrow excess reserves on an overnight basis (known as "federal funds
purchased") in the amount of $5.7 million, and to borrow on a secured basis
("repurchase agreements") in the amount of $5.0 million. At March 31, 2000, the
Company had no outstanding federal funds purchased, and $7.7 million in customer
repurchase agreements. Also at March 31, 2000, the Company was utilizing $16.1
million of available FHLBA credit in the form of fixed-rate ($13.1 million) and
variable-rate ($3.0 million) advances with an average cost of 6.07 percent. The
Company utilizes fixed rate term credit advances from the FHLBA to fund fixed
rate real estate loans of comparable terms and maturities.
The Company had cash on hand of $7.3 million at the holding company
level at March 31, 2000. The Company anticipates using these funds as working
capital available to support the future growth of the franchise as well as to
pay normal operating expenses. Working capital is further augmented by dividends
available from the Bank, subject to certain regulatory restrictions generally
applicable to national banks. In March 2000, a subsidiary trust of the Company
issued $8.8 million of preferred securities (Trust Preferred Stock) which are
classified as long term debt in the consolidated financial statements. Such
Trust Preferred Stock is treated as regulatory capital. At March 31, 2000, the
Company had no other indebtedness outstanding at the holding company level.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
ITEM 3. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company's principal market risk exposure is to interest rates.
Net interest income, which constitutes the principal source of income
for the Company, represents the difference between interest income on
interest-earning assets and interest expense on interest-bearing liabilities.
The difference between the Company's interest-rate sensitive assets and
interest-rate sensitive liabilities for a specified time-frame is referred to as
an interest sensitive "gap." Interest rate sensitivity reflects the potential
effect on net interest income of a movement in interest rates. A financial
institution is considered to be asset sensitive, or having a positive gap, when
the amount of its interest-earning assets maturing or repricing exceeds the
amount of its interest-bearing liabilities also maturing or repricing within
that time period. Conversely, a financial institution is considered to be
liability sensitive, or having a negative gap, when the amount of its
interest-bearing liabilities maturing or repricing exceeds the amount of its
interest-earning assets. During a period of rising (falling) interest rates, a
positive gap would tend to increase (decrease) net interest income, while a
negative gap would tend to decrease (increase) net interest income.
Management seeks to maintain a balanced interest rate risk position to
protect its net interest margin from market fluctuations. Toward this end, the
Company has a Finance Committee which reviews, on a regular basis, the maturity
and repricing of the assets and liabilities of the Company. The Finance
Committee has adopted the objective of achieving and maintaining a one-year
cumulative GAP, as a percent of total assets, of between plus 10 percent and
minus 10 percent. In addition, potential changes in net interest income under
various interest rate scenarios are monitored. On a consolidated basis, the
Company's one year cumulative gap was a negative 6.8 percent of total assets at
March 31, 2000.
Market risk is the risk of loss from adverse changes in market prices
and rates, arising primarily from interest rate risk in the Company's
portfolios, which can significantly impact the Company's profitability. The
Finance Committee has adopted the objective that an immediate increase or
decrease of 200 basis points in market interest rates should not result in a
change of more than 10 percent (plus or minus) in the Company's projected net
interest income over the next twelve months, and not more than 20 percent (plus
or minus) in projected net income. At March 31, 2000, the forecasted impact of
an immediate increase (or decrease) of 200 basis points would have resulted in
an increase (or decrease) in net interest income over a twelve month period of
(1.24 percent) and 0.27 percent, respectively, and an increase (or decrease) in
net income over a twelve month period of (10.20 percent) and 5.45 percent,
respectively.
Since there are limitations inherent in any methodology used to
estimate the exposure to changes in market interest rates, the analysis included
herein is not intended to be a forecast of the actual effect of a change in
market interest rates on the Company. The analysis is based on the Company's
assets and liabilities as of March 31, 2000, and does not contemplate any
actions the company might undertake in response to changes in market interest
rates, which could change the anticipated results. The analysis assumes
repricing and/or repayment of all assets and liabilities in accordance with
their contractual terms with the exception of (a) mortgage-backed securities,
which are assumed to prepay at a rate based on consensus market expectations,
and (b) non-maturity customer deposits, which are assumed to respond to interest
rate changes on a three-month time-lag basis consistent with the company's
historical experience for various types of deposit accounts.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
No events have occurred during the reporting period which require
disclosure under any of these items.
Item 2. Changes in Securities and Use of Proceeds
During the first quarter of 2000, the Company formed a new wholly owned
statutory business trust, Century Capital Trust I (the "Trust"), which issued
$8.8 million of 10.875% of capital securities to a third party. The Trust
invested the proceeds in an equivalent amount of junior subordinated debt
securities of the Company bearing an interest rate equal to the coupon rate on
the capital securities issued by the Trust. After the payment of placement fees,
the Company received and aggregate of $8,536,000 from these transactions. The
net proceeds received by the Company will be used for the general corporate
purposes of the Company and the Bank, including supporting continued expansion
activities in the Washington, DC metropolitan area through the establishment
and/or acquisition of additional branch offices and possible corporate
acquisitions. The subordinated debt securities, which are the sole assets of the
Trust, are subordinate and junior in right of payment to all present and future
senior indebtedness (as defined in the indenture) and certain other financial
obligations of the Company. The Company and the Trust issued these securities in
reliance on the exemption from registration provided by Section 4(2) of the
Securities Act of 1933, as amended. See Part I, Item 2. "Management's Discussion
and Analysis of Financial Condition and Results of Operations - Preferred
Securities of Subsidiary Trust."
Items 3 through 5
No events have occurred during the reporting period which require
disclosure under any of these items.
Item 6. Exhibits and Reports on Form 8-K
(a)Exhibits. The following exhibits are filed with this report:
Exhibit 4.1 Indenture dated as of March 23, 2000
from Century Bancshares, Inc., as issuer, to
The Bank of New York, as Trustee, with
respect to the Junior Subordinated Debt
Securities of Century Bancshares, Inc.
Exhibit 4.2 Amended and Restated Declaration of Trust dated as of
March 23, 2000 of Century Capital Trust I.
Exhibit 4.3 Guarantee Agreement dated as of March 23, 2000 by and between
Century Bancshares, Inc. and The Bank of New York
Exhibit 11 Computation of Earnings Per Share, Quarter Ended March 31, 2000.
Exhibit 27 Financial Data Schedule, Quarter Ended March 31, 2000.
(b) Reports on Form 8-K.
None.
<PAGE>
CENTURY BANCSHARES, INC.
QUARTERLY REPORT ON FORM 10-Q
For Quarter Ended March 31, 2000
SIGNATURES
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 thereunto duly authorized.
CENTURY BANCSHARES, INC.
Date: May 15, 2000 By: JOSEPH S. BRACEWELL
-------------------
Joseph S. Bracewell
Chairman of the Board,President
and Chief Executive Officer
Date: May 15, 2000 By: CHARLES V. JOYCE III
--------------------
Charles V. Joyce III
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
<PAGE>
CENTURY BANCSHARES, INC.
EXHIBIT INDEX
March 31, 2000
The following exhibits are filed within this report.
Exhibit
Number
Description
4.1 Indenture dated as of March 23, 2000 from Century Bancshares,
Inc., as issuer, to The Bank of New York, as Trustee, with
respect to the Junior Subordinated Debt Securities of Century
Bancshares, Inc.
4.2 Amended and Restated Declaration of Trust dated as of March 23, 2000 of
Century Capital Trust I.
4.3 Guarantee Agreement dated as of March 23, 2000 by and between Century
Bancshares, Inc. and The Bank of New York
11 Computation of Earnings Per Share for the quarter ended March 31, 2000
27 Financial Data Schedule for the quarter ended March 31, 2000
<PAGE>
CENTURY BANCSHARES, INC.
as Issuer
INDENTURE
Dated as of March 23, 2000
THE BANK OF NEW YORK
as Trustee
JUNIOR SUBORDINATED DEBT SECURITIES
<PAGE>
TABLE OF CONTENTS
Page
Parties.....................................................................1
Recitals....................................................................1
Authorization of Indenture..................................................1
Compliance with Legal Requirements..........................................1
Purpose of and Consideration for Indenture..................................1
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions..................................................1
Additional Interest................................................1
Affiliate..........................................................1
Authenticating Agent...............................................2
Bankruptcy Law.....................................................2
Board of Directors.................................................2
Board Resolution...................................................2
Business Day.......................................................2
Capital Securities.................................................2
Capital Securities Guarantee.......................................2
Capital Treatment Event............................................2
Certificate........................................................2
Common Securities..................................................2
Company............................................................3
Comparable Treasury Issue..........................................3
Comparable Treasury Price..........................................3
Custodian..........................................................3
Debt Security or Debt Securities...................................3
Debt Security Register.............................................3
Declaration........................................................3
Default............................................................3
Defaulted Interest................................................3
Deferred Interest..................................................3
Event of Default...................................................3
Extension Period...................................................3
Federal Reserve....................................................3
Finance Subsidiary.................................................3
Indenture..........................................................4
Institutional Trustee..............................................4
Interest Payment Date..............................................4
Interest Rate......................................................4
Investment Company Event...........................................4
Liquidation Amount.................................................4
Maturity Date......................................................4
Officers' Certificate..............................................4
Opinion of Counsel.................................................4
outstanding........................................................4
Person.............................................................5
Predecessor Security...............................................5
Primary Treasury Dealer............................................5
Principal Office of the Trustee....................................5
Quotation Agent....................................................5
Redemption Date....................................................5
Reference Treasury Dealer..........................................6
Reference Treasury Dealer Quotations...............................6
Remaining Life.....................................................6
Responsible Officer................................................6
Securityholder, holder of Debt Securities..........................6
Senior Indebtedness................................................6
Special Event......................................................7
Special Redemption Date............................................7
Special Redemption Price...........................................7
Subsidiary.........................................................7
Tax Event..........................................................7
Treasury Rate......................................................8
The Trust..........................................................8
Trust Indenture Act................................................8
Trust Securities...................................................8
Trustee............................................................8
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Authentication and Dating....................................9
SECTION 2.02. Form of Trustee's Certificate of Authentication..............9
SECTION 2.03. Form and Denomination of Debt Securities....................10
SECTION 2.04. Execution of Debt Securities................................10
SECTION 2.05. Exchange and Registration of Transfer of Debt Securities....10
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt Securities........12
SECTION 2.07. Temporary Debt Securities...................................13
SECTION 2.08. Payment of Interest.........................................13
SECTION 2.09. Cancellation of Debt Securities Paid, etc...................14
SECTION 2.10. Computation of Interest.....................................15
SECTION 2.11. Extension of Interest Payment Period........................15
SECTION 2.12. CUSIP Numbers...............................................16
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest; Agreed Treatment
of the Debt Securities and the Capital Securities...........16
SECTION 3.02. Offices for Notices and Payments, etc.......................17
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office..........17
SECTION 3.04. Provision as to Paying Agent................................18
SECTION 3.05. Certificate to Trustee......................................19
SECTION 3.06. Additional Sums.............................................19
SECTION 3.07. Compliance with Consolidation Provisions....................19
SECTION 3.08. Limitation on Dividends.....................................19
SECTION 3.09. Covenants as to the Trust...................................20
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists......................................20
SECTION 4.02. Preservation and Disclosure of Lists........................21
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default...........................................22
SECTION 5.02. Payment of Debt Securities on Default; Suit Therefor........24
SECTION 5.03. Application of Moneys Collected by Trustee..................25
SECTION 5.04. Proceedings by Securityholders..............................26
SECTION 5.05. Proceedings by Trustee......................................26
SECTION 5.06. Remedies Cumulative and Continuing..........................26
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders.................................27
SECTION 5.08. Notice of Defaults..........................................27
SECTION 5.09. Undertaking to Pay Costs....................................28
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee......................28
SECTION 6.02. Reliance on Documents, Opinions, etc........................29
SECTION 6.03. No Responsibility for Recitals, etc.........................30
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Debt Securities.................30
SECTION 6.05. Moneys to be Held in Trust..................................31
SECTION 6.06. Compensation and Expenses of Trustee........................31
SECTION 6.07. Officers' Certificate as Evidence...........................32
SECTION 6.08. Eligibility of Trustee......................................32
SECTION 6.09. Resignation or Removal of Trustee...........................32
SECTION 6.10. Acceptance by Successor Trustee.............................33
SECTION 6.11. Succession by Merger, etc...................................34
SECTION 6.12. Authenticating Agents.......................................35
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders...................................36
SECTION 7.02. Proof of Execution by Securityholders.......................37
SECTION 7.03. Who Are Deemed Absolute Owners..............................37
SECTION 7.04. Debt Securities Owned by Company Deemed Not Outstanding.....37
SECTION 7.05. Revocation of Consents; Future Holders Bound................38
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings........................................38
SECTION 8.02. Call of Meetings by Trustee.................................38
SECTION 8.03. Call of Meetings by Company or Securityholders..............39
SECTION 8.04. Qualifications for Voting...................................39
SECTION 8.05. Regulations.................................................39
SECTION 8.06. Voting......................................................40
SECTION 8.07. Quorum; Actions.............................................40
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of Securityholders..41
SECTION 9.02. Supplemental Indentures with Consent of Securityholders.....42
SECTION 9.03. Effect of Supplemental Indentures...........................43
SECTION 9.04. Notation on Debt Securities.................................44
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee........................................44
ARTICLE X
REDEMPTION OF SECURITIES
SECTION 10.01. Optional Redemption........................................44
SECTION 10.02. Special Event Redemption...................................44
SECTION 10.03. Notice of Redemption; Selection of Debt Securities.........44
SECTION 10.04. Payment of Debt Securities Called for Redemption...........45
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.01. Company May Consolidate, etc., on Certain Terms............46
SECTION 11.02. Successor Entity to be Substituted.........................46
SECTION 11.03. Opinion of Counsel to be Given to Trustee..................47
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.01. Discharge of Indenture.....................................47
SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee............48
SECTION 12.03. Paying Agent to Repay Moneys Held..........................48
SECTION 12.04. Return of Unclaimed Moneys.................................48
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND DIRECTORS
SECTION 13.01. Indenture and Debt Securities Solely Corporate Obligations.48
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors.................................................49
SECTION 14.02. Official Acts by Successor Entity..........................49
SECTION 14.03. Surrender of Company Powers................................49
SECTION 14.04. Addresses for Notices, etc.................................49
SECTION 14.05. Governing Law..............................................49
SECTION 14.06. Evidence of Compliance with Conditions Precedent...........49
SECTION 14.07. Non-Business Days..........................................50
SECTION 14.08. Table of Contents, Headings, etc...........................50
SECTION 14.09. Execution in Counterparts..................................50
SECTION 14.10. Separability...............................................50
SECTION 14.11. Assignment.................................................51
SECTION 14.12. Acknowledgment of Rights...................................51
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate...................................51
SECTION 15.02. Default on Senior Indebtedness.............................52
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.......................53
SECTION 15.04. Subrogation................................................54
SECTION 15.05. Trustee to Effectuate Subordination........................55
SECTION 15.06. Notice by the Company......................................55
SECTION 15.07. Rights of the Trustee; Holders of Senior Indebtedness......56
SECTION 15.08. Subordination May Not Be Impaired..........................56
<PAGE>
THIS INDENTURE, dated as of March 23, 2000, between Century
Bancshares, Inc., a bank holding company incorporated in Delaware (hereinafter
sometimes called the "Company"), and The Bank of New York, as trustee
(hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the issuance of its 107/8% Junior Subordinated Deferrable
Interest Debentures due 2030 (the "Debt Securities") under this Indenture to
provide, among other things, for the execution and authentication, delivery and
administration thereof, the Company has duly authorized the execution of this
Indenture; and
WHEREAS, all acts and things necessary to make this Indenture
a valid agreement according to its terms, have been done and performed;
NOW, THEREFORE, This Indenture Witnesseth:
In consideration of the premises, and the purchase of the Debt
Securities by the holders thereof, the Company covenants and agrees with the
Trustee for the equal and proportionate benefit of the respective holders from
time to time of the Debt Securities as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions
The terms defined in this Section 1.01 (except as herein
otherwise expressly provided or unless the context otherwise requires) for all
purposes of this Indenture and of any indenture supplemental hereto shall have
the respective meanings specified in this Section 1.01. All accounting terms
used herein and not expressly defined shall have the meanings assigned to such
terms in accordance with generally accepted accounting principles and the term
"generally accepted accounting principles" means such accounting principles as
are generally accepted at the time of any computation. The words "herein,"
"hereof" and "hereunder" and other words of similar import refer to this
Indenture as a whole and not to any particular Article, Section or other
subdivision.
"Additional Interest" shall have the meaning set forth in
Section 3.06.
"Affiliate" means, with respect to a specified Person, any
Person directly or indirectly controlling or controlled by, or under direct or
indirect common control with the specified Person. For purposes of this
definition, "control" when used with respect to any 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.
"Authenticating Agent" means any agent or agents of the
Trustee which at the time shall be appointed and acting pursuant to Section
6.12.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors.
"Board of Directors" means the board of directors or the
executive committee or any other duly authorized designated officers of the
Company.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification and delivered to the Trustee.
"Business Day" means any day other than a Saturday, Sunday or
any other day on which banking institutions in New York City are permitted or
required by any applicable law to close.
"Capital Securities" means undivided beneficial interests in
the assets of Century Capital Trust I which rank pari passu with Common
Securities issued by Century Capital Trust I; provided, however, that upon the
occurrence of an Event of Default (as defined in the Declaration), the rights of
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
"Capital Securities Guarantee" means, in respect of the
guarantee that the Company may enter into with The Bank of New York or other
Persons that operates directly or indirectly for the benefit of holders of
Capital Securities of Century Capital Trust I
"Capital Treatment Event" means the reasonable determination
by the Company that, as a result of the occurrence of any amendment to, or
change (including any announced prospective change) in, the laws of the United
States or any political subdivision thereof or therein, or as the result of any
official or administrative pronouncement or action or decision interpreting or
applying such laws, rules or regulations, which amendment or change is effective
or which pronouncement, action or decision is announced on or after the date of
issuance of the Debt Securities, there is more than an insubstantial risk that
the Company will not be entitled to treat an amount equal to the aggregate
Liquidation Amount of the Debt Securities as "Tier I 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 Company.
"Certificate" means a certificate signed by any one of the
principal executive officer, the principal financial officer or the principal
accounting officer of the Company.
"Common Securities" means undivided beneficial interests in
the assets of Century Capital Trust I which rank pari passu with Capital
Securities issued by Century Capital Trust I; provided, however, that upon the
occurrence of an Event of Default (as defined in the Declaration), the rights of
holders of such Common Securities to payment in respect of distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of such Capital Securities.
"Company" means Century Bancshares, Inc., a bank holding
company incorporated in Delaware, and, subject to the provisions of Article XI,
shall include its successors and assigns.
"Comparable Treasury Issue" means with respect to any Special
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
March 8, 2010, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (a) the average of five
Reference Treasury Dealer Quotations for such Special Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any Bankruptcy Law.
"Debt Security" or "Debt Securities" has the meaning stated in
the first recital of this Indenture.
"Debt Security Register" has the meaning specified in
Section 2.05.
"Declaration" means the Amended and Restated Declaration of
Trust of Century Capital Trust I, as amended or supplemented from time to time.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" has the meaning set forth in Section 2.08.
"Deferred Interest" has the meaning set forth in Section 2.11.
"Event of Default" means any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Extension Period" has the meaning set forth in Section 2.11.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System.
"Finance Subsidiary" means a special purpose vehicle created
expressly for the purpose of financing the activities of the Company and its
subsidiaries.
"Indenture" means this instrument as originally executed or,
if amended or supplemented as herein provided, as so amended or supplemented, or
both.
"Institutional Trustee" has the meaning set forth in the
Declaration.
"Interest Payment Date" means each March 8 and September 8
during the term of this Indenture.
"Interest Rate" means 107/8%.
"Investment Company Event" means the receipt by Century
Capital Trust I of an opinion of counsel experienced in such matters to the
effect that, as a result of the occurrence of a change in law or regulation or
written change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
Century Capital Trust I is or will be considered an "investment company" that is
required to be registered under the Investment Company Act of 1940, as amended,
which change or prospective change becomes effective or would become effective,
as the case may be, on or after the date of the issuance of the Debt Securities.
"Liquidation Amount" means the stated amount of $1,000 per
Trust Security.
"Maturity Date" means March 8, 2030.
"Officers' Certificate" means a certificate signed by the
Chairman of the Board, the Vice Chairman, the President, any Managing Director
or any Vice President, and by the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Comptroller, an Assistant Comptroller, the Secretary or
an Assistant Secretary of the Company, and delivered to the Trustee. Each such
certificate shall include the statements provided for in Section 14.06 if and to
the extent required by the provisions of such Section.
"Opinion of Counsel" means an opinion in writing signed by
legal counsel, who may be an employee of or counsel to the Company, or may be
other counsel satisfactory to the Trustee. Each such opinion shall include the
statements provided for in Section 14.06 if and to the extent required by the
provisions of such Section.
The term "outstanding," when used with reference to Debt
Securities, subject to the provisions of Section 7.04, means, as of any
particular time, all Debt Securities authenticated and delivered by the Trustee
or the Authenticating Agent under this Indenture, except
(a) Debt Securities theretofore canceled by the Trustee
or the Authenticating Agent or delivered to the Trustee for cancellation;
(b) Debt Securities, or portions thereof, for the payment or
redemption of which moneys in the necessary amount shall have been
deposited in trust with the Trustee or with any paying agent (other
than the Company) or shall have been set aside and segregated in trust
by the Company (if the Company shall act as its own paying agent);
provided that, if such Debt Securities, or portions thereof, are to be
redeemed prior to maturity thereof, notice of such redemption shall
have been given as provided in Article Fourteen or provision
satisfactory to the Trustee shall have been made for giving such
notice; and
(c) Debt Securities paid pursuant to Section 2.06 or in lieu
of or in substitution for which other Debt Securities shall have been
authenticated and delivered pursuant to the terms of Section 2.06
unless proof satisfactory to the Company and the Trustee is presented
that any such Debt Securities are held by bona fide holders in due
course.
"Person" means any individual, corporation, limited liability
company, partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Debt Security means
every previous Debt Security evidencing all or a portion of the same debt as
that evidenced by such particular Debt Security; and, for the purposes of this
definition, any Debt Security authenticated and delivered under Section 2.06 in
lieu of a lost, destroyed or stolen Debt Security shall be deemed to evidence
the same debt as the lost, destroyed or stolen Debt Security.
"Primary Treasury Dealer" means a primary United States
Government securities dealer in New York City.
"Principal Office of the Trustee," or other similar term,
means the office of the Trustee, at which at any particular time its corporate
trust business shall be principally administered, which at the time of the
execution of this Indenture shall be 101 Barclay Street, Floor 21 West, New
York, NY 10286.
"Quotation Agent" means Salomon Smith Barney, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a Primary
Treasury Dealer, the Company shall substitute therefor another Primary Treasury
Dealer.
"Redemption Date" has the meaning set forth in Section 10.01.
"Redemption Price" means the price set forth in the following
table for any Redemption Date or Special Redemption Date that occurs within the
twelve-month period beginning in the relevant year indicated below, expressed in
percentage of the principal amount of the Debt Securities being redeemed:
Year Beginning Percentage
March 8, 2010 105.438
March 8, 2011 104.894
March 8, 2012 104.350
March 8, 2013 103.806
March 8, 2014 103.263
March 8, 2015 102.719
March 8, 2016 102.175
March 8, 2017 101.631
March 8, 2018 101.088
March 8, 2019 100.544
March 8, 2020 and after 100.000
plus accrued and unpaid interest on such Debentures to the
Redemption Date or, in the case of a redemption due to the occurrence of a
Special Event, to the Special Redemption Date.
"Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m., New York City time, on the third Business Day preceding
such Redemption Date.
"Remaining Life" means, with respect to any Debt Security, the
period from the Special Redemption Date for such Debt Security to March 8, 2010.
"Responsible Officer" means, with respect to the Trustee, any
officer within the Principal Office of the Trustee, including any
vice-president, any assistant vice-president, any secretary, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Principal Trust Office 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 that officer's knowledge of
and familiarity with the particular subject.
"Securityholder," "holder of Debt Securities" or other similar
terms, means any Person in whose name at the time a particular Debt Security is
registered on the register kept by the Company or the Trustee for that purpose
in accordance with the terms hereof.
"Senior Indebtedness" means, with respect to the Company, (i)
the principal, premium, if any, and interest in respect of (A) indebtedness of
the Company for money borrowed and (B) indebtedness evidenced by securities,
debentures, notes, bonds or other similar instruments issued by the Company;
(ii) all capital lease obligations of the Company; (iii) all obligations of the
Company issued or assumed as the deferred purchase price of property, all
conditional sale obligations of the Company and all obligations of the Company
under any title retention agreement (but excluding trade accounts payable
arising in the ordinary course of business); (iv) all obligations of the Company
for the reimbursement of any letter of credit, any banker's acceptance, any
security purchase facility, any repurchase agreement or similar arrangement, any
interest rate swap, any other hedging arrangement, any obligation under options
or any similar credit or other transaction; (v) all obligations of the type
referred to in clauses (i) through (iv) above of other Persons for the payment
of which the Company is responsible or liable as obligor, guarantor or
otherwise; and (vi) all obligations of the type referred to in clauses (i)
through (v) above of other Persons secured by any lien on any property or asset
of the Company (whether or not such obligation is assumed by the Company),
whether incurred on or prior to the date of this Indenture or thereafter
incurred, unless, in the instrument creating or evidencing the same or pursuant
to which the same is outstanding, it is provided that such obligations are not
superior or pari passu in right of payment to the Debt Securities, except for
(1) any indebtedness between or among the Company and any Finance Subsidiary of
the Company, and (2) Debt Securities issued pursuant to this Indenture and
guarantees in respect of such Debt Securities. Senior Indebtedness shall
continue to be Senior Indebtedness and be entitled to the subordination
provisions irrespective of any amendment, modification or waiver of any term of
such Senior Indebtedness.
"Special Event" means any of a Tax Event, an Investment
Company Event or a Capital Treatment Event.
"Special Redemption Date" has the meaning set forth in 10.02.
"Special Redemption Price" means (1) if the Special Redemption
Date is before March 8, 2010, the greater of (a) 100% of the principal amount of
the Debt Securities being redeemed pursuant to Section 10.02 and (b) as
determined by a Quotation Agent, the sum of the present values of scheduled
payments of principal and interest over the Remaining Life of such Debt
Securities, discounted to the Special Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Treasury
Rate plus 0.45%, plus, in the case of either (a) or (b), accrued and unpaid
interest on such Debt Securities to the Special Redemption Date and (2) if the
Special Redemption Date is on or after March 8, 2010, the Redemption Price for
such Special Redemption Date.
"Subsidiary" means, with respect to any Person, (i) any
corporation at least a majority of the outstanding voting stock of which is
owned, directly or indirectly, by such Person or by one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries, (ii) any
general partnership, joint venture or similar entity, at least a majority of the
outstanding partnership or similar interests of which shall at the time be owned
by such Person, or by one or more of its Subsidiaries, or by such Person and one
or more of its Subsidiaries, and (iii) any limited partnership of which such
Person or any of its Subsidiaries is a general partner. For the purposes of this
definition, "voting stock" means shares, interests, participations or other
equivalents in the equity interest (however designated) in such Person having
ordinary voting power for the election of a majority of the directors (or the
equivalent) of such Person, other than shares, interests, participations or
other equivalents having such power only by reason of the occurrence of a
contingency.
"Tax Event" means the receipt by the Company and Century
Capital Trust I of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to or change (including any announced
prospective 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 (including any private
letter ruling, technical advice memorandum, field service advice, regulatory
procedure, notice or announcement, including any notice or announcement of
intent to adopt such procedures or regulations (an "Administrative Action")) or
judicial decision interpreting or applying such laws or regulations, regardless
of whether such Administrative Action or judicial decision is issued to or in
connection with a proceeding involving the Company or Century Capital Trust I
and whether or not subject to review or appeal, which amendment, clarification,
change, Administrative Action or decision is enacted, promulgated or announced,
in each case on or after the date of issuance of the Debt Securities, there is
more than an insubstantial risk that: (i) Century Capital Trust I is, or will be
within 90 days of the date of such opinion, subject to United States federal
income tax with respect to income received or accrued on the Debt Securities;
(ii) interest payable by the Company on the Debt Securities is not, or within 90
days of the date of such opinion, will not be, deductible by the Company, in
whole or in part, for United States federal income tax purposes; or (iii)
Century Capital Trust I is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the week immediately prior to the date of
calculation, 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 for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Special Redemption Date. The
Treasury Rate shall be calculated on the third Business Day preceding the
Special Redemption Date.
"Trust" means Century Capital Trust I, the Delaware business
trust, or any other similar trust created for the purpose of issuing Capital
Securities in connection with the issuance of Debt Securities under this
Indenture, of which the Company is the sponsor.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trust Securities" means Common Securities and Capital
Securities of Century Capital Trust I
"Trustee" means the Person identified as "Trustee" in the
first paragraph hereof, and, subject to the provisions of Article VI hereof,
shall also include its successors and assigns as Trustee hereunder.
ARTICLE II
DEBT SECURITIES
SECTION 2.01. Authentication and Dating
Upon the execution and delivery of this Indenture, or from
time to time thereafter, Debt Securities in an aggregate principal amount not in
excess of $9,073,000 may be executed and delivered by the Company to the Trustee
for authentication, and the Trustee shall thereupon authenticate and make
available for delivery said Debt Securities to or upon the written order of the
Company, signed by its Chairman of the Board of Directors, Vice Chairman,
President or Chief Financial Officer, one of its Managing Directors or one of
its Vice Presidents and by its Secretary, any Assistant Secretary, Treasurer or
any Assistant Treasurer, without any further action by the Company hereunder. In
authenticating such Debt Securities, and accepting the additional
responsibilities under this Indenture in relation to such Debt Securities, the
Trustee shall be entitled to receive, and (subject to Section 6.01) shall be
fully protected in relying upon:
(a) a copy of any Board Resolution or Board
Resolutions relating thereto and, if applicable, an appropriate record
of any action taken pursuant to such resolution, in each case certified
by the Secretary or an Assistant Secretary of the Company as the case
may be; and
(b) an Opinion of Counsel prepared in accordance
with Section 14.06 which shall also state:
(1) that such Debt Securities, when
authenticated and delivered by the Trustee and issued
by the Company in each case in the manner and subject
to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding
obligations of the Company; and
(2) that all laws and requirements in respect
of the execution and delivery by the Company of the
Debt Securities, have been complied with and that
authentication and delivery of the Debt Securities by
the Trustee will not violate the terms of this
Indenture.
The Trustee shall have the right to decline to authenticate and
deliver any Debt Securities under this Section if the Trustee, being advised by
counsel, determines that such action may not lawfully be taken or if a
Responsible Officer of the Trustee in good faith shall determine that such
action would expose the Trustee to personal liability to existing holders.
The definitive Debt Securities shall be typed, printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Debt Securities,
as evidenced by their execution of such Debt Securities.
SECTION 2.02. Form of Trustee's Certificate of Authentication
The Trustee's certificate of authentication on all Debt
Securities shall be in substantially the following form:
This is one of the Debt Securities referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK, AS TRUSTEE
By:_________________________
Authorized Officer
Dated: ______________________
SECTION 2.03. Form and Denomination of Debt Securities
The Debt Securities shall be in registered, certificated form
without coupons and in minimum denominations of $1,000 and any multiple of
$1,000 in excess thereof. The Debt Securities shall be numbered, lettered, or
otherwise distinguished in such manner or in accordance with such plans as the
officers executing the same may determine with the approval of the Trustee as
evidenced by the execution and authentication thereof.
SECTION 2.04. Execution of Debt Securities
The Debt Securities shall be signed in the name and on behalf
of the Company by the manual or facsimile signature of its Chairman of the Board
of Directors, Vice Chairman, President or Chief Financial Officer, one of its
Managing Directors or one of its Executive Vice Presidents, Senior Vice
Presidents or Vice Presidents and by the manual or facsimile signature of its
Secretary, one of its Assistant Secretaries, its Treasurer or one of its
Assistant Treasurers, under its corporate seal which may be affixed thereto or
printed, engraved or otherwise reproduced thereon, by facsimile or otherwise,
and which need not be attested. Only such Debt Securities as shall bear thereon
a certificate of authentication substantially in the form herein before recited,
executed by the Trustee or the Authenticating Agent by the manual signature of
an authorized officer, shall be entitled to the benefits of this Indenture or be
valid or obligatory for any purpose. Such certificate by the Trustee or the
Authenticating Agent upon any Debt Security executed by the Company shall be
conclusive evidence that the Debt Security so authenticated has been duly
authenticated and delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
In case any officer of the Company who shall have signed any
of the Debt Securities shall cease to be such officer before the Debt Securities
so signed shall have been authenticated and delivered by the Trustee or the
Authenticating Agent, or disposed of by the Company, such Debt Securities
nevertheless may be authenticated and delivered or disposed of as though the
Person who signed such Debt Securities had not ceased to be such officer of the
Company; and any Debt Security may be signed on behalf of the Company by such
Persons as, at the actual date of the execution of such Debt Security, shall be
the proper officers of the Company, although at the date of the execution of
this Indenture any such person was not such an officer.
Every Debt Security shall be dated the date of its
authentication.
SECTION 2.05. Exchange and Registration of Transfer of Debt
Securities
The Company shall cause to be kept, at the office or agency
maintained for the purpose of registration of transfer and for exchange as
provided in Section 3.02, a register (the "Debt Security Register") for the Debt
Securities issued hereunder in which, subject to such reasonable regulations as
it may prescribe, the Company shall provide for the registration and transfer of
all Debt Securities as in this Article Two provided. Such register shall be in
written form or in any other form capable of being converted into written form
within a reasonable time.
Debt Securities to be exchanged may be surrendered at the
principal corporate trust office of the Trustee or at any office or agency to be
maintained by the Company for such purpose as provided in Section 3.02, and the
Company shall execute, the Company or the Trustee shall register and the Trustee
or the Authenticating Agent shall authenticate and make available for delivery
in exchange therefor the Debt Security or Debt Securities which the
Securityholder making the exchange shall be entitled to receive. Upon due
presentment for registration of transfer of any Debt Security at the principal
corporate trust office of the Trustee or at any office or agency of the Company
maintained for such purpose as provided in Section 3.02, the Company shall
execute, the Company or the Trustee shall register and the Trustee or the
Authenticating Agent shall authenticate and make available for delivery in the
name of the transferee or transferees a new Debt Security for a like aggregate
principal amount. Registration or registration of transfer of any Debt Security
by the Trustee or by any agent of the Company appointed pursuant to Section
3.02, and delivery of such Debt Security, shall be deemed to complete the
registration or registration of transfer of such Debt Security.
All Debt Securities presented for registration of transfer or
for exchange or payment shall (if so required by the Company or the Trustee or
the Authenticating Agent) be duly endorsed by, or be accompanied by a written
instrument or instruments of transfer in form satisfactory to the Company and
the Trustee or the Authenticating Agent duly executed by, the holder or his
attorney duly authorized in writing.
No service charge shall be made for any exchange or
registration of transfer of Debt Securities, but the Company or the Trustee may
require payment of a sum sufficient to cover any tax, fee or other governmental
charge that may be imposed in connection therewith.
The Company or the Trustee shall not be required to exchange
or register a transfer of any Debt Security for a period of 15 days next
preceding the date of selection of Debt Securities for redemption.
Notwithstanding the foregoing, Debt Securities may not be
transferred except in compliance with the restricted securities legend set forth
below (the "Restrictive Securities Legend"), unless otherwise determined by the
Company in accordance with applicable law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY ONLY (A) TO THE COMPANY, (B) PURSUANT TO RULE 144A UNDER
THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES IS A
"QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES FOR ITS
OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE
IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (C) TO AN
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a) (1), (2), (3) OR
(7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF AN "ACCREDITED INVESTOR," FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR (D) PURSUANT TO ANOTHER
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT,
SUBJECT TO THE COMPANY'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO IT IN ACCORDANCE WITH THE
INDENTURE, A COPY OF WHICH MAY BE OBTAINED FROM THE COMPANY. THE HOLDER OF THIS
SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
SECTION 2.06. Mutilated, Destroyed, Lost or Stolen Debt
Securities
In case any Debt Security shall become mutilated or be
destroyed, lost or stolen, the Company shall execute, and upon its written
request the Trustee shall authenticate and deliver, a new Debt Security bearing
a number not contemporaneously outstanding, in exchange and substitution for the
mutilated Debt Security, or in lieu of and in substitution for the Debt Security
so destroyed, lost or stolen. In every case the applicant for a substituted Debt
Security shall furnish to the Company and the Trustee such security or indemnity
as may be required by them to save each of them harmless, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Company and
the Trustee evidence to their satisfaction of the destruction, loss or theft of
such Debt Security and of the ownership thereof.
The Trustee may authenticate any such substituted Debt
Security and deliver the same upon the written request or authorization of any
officer of the Company. Upon the issuance of any substituted Debt Security, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Debt Security which has matured or is
about to mature or has been called for redemption in full shall become mutilated
or be destroyed, lost or stolen, the Company may, instead of issuing a
substitute Debt Security, pay or authorize the payment of the same (without
surrender thereof except in the case of a mutilated Debt Security) if the
applicant for such payment shall furnish to the Company and the Trustee such
security or indemnity as may be required by them to save each of them harmless
and, in case of destruction, loss or theft, evidence satisfactory to the Company
and to the Trustee of the destruction, loss or theft of such Security and of the
ownership thereof.
Every substituted Debt Security issued pursuant to the
provisions of this Section 2.06 by virtue of the fact that any such Debt
Security is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Company, whether or not the destroyed, lost or stolen Debt
Security shall be found at any time, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Debt
Securities duly issued hereunder. All Debt Securities shall be held and owned
upon the express condition that, to the extent permitted by applicable law, the
foregoing provisions are exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Debt Securities and shall preclude any and
all other rights or remedies notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their surrender.
SECTION 2.07. Temporary Debt Securities
Pending the preparation of definitive Debt Securities, the
Company may execute and the Trustee shall authenticate and make available for
delivery temporary Debt Securities that are typed, printed or lithographed.
Temporary Debt Securities shall be issuable in any authorized denomination, and
substantially in the form of the definitive Debt Securities but with such
omissions, insertions and variations as may be appropriate for temporary Debt
Securities, all as may be determined by the Company. Every such temporary Debt
Security shall be executed by the Company and be authenticated by the Trustee
upon the same conditions and in substantially the same manner, and with the same
effect, as the definitive Debt Securities. Without unreasonable delay the
Company will execute and deliver to the Trustee or the Authenticating Agent
definitive Debt Securities and thereupon any or all temporary Debt Securities
may be surrendered in exchange therefor, at the principal corporate trust office
of the Trustee or at any office or agency maintained by the Company for such
purpose as provided in Section 3.02, and the Trustee or the Authenticating Agent
shall authenticate and make available for delivery in exchange for such
temporary Debt Securities a like aggregate principal amount of such definitive
Debt Securities. Such exchange shall be made by the Company at its own expense
and without any charge therefor except that in case of any such exchange
involving a registration of transfer the Company may require payment of a sum
sufficient to cover any tax, fee or other governmental charge that may be
imposed in relation thereto. Until so exchanged, the temporary Debt Securities
shall in all respects be entitled to the same benefits under this Indenture as
definitive Debt Securities authenticated and delivered hereunder.
SECTION 2.08. Payment of Interest
Each Debt Security will bear interest at the Interest Rate
from and including the original date of issuance of such Debt Security until the
Maturity Date, and on any overdue principal and (to the extent that payment of
such interest is enforceable under applicable law) Deferred Interest on any
overdue installment of interest (including Defaulted Interest), payable (subject
to the provisions of Article XII) on each Interest Payment Date commencing on
September 8, 2000. Interest and any Deferred Interest on any Debt Security that
is payable, and is punctually paid or duly provided for, on any Interest Payment
Date for Debt Securities shall be paid to the Person in whose name said Debt
Security (or one or more Predecessor Securities) is registered at the close of
business on the regular record date for such interest installment except that
interest and any Deferred Interest payable on the Maturity Date shall be paid to
the Person to whom principal is paid. In the event that any Debt Security or
portion thereof is called for redemption and the redemption date is subsequent
to a regular record date with respect to any Interest Payment Date and prior to
such Interest Payment Date, interest on such Debt Security will be paid upon
presentation and surrender of such Debt Security.
Any interest on any Debt Security, other than Deferred
Interest, that is payable, but is not punctually paid or duly provided for, on
any Interest Payment Date (herein called "Defaulted Interest") shall forthwith
cease to be payable to the registered holder on the relevant regular record date
by virtue of having been such holder; and such Defaulted Interest shall be paid
by the Company to the Persons in whose names such Debt Securities (or their
respective Predecessor Securities) are registered at the close of business on a
special record date for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the Trustee in writing
of the amount of Defaulted Interest proposed to be paid on each such Debt
Security and the date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the aggregate amount
proposed to be paid in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as in this clause
provided. Thereupon the Trustee shall fix a special record date for the payment
of such Defaulted Interest which shall not be more than fifteen nor less than
ten days prior to the date of the proposed payment and not less than ten days
after the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such special record date and, in
the name and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the special record date therefor to be
mailed, first class postage prepaid, to each Securityholder at his or her
address as it appears in the Debt Security Register, not less than ten days
prior to 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
such Debt Securities (or their respective Predecessor Securities) are registered
on such special record date and shall be no longer payable.
Any interest scheduled to become payable on an Interest
Payment Date occurring during an Extension Period shall not be Defaulted
Interest and shall be payable on such other date as may be specified in the
terms of such Debt Securities.
The term "regular record date" as used in this Section shall
mean either the fifteenth day of the month immediately preceding the month in
which an Interest Payment Date shall occur, if such Interest Payment Date is the
first day of a month, or the last day of the month immediately preceding the
month in which an Interest Payment shall occur, if such Interest Payment Date is
the fifteenth day of a month, whether or not such date is a Business Day.
Subject to the foregoing provisions of this Section, each Debt
Security delivered under this Indenture upon registration of transfer of or in
exchange for or in lieu of any other Debt Security shall carry the rights to
interest accrued and unpaid, and to accrue, that were carried by such other Debt
Security.
SECTION 2.09. Cancellation of Debt Securities Paid, etc
All Debt Securities surrendered for the purpose of payment,
redemption, exchange or registration of transfer, shall, if surrendered to the
Company or any paying agent, be surrendered to the Trustee and promptly canceled
by it, or, if surrendered to the Trustee or any Authenticating Agent, shall be
promptly canceled by it, and no Debt Securities shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Indenture. All
Debt Securities canceled by any Authenticating Agent shall be delivered to the
Trustee. The Trustee shall destroy all canceled Debt Securities unless the
Company otherwise directs the Trustee in writing. If the Company shall acquire
any of the Debt Securities, however, such acquisition shall not operate as a
redemption or satisfaction of the indebtedness represented by such Debt
Securities unless and until the same are surrendered to the Trustee for
cancellation.
SECTION 2.10. Computation of Interest
The amount of interest payable for any period will be computed
on the basis of a 360-day year of twelve 30-day months.
SECTION 2.11. Extension of Interest Payment Period
So long as no Event of Default has occurred and is continuing,
the Company shall have the right, from time to time and without causing an Event
of Default, to defer payments of interest on the Debt Securities by extending
the interest payment period on the Debt Securities at any time and from time to
time during the term of the Debt Securities, for up to ten consecutive
semi-annual periods (each such extended interest payment period, an "Extension
Period"), during which Extension Period no interest shall be due and payable. No
Extension Period may end on a date other than an Interest Payment Date. During
any Extension Period, interest will continue to accrue on the Debt Securities
and interest on such accrued interest (such accrued interest and interest
thereon referred to herein as "Deferred Interest") will accrue at the Interest
Rate, compounded semi-annually from the date such Deferred Interest would have
been payable were it not for the Extension Period, both to the extent permitted
by law. No interest or Deferred 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 Deferred Interest. At the end of any such Extension Period the
Company shall pay all Deferred Interest then accrued and unpaid on the Debt
Securities; provided, however, that no Extension Period may extend beyond the
Maturity Date; and provided further, however, that during any such Extension
Period, the Company may 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 Company's capital stock or (ii) make any payment of principal of or
interest or premium, if any, on or repay, repurchase or redeem any debt
securities of the Company that rank pari passu in all respects with or junior in
interest to the Debt Securities (other than (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Company in connection with
any employment contract, benefit plan or other similar arrangement with or for
the benefit of 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 Company (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 any exchange or conversion of any class or series of the
Company's capital stock (or any capital stock of a subsidiary of the Company)
for any class or series of the Company's capital stock or of any class or series
of the Company's indebtedness for any class or series of the Company's capital
stock, (c) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (d) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (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 Extension Period, the
Company may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed
ten consecutive semi-annual periods, or extend beyond the Maturity Date. Upon
the termination of any Extension Period and upon the payment of all Deferred
Interest, the Company may commence a new Extension Period, subject to the
foregoing requirements. The Company must give the Trustee notice of its election
to begin such Extension Period at least one Business Day prior to the earlier of
(i) the date interest on the Debt Securities would have been payable except for
the election to begin such Extension Period or (ii) the date such interest is
payable, but in any event not less than one Business Day prior to such record
date. The Trustee shall give notice of the Company's election to begin a new
Extension Period to the Securityholders.
SECTION 2.12. CUSIP Numbers
The Company in issuing the Debt Securities may use "CUSIP"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Securityholders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Debt Securities or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Debt Securities, and any such
redemption shall not be affected by any defect in or omission of such numbers.
The Company will promptly notify the Trustee in writing of any change in the
CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest;
Agreed Treatment of the Debt Securities.
(a)......The Company covenants and agrees that it will duly
and punctually pay or cause to be paid the principal of and premium, if any, and
interest on the Debt Securities at the place, at the respective times and in the
manner provided in this Indenture and the Debt Securities. At the option of the
Company, each installment of interest on the Debt Securities may be paid (i) by
mailing checks for such interest payable to the order of the holders of Debt
Securities entitled thereto as they appear on the registry books of the Company
or (ii) by wire transfer to any account with a banking institution located in
the United States designated by such Person to the paying agent no later than
the related record date.
(b)......The Company will treat the Debt Securities as
indebtedness, and the amounts payable in respect of the principal amount of such
Debt Securities as interest, for all U.S. federal income tax purposes. All
payments in respect of such Debt Securities will be made free and clear of U.S.
withholding tax to any beneficial owner thereof that has provided an Internal
Revenue Service Form W8 BEN (or any substitute or successor form) establishing
its non-U.S. status for U.S. federal income tax purposes.
(c)......The Company has no present intention to exercise its
right under Section 2.11 to defer payments of interest on the Debt Securities by
commencing an Extension Period.
(d)......The Company believes that the likelihood that it
would exercise its right under Section 2.11 to defer payments of interest on the
Debt Securities by commencing an Extension Period at any time during which the
Debt Securities are outstanding is remote because of the restrictions that would
be imposed on the Company's ability to declare or pay dividends or distributions
on, or to redeem, purchase or make a liquidation payment with respect to, any of
its outstanding equity and on the Company's ability to make any payments of
principal of or interest on, or repurchase or redeem, any of its debt securities
that rank pari passu in all respects with (or junior in interest to) the Debt
Securities.
.ECTION 3.02. Offices for Notices and Payments, etc
So long as any of the Debt Securities remain outstanding, the
Company will maintain in Delaware, an office or agency where the Debt Securities
may be presented for payment, an office or agency where the Debt Securities may
be presented for registration of transfer and for exchange as in this Indenture
provided and an office or agency where notices and demands to or upon the
Company in respect of the Debt Securities or of this Indenture may be served.
The Company will give to the Trustee written notice of the location of any such
office or agency and of any change of location thereof. Until otherwise
designated from time to time by the Company in a notice to the Trustee, or
specified as contemplated by Section 2.05, such office or agency for all of the
above purposes shall be the office or agency of the Trustee. In case the Company
shall fail to maintain any such office or agency in Delaware, or shall fail to
give such notice of the location or of any change in the location thereof,
presentations and demands may be made and notices may be served at the principal
corporate trust office of the Trustee.
In addition to any such office or agency, the Company may from
time to time designate one or more offices or agencies outside Delaware, where
the Debt Securities may be presented for registration of transfer and for
exchange in the manner provided in this Indenture, and the Company may from time
to time rescind such designation, as the Company may deem desirable or
expedient; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain any such office or
agency in Delaware, for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.
SECTION 3.03. Appointments to Fill Vacancies in Trustee's
Office
The Company, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, in the manner provided in Section 6.09, a
Trustee, so that there shall at all times be a Trustee hereunder.
SECTION 3.04. Provision as to Paying Agent.
(a)......If the Company shall appoint a paying agent other
than the Trustee, it will cause such paying agent to execute and deliver to the
Trustee an instrument in which such agent shall agree with the Trustee, subject
to the provision of this Section 3.04,
(1) that it will hold all sums held by it as such
agent for the payment of the principal of and premium, if any,
or interest, if any, on the Debt Securities (whether such sums
have been paid to it by the Company or by any other obligor on
the Debt Securities) in trust for the benefit of the holders
of the Debt Securities;
(2) that it will give the Trustee prompt written
notice of any failure by the Company (or by any other obligor
on the Debt Securities) to make any payment of the principal
of and premium, if any, or interest, if any, on the Debt
Securities when the same shall be due and payable; and
(3) that it will, at any time during the continuance
of any Event of Default, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent.
(b)......If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of and premium, if any, or
interest, if any, on the Debt Securities, set aside, segregate and hold in trust
for the benefit of the holders of the Debt Securities a sum sufficient to pay
such principal, premium or interest so becoming due and will notify the Trustee
in writing of any failure to take such action and of any failure by the Company
(or by any other obligor under the Debt Securities) to make any payment of the
principal of and premium, if any, or interest, if any, on the Debt Securities
when the same shall become due and payable.
Whenever the Company shall have one or more paying agents for
the Debt Securities, it will, on or prior to each due date of the principal of
and premium, if any, or interest, if any, on the Debt Securities, deposit with a
paying agent a sum sufficient to pay the principal, premium or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled thereto and (unless such paying agent is the Trustee) the Company shall
promptly notify the Trustee in writing of its action or failure to act.
(c)......Anything in this Section 3.04 to the contrary
notwithstanding, the Company may, at any time, for the purpose of obtaining a
satisfaction and discharge with respect to the Debt Securities, or for any other
reason, pay, or direct any paying agent to pay to the Trustee all sums held in
trust by the Company or any such paying agent, such sums to be held by the
Trustee upon the trusts herein contained.
(d)......Anything in this Section 3.04 to the contrary
notwithstanding, the agreement to hold sums in trust as provided in this Section
3.04 is subject to Sections 12.03 and 12.04.
SECTION 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days
after the end of each fiscal year in each year, so long as Debt Securities are
outstanding hereunder, a Certificate stating that in the course of the
performance by the signers of their duties as officers of the Company they would
normally have knowledge of any default by the Company in the performance of any
covenants contained herein, stating whether or not they have knowledge of any
such default and, if so, specifying each such default of which the signers have
knowledge and the nature thereof.
SECTION 3.06. Additional Interest.
If and for so long as the Trust is the holder of all Debt
Securities and the Trust is required to pay any additional taxes, duties,
assessments or other governmental charges as a result of a Tax Event, the
Company will pay such additional amounts (the "Additional Interest") on the Debt
Securities as shall be required so that the net amounts received and retained by
the Trust after paying taxes, duties, assessments or other governmental charges
will be equal to the amounts the Trust would have received if no such taxes,
duties, assessments or other governmental charges had been imposed. Whenever in
this Indenture or the Debt Securities there is a reference in any context to the
payment of principal of or interest on the Debt Securities, such mention shall
be deemed to include mention of payments of the Additional Interest provided for
in this paragraph to the extent that, in such context, Additional Interest is,
was or would be payable in respect thereof pursuant to the provisions of this
paragraph and express mention of the payment of Additional Interest (if
applicable) in any provisions hereof shall not be construed as excluding
Additional Interest in those provisions hereof where such express mention is not
made, provided, however, that the deferral of the payment of interest during an
Extension Period pursuant to Section 2.11 shall not defer the payment of any
Additional Interest that may be due and payable.
SECTION 3.07. Compliance with Consolidation Provisions.
The Company will not, while any of the Debt Securities remain
outstanding, consolidate with, or merge into, or merge into itself, or sell or
convey all or substantially all of its property to any other Person unless the
provisions of Article XI hereof are complied with.
SECTION 3.08. Limitation on Dividends.
If Debt Securities are initially issued to the Trust or a
trustee of such trust in connection with the issuance of Trust Securities by the
Trust (regardless of whether Debt Securities continue to be held by such trust)
and (i) there shall have occurred and be continuing any event that would
constitute an Event of Default, (ii) the Company shall be in default with
respect to its payment of any obligations under the Capital Securities
Guarantee, or (iii) the Company shall have given notice of its election to defer
payments of interest on the Debt Securities by extending the interest payment
period as provided herein and such period, or any extension thereof, shall be
continuing, then the Company may 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 Company's capital stock or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Company that rank pari passu in all respects with or
junior in interest to the Debt Securities (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Company in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of 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 Company (or securities convertible into or exercisable for such
capital stock) as consideration in an acquisition transaction entered into prior
to the occurrence of the Event of Default, (b) as a result of any exchange or
conversion of any class or series of the Company's capital stock (or any capital
stock of a subsidiary of the Company) for any class or series of the Company's
capital stock or of any class or series of the Company's indebtedness for any
class or series of the Company's capital stock, (c) the purchase of fractional
interests in shares of the Company's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being converted or
exchanged, (d) any declaration of a dividend in connection with any
stockholder's rights plan, or the issuance of rights, stock or other property
under any stockholder's rights plan, or the redemption or repurchase of rights
pursuant thereto, or (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).
SECTION 3.09. Covenants as to the Trust.
For so long as such Trust Securities remain outstanding, the
Company shall maintain 100% ownership of the Common Securities; provided,
however, that any permitted successor of the Company under this Indenture may
succeed to the Company's ownership of such Common Securities. The Company, as
owner of a majority of the Common Securities shall cause the Trust (a) to remain
a statutory business trust, except in connection with a distribution of Debt
Securities to the holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities or certain mergers, consolidations or
amalgamations, each as permitted by the Declaration, (b) to otherwise continue
to be classified as a grantor trust for United States federal income tax
purposes and (c) to use its reasonable efforts to cause each holder of Trust
Securities to be treated as owning an undivided beneficial interest in the Debt
Securities.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or
caused to be furnished to the Trustee:
(a)......on each regular record date for the Debt Securities,
a list, in such form as the Trustee may reasonably require, of the names and
addresses of the Securityholders of the Debt Securities as of such record date;
and
(b)......at such other times as the Trustee may request in
writing, within 30 days after the receipt by the Company of any such 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;
except that no such lists need be furnished under this Section 4.01 so long as
the Trustee is in possession thereof by reason of its acting as Debt Security
registrar.
SECTION 4.02. Preservation and Disclosure of Lists.
(a)......The Trustee shall preserve, in as current a form as
is reasonably practicable, all information as to the names and addresses of the
holders of Debt Securities (1) contained in the most recent list furnished to it
as provided in Section 4.01 or (2) received by it in the capacity of Debt
Securities registrar (if so acting) hereunder. The Trustee may destroy any list
furnished to it as provided in Section 4.01 upon receipt of a new list so
furnished.
(b)......In case three or more holders of Debt Securities
(hereinafter referred to as "applicants") apply in writing to the Trustee and
furnish to the Trustee reasonable proof that each such applicant has owned a
Debt Security for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Debt Securities with respect to their rights
under this Indenture or under such Debt Securities and is accompanied by a copy
of the form of proxy or other communication which such applicants propose to
transmit, then the Trustee shall within five Business Days after the receipt of
such application, at its election, either:
(1) afford such applicants access to the information
preserved at the time by the Trustee in accordance with the provisions
of subsection (a) of this Section 4.02, or
(2) inform such applicants as to the approximate
number of holders of Debt Securities whose names and addresses appear
in the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.02, and as to
the approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder of Debt Securities whose name and
address appear in the information preserved at the time by the Trustee in
accordance with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such request with
reasonable promptness after a tender to the Trustee of the material to be mailed
and of payment, or provision for the payment, of the reasonable expenses of
mailing, unless within five days after such tender, the Trustee shall mail to
such applicants and file with the Securities and Exchange Commission, if
permitted or required by applicable law, together with a copy of the material to
be mailed, a written statement to the effect that, in the opinion of the
Trustee, such mailing would be contrary to the best interests of the holders of
all Debt Securities, as the case may be, or would be in violation of applicable
law. Such written statement shall specify the basis of such opinion. If said
Commission, as permitted or required by applicable law, after opportunity for a
hearing upon the objections specified in the written statement so filed, shall
enter an order refusing to sustain any of such objections or if, after the entry
of an order sustaining one or more of such objections, said Commission shall
find, after notice and opportunity for hearing, that all the objections so
sustained have been met and shall enter an order so declaring, the Trustee shall
mail copies of such material to all such Securityholders with reasonable
promptness after the entry of such order and the renewal of such tender;
otherwise the Trustee shall be relieved of any obligation or duty to such
applicants respecting their application.
(c)......Each and every holder of Debt Securities, by
receiving and holding the same, agrees with Company and the Trustee that neither
the Company nor the Trustee nor any paying agent shall be held accountable by
reason of the disclosure of any such information as to the names and addresses
of the holders of Debt Securities in accordance with the provisions of
subsection (b) of this Section 4.02, regardless of the source from which such
information was derived, and that the Trustee shall not be held accountable by
reason of mailing any material pursuant to a request made under said subsection
(b).
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON AN EVENT OF DEFAULT
SECTION 5.01. Events of Default.
The following Events of Default shall be "Events of Default"
with respect to Debt Securities:
(a)......the Company defaults in the payment of any interest
upon any Debt Security when it becomes due and payable, and continuance of such
default for a period of 30 days; or
(b)......the Company defaults in the payment of all or any
part of the principal of (or premium, if any, on) any Debt Securities as and
when the same shall become due and payable either at maturity, upon redemption
(including redemption for any sinking fund), by declaration of acceleration or
otherwise; or
(c)......the Company defaults in the performance of, or
breaches, any of its covenants or agreements in Sections 3.06, 3.07, 3.08 and
3.09 of this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with), and continuance of such default or breach for a period of 90 days after
there has been given, by registered or certified mail, to the Company by the
Trustee or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Debt 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
(d)......a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of the Company in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of the Company or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(e)......the Company shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of the Company or of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(f)......the Trust shall have voluntarily or involuntarily
liquidated, dissolved, wound-up its business or otherwise terminated its
existence except in connection with (1) the distribution of the Debt Securities
to holders of such Trust Securities in liquidation of their interests in the
Trust, (2) the redemption of all of the outstanding Trust Securities or (3)
certain mergers, consolidations or amalgamations, each as permitted by the
Declaration.
If an Event of Default occurs and is continuing with respect
to the Debt Securities, then, and in each and every such case, unless the
principal of the Debt Securities shall have already become due and payable,
either the Trustee or the holders of not less than 25% in aggregate principal
amount of the Debt Securities then outstanding hereunder, by notice in writing
to the Company (and to the Trustee if given by Securityholders), may declare the
entire principal of the Debt Securities and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration the same
shall become immediately due and payable.
The foregoing provisions, however, are subject to the
condition that if, at any time after the principal of the Debt Securities shall
have been so declared due and payable, and before any judgment or decree for the
payment of the moneys due shall have been obtained or entered as hereinafter
provided, the Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all the Debt
Securities and the principal of and premium, if any, on the Debt Securities
which shall have become due otherwise than by acceleration (with interest upon
such principal and premium, if any, and Deferred Interest, to the extent
permitted by law) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other amounts due to the Trustee pursuant
to Section 6.06, and if any and all Events of Default under this Indenture,
other than the non-payment of the principal of or premium, if any, on Debt
Securities which shall have become due by acceleration, shall have been cured,
waived or otherwise remedied as provided herein -- then and in every such case
the holders of a majority in aggregate principal amount of the Debt Securities
then outstanding, by written notice to the Company and to the Trustee, may waive
all defaults and rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right
under this Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the Trustee and the holders of the Debt Securities shall be
restored respectively to their several positions and rights hereunder, and all
rights, remedies and powers of the Company, the Trustee and the holders of the
Debt Securities shall continue as though no such proceeding had been taken.
SECTION 5.02. Payment of Debt Securities on Default; Suit
Therefor.
The Company covenants that (a) in case default shall be made
in the payment of any installment of interest upon any of the Debt Securities as
and when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Debt Securities as
and when the same shall have become due and payable, whether at maturity of the
Debt Securities or upon redemption or by declaration of acceleration or
otherwise -- then, upon demand of the Trustee, the Company will pay to the
Trustee, for the benefit of the holders of the Debt Securities the whole amount
that then shall have become due and payable on all Debt Securities for principal
and premium, if any, or interest, or both, as the case may be, including
Deferred Interest accrued on the Debt Securities; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and expenses of
collection, including a reasonable compensation to the Trustee, its agents,
attorneys and counsel, and any other amounts due to the Trustee under Section
6.06. In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on such Debt
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on such Debt Securities wherever situated the
moneys adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy
or for the reorganization of the Company or any other obligor on the Debt
Securities under Bankruptcy Law, or in case a receiver or trustee shall have
been appointed for the property of the Company or such other obligor, or in the
case of any other similar judicial proceedings relative to the Company or other
obligor upon the Debt Securities, or to the creditors or property of the Company
or such other obligor, the Trustee, irrespective of whether the principal of the
Debt Securities shall then be due and payable as therein expressed or by
declaration of acceleration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Debt Securities and, in case of
any judicial proceedings, to file such proofs of claim and other papers or
documents as may be necessary or advisable in order to have the claims of the
Trustee (including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all other amounts due to the Trustee under Section 6.06) and of
the Securityholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Debt Securities, or to the creditors or property of
the Company or such other obligor, unless prohibited by applicable law and
regulations, to vote on behalf of the holders of the Debt Securities in any
election of a trustee or a standby trustee in arrangement, reorganization,
liquidation or other bankruptcy or insolvency proceedings or Person performing
similar functions in comparable proceedings, and to collect and receive any
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the deduction of its charges and expenses; and any
receiver, assignee or trustee in bankruptcy or reorganization is hereby
authorized by each of the Securityholders to make such payments to the Trustee,
and, in the event that the Trustee shall consent to the making of such payments
directly to the Securityholders, to pay to the Trustee such amounts as shall be
sufficient to cover reasonable compensation to the Trustee, each predecessor
Trustee and their respective agents, attorneys and counsel, and all other
amounts due to the Trustee under Section 6.06.
Nothing herein contained shall be construed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Debt Securities or the rights of any holder thereof or
to authorize the Trustee to vote in respect of the claim of any Securityholder
in any such proceeding.
All rights of action and of asserting claims under this
Indenture, or under any of the Debt Securities, may be enforced by the Trustee
without the possession of any of the Debt Securities, or the production thereof
at any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name as trustee
of an express trust, and any recovery of judgment shall be for the ratable
benefit of the holders of the Debt Securities.
In any proceedings brought by the Trustee (and also any
proceedings involving the interpretation of any provision of this Indenture to
which the Trustee shall be a party) the Trustee shall be held to represent all
the holders of the Debt Securities, and it shall not be necessary to make any
holders of the Debt Securities parties to any such proceedings.
SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys collected by the Trustee shall be applied in the
following order, at the date or dates fixed by the Trustee for the distribution
of such moneys, upon presentation of the several Debt Securities in respect of
which moneys have been collected, and stamping thereon the payment, if only
partially paid, and upon surrender thereof if fully paid:
First: To the payment of costs and expenses incurred by, and
reasonable fees of, the Trustee, its agents, attorneys and counsel, and of all
other amounts due to the Trustee under Section 6.06;
Second: To the payment of all Senior Indebtedness of the
Company if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Debt Securities for principal (and premium, if any), and interest on the Debt
Securities, in respect of which or for the benefit of which money has been
collected, ratably, without preference or priority of any kind, according to the
amounts due on such Debt Securities for principal (and premium, if any) and
interest, respectively; and
Fourth: The balance, if any, to the Company.
SECTION 5.04. Proceedings by Securityholders.
No holder of any Debt Security shall have any right to
institute any suit, action or proceeding for any remedy hereunder, unless such
holder previously shall have given to the Trustee written notice of an Event of
Default with respect to the Debt Securities and unless the holders of not less
than 25% in aggregate principal amount of the Debt Securities then outstanding
shall have given the Trustee a written request to institute such action, suit or
proceeding and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred thereby,
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action, suit or proceeding;
provided, that no holder of Debt Securities shall have any right to prejudice
the rights of any other holder of Debt Securities, obtain priority or preference
over any other such holder or enforce any right under this Indenture except in
the manner herein provided and for the equal, ratable and common benefit of all
holders of Debt Securities.
Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Debt Security to receive payment of the
principal of, premium, if any, and interest, on such Debt Security when due, or
to institute suit for the enforcement of any such payment, shall not be impaired
or affected without the consent of such holder. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
SECTION 5.05. Proceedings by Trustee.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either by suit in
equity or by action at law or by proceeding in bankruptcy or otherwise, whether
for the specific enforcement of any covenant or agreement contained in this
Indenture or in aid of the exercise of any power granted in this Indenture, or
to enforce any other legal or equitable right vested in the Trustee by this
Indenture or by law.
SECTION 5.06. Remedies Cumulative and Continuing.
Except as otherwise provided in Section 2.06, all powers and
remedies given by this Article V to the Trustee or to the Securityholders shall,
to the extent permitted by law, be deemed cumulative and not exclusive of any
other powers and remedies available to the Trustee or the holders of the Debt
Securities, by judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this Indenture or
otherwise established with respect to the Debt Securities, and no delay or
omission of the Trustee or of any holder of any of the Debt Securities to
exercise any right or power accruing upon any Event of Default occurring and
continuing as aforesaid shall impair any such right or power, or shall be
construed to be a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 5.04, every power and remedy given by this
Article V or by law to the Trustee or to the Securityholders may be exercised
from time to time, and as often as shall be deemed expedient, by the Trustee or
by the Securityholders.
SECTION 5.07. Direction of Proceedings and Waiver of Defaults
by Majority of Securityholders.
The holders of a majority in aggregate principal amount of the
Debt Securities affected (voting as one class) at the time outstanding 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 such Debt Securities; provided,
however, that (subject to the provisions of Section 6.01) the Trustee shall have
the right to decline to follow any such direction if the Trustee shall determine
that the action so directed would be unjustly prejudicial to the holders not
taking part in such direction or if the Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully be taken
or if a Responsible Officer of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability. Prior
to any declaration accelerating the maturity of the Debt Securities, the holders
of a majority in aggregate principal amount of the Debt Securities at the time
outstanding may on behalf of the holders of all of the Debt Securities waive (or
modify any previously granted waiver of) any past default or Event of Default
and its consequences, except a default (a) in the payment of principal of,
premium, if any, or interest on any of the Debt Securities, (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Debt Security affected, or (c) in respect of the
covenants contained in Section 3.09; provided, however, that if the Debt
Securities are held by the Trust or a trustee of such trust, such waiver or
modification to such waiver shall not be effective until the holders of a
majority in liquidation preference of Trust Securities of the Trust shall have
consented to such waiver or modification to such waiver; provided, further, that
if the consent of the holder of each outstanding Debt Security is required, such
waiver shall not be effective until each holder of the Trust Securities of the
Trust shall have consented to such waiver. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of this Indenture
and the Company, the Trustee and the holders of the Debt Securities shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon. Whenever any default or Event of Default
hereunder shall have been waived as permitted by this Section 5.07, said default
or Event of Default shall for all purposes of the Debt Securities and this
Indenture be deemed to have been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after a Responsible Officer
of the Trustee shall have received notice or obtained actual knowledge of the
occurrence of a default with respect to the Debt Securities, mail to all
Securityholders, as the names and addresses of such holders appear upon the Debt
Security Register, notice of all defaults with respect to the Debt Securities
known to the Trustee, unless such defaults shall have been cured before the
giving of such notice (the term "defaults" for the purpose of this Section 5.08
being hereby defined to be the events specified in subsections (a), (b), (c),
(d) and (e) of Section 5.01, not including periods of grace, if any, provided
for therein); provided, that, except in the case of default in the payment of
the principal of, premium, if any, or interest on any of the Debt Securities,
the Trustee shall be protected in withholding such notice if and so long as a
Responsible Officer of the Trustee in good faith determines that the withholding
of such notice is in the interests of the Securityholders.
SECTION 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any
Debt 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 and expenses, against any party litigant in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party litigant;
but the provisions of this Section 5.09 shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in principal amount of
the Debt Securities outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of (or premium, if any) or
interest on any Debt Security against the Company on or after the same shall
have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of Debt Securities issued
hereunder, the Trustee, prior to the occurrence of an Event of Default with
respect to the Debt Securities and after the curing or waiving of all Events of
Default which may have occurred, with respect to the Debt Securities, undertakes
to perform such duties and only such duties as are specifically set forth in
this Indenture. In case an Event of Default with respect to the Debt Securities
has occurred (which has not been cured or waived) the Trustee shall exercise
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
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:
(a)......prior to the occurrence of an Event of Default with
respect to Debt Securities and after the curing or waiving of all Events of
Default which may have occurred
(1) the duties and obligations of the Trustee with
respect to Debt Securities shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations with respect
to the Debt Securities as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into this
Indenture against the Trustee, and
(2) in the absence of bad faith on the part of the
Trustee, the 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 Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision 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)......the Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer or Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c)......the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, 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.
None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise incur personal
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers.
SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a)......the Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
note, debenture 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, direction, order or demand of the
Company mentioned herein shall be sufficiently evidenced by an Officers'
Certificate (unless other evidence in respect thereof be herein specifically
prescribed); and any Board Resolution may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c)......the Trustee may consult with counsel of its selection
and any advice or 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 accordance with such advice or Opinion of
Counsel;
(d)......the Trustee shall be under no obligation to exercise
any of the rights or powers vested in it by this Indenture at the request, order
or direction of any of the Securityholders, pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby;
(e)......the Trustee shall not be liable for any action taken
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; nothing
contained herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default with respect to the Debt Securities (that has
not been cured or waived) to exercise with respect to Debt Securities such of
the rights and powers vested in it by this Indenture, and to use the same degree
of care and skill in their exercise, as a prudent man would exercise or use
under the circumstances in the conduct of his own affairs;
(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, consent, order,
approval, bond, debenture, coupon or other paper or document, unless requested
in writing to do so by the holders of not less than a majority in principal
amount of the outstanding Debt Securities affected thereby; provided, however,
that if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Indenture, the
Trustee may require reasonable indemnity against such expense or liability as a
condition to so proceeding;
(g)......the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents (including any Authenticating Agent) or attorneys, and the 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; and
(h)......the Trustee shall not be charged with knowledge of
any Default or Event of Default with respect to the Debt Securities unless
either (1) a Responsible Officer shall have actual knowledge of such Default or
Event of Default or (2) written notice of such Default or Event of Default shall
have been given to the Trustee by the Company or any other obligor on the Debt
Securities or by any holder of the Debt Securities.
SECTION 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Debt Securities
(except in the certificate of authentication of the Trustee or the
Authenticating Agent) shall be taken as the statements of the Company and the
Trustee and the Authenticating Agent assume no responsibility for the
correctness of the same. The Trustee and the Authenticating Agent make no
representations as to the validity or sufficiency of this Indenture or of the
Debt Securities. The Trustee and the Authenticating Agent shall not be
accountable for the use or application by the Company of any Debt Securities or
the proceeds of any Debt Securities authenticated and delivered by the Trustee
or the Authenticating Agent in conformity with the provisions of this Indenture.
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents,
Transfer Agents or Registrar May Own Debt Securities.
The Trustee or any Authenticating Agent or any paying agent or
any transfer agent or any Debt Security registrar, in its individual or any
other capacity, may become the owner or pledgee of Debt Securities with the same
rights it would have if it were not Trustee, Authenticating Agent, paying agent,
transfer agent or Debt Security registrar.
SECTION 6.05. Moneys to be Held in Trust.
Subject to the provisions of Section 12.04, all moneys
received by the Trustee or any paying agent shall, until used or applied as
herein provided, be held in trust for the purpose for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee and any paying agent shall be under no liability for interest
on any money received by it hereunder except as otherwise agreed in writing with
the Company. So long as no Event of Default shall have occurred and be
continuing, all interest allowed on any such moneys shall be paid from time to
time upon the written order of the Company, signed by the Chairman of the Board
of Directors, the President, the Chief Operating Officer, a Managing Director, a
Vice President, the Treasurer or an Assistant Treasurer of the Company.
SECTION 6.06. Compensation and Expenses of Trustee.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as shall
be agreed to in writing between the Company and the Trustee (which shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust), and the Company will pay or reimburse the Trustee upon its
request for all reasonable expenses, disbursements and advances incurred or made
by the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and disbursements of its
counsel and of all Persons not regularly in its employ) except any such expense,
disbursement or advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify each of the Trustee or any predecessor
Trustee (and its officers, agents, directors and employees) for, and to hold it
harmless against, any and all loss, damage, claim, liability or expense
including taxes (other than taxes based on the income of the Trustee) incurred
without negligence or bad faith on the part of the Trustee and arising out of or
in connection with the acceptance or administration of this trust, including the
costs and expenses of defending itself against any claim of liability in the
premises. The obligations of the Company under this Section 6.06 to compensate
and indemnify the Trustee and to pay or reimburse the Trustee for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Debt Securities upon all property and funds held or collected by the Trustee as
such, except funds held in trust for the benefit of the holders of particular
Debt Securities.
Without prejudice to any other rights available to the Trustee
under applicable law, when the Trustee incurs expenses or renders services in
connection with an Event of Default specified in subsections (c), (d) or (e) of
Section 5.01, the expenses (including the reasonable charges and expenses of its
counsel) and the compensation for the services are intended to constitute
expenses of administration under any applicable federal or state bankruptcy,
insolvency or other similar law.
The provisions of this Section shall survive the resignation
or removal of the Trustee and the defeasance or other termination of this
Indenture.
SECTION 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02,
whenever in the administration of the provisions of this Indenture the Trustee
shall deem it necessary or desirable that a matter be proved or established
prior to taking or omitting any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed) may, in the
absence of negligence or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officers' Certificate delivered to the
Trustee, and such certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any action taken
or omitted by it under the provisions of this Indenture upon the faith thereof.
SECTION 6.08. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
any state or territory thereof or of the District of Columbia or a corporation
or other Person authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000) and subject to supervision or examination by federal, state,
territorial, or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 6.08 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
records of condition so published.
The Company may not, nor may any Person directly or indirectly
controlling, controlled by, or under common control with the Company, serve as
Trustee; provided, that such corporation shall be otherwise eligible and
qualified under this Article.
In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 6.08, the Trustee shall resign
immediately in the manner and with the effect specified in Section 6.09.
If the Trustee has or shall acquire any "conflicting interest"
within the meaning of ss. 310(b) of the Trust Indenture Act, the Trustee shall
either eliminate such interest or resign, to the extent and in the manner
provided by, and subject to this Indenture.
SECTION 6.09. Resignation or Removal of Trustee.
(a)......The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice of such resignation
to the Company and by mailing notice thereof, at the Company's expense, to the
holders of the Debt Securities at their addresses as they shall appear on the
Debt Security Register. Upon receiving such notice of resignation, the Company
shall promptly appoint a successor trustee or trustees by written instrument, in
duplicate, executed by order of its Board of Directors, one copy of which
instrument shall be delivered to the resigning Trustee and one copy to the
successor Trustee. If no successor Trustee shall have been so appointed and have
accepted appointment within 30 days after the mailing of such notice of
resignation to the affected Securityholders, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a successor Trustee,
or any Securityholder who has been a bona fide holder of a Debt Security or Debt
Securities for at least six months may, subject to the provisions of Section
5.09, on behalf of himself and all others similarly situated, petition any such
court for the appointment of a successor Trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe, appoint a
successor Trustee.
(b)......In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the
provisions of Section 6.08 after written request therefor by the
Company or by any Securityholder who has been a bona fide holder of a
Debt Security or Debt Securities for at least six months,
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 6.08 and shall fail to resign
after written request therefor by the Company or by any such
Securityholder, 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, the Company may remove the Trustee and appoint a
successor Trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor Trustee, or, subject to the
provisions of Section 5.09, any Securityholder who has been a bona fide holder
of a Debt Security or Debt Securities for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint successor Trustee.
(c)......Upon prior written notice to the Company and the
Trustee, the holders of a majority in aggregate principal amount of the Debt
Securities at the time outstanding may at any time remove the Trustee and
nominate a successor Trustee, which shall be deemed appointed as successor
Trustee unless within ten Business Days after such nomination the Company
objects thereto, in which case or in the case of a failure by such holders to
nominate a successor Trustee, the Trustee so removed or any Securityholder, upon
the terms and conditions and otherwise as in subsection (a) of this Section 6.09
provided, may petition any court of competent jurisdiction for an appointment of
a successor.
(d)......Any resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to any of the provisions of this
Section 6.09 shall become effective upon acceptance of appointment by the
successor Trustee as provided in Section 6.10.
SECTION 6.10. Acceptance by Successor Trustee.
Any successor Trustee appointed as provided in Section 6.09
shall execute, acknowledge and deliver to the Company and to its predecessor
Trustee an instrument accepting such appointment hereunder, 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, duties and obligations with respect to the
Debt Securities of its predecessor hereunder, with like effect as if originally
named as Trustee herein; but, nevertheless, on the written request of the
Company or of the successor Trustee, the Trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of Section 6.06,
execute and deliver an instrument transferring to such successor Trustee all the
rights and powers of the Trustee so ceasing to act and shall duly assign,
transfer and deliver to such successor Trustee all property and money held by
such retiring Trustee thereunder. Upon request of any such successor Trustee,
the Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor Trustee all such rights
and powers. Any Trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such Trustee to secure any amounts
then due it pursuant to the provisions of Section 6.06.
If a successor Trustee is appointed, the Company, the retiring
Trustee and the successor Trustee shall execute and deliver an indenture
supplemental hereto which 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 Debt Securities as to which the
predecessor Trustee is not retiring shall continue to be vested in the
predecessor Trustee, and 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 Trust 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.
No successor Trustee shall accept appointment as provided in
this Section 6.10 unless at the time of such acceptance such successor Trustee
shall be eligible under the provisions of Section 6.08.
In no event shall a retiring Trustee be liable for the acts or
omissions of any successor Trustee hereunder.
Upon acceptance of appointment by a successor Trustee as
provided in this Section 6.10, the Company shall mail notice of the succession
of such Trustee hereunder to the holders of Debt Securities at their addresses
as they shall appear on the Debt Security Register. If the Company fails to mail
such notice within ten Business Days after the acceptance of appointment by the
successor Trustee, the successor Trustee shall cause such notice to be mailed at
the expense of the Company.
SECTION 6.11. Succession by Merger, etc.
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 without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, that such corporation shall be
otherwise eligible and qualified under this Article.
In case at the time such successor to the Trustee shall
succeed to the trusts created by this Indenture any of the Debt Securities shall
have been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee, and deliver
such Debt Securities so authenticated; and in case at that time any of the Debt
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Debt Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificates shall have the full force which it is anywhere in the Debt
Securities or in this Indenture provided that the certificate of the Trustee
shall have; provided, however, that the right to adopt the certificate of
authentication of any predecessor Trustee or authenticate Debt Securities in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.12. Authenticating Agents.
There may be one or more Authenticating Agents appointed by
the Trustee upon the request of the Company with power to act on its behalf and
subject to its direction in the authentication and delivery of Debt Securities
issued upon exchange or registration of transfer thereof as fully to all intents
and purposes as though any such Authenticating Agent had been expressly
authorized to authenticate and deliver Debt Securities; provided, that the
Trustee shall have no liability to the Company for any acts or omissions of the
Authenticating Agent with respect to the authentication and delivery of Debt
Securities. Any such Authenticating Agent shall at all times be a corporation
organized and doing business under the laws of the United States or of any state
or territory thereof or of the District of Columbia authorized under such laws
to act as Authenticating Agent, having a combined capital and surplus of at
least $5,000,000 and being subject to supervision or examination by federal,
state, territorial or District of Columbia authority. If such corporation
publishes reports of condition at least annually pursuant to law or the
requirements of such authority, then for the purposes of this Section 6.12 the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. If at any time an Authenticating Agent shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be
merged or converted or with which it may be consolidated, or any corporation
resulting from any merger, consolidation or conversion to which any
Authenticating Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of any Authenticating Agent,
shall be the successor of such Authenticating Agent hereunder, if such successor
corporation is otherwise eligible under this Section 6.12 without the execution
or filing of any paper or any further act on the part of the parties hereto or
such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company. The Trustee may
at any time terminate the agency of any Authenticating Agent with respect to the
Debt Securities by giving written notice of termination to such Authenticating
Agent and to the Company. Upon receiving such a notice of resignation or upon
such a termination, or in case at any time any Authenticating Agent shall cease
to be eligible under this Section 6.12, the Trustee may, and upon the request of
the Company shall, promptly appoint a successor Authenticating Agent eligible
under this Section 6.12, shall give written notice of such appointment to the
Company and shall mail notice of such appointment to all holders of Debt
Securities as the names and addresses of such holders appear on the Debt
Security Register. Any successor Authenticating Agent upon acceptance of its
appointment hereunder shall become vested with all rights, powers, duties and
responsibilities with respect to the Debt Securities of its predecessor
hereunder, with like effect as if originally named as Authenticating Agent
herein.
The Company agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any Authenticating Agent
shall have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of
a specified percentage in aggregate principal amount of the Debt Securities may
take any action (including the making of any demand or request, the giving of
any notice, consent or waiver or the taking of any other action) the fact that
at the time of taking any such action the holders of such specified percentage
have joined therein may be evidenced (a) by any instrument or any number of
instruments of similar tenor executed by such Securityholders in person or by
agent or proxy appointed in writing, (b) by the record of such holders of Debt
Securities voting in favor thereof at any meeting of such Securityholders duly
called and held in accordance with the provisions of Article VIII, (c) by a
combination of such instrument or instruments and any such record of such a
meeting of such Securityholders or (d) by any other method the Trustee deems
satisfactory.
If the Company shall solicit from the Securityholders any
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, the Company may, at its option, as evidenced
by an Officers' Certificate, fix in advance a record date for such Debt
Securities for the determination of Securityholders entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other
action or revocation of the same, but the Company shall have no obligation to do
so. If such a record date is fixed, such request, demand, authorization,
direction, notice, consent, waiver or other action or revocation of the same may
be given before or after the record date, but only the Securityholders of record
at the close of business on the record date shall be deemed to be
Securityholders for the purposes of determining whether Securityholders of the
requisite proportion of outstanding Debt Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other action or revocation of the same, and for that purpose the
outstanding Debt Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
SECTION 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Sections 6.01, 6.02 and 8.05,
proof of the execution of any instrument by a Securityholder or his agent or
proxy shall be sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The ownership of Debt Securities shall be proved by
the Debt Security Register or by a certificate of the Debt Security registrar.
The Trustee may require such additional proof of any matter referred to in this
Section as it shall deem necessary.
The record of any Securityholders' meeting shall be proved in
the manner provided in Section 8.06.
SECTION 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any
Debt Security, the Company, the Trustee, any Authenticating Agent, any paying
agent, any transfer agent and any Debt Security registrar may deem the Person in
whose name such Debt Security shall be registered upon the Debt Security
Register to be, and may treat him as, the absolute owner of such Debt Security
(whether or not such Debt Security shall be overdue) for the purpose of
receiving payment of or on account of the principal of, premium, if any, and
interest on such Debt Security and for all other purposes; and neither the
Company nor the Trustee nor any Authenticating Agent nor any paying agent nor
any transfer agent nor any Debt Security registrar shall be affected by any
notice to the contrary. All such payments so made to any holder for the time
being or upon his order shall be valid, and, to the extent of the sum or sums so
paid, effectual to satisfy and discharge the liability for moneys payable upon
any such Debt Security.
SECTION 7.04. Debt Securities Owned by Company Deemed Not
Outstanding.
In determining whether the holders of the requisite aggregate
principal amount of Debt Securities have concurred in any direction, consent or
waiver under this Indenture, Debt Securities which are owned by the Company or
any other obligor on the Debt Securities or by any Person directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Company or any other obligor on the Debt Securities shall be disregarded and
deemed not to be outstanding for the purpose of any such determination;
provided, that for the purposes of determining whether the Trustee shall be
protected in relying on any such direction, consent or waiver, only Debt
Securities which a Responsible Officer of the Trustee actually knows are so
owned shall be so disregarded. Debt Securities so owned which have been pledged
in good faith may be regarded as outstanding for the purposes of this Section
7.04 if the pledgee shall establish to the satisfaction of the Trustee the
pledgee's right to vote such Debt Securities and that the pledgee is not the
Company or any such other obligor or Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
SECTION 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 7.01, of the taking of any action by the holders
of the percentage in aggregate principal amount of the Debt Securities specified
in this Indenture in connection with such action, any holder (in cases where no
record date has been set pursuant to Section 7.01) or any holder as of an
applicable record date (in cases where a record date has been set pursuant to
Section 7.01) of a Debt Security (or any Debt Security issued in whole or in
part in exchange or substitution therefor) the serial number of which is shown
by the evidence to be included in the Debt Securities the holders of which have
consented to such action may, by filing written notice with the Trustee at the
Principal Office of the Trustee and upon proof of holding as provided in Section
7.02, revoke such action so far as concerns such Debt Security (or so far as
concerns the principal amount represented by any exchanged or substituted Debt
Security). Except as aforesaid any such action taken by the holder of any Debt
Security shall be conclusive and binding upon such holder and upon all future
holders and owners of such Debt Security, and of any Debt Security issued in
exchange or substitution therefor or on registration of transfer thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Debt Security or any Debt Security issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.
A meeting of Securityholders may be called at any time and
from time to time pursuant to the provisions of this Article VIII for any of the
following purposes:
(a)......to give any notice to the Company or to the Trustee,
or to give any directions to the Trustee, or to consent to the waiving of any
default hereunder and its consequences, or to take any other action authorized
to be taken by Securityholders pursuant to any of the provisions of Article V;
(b)......to remove the Trustee and nominate a successor
trustee pursuant to the provisions of Article VI;
(c)......to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the provisions of Section 9.02; or
(d)......to take any other action authorized to be taken by or
on behalf of the holders of any specified aggregate principal amount of such
Debt Securities under any other provision of this Indenture or under applicable
law.
SECTION 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders
to take any action specified in Section 8.01, to be held at such time and at
such place in Delaware, as the Trustee shall determine. Notice of every meeting
of the Securityholders, setting forth the time and the place of such meeting and
in general terms the action proposed to be taken at such meeting, shall be
mailed to holders of Debt Securities affected at their addresses as they shall
appear on the Debt Securities Register. Such notice shall be mailed not less
than 20 nor more than 180 days prior to the date fixed for the meeting.
SECTION 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a Board
Resolution, or the holders of at least 10% in aggregate principal amount of the
Debt Securities, as the case may be, then outstanding, shall have requested the
Trustee to call a meeting of Securityholders, by written request setting forth
in reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have mailed the notice of such meeting within 20 days after
receipt of such request, then the Company or such Securityholders may determine
the time and the place in said Borough of Manhattan for such meeting and may
call such meeting to take any action authorized in Section 8.01, by mailing
notice thereof as provided in Section 8.02.
SECTION 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a
Person shall (a) be a holder of one or more Debt Securities with respect to
which the meeting is being held or (b) a Person appointed by an instrument in
writing as proxy by a holder of one or more such Debt Securities. The only
Persons who shall be entitled to be present or to speak at any meeting of
Securityholders shall be the Persons entitled to vote at such meeting and their
counsel and any representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 8.05. Regulations
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Securityholders, in regard to proof of the holding of Debt Securities
and of the appointment of proxies, and in regard to the appointment and duties
of inspectors of votes, the submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 7.04, at any meeting each
holder of Debt Securities with respect to which such meeting is being held or
proxy therefor shall be entitled to one vote for each $1,000 principal amount of
Debt Securities held or represented by him; provided, however, that no vote
shall be cast or counted at any meeting in respect of any Debt Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Debt Securities held by him or instruments in writing as aforesaid
duly designating him as the Person to vote on behalf of other Securityholders.
Any meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
whether or not constituting a quorum, and the meeting may be held as so
adjourned without further notice.
SECTION 8.06. Voting
The vote upon any resolution submitted to any meeting of
holders of Debt Securities with respect to which such meeting is being held
shall be by written ballots on which shall be subscribed the signatures of such
holders or of their representatives by proxy and the serial number or numbers of
the Debt Securities held or represented by them. The permanent chairman of the
meeting shall appoint two inspectors of votes who shall count all votes cast at
the meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in triplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Securityholders shall be prepared by the secretary of the meeting and
there shall be attached to said record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more Persons
having knowledge of the facts setting forth a copy of the notice of the meeting
and showing that said notice was mailed as provided in Section 8.02. The record
shall show the serial numbers of the Debt Securities voting in favor of or
against any resolution. The record shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one of the
duplicates shall be delivered to the Company and the other to the Trustee to be
preserved by the Trustee, the latter to have attached thereto the ballots voted
at the meeting.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 8.07. Quorum; Actions
The Persons entitled to vote a majority in principal amount of
the Debt Securities shall constitute a quorum for a meeting of Securityholders;
provided, however, that if any action is to be taken at such meeting with
respect to a consent, waiver, request, demand, notice, authorization, direction
or other action which may be given by the holders of not less than a specified
percentage in principal amount of the Debt Securities, the Persons holding or
representing such specified percentage in principal amount of the Debt
Securities will constitute a quorum. In the absence of a quorum within 30
minutes of the time appointed for any such meeting, the meeting shall, if
convened at the request of Securityholders, be dissolved. In any other case the
meeting may be adjourned for a period of not less than 10 days as determined by
the permanent chairman of the meeting prior to the adjournment of such meeting.
In the absence of a quorum at any such adjourned meeting, such adjourned meeting
may be further adjourned for a period of not less than 10 days as determined by
the permanent chairman of the meeting prior to the adjournment of such adjourned
meeting. Notice of the reconvening of any adjourned meeting shall be given as
provided in Section 8.02, except that such notice need be given only once not
less than five days prior to the date on which the meeting is scheduled to be
reconvened. Notice of the reconvening of an adjourned meeting shall state
expressly the percentage, as provided above, of the principal amount of the Debt
Securities which shall constitute a quorum.
Except as limited by the proviso in the first paragraph of
Section 9.02, any resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be adopted by the
affirmative vote of the holders of a majority in principal amount of the Debt
Securities; provided, however, that, except as limited by the proviso in the
first paragraph of Section 9.02, any resolution with respect to any consent,
waiver, request, demand, notice, authorization, direction or other action that
this Indenture expressly provides may be given by the holders of not less than a
specified percentage in principal amount of the Debt Securities may be adopted
at a meeting or an adjourned meeting duly reconvened and at which a quorum is
present as aforesaid only by the affirmative vote of the holders of a not less
than such specified percentage in principal amount of the Debt Securities.
Any resolution passed or decision taken at any meeting of
holders of Debt Securities duly held in accordance with this Section shall be
binding on all the Securityholders, whether or not present or represented at the
meeting.
ARTICLE IX
SUPPLEMENTAL INDENTURES
SECTION 9.01. Supplemental Indentures without Consent of
Securityholders.
The Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto, without the consent of the Securityholders, for
one or more of the following purposes:
(a)......to evidence the succession of another corporation to
the Company, or successive successions, and the assumption by the successor
corporation of the covenants, agreements and obligations of the Company,
pursuant to Article XI hereof;
(b)......to add to the covenants of the Company such further
covenants, restrictions or conditions for the protection of the holders of Debt
Securities as the Board of Directors shall consider to be for the protection of
the holders of such Debt Securities, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional covenants,
restrictions or conditions a default or an Event of Default permitting the
enforcement of all or any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such additional
covenant, restriction or condition such supplemental indenture may provide for a
particular period of grace after default (which period may be shorter or longer
than that allowed in the case of other defaults) or may provide for an immediate
enforcement upon such default or may limit the remedies available to the Trustee
upon such default;
(c)......to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or in any
supplemental indenture, or to make such other provisions in regard to matters or
questions arising under this Indenture; provided, that any such action shall not
adversely affect the interests of the holders of the Debt Securities;
(d)......to add to, delete from, or revise the terms of Debt
Securities, including, without limitation, any terms relating to the issuance,
exchange, registration or transfer of Debt Securities, including to provide for
transfer procedures and restrictions substantially similar to those applicable
to the Capital Securities as required by Section 2.05 (for purposes of assuring
that no registration of Debt Securities is required under the Securities Act of
1933, as amended); provided that any such action shall not adversely affect the
interests of the holders of the Debt Securities then outstanding (it being
understood, for purposes of this proviso, that transfer restrictions on Debt
Securities substantially similar to those that were applicable to Capital
Securities shall not be deemed to adversely affect the holders of the Debt
Securities);
(e)......to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to the Debt Securities
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
6.10;
(f)......to make any change (other than as elsewhere provided
in this paragraph) that does not adversely affect the rights of any
Securityholder in any material respect; or
(g)......to provide for the issuance of and establish the form
and terms and conditions of the Debt Securities, to establish the form of any
certifications required to be furnished pursuant to the terms of this Indenture
or the Debt Securities, or to add to the rights of the holders of Debt
Securities.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of
this Section 9.01 may be executed by the Company and the Trustee without the
consent of the holders of any of the Debt Securities at the time outstanding,
notwithstanding any of the provisions of Section 9.02.
SECTION 9.02. Supplemental Indentures with Consent of
Securityholders.
With the consent (evidenced as provided in Section 7.01) of
the holders of not less than a majority in aggregate principal amount of the
Debt Securities at the time outstanding affected by such supplemental indenture
(voting as a class), the Company, when authorized by a Board Resolution, and the
Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act, then in effect, applicable to indentures qualified
thereunder) for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Indenture or of any
supplemental indenture or of modifying in any manner the rights of the holders
of the Debt Securities; provided, however, that no such supplemental indenture
shall without the consent of the holders of each Debt Security then outstanding
and affected thereby (i) extend the fixed maturity of any Debt Security, or
reduce the principal amount thereof or any premium thereon, or reduce the rate
or extend the time of payment of interest thereon, or reduce any amount payable
on redemption thereof or make the principal thereof or any interest or premium
thereon payable in any coin or currency other than that provided in the Debt
Securities, or impair or affect the right of any Securityholder to institute
suit for payment thereof or impair the right of repayment, if any, at the option
of the holder, or (ii) reduce the aforesaid percentage of Debt Securities the
holders of which are required to consent to any such supplemental indenture; and
provided, further, that if the Debt Securities are held by the Trust or a
trustee of such trust, such supplemental indenture shall not be effective until
the holders of a majority in liquidation preference of Trust Securities shall
have consented to such supplemental indenture; provided further, that if the
consent of the Securityholder of each outstanding Debt Security is required,
such supplemental indenture shall not be effective until each holder of the
Trust Securities shall have consented to such supplemental indenture.
Upon the request of the Company accompanied by a Board
Resolution authorizing the execution of any such supplemental indenture, and
upon the filing with the Trustee of evidence of the consent of Securityholders
as aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of this Section, the
Trustee shall transmit by mail, first class postage prepaid, a notice, prepared
by the Company, setting forth in general terms the substance of such
supplemental indenture, to the Securityholders thereby as their names and
addresses appear upon the Debt Security Register. Any failure of the Trustee to
mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture.
It shall not be necessary for the consent of the
Securityholders under this Section 9.02 to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient if such consent
shall approve the substance thereof.
SECTION 9.03. Effect of Supplemental Indentures
Upon the execution of any supplemental indenture pursuant to
the provisions of this Article IX, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitations of rights, obligations, duties and immunities under this Indenture
of the Trustee, the Company and the holders of Debt Securities shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.
SECTION 9.04. Notation on Debt Securities
Debt Securities authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article IX may bear a notation as to any matter provided for in such
supplemental indenture. If the Company or the Trustee shall so determine, new
Debt Securities so modified as to conform, in the opinion of the Board of
Directors of the Company, to any modification of this Indenture contained in any
such supplemental indenture may be prepared and executed by the Company,
authenticated by the Trustee or the Authenticating Agent and delivered in
exchange for the Debt Securities then outstanding.
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished to Trustee.
The Trustee, subject to the provisions of Sections 6.01 and
6.02, shall, in addition to the documents required by Section 14.06, receive an
Officers' Certificate and an Opinion of Counsel as conclusive evidence that any
supplemental indenture executed pursuant hereto complies with the requirements
of this Article IX. The Trustee shall receive an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant to this
Article IX is authorized or permitted by, and conforms to, the terms of this
Article IX and that it is proper for the Trustee under the provisions of this
Article IX to join in the execution thereof.
ARTICLE X
REDEMPTION OF SECURITIES
SECTION 10.01. Optional Redemption.
At any time the Company shall have the right, subject to the
receipt by the Company of prior approval from the Federal Reserve, if then
required under applicable capital guidelines or policies of the Federal Reserve,
to redeem the Debt Securities, in whole or in part, on any March 8 or September
8 on or after March 8, 2010 (the "Redemption Date"), at the Redemption Price.
SECTION 10.02. Special Event Redemption
If a Special Event shall occur and be continuing, the Company
shall have the right, subject to the receipt by the Company of prior approval
from the Federal Reserve if then required under applicable capital guidelines or
policies of the Federal Reserve, to redeem the Debt Securities, in whole but not
in part, at any time within 90 days following the occurrence of such Special
Event (the "Special Redemption Date"), at the Special Redemption Price.
SECTION 10.03. Notice of Redemption; Selection of Debt
Securities.
In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Debt Securities, it shall
fix a date for redemption and shall mail a notice of such redemption at least 30
and not more than 60 days prior to the date fixed for redemption to the holders
of Debt Securities so to be redeemed as a whole or in part at their last
addresses as the same appear on the Debt Security Register. Such mailing shall
be by first class mail. The notice if mailed in the manner herein provided shall
be conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Debt Security designated for
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Debt Security.
Each such notice of redemption shall specify the date fixed
for redemption, the redemption price at which Debt Securities are to be
redeemed, the place or places of payment, that payment will be made upon
presentation and surrender of such Debt Securities, that interest accrued to the
date fixed for redemption will be paid as specified in said notice, and that on
and after said date interest thereon or on the portions thereof to be redeemed
will cease to accrue. If less than all the Debt Securities are to be redeemed
the notice of redemption shall specify the numbers of the Debt Securities to be
redeemed. In case the Debt Securities are to be redeemed in part only, the
notice of redemption shall state the portion of the principal amount thereof to
be redeemed and shall state that on and after the date fixed for redemption,
upon surrender of such Debt Security, a new Debt Security or Debt Securities in
principal amount equal to the unredeemed portion thereof will be issued.
Prior to 10:00 a.m. on the Redemption Date specified or
Special Redemption Date in the notice of redemption given as provided in this
Section, the Company will deposit with the Trustee or with one or more paying
agents an amount of money sufficient to redeem on the redemption date all the
Debt Securities so called for redemption at the appropriate redemption price,
together with accrued interest to the date fixed for redemption.
The Company will give the Trustee notice not less than 45 nor
more than 60 days prior to the redemption date as to the aggregate principal
amount of Debt Securities to be redeemed and the Trustee shall select, in such
manner as in its sole discretion it shall deem appropriate and fair, the Debt
Securities or portions thereof (in integral multiples of $1,000) to be redeemed.
In the case of a redemption pursuant to Section 10.02 above, the Trustee shall,
promptly upon receipt of the Treasury Rate from the Quotation Agent, provide the
Treasury Rate to Chase Bank of Texas, National Association, on behalf of the
holders of the Capital Securities.
SECTION 10.04. Payment of Debt Securities Called for
Redemption.
If notice of redemption has been given as provided in Section
10.03, the Debt Securities or portions of Debt Securities with respect to which
such notice has been given shall become due and payable on the Redemption Date
or the Special Redemption Date, as the case may be, and at the place or places
stated in such notice at the applicable redemption price, together with interest
accrued to the date fixed for redemption, and on and after said Redemption Date
or Special Redemption Date (unless the Company shall default in the payment of
such Debt Securities at the redemption price, together with interest accrued to
said date) interest on the Debt Securities or portions of Debt Securities so
called for redemption shall cease to accrue. On presentation and surrender of
such Debt Securities at a place of payment specified in said notice, such Debt
Securities or the specified portions thereof shall be paid and redeemed by the
Company at the applicable redemption price, together with interest accrued
thereon to the Redemption Date or the Special Redemption Date, as the case may
be.
Upon presentation of any Debt Security redeemed in part only,
the Company shall execute and the Trustee shall authenticate and make available
for delivery to the holder thereof, at the expense of the Company, a new Debt
Security or Debt Securities of authorized denominations in principal amount
equal to the unredeemed portion of the Debt Security so presented.
ARTICLE XI
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 11.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in the Debt Securities
shall prevent any consolidation or merger of the Company with or into any other
corporation or corporations (whether or not affiliated with the Company) or
successive consolidations or mergers in which the Company or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance,
transfer or other disposition of the property of the Company or its successor or
successors as an entirety, or substantially as an entirety, to any other
corporation (whether or not affiliated with the Company, or its successor or
successors) authorized to acquire and operate the same; provided, however, that
the Company hereby covenants and agrees that, upon any such consolidation,
merger (where the Company is not the surviving corporation), sale, conveyance,
transfer or other disposition, the due and punctual payment of the principal of
(and premium, if any) and interest on all of the Debt Securities in accordance
with their terms, according to their tenor, and the due and punctual performance
and observance of all the covenants and conditions of this Indenture to be kept
or performed by the Company, shall be expressly assumed by supplemental
indenture satisfactory in form to the Trustee executed and delivered to the
Trustee by the entity formed by such consolidation, or into which the Company
shall have been merged, or by the entity which shall have acquired such
property.
SECTION 11.02. Successor Entity to be Substituted
In case of any such consolidation, merger, sale, conveyance,
transfer or other disposition and upon the assumption by the successor entity,
by supplemental indenture, executed and delivered to the Trustee and
satisfactory in form to the Trustee, of the due and punctual payment of the
principal of and premium, if any, and interest on all of the Debt Securities and
the due and punctual performance and observance of all of the covenants and
conditions of this Indenture to be performed or observed by the Company, such
successor entity shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein as the Company, and thereupon the
predecessor entity shall be relieved of any further liability or obligation
hereunder or upon the Debt Securities. Such successor entity thereupon may cause
to be signed, and may issue either in its own name or in the name of the
Company, any or all of the Debt Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the Trustee or the
Authenticating Agent; and, upon the order of such successor entity instead of
the Company and subject to all the terms, conditions and limitations in this
Indenture prescribed, the Trustee or the Authenticating Agent shall authenticate
and deliver any Debt Securities which previously shall have been signed and
delivered by the officers of the Company, to the Trustee or the Authenticating
Agent for authentication, and any Debt Securities which such successor entity
thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Debt Securities so issued shall
in all respects have the same legal rank and benefit under this Indenture as the
Debt Securities theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Debt Securities had been issued at the date
of the execution hereof.
SECTION 11.03. Opinion of Counsel to be Given to Trustee
The Trustee, subject to the provisions of Sections 6.01 and
6.02, shall receive, in addition to the Opinion of Counsel required by Section
9.05, an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or other disposition, and any assumption,
permitted or required by the terms of this Article XI complies with the
provisions of this Article XI.
ARTICLE XII
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 12.01. Discharge of Indenture
When (a) the Company shall deliver to the Trustee for
cancellation all Debt Securities theretofore authenticated (other than any Debt
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.06) and not theretofore canceled,
or (b) all the Debt Securities not theretofore canceled or delivered to the
Trustee for cancellation shall have become due and payable, or are by their
terms to become due and payable within one year or are to be called for
redemption within one year under arrangements satisfactory to the Trustee for
the giving of notice of redemption, and the Company shall deposit with the
Trustee, in trust, funds, which shall be immediately due and payable, sufficient
to pay at maturity or upon redemption all of the Debt Securities (other than any
Debt Securities which shall have been destroyed, lost or stolen and which shall
have been replaced or paid as provided in Section 2.06) not theretofore canceled
or delivered to the Trustee for cancellation, including principal and premium,
if any, and interest due or to become due to such date of maturity or redemption
date, as the case may be, but excluding, however, the amount of any moneys for
the payment of principal of, and premium, if any, or interest on the Debt
Securities (1) theretofore repaid to the Company in accordance with the
provisions of Section 12.04, or (2) paid to any state or to the District of
Columbia pursuant to its unclaimed property or similar laws, and if in the case
of either clause (a) or clause (b) the Company shall also pay or cause to be
paid all other sums payable hereunder by the Company, then this Indenture shall
cease to be of further effect except for the provisions of Sections 2.05, 2.06,
2.08, 3.01, 3.02, 3.04, 6.06, 6.09 and 12.04 hereof shall survive until such
Debt Securities shall mature and be paid. Thereafter, Sections 6.09 and 12.04
shall survive, and the Trustee, on demand of the Company accompanied by 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, and at the cost and expense
of the Company, shall execute proper instruments acknowledging satisfaction of
and discharging this Indenture, the Company, however, hereby agreeing to
reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred by the Trustee in connection with this Indenture or the Debt
Securities.
SECTION 12.02. Deposited Moneys to be Held in Trust by Trustee
Subject to the provisions of Section 12.04, all moneys
deposited with the Trustee pursuant to Section 12.01 shall be held in trust and
applied by it to the payment, either directly or through any paying agent
(including the Company if acting as its own paying agent), to the holders of the
particular Debt Securities for the payment of which such moneys have been
deposited with the Trustee, of all sums due and to become due thereon for
principal, and premium, if any, and interest.
SECTION 12.03. Paying Agent to Repay Moneys Held
Upon the satisfaction and discharge of this Indenture all
moneys then held by any paying agent of the Debt Securities (other than the
Trustee) shall, upon demand of the Company, be repaid to it or paid to the
Trustee, and thereupon such paying agent shall be released from all further
liability with respect to such moneys.
SECTION 12.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of, and premium, if any, or interest on Debt
Securities and not applied but remaining unclaimed by the holders of Debt
Securities for two years after the date upon which the principal of, and
premium, if any, or interest on such Debt Securities, as the case may be, shall
have become due and payable, shall be repaid to the Company by the Trustee or
such paying agent on written demand; and the holder of any of the Debt
Securities shall thereafter look only to the Company for any payment which such
holder may be entitled to collect and all liability of the Trustee or such
paying agent with respect to such moneys shall thereupon cease.
ARTICLE XIII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 13.01. Indenture and Debt Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of or premium, if
any, or interest on any Debt Security, or for any claim based thereon or
otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company in this Indenture or in any supplemental
indenture, or in any such Debt Security, or because of the creation of any
indebtedness represented thereby, shall be had against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company or of any successor corporation of the Company, either directly or
through the Company or any successor corporation of the Company, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issue of the Debt
Securities.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
SECTION 14.01. Successors.
All the covenants, stipulations, promises and agreements in
this Indenture contained by the Company shall bind its successors and assigns
whether so expressed or not.
SECTION 14.02. Official Acts by Successor Entity
Any act or proceeding by any provision of this Indenture
authorized or required to be done or performed by any board, committee or
officer of the Company shall and may be done and performed with like force and
effect by the like board, committee, officer or other authorized Person of any
entity that shall at the time be the lawful successor of the Company.
SECTION 14.03. Surrender of Company Powers
The Company by instrument in writing executed by authority of
2/3 (two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company and thereupon such power so
surrendered shall terminate both as to the Company, and as to any permitted
successor.
SECTION 14.04. Addresses for Notices, etc
Any notice or demand which by any provision of this Indenture
is required or permitted to be given or served by the Trustee or by the
Securityholders on the Company may be given or served in writing by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company, with the
Trustee for the purpose) to the Company at 1275 Pennsylvania Avenue, NW,
Washington, DC 20004, Attention: Joseph S. Bracewell, President and Chief
Executive Officer. Any notice, direction, request or demand by any
Securityholder or the Company to or upon the Trustee shall be deemed to have
been sufficiently given or made, for all purposes, if given or made in writing
at the office of the Trustee, addressed to the Trustee, 101 Barclay Street,
Floor 21W, New York, NY 10286 Attention: Corporate Trust Administration.
SECTION 14.05. Governing Law.
This Indenture and each Debt Security shall be deemed to be a
contract made under the law of the State of New York, and for all purposes shall
be governed by and construed in accordance with the law of said State, without
regard to conflict of laws principles thereof.
SECTION 14.06. Evidence of Compliance with Conditions Precedent
Upon any application or demand by the Company to the Trustee
to take any action under any of the provisions of this Indenture, the Company
shall furnish to the Trustee an Officers' Certificate stating that in the
opinion of the signers all conditions 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 have been complied with.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition; (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
SECTION 14.07. Non-Business Days
In any case where the date of payment of interest on or
principal of the Debt Securities will be a Saturday, Sunday or a day on which
banking institutions in New York City (in the State of New York) are permitted
or required by any applicable law to close, the payment of such interest on or
principal of the Debt Securities need not be made on such date but may be made
on the next succeeding day not a Saturday, Sunday or a day on which banking
institutions in such cities are permitted or required by any applicable law to
close, with the same force and effect as if made on the date of payment and no
interest shall accrue for the period from and after such date.
SECTION 14.08. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the
articles and sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 14.09. Execution in Counterparts.
This Indenture may be executed in any number of counterparts,
each of which shall be an original, but such counterparts shall together
constitute but one and the same instrument.
SECTION 14.10. Separability
In case any one or more of the provisions contained in this
Indenture or in the Debt Securities shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this Indenture or of
such Debt Securities, but this Indenture and such Debt Securities shall be
construed as if such invalid or illegal or unenforceable provision had never
been contained herein or therein.
SECTION 14.11. Assignment
The Company will have the right at all times to assign any of
its rights or obligations under this Indenture to a direct or indirect wholly
owned Subsidiary of the Company, provided that, in the event of any such
assignment, the Company will remain liable for all such obligations. Subject to
the foregoing, this Indenture is binding upon and inures to the benefit of the
parties hereto and their respective successors and assigns. This Indenture may
not otherwise be assigned by the parties thereto.
SECTION 14.12. Acknowledgment of Rights
The Company acknowledges that, with respect to any Debt
Securities held by the Trust or the Institutional Trustee of the Trust, if the
Institutional Trustee of the Trust fails to enforce its rights under this
Indenture as the holder of Debt Securities held as the assets of the Trust after
the holders of a majority in liquidation amount of the Capital Securities of the
Trust have so directed such Institutional Trustee, a holder of record of such
Capital Securities may to the fullest extent permitted by law institute legal
proceedings directly against the Company to enforce such Institutional Trustee's
rights under this Indenture without first instituting any legal proceedings
against such Institutional Trustee or any other Person. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Company to pay interest (or premium, if
any) or principal on the Debt Securities on the date such interest (or premium,
if any) or principal is otherwise payable (or in the case of redemption, on the
redemption date), the Company acknowledges that a holder of record of Capital
Securities of the Trust may directly institute a proceeding against the Company
for enforcement of payment to such holder directly of the principal of (or
premium, if any) or interest on the of Debt Securities having an aggregate
principal amount equal to the aggregate liquidation amount of the Capital
Securities of such holder on or after the respective due date specified in the
Debt Securities.
ARTICLE XV
SUBORDINATION OF DEBT SECURITIES
SECTION 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Debt
Securities issued hereunder and under any supplemental indenture or by any Board
Resolution (the "Additional Provisions") by such Securityholder's acceptance
thereof likewise covenants and agrees, that all Debt Securities shall be issued
subject to the provisions of this Article XV; and each holder of a Debt
Security, whether upon original issue or upon transfer or assignment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of, and premium,
if any, and interest on all Debt Securities issued hereunder and under any
Additional Provisions shall, to the extent and in the manner hereinafter set
forth, be subordinated and junior in right of payment to the prior payment in
full of all Senior Indebtedness of the Company, whether outstanding at the date
of this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence
of any default or Event of Default hereunder.
SECTION 15.02. Default on Senior Indebtedness
In the event and during the continuation of any default by the
Company in the payment of principal, premium, interest or any other payment due
on any Senior Indebtedness of the Company following any grace period, or in the
event that the maturity of any Senior Indebtedness of the Company has been
accelerated because of a default, then, in either case, no payment shall be made
by the Company with respect to the principal (including redemption and sinking
fund payments) of, or premium, if any, or interest on the Debt Securities.
In the event that, notwithstanding the foregoing, any payment
shall be received by the Trustee when such payment is prohibited by the
preceding paragraph of this Section 15.02, such payment shall, subject to
Section 15.06, be held in trust for the benefit of, and shall be paid over or
delivered to, the holders of Senior Indebtedness or their respective
representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Senior Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior
Indebtedness (or their representative or representatives or a trustee) notify
the Trustee in writing within 90 days of such payment of the amounts then due
and owing on the Senior Indebtedness and only the amounts specified in such
notice to the Trustee shall be paid to the holders of Senior Indebtedness.
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of
the Company of any kind or character, whether in cash, property or securities,
to creditors upon any dissolution or winding-up or liquidation or reorganization
of the Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due upon all Senior Indebtedness
of the Company shall first be paid in full, or payment thereof provided for in
money in accordance with its terms, before any payment is made by the Company,
on account of the principal (and premium, if any) or interest on the Debt
Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company, or by any receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, or by the Securityholders
or by the Trustee under this Indenture if received by them or it, directly to
the holders of Senior Indebtedness of the Company (pro rata to such holders on
the basis of the respective amounts of Senior Indebtedness held by such holders,
as calculated by the Company) or their representative or representatives, or to
the trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior Indebtedness in
full, in money or money's worth, after giving effect to any concurrent payment
or distribution to or for the holders of such Senior Indebtedness, before any
payment or distribution is made to the Securityholders or to the Trustee.
In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior Indebtedness of the Company is paid in full, or
provision is made for such payment in money in accordance with its terms, such
payment or distribution shall be held in trust for the benefit of and shall be
paid over or delivered to the holders of such Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under any
indenture pursuant to which any instruments evidencing such Senior Indebtedness
may have been issued, as their respective interests may appear, as calculated by
the Company, for application to the payment of all Senior Indebtedness of the
Company, remaining unpaid to the extent necessary to pay such Senior
Indebtedness in full in money in accordance with its terms, after giving effect
to any concurrent payment or distribution to or for the benefit of the holders
of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article XV with respect
to the Debt Securities to the payment of all Senior Indebtedness of the Company,
that may at the time be outstanding, provided that (a) such Senior Indebtedness
is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such Senior
Indebtedness are not, without the consent of such holders, altered by such
reorganization or readjustment. The consolidation of the Company with, or the
merger of the Company into, another corporation or the liquidation or
dissolution of the Company following the conveyance or transfer of its property
as an entirety, or substantially as an entirety, to another corporation upon the
terms and conditions provided for in Article IX of this Indenture shall not be
deemed a dissolution, winding-up, liquidation or reorganization for the purposes
of this Section 15.03 if such other corporation shall, as a part of such
consolidation, merger, conveyance or transfer, comply with the conditions stated
in Article IX of this Indenture. Nothing in Section 15.02 or in this Section
15.03 shall apply to claims of, or payments to, the Trustee under or pursuant to
Section 6.06 of this Indenture.
SECTION 15.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness of
the Company, the Securityholders shall be subrogated to the rights of the
holders of such Senior Indebtedness to receive payments or distributions of
cash, property or securities of the Company, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Debt Securities shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior
Indebtedness of any cash, property or securities to which the Securityholders or
the Trustee would be entitled except for the provisions of this Article XV, and
no payment over pursuant to the provisions of this Article XV to or for the
benefit of the holders of such Senior Indebtedness by Securityholders or the
Trustee, shall, as between the Company, its creditors other than holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities be
deemed to be a payment or distribution by the Company to or on account of such
Senior Indebtedness. It is understood that the provisions of this Article XV are
and are intended solely for the purposes of defining the relative rights of the
holders of the Securities, on the one hand, and the holders of such Senior
Indebtedness, on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture, any Additional Provisions or in the Debt Securities is intended to or
shall impair, as between the Company, its creditors other than the holders of
Senior Indebtedness of the Company, and the holders of the Debt Securities, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Debt Securities the principal of (and premium, if any) and
interest on the Debt Securities as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the holders of the Debt Securities and creditors of the
Company, other than the holders of Senior Indebtedness of the Company, nor shall
anything herein or therein prevent the Trustee or the holder of any Debt
Security from exercising all remedies otherwise permitted by applicable law upon
default under this Indenture, subject to the rights, if any, under this Article
XV of the holders of such Senior Indebtedness in respect of cash, property or
securities of the Company, received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Company
referred to in this Article XV, the Trustee, subject to the provisions of
Article VI of this Indenture, and the Securityholders shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Securityholders, for
the purposes of ascertaining the Persons entitled to participate in such
distribution, the holders of Senior Indebtedness and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article XV.
SECTION 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance
thereof authorizes and directs the Trustee on such Securityholder's behalf to
take such action as may be necessary or appropriate to effectuate the
subordination provided in this Article XV and appoints the Trustee such
Securityholder's attorney-in-fact for any and all such purposes.
SECTION 15.06. Notice by the Company
The Company shall give prompt written notice to a Responsible
Officer of the Trustee at the Principal Office of the Trustee of any fact known
to the Company that would prohibit the making of any payment of monies to or by
the Trustee in respect of the Debt Securities pursuant to the provisions of this
Article XV. Notwithstanding the provisions of this Article XV or any other
provision of this Indenture or any Additional Provisions, the Trustee shall not
be charged with knowledge of the existence of any facts that would prohibit the
making of any payment of monies to or by the Trustee in respect of the Debt
Securities pursuant to the provisions of this Article XV, unless and until a
Responsible Officer of the Trustee at the Principal Office of the Trustee shall
have received written notice thereof from the Company or a holder or holders of
Senior Indebtedness or from any trustee therefor; and before the receipt of any
such written notice, the Trustee, subject to the provisions of Article VI of
this Indenture, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if the Trustee shall not have received the notice
provided for in this Section 15.06 at least two Business Days prior to the date
upon which by the terms hereof any money may become payable for any purpose
(including, without limitation, the payment of the principal of (or premium, if
any) or interest on any Debt Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this
Indenture, shall be entitled to conclusively rely on the delivery to it of a
written notice by a Person representing himself to be a holder of Senior
Indebtedness of the Company (or a trustee or representative on behalf of such
holder), to establish that such notice has been given by a holder of such Senior
Indebtedness or a trustee or representative on behalf of any such holder or
holders. In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any Person as a holder of such
Senior Indebtedness to participate in any payment or distribution pursuant to
this Article XV, the Trustee may request such Person to furnish evidence to the
reasonable satisfaction of the Trustee as to the amount of such Senior
Indebtedness held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to the
rights of such Person under this Article XV, 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 15.07. Rights of the Trustee; Holders of Senior Indebtedness
The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article XV in respect of any Senior
Indebtedness at any time held by it, to the same extent as any other holder of
Senior Indebtedness, and nothing in this Indenture or any Additional Provisions
shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior Indebtedness of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XV, and
no implied covenants or obligations with respect to the holders of such Senior
Indebtedness shall be read into this Indenture or any Additional Provisions
against the Trustee. The Trustee shall not be deemed to owe any fiduciary duty
to the holders of such Senior Indebtedness and, subject to the provisions of
Article VI of this Indenture, the Trustee shall not be liable to any holder of
such Senior Indebtedness if it shall pay over or deliver to Securityholders, the
Company or any other Person money or assets to which any holder of such Senior
Indebtedness shall be entitled by virtue of this Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 6.06.
SECTION 15.08. Subordination May Not Be Impaired
No right of any present or future holder of any Senior
Indebtedness of the Company to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company, or by any act or failure to act, in good faith, by any
such holder, or by any noncompliance by the Company, with the terms, provisions
and covenants of this Indenture, regardless of any knowledge thereof that any
such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness of the Company may, at any time
and from time to time, without the consent of or notice to the Trustee or the
Securityholders, without incurring responsibility to the Securityholders and
without impairing or releasing the subordination provided in this Article XV or
the obligations hereunder of the holders of the Debt Securities to the holders
of such Senior Indebtedness, do any one or more of the following: (a) change the
manner, place or terms of payment or extend the time of payment of, or renew or
alter, such Senior Indebtedness, or otherwise amend or supplement in any manner
such Senior Indebtedness or any instrument evidencing the same or any agreement
under which such Senior Indebtedness is outstanding; (b) sell, exchange, release
or otherwise deal with any property pledged, mortgaged or otherwise securing
such Senior Indebtedness; (c) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (d) exercise or refrain from
exercising any rights against the Company, and any other Person.
The Bank of New York hereby accepts the trusts in this
Indenture declared and provided, upon the terms and conditions herein above set
forth.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed by their respective officers thereunto duly
authorized, as of the day and year first above written.
CENTURY BANCSHARES, INC.
By: s/b JOSEPH S. BRACEWELL
------------------------
Name: Joseph S. Bracewell
Title: President
THE BANK OF NEW YORK, as Trustee
By
Name:
Title:
<PAGE>
==============================================
AMENDED AND RESTATED DECLARATION
OF TRUST
CENTURY CAPITAL TRUST I
Dated as of March 23, 2000
==============================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1..Definitions....................................................1
ARTICLE II
ORGANIZATION
SECTION 2.1..Name...........................................................9
SECTION 2.2..Office.........................................................9
SECTION 2.3..Purpose........................................................9
SECTION 2.4..Authority......................................................9
SECTION 2.5..Title to Property of the Trust.................................9
SECTION 2.6..Powers and Duties of the Trustees and the Administrators.......9
SECTION 2.7..Prohibition of Actions by the Trust and the Trustees..........13
SECTION 2.8..Powers and Duties of the Institutional Trustee................14
SECTION 2.9..Certain Duties and Responsibilities of the Trustees
and Administrators...........................................16
SECTION 2.10..Certain Rights of Institutional Trustee......................17
SECTION 2.11..Delaware Trustee.............................................19
SECTION 2.12..Execution of Documents.......................................20
SECTION 2.13..Not Responsible for Recitals or Issuance of Securities.......20
SECTION 2.14..Duration of Trust............................................20
SECTION 2.15..Mergers......................................................20
ARTICLE III
SPONSOR
SECTION 3.1...Sponsor's Purchase of Common Securities......................22
SECTION 3.2...Responsibilities of the Sponsor..............................22
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
SECTION 4.1...Number of Trustees...........................................22
SECTION 4.2...Delaware Trustee.............................................23
SECTION 4.3...Institutional Trustee; Eligibility...........................23
SECTION 4.4...Certain Qualifications of the Delaware Trustee Generally.....23
SECTION 4.5...Administrators...............................................23
SECTION 4.6...Delaware Trustee.............................................24
SECTION 4.7...Appointment, Removal and Resignation of Trustees
and Administrators...........................................24
SECTION 4.8...Vacancies Among Trustees.....................................25
SECTION 4.9...Effect of Vacancies..........................................26
SECTION 4.10..Meetings of the Trustees and the Administrators..............26
SECTION 4.11..Delegation of Power..........................................26
SECTION 4.12..Conversion, Consolidation or Succession to Business..........27
ARTICLE V
DISTRIBUTIONS
SECTION 5.1...Distributions................................................27
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1..General Provisions Regarding Securities......................27
SECTION 6.2..Paying Agent, Transfer Agent and Registrar...................28
SECTION 6.3..Form and Dating..............................................28
SECTION 6.4..Mutilated, Destroyed, Lost or Stolen Certificates............29
SECTION 6.5..Temporary Securities.........................................29
SECTION 6.6..Cancellation.................................................30
SECTION 6.7..Rights of Holders; Waivers of Past Defaults..................30
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1..Dissolution and Termination of Trust.........................32
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1..General......................................................33
SECTION 8.2..Transfer Procedures and Restrictions.........................34
SECTION 8.3..Deemed Security Holders......................................35
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1..Liability....................................................36
SECTION 9.2..Exculpation..................................................36
SECTION 9.3..Fiduciary Duty...............................................36
SECTION 9.4..Idemnification...............................................37
SECTION 9.5..Outside Businesses...........................................40
SECTION 9.6..Compensation; Fee............................................40
ARTICLE X
ACCOUNTING
SECTION 10.1..Fiscal Year.................................................40
SECTION 10.2..Certain Accounting Matters..................................41
SECTION 10.3..Banking.....................................................41
SECTION 10.4..Withholding.................................................42
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1..Amendments..................................................42
SECTION 11.2..Meetings of the Holders of Securities; Action by
Written Consent.............................................44
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL
TRUSTEE AND DELAWARE TRUSTEE
SECTION 12.1..Representations and Warranties of Institutional Trustee.....45
SECTION 12.2..Representations and Warranties of Delaware Trustee..........46
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1..Notices.....................................................47
SECTION 13.2..Governing Law...............................................48
SECTION 13.3..Intention of the Parties....................................48
SECTION 13.4..Headings....................................................48
SECTION 13.5..Successors and Assigns......................................49
SECTION 13.6..Partial Enforceability......................................49
SECTION 13.7..Counterparts................................................49
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST
OF
CENTURY CAPITAL TRUST I
March 23, 2000
AMENDED AND RESTATED DECLARATION OF TRUST (this "Declaration")
dated and effective as of March 23, 2000, by the Trustees (as defined herein),
the Administrators (as defined herein), the Sponsor (as defined herein) and the
holders, from time to time, of undivided beneficial interests in the Trust (as
defined herein) to be issued pursuant to this Declaration;
WHEREAS, certain of the Trustees, the Administrators and the
Sponsor established Century Capital Trust I (the "Trust"), a statutory business
trust under the Delaware Business Trust Act pursuant to a Declaration of Trust
dated as of March 7, 2000 (the "Original Declaration"), and a Certificate of
Trust filed with the Secretary of State of the State of Delaware on March 10,
2000, for the sole purpose of issuing and selling certain securities
representing undivided beneficial interests in the assets of the Trust and
investing the proceeds thereof in certain debentures of the Debenture Issuer (as
defined herein);
WHEREAS, as of the date hereof, no interests in the Trust
have been issued;
WHEREAS, all of the Trustees, the Administrators and the
Sponsor, by this Declaration, amend and restate each and every term and
provision of the Original Declaration; and
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a statutory business trust under the Business Trust Act
(as defined herein) and that this Declaration constitutes the governing
instrument of such statutory business trust, the Trustees declare that all
assets contributed to the Trust will be held in trust for the benefit of the
holders, from time to time, of the securities representing undivided beneficial
interests in the assets of the Trust issued hereunder, subject to the provisions
of this Declaration.
ARTICLE I
INTERPRETATION AND DEFINITIONS
SECTION 1.1 Definitions
Unless the context otherwise requires:
(a)......Capitalized terms used in this Declaration but not
defined in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b)......a term defined anywhere in this Declaration has the
same meaning throughout;
(c)......all references to "the Declaration" or "this
Declaration" are to this Declaration as modified, supplemented or amended from
time to time;
(d)......all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and Annexes
and Exhibits to this Declaration unless otherwise specified;
(e)......a term defined in the Trust Indenture Act (as defined
herein) has the same meaning when used in this Declaration unless otherwise
defined in this Declaration or unless the context otherwise requires; and
(f)......a reference to the singular includes the plural and
vice versa.
"Additional Interest" has the meaning set forth in
Section 3.06 of the Indenture.
"Administrative Action" has the meaning set forth in
paragraph 4(a) of Annex I.
"Administrators" means each of Joseph S. Bracewell and F.
Kathryn Roberts, solely in such Person's capacity as Administrator of the Trust
created and continued hereunder and not in such Person's individual capacity, or
such Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule
405 of the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is
authorized to bind such Person.
"Bankruptcy Event" means, with respect to any Person:
(a)......a court having jurisdiction in the premises enters a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appoints a receiver, liquidator, assignee, custodian,
trustee, sequestrator or similar official of such Person or for any substantial
part of its property, or orders the winding-up or liquidation of its affairs,
and such decree, appointment or order remains unstayed and in effect for a
period of 90 consecutive days; or
(b)......such Person commences a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, consents to the entry of an order for relief in an involuntary case
under any such law, or consents to the appointment of or taking possession by a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official of such Person of any substantial part of its property, or
makes any general assignment for the benefit of creditors, or fails generally to
pay its debts as they become due.
"Business Day" means any day other than Saturday, Sunday or
any other day on which banking institutions in New York are permitted or
required by any applicable any applicable law to close.
"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, or any successor legislation.
"Capital Securities" has the meaning set forth in 6.1(a).
"Capital Security Certificate" means a Certificate
representing a Capital Security substantially in the form of Exhibit A-1.
"Capital Treatment Event" has the meaning set forth in
paragraph 4(a) of Annex I.
"Certificate" means any certificate evidencing Securities.
"Closing Date" has the meaning set forth in the Placement
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
"Common Securities" has the meaning set forth in
Section 6.1(a).
"Common Security Certificate" means a definitive Certificate
in fully registered form representing a Common Security substantially in the
form of Exhibit A-2.
"Company Indemnified Person" means (a) any Administrator; (b)
any Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in
paragraph 4(a) of Annex I.
"Comparable Treasury Price" has the meaning set forth in
paragraph 4(a) of Annex I.
"Corporate Trust Office" means the office of the Institutional
Trustee at which the corporate trust business of the Institutional Trustee
shall, at any particular time, be principally administered, which office at the
date of execution of this Declaration is located at 101 Barclay Street, Floor 21
West, New York, NY 10286.
"Covered Person" means: (a) any Administrator, officer,
director, shareholder, partner, member, representative, employee or agent of (i)
the Trust or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
"Debenture Issuer" means Century Bancshares, Inc., a bank
holding company incorporated in Delaware, in its capacity as issuer of the
Debentures under the Indenture.
"Debenture Trustee" means The Bank of New York, as trustee
under the Indenture until a successor is appointed thereunder, and thereafter
means such successor trustee.
"Debentures" means the 107/8% Junior Subordinated Deferrable
Interest Debentures due 2030 to be issued by the Debenture Issuer under the
Indenture.
"Deferred Interest" means any interest on the Debentures that
would have been overdue and unpaid for more than one Distribution Payment Date
but for the imposition of an Extension Period, and the interest that shall
accrue (to the extent that the payment of such interest is legally enforceable)
on such interest at the rate per annum equal to 107/8%, compounded semi-annually
from the date on which such Deferred Interest would otherwise have been due and
payable until paid or made available for payment.
"Definitive Capital Securities" means any Capital Securities
in definitive form issued by the Trust.
"Delaware Trustee" has the meaning set forth in Section 4.2.
"Direct Action" has the meaning set forth in Section 2.8(e).
"Distribution" means a distribution payable to Holders of
Securities in accordance with Section 5.1.
"Distribution Payment Date" has the meaning set forth in
paragraph 2(b) of Annex I.
"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 an Indenture Event of Default;
(b)......default by the Trust in the payment of any
Redemption Price of any Security when it becomes due and payable;
(c)......default in the performance, or breach, in any
material respect, of any covenant or warranty of the Trustees in this
Declaration (other than those specified in clause (b) above) and continuation of
such default or breach for a period of 30 days after there has been given, by
registered or certified mail to the Trustees and to the Sponsor 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
(d)......the occurrence of a Bankruptcy Event with respect to
the Institutional Trustee if a successor Institutional Trustee has not been
appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, or any successor legislation.
"Extension Period" has the meaning set forth in
paragraph 2(b) of Annex I.
"Federal Reserve" has the meaning set forth in
paragraph 3 of Annex I.
"Fiduciary Indemnified Person" shall mean the Institutional
Trustee, the Delaware Trustee, any Affiliate of the Institutional Trustee or the
Delaware Trustee, and any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the Institutional
Trustee and the Delaware Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1
"Guarantee" means the guarantee agreement to be dated as of
March 23, 2000, of the Sponsor in respect of the Capital Securities.
"Holder" means a Person in whose name a Certificate
representing a Security is registered, such Person being a beneficial owner
within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of March 23, 2000,
among the Debenture Issuer and the Debenture Trustee, and any indenture
supplemental thereto pursuant to which the Debentures are to be issued.
"Indenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Institutional Trustee" means the Trustee meeting the
eligibility requirements set forth in Section 4.3.
"interest" means any interest due on the Debentures, including
any Deferred Interest and Defaulted Interest (as each such term is defined in
the Indenture).
"Investment Company" means an investment company as defined
in the Investment Company Act.
"Investment Company Act" means the Investment Company Act of
1940, as amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in
paragraph 4(a) of Annex I.
"Legal Action" has the meaning set forth in Section 2.8(e).
"Liquidation" has the meaning set forth in paragraph 3 of
Annex I.
"Liquidation Distribution" has the meaning set forth in
paragraph 3 of Annex I.
"Majority in liquidation amount of the Securities" means
Holder(s) of outstanding Securities voting together as a single class or, as the
context may require, Holders of outstanding Capital Securities or Holders of
outstanding Common Securities voting separately as a class, who are the record
owners of more than 50% of the aggregate liquidation amount (including the
stated amount that would be paid on redemption, liquidation or otherwise, plus
accrued and unpaid Distributions to the date upon which the voting percentages
are determined) of all outstanding Securities of the relevant class.
"Officers' Certificates" means, with respect to any Person, a
certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for it in this Declaration shall include:
(a)......a statement that each officer signing the Certificate
has read the covenant or condition and the definitions relating thereto;
(b)......a brief statement of the nature and scope of the
examination or investigation
undertaken by each officer in rendering the Certificate;
(c)......a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is necessary to
enable such officer to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d)......a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 6.2.
"Payment Amount" has the meaning set forth in Section 5.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Placement Agreement" means the Placement Agreement relating
to the offering and sale of Capital Securities in the form of Exhibit E.
"PORTAL" has the meaning set forth in Section 2.6(a)(i).
"Primary Treasury Dealer" has the meaning set forth in
paragraph 4(a) of Annex I.
"Property Account" has the meaning set forth in Section 2.8(c).
"Pro Rata" has the meaning set forth in paragraph 8 of
Annex I.
"QIB" means a "qualified institutional buyer" as defined under
Rule 144A of the Securities Act.
"Quorum" means a majority of the Administrators or, if there
are only two Administrators, both of them.
"Quotation Agent" has the meaning set forth in paragraph 4(a)
of Annex I.
"Redemption/Distribution Notice" has the meaning set forth in
paragraph 4(e) of Annex I.
"Redemption Price" has the meaning set forth in paragraph 4(a)
of Annex I.
"Registrar" has the meaning set forth in Section 6.2.
"Reference Treasury Dealer" has the meaning set forth in
paragraph 4(a) of Annex I.
"Reference Treasury Dealer Quotations" has the meaning set
forth in paragraph 4(a) of Annex I.
"Relevant Trustee" has the meaning set forth in
Section 4.7(a).
"Remaining Life" has the meaning set forth in paragraph 4(a)
of Annex I.
"Responsible Officer" means, with respect to the Institutional
Trustee, any officer within the Corporate Trust Office of the Institutional
Trustee, including any vice-president, any assistant vice-president, any
assistant secretary, the treasurer, any assistant treasurer, any trust officer
or other officer of the Corporate Trust Office of the Institutional Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Securities Legend" has the meaning set forth in
Section 8.2(c).
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
"Securities" means the Common Securities and the Capital
Securities.
"Securities Act" means the Securities Act of 1933, as amended
from time to time or any successor legislation.
"Sponsor" means Century Bancshares, Inc., a bank holding
company incorporated in Delaware, or any successor entity in a merger,
consolidation or amalgamation, in its capacity as sponsor of the Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 4.7(a).
"Successor Entity" has the meaning set forth in
Section 2.15(b).
"Successor Institutional Trustee" has the meaning set forth
in Section 4.7(a).
"Successor Securities" has the meaning set forth in
Section 2.15(b).
"Super Majority" has the meaning set forth in paragraph 5(b)
of Annex I.
"Tax Event" has the meaning set forth in paragraph 4(a)
of Annex I.
"10% in liquidation amount of the Securities" means Holder(s)
of outstanding Securities voting together as a single class or, as the context
may require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 10%
or more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Transfer Agent" has the meaning set forth in Section 6.2.
"Treasury Rate" has the meaning set forth in paragraph 4(a)
of Annex I.
"Treasury Regulations" means the income tax regulations,
including temporary and proposed regulations, promulgated under the Code by the
United States Treasury, as such regulations may be amended from time to time
(including corresponding provisions of succeeding regulations).
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Property" means (a) the Debentures, (b) any cash on
deposit in, or owing to, the Property 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 Institutional Trustee pursuant to the trusts of
this Declaration.
"U.S. Person" means a United States Person as defined a
Section 7701(a)(30) of the Code.
ARTICLE II
ORGANIZATION
SECTION 2.1 Name. The Trust is named "Century Capital Trust
I," as such name may be modified from time to time by the Administrators
following written notice to the Holders of the Securities. The Trust's
activities may be conducted under the name of the Trust or any other name deemed
advisable by the Administrators.
SECTION 2.2 Office. The address of the principal office of the
Trust is 1275 Pennsylvania Avenue, NW, Washington D.C. 20004. On ten Business
Days written notice to the Holders of the Securities, the Administrators may
designate another principal office which, shall be in a State of the United
States or the District of Columbia.
SECTION 2.3 Purpose. The exclusive purposes and functions of
the Trust are (a) to issue and sell the Securities representing undivided
beneficial interests in the assets of the Trust, (b) to invest the gross
proceeds from such sale to acquire the Debentures and (c) except as otherwise
limited herein, to engage in only those other activities necessary or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
SECTION 2.4 Authority. Except as specifically provided in this
Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders.
SECTION 2.5 Title to Property of the Trust. Except as provided
in Section 2.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
SECTION 2.6 Powers and Duties of the Trustees and the
Administrators.
(a)......The Trustees and the Administrators shall conduct the
affairs of the Trust in accordance with the terms of this Declaration. Subject
to the limitations set forth in paragraph (b) of this Section, and in accordance
with the following provisions (i) and (ii), the Trustees and the Administrators
shall have the authority to enter into all transactions and agreements
determined by the Trustees to be appropriate in exercising the authority,
express or implied, otherwise granted to the Trustees or the Administrators, as
the case may be, under this Declaration, and to perform all acts in furtherance
thereof, including without limitation, the following:
(i) Each Administrator shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to execute
and deliver on behalf of the Trust, such agreements as may be
necessary or desirable in connection with the purposes and
function of the Trust, including agreements with the Paying
Agent;
(C) ensuring compliance with the Securities Act,
applicable state securities or blue sky laws;
(D) if and at such time determined by the Sponsor at
the request of the Holders, assisting in the designation of
the Capital Securities for trading in the Private Offering,
Resales and Trading through the Automatic Linkages ("PORTAL")
system;
(E) the sending of notices (other than notices of
default) and other information regarding the Securities and
the Debentures to the Holders in accordance with this
Declaration;
(F) the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this
Declaration, which consent shall not be unreasonably withheld;
(G) execution and delivery of the Securities
in accordance with this Declaration;
(H) execution and delivery of closing certificates,
pursuant to the Placement Agreement and the application for a
taxpayer identification number;
(I) unless otherwise determined by the Institutional
Trustee or the Holders of a Majority in liquidation amount of
the Securities or as otherwise required by the Business Trust
Act, to execute on behalf of the Trust (either acting alone or
together with any or all of the Administrators) any documents
that the Administrators have the power to execute pursuant to
this Declaration;
(J) the taking of any action incidental to the
foregoing as the Institutional Trustee may from time to time
determine is necessary to give effect to the terms of this
Declaration for the benefit of the Holders (without
consideration of the effect of any such action on any
particular Holder);
(K) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including Distributions, voting rights,
redemptions and exchanges, and to issue relevant notices to
the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates; and
(L) to duly prepare and file all applicable tax
returns and tax information reports that are required to be
filed with respect to the Trust on behalf of the Trust.
(ii) As among the Trustees and the Administrators, the
Institutional Trustee shall have the power, duty and authority to act
on behalf of the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any
other payments made in respect of the Debentures in the
Property Account;
(D) the distribution through the Paying Agent
of amounts owed to the Holders in respect of the 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 Securities and the Debentures to the
Holders in accordance with this Declaration;
(G) the distribution of the Trust Property in
accordance with the terms of this Declaration;
(H) to the extent provided in this Declaration, the
winding up of the affairs of and liquidation of the Trust and
the preparation, execution and filing of the certificate of
cancellation with the Secretary of State of the State of
Delaware;
(I) after any Event of Default (provided that such
Event of Default is not by or with respect to the
Institutional Trustee) the taking of any action incidental to
the foregoing as the Institutional Trustee may from time to
time determine is necessary or advisable to give effect to the
terms of this Declaration 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);
and
(J) to take all action that may be necessary for the
preservation and the continuation of the Trust's valid
existence, rights, franchises and privileges as a statutory
business trust under the laws of the State of Delaware and of
each other jurisdiction in which such existence is necessary
to protect the limited liability of the Holders of the Capital
Securities or to enable the Trust to effect the purposes for
which the Trust was created.
(b)......So long as this Declaration remains in effect, the
Trust (or the Trustees or Administrators acting on behalf of the Trust) shall
not undertake any business, activities or transaction except as expressly
provided herein or contemplated hereby. In particular, neither the Trustees nor
the Administrators may cause the Trust to (i) acquire any investments or engage
in any activities not authorized by this Declaration, (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 cause the Trust to fail or
cease to qualify as 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 Institutional Trustee shall, at the sole
cost and expense of the Trust, 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 Trust or the Holders in their capacity as Holders.
(c)......In connection with the issuance and sale of the
Capital Securities, the Sponsor shall have the right and responsibility to
assist the Trust with respect to, or effect on behalf of the Trust, the
following (and any actions taken by the Sponsor in furtherance of the following
prior to the date of this Declaration are hereby ratified and confirmed in all
respects):
(i) the taking of any action necessary to obtain an
exemption from the Securities Act;
(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 determination of any and all such acts,
other than actions which must be taken by or on behalf of the Trust,
and the advice to the Trustees of actions they must take on behalf of
the Trust, and the preparation for execution and filing of any
documents to be executed and filed by the Trust or on behalf of the
Trust, as the Sponsor 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 negotiation of the terms of, and the execution and
delivery of, the Placement Agreement providing for the sale of the
Capital Securities; and
(iv) 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
Administrators and the Holders of a Majority in liquidation amount of the Common
Securities are authorized and directed to conduct the affairs of the Trust and
to operate the Trust so that (i) the Trust will not be deemed to be an
"investment company" required to be registered under the Investment Company Act
and (ii) the Trust will not fail to be classified as a grantor trust for United
States federal income tax purposes. The Administrator and the Holders of a
Majority in liquidation amount of the Common Securities shall not take any
action inconsistent with the treatment of the Debentures as indebtedness of the
Debenture Issuer for United States federal income tax purposes. In this
connection, the Holders of a Majority in liquidation amount of the Common
Securities are authorized to take any action, not inconsistent with applicable
laws, the Original Declaration or this Declaration, as amended from time to
time, that such Holders determine in their discretion to be necessary or
desirable for such purposes, even if such action adversely affects the interests
of the Holders of the Capital Securities.
(e)......All expenses incurred by the Administrators or the
Trustees pursuant to this Section 2.6 shall be reimbursed by the Sponsor, and
the Trustees shall have no obligations with respect to such expenses.
(f)......The assets of the Trust shall consist of the Trust
Property.
(g)......Legal title to all Trust Property shall be vested at
all times in the Institutional Trustee (in its capacity as such) and shall be
held and administered by the Institutional Trustee for the benefit of the Trust
and neither the Administrators nor the Holders in accordance with this
Declaration.
SECTION 2.7 Prohibition of Actions by the Trust and the
Trustees.
(a)......The Trust shall not, and the Institutional Trustee
shall cause the Trust not to, engage in any activity other than as required or
authorized by this Declaration. In particular, the Trust shall not and the
Institutional Trustee shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders of the
Securities pursuant to the terms of this Declaration and of the
Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust Property for other than a Trust
purpose;
(iv) make any loans or incur any indebtedness other than
loans represented by the Debentures;
(v) possess any power or otherwise act in such a way as
to vary the Trust assets or the terms of the Securities;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the
Securities; or
(vii) other than as provided in this Declaration (including
Annex I), (A) direct the time, method and place of exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable, or
(D) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the effect that
such modification will not cause the Trust to cease to be classified as
a grantor trust for United States federal income tax purposes.
SECTION 2.8 Powers and Duties of the Institutional Trustee.
(a)......The legal title to the Debentures shall be owned by
and held of record in the name of the Institutional Trustee in trust for the
benefit of the Trust. The right, title and interest of the Institutional Trustee
to the Debentures shall vest automatically in each Person who may hereafter be
appointed as Institutional Trustee in accordance with Section 4.7. Such vesting
and cessation of title shall be effective whether or not conveyancing documents
with regard to the Debentures have been executed and delivered.
(b)......The Institutional Trustee shall not transfer its
right, title and interest in the Debentures to the Administrators or to the
Delaware Trustee.
(c)......The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the United States (as defined
in Treasury Regulations section 301.7701-7), in the name of and under
the exclusive control of the Institutional Trustee, and maintained in
the Institutional Trustee's trust department, on behalf of the Holders
of the Securities and, upon the receipt of payments of funds made in
respect of the Debentures held by the Institutional Trustee, deposit
such funds into the Property Account and make payments to the Holders
of the Capital Securities and Holders of the Common Securities from the
Property Account in accordance with Section 5.1. Funds in the Property
Account shall be held uninvested until disbursed in accordance with
this Declaration;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital
Securities and the Common Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage
in such ministerial activities as shall be necessary or appropriate to
effect the distribution of the Debentures to Holders of Securities upon
the occurrence of certain circumstances pursuant to the terms of the
Securities.
(d)......The Institutional Trustee shall take all actions and
perform such duties as may be specifically required of the Institutional Trustee
pursuant to the terms of the Securities.
(e)......The Institutional Trustee may bring or defend, pay,
collect, compromise, arbitrate, resort to legal action with respect to, or
otherwise adjust claims or demands of or against, the Trust (a "Legal Action")
which arises out of or in connection with an Event of Default of which a
Responsible Officer of the Institutional Trustee has actual knowledge or the
Institutional Trustee's duties and obligations under this Declaration or the
Trust Indenture Act; provided, however, that if an Event of Default has occurred
and is continuing and such event is attributable to the failure of the Debenture
Issuer to pay interest or principal on the Debentures on the date such interest
or principal is otherwise payable (or in the case of redemption, on the
redemption date), then a Holder of the Capital Securities may directly institute
a proceeding for enforcement of payment to such Holder of the principal of or
interest on the Debentures having a principal amount equal to the aggregate
liquidation amount of the Capital Securities of such Holder (a "Direct Action")
on or after the respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Holders of the Common Securities will
be subrogated to the rights of such Holder of the Capital Securities to the
extent of any payment made by the Debenture Issuer to such Holder of the Capital
Securities in such Direct Action; provided, however, that a Holder of the Common
Securities may exercise such right of subrogation only so long as an Event of
Default with respect to the Capital Securities has occurred and is continuing.
(f)......The Institutional Trustee shall continue to serve as
a Trustee until either:
(i) the Trust has been completely liquidated and the
proceeds of the liquidation distributed to the Holders of the Securities
pursuant to the terms of the Securities; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 4.7.
(g)......The Institutional Trustee shall have the legal power
to exercise all of the rights, powers and privileges of a Holder of the
Debentures under the Indenture and, if an Event of Default occurs and is
continuing, the Institutional Trustee may, for the benefit of Holders of the
Securities, enforce its rights as holder of the Debentures subject to the rights
of the Holders pursuant to this Declaration (including Annex I)
and the terms of the Securities.
The Institutional Trustee must exercise the powers set forth
in this Section 2.8 in a manner that is consistent with the purposes and
functions of the Trust set out in Section 2.3, and the Institutional Trustee
shall not take any action that is inconsistent with the purposes and functions
of the Trust set out in Section 2.3.
SECTION 2.9 Certain Duties and Responsibilities of the
Trustees and Administrators.
(a)......The Institutional 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 Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 6.7), the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b)......The duties and responsibilities of the Trustees and
the Administrators shall be as provided by this Declaration and, in the case of
the Institutional Trustee, by the Trust Indenture Act. Notwithstanding the
foregoing, no provision of this Declaration shall require the Trustees or
Administrators to expend or risk their own funds or otherwise incur any
financial liability in the performance of any of their duties hereunder, or in
the exercise of any of their rights or powers. Whether or not therein expressly
so provided, every provision of this Declaration relating to the conduct or
affecting the liability of or affording protection to the Trustees or
Administrators shall be subject to the provisions of this Article. Nothing in
this Declaration shall be construed to release an Administrator or Trustee from
liability for its own negligent action, its own negligent failure to act, or its
own willful misconduct. To the extent that, at law or in equity, a Trustee or an
Administrator has duties and liabilities relating to the Trust or to the
Holders, such Trustee or Administrator shall not be liable to the Trust or to
any Holder for such Trustee's or Administrator's good faith reliance on the
provisions of this Declaration. The provisions of this Declaration, to the
extent that they restrict the duties and liabilities of the Administrators or
the Trustees otherwise existing at law or in equity, are agreed by the Sponsor
and the Holders to replace such other duties and liabilities of the
Administrators or the Trustees.
(c)......All payments made by the Institutional Trustee or a
Paying Agent in respect of the 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
Institutional Trustee or a Paying Agent to make payments in accordance with the
terms hereof. Each Holder, by its acceptance of a Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees and the Administrators are not personally liable to it for any amount
distributable in respect of any Security or for any other liability in respect
of any Security. This Section 2.9(c) does not limit the liability of the
Trustees expressly set forth elsewhere in this Declaration or, in the case of
the Institutional Trustee, in the Trust Indenture Act.
(d)......No provision of this Declaration shall be construed
to relieve the Institutional Trustee from liability with respect to matters that
are within the authority of the Institutional Trustee under this Declaration for
its own negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) the Institutional Trustee shall not be liable for any
error or judgment made in good faith by an Authorized Officer of the
Institutional Trustee, unless it shall be proved that the Institutional
Trustee was negligent in ascertaining the pertinent facts;
(ii) the Institutional 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 or the Common
Securities, as applicable, relating to the time, method and place of
conducting any proceeding for any remedy available to the Institutional
Trustee, or exercising any trust or power conferred upon the
Institutional Trustee under this Declaration;
(iii) the Institutional Trustee's sole duty with respect to
the custody, safe keeping and physical preservation of the Debentures
and the Property Account shall be to deal with such property in a
similar manner as the Institutional Trustee deals with similar property
for its own account, subject to the protections and limitations on
liability afforded to the Institutional Trustee under this Declaration
and the Trust Indenture Act;
(iv) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor; and money held by the Institutional
Trustee need not be segregated from other funds held by it except in
relation to the Property Account maintained by the Institutional
Trustee pursuant to Section 2.8(c)(i) and except to the extent
otherwise required by law; and
(v) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with
their respective duties under this Declaration, nor shall the
Institutional Trustee be liable for any default or misconduct of the
Administrators or the Sponsor.
SECTION 2.10 Certain Rights of Institutional Trustee.
Subject to the provisions of Section 2.9:
(a)......the Institutional Trustee may conclusively rely and
shall fully 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, direction, consent,
order, appraisal, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(b)......if (i) in performing its duties under this
Declaration, the Institutional Trustee is required to decide between alternative
courses of action, (ii) in construing any of the provisions of this Declaration,
the Institutional Trustee finds the same ambiguous or inconsistent with any
other provisions contained herein, or (iii) the Institutional Trustee is unsure
of the application of any provision of this Declaration, then, except as to any
matter as to which the Holders of Capital Securities are entitled to vote under
the terms of this Declaration, the Institutional Trustee may deliver a notice to
the Sponsor requesting the Sponsor's opinion as to the course of action to be
taken and the Institutional Trustee shall take such action, or refrain from
taking such action, as the Institutional Trustee shall be directed, in which
event the Institutional Trustee shall have no liability except for its own
negligence or willful misconduct;
(c)......any direction or act of the Sponsor or the
Administrators contemplated by this Declaration shall be sufficiently evidenced
by an Officers' Certificate;
(d)......whenever in the administration of this Declaration,
the Institutional Trustee shall deem it desirable that a matter be proved or
established before undertaking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically prescribed)
may request and conclusively rely upon an Officers' Certificate as to factual
matters which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrators;
(e)......the Institutional 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 reregistration thereof;
(f)......the Institutional Trustee may consult with counsel of
its selection (which counsel may be counsel to the Sponsor or any of its
Affiliates) 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 Institutional Trustee shall have the right at any time to seek
instructions concerning the administration of this Declaration from any court of
competent jurisdiction;
(g)......the Institutional Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Declaration at the request or direction of any of the Holders pursuant to this
Declaration, unless such Holders shall have offered to the Institutional Trustee
security or indemnity reasonably satisfactory to it against the costs, expenses
and liabilities which might be incurred by it in compliance with such request or
direction; provided, that nothing contained in this Section 2.10(g) shall be
taken to relieve the Institutional Trustee, upon the occurrence of an Event of
Default, of its obligation to exercise the rights and powers vested in it by
this Declaration;
(h)......the Institutional 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 Institutional Trustee may make such further inquiry or
investigation into such facts or matters as it may see fit;
(i)......the Institutional 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 Institutional Trustee shall not be
responsible for any misconduct or negligence on the part of, or for the
supervision of, any such agent or attorney appointed with due care by it
hereunder;
(j)......whenever in the administration of this Declaration
the Institutional Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action hereunder,
the Institutional Trustee (i) may request instructions from the Holders of the
Capital Securities, which instructions may be given only by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
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 fully protected in acting in
accordance with such instructions;
(k)......except as otherwise expressly provided in this
Declaration, the Institutional Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this Declaration;
(l)......when the Institutional Trustee incurs expenses or
renders services in connection with a Bankruptcy Event, such expenses (including
the fees and expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law or
law relating to creditors rights generally;
(m)......the Institutional Trustee shall not be charged with
knowledge of an Event of Default unless a Responsible Officer of the
Institutional Trustee obtains actual knowledge of such event or the
Institutional Trustee receives written notice of such event from any Holder;
(n)......any action taken by the Institutional Trustee or its
agents hereunder shall bind the Trust and the Holders of the Securities, and the
signature of the Institutional Trustee or its agents alone shall be sufficient
and effective to perform any such action and no third party shall be required to
inquire as to the authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action; and
(o)......no provision of this Declaration shall be deemed to
impose any duty or obligation on the Institutional 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
Institutional 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
Institutional Trustee shall be construed to be a duty.
SECTION 2.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration
other than Section 4.2, the Delaware Trustee shall not be entitled to exercise
any powers, nor shall the Delaware Trustee have any of the duties and
responsibilities of any of the Trustees or the Administrators described in this
Declaration. Except as set forth in Section 4.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of ss.
3807 of the Business Trust Act.
SECTION 2.12 Execution of Documents.
Subject to the provisions of Section 2.11, unless otherwise
determined in writing by the Institutional Trustee, and except as otherwise
required by the Business Trust Act, the Institutional Trustee, or any one or
more of the Administrators, as the case may be, is authorized to execute on
behalf of the Trust any documents that the Trustees or the Administrators, as
the case may be, have the power and authority to execute pursuant to Section
2.6.
SECTION 2.13 Not Responsible for Recitals or Issuance of
Securities. The recitals contained in this Declaration and the
Securities shall be taken as the statements of the Sponsor, and the Trustees do
not assume any responsibility for their correctness. The Trustees make no
representations as to the value or condition of the property of the Trust or any
part thereof. The Trustees make no representations as to the validity or
sufficiency of this Declaration, the Debentures or the Securities.
SECTION 2.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VII hereof, shall have existence for fifty-five (55) years from the
Closing Date.
SECTION 2.15 Mergers.
(a) The Trust may not consolidate, amalgamate,
merge with or into, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any corporation or other
body, except as described in this Section 2.15(b) and (c).
(b)......The Trust may, with the consent of the Institutional
Trustee and without the consent of the Delaware Trustee or the Holders of the
Capital Securities, consolidate, amalgamate, merge with or into, or be replaced
by a trust organized as such under the laws of any State; provided, that:
(i) if the Trust is not the Survivor, such successor entity
(the "Successor Entity") either:
(A) expressly assumes all of the obligations of
the Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so that the Successor Securities rank
the same as the Securities rank with respect to Distributions
and payments upon Liquidation, redemption and otherwise;
(ii) the Institutional Trustee expressly appoints a trustee of
the Successor Entity that possesses the same powers and duties as the
Institutional Trustee as the Holder of the Debentures;
(iii) the Capital Securities or any Successor Securities are
listed, or any Successor Securities will be listed upon notification of
issuance, on any national securities exchange or with another
organization on which the Capital Securities are then listed or quoted,
if any;
(iv) such merger, consolidation, amalgamation or replacement
does not cause the Capital Securities (including any Successor
Securities) to be downgraded by any nationally recognized statistical
rating organization;
(v) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the
Holders of the Securities (including any Successor Securities) in any
material respect (other than with respect to any dilution of such
Holders' interests in the Successor Entity as a result of such merger,
consolidation, amalgamation or replacement);
(vi) such Successor Entity has a purpose substantially
identical to that of the Trust;
(vii) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally
recognized independent counsel to the Trust experienced in such matters
to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences
and privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the
Successor Entity);
(B) following such merger, consolidation,
amalgamation or replacement, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company;
(C) following such merger, consolidation,
amalgamation or replacement, the Trust (or the Successor
Entity) will continue to be classified as a grantor trust for
United States federal income tax purposes; and
(viii) the Sponsor guarantees the obligations of such
Successor Entity under the Successor Securities at least to the extent
provided by the Guarantee; and
(ix) prior to such merger, consolidation, amalgamation or
replacement, the Institutional Trustee shall have received an Officers'
Certificate of the Administrators and an opinion of counsel, each to
the effect that all conditions precedent of this paragraph (b) to such
transaction have been satisfied.
(c)......Notwithstanding Section 2.15(b), the Trust shall not,
except with the consent of Holders of 100% in liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or to be replaced by
any other entity or permit any other entity to consolidate, amalgamate, merge
with or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE III
SPONSOR
SECTION 3.1 Sponsor's Purchase of Common Securities.
On the Closing Date, the Sponsor will purchase all of the
Common Securities issued by the Trust, in an amount at least equal to 3% of the
capital of the Trust, at the same time as the Capital Securities are sold.
SECTION 3.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a)......to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Capital Securities and
to do any and all such acts, other than actions which must be taken by the
Trust, and advise the Trust of actions it must take, and prepare for execution
and filing any documents to be executed and filed by the Trust, as the Sponsor
deems necessary or advisable in order to comply with the applicable laws of any
such States;
(b)......to prepare for filing and request the Administrators
to cause the filing by the Trust, as may be appropriate, of an application to
the PORTAL system, for listing or quotation upon notice of issuance of any
Capital Securities, if required ; and
(c)......to negotiate the terms of and/or execute on behalf of
the Trust, the Placement Agreement and other related agreements providing for
the sale of the Capital Securities.
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
SECTION 4.1 Number of Trustees. The number of Trustees
initially shall be two, and:
(a)......at any time before the issuance of any Securities,
the Sponsor may, by written instrument, increase or decrease the number of
Trustees; and
(b)......after the issuance of any Securities, the number of
Trustees may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Capital Securities voting as a class at a meeting of
the Holders of the Capital Securities; provided, however, that there shall be a
Delaware Trustee if required by Section 4.2; and there shall always be one
Trustee who shall be the Institutional Trustee, and such Trustee may also serve
as Delaware Trustee if it meets the applicable requirements, in which case
Section 2.11 shall have no application to such entity in its capacity as
Institutional Trustee.
SECTION 4.2 Delaware Trustee. If required by the Business
Trust Act, one Trustee (the "Delaware Trustee") shall be:
(a)......a natural person who is a resident of the State of
Delaware; or
(b)......if not a natural person, an entity which is organized
under the laws of the United States or any State thereof or the District of
Columbia, has its principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law, including ss.3807 of the
Business Trust Act.
SECTION 4.3 Institutional Trustee; Eligibility.
(a)There shall at all times be one Trustee which shall act as Institutional
Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement
to the Trust; and
(iii) be a banking corporation organized and doing business
under the laws of the United States of America or any State thereof or
of the District of Columbia authorized under such laws to exercise
corporate trust powers, having a combined capital and surplus of at
least 50 million U.S. dollars ($50,000,000), and subject to supervision
or examination by Federal, State or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
4.3(a)(ii), the combined capital and surplus of such corporation shall
be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published.
(b)......If at any time the Institutional Trustee shall cease
to be eligible to so act under Section 4.3(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
4.7(a).
(c)......If the Institutional Trustee has or shall acquire any
"conflicting interest" within the meaning of ss. 310(b) of the Trust Indenture
Act, the Institutional Trustee shall either eliminate such interest or resign,
to the extent and in the manner provided by, and subject to this Declaration.
(d)......The initial Institutional Trustee shall be
The Bank of New York.
SECTION 4.4 Certain Qualifications of the Delaware Trustee
Generally. The Delaware Trustee shall be a U.S. Person and either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 4.5 Administrators. Each Administrator shall be a
U.S. Person. The initial Administrators shall be Joseph S. Bracewell and
F. Kathryn Roberts. There shall at all times be at least one Administrator.
Except where a requirement for action by a specific number of
Administrators is expressly set forth in this Declaration and except with
respect to any action the taking of which is the subject of a meeting of the
Administrators any action required or permitted to be taken by the
Administrators may be taken by, and any power of the Administrators may be
exercised by, or with the consent of, any one such Administrator.
SECTION 4.6 Initial Delaware Trustee. The initial Delaware
Trustee shall be The Bank of New York (Delaware).
SECTION 4.7 Appointment, Removal and Resignation of Trustees
and Administrators.
(a) No resignation or removal of any Trustee (the "Relevant
Trustee") and no appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of this Section 4.7.
Subject to the immediately preceding paragraph, a Relevant
Trustee may resign at any time by giving written notice thereof to the Holders
of the Securities and by appointing a successor Relevant Trustee. Upon the
resignation of the Institutional Trustee, the Institutional Trustee shall
appoint a successor by requesting from each of Bank One Trust Company, NA,
Bankers Trust Company and State Street Bank & Trust Company, its expenses and
charges to serve as the successor Institutional Trustee on a form provided by
the Administrators, and selecting the Person who agrees to the lowest expense
and charges (the "Successor Institutional Trustee"). If the instrument of
acceptance by the successor Relevant Trustee required by Section 4.7 shall not
have been delivered to the Relevant Trustee within 60 days after the giving of
such notice of resignation or delivery of the instrument of removal, the
Relevant Trustee may petition, at the expense of the Trust, any Federal, State
or District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Relevant Trustee. The
Institutional Trustee shall have no liability for the selection of such
successor pursuant to this Section 4.7.
The Institutional Trustee or the Delaware Trustee, or both of
them, may be removed by the 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) if an Event of Default shall
have occurred and be continuing. If any Trustee shall be so removed, the Holders
of Capital Securities, by act of the Holders of a Majority in liquidation amount
of the Capital Securities then outstanding delivered to the Relevant Trustee,
shall promptly appoint a successor Relevant Trustee or Trustees, and such
successor Trustee shall comply with the applicable requirements of this Section
4.7. If no successor Relevant Trustee shall have been so appointed by the
Holders of a Majority in liquidation amount of the Capital Securities and
accepted appointment in the manner required by this Section 4.7, within 30 days
after delivery of an instrument of removal, the Relevant Trustee or any Holder
who has been a Holder of the Securities for at least six months may, on behalf
of himself and all others similarly situated, petition any Federal, State or
District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a successor Relevant Trust or
Trustees.
The Institutional Trustee shall give notice of each
resignation and each removal of a Trustee and each appointment of a successor
Trustee to all Holders in the manner provided in Section 4.7(b) and shall give
notice to the Sponsor. Each notice shall include the name of the successor
Relevant Trustee and the address of its Corporate Trust Office if it is the
Institutional Trustee.
Notwithstanding the foregoing or any other provision of this
Declaration, in the event a Delaware Trustee who is a natural person dies or
becomes incompetent or incapacitated, the vacancy created by such death,
incompetence or incapacity may be filled by the Institutional Trustee following
the procedures in this Section 4.7 (with the successor being a Person who
satisfies the eligibility requirement for a Delaware Trustee set forth in this
Declaration) (the "Successor Delaware Trustee").
(b)......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 Securities and the Trust and (b) shall add to or
change any of the provisions of this Declaration as shall be necessary to
provide for or facilitate the administration of the 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 Trust of 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 Securities
and the Trust.
(c)......No Institutional Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Institutional Trustee
or Successor Delaware Trustee, as the case may be.
(d)......The Holders of the Capital Securities will have no
right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Holder of the Common Securities.
SECTION 4.8 Vacancies Among Trustees. If a Trustee ceases to
hold office for any reason and the number of Trustees is not reduced pursuant
to Section 4.1, or if the number of Trustees is increased pursuant to
Section 4.1, a vacancy shall occur. A resolution certifying the existence
of such vacancy by the Trustees or, if there are more than two, a majority of
the Trustees shall be conclusive evidence of the existence of such vacancy.
The vacancy shall be filled with an a Trustee appointed in accordance
with Section 4.7.
SECTION 4.9 Effect of Vacancies. The death, resignation,
retirement, removal, bankruptcy, dissolution, liquidation, incompetence or
incapacity to perform the duties of a Trustee shall not operate to dissolve,
terminate or annul the Trust. Whenever a vacancy in the number of Trustees
shall occur, until such vacancy is filled by the appointment of a Trustee in
accordance with Section 4.7, the Institutional Trustee shall have all the
powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration.
SECTION 4.10 Meetings of the Trustees or the Administrators.
Meetings of the Trustees or the Administrators shall be held from time to time
upon the call of any Trustee or Administrator, as applicable. Regular meetings
of the Trustees and the Administrators, respectively, may be in
person in the United States or by telephone, at a place (if applicable) and time
fixed by resolution of the Trustees or the Administrators, as applicable. Notice
of any in-person meetings of the Trustees or the Administrators shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 48 hours before such meeting. Notice of
any telephonic meetings of the Trustees or the Administrators or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Trustee or an Administrator, as the case may be, at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee or an
Administrator, as the case may be, attends a meeting for the express purpose of
objecting to the transaction of any activity on the ground that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Trustees or the Administrators, as the case may
be, may be taken at a meeting by vote of a majority of the Trustees or the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter; provided, that a Quorum is present, or without a
meeting by the unanimous written consent of the Trustees or the Administrators.
Meetings of the Trustees and the Administrators together shall be held from the
time to time upon the call of any Trustee or Administrator.
SECTION 4.11 Delegation of Power. (a) Any Trustee or any
Administrator, as the case may be, may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 that is
a U.S. Person his or her power for the purpose of executing any documents
contemplated in Section 2.6; and
(b)......the Trustees shall have power to delegate from time
to time to such of their number or to any officer of the Trust that is a U.S.
Person, the doing of such things and the execution of such instruments either in
the name of the Trust or the names of the Trustees or otherwise as the Trustees
may deem expedient, to the extent such delegation is not prohibited by
applicable law or contrary to the provisions of the Trust, as set forth herein.
SECTION 4.12 Conversion, Consolidation or Succession to
Business. Any Person into which the Institutional Trustee or the
Delaware Trustee, as the case may be, may be merged or converted or with which
either may be consolidated, or any Person resulting from any merger, conversion
or consolidation to which the Institutional Trustee or the Delaware Trustee, as
the case may be, shall be a party, or any Person succeeding to all or
substantially all the corporate trust business of the Institutional Trustee or
the Delaware Trustee, as the case may be, shall be the successor of the
Institutional Trustee or the Delaware Trustee, as the case may be, hereunder,
provided 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.
ARTICLE V
DISTRIBUTIONS
SECTION 5.1 Distributions. Holders shall receive Distributions
in accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of interest (including
any Additional Interest or Deferred Interest) and/or principal on the
Debentures held by the Institutional Trustee (the amount of any such payment
being a "Payment Amount"), the Institutional Trustee shall and is directed,
to the extent funds are available for that purpose, to make a distribution
(a "Distribution") of the Payment Amount to Holders.
ARTICLE VI
ISSUANCE OF SECURITIES
SECTION 6.1 General Provisions Regarding Securities
(a) The Administrators shall on behalf of the Trust issue one
series of capital securities substantially in the form of Exhibit A-1
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Capital Securities") and one series
of common securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Capital Securities and the Common Securities.
The Capital Securities rank pari passu and payment thereon shall be made Pro
Rata with the Common Securities except that, where an Event of Default has
occurred and is continuing, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities.
(b)......The Certificates shall be signed on behalf of the
Trust by one or more Administrators. Such signature shall be the facsimile or
manual signature of any Administrator. In case any Administrator of the Trust
who shall have signed any of the Securities shall cease to be such Administrator
before the Certificates so signed shall be delivered by the Trust, such
Certificates nevertheless may be delivered as though the person who signed such
Certificates had not ceased to be such Administrator; and any Certificate may be
signed on behalf of the Trust by such person who, at the actual date of
execution of such Security, shall be an Administrator of the Trust, although at
the date of the execution and delivery of the Declaration any such person was
not such an Administrator. A Capital Security shall not be valid until
authenticated by the manual signature of an Authorized Officer of the
Institutional Trustee. Such signature shall be conclusive evidence that the
Capital Security has been authenticated under this Declaration. Upon written
order of the Trust signed by one Administrator, the Institutional Trustee shall
authenticate the Capital Securities for original issue. The Institutional
Trustee may appoint an authenticating agent that is a U.S. Person acceptable to
the Trust to authenticate the Capital Securities. A Common Security need not be
so authenticated.
(c)......The consideration received by the Trust for the
issuance of the Securities shall constitute a contribution to the capital of the
Trust and shall not constitute a loan to the Trust.
(d)......Upon issuance of the Securities as provided in this
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable.
(e)......Every Person, by virtue of having become a Holder or
a Capital Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the Guarantee.
SECTION 6.2 Paying Agent, Transfer Agent and Registrar.
The Trust shall maintain in New York, New York, an office or
agency where the Capital Securities may be presented for payment (the "Paying
Agent"), and an office or agency where Securities may be presented for
registration of transfer (the "Transfer Agent"). The Trust shall keep or cause
to be kept at such office or agency a register for the purpose of registering
Securities and transfers and exchanges of Securities, such register to be held
by a registrar (the "Registrar"). The Administrators may appoint the Paying
Agent, the Registrar and the Transfer Agent, and may appoint one or more
additional Paying Agents or one or more co-Registrars, or one or more
co-Transfer Agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent, the term "Registrar"
includes any additional registrar or co-Registrar and the term "Transfer Agent"
includes any additional transfer agent. The Administrators may change any Paying
Agent without prior notice to any Holder. The Administrators shall notify the
Institutional Trustee of the name and address of any Paying Agent, Transfer
Agent and Registrar not a party to this Declaration. The Administrators hereby
appoint the Institutional Trustee to act as Paying Agent, Transfer Agent and
Registrar for the Capital Securities and the Common Securities. The
Institutional Trustee or any of its Affiliates in the United States may act as
Paying Agent, Transfer Agent or Registrar.
Section 6.3 Form and Dating.
The Capital Securities and the Institutional Trustee's
certificate of authentication thereon shall be substantially in the form of
Exhibit A-1, and the Common Securities shall be substantially in the form of
Exhibit A-2, each of which is hereby incorporated in and expressly made a part
of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided, that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Capital Security shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the
Delaware Trustee, the Administrators and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby. Capital Securities will be issued only in blocks having a
stated liquidation amount of not less than $1,000.
The Capital Securities are being offered and sold by the Trust
pursuant to the Placement Agreement in definitive, registered form without
coupons with the Restricted Securities Legend.
SECTION 6.4 Mutilated, Destroyed, Lost or Stolen Certificates. If:
(a) any mutilated Certificates should be surrendered to the
Registrar, or if the Registrar shall receive evidence to their satisfaction of
the destruction, loss or theft of any Certificate; and
(b)......there shall be delivered to the Registrar, the
Administrators and the Institutional Trustee such security or indemnity as may
be required by them to keep each of them harmless; then, in the absence of
notice that such Certificate shall have been acquired by a bona fide purchaser,
an Administrator on behalf of the Trust shall execute (and in the case of a
Capital Security Certificate, the Institutional Trustee shall authenticate) and
deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like denomination. In connection with
the issuance of any new Certificate under this Section 6.4, the Registrar or the
Administrators may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith. Any
duplicate Certificate issued pursuant to this Section shall constitute
conclusive evidence of an ownership interest in the relevant Securities, as if
originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time.
SECTION 6.5 Temporary Securities.
Until definitive Securities are ready for delivery, the
Administrators may prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate, temporary Securities. Temporary
Securities shall be substantially in form of definitive Securities but may have
variations that the Administrators consider appropriate for temporary
Securities. Without unreasonable delay, the Administrators shall prepare and, in
the case of the Capital Securities, the Institutional Trustee shall authenticate
definitive Securities in exchange for temporary Securities.
SECTION 6.6 Cancellation.
The Administrators at any time may deliver Securities to the
Institutional Trustee for cancellation. The Registrar shall forward to the
Institutional Trustee any Securities surrendered to it for registration of
transfer, redemption or payment. The Institutional Trustee shall promptly cancel
all Securities surrendered for registration of transfer, payment, replacement or
cancellation and shall dispose of such canceled Securities as the Administrators
direct. The Administrators may not issue new Securities to replace Securities
that have been paid or that have been delivered to the Institutional Trustee for
cancellation.
SECTION 6.7 Rights of Holders; Waivers of Past Defaults.
(a)......The legal title to the Trust Property is vested
exclusively in the Institutional Trustee (in its capacity as such) in accordance
with Section 2.5, and the Holders shall not have any right or title therein
other than the undivided beneficial interest in the assets of the Trust
conferred by their Securities and they shall have no right to call for any
partition or division of property, profits or rights of the Trust except as
described below. The Securities shall be personal property giving only the
rights specifically set forth therein and in this Declaration. The Securities
shall have no preemptive or similar rights and when issued and delivered to
Holders against payment of the purchase price therefor will be fully paid and
nonassessable by the Trust.
(b)......For so long as any Capital Securities remain
outstanding, if, upon an Indenture 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 a majority in liquidation
amount of the Capital Securities then outstanding shall have the right to make
such declaration by a notice in writing to the Institutional Trustee, the
Sponsor 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 provided in the
Indenture, if the Institutional 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 Institutional Trustee, the
Sponsor and the Debenture Trustee, may rescind and annul such declaration and
its consequences if:
(i) the Sponsor 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 Deferred 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 Deferred 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 Institutional 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 5.07 of the Indenture.
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 under the Indenture,
except a default or Event of Default in the payment of principal or interest
(unless such default or Event of 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 or
Event of Default in respect of a covenant or provision that under the Indenture
cannot be modified or amended without the consent of the holder of each
outstanding Debenture. No such rescission shall affect any subsequent default or
impair any right consequent thereon.
Upon receipt by the Institutional 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
Institutional 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 6.7.
(d)......Except as otherwise provided in paragraphs (a) and
(b) of this Section 6.7, 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.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
SECTION 7.1 Dissolution and Termination of Trust.
The Trust shall dissolve on the first to occur of :
(i) unless earlier dissolved, on March 8, 2055, the expiration of
the term of the Trust;
(ii) upon a Bankruptcy Event with respect to the Sponsor, the Trust
or the Debenture Issuer;
(iii) (other than in connection with a merger, consolidation
or similar transaction not prohibited by the Indenture, this
Declaration or the Guarantee, as the case may be) upon the filing of a
certificate of dissolution or its equivalent with respect to the
Sponsor; upon the revocation of the charter of the Sponsor and the
expiration of 90 days after the date of revocation without a
reinstatement thereof;
(iv) upon the distribution of the Debentures to the Holders of
the Securities, upon exercise of the right of the Holder of all of the
outstanding Common Securities to dissolve the Trust as provided in
Annex I hereto;
(v) upon the entry of a decree of judicial dissolution of the Holder
of the Common Securities, the Sponsor, the Trust or the Debenture Issuer;
(vi) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have
been paid to the Holders in accordance with the terms of the
Securities; or
(vii) before the issuance of any Securities, with the consent
of all of the Trustees and the Sponsor.
(b)......As soon as is practicable after the occurrence of an
event referred to in Section 7.1(a), and after satisfaction of liabilities to
creditors of the Trust as required by applicable law, including Section 3808 of
the Business Trust Act, and subject to the terms set forth in Annex I, the
Institutional Trustee shall terminate the Trust by filing a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c)......The provisions of Section 2.9 and Article IX shall
survive the termination of the Trust.
ARTICLE VIII
TRANSFER OF INTERESTS
SECTION 8.1 General. Where Capital Securities are presented to the
Registrar or a co-registrar with a request to register a transfer or to exchange
them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.
(b)......Upon issuance of the Common Securities, the Sponsor
shall acquire and retain beneficial and record ownership of the Common
Securities and for so long as the Securities remain outstanding, the Sponsor
shall maintain 100% ownership of the Common Securities; provided, however, that
any permitted successor of the Sponsor under the Indenture that is a U.S. Person
may succeed to the Sponsor's ownership of the Common Securities.
(c)......Capital Securities may only be transferred, in whole
or in part, in accordance with the terms and conditions set forth in this
Declaration and in the terms of the Securities. To the fullest extent permitted
by applicable law, any transfer or purported transfer of any Security not made
in accordance with this Declaration shall be null and void and will be deemed to
be of no legal effect whatsoever and any such transferee shall be deemed not to
be the holder of such Capital Securities for any purpose, including but not
limited to the receipt of Distributions on such Capital Securities, and such
transferee shall be deemed to have no interest whatsoever in such Capital
Securities.
(d)......The Registrar shall provide for the registration of
Securities and of transfers of Securities, which will be effected without charge
but only upon payment (with such indemnity as the Registrar may require) in
respect of any tax or other governmental charges that may be imposed in relation
to it. Upon surrender for registration of transfer of any Securities, the
Registrar shall cause one or more new Securities to be issued in the name of the
designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.6. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
(e)......The Trust shall not be required (i) to issue,
register the transfer of, or exchange any Securities during a period beginning
at the opening of business 15 days before the day of any selection of Securities
for redemption and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all Holders of
the Securities to be redeemed, or (ii) to register the transfer or exchange of
any Security so selected for redemption in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
SECTION 8.2 Transfer Procedures and Restrictions.
(a)......General. (i) The Capital Securities shall bear the
Restricted Securities Legend, which shall not be removed unless there is
delivered to the Trust such satisfactory evidence, which may include an opinion
of counsel licensed to practice law in the State of New York, as may be
reasonably required by the Trust, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of the Securities Act or that such Securities are not
"restricted" within the meaning of Rule 144 under the Securities Act. Upon
provision of such satisfactory evidence, the Institutional Trustee, at the
written direction of the Trust, shall authenticate and deliver Capital
Securities that do not bear the legend.
(b)......Transfer and Exchange of Capital Securities. When
Capital Securities are presented to the Registrar (x) to register the transfer
of such Capital Securities, or (y) to exchange such Capital Securities for an
equal number of Capital Securities of another number, the Registrar shall
register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the Capital
Securities surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form reasonably
satisfactory to the Trust and the Registrar, duly executed by the Holder thereof
or his attorney duly authorized in writing and (i) if such Capital Securities
are being transferred to a QIB, accompanied by a certificate of the transferee
substantially in the form set forth as Exhibit C hereto or (ii) if such Capital
Securities are being transferred otherwise than to a QIB, accompanied by a
certificate of the transferee substantially in the form set forth as Exhibit B
hereto.
(c)......Legend. Except as permitted by Section 8.2(a), each
Capital Security shall bear a legend (the "Restricted Securities Legend") in
substantially the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE DEBENTURE
ISSUER'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM
THE DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
(d)......Obligations with Respect to Transfers and Exchanges
of Capital Securities.
(i) To permit registrations of transfers and exchanges, the
Trust shall execute and the Institutional Trustee shall authenticate
Capital Securities at the Registrar's request.
(ii) Registrations of transfers or exchanges will be effected
without charge, but only upon payment (with such indemnity as the
Registrar or the Sponsor may require) in respect of any tax or other
governmental charge that may be imposed in relation to it.
(iii) The Registrar shall not be required to register the
transfer of or exchange of any Capital Security during a period
beginning at the opening of business 15 days before the day of any
selection of any Capital Security for redemption set forth in the terms
and ending at the close of business on the earliest date on which the
relevant notice of redemption is deemed to have been given to all
Holders of Capital Securities to be redeemed.
(iv) All Capital Securities issued upon any registration of
transfer or exchange pursuant to the terms of this Declaration shall
evidence the same security and shall be entitled to the same benefits
under this Declaration as the Capital Securities surrendered upon such
registration of transfer or exchange.
. The Trust, the Administrators, the Trustees, the Paying
Agent, the Transfer Agent or the Registrar may treat the Person in whose name
any Certificate shall be registered on the books and records of the Trust as the
sole holder of such Certificate and of the Securities represented by such
Certificate for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Certificate or in the Securities represented
by such Certificate on the part of any Person, whether or not the Trust, the
Administrators, the Trustees, the Paying Agent, the Transfer Agent or the
Registrar shall have actual or other notice thereof.
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 9.1 Liability. (a) Except as expressly set forth
in this Declaration, the Guarantee and the terms of the Securities,
the Sponsor shall not be:
(i) personally liable for the return of any portion of the
capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.
(b)......The Holder of the Common Securities shall be liable
for all of the debts and obligations of the Trust (other than with respect to
the Securities) to the extent not satisfied out of the Trust's assets.
(c)......Pursuant to ss. 3803(a) of the Business Trust Act,
the Holders of the Capital Securities shall be entitled to the same limitation
of personal liability extended to stockholders of private corporations for
profit organized under the General Corporation Law of the State of Delaware.
SECTION 9.2 (a) No Indemnified Person shall be liable,
responsible or accountable in damages or otherwise to the Trust or any Covered
Person for any loss, damage or claim incurred by reason of any act or omission
performed or omitted by such Indemnified Person in good faith on behalf of the
Trust and in a manner such Indemnified Person reasonably believed to be within
the scope of the authority conferred on such Indemnified Person by this
Declaration or by law, except that an Indemnified Person shall be liable for
any such loss, damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or omissions.
(b)......An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Trust and upon such information,
opinions, reports or statements presented to the Trust by any Person as to
matters the Indemnified Person reasonably believes are within such other
Person's professional or expert competence and, if selected by such Indemnified
Person, has been selected by such Indemnified Person with reasonable care by or
on behalf of the Trust, including information, opinions, reports or statements
as to the value and amount of the assets, liabilities, profits, losses or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
SECTION 9.3 Exculpation (a) To the extent that,
at law or in equity, an Indemnified Person has duties (including fiduciary
duties) and liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Declaration shall not be
liable to the Trust or to any other Covered Person for its good faith
reliance on the provisions of this Declaration. The provisions of this
Declaration, to the extent that they restrict the duties and liabilities
of an Indemnified Person otherwise existing at law or in equity (other than the
duties imposed on the Institutional Trustee under the Trust Indenture Act),
are agreed by the parties hereto to replace such other duties and liabilities
of the Indemnified Person.
(b)......Whenever in this Declaration an Indemnified Person
is permitted or required to make a decision:
(i) in its "discretion" or under a grant of similar authority,
the Indemnified Person shall be entitled to consider such interests and
factors as it desires, including its own interests, and shall have no
duty or obligation to give any consideration to any interest of or
factors affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall
not be subject to any other or different standard imposed by this
Declaration or by applicable law.
SECTION 9.4 Indemnification.
(a) (i) The Sponsor shall indemnify, to the full extent
permitted by law, any Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the Trust) by reason of the fact that he is or
was an Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Indemnified Person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(ii) The Sponsor shall indemnify, to the full extent permitted
by law, any Indemnified Person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor
by reason of the fact that he is or was an Indemnified Person against
expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be made in
respect of any claim, issue or matter as to which such Indemnified
Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court
in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such Court of Chancery or
such other court shall deem proper.
(iii) To the extent that an Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 9.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees
and expenses) actually and reasonably incurred by him in connection
therewith.
(iv) Any indemnification of an Administrator under paragraphs
(i) and (ii) of this Section 9.4(a) (unless ordered by a court) shall
be made by the Sponsor only as authorized in the specific case upon a
determination that indemnification of the Indemnified Person is proper
in the circumstances because he has met the applicable standard of
conduct set forth in paragraphs (i) and (ii). Such determination shall
be made (A) by the Administrators by a majority vote of a Quorum
consisting of such Administrators who were not parties to such action,
suit or proceeding, (B) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (C) by the Common
Security Holder of the Trust.
(v) To the fullest extent permitted by law, expenses
(including attorneys' fees and expenses) incurred by an Indemnified
Person in defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and (ii) of
this Section 9.4(a) shall be paid by the Sponsor in advance of the
final disposition of such action, suit or proceeding upon receipt of an
undertaking by or on behalf of such Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to
be indemnified by the Sponsor as authorized in this Section 9.4(a).
Notwithstanding the foregoing, no advance shall be made by the Sponsor
if a determination is reasonably and promptly made (A) by the
Administrators by a majority vote of a Quorum of disinterested
Administrators, (B) if such a Quorum is not obtainable, or, even if
obtainable, if a quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion or (C) by the Common
Security Holder of the Trust, that, based upon the facts known to the
Administrators, counsel or the Common Security Holder at the time such
determination is made, such Indemnified Person acted in bad faith or in
a manner that such Person did not believe to be in or not opposed to
the best interests of the Trust, or, with respect to any criminal
proceeding, that such Indemnified Person believed or had reasonable
cause to believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrators, independent
legal counsel or the Common Security Holder reasonably determine that
such Person deliberately breached his duty to the Trust or its Common
or Capital Security Holders.
(vi) Each Trustee, at the sole cost and expense of the
Sponsor, retains the right to representation by counsel of its own
choosing in any action, suit or any other proceeding hereunder or
against it by relation to the foregoing, without affecting its right to
indemnification hereunder or waiving any rights afforded to it under
this Declaration or applicable law.
(b)......The Sponsor shall indemnify, to the fullest extent
permitted by applicable law, each Indemnified Person from and against any and
all loss, damage, liability, tax, penalty, expense or claim of any kind or
nature whatsoever incurred by such Indemnified Person arising out of or in
connection with or by reason of the creation, operation or termination of the
Trust, or any act or omission performed or omitted by such Indemnified Person in
good faith on behalf of the Trust and in a manner such Indemnified Person
reasonably believed to be within the scope of authority conferred on such
Indemnified Person by this Declaration, 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 gross negligence or willful misconduct
with respect to such acts or omissions.
(c)......The indemnification and advancement of expenses
provided by, or granted pursuant to, the other paragraphs of this Section 9.4
shall not be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any agreement,
vote of stockholders or disinterested directors of the Sponsor or Capital
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 9.4 shall be deemed to be provided
by a contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section 9.4 is in effect. Any repeal or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.
(d)......The Sponsor or the Trust may purchase and maintain
insurance on behalf of any Person who is or was an Indemnified Person against
any liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Sponsor would have the
power to indemnify him against such liability under the provisions of this
Section 9.4.
(e)......For purposes of this Section 9.4, references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any Person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity as a director, trustee, officer, employee or
agent of another entity, shall stand in the same position under the provisions
of this Section 9.4 with respect to the resulting or surviving entity as he
would have with respect to such constituent entity if its separate existence had
continued.
(f)......The indemnification and advancement of expenses
provided by, or granted pursuant to, this Section 9.4 shall, unless otherwise
provided when authorized or ratified, continue as to a Person who has ceased to
be an Indemnified Person and shall inure to the benefit of the heirs, executors
and administrators of such a Person.
The provisions of this Section shall survive the termination
of this agreement or the earlier resignation or removal of the Institutional
Trustee. The obligations of the Sponsor under this Section 9.4 to compensate and
indemnify the Trustees and to pay or reimburse the Trustees for expenses,
disbursements and advances shall constitute additional indebtedness hereunder.
Such additional indebtedness shall be secured by a lien prior to that of the
Securities upon all property and funds held or collected by the Trustees as
such, except funds held in trust for the benefit of the holders of particular
Securities.
SECTION 9.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and
the Institutional Trustee (subject to Section 4.3(c)) 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
Trust, and the Trust and the Holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. None of any Covered Person, the Sponsor, the Delaware Trustee or the
Institutional Trustee shall be obligated to present any particular investment or
other opportunity to the Trust even if such opportunity is of a character that,
if presented to the Trust, could be taken by the Trust, and any Covered Person,
the Sponsor, the Delaware Trustee and the Institutional Trustee shall have the
right to take for its own account (individually or as a partner or fiduciary) or
to recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Institutional Trustee may engage or
be interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
SECTION 9.6 Compensation; Fee. The Sponsor agrees:
(a)......to pay to the Trustees from time to time such
compensation for all services rendered by them hereunder as the parties 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); and
(b)......except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or willful
misconduct.
The provisions of this Section 9.6 shall survive the
dissolution of the Trust and the termination of this Declaration and the removal
or resignation of any Trustee.
No Trustee may claim any lien or charge on any property of the
Trust as a result of any amount due pursuant to this Section 9.6.
ARTICLE X
ACCOUNTING
SECTION 10.1 Fiscal Year.
The fiscal year (the "Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
SECTION 10.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrators shall keep, or cause to be kept at the principal office of the
Trust in the United States, as defined for purposes of Treasury regulations
section 301.7701-7, full books of account, records and supporting documents,
which shall reflect in reasonable detail each transaction of the Trust. The
books of account shall be maintained on the accrual method of accounting, in
accordance with generally accepted accounting principles, consistently applied.
The books of account and the records of the Trust shall be examined by and
reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrators.
(b)......The Administrators shall cause to be prepared at the
principal office of the Trust in the United States, as defined for purposes of
Treasury regulations section 301.7701-7, and delivered to each of the Holders of
Securities, within 90 days after the end of each Fiscal Year of the Trust,
annual financial statements of the Trust, including a balance sheet of the Trust
as of the end of such Fiscal Year, and the related statements of income or loss
which shall be examined by and reported upon by a firm of independent certified
public accountants selected by the Administrators.
(c)......The Administrators shall cause to be duly prepared
and delivered to each of the Holders of Securities Form 1099 or such other
annual United States federal income tax information statement required by the
Code, containing such information with regard to the Securities held by each
Holder as is required by the Code and the Treasury Regulations. Notwithstanding
any right under the Code to deliver any such statement at a later date, the
Administrators shall endeavor to deliver all such statements within 30 days
after the end of each Fiscal Year of the Trust.
(d)......The Administrators shall cause to be duly prepared in
the United States, as defined for purposes of Treasury regulations section
301.7701-7, and filed an annual United States federal income tax return on a
Form 1041 or such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by the
Administrators on behalf of the Trust with any state or local taxing authority.
(e)......So long as the only Holder of the Capital Securities
is Regional Diversified Funding Limited, the Administrators will cause the
Sponsor's reports on Forms FR Y-9C, FR Y-9LP and FR Y-6 to be delivered to the
Holder promptly following their filing with the Federal Reserve.
SECTION 10.3 Banking.
The Trust shall maintain one or more bank accounts in the
United States, as defined for purposes of Treasury regulations section
301.7701-7, in the name and for the sole benefit of the Trust; provided,
however, that all payments of funds in respect of the Debentures held by the
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust shall be deposited in the Property Account. The sole
signatories for such accounts (including the Property Account) shall be
designated by the Institutional Trustee.
SECTION 10.4 Withholding.
The Institutional Trustee or any Paying Agent and the
Administrators shall comply with all withholding requirements under United
States federal, state and local law. The Institutional Trustee or any Paying
Agent shall request, and each Holder shall provide to the Institutional Trustee
or any Paying Agent, such forms or certificates as are necessary to establish an
exemption from withholding with respect to the Holder, and any representations
and forms as shall reasonably be requested by the Institutional Trustee or any
Paying Agent to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Administrators shall file required forms with
applicable jurisdictions and, unless an exemption from withholding is properly
established by a Holder, shall remit amounts withheld with respect to the Holder
to applicable jurisdictions. To the extent that the Institutional Trustee or any
Paying Agent is required to withhold and pay over any amounts to any authority
with respect to distributions or allocations to any Holder, the amount withheld
shall be deemed to be a Distribution to the Holder in the amount of the
withholding. In the event of any claimed overwithholding, Holders shall be
limited to an action against the applicable jurisdiction. If the amount required
to be withheld was not withheld from actual Distributions made, the
Institutional Trustee or any Paying Agent may reduce subsequent Distributions by
the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
SECTION 11.1 Amendments. (a) Except as otherwise provided
in this Declaration or by any applicable terms of the Securities, this
Declaration may only be amended by a written instrument approved and executed by
(i) the Institutional Trustee, and
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b)......Notwithstanding any other provision of this Article
XI, no amendment shall be made, and any such purported amendment shall be void
and ineffective:
(i) unless the Institutional Trustee shall have first received
(A) an Officers' Certificate from each of the Trust
and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(ii) if the result of such amendment would be to
(A) cause the Trust to cease to be classified for
purposes of United States federal income taxation as a grantor
trust;
(B) reduce or otherwise adversely affect the powers
of the Institutional Trustee in contravention of the Trust
Indenture Act;
(C) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act; or
(D) cause the Debenture Issuer to be unable to treat
an amount equal to the Liquidation Amount of the Debentures as
"Tier 1 Capital" for purposes of the capital adequacy
guidelines of the Federal Reserve.
(c)......Except as provided in Section 11.1(d), (e) or (h), no
amendment shall be made, and any such purported amendment shall be void and
ineffective unless the Holders of a Majority in liquidation amount of the
Capital Securities shall have consented to such amendment.
(d)......In addition to and notwithstanding any other
provision in this Declaration, without the consent of each affected Holder, this
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Securities or otherwise adversely affect the amount of any
Distribution required to be made in respect of the Securities as of a specified
date or (ii) restrict the right of a Holder to institute suit for the
enforcement of any such payment on or after such date.
(e)......Section 8.1(b) and 8.1(c) and this Section 11.1 shall
not be amended without the consent of all of the Holders of the Securities.
(f)......Article III shall not be amended without the consent
of the Holders of a Majority in liquidation amount of the Common Securities.
(g)......the rights of the Holders of the Capital Securities
under Article IV to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Capital Securities.
(h)......This Declaration may be amended by the Institutional
Trustee and the Holders of a Majority in the liquidation amount of the Common
Securities without the consent of the Holders of the Capital Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations
of the Sponsor; and
(iv) modify, eliminate or add to any provision of this
Declaration to such extent as may be necessary to ensure that the Trust
will be classified for United States federal income tax purposes at all
times as a grantor trust and will not be required to register as an
"investment company" under the Investment Company Act (including
without limitation to conform to any change in Rule 3a-5, Rule 3a-7 or
any other applicable rule under the Investment Company Act or written
change in interpretation or application thereof by any legislative
body, court, government agency or regulatory authority) which amendment
does not have a material adverse effect on the right, preferences or
privileges of the Holders of Securities;
provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii) or (iii) shall adversely affect the powers,
preferences or special rights of Holders of Capital Securities.
SECTION 11.2 Meetings of the Holders of Securities;
Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration, the terms of
the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, if any. The Administrators shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrators one or more calls
in a writing stating that the signing Holders of the Securities wish to call a
meeting and indicating the general or specific purpose for which the meeting is
to be called. Any Holders of the Securities calling a meeting shall specify in
writing the Certificates held by the Holders of the Securities exercising the
right to call a meeting and only those Securities represented by such
Certificates shall be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has been met.
(b)......Except to the extent otherwise provided in the terms
of the Securities, the following provisions shall apply to meetings of Holders
of the Securities:
(i) notice of any such meeting shall be given to all the
Holders of the Securities having a right to vote thereat at least 7
days and not more than 60 days before the date of such meeting.
Whenever a vote, consent or approval of the Holders of the Securities
is permitted or required under this Declaration or the rules of any
stock exchange on which the Capital Securities are listed or admitted
for trading, if any, such vote, consent or approval may be given at a
meeting of the Holders of the Securities. Any action that may be taken
at a meeting of the Holders of the Securities may be taken without a
meeting if a consent in writing setting forth the action so taken is
signed by the Holders of the Securities owning not less than the
minimum amount of Securities in liquidation amount that would be
necessary to authorize or take such action at a meeting at which all
Holders of the Securities having a right to vote thereon were present
and voting. Prompt notice of the taking of action without a meeting
shall be given to the Holders of the Securities entitled to vote who
have not consented in writing. The Administrators may specify that any
written ballot submitted to the Holders of the Securities for the
purpose of taking any action without a meeting shall be returned to the
Trust within the time specified by the Administrators;
(ii) each Holder of a Security may authorize any Person to act
for it by proxy on all matters in which a Holder of Securities is
entitled to participate, including waiving notice of any meeting, or
voting or participating at a meeting. No proxy shall be valid after the
expiration of 11 months from the date thereof unless otherwise provided
in the proxy. Every proxy shall be revocable at the pleasure of the
Holder of the Securities executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of
proxies shall be governed by the General Corporation Law of the State
of Delaware relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Delaware corporation and the Holders
of the Securities were stockholders of a Delaware corporation; each
meeting of the Holders of the Securities shall be conducted by the
Administrators or by such other Person that the Administrators may
designate; and
(iii) unless the Business Trust Act, this Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Capital Securities are then listed
for trading, if any, otherwise provides, the Administrators, in their
sole discretion, shall establish all other provisions relating to
meetings of Holders of Securities, including notice of the time, place
or purpose of any meeting at which any matter is to be voted on by any
Holders of the Securities, waiver of any such notice, action by consent
without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with
respect to the exercise of any such right to vote; provided, however,
that each meeting shall be conducted in the United States (as that term
is defined in Treasury regulations section 301.7701-7).
ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
AND DELAWARE TRUSTEE
SECTION 12.1 Representations and Warranties of Institutional
Trustee. The Trustee that acts as initial Institutional Trustee
represents and warrants to the Trust and to the Sponsor at the date of this
Declaration, and each Successor Institutional Trustee represents and warrants to
the Trust and the Sponsor at the time of the Successor Institutional Trustee's
acceptance of its appointment as Institutional Trustee, that:
(a)......the Institutional Trustee is a banking corporation
with trust powers, duly organized, validly existing and in good standing under
the laws of the United States with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Declaration;
(b)......the execution, delivery and performance by the
Institutional Trustee of this Declaration has been duly authorized by all
necessary corporate action on the part of the Institutional Trustee. This
Declaration has been duly executed and delivered by the Institutional Trustee,
and it constitutes a legal, valid and binding obligation of the Institutional
Trustee, enforceable against it in accordance with its terms, subject to
applicable bankruptcy, reorganization, moratorium, insolvency and other similar
laws affecting creditors' rights generally and to general principles of equity
(regardless of whether considered in a proceeding in equity or at law);
(c)......the execution, delivery and performance of this
Declaration by the Institutional Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Institutional Trustee; and
(d)......no consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority is
required for the execution, delivery or performance by the Institutional Trustee
of this Declaration.
SECTION 12.2 Representations and Warranties of Delaware
Trustee. The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust and to the Sponsor at the date of this Declaration,
and each Successor Delaware Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Delaware Trustee's acceptance of its
appointment as Delaware Trustee, that:
(a)......The Delaware Trustee is duly organized, validly
existing and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, this Declaration.
(b)......The Delaware Trustee has been authorized to perform
its obligations under the Certificate of Trust and this Declaration. This
Declaration under Delaware law constitutes a legal, valid and binding obligation
of the Delaware Trustee, enforceable against it in accordance with its terms,
subject to applicable bankruptcy, reorganization, moratorium, insolvency and
other similar laws affecting creditors' rights generally, and to general
principles of equity (regardless of whether considered in a proceeding in equity
or at law).
(c)......No consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority is
required for the execution, delivery or performance by the Delaware Trustee of
this Declaration.
(d)......The Delaware Trustee is a natural person who is a
resident of the State of Delaware or, if not a natural person, an entity which
has its principal place of business in the State of Delaware and, in either
case, a Person that satisfies for the Trust the requirements of Section 3807 of
the Business Trust Act.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied (which telecopy shall be followed by notice delivered or mailed by
first class mail) or mailed by first class mail, as follows:
(a)......if given to the Trust, in care of the Administrators
at the Trust's mailing address set forth below (or such other address as the
Trust may give notice of to the Holders of the Securities:
Century Capital Trust I
c/o Century Bancshares, Inc.
1275 Pennsylvania Avenue, NW
Washington D.C. 20004
Attention: Administrators for Century Capital Trust I
(b)......if given to the Delaware Trustee, at the mailing
address set forth below (or such other address as Delaware Trustee may give
notice of to the Holders of the Securities):
The Bank of New York (Delaware)
White Clay Center, Route 273
Newark, Delaware
Attention: Corporate Trust Administration
Telecopy:
(c)......if given to the Institutional Trustee, at the
Institutional Trustee's mailing address set forth below (or such other address
as the Institutional Trustee may give notice of to the Holders of the
Securities):
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Attention: Corporate Trust Administration
Telecopy: 212-819-5915
(d)......if given to the Holder of the Common Securities, at
the mailing address of the Sponsor set forth below (or such other address as the
Holder of the Common Securities may give notice of to the Trust):
Century Bancshares, Inc.
1275 Pennsylvania Avenue, NW
Washington D.C. 20004
Attention: Joseph S. Bracewell,
President and Chief Executive Officer.
(e)......if given to any other Holder, at the address set
forth on the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTUION 13.2 Governing Law.
This Declaration and the rights of the parties hereunder
shall be governed by and interpreted in accordance with the law of the State of
Delaware and all rights and remedies shall be governed by such laws without
regard to the principles of conflict of laws of the State of Delaware or any
other jurisdiction that would call for the application of the law of any
jurisdiction other than the State of Delaware; provided, however, that there
shall not be applicable to the Trust, the Trustees or this Declaration any
provision of the laws (statutory or common) of the State of Delaware pertaining
to trusts that relate to or regulate, in a manner inconsistent with the terms
hereof (a) the filing with any court or governmental body or agency of trustee
accounts or schedules of trustee fees and charges, (b) affirmative requirements
to post bonds for trustees, officers, agents or employees of a trust, (c) the
necessity for obtaining court or other governmental approval concerning the
acquisition, holding or disposition of real or personal property, (d) fees or
other sums payable to trustees, officers, agents or employees of a trust, (e)
the allocation of receipts and expenditures to income or principal, (f)
restrictions or limitations on the permissible nature, amount or concentration
of trust investments or requirements relating to the titling, storage or other
manner of holding or investing trust assets or (g) the establishment of
fiduciary or other standards of responsibility or limitations on the acts or
powers of trustees that are inconsistent with the limitations or liabilities or
authorities and powers of the Trustees as set forth or referenced in this
Declaration. Section 3540 of Title 12 of the Delaware Code shall not apply to
the Trust.
SECTION 13.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 13.4 Headings.
Headings contained in this Declaration are inserted for
convenience of reference only and do not affect the interpretation of this
Declaration or any provision hereof.
SECTION 13.5 Successors and Assigns.
Whenever in this Declaration any of the parties hereto is
named or referred to, the successors and assigns of such party shall be deemed
to be included, and all covenants and agreements in this Declaration by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether or not so expressed.
SECTION 13.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 13.7 Counterparts.
This Declaration may contain more than one counterpart of
the signature page and this Declaration may be executed by the affixing of the
signature of each of the Trustees and Administrators to any of such counterpart
signature pages. All of such counterpart signature pages shall be read as though
one, and they shall have the same force and effect as though all of the signers
had signed a single signature page.
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents
to be executed as of the day and year first above written.
THE BANK OF NEW YORK (DELAWARE)
as Delaware Trustee
By: _____________________________
Name:
Title
THE BANK OF NEW YORK
as Institutional Trustee
By: _____________________________
Name:
Title:
CENTURY BANCSHARES, INC.
as Sponsor
By: S/B/ JOSEPH S. BRACEWELL
-------------------------
Name: Joseph S. Bracewell
Title: President
CENTURY CAPITAL TRUST I
By: S/B/ JOSEPH S. BRACEWELL
-------------------------
Name: Joseph S. Bracewell
Administrator
By: S/B/ F. KATHRYN ROBERTS
-------------------------
Name: F. Kathryn Roberts
Administrator
<PAGE>
ANNEX I
TERMS OF
FIXED RATE CAPITAL TRUST PASS-THROUGH SECURITIES(R) (TRUPS(R))
Pursuant to Section 6.1 of the Amended and Restated
Declaration of Trust, dated as of March 23, 2000 (as amended from time to time,
the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1........Designation and Number. (a) Capital Securities. 8,800
Capital Securities of Century Capital Trust I (the "Trust"), with an aggregate
stated liquidation amount with respect to the assets of the Trust of Eight
Million Eight Hundred Thousand ($8,800,000) and a stated liquidation amount with
respect to the assets of the Trust of $1,000 per Capital Security, are hereby
designated for the purposes of identification only as the "Fixed Rate Capital
Trust Pass-through Securities"(R) (the "Capital Securities"). The Capital
Security Certificates evidencing the Capital Securities shall be substantially
in the form of Exhibit A-1 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice or to conform to the rules of any stock exchange on which the Capital
Securities are listed, if any.
(b)......Common Securities. 273 Common Securities of the Trust
(the "Common Securities") will be evidenced by Common Security Certificates
substantially in the form of Exhibit A-2 to the Declaration, with such changes
and additions thereto or deletions therefrom as may be required by ordinary
usage, custom or practice.
2........Distributions. (a) Distributions payable on each
Security will be payable at an annual rate equal to 107/8% (the "Coupon Rate")
of the stated liquidation amount of $1,000 per Security, such rate being the
rate of interest payable on the Debentures to be held by the Institutional
Trustee. Except as set forth below in respect of an Extension Period,
Distributions in arrears for more than one semi-annual period will bear interest
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions" as used herein includes cash
distributions and any such compounded distributions payable unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semi-annual
period on the basis of a 360-day year of twelve 30-day months.
(b)......Distributions on the Securities will be cumulative,
will accrue from the date of original issuance, and will be payable, subject to
extension of distribution payment periods as described herein, semi-annually in
arrears on March 8 and September 8 of each year, commencing on September 8, 2000
(each, a "Distribution Payment Date") when, as and if available for payment. The
Debenture Issuer has the right under the Indenture to defer payments of interest
on the Debentures by extending the interest payment period for up to 10
consecutive semi-annual periods (each, an "Extension Period") at any time and
from time to time on the Debentures, subject to the conditions described below,
although such interest would continue to accrue on the Debentures, and interest
will accrue on such Deferred Interest at an annual rate equal to 107/8%,
compounded semi-annually to the extent permitted by law during any Extension
Period. No Extension Period may end on a date other than a Distribution Payment
Date. At the end of any such Extension Period the Debenture Issuer shall pay all
Deferred Interest; provided, however, that no Extension Period may extend beyond
the Maturity Date and provided further, that, during any such Extension Period,
the Debenture Issuer may 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 Debenture Issuer's capital stock or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Debenture Issuer that rank pari passu in all respects
with or junior in interest to the Debentures (other than (a) repurchases,
redemptions or other acquisitions of shares of capital stock of the Debenture
Issuer in connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of 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 Debenture Issuer (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 any exchange or
conversion of any class or series of the Debenture Issuer's capital stock (or
any capital stock of a subsidiary of the Debenture Issuer) for any class or
series of the Debenture Issuer's capital stock or of any class or series of the
Debenture Issuer's indebtedness for any class or series of the Debenture
Issuer's capital stock, (c) the purchase of fractional interests in shares of
the Debenture Issuer'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 stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, or (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
Extension Period, the Debenture Issuer may further extend such period, provided
that such period together with all such previous and further consecutive
extensions thereof shall not exceed 10 consecutive semi-annual periods, or
extend beyond the Maturity Date. Upon the termination of any Extension Period
and upon the payment of all Deferred Interest, the Debenture Issuer may commence
a new Extension Period, subject to the foregoing requirements. No interest or
Deferred 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 Deferred Interest. If
Distributions are deferred, the Distributions due shall be paid on the date that
the related Extension Period terminates, or, if such date is not a Distribution
Payment Date, on the immediately following Distribution Payment Date, to Holders
of the Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date. Distributions on the Securities
must be paid on the dates payable (after giving effect to any Extension Period)
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account of the Trust. The Trust's funds available
for Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.
(c)......Distributions on the Securities will be payable to
the Holders thereof as they appear on the books and records of the Trust on the
relevant record dates. The relevant record dates shall be selected by the
Administrators, which dates shall be 15 days before the relevant payment dates.
Distributions payable on any Securities that are not punctually paid on any
Distribution Payment Date, as a result of the Debenture Issuer having failed to
make a payment under the Debentures, as the case may be, when due (taking into
account any Extension Period), will cease to be payable to the Person in whose
name such Securities are registered on the relevant record date, and such
defaulted Distribution will instead be payable to the Person in whose name such
Securities are registered on the special record date or other specified date
determined in accordance with the Indenture. If any date on which Distributions
are payable on the Securities is not a Business Day, then payment of the
Distribution payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in respect of any
such delay) except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such payment date.
(d)......In the event that there is any money or other
property held by or for the Trust that is not accounted for hereunder, such
property shall be distributed pro rata (as defined herein) among the Holders of
the Securities.
3........Liquidation Distribution Upon Dissolution. In the
event of the voluntary or involuntary liquidation, dissolution, winding-up or
termination of the Trust (each, a "Liquidation") other than in connection with a
redemption of the Debentures, the Holders of the Securities will be entitled to
receive out of the assets of the Trust available for distribution to Holders of
the Securities, after satisfaction of liabilities to creditors of the Trust (to
the extent not satisfied by the Debenture Issuer), distributions equal to the
aggregate of the stated liquidation amount of $1,000 per Security plus accrued
and unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution"), unless in connection with such Liquidation, the
Debentures in an aggregate stated principal amount equal to the aggregate stated
liquidation amount of such Securities, with an interest rate equal to the Coupon
Rate of, and bearing accrued and unpaid interest in an amount equal to the
accrued and unpaid Distributions on, and having the same record date as, such
Securities, after paying or making reasonable provision to pay all claims and
obligations of the Trust in accordance with Section 3808(e) of the Business
Trust Act, shall be distributed on a Pro Rata basis to the Holders of the
Securities in exchange for such Securities.
The Sponsor, as the Holder of all of the Common Securities,
has the right at any time to dissolve the Trust (including without limitation
upon the occurrence of a Tax Event, an Investment Company Event or a Capital
Treatment Event), subject to the receipt by the Debenture Issuer of prior
approval from the Board of Governors of the Federal Reserve System (the "Federal
Reserve"), if then required under applicable capital guidelines or policies of
the Federal Reserve and, after satisfaction of liabilities to creditors of the
Trust, cause the Debentures to be distributed to the Holders of the Securities
on a Pro Rata basis in accordance with the aggregate stated liquidation amount
thereof.
The Trust shall dissolve on the first to occur of (i) March 8,
2055, the expiration of the term of the Trust, (ii) a Bankruptcy Event with
respect to the Sponsor, Trust or the Debenture Issuer, (iii) (other than in
connection with a merger, consolidation or similar transaction not prohibited by
the Indenture, this Declaration or the Guarantee, as the case may be) upon the
filing of a certificate of dissolution of the Sponsor or upon the revocation of
the charter of the Sponsor and the expiration of 90 days after the date of
revocation without a reinstatement thereof, (iv) the distribution to the Holders
of the Securities of the Debentures, upon exercise of the right of the Holder of
all of the outstanding Common Securities to dissolve the Trust as described
above, (v) the entry of a decree of a judicial dissolution of the Sponsor or the
Trust, or (vi) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to the
Holders in accordance with the terms of the Securities. As soon as practicable
after the dissolution of the Trust and upon completion of the winding up of the
Trust, the Trust shall terminate upon the filing of a certificate of
cancellation with the Secretary of State of the State of Delaware.
If a Liquidation of the Trust occurs as described in clause
(i), (ii), (iii) or (v) in the immediately preceding paragraph, the Trust shall
be liquidated by the Trustees of the Trust as expeditiously as such Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust, to the Holders of the Securities, the Debentures on a
Pro Rata basis to the extent not satisfied by the Debenture Issuer, unless such
distribution is determined by the Institutional Trustee not to be practical, in
which event such Holders will be entitled to receive out of the assets of the
Trust available for distribution to the Holders, after satisfaction of
liabilities of creditors of the Trust to the extent not satisfied by the
Debenture Issuer, an amount equal to the Liquidation Distribution. An early
Liquidation of the Trust pursuant to clause (iv) above shall occur if the
Institutional Trustee determines that such Liquidation is possible by
distributing, after satisfaction of liabilities to creditors of Trust, to the
Holders of the Securities on a Pro Rata basis, the Debentures, and such
distribution occurs.
If, upon any such Liquidation the Liquidation Distribution can
be paid only in part because the Trust has insufficient assets available to pay
in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on such Capital Securities shall be paid to the Holders of
the Trust Securities on a pro rata basis, except that if an Event of Default has
occurred and is continuing, the Capital Securities shall have a preference over
the Common Securities with regard to such distributions.
Upon any such Liquidation of the Trust involving a
distribution of the Debentures, if at the time of such Liquidation, the Capital
Securities were rated by at least one nationally-recognized statistical rating
organization, the Debenture Issuer will use its reasonable best efforts to
obtain from at least one such or other rating organization a rating for the
Debentures.
After the date for any distribution of the Debentures upon
dissolution of the Trust, (i) the Securities of the Trust will be deemed to be
no longer outstanding, and (ii) any certificates representing the Capital
Securities will be deemed to represent undivided beneficial interests in such of
the Debentures as have an aggregate principal amount equal to the aggregate
stated liquidation amount of, with an interest rate identical to the
distribution rate of, and bearing accrued and unpaid interest equal to accrued
and unpaid distributions on, the Securities until such certificates are
presented to the Debenture Issuer or its agent for transfer or reissuance.
4........Redemption and Distribution.
(a)......The Debentures will mature on March 8, 2030. The
Debentures may be redeemed by the Debenture Issuer, in whole or in part, on any
March 8 or September 8 on or after March 8, 2010, at the Redemption Price, upon
not less than 30 days nor more than 60 days' notice to Holders of such
Debentures. In addition, upon the occurrence and continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, the Debentures may be
redeemed by the Debenture Issuer in whole but not in part, at any time within 90
days following the occurrence of such Tax Event, Investment Company Event or
Capital Treatment Event, as the case may be (the "Special Redemption Date"), at
the Special Redemption Price, upon not less than 30 nor more than 60 days'
notice to Holders of such Debentures so long as such Tax Event, Investment
Company Event or Capital Treatment Event, as the case may be, is continuing. In
each case, the right of the Debenture Issuer to redeem the Debentures is subject
to the Debenture Issuer having received prior approval from the Federal Reserve,
if then required under applicable capital guidelines or policies of the Federal
Reserve.
"Tax Event" means the receipt by the Debenture Issuer and the
Trust of an opinion of counsel experienced in such matters to the effect that,
as a result of any amendment to or change (including any announced prospective
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 (including any private letter ruling,
technical advice memorandum, field service advice, regulatory procedure, notice
or announcement, including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action")) or judicial decision
interpreting or applying such laws or regulations, regardless of whether such
Administrative Action or judicial decision is issued to or in connection with a
proceeding involving the Debenture Issuer or the Trust and whether or not
subject to review or appeal, which amendment, clarification, change,
Administrative Action or decision is enacted, promulgated or announced, in each
case on or after the date of issuance of the Debentures, there is more than an
insubstantial risk that: (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Debentures; (ii) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Debenture Issuer, in whole or in part,
for United States federal income tax purposes; or (iii) the Trust is, or will be
within 90 days of the date of such opinion, subject to more than a de minimis
amount of other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Trust of
an opinion of counsel experienced in such matters to the effect that, as a
result of the occurrence of a change in law or regulation or written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act of 1940, as amended which change or prospective
change becomes effective or would become effective, as the case may be, on or
after the date of the issuance of the Debentures.
"Capital Treatment Event" means the reasonable determination
by the Debenture Issuer that, as a result of the occurrence of any amendment to,
or change (including any announced prospective change) in, the laws of the
United States or any political subdivision thereof or therein, or as the result
of any official or administrative pronouncement or action or decision
interpreting or applying such laws, rules or regulations, which amendment or
change is effective or which pronouncement, action or decision is announced on
or after the date of issuance of the Debentures, there is more than an
insubstantial risk that the Debenture Issuer will not be entitled to treat an
amount equal to the aggregate Liquidation Amount of the Debentures as "Tier I
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
Debenture Issuer; provided, however, that the distribution of the Debentures in
connection with the Liquidation of the Trust by the Debenture Issuer shall not
in and of itself constitute a Capital Treatment Event unless such Liquidation
shall have occurred in connection with a Tax Event or an Investment Company
Event.
"Special Event" means any of a Capital Treatment Event,
a Tax Event or an Investment Company Event."
Redemption Price" means the price set forth in the following
table for any Redemption Date or Special Redemption Date that occurs within the
twelve-month period beginning in the relevant year indicated below, expressed in
percentage of the principal amount of the Debt Securities being redeemed:
Year Percentage
March 8, 2010 105.438
March 8, 2011 104.894
March 8, 2012 104.350
March 8, 2013 103.806
March 8, 2014 103.263
March 8, 2015 102.719
March 8, 2016 102.175
March 8, 2017 101.631
March 8, 2018 101.088
March 8, 2019 100.544
March 8, 2020 and after 100.000
plus accrued and unpaid interest on such Debentures to the
Redemption Date or, in the case of a redemption due to the occurrence of a
Special Event, to the Special Redemption Date.
"Special Redemption Price" means (1) if the Special Redemption
Date is before March 8, 2010, the greater of (a) 100% of the principal amount of
the Debentures being redeemed and (b) as determined by a Quotation Agent, the
sum of the present values of scheduled payments of principal and interest from
the Special Redemption Date to March 8, 2010 (the "Remaining Life") discounted
to the Special Redemption Date on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Treasury Rate plus 0.45%, plus, in
the case of either (a) or (b), accrued and unpaid interest on such Debentures to
the Special Redemption Date and (2) if the Special Redemption Date is on or
after March 8, 2010, the Redemption Price for such Special Redemption Date.
"Comparable Treasury Issue" means with respect to any Special
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
March 8, 2010, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (a) the average of five
Reference Treasury Dealer Quotations for such Special Redemption Date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(b) if the Quotation Agent obtains fewer than five such Reference Treasury
Dealer Quotations, the average of all such Quotations.
"Primary Treasury Dealer" shall mean a primary United States
Government securities dealer in New York City.
"Quotation Agent" means Salomon Smith Barney, Inc. and its
successors; provided, however, that if the foregoing shall cease to be a primary
United States Government securities dealer in New York City (a "Primary Treasury
Dealer"), the Debenture Issuer shall substitute therefor another Primary
Treasury Dealer.
"Redemption Date" shall mean the date fixed for the redemption
of Capital Securities, which shall be any March 8 or September 8 commencing on
March 8, 2010.
"Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Company.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"Treasury Rate" means (i) the yield, under the heading which
represents the average for the week immediately prior to the date of
calculation, 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 for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such Special Redemption Date. The
Treasury Rate shall be calculated on the third Business Day preceding the
Special Redemption Date.
(b)......Upon the repayment in full at maturity or redemption
in whole or in part of the Debenture (other than following the distribution of
the Debenture to the Holders of the Securities), the proceeds from such
repayment or payment shall concurrently be applied to redeem Pro Rata at the
applicable Redemption Price, Securities having an aggregate liquidation amount
equal to the aggregate principal amount of the Debenture so repaid or redeemed;
provided, however, that holders of such Securities shall be given not less than
30 nor more than 60 days' notice of such redemption (other than at the scheduled
maturity of the Debenture).
(c)......If fewer than all the outstanding Securities are to
be so redeemed, the Common Securities and the Capital Securities will be
redeemed Pro Rata and the Capital Securities to be redeemed will be as described
in Section 4(e)(ii) below.
(d)......The Trust may not redeem fewer than all the
outstanding Capital Securities unless all accrued and unpaid Distributions have
been paid on all Capital Securities for all semi-annual Distribution periods
terminating on or before the date of redemption.
(e)......Redemption or Distribution Procedures.
(i) Notice of any redemption of, or notice of
distribution of the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to
each Holder of Securities to be redeemed or exchanged not fewer than 30
nor more than 60 days before the date fixed for redemption or exchange
thereof which, in the case of a redemption, will be the date fixed for
redemption of the Debentures. For purposes of the calculation of the
date of redemption or exchange and the dates on which notices are given
pursuant to this Section 4(e)(i), a Redemption/Distribution Notice
shall be deemed to be given on the day such notice is first mailed by
first-class mail, postage prepaid, to Holders of such Securities. Each
Redemption/Distribution Notice shall be addressed to the Holders of
such Securities at the address of each such Holder appearing on the
books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing thereof with respect
to any Holder shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the Securities to be redeemed shall be
redeemed Pro Rata from each Holder of Capital Securities.
(iii) If the Securities are to be redeemed and the
Trust gives a Redemption/Distribution Notice, which notice may only be
issued if the Debentures are redeemed as set out in this Section 4
(which notice will be irrevocable), then, provided that the
Institutional Trustee has a sufficient amount of cash in connection
with the related redemption or maturity of the Debentures, the
Institutional Trustee will pay the relevant Redemption Price to the
Holders of such Securities by check mailed to the address of each such
Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been
given and funds deposited as required then immediately prior to the
close of business on the date of such deposit Distributions will cease
to accrue on the Securities so called for redemption and all rights of
Holders of such Securities so called for redemption will cease, except
the right of the Holders of such Securities to receive the applicable
Redemption Price specified in Section 4(a), but without interest on
such Redemption Price. If any date fixed for redemption of Securities
is not a Business Day, then payment of any such Redemption Price
payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of
any such delay) except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on
such date fixed for redemption. If payment of the Redemption Price in
respect of any Securities is improperly withheld or refused and not
paid either by the Trust or by the Debenture Issuer as guarantor
pursuant to the Guarantee, Distributions on such Securities will
continue to accrue at the then applicable rate from the original
redemption date to the actual date of payment, in which case the actual
payment date will be considered the date fixed for redemption for
purposes of calculating the Redemption Price. In the event of any
redemption of the Capital Securities issued by the Trust in part, the
Trust shall not be required to (i) issue, register the transfer of or
exchange any Security during a period beginning at the opening of
business 15 days before any selection for redemption of the Capital
Securities and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to
all Holders of the Capital Securities to be so redeemed or (ii)
register the transfer of or exchange any Capital Securities so selected
for redemption, in whole or in part, except for the unredeemed portion
of any Capital Securities being redeemed in part.
(iv) Redemption/Distribution Notices shall be sent by
the Administrators on behalf of the Trust (A) in respect of the Capital
Securities, to the Holders thereof, and (B) in respect of the Common
Securities, to the Holder thereof.
(v) Subject to the foregoing and applicable law
(including, without limitation, United States federal securities laws),
and provided that the acquiror is not the Holder of the Common
Securities or the obligor under the Indenture, the Sponsor or any of
its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by
private agreement.
5........Voting Rights - Capital Securities. (a) Except as
provided under Sections 5(b) and 7 and as otherwise required by law and the
Declaration, the Holders of the Capital Securities will have no voting rights.
The Administrators are required to call a meeting of the Holders of the Capital
Securities if directed to do so by Holders of at least 10% in liquidation amount
of the Capital Securities.
(b)......Subject to the requirements of obtaining a tax
opinion by the Institutional Trustee in certain circumstances set forth in the
last sentence of this paragraph, the Holders of a Majority in liquidation amount
of the Capital Securities, voting separately as a class, have the right to
direct the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including the
right to direct the Institutional Trustee, as holder of the Debentures, to (i)
exercise the remedies available under the Indenture as the holder of the
Debentures, (ii) waive any past default that is waivable under the Indenture, or
(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 on behalf of all the
Holders of the Capital Securities to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required;
provided, however, that, where a consent or action under the Indenture would
require the consent or act of the holders of greater than a simple majority in
principal amount of Debentures (a "Super Majority") affected thereby, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Capital Securities outstanding which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding. If
the Institutional Trustee fails to enforce its rights under the Debentures after
the Holders of a Majority in liquidation amount of such Capital Securities have
so directed the Institutional Trustee, to the fullest extent permitted by law, a
Holder of the Capital Securities may institute a legal proceeding directly
against the Debenture Issuer to enforce the Institutional Trustee's rights under
the Debentures without first instituting any legal proceeding against the
Institutional Trustee or any other person or entity. Notwithstanding the
foregoing, if an Event of Default has occurred and is continuing and such event
is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date the interest or principal is payable (or
in the case of redemption, the redemption date), then a Holder of record of the
Capital Securities may directly institute a proceeding for enforcement of
payment, on or after the respective due dates specified in the Debentures, to
such Holder directly of the principal of or interest on the Debentures having an
aggregate principal amount equal to the aggregate liquidation amount of the
Capital Securities of such Holder. The Institutional Trustee shall notify all
Holders of the Capital Securities of any default actually known to the
Institutional Trustee with respect to the Debentures unless (x) such default has
been cured prior to the giving of such notice or (y) the Institutional Trustee
determines in good faith that the withholding of such notice is in the interest
of the Holders of such Capital Securities, except where the default relates to
the payment of principal of or interest on any of the Debentures. Such notice
shall state that such Indenture Event of Default also constitutes an Event of
Default hereunder. Except with respect to directing the time, method and place
of conducting a proceeding for a remedy, the Institutional Trustee shall not
take any of the actions described in clauses (i), (ii) or (iii) above unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.
In the event the consent of the Institutional Trustee, as the
holder of the Debentures is required under the Indenture with respect to any
amendment, modification or termination of the Indenture, the Institutional
Trustee shall request the direction of the Holders of the Securities with
respect to such amendment, modification or termination and shall vote with
respect to such amendment, modification or termination as directed by a Majority
in liquidation amount of the Securities voting together as a single class;
provided, however, that where a consent under the Indenture would require the
consent of a Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of such Trust Securities outstanding which the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding. The Institutional Trustee shall not take any such action in
accordance with the directions of the Holders of the Securities unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that,
as a result of such action, the Trust will not be classified as other than a
grantor trust for United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a
waiver of the corresponding Event of Default hereunder. Any required approval or
direction of Holders of the Capital Securities may be given at a separate
meeting of Holders of the Capital Securities convened for such purpose, at a
meeting of all of the Holders of the Securities in the Trust or pursuant to
written consent. The Institutional Trustee will cause a notice of any meeting at
which Holders of the Capital Securities are entitled to vote, or of any matter
upon which action by written consent of such Holders is to be taken, to be
mailed to each Holder of record of the Capital Securities. Each such notice will
include a statement setting forth the following information (i) the date of such
meeting or the date by which such action is to be taken, (ii) a description of
any resolution proposed for adoption at such meeting on which such Holders are
entitled to vote or of such matter upon which written consent is sought and
(iii) instructions for the delivery of proxies or consents. No vote or consent
of the Holders of the Capital Securities will be required for the Trust to
redeem and cancel Capital Securities or to distribute the Debentures in
accordance with the Declaration and the terms of the Securities.
Notwithstanding that Holders of the Capital Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Capital Securities that are owned by the Sponsor or any Affiliate of the
Sponsor shall not entitle the Holder thereof to vote or consent and shall, for
purposes of such vote or consent, be treated as if such Capital Securities were
not outstanding.
In no event will Holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrators, which voting
rights are vested exclusively in the Sponsor as the Holder of all of the Common
Securities of the Trust. Under certain circumstances as more fully described in
the Declaration, Holders of Capital Securities have the right to vote to
appoint, remove or replace the Institutional Trustee and the Delaware Trustee.
6........Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c) and 7 and as otherwise
required by law and the Declaration, the Common Securities will have no
voting rights.
(b)......The Holders of the Common Securities are entitled, in
accordance with Article V of the Declaration, to vote to appoint, remove or
replace any Administrators.
(c)......Subject to Section 6.7 of the Declaration and only
after each Event of Default (if any) with respect to the Capital Securities has
been cured, waived or otherwise eliminated and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable, provided, however, that, where a
consent or action under the Indenture would require a Super Majority, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this Section 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action described in (i), (ii) or (iii) above, unless the
Institutional Trustee has obtained an opinion of tax counsel to the effect that
for the purposes of United States federal income tax the Trust will not be
classified as other than a grantor trust on account of such action. If the
Institutional Trustee fails to enforce its rights under the Declaration to the
fullest extent permitted by law, any Holder of the Common Securities may
institute a legal proceeding directly against any Person to enforce the
Institutional Trustee's rights under the Declaration, without first instituting
a legal proceeding against the Institutional Trustee or any other Person.
Any approval or direction of Holders of the Common Securities
may be given at a separate meeting of Holders of the Common Securities convened
for such purpose, at a meeting of all of the Holders of the Securities in the
Trust or pursuant to written consent. The Administrators will cause a notice of
any meeting at which Holders of the Common Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of the Common Securities. Each such notice
will include a statement setting forth (i) the date of such meeting or the date
by which such action is to be taken, (ii) a description of any resolution
proposed for adoption at such meeting on which such Holders are entitled to vote
or of such matter upon which written consent is sought and (iii) instructions
for the delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7........Amendments to Declaration and Indenture. (a) In
addition to any requirements under Section 11.1 of the Declaration, if any
proposed amendment to the Declaration provides for, or the Trustees otherwise
propose to effect, (i) any action that would adversely affect the powers,
preferences or special rights of the Securities, whether by way of amendment to
the Declaration or otherwise, or (ii) the Liquidation of the Trust, other than
as described in Section 7.1 of the Declaration, then the Holders of outstanding
Securities, voting together as a single class, will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of the Holders of at least a Majority in liquidation
amount of the Securities, affected thereby; provided, however, if any amendment
or proposal referred to in clause (i) above would adversely affect only the
Capital Securities or only the Common Securities, then only the affected class
will be entitled to vote on such amendment or proposal and such amendment or
proposal shall not be effective except with the approval of a Majority in
liquidation amount of such class of Securities.
(b)......In the event the consent of the Institutional Trustee
as the holder of the Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require a Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
(c)......Notwithstanding the foregoing, no amendment or
modification may be made to a Declaration if such amendment or modification
would (i) cause the Trust to be classified for purposes of United States federal
income taxation as other than a grantor trust, (ii) reduce or otherwise
adversely affect the powers of the Institutional Trustee or (iii) cause the
Trust to be deemed an "investment company" which is required to be registered
under the Investment Company Act.
(d)......Notwithstanding any provision of the Declaration, the
right of any Holder of the Capital Securities to receive payment of
distributions and other payments upon redemption or otherwise, on or after their
respective due dates, or to institute a suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder. For the protection and enforcement of the
foregoing provision, each and every Holder of the Capital Securities shall be
entitled to such relief as can be given either at law or equity.
8........Pro Rata. A reference in these terms of the
Securities to any payment, distribution or treatment as being "Pro Rata" shall
mean pro rata to each Holder of the Securities according to the aggregate
liquidation amount of the Securities held by the relevant Holder in relation to
the aggregate liquidation amount of all Securities outstanding unless, in
relation to a payment, an Event of Default has occurred and is continuing, in
which case any funds available to make such payment shall be paid first to each
Holder of the Capital Securities Pro Rata according to the aggregate liquidation
amount of the Capital Securities held by the relevant Holder relative to the
aggregate liquidation amount of all Capital Securities outstanding, and only
after satisfaction of all amounts owed to the Holders of the Capital Securities,
to each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding.
9........Ranking. The Capital Securities rank pari passu with
and payment thereon shall be made Pro Rata with the Common Securities except
that, where an Event of Default has occurred and is continuing, the rights of
Holders of the Common Securities to receive payment of Distributions and
payments upon liquidation, redemption and otherwise are subordinated to the
rights of the Holders of the Capital Securities with the result that no payment
of any Distribution on, or Redemption Price of, any Common Security, and no
other payment on account of redemption, liquidation or other acquisition of
Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions 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, shall have been made
or provided for, and all funds immediately available to the Institutional
Trustee shall first be applied to the payment in full in cash of all
Distributions on, or the Redemption Price of, the Capital Securities then due
and payable.
10.......Acceptance of Guarantee and Indenture. Each Holder of
the Capital Securities and the Common Securities, by the acceptance of such
Securities, agrees to the provisions of the Guarantee, including the
subordination provisions therein and to the provisions of the Indenture.
11.......No Preemptive Rights. The Holders of the Securities
shall have no preemptive or similar rights to subscribe for any additional
securities.
12.......Miscellaneous. These terms constitute a part of the
Declaration. The Sponsor will provide a copy of the Declaration, the Guarantee,
and the Indenture to a Holder without charge on written request to the Sponsor
at its principal place of business.
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS.
NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE
TRANSFER SUCH SECURITY ONLY (A) TO THE DEBENTURE ISSUER OR THE TRUST, (B)
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (C) TO AN "ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPH (a) (1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT
IS ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF AN
"ACCREDITED INVESTOR," FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR
OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (D) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE DEBENTURE
ISSUER'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER
PURSUANT TO CLAUSES (C) OR (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM
THE DEBENTURE ISSUER OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT IT
WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO
THE REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHER INFORMATION MAY BE
REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
<PAGE>
Certificate Number.........P-1 Number of Capital Securities: 8,800
CUSIP NO ___________
Certificate Evidencing Capital Securities
of
Century Capital Trust I
Fixed Rate Capital Pass-through Securities(R) (TRUPS(R))
(liquidation amount $1,000 per Capital Security)
Century Capital Trust I , a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
______________ (the "Holder") is the registered owner of securities of the Trust
representing undivided beneficial interests in the assets of the Trust,
designated the Fixed Rate Capital Trust Pass-through Securities(R) (liquidation
amount $1,000 per Capital Security) (the "Capital Securities"). Subject to the
Declaration (as defined below), the Capital Securities are transferable on the
books and records of the Trust, in person or by a duly authorized attorney, upon
surrender of this Certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Capital Securities represented hereby are issued pursuant to,
and shall in all respects be subject to, the provisions of the Amended and
Restated Declaration of Trust of the Trust dated as of March 23, 2000, among
Joseph S. Bracewell and F. Kathryn Roberts, as Administrators, The Bank of New
York (Delaware), as Delaware Trustee, The Bank of New York, as Institutional
Trustee, Century Bancshares, Inc., as Sponsor, and the holders from time to time
of undivided beneficial interests in the assets of the Trust, including the
designation of the terms of the Capital Securities as set forth in Annex I to
the Declaration, as the same may be amended from time to time (the
"Declaration"). Capitalized terms used herein but not defined shall have the
meaning given them in the Declaration. The Holder is entitled to the benefits of
the Guarantee to the extent provided therein. The Sponsor will provide a copy of
the Declaration, the Guarantee, and the Indenture to the Holder without charge
upon written request to the Trust at its principal place of business.
Upon receipt of this Security, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat,
for United States federal income tax purposes, the Debentures as indebtedness
and the Capital Securities as evidence of beneficial ownership in the
Debentures.
This Capital Security is governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to principles
of conflict of laws.
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this
certificate.
CENTURY CAPITAL TRUST I
By:________________________________
Name:
Title: Administrator
Dated: ___________________________
CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
THE BANK OF NEW YORK, as the Institutional Trustee
By:
Authorized Officer
Dated: ___________________________
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable
at an annual rate of 107/8% (the "Coupon Rate") of the stated liquidation amount
of $1,000 per Capital Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. Except as set forth
below in respect of an Extension Period, Distributions in arrears for more than
a semi-annual period will bear interest thereon compounded semi-annual at the
Coupon Rate (to the extent permitted by applicable law). The term
"Distributions" as used herein includes cash distributions, any such compounded
interest and any Additional Interest payable on the Debentures unless otherwise
stated. A Distribution is payable only to the extent that payments are made in
respect of the Debentures held by the Institutional Trustee and to the extent
the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semi-annual
Distribution period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, Distributions on the
Capital Securities will be cumulative, will accrue from the date of original
issuance and will be payable semi-annually in arrears on March 8 and September 8
of each year, commencing on September 8, 2000. The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 10 consecutive semi-annual
periods (each, an "Extension Period") at any time and from time to time on the
Debentures, subject to the conditions described below, although such interest
would continue to accrue on the Debentures, and Interest will accrue on such
Deferred Interest, at an annual rate equal to 107/8%, compounded semi-annually
to the extent permitted by law during any Extension Period. No Extension Period
may end on a date other than a Distribution Payment Date. At the end of any such
Extension Period the Debenture Issuer shall pay all Deferred Interest then
accrued and unpaid on the Debentures; provided however, that no Extension Period
may extend beyond the Maturity Date. Prior to the termination of any Extension
Period, the Debenture Issuer may further extend such period, provided that such
period together with all such previous and further consecutive extensions
thereof shall not exceed 10 consecutive semi-annual periods, or extend beyond
the Maturity Date. Upon the termination of any Extension Period and upon the
payment of all Deferred Interest, the Debenture Issuer may commence a new
Extension Period, subject to the foregoing requirements. No interest or Deferred
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 Deferred Interest. If
Distributions are deferred, the Distributions due shall be paid on the date that
the related Extension Period terminates, or, if such date is not a Distribution
Payment Date, on the immediately following Distribution Payment Date, to Holders
of the Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date. Distributions on the Securities
must be paid on the dates payable (after giving effect to any Extension Period)
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account of the Trust. The Trust's funds available
for Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.
The Capital Securities shall be redeemable as provided in the
Declaration.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee), and irrevocably appoints as agent to
transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this
Capital Security Certificate)
Signature Guarantee:1
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR
OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
THIS SECURITY MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED.
Certificate Number C-1 Number of Common Securities: 273
Certificate Evidencing Common Securities
of
Century Capital Trust I
Century Capital Trust I, a statutory business trust created
under the laws of the State of Delaware (the "Trust"), hereby certifies that
[__________] (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of March 23, 2000, among Joseph S. Bracewell and F. Kathryn Roberts, as
Administrators, The Bank of New York (Delaware), as Delaware Trustee, The Bank
of New York, as Institutional Trustee, Century Bancshares, Inc., as Sponsor and
the holders from time to time of undivided beneficial interest in the assets of
the Trust including the designation of the terms of the Common Securities as set
forth in Annex I to the Declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of
business.
As set forth in the Declaration, where an Event of Default has
occurred and continuing, the rights of Holders of Common securities to payment
in respect of Distributions and payments upon Liquidation, redemption or
otherwise are subordinated to the rights of payment of Holders of the Capital
Securities.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat,
for United States federal income tax purposes, the Debentures as indebtedness
and the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Common Security is governed by, and construed in
accordance with, the laws of the State of Delaware, without regard to principles
of conflict of laws.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this 23rd day of March, 2000.
CENTURY CAPITAL TRUST I
By:______________________________
Name:
Title: Administrator
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be
identical in amount to the Distributions payable on each Capital Security, which
is at an annual rate of 107/8% (the "Coupon Rate") of the stated liquidation
amount of $1,000 per Capital Security, such rate being the rate of interest
payable on the Debentures to be held by the Institutional Trustee. Except as set
forth below in respect of an Extension Period, Distributions in arrears for more
than one period will bear interest thereon compounded at the Coupon Rate (to the
extent permitted by applicable law). The term "Distributions" as used herein
includes cash distributions, any such compounded distribution and any Additional
Interest payable on the Debentures unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full semi-annual Distribution period on 360-day year of
twelve 30-day months.
Except as otherwise described below, Distributions on the
Common Securities will be cumulative, will accrue from the date of original
issuance and will be payable semi-annually in arrears on March 8 and September 8
of each year, commencing on September 8, 2000. The Debenture Issuer has the
right under the Indenture to defer payments of interest on the Debentures by
extending the interest payment period for up to 10 consecutive semi-annual
periods (each, an "Extension Period") at any time and from time to time on the
Debentures, subject to the conditions described below, during which Extension
Period no interest shall be due and payable. No Extension Period may end on a
date other than a Distribution Payment Date. During an Extension Period,
interest would continue to accrue on the Debentures, and interest on such
accrued interest (such accrued interest and interest theron referred to herein
as "Deferred Interest") will accrue at an annual rate equal to 107/8%,
compounded semi-annually from the date such Deferred Interest would have been
payable were it not for the Extension Period to the extent permitted by law
during any Extension Period. At the end of any such Extension Period the
Debenture Issuer shall pay all Deferred Interest then accrued and unpaid on the
Debentures; provided, however, that no Extension Period may extend beyond the
Maturity Date. Prior to the termination of any Extension Period, the Debenture
Issuer may further extend such period, provided that such period together with
all such previous and further consecutive extensions thereof shall not exceed 10
consecutive semi-annual periods, or extend beyond the Maturity Date. Upon the
termination of any Extension Period and upon the payment of all Deferred
Interest, the Debenture Issuer may commence a new Extension Period, subject to
the foregoing requirements. No interest or Deferred 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 Deferred Interest. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, or, if such date is not a Distribution Payment
Date, on the immediately following Distribution Payment Date, to Holders of the
Securities as they appear on the books and records of the Trust on the record
date immediately preceding such date. Distributions on the Securities must be
paid on the dates payable (after giving effect to any Extension Period) to the
extent that the Trust has funds available for the payment of such distributions
in the Property Account of the Trust. The Trust's funds available for
Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.
The Common Securities shall be redeemable as provided in the
Declaration.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Common Security Certificate to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee), and irrevocably
appoints as agent to transfer this Common Security Certificate on the books of
the Trust. The agent may substitute another to act for him or her.
Date:
Signature:
(Sign exactly as your name appears on the other side of this
Common Security Certificate)
Signature Guarantee:2:
<PAGE>
EXHIBIT B
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED BY TRANSFEREES OTHER THAN QIBS
----------, [ ]
[Sponsor].
[Trust]
[Address]
Re: Purchase of $1,000 stated liquidation amount of Fixed Rate Capital Trust
Pass-through Securities(R) (TruPS) (R) (the "Capital Securities") of [Trust]
Ladies and Gentlemen:
In connection with our purchase of the Capital Securities we
confirm that:
1. We understand that the Fixed Rate Capital Trust
Pass-through SecuritiesSM (the "Capital Securities") (including the guarantee
(the "Guarantee") of [__________] ("[___________]") executed in connection
therewith) and the Fixed Rate Junior Subordinated Deferrable Interest Debentures
due 2030 (the "Subordinated Debt Securities") of [________] (the "Company") (the
Capital Securities, the Guarantee and the Subordinated Debt Securities together
being referred to herein as "Offered Securities"), have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold except as permitted in the following sentence. We agree on
our own behalf and on behalf of any investor account for which we are purchasing
the Offered Securities that, if, we decide to offer, sell or otherwise transfer
any such Offered Securities, such offer, sale or transfer will be made only (a)
to [_________] or [________], (b) pursuant to Rule 144A under the Securities
Act, to a person we reasonably believe is a qualified institutional buyer under
Rule 144A (a "QIB") that purchases for its own account or for the account of a
QIB and to whom notice is given that the transfer is being made in reliance on
Rule 144A, (c) to an "accredited investor" with the meaning of subparagraph (a)
(1), (2), (3) or (7) of Rule 501 under the Securities Act that is acquiring
Offered Securities for its own account or for the account of such an accredited
investor for investment purposes and not with a view to, or for offer or sale in
connection with, any distribution thereof in violation of the Securities Act, or
(d) pursuant to another available exemption from the registration requirements
of the Securities Act, subject in each of the foregoing cases to any
requirements of law that the disposition of our property or compliance with any
applicable state securities laws. The foregoing restrictions on resale will not
apply subsequent to the Resale Restriction Termination Date. If any resale or
other transfer of the Offered Securities is proposed to be made pursuant to
clause (c) or (d) above the transferor shall deliver a letter from the
transferee substantially in the form of this letter to [________________] as
Transfer Agent, which shall provide as applicable, among other things, that the
transferee is an "accredited investor" within the meaning of subparagraph (a)
(1), (2), (3) or (7) of Rule 501 under the Securities Act that is acquiring such
Securities for investment purposes and not for distribution in violation of the
Securities Act. We acknowledge on our behalf and on behalf of any investor
account for which we are purchasing Securities that the [______] and
[__________] reserve the right prior to any offer, sale or other transfer
pursuant to clauses (d) or (e) to require the delivery of any opinion of
counsel, certifications and/or other information satisfactory to the Trust and
the Company. We understand that the certificates for any Offered Security that
we receive will bear a legend substantially to the effect of the foregoing.
2. We are an "accredited investor" with the meaning of
subparagraph (a) (1), (2), (3) or (7) of Rule 501 under the Securities Act
purchasing for our own account or for the account of such an "accredited
investor," and we are acquiring the Offered Securities for the investment
purposes and not with view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act and we have such knowledge and
experience in financial and business matters as to be capable of evaluating the
merits and risks of our investment in the Offered Securities, and we and any
account for which we are acting are each able to bear the economic risks of our
or its investment.
3. We are acquiring the Offered Securities purchased by us for
our own account (or for one or more accounts as to each of which we exercise
sole investment discretion and have authority to make, and do make, the
statements contained in this letter) and not with a view to any distribution of
the Offered Securities, subject, nevertheless, to the understanding that the
disposition of our property will at all times be and remain within our control.
4. In the event that we purchase any Capital Securities or any
Subordinated Debt Securities, we will acquire such Capital Securities having an
aggregate stated liquidation amount of not less than $1,000 or such Subordinated
Debt Securities having an aggregate principal amount not less than $1,000, for
our own account and for each separate account for which we are acting.
5. We acknowledge that we either (A) are not a fiduciary of a
pension, profit-sharing or other employee benefit plan subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") (a "Plan"), or an
entity whose assets include "plan assets" by reason of any Plan's investment in
the entity and are not purchasing the Offered Securities on behalf of or with
"plan assets" by reason of any Plan's investment in the entity and is not
purchasing the Offered Securities on behalf of or with "plan assets" of any Plan
or (B) are eligible for the exemptive relief available under one ore more of the
following prohibited transaction class exemptions ("PTCEs") issued by the U.S.
Department of Labor: PTCE 96-23, 95-60, 91-38, 90-1 or 84-14.
6. We acknowledge that [_________] and [_______] and others
will rely upon the truth and accuracy of the foregoing acknowledges,
representations, warranties and agreements and agree that if any of the
acknowledgments, representations, warranties and agreements deemed to have been
made by our purchase of the Offered Securities are no longer accurate, we shall
promptly notify the Initial Purchasers. If we are acquiring any Offered
Securities as a fiduciary or agent for one or more investor accounts, we
represent that we have sole discretion with respect to each such investor
account and that we have full power to make the foregoing acknowledgments,
representations and agreement on behalf of each such investor account.
Very truly yours,
(Name of Purchaser)
By:
Date:
Upon transfer of the Offered Securities would be registered in
the name of the new beneficial owner as follows.
Name:
Address:
Taxpayer ID Number:
<PAGE>
EXHIBIT C
FORM OF TRANSFEREE CERTIFICATE
TO BE EXECUTED FOR QIBs
----------, [ ]
[Sponsor]
[Trust]
[Address]
Re: Purchase of $1,000 stated liquidation amount of Fixed Rate Capital Trust
Pass-through Securities(R) (TRUPS)(R) (the "Capital Securities") of [Trust]
Reference is hereby made to the Amended and Restated
Declaration dated as of March 23, 2000 (the "Declaration") among [____________]
and [__________], as Administrators, The Bank of New York (Delaware), as
Delaware Trustee, The Bank of New York, as Institutional Trustee, [___________],
as Sponsor, and the holders from time to time of undivided beneficial interest
in the assets of [Trust]. Capitalized terms used but not defined herein shall
have the meanings given them in the Declaration.
This letter relates to $[_______________] aggregate
liquidation amount of Capital Securities which are held in the name of [name of
transferor] (the "Transferor").
In connection with such request, and in respect to such
Capital Securities, the transferor does hereby certify that such Capital
Securities are being transferred in accordance with (i) the transfer
restrictions set forth in the Capital Securities and (ii) Rule 144A under the
United States Securities Act of 1933, as amended ("Rule 144A"), to a transferee
that the Transferor reasonably believes is purchasing the Capital Securities for
its own account or an account with respect to which the transferee exercises
sole investment discretion and the transferee and any such account is a
"qualified institutional buyer" within the meaning of Rule 144A, in a
transaction meeting the requirements of Rule 144A and in accordance with
applicable securities laws of any state of the United States or any other
jurisdiction.
You are entitled to rely upon this letter and are irrevocably
authorized to produce this letter or a copy hereof to any interested party in
any administrative or legal proceeding or official inquiry with respect to the
matters covered hereby.
(Name of Transferor)
By:
Name:
Title:
Date:
<PAGE>
EXHIBIT D
SPECIMEN OF INITIAL DEBENTURE
<PAGE>
EXHIBIT E
PLACEMENT AGREEMENT
<PAGE>
GUARANTEE AGREEMENT
CENTURY BANCSHARES, INC.
Dated as of March 23, 2000
<PAGE>
Table of Contents
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation.............................1
ARTICLE II
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee.................4
SECTION 2.2 Certain Rights of Guarantee Trustee........................5
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee......7
SECTION 2.4 Events of Default; Waiver..................................7
SECTION 2.5 Events of Default; Notice..................................8
ARTICLE III
GUARANTEE TRUSTEE
SECTION 3.1 Guarantee Trustee; Eligibility.............................8
SECTION 3.2 Appointment, Removal and Resignation of Guarantee Trustee..9
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee.................................................10
SECTION 4.2 Waiver of Notice and Demand...............................10
SECTION 4.3 Obligations Not Affected..................................10
SECTION 4.4 Rights of Holders.........................................11
SECTION 4.5 Guarantee of Payment......................................11
SECTION 4.6 Subrogation...............................................12
SECTION 4.7 Independent Obligations...................................12
SECTION 4.8 Enforcement by a Beneficiary..............................12
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions................................12
SECTION 5.2 Ranking...................................................13
ARTICLE VI
TERMINATION
SECTION 6.1 Termination...............................................13
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation...............................................14
SECTION 7.2 Indemnification...........................................14
SECTION 7.3 Compensation; Reimbursement of Expenses...................15
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns....................................16
SECTION 8.2 Amendments................................................16
SECTION 8.3 Notices...................................................16
SECTION 8.4 Benefit...................................................17
SECTION 8.5 Governing Law.............................................17
<PAGE>
GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Guarantee"), dated as of March
23, 2000, is executed and delivered by Century Bancshares, Inc., a bank holding
company incorporated in Delaware (the "Guarantor"), and The Bank of New York, 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
Century Capital Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of March 23, 2000, among the trustees named
therein of the Issuer, Century Bancshares, Inc., as sponsor, and the holders
from time to time of undivided beneficial interests in the assets of the Issuer,
the Issuer is issuing on the date hereof securities, having an aggregate
liquidation amount of up to $8,800,000, designated the Fixed Rate Capital Trust
Pass-through Securities(R) (the "Capital Securities");
WHEREAS, as incentive for the Holders to purchase the Capital
Securities, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Guarantee, to pay to the Holders of Capital
Securities the Guarantee Payments (as defined herein) and to make certain other
payments on the terms and conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by each
Holder of the Capital Securities, which purchase the Guarantor hereby agrees
shall benefit the Guarantor, the Guarantor executes and delivers this Guarantee
for the benefit of the Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Guarantee, unless the context otherwise requires:
(a) capitalized terms used in this Guarantee but not defined
in the preamble above have the respective meanings assigned to them in
this Section 1.1;
(b) a term defined anywhere in this Guarantee has the same
meaning throughout;
(c) all references to "the Guarantee" or "this Guarantee" are
to this Guarantee as modified, supplemented or amended from time to
time;
(d) all references in this Guarantee to Articles and Sections
are to Articles and Sections of this Guarantee, unless otherwise
specified;
(e) terms defined in the Declaration as at the date of
execution of this Guarantee have the same meanings when used in this
Guarantee, unless otherwise defined in this Guarantee or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural and vice
versa.
"Beneficiaries" means any Person to whom the Trust is or
hereafter becomes indebted or liable.
"Corporate Trust Office" means the office of the Guarantee
Trustee at which the corporate trust business of the Guarantee Trustee shall, at
any particular time, be principally administered, which office at the date of
execution of this Guarantee Agreement is located at 101 Barclay Street, Floor
21W, New York, NY 10286.
"Covered Person" means any Holder of Capital Securities.
"Debentures" means the junior subordinated debentures of
Century Bancshares, Inc., designated the 107/8% Junior Subordinated Deferrable
Interest Debentures due 2030, held by the Institutional Trustee (as defined in
the Declaration) of the Issuer.
"Declaration Event of Default" means an "Event of Default"
as defined in the Declaration.
"Event of Default" has the meaning set forth in Section 2.4.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Capital Securities, to
the extent not paid or made by the Issuer: (i) any accrued and unpaid
Distributions (as defined in the Declaration) which are required to be paid on
such Capital Securities to the extent the Issuer shall have funds available
therefor, (ii) the Redemption Price (as defined in the Indenture) to the extent
the Issuer has funds available therefor, with respect to any Capital Securities
called for redemption by the Issuer, (iii) the Special Redemption Price (as
defined in the Indenture) to the extent the Issuer has funds available therefor,
with respect to Capital Securities redeemed upon the occurrence of a Special
Event (as defined in the Indenture), and (iv) upon a voluntary or involuntary
liquidation, dissolution, winding-up or termination of the Issuer (other than in
connection with the distribution of Debentures to the Holders of the Capital
Securities in exchange therefor as provided in the Declaration), the lesser of
(a) the aggregate of the liquidation amount and all accrued and unpaid
Distributions on the Capital Securities to the date of payment, to the extent
the Issuer shall have funds available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in liquidation of the
Issuer (in either case, the "Liquidation Distribution").
"Guarantee Trustee" means The Bank of New York, until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
pursuant to the terms of this Guarantee and thereafter means each such Successor
Guarantee Trustee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, 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 Guarantor or any Affiliate of the Guarantor.
"Indemnified Person" means the Guarantee Trustee, any
Affiliate of the Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees, custodians or agents of
the Guarantee Trustee.
"Indenture" means the Indenture dated as of March 23, 2000,
between the Guarantor and The Bank of New York, not in its individual capacity
but solely as trustee, and any indenture supplemental thereto pursuant to which
the Debentures are to be issued to the Institutional Trustee of the Issuer.
"Liquidation Distribution" has the meaning set forth in the
definition of "Guarantee Payments" herein.
"Majority in liquidation amount of the Capital Securities"
means Holder(s) of outstanding Capital Securities, voting together as a class,
but separately from the holders of Common Securities, of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all Capital
Securities then outstanding.
"Obligations" means any costs, expenses or liabilities (but
not including liabilities related to taxes) of the Trust, other than obligations
of the Trust to pay to holders of any Trust Securities the amounts due such
holders pursuant to the terms of the Trust Securities.
"Officer's Certificate" means, with respect to any Person, a
certificate signed by one Authorized Officer of such Person. Any Officer's
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Guarantee shall include:
(a) a statement that each officer signing the Officer's
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officer's Certificate;
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Redemption Price" has the meaning set forth in the definition
of "Guarantee Payments" herein.
"Responsible Officer" means, with respect to the Guarantee
Trustee, any officer within the Corporate Trust Office of the Guarantee Trustee,
including any Vice President, Assistant Vice President, Secretary, Assistant
Secretary or any other officer of the Guarantee Trustee customarily performing
functions similar to those performed by any of the above designated officers and
also, with respect to a particular corporate trust matter, any other officer to
whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Guarantee Trustee" means a successor Guarantee
Trustee possessing the qualifications to act as Guarantee Trustee under Section
3.1.
"Trust Securities" means the Common Securities and the
Capital Securities.
ARTICLE II
POWERS, DUTIES AND RIGHTS OF
GUARANTEE TRUSTEE
SECTION 2.1 Powers and Duties of the Guarantee Trustee
(a) This Guarantee shall be held by the Guarantee Trustee for
the benefit of the Holders of the Capital Securities, and the Guarantee
Trustee shall not transfer this Guarantee to any Person except a Holder
of Capital Securities exercising his or her rights pursuant to Section
4.4(b) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor
Guarantee Trustee. The right, title and interest of the Guarantee
Trustee shall automatically vest in any Successor Guarantee Trustee,
and such vesting and cessation of title shall be effective whether or
not conveyancing documents have been executed and delivered pursuant to
the appointment of such Successor Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible
Officer of the Guarantee Trustee has occurred and is continuing, the
Guarantee Trustee shall enforce this Guarantee for the benefit of the
Holders of the Capital Securities.
(c) The Guarantee Trustee, before the occurrence of any Event
of Default and after curing all Events of Default that may have
occurred, shall undertake to perform only such duties as are
specifically set forth in this Guarantee, and no implied covenants
shall be read into this Guarantee against the Guarantee Trustee. In
case an Event of Default has occurred (that has not been cured or
waived pursuant to Section 2.4) and is actually known to a Responsible
Officer of the Guarantee Trustee, the Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Guarantee, and use
the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(d) No provision of this Guarantee shall be construed to
relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Guarantee Trustee shall be determined solely by the
express provisions of this Guarantee, and the
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Guarantee, and no
implied covenants or obligations shall be read into
this Guarantee against the Guarantee Trustee; and
(B) in the absence of bad faith on the part
of the Guarantee Trustee, the Guarantee Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished
to the Guarantee Trustee and conforming to the
requirements of this Guarantee; but in the case of
any such certificates or opinions 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;
(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 such Responsible Officer of the Guarantee Trustee or 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; and
(iv) no provision of this Guarantee shall require the
Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any
of its duties or in the exercise of any of its rights or
powers, if the Guarantee Trustee shall have reasonable grounds
for believing that the repayment of such funds is not
reasonably assured to it under the terms of this Guarantee, or
security and indemnity, reasonably satisfactory to the
Guarantee Trustee, against such risk or liability is not
reasonably assured to it.
SECTION 2.2 Certain Rights of Guarantee Trustee
(a) Subject to the provisions of Section 2.1:
(i) The Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting
upon, any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order,
bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have
been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Guarantee shall be sufficiently evidenced
by an Officer's Certificate.
(iii) Whenever, in the administration of this
Guarantee, the Guarantee Trustee shall deem it desirable that
a matter be proved or established before taking, suffering or
omitting any action hereunder, the Guarantee Trustee (unless
other evidence is herein specifically prescribed) may, in the
absence of bad faith on its part, request and conclusively
rely upon an Officer's Certificate of the Guarantor which,
upon receipt of such request, shall be promptly delivered by
the Guarantor.
(iv) The Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or
any rerecording, refiling or registration thereof).
(v) The Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel with
respect to legal matters shall be full and complete
authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in
accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may
include any of its employees. The Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Guarantee from any court of competent
jurisdiction.
(vi) The Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Guarantee at the request or direction of any
Holder, unless such Holder shall have provided to the
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Guarantee Trustee, against the costs,
expenses (including attorneys' fees and expenses and the
expenses of the Guarantee Trustee's agents, nominees or
custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such
reasonable advances as may be requested by the Guarantee
Trustee; provided, however, that nothing contained in this
Section 2.2(a)(vi) shall be taken to relieve the Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Guarantee.
(vii) The Guarantee Trustee shall not be bound to
make any investigation into the facts or matters stated in any
resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper
or document, but the Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder
either directly or by or through agents, nominees, custodians
or attorneys, and the Guarantee Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Guarantee Trustee or its
agents hereunder shall bind the Holders of the Capital
Securities, and the signature of the Guarantee Trustee or its
agents alone shall be sufficient and effective to perform any
such action. No third party shall be required to inquire as to
the authority of the Guarantee Trustee to so act or as to its
compliance with any of the terms and provisions of this
Guarantee, both of which shall be conclusively evidenced by
the Guarantee Trustee's or its agent's taking such action.
(x) Whenever in the administration of this Guarantee
the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or
taking any other action hereunder, the Guarantee Trustee (A)
may request instructions from the Holders of a Majority in
liquidation amount of the Capital Securities, (B) may refrain
from enforcing such remedy or right or taking such other
action until such instructions are received, and (C) shall be
protected in conclusively relying on or acting in accordance
with such instructions.
(xi) The Guarantee Trustee shall not be liable for
any action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be authorized or
within the discretion or rights or powers conferred upon it by
this Guarantee.
(b) No provision of this Guarantee shall be deemed to impose
any duty or obligation on the Guarantee Trustee to perform any act or
acts or exercise any right, power, duty or obligation conferred or
imposed on it, in any jurisdiction in which it shall be illegal or in
which the Guarantee Trustee shall be unqualified or incompetent in
accordance with applicable law to perform any such act or acts or to
exercise any such right, power, duty or obligation. No permissive power
or authority available to the Guarantee Trustee shall be construed to
be a duty.
SECTION 2.3 Not Responsible for Recitals or Issuance of Guarantee
The recitals contained in this Guarantee shall be taken as the
statements of the Guarantor, and the Guarantee Trustee does not assume any
responsibility for their correctness. The Guarantee Trustee makes no
representation as to the validity or sufficiency of this Guarantee.
SECTION 2.4 Events of Default; Waiver
(a) An Event of Default under this Guarantee will occur upon
the failure of the Guarantor to perform any of its payment or other obligations
hereunder.
(b) The Holders of a Majority in liquidation amount of Capital
Securities may, voting or consenting as a class, on behalf of the Holders of all
of the Capital Securities, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist, and shall be
deemed to have been cured, for every purpose of this Guarantee, but no such
waiver shall extend to any subsequent or other default or Event of Default or
impair any right consequent thereon.
SECTION 2.5 Events of Default; Notice
(a) The Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class
postage prepaid, to the Holders of the Capital Securities, notices of
all Events of Default actually known to a Responsible Officer of the
Guarantee Trustee, unless such defaults have been cured before the
giving of such notice, provided, however, that the Guarantee Trustee
shall be protected in withholding such notice if and so long as a
Responsible Officer of the Guarantee Trustee in good faith determines
that the withholding of such notice is in the interests of the Holders
of the Capital Securities.
(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 from the Guarantor or a Holder of the
Capital Securities (except in the case of a payment default), or a
Responsible Officer of the Guarantee Trustee charged with the
administration of this Guarantee shall have obtained actual knowledge,
thereof.
ARTICLE III
GUARANTEE TRUSTEE
SECTION 3.1 Guarantee Trustee; Eligibility
(a) There shall at all times be a Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State or
Territory thereof or of the District of Columbia, or Person
authorized under such laws to exercise corporate trust powers,
having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or
examination by Federal, State, Territorial or District of
Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section
3.1(a) (ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Guarantee Trustee shall cease to be
eligible to so act under Section 3.1(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section
3.2(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the
Trust Indenture Act, the Guarantee Trustee shall either eliminate such
interest or resign to the extent and in the manner provided by, and
subject to this Guarantee.
SECTION 3.2 Appointment, Removal and Resignation of Guarantee Trustee
(a) Subject to Section 3.2(b), the Guarantee Trustee may be
appointed or removed without cause at any time by the Guarantor except
during an Event of Default.
(b) The Guarantee Trustee shall not be removed in accordance
with Section 3.2(a) until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Guarantee Trustee and delivered to the
Guarantor.
(c) The Guarantee Trustee appointed to office shall hold
office until a Successor Guarantee Trustee shall have been appointed or
until its removal or resignation. The Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Guarantee Trustee and delivered
to the Guarantor, which resignation shall not take effect until a
Successor Guarantee Trustee has been appointed and has accepted such
appointment by an instrument in writing executed by such Successor
Guarantee Trustee and delivered to the Guarantor and the resigning
Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 3.2
within 60 days after delivery of an instrument of removal or
resignation, the Guarantee Trustee resigning or being removed may
petition any court of competent jurisdiction for appointment of a
Successor Guarantee Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper, appoint a
Successor Guarantee Trustee.
(e) No Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Guarantee Trustee.
(f) Upon termination of this Guarantee or removal or
resignation of the Guarantee Trustee pursuant to this Section 3.2, the
Guarantor shall pay to the Guarantee Trustee all amounts owing to the
Guarantee Trustee under Sections 7.2 and 7.3 accrued to the date of
such termination, removal or resignation.
ARTICLE IV
GUARANTEE
SECTION 4.1 Guarantee
(a) The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without duplication of
amounts theretofore paid by the Issuer), as and when due, regardless of any
defense (except as defense of payment by the Issuer), right of set-off or
counterclaim that the Issuer may have or assert. The Guarantor's obligation to
make a Guarantee Payment may be satisfied by direct payment of the required
amounts by the Guarantor to the Holders or by causing the Issuer to pay such
amounts to the Holders.
(b) The Guarantor hereby also agrees to assume any and all
Obligations of the Trust and in the event any such Obligation is not so assumed,
subject to the terms and conditions hereof, the Guarantor hereby irrevocably and
unconditionally guarantees to each Beneficiary the full payment, when and as
due, of any and all obligations to such Beneficiaries. 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 4.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 4.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Guarantee shall in no way be affected or impaired by reason
of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Capital
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Special
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 (other than an extension of
time for payment of Distributions, Redemption Price, Special Redemption
Price, Liquidation Distribution or other sum payable that results from
the extension of any interest payment period on the Debentures or any
extension of the maturity date of the Debentures permitted by the
Indenture);
(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 granting indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization, arrangement,
composition or readjustment of debt of, or other similar proceedings
affecting, the Issuer or any of the assets of the Issuer;
(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
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 4.3 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 4.4 Rights of Holders
(a) 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 or to direct the exercise of any
trust or power conferred upon the Guarantee Trustee under this
Guarantee; provided, however, that (subject to Section 2.1) the
Guarantee Trustee shall have the right to decline to follow any such
direction if the Guarantee Trustee shall determine that the actions so
directed would be unjustly prejudicial to the Holders not taking part
in such direction or if the Guarantee Trustee being advised by counsel
determines that the action or proceeding so directed may not lawfully
be taken or if the Guarantor Trustee in good faith by its board of
directors or trustees, executive committees or a trust committee of
directors or trustees and/or Responsible Officers shall determine that
the action or proceedings so directed would involve the Guarantee
Trustee in personal liability.
(b) Any Holder of Capital Securities may institute a legal
proceeding directly against the Guarantor to enforce the Guarantee
Trustee's rights under this Guarantee, without first instituting a
legal proceeding against the Issuer, the Guarantee Trustee or any other
Person. The Guarantor waives any right or remedy to require that any
such action be brought first against the Issuer, the Guarantee Trustee
or any other Person before so proceeding directly against the
Guarantor.
SECTION 4.5 Guarantee of Payment
This Guarantee creates a guarantee of payment and not of
collection.
SECTION 4.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders of Capital Securities against the Issuer in respect of any amounts
paid to such Holders by the Guarantor under this Guarantee; provided, however,
that the Guarantor shall not (except to the extent required by mandatory
provisions of law) be entitled to enforce or exercise any right that it may
acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Guarantee, if, after
giving effect to any such payment, any amounts are due and unpaid under this
Guarantee. If any amount shall be paid to the Guarantor in violation of the
preceding sentence, the Guarantor agrees to hold such amount in trust for the
Holders and to pay over such amount to the Holders.
SECTION 4.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Capital
Securities and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Guarantee
notwithstanding the occurrence of any event referred to in subsections (a)
through (g), inclusive, of Section 4.3 hereof.
SECTION 4.8 Enforcement by a Beneficiary
A Beneficiary may enforce the obligations of the Guarantor
contained in Section 4.1(b) directly against the Guarantor and the Guarantor
waives any right or remedy to require that any action be brought against the
Trust or any other person or entity before preceding against the Guarantor. The
Guarantor shall be subrogated to all rights (if any) of any Beneficiary against
the Trust in respect of any amounts paid to the Beneficiaries by the Guarantor
under this Agreement; provided, however, that the Guarantor shall not (except to
the extent required by mandatory provisions of law) be entitled to enforce or
exercise any rights that 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, after giving effect to such payment, any amounts are due and
unpaid under this Agreement.
ARTICLE V
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 5.1 Limitation of Transactions
So long as any Capital Securities remain outstanding, if (a)
there shall have occurred and be continuing an Event of Default or a Declaration
Event of Default or (b) the Guarantor shall have selected an Extension Period as
provided in the Declaration and such period, or any extension thereof, shall be
continuing, then the Guarantor may not (x) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liquidation payment
with respect to, any of 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 Guarantor that rank pari passu in all respects with
or junior in interest to the Debentures (other than (i) repurchases, redemptions
or other acquisitions of shares of capital stock of the Guarantor in connection
with any employment contract, benefit plan or other similar arrangement with or
for the benefit of 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 Guarantor (or securities
convertible into or exercisable for such capital stock) as consideration in an
acquisition transaction entered into prior to occurrence of the Event of Default
or Declaration Event of Default or the applicable Extension Period, (ii) as a
result of any exchange or conversion of any class or series of the Guarantor's
capital stock (or any capital stock of a subsidiary of the Guarantor) for any
class or series of the Guarantor's capital stock or of any class or series of
the Guarantor's indebtedness for any class or series of the Guarantor's capital
stock, (iii) the purchase of fractional interests in shares of the Guarantor's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged, (iv) any declaration of a
dividend in connection with any stockholder's rights plan, or the issuance of
rights, stock or other property under any stockholder's rights plan, or the
redemption or repurchase of rights pursuant thereto, or (v) 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).
SECTION 5.2 Ranking
This Guarantee will constitute an unsecured obligation of the
Guarantor and will rank subordinate and junior in right of payment to all
present and future Senior Indebtedness (as defined in the Indenture) of the
Guarantor. By their acceptance thereof, each Holder of Capital Securities agrees
to the foregoing provisions of this Guarantee and the other terms set forth
herein.
The right of the Guarantor to participate in any distribution
of assets of any of its subsidiaries upon any such subsidiary's liquidation or
reorganization or otherwise is subject to the prior claims of creditors of that
subsidiary, except to the extent the Guarantor may itself be recognized as a
creditor of that subsidiary. Accordingly, the Guarantor's obligations under this
Guarantee will be effectively subordinated to all existing and future
liabilities of the Guarantor's subsidiaries, and claimants should look only to
the assets of the Guarantor for payments thereunder. This Guarantee does not
limit the incurrence or issuance of other secured or unsecured debt of the
Guarantor, including Senior Indebtedness of the Guarantor, under any indenture
that the Guarantor may enter into in the future or otherwise.
ARTICLE VI
TERMINATION
SECTION 6.1 Termination
This Guarantee shall terminate as to the Capital Securities
(i) upon full payment of the Redemption Price of all Capital Securities, (ii)
upon the distribution of the Debentures to the Holders of all of the Capital
Securities or (iii) upon full payment of the amounts payable in accordance with
the Declaration upon dissolution of the Issuer. This Guarantee will continue to
be effective or will be reinstated, as the case may be, if at any time any
Holder of Capital Securities must restore payment of any sums paid under the
Capital Securities or under this Guarantee.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Guarantor or any Covered
Person for any loss, damage or claim incurred by reason of any act or
omission performed or omitted by such Indemnified Person in good faith
in accordance with this Guarantee and in a manner that such Indemnified
Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Guarantee or by law,
except that an Indemnified Person shall be liable for any such loss,
damage or claim incurred by reason of such Indemnified Person's
negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Issuer or the Guarantor and upon
such information, opinions, reports or statements presented to the
Issuer or the Guarantor by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional
or expert competence and who, if selected by such Indemnified Person,
has been selected with reasonable care by such Indemnified Person,
including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other
facts pertinent to the existence and amount of assets from which
Distributions to Holders of Capital Securities might properly be paid.
SECTION 7.2 Indemnification
(a) The Guarantor agrees to indemnify each Indemnified Person
for, and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or willful
misconduct on the part of the Indemnified Person, arising out of or in
connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of the Indemnified Person defending itself against, or investigating,
any claim or liability in connection with the exercise or performance of any of
the Indemnified Person's powers or duties hereunder. The obligation to indemnify
as set forth in this Section 7.2 shall survive the resignation or removal of the
Guarantee Trustee and the termination of this Guarantee.
(b) Promptly after receipt by an Indemnified Person under this
Section 7.2 of notice of the commencement of any action, such Indemnified Person
will, if a claim in respect thereof is to be made against the Guarantor under
this Section 7.2, notify the Guarantor in writing of the commencement thereof;
but the failure so to notify the Guarantor (i) will not relieve the Guarantor
from liability under paragraph (a) above unless and to the extent that the
Guarantor did not otherwise learn of such action and such failure results in the
forfeiture by the Guarantor of substantial rights and defenses and (ii) will
not, in any event, relieve the Guarantor from any obligations to any Guarantor
other than the indemnification obligation provided in paragraph (a) above. The
Guarantor shall be entitled to appoint counsel of the Guarantor's choice at the
Guarantor's expense to represent the Indemnified Person in any action for which
indemnification is sought (in which case the Guarantor shall not thereafter be
responsible for the fees and expenses of any separate counsel retained by the
Indemnified Person or Persons except as set forth below); provided, however,
that such counsel shall be satisfactory to the Indemnified Person.
Notwithstanding the Guarantor's election to appoint counsel to represent the
Guarantor in an action, the Indemnified Person shall have the right to employ
separate counsel (including local counsel), and the Guarantor shall bear the
reasonable fees, costs and expenses of such separate counsel if (i) the use of
counsel chosen by the Guarantor to represent the Indemnified Person would
present such counsel with a conflict of interest, (ii) the actual or potential
defendants in, or targets of, any such action include both the Indemnified
Person and the Guarantor and the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it and/or other
Indemnified Person which are different from or additional to those available to
the Guarantor, (iii) the Guarantor shall not have employed counsel satisfactory
to the Indemnified Person to represent the Indemnified Person within a
reasonable time after notice of the institution of such action or (iv) the
Guarantor shall authorize the Indemnified Person to employ separate counsel at
the expense of the Guarantor. The Guarantor will not, without the prior written
consent of the Indemnified Persons, settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim, action, suit or
proceeding in respect of which indemnification or contribution may be sought
hereunder (whether or not the Indemnified Persons are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each Indemnified Person from all liability
arising out of such claim, action, suit or proceeding.
SECTION 7.3 Compensation; Reimbursement of Expenses
The Guarantor agrees:
(a) to pay to the Guarantee Trustee from time to time such
compensation for all services rendered by it hereunder as the parties shall
agree to 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); and
(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 it in accordance with any
provision of this Guarantee (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 willful
misconduct.
The provisions of this Section 7.3 shall survive the
resignation or removal of the Guarantee Trustee and the termination of this
Guarantee.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Successors and Assigns
All guarantees and agreements contained in this Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Capital
Securities then outstanding. Except in connection with any merger or
consolidation of the Guarantor with or into another entity or any sale, transfer
or lease of the Guarantor's assets to another entity, in each case, to the
extent permitted under the Indenture, the Guarantor may not assign its rights or
delegate its obligations under this Guarantee without the prior approval of the
Holders of at least a Majority in liquidation amount of the Capital Securities.
SECTION 8.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders of the Capital Securities in any material respect
(in which case no consent of Holders will be required), this Guarantee may be
amended only with the prior approval of the Holders of not less than a Majority
in liquidation amount of the Capital Securities. The provisions of the
Declaration with respect to amendments thereof apply to the giving of such
approval.
SECTION 8.3 Notices
All notices provided for in this Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Guarantee Trustee, at the Guarantee
Trustee's mailing address set forth below (or such other address as the
Guarantee Trustee may give notice of to the Holders of the Capital
Securities):
The Bank of New York
101 Barclay Street, Floor 21W
New York, NY 10286
Attention: Corporate Trust Administration
Telecopy: 212-815-5915
(b) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may
give notice of to the Holders of the Capital Securities and to the
Guarantee Trustee):
1275 Pennsylvania Avenue, NW
Washington, DC 20004
Attention: Joseph S. Bracewell
Telecopy:
(c) If given to any Holder of the Capital Securities, at the
address set forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 8.4 Benefit
This Guarantee is solely for the benefit of the Holders of the
Capital Securities and, subject to Section 2.1(a), is not separately
transferable from the Capital Securities.
SECTION 8.5 Governing Law
THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD
TO CONFLICT OF LAWS PRINCIPLES THEREOF.
<PAGE>
THIS GUARANTEE is executed as of the day and year first above
written.
CENTURY BANCSHARES, INC.,
as Guarantor
By: S/B/ JOSEPH S. BRACEWELL
-----------------------
Name: Joseph S. Bracewell
Title: President
THE BANK OF NEW YORK,
as Guarantee Trustee
By:_______________________________
Name:
Title:
<PAGE>
Exhibit 11
CENTURY BANCSHARES, Inc.
Computation of Earnings Per Share
March 31, 2000
CENTURY BANCSHARES, INC. Exhibit 11
Computation of Earnings Per Share
Three Months Ended March 31, 200
Three Months Ended March 31,
2000 1999
Basic Income Per Share:
Net income $ 407,544 $ 211,347
Weighted average common shares outstanding 2,722,418 2,844,239
Basic income per share $ 0.15 $ 0.07
Diluted Income Per Share:
Net income $ 407,544 $ 211,347
Weighted average common shares outstanding 2,722,418 2,844,239
Dilutive effect of stock options 21,352 27,095
Diluted weighted average
common shares outstanding 2,743,770 2,871,334
Diluted income per share $ 0.15 $ 0.07
<PAGE>
Exhibit 27
CENTURY BANCSHARES, Inc.
Financial Data Schedule
March 31, 2000
[ARTICLE] 9
[CIK] 785813
[NAME] CENTURY BANCSHARES, INC.
[MULTIPLIER] 1000
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] DEC-31-2000
[PERIOD-END] MAR-31-2000
[CASH] 8,445
[INT-BEARING-DEPOSITS] 17,686
[FED-FUNDS-SOLD] 22,812
[TRADING-ASSETS] 0
[INVESTMENTS-HELD-FOR-SALE] 18,399
[INVESTMENTS-CARRYING] 7,921
[INVESTMENTS-MARKET] 7,673
[LOANS] 142,230
[ALLOWANCE] 1,552
[TOTAL-ASSETS] 221,638
[DEPOSITS] 170,830
[SHORT-TERM] 7,680
[LIABILITIES-OTHER] 2,215
[LONG-TERM] 24,898
[COMMON] 2,859
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 13,156
[TOTAL-LIABILITIES-AND-EQUITY] 221,638
[INTEREST-LOAN] 3,205
[INTEREST-INVEST] 333
[INTEREST-OTHER] 240
[INTEREST-TOTAL] 3,778
[INTEREST-DEPOSIT] 1,125
[INTEREST-EXPENSE] 304
[INTEREST-INCOME-NET] 2,349
[LOAN-LOSSES] 180
[SECURITIES-GAINS] 0
[EXPENSE-OTHER] 2,029
[INCOME-PRETAX] 670
[INCOME-PRE-EXTRAORDINARY] 670
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 408
[EPS-BASIC] 0.15
[EPS-DILUTED] 0.15
[YIELD-ACTUAL] 5.27
[LOANS-NON] 501
[LOANS-PAST] 81
[LOANS-TROUBLED] 0
[LOANS-PROBLEM] 0
[ALLOWANCE-OPEN] 1,519
[CHARGE-OFFS] 171
[RECOVERIES] 24
[ALLOWANCE-CLOSE] 1,552
[ALLOWANCE-DOMESTIC] 1,552
[ALLOWANCE-FOREIGN] 0
[ALLOWANCE-UNALLOCATED] 1,188
