As Filed With the Securities and Exchange Commission on
September 27, 1999
Registration No. 333-86961
333-86961-01
333-86961-02
333-86961-03
_________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________
PRE-EFFECTIVE AMENDMENT NO. I
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
Sovereign Bancorp, Inc. Pennsylvania 23-2453088
Sovereign Capital Trust II Delaware To Be Applied For
Sovereign Capital Trust III Delaware To Be Applied For
Sovereign Capital Trust IV Delaware To Be Applied For
(Exact Name of Registrant as State or Other (I.R.S. Employer
Specified in its Charter) Jurisdiction of Identification
Incorporation or Number)
Organization)
___________
2000 Market Street
Philadelphia, Pennsylvania 19103
(215) 557-4630
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
___________
Jay S. Sidhu
Sovereign Bancorp, Inc.
2000 Market Street
Philadelphia, Pennsylvania 19103
(215) 557-4630
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
___________
Copies To:
Joseph M. Harenza, Esq. William J. Reynolds, Esq.
Stevens & Lee Stevens & Lee
111 North Sixth Street 111 North Sixth Street
Reading, PA 19601 Reading, PA 19601
(610) 478-2160 (610) 478-2099
___________
Approximate Date of Commencement of Proposed Sale of the
Securities to the Public: From time to time after the effective
date of this Registration Statement, as determined by market
conditions.
If the only securities being registered on this form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this form are
to be offered on a delayed or continuous basis pursuant to
Rule 415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest reinvestment
plans, check the following box. [ X ]
If this form is filed to register additional securities
for
an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this form is a post-effective amendment filed pursuant
to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier effective registration statement for the same offering.
[ ]
If delivery of the prospectus is expected to be made
pursuant to Rule 434 under the Securities Act, please check the
following box. [ X ]
___________
The Registrants hereby amend this Registration Statement
on
such date or dates as may be necessary to delay its effective
date until the Registrants shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
_________________________________________________________________
__
INTRODUCTORY NOTE
This Registration Statement contains a form of base
prospectus relating to common stock and common stock warrants,
preferred stock and preferred stock warrants, depositary shares,
debt securities and debt warrants, stock purchase contracts and
stock purchase units of Sovereign Bancorp, Inc., and the
preferred securities of Sovereign Capital Trust II, Sovereign
Capital Trust III and Sovereign Capital Trust IV (each a "Trust"
and collectively the "Trusts").
To the extent required, the information in the prospectus,
including financial information, will be updated at the time of
each offering. Upon each such offering, a prospectus supplement
to the base prospectus will be filed.
PROSPECTUS
$2,000,000,000
Sovereign Bancorp, Inc.
May Offer --
Common Stock
Common Stock Warrants
Preferred Stock
Preferred Stock Warrants
Depositary Shares
Debt Securities
Debt Warrants
Stock Purchase Contracts
Stock Purchase Units
___________
The Trusts
May Offer --
Trust Preferred Securities
___________
Sovereign Bancorp and, in the case of the trust preferred
securities, the applicable Trust, will provide the specific terms
of these securities in supplements to this prospectus. You
should read this prospectus and the accompanying prospectus
supplement carefully before you invest.
Sovereign Bancorp or the Trusts may use this prospectus to
offer up to $2,000,000,000 of securities.
Sovereign Bancorp common stock is traded on the NASDAQ
National Market under the symbol "SVRN."
___________
Neither the Securities and Exchange Commission nor any
state
securities commission has approved or disapproved of these
securities or determined if this prospectus or any accompanying
prospectus supplement is truthful or complete. Any
representation to the contrary is a criminal offense.
___________
September 28, 1999
TABLE OF CONTENTS
Page
Prospectus Summary..............................................
1
Where You Can Find More Information.............................
3
Use of Proceeds.................................................
7
Our Ratio of Earnings to Fixed Charges..........................
8
Description of Common Stock.....................................
8
Description of Preferred Stock..................................
8
Description of Depositary Shares................................
12
Description of Debt Securities..................................
15
Description of Warrants.........................................
35
Stock Purchase Contracts and Stock Purchase Units...............
40
Description of Capital Securities...............................
41
Description of Trust Preferred Securities and Trust Guarantees..
47
Certain Tax Considerations......................................
53
Plan of Distribution............................................
53
ERISA Considerations............................................
56
Legal Matters...................................................
56
Experts.........................................................
56
PROSPECTUS SUMMARY
This summary provides a brief overview of the key aspects
of
Sovereign Bancorp and the Trusts (collectively, the
"Registrants") and all material terms of the offered securities
that are known as of the date of this prospectus. For more
complete information on Sovereign Bancorp, Sovereign Bank and the
Trusts and a more complete understanding of the terms of the
offered securities, before making your investment decision, you
should carefully read:
- this prospectus, which explains the general terms
of
the securities that Sovereign Bancorp and the
Trusts
may offer;
- the accompanying prospectus supplement, which
(1) explains the specific terms of the securities
being
offered and (2) updates and changes information in
this
prospectus; and
- the documents referred to in "Where You Can Find
More
Information" for information about Sovereign
Bancorp,
including its financial statements.
SOVEREIGN BANCORP, INC.
Sovereign Bancorp is a Pennsylvania business corporation
and
the holding company for Sovereign Bank, a federal savings bank.
As of June 30, 1999, Sovereign Bancorp had total consolidated
assets, deposits and shareholders' equity of approximately
$24.6 billion, $12.2 billion and $1.4 billion, respectively.
Sovereign Bancorp conducts its operations principally
through its subsidiary, Sovereign Bank. Sovereign Bank's primary
business consists of attracting deposits from its network of
approximately 305 community banking offices, and originating
commercial and asset-based loans, consumer and residential
mortgage loans and home equity lines of credit in the communities
served by those offices. Sovereign Bank's mortgage banking
division also originates loans through, provides financing to,
and acquires loans from, mortgage companies and other originators
of loans across the nation. Sovereign Bank's vehicle finance
division provides direct and indirect automobile loans and
commercial loans (primarily dealer floor planning) in New
England, as well as in New York, Pennsylvania, New Jersey and
Delaware. Most of Sovereign Bank's community banking offices are
located in north central and eastern Pennsylvania, New Jersey and
northern Delaware. In terms of assets, Sovereign Bancorp is the
third largest bank or thrift holding company headquartered in
Pennsylvania, and one of the 50 largest in the United States.
<PAGE 1>
Sovereign Bancorp's principal executive offices are
located
at 2000 Market Street, Philadelphia, Pennsylvania 19103, and its
telephone number is (215) 557-4630.
<PAGE 2>
THE SECURITIES SOVEREIGN BANCORP MAY
OFFER
Sovereign Bancorp may use this prospectus to offer up to
$2,000,000,000 of:
- common stock;
- common stock warrants;
- preferred stock;
- preferred stock warrants;
- depositary shares;
- debt securities;
- debt warrants;
- stock purchase contracts; and
- stock purchase units.
A prospectus supplement will describe the specific types,
amounts, prices, and detailed terms of any of these offered
securities.
THE TRUSTS
Each Trust is a statutory business trust formed under
Delaware law pursuant to a separate Declaration of Trust (a
"Declaration") executed by Sovereign Bancorp, as sponsor for such
Trust, and the trustees of such Trust and the filing of a
Certificate of Trust with the Delaware Secretary of State.
Unless an accompanying prospectus supplement provides
otherwise, each Trust exists for the sole purposes of:
- issuing the trust preferred securities;
- investing the gross proceeds of the sale of the
trust
preferred securities in a specific series of
subordinated debt securities; and
- engaging in only those other activities necessary
or
incidental thereto.
All of the trust common securities will be owned by
Sovereign Bancorp. The trust common securities will rank on a
parity, and payments will be made thereon pro rata, with the
trust preferred securities, except that upon the occurrence and
continuance of an event of default under the applicable
Declaration, the rights of the holders of the applicable trust
<PAGE 3> common securities to payment in respect of distributions
and payments upon liquidation, redemption and otherwise will be
subordinated to the rights of the holders of the applicable trust
preferred securities.
Sovereign Bancorp will acquire trust common securities
having an aggregate liquidation amount equal to a minimum of 3%
of the total capital of each Trust. Each Trust will have a term
of at least 20 but not more than 50 years, but may terminate
earlier as provided in the applicable Declaration. Each Trust's
business and affairs will be conducted by the trustees. The
holder of the trust common securities will be entitled to
appoint, remove or replace any of, or increase or reduce the
number of, the Trustees of each Trust. The duties and
obligations of the Trustees shall be governed by the Declaration
of such Trust. At least one of the trustees of each Trust will
be a person who is an employee or officer of or who is affiliated
with Sovereign Bancorp (a "Regular Trustee"). One trustee of
each Trust will be a financial institution that is not affiliated
with Sovereign Bancorp, which shall act as property trustee and
as indenture trustee for the purposes of the Trust Indenture Act
of 1939 (the "Trust Indenture Act"), as amended, pursuant to the
terms set forth in a prospectus supplement (the "Property
Trustee"). In addition, unless the Property Trustee maintains a
principal place of business in the State of Delaware and
otherwise meets the requirements of applicable law, one trustee
of each Trust will be a legal entity having a principal place of
business in, or an individual resident of, the State of Delaware.
Sovereign Bancorp will pay all fees and expenses related to each
Trust and the offering of the trust preferred securities. Unless
otherwise set forth in the prospectus supplement, the Property
Trustee will be The Bank of New York, and the Delaware trustee
will be The Bank of New York, Delaware. The office of the
Delaware trustee in the State of Delaware is White Clay Center,
Newark, Delaware 19711. The principal place of business of each
Trust is 34 Reads Way, New Castle, Delaware 19720.
THE SECURITIES THE TRUSTS MAY OFFER
Each Trust may use this prospectus to offer up to
$2,000,000,000 of trust preferred securities.
A prospectus supplement will describe the specific types,
amounts, prices, and detailed terms of any of the trust preferred
securities.
WHERE YOU CAN FIND MORE INFORMATION
As required by the Securities Act of 1933, the
Registrants have filed a joint registration statement
(No. 333-86961) relating to the securities offered by this
prospectus with the Securities and Exchange Commission. This
prospectus is a part of that registration statement, which
includes additional information. <PAGE 4>
Sovereign Bancorp files annual, quarterly and current
reports, proxy statements and other information with the SEC.
You may read and copy any document Sovereign Bancorp files at the
SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. You can also request copies of the
documents, upon payment of a duplicating fee, by writing the
Public Reference Section of the SEC. Please call the SEC at
1-800-SEC-0330 for further information on the public reference
rooms. These SEC filings are also available to the public from
the SEC's web site at http://www.sec.gov.
The SEC allows Sovereign Bancorp to "incorporate by
reference" the information it files with the SEC, which means
that it can disclose important information to you by referring
you to those documents. The information incorporated by
reference is an important part of this prospectus. Information
that Sovereign Bancorp files later with the SEC will
automatically update and supersede, as relevant, information in
this prospectus. In all cases, you should rely on the later
information over different information included in this
prospectus or the prospectus supplement. Sovereign Bancorp
incorporates by reference the documents listed below and any
future filings made with the SEC under Section 13(a), 13(c), 14,
or 15(d) of the Securities Exchange Act of 1934 before the later
of (1) the completion of the offering of the securities described
in this prospectus and (2) the date Sovereign Bancorp stops
offering securities pursuant to this prospectus shall be
incorporated by reference in this prospectus from the date of
filing of such documents:
- Amended Annual Report on Form 10-K for the year
ended
December 31, 1998, filed with the SEC on June 1,
1999;
- Amended Quarterly Report on Form 10-Q for the
quarter
ended March 31, 1999, filed with the SEC on June 1,
1999;
- Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999, filed with the SEC on August 16,
1999;
and
- Current Reports on Form 8-K, filed with the SEC on
March 19, 1999, April 16, 1999 and September 10,
1999
(as amended by Form 8-K/A filed September 23,
1999).
- Registration Statement on Form 8-A, filed with the
SEC
August 14, 1989, pursuant to which Sovereign
Bancorp
registered certain stock purchase rights under the
Exchange Act, and any amendments or reports filed
for
the purpose of updating such Registration
Statement.
<PAGE 5>
You may request a copy of these filings, in most cases
without exhibits, at no cost, by writing or telephoning Sovereign
Bancorp at the following address:
Investor Relations Office
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, Pennsylvania 19610
(610) 320-8498
___________
No separate financial statements of the Trusts have been
included or incorporated by reference herein. Neither the Trusts
nor Sovereign Bancorp considers such financial statements
material to holders of trust preferred securities because:
- all of the voting securities of each Trust will be
owned, directly or indirectly, by Sovereign
Bancorp, a
reporting company under the Exchange Act;
- no Trust has independent operations, but rather
each
exists for the sole purpose of issuing securities
representing undivided beneficial interests in the
assets of such Trust and investing the proceeds
thereof
in debt securities; and
- the obligations of the Trusts under the trust
preferred
securities are fully and unconditionally guaranteed
by
Sovereign Bancorp to the extent set forth herein.
See "The Trusts" and "Description of Trust Preferred Securities
and Trust Guarantees -- Trust Guarantees."
You should rely only on the information provided in this
prospectus and the prospectus supplement, as well as the
information incorporated by reference. Neither Sovereign Bancorp
nor the Trusts have authorized anyone to provide you with
different information. Sovereign Bancorp and the Trusts are not
making an offer of these securities in any jurisdiction where the
offer is not permitted. You should not assume that the
information in this prospectus, the prospectus supplement or any
documents incorporated by reference is accurate as of any date
other than the date of the applicable document.
FORWARD-LOOKING STATEMENTS
Some of the statements in this prospectus, the attached
prospectus supplement and the documents incorporated by reference
are forward-looking statements.
These forward-looking statements include statements with
respect to the Registrants' beliefs, plans, objectives, goals,
expectations, anticipations, estimates, intentions, financial
<PAGE 6> condition, results of operations, future performance and
business, including:
- statements relating to Sovereign Bancorp's goals
with
respect to growth in earnings per share, return on
equity, return on assets, overhead efficiency
ratio,
tier 1 leverage ratio, annualized net charge-offs,
dividend pay-out ratio, and fee income as a
percentage
of total revenue; and
- statements that include the words "may," "could,"
"should," "would," "believe," "expect,"
"anticipate,"
"estimate," "intend," "plan," or similar
expressions.
These forward-looking statements involve risks and
uncertainties that are subject to change based on various
important factors (some of which are beyond the Registrants'
control). The following factors, among others, could cause
Sovereign Bancorp's financial performance to differ materially
from the goals, plans, objectives, intentions and expectations
expressed in such forward-looking statements:
- the strength of the United States economy in
general
and the strength of the local economies in which
Sovereign Bancorp conducts operations;
- the effects of trade, monetary and fiscal policies
and
laws, including interest rate policies of the Board
of
Governors of the Federal Reserve System;
- inflation, interest rate, market and monetary
fluctuations;
- the timely development of competitive new products
and
services by Sovereign Bancorp and the acceptance of
those products and services by customers;
- the willingness of customers to substitute
competitors'
products and services for Sovereign Bancorp's
products
and services and vice versa;
- Sovereign Bancorp's success in gaining regulatory
approval of products and services, when required;
- the impact of changes in financial services laws
and
regulations (including laws concerning taxes,
banking,
securities and insurance);
- technological changes;
- changes in consumer spending and savings habits;
- the impact of Sovereign Bancorp's pending and
completed
acquisitions, including Sovereign Bancorp's success
in
<PAGE 7> fully realizing or realizing within the
expected time frame expected cost savings and/or
revenue enhancements from such pending or completed
acquisitions;
- unanticipated regulatory or judicial proceedings;
- unanticipated results of Sovereign Bancorp's
efforts to
be Year 2000 compliant; and
- our success at managing the risks involved in the
foregoing.
If one or more of these risks or uncertainties occurs or if the
underlying assumptions prove incorrect, then Sovereign Bancorp's
actual results, performance or achievements in 1999 and beyond
could differ materially from those expressed in, or implied by,
the forward-looking statements.
The Registrants caution that the foregoing list of
important
factors is not exclusive, and neither such list nor any such
forward-looking statement takes into account the impact that any
future acquisition may have on us and any such forward-looking
statement. The Registrants do not undertake to update any
forward-looking statement, whether written or oral, that may be
made from time to time by or on behalf of the Registrants.
USE OF PROCEEDS
Except as otherwise described in any prospectus
supplement,
Sovereign Bancorp will use the net proceeds from the sale of the
offered securities for general corporate purposes, which may
include working capital, capital expenditures, repayment of
existing indebtedness, financing possible future acquisitions and
providing advances to or investments in Sovereign Bank. The
amounts and timing of our application of the proceeds will depend
upon many factors, including the funding requirements of
Sovereign Bank, the availability of other funds, and the
existence of acquisition opportunities. Pending these uses,
Sovereign Bancorp expects to invest the net proceeds in
short-term, interest-bearing securities.
<PAGE 8>
OUR RATIO OF EARNINGS TO FIXED CHARGES
We computed our ratio of earnings to fixed charges by
dividing earnings by fixed charges on a consolidated basis. We
computed our ratio of earnings to combined fixed charges and
preferred stock dividends by dividing earnings by the sum of
fixed charges and preferred stock dividend requirements.
Earnings consist primarily of income before income taxes adjusted
for fixed charges. Fixed charges consist primarily of interest
expense on short-term and long-term borrowings.
<TABLE>
<CAPTION>
Six Months
Ended Year
Ended December 31,
June 30, 1999 1998 1997
1996 1995 1994
<S> <C> <C> <C>
<C> <C>
Ratio of Earnings to Fixed Charges
Excluding interest on deposits... 1.57x 1.48x
1.44x 1.49x 1.89x 2.16x
Including interest on deposits... 1.31x 1.24x
1.22x 1.22x 1.29x 1.40x
Ratio of Earnings to Combined Fixed
Charges and Preferred Stock
Dividends (1)
Excluding interest on deposits... 1.57x 1.47x
1.41x 1.44x 1.81x 2.16x
Including interest on deposits... 1.31x 1.24x
1.21x 1.20x 1.27x 1.40x
</TABLE>
_______________
(1) On May 15, 1998, we redeemed all outstanding shares of our
6-1/4% Cumulative Convertible Preferred Stock, Series B at
a
redemption price of $52.188 per share. Substantially all
holders of the Series B Preferred Stock converted their
shares of preferred stock to shares of our common stock.
DESCRIPTION OF COMMON STOCK
Sovereign Bancorp may issue, either separately or together
with other securities, shares of common stock. Under its
articles of incorporation, Sovereign Bancorp is authorized to
issue up to 400,000,000 shares of common stock. Upon receipt by
Sovereign Bancorp of the full specified purchase price therefor,
the common stock will be fully paid and nonassessable. A
prospectus supplement relating to an offering of common stock, or
other securities convertible or exchangeable for, or exercisable
into, common stock, will describe the relevant terms, including
the number of shares offered, any initial offering price, and
market price and dividend information, as well as, if applicable,
information on other related securities. See "Description of
Capital Securities" below.
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of
Sovereign Bancorp's preferred stock, other than pricing and
related terms disclosed in the accompanying prospectus
supplement. You should read the particular terms of any series
<PAGE 9> of preferred stock offered by Sovereign Bancorp which
will be described in more detail in any prospectus supplement
relating to such series, together with the more detailed
provisions of Sovereign Bancorp's articles of incorporation and
the statement with respect to shares relating to each particular
series of preferred stock for provisions that may be important to
you. The statement with respect to shares relating to each
particular series of preferred stock offered by the accompanying
prospectus supplement and this prospectus will be filed as an
exhibit to a document incorporated by reference in the
registration statement. The prospectus supplement will also
state whether any of the terms summarized below do not apply to
the series of preferred stock being offered.
General
Under Sovereign Bancorp's articles of incorporation, the
board of directors of Sovereign Bancorp is authorized to issue
shares of preferred stock in one or more series, and to establish
from time to time a series of preferred stock with the following
terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of
the
shares of the series; and
- the qualifications, limitations or restrictions of
such
series, except as otherwise stated in the articles
of
incorporation.
Prior to the issuance of any series of preferred stock,
the
board of directors of Sovereign Bancorp will adopt resolutions
creating and designating the series as a series of preferred
stock and the resolutions will be filed in a statement with
respect to shares as an amendment to the articles of
incorporation. The term "board of directors of Sovereign
Bancorp" includes any duly authorized committee.
The rights of holders of the preferred stock offered may
be
adversely affected by the rights of holders of any shares of
preferred stock that may be issued in the future. The board of
directors may cause shares of preferred stock to be issued in
public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain
additional financing in connection with acquisitions or
otherwise, and issuances to officers, directors and employees of
Sovereign Bancorp and its subsidiaries pursuant to benefit plans
or otherwise. Shares of preferred stock issued by Sovereign
Bancorp may have the effect of rendering more difficult or
discouraging an acquisition of Sovereign Bancorp deemed
undesirable by the board of directors of Sovereign Bancorp.
<PAGE 10>
The preferred stock will be, when issued, fully paid and
nonassessable. Unless the particular prospectus supplement
states otherwise, holders of each series of preferred stock will
not have any preemptive or subscription rights to acquire more
stock of Sovereign Bancorp.
The transfer agent, registrar, dividend disbursing agent
and
redemption agent for shares of each series of preferred stock
will be named in the prospectus supplement relating to such
series.
Rank
Unless otherwise specified in the prospectus supplement
relating to the shares of any series of preferred stock, such
shares will rank on an equal basis with each other series of
preferred stock and prior to the common stock as to dividends and
distributions of assets.
Dividends
Unless the particular prospectus supplement states
otherwise, holders of each series of preferred stock will be
entitled to receive cash dividends, when, as and if declared by
the board of directors of Sovereign Bancorp out of funds legally
available for dividends. The rates and dates of payment of
dividends will be set forth in the prospectus supplement relating
to each series of preferred stock. Dividends will be payable to
holders of record of preferred stock as they appear on the books
of Sovereign Bancorp or, if applicable, the records of the
depositary referred to below under "Description of Depositary
Shares," on the record dates fixed by the board of directors.
Dividends on any series of preferred stock may be cumulative or
noncumulative.
Sovereign Bancorp may not declare, pay or set apart for
payment dividends on the preferred stock unless full dividends on
any other series of preferred stock that ranks on an equal or
senior basis have been paid or sufficient funds have been set
apart for payment for:
- all prior dividend periods of the other series of
preferred stock that pay dividends on a cumulative
basis; or
- the immediately preceding dividend period of the
other
series of preferred stock that pay dividends on a
noncumulative basis.
Partial dividends declared on shares of preferred stock
and
any other series of preferred stock ranking on an equal basis as
to dividends will be declared pro rata. A pro rata declaration
means that the ratio of dividends declared per share to accrued
<PAGE 11> dividends per share will be the same for all such
series of preferred stock.
Similarly, Sovereign Bancorp may not declare, pay or set
apart for payment non-stock dividends or make other payments on
the common stock or any other stock of Sovereign Bancorp ranking
junior to the preferred stock unless full dividends on all series
of preferred stock have been paid or set apart for payment for:
- all prior dividend periods if the preferred stock
pays
dividends on a cumulative basis; or
- the immediately preceding dividend period if the
preferred stock pays dividends on a noncumulative
basis.
Conversion and Exchange
The prospectus supplement for any series of preferred
stock
will state the terms, if any, on which shares of that series are
convertible into or exchangeable for shares of Sovereign
Bancorp's common stock.
Redemption
If so specified in the applicable prospectus supplement, a
series of preferred stock may be redeemable at any time, in whole
or in part, at the option of Sovereign Bancorp or the holder
thereof, or may be mandatorily redeemed.
Any partial redemptions of preferred stock will be made in
a
way that the board of directors decides is equitable.
Unless Sovereign Bancorp defaults in the payment of the
redemption price, dividends will cease to accrue after the
redemption date on shares of preferred stock called for
redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
Liquidation Preference
Upon any voluntary or involuntary liquidation, dissolution
or winding up of Sovereign Bancorp, holders of each series of
preferred stock will be entitled to receive distributions upon
liquidation in the amount set forth in the prospectus supplement
relating to such series of preferred stock, plus an amount equal
to any accrued and unpaid dividends. Such distributions will be
made before any distribution is made on any securities ranking
junior to the preferred stock with respect to liquidation,
including common stock.
If the liquidation amounts payable relating to the
preferred
stock of any series and any other securities ranking on a parity
regarding liquidation rights are not paid in full, the holders of
<PAGE 12> the preferred stock of such series and such other
securities will share in any such distribution of available
assets of Sovereign Bancorp on a ratable basis in proportion to
the full liquidation preferences. Holders of such series of
preferred stock will not be entitled to any other amounts from
Sovereign Bancorp after they have received their full liquidation
preference.
Voting Rights
The holders of shares of preferred stock will have no
voting
rights, except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the statement with respect
to
shares establishing such series; or
- as required by applicable law.
DESCRIPTION OF DEPOSITARY SHARES
The following briefly summarizes the material provisions
of
the deposit agreement and of the depositary shares and depositary
receipts, other than pricing and related terms disclosed in the
accompanying prospectus supplement. This description is not
complete and is subject to, and qualified in its entirety by
reference to, all provisions of the deposit agreement, depositary
shares and depositary receipts. You should read the particular
terms of any depositary shares and any depositary receipts that
are offered by Sovereign Bancorp and any deposit agreement
relating to a particular series of preferred stock which will be
described in more detail in a prospectus supplement. The
prospectus supplement will also state whether any of the
generalized provisions summarized below do not apply to the
depositary shares or depositary receipts being offered. A copy
of the form of deposit agreement, including the form of
depositary receipt, will be filed as an exhibit to a document
incorporated by reference in the registration statement of which
this prospectus forms a part. You should read the more detailed
provisions of the deposit agreement and the form of depositary
receipt for provisions that may be important to you.
General
Sovereign Bancorp may, at its option, elect to offer
fractional shares of preferred stock, rather than full shares of
preferred stock. In such event, Sovereign Bancorp will issue
receipts for depositary shares, each of which will represent a
fraction of a share of a particular series of preferred stock.
The shares of any series of preferred stock represented by
depositary shares will be deposited under a deposit agreement
between Sovereign Bancorp and a bank or trust company selected by
<PAGE 13> Sovereign Bancorp having its principal office in the
United States and having a combined capital and surplus of at
least $50,000,000, as preferred stock depositary. Each owner of
a depositary share will be entitled to all the rights and
preferences of the underlying preferred stock, including any
dividend, voting, redemption, conversion and liquidation rights
described in the particular prospectus supplement, in proportion
to the applicable fraction of a share of preferred stock
represented by such depositary share.
The depositary shares will be evidenced by depositary
receipts issued pursuant to the deposit agreement. Depositary
receipts will be distributed to those persons purchasing the
fractional shares of preferred stock in accordance with the terms
of the applicable prospectus supplement.
Dividends and Other Distributions
The preferred stock depositary will distribute all cash
dividends or other cash distributions received in respect of the
deposited preferred stock to the record holders of depositary
shares relating to such preferred stock in proportion to the
number of such depositary shares owned by such holders.
The preferred stock depositary will distribute any
property
received by it other than cash to the record holders of
depositary shares entitled thereto. If the preferred stock
depositary determines that it is not feasible to make such
distribution, it may, with the approval of Sovereign Bancorp,
sell such property and distribute the net proceeds from such sale
to such holders.
Redemption of Preferred Stock
If a series of preferred stock represented by depositary
shares is to be redeemed, the depositary shares will be redeemed
from the proceeds received by the preferred stock depositary
resulting from the redemption, in whole or in part, of such
series of preferred stock. The depositary shares will be
redeemed by the preferred stock depositary at a price per
depositary share equal to the applicable fraction of the
redemption price per share payable in respect of the shares of
preferred stock so redeemed.
Whenever Sovereign Bancorp redeems shares of preferred
stock
held by the preferred stock depositary, the preferred stock
depositary will redeem as of the same date the number of
depositary shares representing shares of preferred stock so
redeemed. If fewer than all the depositary shares are to be
redeemed, the depositary shares to be redeemed will be selected
by the preferred stock depositary by lot or ratably or by any
other equitable method as the preferred stock depositary may
decide.
<PAGE 14>
Voting Deposited Preferred Stock
Upon receipt of notice of any meeting at which the holders
of any series of deposited preferred stock are entitled to vote,
the preferred stock depositary will mail the information
contained in such notice of meeting to the record holders of the
depositary shares relating to such series of preferred stock.
Each record holder of such depositary shares on the record date
will be entitled to instruct the preferred stock depositary to
vote the amount of the preferred stock represented by such
holder's depositary shares. The preferred stock depositary will
try to vote the amount of such series of preferred stock
represented by such depositary shares in accordance with such
instructions.
Sovereign Bancorp will agree to take all actions that the
preferred stock depositary determines are necessary to enable the
preferred stock depositary to vote as instructed. The preferred
stock depositary will abstain from voting shares of any series of
preferred stock held by it for which it does not receive specific
instructions from the holders of depositary shares representing
such preferred stock.
Amendment and Termination of the Deposit Agreement
The form of depositary receipt evidencing the depositary
shares and any provision of the deposit agreement may at any time
be amended by agreement between Sovereign Bancorp and the
preferred stock depositary. However, any amendment that
materially and adversely alters any existing right of the holders
of depositary shares will not be effective unless such amendment
has been approved by the holders of at least a majority of the
depositary shares then outstanding. Every holder of an
outstanding depositary receipt at the time any such amendment
becomes effective shall be deemed, by continuing to hold such
depositary receipt, to consent and agree to such amendment and to
be bound by the deposit agreement, which has been amended
thereby. The deposit agreement may be terminated only if:
- all outstanding depositary shares have been
redeemed;
or
- a final distribution in respect of the preferred
stock
has been made to the holders of depositary shares
in
connection with any liquidation, dissolution or
winding
up of Sovereign Bancorp.
Charges of Preferred Stock Depositary; Taxes and Other
Governmental Charges
Sovereign Bancorp will pay all transfer and other taxes
and
governmental charges arising solely from the existence of the
depositary arrangements. Sovereign Bancorp also will pay charges
of the depositary in connection with the initial deposit of
<PAGE 15> preferred stock and any redemption of preferred stock.
Holders of depositary receipts will pay other transfer and other
taxes and governmental charges and such other charges, including
a fee for the withdrawal of shares of preferred stock upon
surrender of depositary receipts, as are expressly provided in
the deposit agreement to be for their accounts.
Prospective purchasers of depositary shares should be
aware
that special tax, accounting and other issues may be applicable
to instruments such as depositary shares.
Resignation and Removal of Depositary
The preferred stock depositary may resign at any time by
delivering to Sovereign Bancorp notice of its intent to do so,
and Sovereign Bancorp may at any time remove the preferred stock
depositary, any such resignation or removal to take effect upon
the appointment of a successor preferred stock depositary and its
acceptance of such appointment. Such successor preferred stock
depositary must be appointed within 60 days after delivery of the
notice of resignation or removal and must be a bank or trust
company having its principal office in the United States and
having a combined capital and surplus of at least $50,000,000.
Miscellaneous
The preferred stock depositary will forward all reports
and
communications from Sovereign Bancorp which are delivered to the
preferred stock depositary and which Sovereign Bancorp is
required to furnish to the holders of the deposited preferred
stock.
Neither the preferred stock depositary nor Sovereign
Bancorp
will be liable if it is prevented or delayed by law or any
circumstances beyond its control in performing its obligations
under the deposit agreement. The obligations of Sovereign
Bancorp and the preferred stock depositary under the deposit
agreement will be limited to performance in good faith of their
duties thereunder and they will not be obligated to prosecute or
defend any legal proceeding in respect of any depositary shares,
depositary receipts or shares of preferred stock unless
satisfactory indemnity is furnished. Sovereign Bancorp and the
preferred stock depositary may rely upon written advice of
counsel or accountants, or upon information provided by holders
of depositary receipts or other persons believed to be competent
and on documents believed to be genuine.
DESCRIPTION OF DEBT SECURITIES
The following briefly summarizes the material provisions
of
the indentures and the debt securities, other than pricing and
related terms disclosed in the accompanying prospectus
supplement. You should read the more detailed provisions of the
applicable indenture and supplemental indentures, if any,
<PAGE 16> including the defined terms, for the provisions that
may be important to you. You should also read the particular
terms of a series of debt securities, which will be described in
more detail in the applicable prospectus supplement. Copies of
the indentures may be obtained from Sovereign Bancorp or the
applicable trustee. So that you may easily locate the more
detailed provisions, the numbers in parentheses below refer to
sections in the applicable indenture or, if no indenture is
specified, to sections in each of the indentures. Whenever
particular sections or defined terms of the applicable indenture
are referred to, such sections or defined terms are incorporated
into this prospectus by reference, and the statement in this
prospectus is qualified by that reference.
General
The debt securities offered by this prospectus will be
secured or unsecured obligations of Sovereign Bancorp, and will
be either senior debt, subordinated debt, or junior subordinated
debt. Senior debt will be issued under a senior indenture.
Subordinated debt will be issued under a subordinated indenture.
Junior subordinated debt will be issued under a junior
subordinated indenture. The senior indenture, the subordinated
indenture, and the junior subordinated indenture are sometimes
referred to in this prospectus individually as an "indenture" and
collectively as the "indentures." Except as specified in "Senior
Debt," "Subordination," the fifth following paragraph or
otherwise below and in any applicable prospectus supplement, any
junior subordinated debt will be subject to the same terms and
conditions as subordinated debt and will be issued under a junior
subordinated indenture filed as an exhibit to this Registration
Statement. Unless the context provides otherwise, references to
the subordinated indenture shall also be deemed to be references
to the junior subordinated indenture. The indentures have been
filed with the Securities and Exchange Commission and are
incorporated by reference in, or have been filed with, the
Registration Statement of which this prospectus forms a part.
Unless otherwise provided in the applicable prospectus
supplement, the trustee under the indentures will be Harris Trust
and Savings Bank.
None of the indentures limits the total principal amount
of
debt securities that may be issued and the indentures provide
that debt securities of any series may be issued up to the total
principal amount which may be authorized from time to time by
Sovereign Bancorp. Except as may be set forth in a prospectus
supplement, neither the indentures nor the debt securities will
limit or otherwise restrict the amount of other indebtedness
which may be incurred or the other securities which may be issued
by Sovereign Bancorp or any of its affiliates.
Because Sovereign Bancorp is a holding company, the claims
of creditors of Sovereign Bancorp's subsidiaries, including
<PAGE 17> Sovereign Bank, will have a priority over Sovereign
Bancorp's rights as a shareholder of Sovereign Bank, and also
over the rights of Sovereign Bancorp's creditors, including the
holders of Sovereign Bancorp's debt securities, to participate in
the assets of the subsidiary upon the subsidiary's liquidation or
recapitalization, except to the extent that Sovereign Bancorp may
itself be a creditor with recognized claims against the
subsidiary. In addition, there are certain regulatory
limitations on the payment of dividends and on loans and other
transfers to Sovereign Bancorp by its banking subsidiaries.
The amount of debt securities offered by this prospectus
will be limited to the amounts described on the cover of this
prospectus. The indentures provide that senior, subordinated or
junior subordinated debt securities of Sovereign Bancorp may be
issued in one or more series with different terms, in each case
as authorized from time to time by Sovereign Bancorp.
(Section 301)
The senior securities may be unsecured or secured by
assets
of Sovereign Bancorp, including the stock of Sovereign Bank owned
by Sovereign Bancorp, and, except as may be set forth in a
prospectus supplement, will rank on an equal basis with other
unsecured senior debt of Sovereign. The subordinated securities
and junior subordinated securities will be unsecured and, except
as may be set forth in a prospectus supplement, will rank on an
equal basis with other subordinated debt or junior subordinated
debt, respectively, of Sovereign Bancorp and, together with such
other subordinated debt or junior subordinated debt, will be
subordinate and junior in right of payment to the prior payment
in full of the senior debt (which in the case of the junior
subordinated debt will also include subordinated debt) of
Sovereign Bancorp as described below under "Subordination."
The applicable prospectus supplement relating to any
series
of debt securities will describe the following terms, where
applicable:
- the designation and any limit on the total
principal
amount of such debt securities;
- the price (expressed as a percentage of the total
principal amount) at which such debt securities
will be
issued;
- the date or dates on which such debt securities
will
mature or method by which such dates can be
determined;
- the currency or currencies in which such debt
securities are being sold and are denominated and
the
circumstances, if any, under which any debt
securities
may be payable in a currency other than the
currency in
which such debt securities are denominated, and if
so,
the exchange rate, the exchange rate agent and, if
the
<PAGE 18> holder of any such debt securities may
elect
the currency in which payments are to be made, the
manner of such election;
- the denomination in which any debt securities which
are
registered securities will be issuable, if other
than
denominations of $1,000 and any integral multiple
thereof, and the denomination or denominations in
which
any debt securities which are bearer securities
will be
issuable, if other than the denomination of $5,000;
- the rate or rates (which may be fixed or variable)
at
which such debt securities will bear interest,
which
rate may be zero in the case of certain debt
securities
issued at an issue price representing a discount
from
the principal amount payable at maturity;
- the date from which interest on such debt
securities
will accrue, the dates on which such interest will
be
payable or method by which such dates can be
determined, the date on which payment of such
interest
will commence and the circumstances, if any, in
which
Sovereign Bancorp may defer interest payments;
- the dates on which, and the price or prices at
which,
such debt securities will, pursuant to any
mandatory
sinking fund provision, or may, pursuant to any
optional redemption or mandatory repayment
provisions,
be redeemed or repaid and the other terms and
provisions of any such optional redemption or
mandatory
repayment;
- any terms by which such debt securities may be
convertible into common stock (see "Description of
Common Stock"), preferred stock (see "Description
of
Preferred Stock"), or any other capital securities
(see
"Description of Capital Securities") of Sovereign
Bancorp and, in case of debt securities convertible
into preferred stock, the terms of such preferred
stock;
- any terms by which the principal of such debt
securities will be exchangeable for capital
securities
and any terms creating a fund (the "securities
fund")
pursuant to which the proceeds of sales of capital
securities may be designated on the books of
Sovereign
Bancorp for the payment of any of the principal of
such
debt securities;
- whether such debt securities are to be issuable as
bearer securities and/or registered securities and,
if
issuable as bearer securities, the terms upon which
any
bearer securities may be exchanged for registered
securities; <PAGE 19>
- whether such debt securities are to be issued in
the
form of one or more temporary or permanent global
securities and, if so, the identity of the
depositary
for such global security or securities;
- if a temporary global debt security is to be issued
with respect to such series, the extent to which,
and
the manner in which, any interest payable on an
interest payment date prior to the issuance of a
permanent global security or definitive bearer
securities will be credited to the accounts of the
persons entitled to interest on the interest
payment
date;
- if a temporary global security is to be issued with
respect to such series, the terms upon which
interests
in such temporary global security may be exchanged
for
interests in a permanent global security or for
definitive debt securities of the series and the
terms
upon which interests in a permanent global
security, if
any, may be exchanged for definitive debt
securities of
the series;
- any additional restrictive covenants included for
the
benefit of holders of such debt securities;
- any additional events of default provided with
respect
to such debt securities;
- information with respect to book-entry procedures,
if
any;
- whether the debt securities will be repayable at
the
option of the holder in the event of a change in
control of Sovereign Bancorp;
- any other terms of the debt securities not
inconsistent
with the provisions of the applicable indenture;
- the terms of any securities being offered together
with
or separately from the debt securities;
- if such debt securities are original issue discount
securities, the accreted or notational value
thereof
(or method of determining such amount) upon
acceleration of maturity;
- any guarantees issued with respect to such debt
securities; and
- any security interests or other liens granted to
secure
such debt securities.
<PAGE 20>
Such prospectus supplement will also describe any special
provisions for the payment of additional amounts with respect to
the debt securities and certain United States federal income tax
consequences and other special considerations applicable to such
series of debt securities. If a debt security is denominated in
a foreign currency, such debt security may not trade on a U.S.
national securities exchange unless and until the SEC has
approved appropriate rule changes pursuant to the Act to
accommodate the trading of such debt security.
Form, Exchange, Registration and Transfer
Debt securities of a series may be issuable in definitive
form solely as registered securities, solely as bearer securities
or as both registered securities and bearer securities. Unless
otherwise indicated in the prospectus supplement, bearer
securities other than bearer securities in temporary or permanent
global form will have interest coupons attached. (Section 201)
Each indenture also provides that bearer securities or registered
securities of a series may be issuable in permanent global form.
(Section 203) See "Permanent Global Securities."
Registered securities of any series will be exchangeable
for
other registered securities of the same series of authorized
denominations and of a like total principal amount, tenor and
terms. In addition, if debt securities of any series are
issuable as both registered securities and bearer securities, at
the option of the holder upon request confirmed in writing, and
subject to the terms of the applicable indenture, bearer securi-
ties (with all unmatured coupons, except as provided below, and
all matured coupons in default) of such series will be
exchangeable into registered securities of the same series of any
authorized denominations and of a like aggregate principal
amount, tenor and terms. Bearer securities surrendered in
exchange for registered securities between the close of business
on a regular record date or a special record date and the
relevant date for payment of interest shall be surrendered
without the coupon relating to such date for payment of interest,
and interest will not be payable in respect of the registered
security issued in exchange for such bearer security, but will be
payable only to the holder of such coupon when due in accordance
with the terms of the applicable indenture. Bearer securities
will not be issued in exchange for registered securities.
(Section 305) Each bearer security, other than a temporary global
bearer security, and each interest coupon will bear an
appropriate legend as will be specified in an applicable
prospectus supplement.
Debt securities may be presented for exchange as provided
above, and registered securities may be presented for
registration of transfer (duly endorsed or accompanied by a
satisfactory written instrument of transfer), at the office of
the security registrar or at the office of any transfer agent
designated by Sovereign Bancorp for such purpose with respect to
<PAGE 21> such series of debt securities, without service charge
and upon payment of any taxes and other governmental charges.
(Section 305) If the applicable prospectus supplement refers to
any transfer agent (in addition to the security registrar)
initially designated by Sovereign Bancorp with respect to any
series of debt securities, Sovereign Bancorp may at any time
rescind the designation of any such transfer agent or approve a
change in the location through which any such transfer agent (or
security registrar) acts, except that, if debt securities of a
series are issuable solely as registered securities, Sovereign
Bancorp will be required to maintain a transfer agent in each
place of payment for such series and, if debt securities of a
series are issuable as bearer securities, Sovereign Bancorp must
maintain (in addition to the security registrar) a transfer agent
in a place of payment for such series located outside the United
States. Sovereign Bancorp may at any time designate additional
transfer agents with respect to any series of debt securities.
(Section 1002)
Sovereign Bancorp shall not be required:
- to issue, register the transfer of or exchange debt
securities of any particular series to be redeemed
or
exchanged for capital securities for a period of
fifteen days preceding the first publication of the
relevant notice of redemption or, if registered
securities are outstanding and there is no
publication,
the mailing of the relevant notice of redemption;
- to register the transfer of or exchange any
registered
security so selected for redemption or exchange in
whole or in part, except the unredeemed or
unexchanged
portion of any registered security being redeemed
or
exchanged in part; or
- to exchange any bearer security so selected for
redemption or exchange except that such a bearer
security may be exchanged for a registered security
of
like tenor and terms of that series, provided that
such
registered security shall be surrendered for
redemption
or exchange. (Section 305)
Additional information regarding restrictions on the issu-
ance, exchange and transfer of, and special United States federal
income tax considerations relating to bearer securities will be
set forth in the applicable prospectus supplement.
Temporary Global Securities
If so specified in the applicable prospectus supplement,
all
or any portion of the debt securities of a series which are
issuable as bearer securities will initially be represented by
one or more temporary global securities, without interest
coupons, to be deposited with a common depositary in London for
<PAGE 22> Morgan Guaranty Trust Corporation of New York, Brussels
Office, as operator of the Euroclear System ("Euroclear") and
Cedel S.A. ("Cedel") for credit to designated accounts. On and
after the date determined as provided in any such temporary
global security and described in the applicable prospectus
supplement, but within a reasonable time, each such temporary
global security will be exchangeable for definitive bearer
securities, definitive registered securities or all or a portion
of a permanent global bearer security, or any combination
thereof, as specified in the prospectus supplement. No
definitive bearer security or permanent global bearer security
delivered in exchange for a portion of a temporary global
security shall be mailed or otherwise delivered to any location
in the United States in connection with such exchange.
Additional information regarding restrictions on and
special
United States federal income tax consequences relating to
temporary global securities will be set forth in the applicable
prospectus supplement.
Permanent Global Securities
If any debt securities of a series are issuable in
permanent
global form, the applicable prospectus supplement will describe
the circumstances, if any, under which beneficial owners of
interests in any such permanent global security may exchange
their interests for debt securities of such series and of like
tenor and principal amount of any authorized form and
denomination. Principal of and any premium and interest on a
permanent global security will be payable in the manner described
in the applicable prospectus supplement.
Payments and Paying Agents
Unless otherwise indicated in the applicable prospectus
supplement:
- payments of principal of and premium, if any, and
interest, if any, on bearer securities will be
payable
in the currency designated in the prospectus
supplement, subject to any applicable laws and
regulations, at such paying agencies outside the
United
States as Sovereign Bancorp may appoint from time
to
time;
- such payments may be made, at the option of the
holder,
by a check in the designated currency or by
transfer to
an account in the designated currency maintained by
the
payee with a bank located outside the United
States;
and
- payment of interest on bearer securities on any
interest payment date will be made only against
surrender of the coupon relating to such interest
<PAGE 23> payment date to a paying agent outside
the
United States. (Section 1001)
No payment with respect to any bearer security will be
made
at any office or paying agency maintained by Sovereign Bancorp in
the United States nor will any such payment be made by transfer
to an account, or by mail to an address, in the United States.
Notwithstanding the foregoing, payments of principal of and
premium, if any, and interest, if any, on bearer securities
denominated and payable in U.S. dollars will be made in U.S.
dollars at an office or agency of, and designated by, Sovereign
Bancorp located in the United States, if payment of the full
amount thereof in U.S. dollars at all paying agencies outside the
United States is illegal or effectively precluded by exchange
controls or other similar restrictions, and the trustee receives
an opinion of counsel that such payment within the United States
is legal. (Section 1002)
Unless otherwise indicated in the applicable prospectus
supplement, payment of principal of and premium, if any, and
interest, if any, on a registered security will be payable in the
currency designated in the prospectus supplement, and interest
will be payable at the office of such paying agent or paying
agents as Sovereign Bancorp may appoint from time to time, except
that, at the option of Sovereign Bancorp, payment of any interest
may be made by a check in such currency mailed to the holder at
the holder's registered address or by wire transfer to an account
in such currency designated by the holder in writing not less
than ten days prior to the date of payment. Unless otherwise
indicated in the applicable prospectus supplement, payment of any
installment of interest on a registered security will be made to
the person in whose name such registered security is registered
at the close of business on the regular record date for such
payments. (Section 307) Unless otherwise indicated in the
applicable prospectus supplement, principal payable at maturity
will be paid to the registered holder upon surrender of the
registered security at the office of a duly appointed paying
agent.
The paying agents outside the United States initially
appointed by Sovereign Bancorp for a series of debt securities
will be named in the applicable prospectus supplement. Sovereign
Bancorp may terminate the appointment of any of the paying agents
from time to time, except that Sovereign Bancorp will maintain at
least one paying agent outside the United States so long as any
bearer securities are outstanding where bearer securities may be
presented for payment and may be surrendered for exchange,
provided that so long as any series of debt securities is listed
on the stock exchange of the United Kingdom and the Republic of
Ireland or the Luxembourg Stock Exchange or any other stock
exchange located outside the United States and such stock
exchange shall so require, Sovereign Bancorp will maintain a
paying agent in London or Luxembourg or any other required city
<PAGE 24> located outside the United States, as the case may be,
for such series of debt securities. (Section 1002)
All moneys paid by Sovereign Bancorp to a paying agent for
the payment of principal of or premium, if any, or interest, if
any, on any debt security that remains unclaimed at the end of
two years after such principal, premium or interest shall have
become due and payable will, at request of Sovereign Bancorp, be
repaid to Sovereign Bancorp, and the holder of such debt security
or any coupon will thereafter look only to Sovereign Bancorp for
payment. (Section 1003)
Covenants Contained in Indentures
The indentures provide that Sovereign Bancorp will not:
- sell, transfer, or otherwise dispose of any shares
of
voting stock of Sovereign Bank or permit Sovereign
Bank
to issue, sell, or otherwise dispose of any shares
of
its voting stock unless Sovereign Bancorp retains
direct ownership of at least 80% of the voting
stock;
- permit Sovereign Bank to merge or consolidate
unless
Sovereign Bancorp directly owns at least 80% of the
voting stock of the surviving entity; or
- convey or transfer its properties and assets
substantially as an entirety to any other entity
unless
Sovereign Bancorp directly owns at least 80% of the
voting stock of the entity. (Section 1005)
With the consent of the Holders of a majority in aggregate
principal amount of the outstanding debt securities of each
series issued under the indentures, these requirements may be
modified so as to reduce the required percentage of ownership
from 80% to a majority. (Section 902)
The senior indenture provides that Sovereign Bancorp will
not create, assume, incur, or suffer to exist, as security for
indebtedness for borrowed money, any mortgage, pledge,
encumbrance or lien or charge of any kind upon more than 20% of
the voting stock of Sovereign Bank (other than directors'
qualifying shares) without effectively providing that each series
of senior securities be secured equally and ratably with (or
prior to) such indebtedness. (Section 1004 of the senior
indenture) The subordinated indenture and junior subordinated
indenture do not contain a similar covenant.
Sovereign Bancorp is not restricted by the indentures from
incurring, assuming or becoming liable for any type of debt or
other obligations, from creating liens on its property (other
than, in the case of the senior indentures, on the voting stock
of Sovereign Bank as described above) for any purposes or from
paying dividends or making distributions on its capital stock or
<PAGE 25> purchasing or redeeming its capital stock. The
indentures do not require the maintenance of any financial ratios
or specific levels of net worth or liquidity. In addition, the
indentures do not contain any provision which would require
Sovereign Bancorp to repurchase, redeem or otherwise modify the
terms of any of its debt securities upon a change in control or
other events involving Sovereign Bancorp which may adversely
affect the creditworthiness of the debt securities.
The above covenants may be modified by, or additional
covenants may be provided for in, a supplemental indenture, as
will be further described in an applicable prospectus supplement.
Modification and Waiver
Except as to the above, and certain other modifications
and
amendments not adverse to holders of debt securities,
modifications and amendments of and waivers of compliance with
certain restrictive provisions under each indenture may be made
only with the consent of the holders of not less than 66 2/3% in
principal amount of the outstanding debt securities of each
series affected by such modification, amendment or waiver.
No such modification or amendment may, without the consent
of the holder of each security so affected:
- change the stated maturity of the principal or any
installment of principal or any installment of
interest, if any;
- reduce the amount of principal or interest payable
on
the debt security, or any premium payable upon its
redemption or repayment or, in the case of an
original
issue discount security the amount of principal
payable
upon the acceleration of its maturity;
- change the place of payment or the currency in
which
principal or interest is payable, if any;
- impair the right of any holders to sue for the
enforcement of any payment of the principal,
premium,
if any, and interest, if any, or adversely affect
the
holder's right of repayment, if any, at the option
of
the holder;
- reduce the percentage in principal amount of
outstanding debt securities of any series, whose
holders must consent for modification or amendment
of
the applicable indenture, or for waiver of
compliance
with certain provisions of the applicable
indenture, or
for waiver of certain defaults;
- reduce the requirements contained in the applicable
indenture for quorum or voting; <PAGE 26>
- in the case of debt securities exchangeable for
capital
securities, impair any right to the delivery of
capital
securities in exchange for such debt securities or
the
right to sue for the enforcement of any such
delivery
or, in the case of debt securities convertible into
common stock or preferred shares, impair any right
to
convert such debt securities; or
- modify any of the above provisions. (Section 902)
Each indenture contains provisions for convening meetings
of
the holders of debt securities of a series issued thereunder if
debt securities of that series are issuable in whole or in part
as bearer securities. (Section 1601) A meeting may be called at
any time by the trustee for such debt securities, or upon the
request of Sovereign Bancorp or the holders of at least 10% in
principal amount of the outstanding debt securities of such
series, upon notice given in accordance with the applicable
indenture. (Section 1602)
Except as limited by the preceding paragraph:
- any resolution presented at a meeting or adjourned
meeting at which a quorum is present may be adopted
by
the affirmative vote of the holders of a majority
in
principal amount of the outstanding debt securities
of
that series;
- any resolution with respect to any consent or
waiver
which may be given only by the holders of not less
than
66 2/3% in principal amount of the outstanding debt
securities of a series issued under an indenture
may be
adopted at a meeting or an adjourned meeting at
which a
quorum is present only by the affirmative vote of
the
holders of 66 2/3% in principal amount of such
outstanding debt securities of that series; and
- any resolution with respect to any demand, consent,
waiver or other action which may be made, given or
taken by the holders of a specified percentage,
which
is less than a majority, in principal amount of the
outstanding debt securities of a series issued
under an
indenture may be adopted at a meeting or adjourned
meeting at which a quorum is present by the
affirmative
vote of the holders of the specified percentage in
principal amount of the outstanding debt securities
of
that series. (Section 1604)
Any resolution passed or decision taken at any meeting of
holders of debt securities of any series duly held in accordance
with the applicable indenture will be binding on all holders of
debt securities of that series and the related coupons issued
under that indenture. The quorum at any meeting of holders of a
series of debt securities called to adopt a resolution, and at
<PAGE 27> any reconvened meeting, will be persons holding or
representing a majority in principal amount of the outstanding
debt securities of such series.
If any action is to be taken at such meeting with respect
to
a consent or waiver which may be given by the holders of not less
than 66 2/3% in principal amount of the outstanding debt
securities of a series, the persons holding or representing
66 2/3% in principal amount of the outstanding debt securities of
such series issued under that indenture will constitute a quorum.
(Section 1604)
Events of Default
Unless otherwise provided in the applicable prospectus
supplement, any series of senior securities issued under the
senior indenture will provide that the following shall constitute
events of default with respect to such series:
- default in payment of principal of or premium, if
any,
on any senior security of such series when due;
- default for 30 days in payment of interest, if any,
on
any senior security of such series or related
coupon,
if any, when due;
- default in the deposit of any sinking fund payment
on
any senior security of such series when due;
- default in the performance of any other covenant in
such indenture, continued for 90 days after written
notice of the default by the trustee thereunder or
by
the holders of at least 25% in principal amount of
the
outstanding senior securities of such series issued
under that indenture; and
- certain events of bankruptcy, insolvency or
reorganization of Sovereign Bancorp or Sovereign
Bank.
(Section 501 of the senior indenture)
Unless otherwise provided in the applicable prospectus
supplement, any series of subordinated securities issued under
the subordinated indenture will provide that the only event of
default will be certain events of bankruptcy of Sovereign
Bancorp. (Section 501 of the subordinated indenture) Unless
specifically stated in the applicable prospectus supplement for a
particular series of subordinated securities, there is no right
of acceleration of the payment of principal of the subordinated
securities upon a default in the payment of principal, premium,
if any, or interest, if any, or in the performance of any
covenant or agreement in the subordinated securities or
subordinated indenture. In the event of a default in the payment
of principal, premium, if any, or interest, if any, or in the
performance of any covenant (including, if applicable, any
<PAGE 28> covenant to deliver any capital securities required to
be delivered or any covenant to sell capital securities in a
secondary offering) or agreement in the subordinated securities
or subordinated indenture, the trustee, subject to certain
limitations and conditions, may institute judicial proceedings to
enforce payment of such principal, premium, if any, or interest,
if any, or to obtain the performance of such covenant or
agreement or any other proper remedy, including, in the case of
the failure to deliver capital securities, a proceeding to
collect money equal to the principal amount of any subordinated
securities for which capital securities were to be exchanged.
(Section 503 of the subordinated indenture)
Sovereign Bancorp is required to file with each trustee
annually an officers' certificate as to the absence of certain
defaults under the terms of the indentures. (Section 1007 of the
senior indenture, Section 1004 of the subordinated indenture)
Each indenture provides that if an event of default shall occur
and be continuing, either the trustee or the holders of not less
than 25% in principal amount of the outstanding debt securities
of such series issued under that indenture may declare the
principal of all such debt securities (or in the case of original
issue discount series, such portion of the principal amount
thereof as may be specified in the terms thereof) to be due and
payable. (Section 502) In certain cases, the holders of a major-
ity in principal amount of the outstanding debt securities of any
series may, on behalf of the holders of all debt securities of
any such series and any related coupons, waive any past default
or event of default except a default in payment of the principal
of or premium, if any, on any of the debt securities of such
series and in respect of a covenant or provision of the indenture
which cannot be modified or amended without the consent of the
holder of each outstanding debt security of such series or
coupons affected. (Section 513)
Each indenture contains a provision entitling the trustee,
subject to the duty during default to act with the required
standard of care, to be indemnified by the holders of the debt
securities of any series or any related coupons before proceeding
to exercise any right or power under such indenture at the
request of such holders. (Section 603) Each indenture provides
that no holder of any debt securities of any series or any
related coupons may institute any proceeding, judicial or
otherwise, to enforce such indenture except in the case of
failure of the trustee, for 60 days, to act after it is given
notice of default, a request to enforce such indenture by the
holders of not less than 25% in aggregate principal amount of the
outstanding debt securities of such series, and an offer of
indemnity reasonable to the trustee. (Section 507) This provision
will not prevent any holder of debt securities or any related
coupons from enforcing payment of the principal, premium, if any,
and interest, if any, at their respective due dates. (Section
508) The holders of a majority in aggregate principal amount of
the outstanding debt securities of any series issued under an
<PAGE 29> indenture may direct the time, method and place of
conducting any proceedings for any remedy available to the
trustee for such debt securities or exercising any trust or power
conferred on it with respect to the debt securities of such
series. However, such trustee may refuse to follow any direction
that conflicts with law or the indenture under which it serves or
which would be unjustly prejudicial to holders not joining the
proceeding. (Section 512)
Each indenture provides that the trustee will, within 90
days after the occurrence of a default with respect to any series
of debt securities known to it, give to the holders of debt
securities of such series notice of such default if not cured or
waived. Except in the case of a default in the payment of
principal of or premium, if any, or interest, if any, on any debt
securities of such series or any related coupons or in the
payment of any sinking fund installment with respect to debt
securities of such series or in the exchange of capital
securities for debt securities of such series, the trustee for
such debt securities shall be protected in withholding such
notice if it determines in good faith that the withholding of
such notice is in the interest of the holders of such debt
securities. (Section 602)
Defeasance
Sovereign Bancorp may terminate certain of its obligations
under each indenture with respect to the debt securities of any
series, including its obligations to comply with the covenants
described under the heading "Covenants Contained in Indentures"
above, on the terms and subject to the conditions contained in
the indentures, by depositing in trust with the trustee money
and/or, to the extent such debt securities are denominated and
payable in U.S. dollars only, eligible instruments which, through
the payment of principal and interest in accordance with their
terms, will provide money in an amount sufficient to pay the
principal and premium, if any, and interest, if any, on such debt
securities, and any mandatory sinking fund, repayment or
analogous payments on the securities, on the scheduled due dates
for payment. Such deposit and termination is conditioned upon
Sovereign Bancorp's delivery of an opinion of counsel that the
holders of such debt securities will have no federal income tax
consequences as a result of such deposit and termination. Such
termination will not relieve Sovereign Bancorp of its obligation
to pay when due the principal of or interest on such debt
securities if such debt securities of such series are not paid
from the money or eligible instruments held by the trustee for
the payment thereof. (Section 401) This is called "covenant
defeasance." The applicable prospectus supplement may further
describe the provisions, if any, permitting or restricting such
defeasance with respect to the debt securities of a particular
series.
<PAGE 30>
Senior Debt
Except as may be described in an applicable prospectus
supplement, senior debt is any obligation of Sovereign Bancorp to
its creditors, now outstanding or subsequently incurred, other
than:
- any obligation as to which the instrument creating
or
evidencing it or pursuant to which it is
outstanding
provides that such obligation is not senior debt;
- obligations evidenced by debt securities issued
under
the subordinated indenture (Section 101 of the
subordinated indenture) (except in the case of the
junior subordinated indenture (section 101 of the
junior subordinated indenture)); and
- obligations evidenced by debt securities issued
under
the junior subordinated indenture.
Subordination
The subordinated securities or the junior subordinated
securities, as applicable, shall be subordinate and junior in
right of payment, to the extent set forth in the subordinated
indenture or the junior subordinated indenture, as applicable, to
all senior debt (as such term is defined above) of Sovereign
Bancorp. In the event that Sovereign Bancorp shall default in
the payment of any principal, premium, if any, or interest, if
any, on any senior debt when it becomes due and payable, whether
at maturity, or at a date fixed for prepayment, or by declaration
of acceleration or otherwise, then, unless and until such default
shall have been cured or waived or shall have ceased to exist, no
direct or indirect payment (in cash, property, securities, by
set-off or otherwise) shall be made or agreed to be made for
principal, premium, if any, or interest, if any, on the
subordinated securities or the junior subordinated securities, as
applicable, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the
subordinated securities or the junior subordinated indenture, as
applicable. (Section 1801 of the subordinated indenture or the
junior subordinated securities, as applicable) A series of
subordinated debt securities may be issued that is subordinate to
the senior debt, but is senior as to right of payment to some or
all other series of subordinated or junior subordinated debt
securities.
In the event of any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other
similar proceeding relating to Sovereign Bancorp, its creditors
or its property, any proceeding for the liquidation, dissolution
or other winding up of Sovereign Bancorp, voluntary or
involuntary, whether or not involving insolvency or bankruptcy
proceedings, any assignment by Sovereign Bancorp for the benefit
<PAGE 31> of creditors, or any other marshalling of the assets of
Sovereign Bancorp, all senior debt (including any interest
accruing after the commencement of any such proceedings) shall
first be paid in full before any payment or distribution, whether
in cash, securities or other property, shall be made on account
of the principal or interest on the subordinated securities or
the junior subordinated securities, as applicable. In such
event, any payment or distribution on account of the principal of
or interest on the subordinated securities or the junior
subordinated securities, as applicable, whether in cash,
securities or other property (other than securities of Sovereign
Bancorp or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in the subordination
provisions with respect to the subordinated securities or the
junior subordinated securities, as applicable, to the payment of
all senior debt at the time outstanding, and to any securities
issued under any such plan of reorganization or adjustment),
which would otherwise (but for the subordination provisions) be
payable or deliverable in respect of the subordinated securities
shall be paid or delivered directly to the holders of senior debt
in accordance with the priorities then existing among such
holders until all senior debt (including any interest accruing
after the commencement of any such proceedings) shall have been
paid in full. (Section 1801 of the subordinated indenture or the
junior subordinated indenture, as applicable).
In the event of any such proceeding, after payment in full
of all sums owing with respect to senior debt, the holders of
subordinated securities or junior subordinated securities, as
applicable, together with the holders of any obligations of
Sovereign Bancorp ranking on an equal basis with the subordinated
securities or junior subordinated securities, as applicable,
shall be entitled to be repaid from the remaining assets of
Sovereign Bancorp the amounts at the time due and owing on
account of unpaid principal, premium, if any, and interest, if
any, on the subordinated securities or junior subordinated
securities, as applicable and such other obligations before any
payment or other distribution, whether in cash, property or
otherwise, shall be made on account of any capital stock or
obligations of Sovereign Bancorp ranking junior to the
subordinated securities or junior subordinated securities, as
applicable, and such other obligations. If any payment or
distribution on account of the principal of or interest on the
subordinated securities or junior subordinated securities, as
applicable, of any character or any security, whether in cash,
securities or other property (other than securities of Sovereign
Bancorp or any other corporation provided for by a plan of
reorganization or readjustment, the payment of which is
subordinate, at least to the extent provided in the subordination
provisions with respect to the subordinated securities or junior
subordinated securities, as applicable, to the payment of all
senior debt at the time outstanding and to any securities issued
under any such plan of reorganization or readjustment) shall be
<PAGE 32> received by any holder of any subordinated securities
or junior subordinated securities, as applicable in contravention
of any of these terms and before all the senior debt shall have
been paid in full, such payment or distribution or security shall
be received in trust for the benefit of, and shall be paid over
or delivered and transferred to, the holders of the senior debt
at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all
senior debt remaining unpaid to the extent necessary to pay all
such senior debt in full. (Section 1801 of the subordinated
indenture or junior subordinated indenture, as applicable) By
reason of such subordination, in the event of the insolvency of
Sovereign Bancorp, holders of senior debt may receive more,
ratably, and holders of the subordinated securities having a
claim pursuant to such securities may receive less, ratably, than
the other creditors of Sovereign Bancorp. Such subordination
will not prevent the occurrence of any event of default in
respect of the subordinated securities.
The subordinated indenture or junior subordinated
indenture,
as applicable, may be modified or amended as provided under
"Modification and Waiver" above, provided that no such
modification or amendment may, without the consent of the holders
of all senior debt outstanding, modify any of the provisions of
the subordinated indenture or junior subordinated indenture, as
applicable, relating to the subordination of the subordinated
securities or the junior subordinated securities and any related
coupons in a manner adverse to such holders. (Section 902 of the
subordinated indenture or junior subordinated indenture, as
applicable)
Conversion of Convertible Debt Securities
The holders of debt securities of a specified series that
are convertible into common stock or preferred stock of Sovereign
Bancorp ("convertible debt securities") will be entitled at
certain times specified in the applicable prospectus supplement,
subject to prior redemption, repayment or repurchase, to convert
any convertible debt securities of such series (in denominations
set forth in the applicable prospectus supplement) into common
stock or preferred stock, as the case may be, at the conversion
price set forth in the applicable prospectus supplement, subject
to adjustment as described below and in the applicable prospectus
supplement. Except as described below and as may be described in
the applicable prospectus supplement, no adjustment will be made
on conversion of any convertible debt securities for interest
accrued thereon or for dividends on any common stock or preferred
stock issued. (Section 1803 of the senior indenture, Section
1903 of the subordinated indenture) If any convertible debt
securities not called for redemption are convened between a
regular record date for the payment of interest and the next
succeeding interest payment date, such convertible debt
securities must be accompanied by funds equal to the interest
payable on such succeeding interest payment date on the principal
<PAGE 33> amount so converted. (Section 1803 of the senior
indenture, Section 1903 of the subordinated indenture) Sovereign
Bancorp is not required to issue fractional shares of common
stock upon conversion of convertible debt securities that are
convertible into common stock and, in lieu thereof, will pay a
cash adjustment based upon the closing price (as defined in the
indenture) of the common stock on the last business day prior to
the date of conversion. (Section 1804 of the senior indenture,
Section 1904 of the subordinated indenture) In the case of
convertible debt securities called for redemption, conversion
rights will expire at the close of business on the redemption
date. (Section 1802 of the senior indenture, Section 1902 of the
subordinated indenture)
Unless otherwise indicated in the applicable prospectus
supplement, the conversion price for convertible debt securities
that are convertible into common stock is subject to adjustment
under formulas set forth in the applicable indenture in certain
events, including:
- the issuance of Sovereign Bancorp's capital stock
as a
dividend or distribution on the common stock;
- subdivisions and combinations of the common stock;
- the issuance to all holders of common stock of
certain
rights or warrants entitling them to subscribe for
or
purchase common stock within 45 days after the date
fixed for the determination of the stockholders
entitled to receive such rights or warrants, at
less
than the current market price (as defined in the
indenture); and
- the distribution to all holders of common stock of
evidences of indebtedness or assets of Sovereign
Bancorp (excluding certain cash dividends and
distributions described in the next paragraph) or
rights or warrants (excluding those referred to
above).
(Section 1806 of the senior indenture, Section 1906
of
the subordinated indenture)
In the event that Sovereign Bancorp shall distribute any
rights or warrants to acquire capital stock ("capital stock
rights") pursuant to which separate certificates representing
such capital stock rights will be distributed subsequent to the
initial distribution of such capital stock rights (whether or not
such distribution shall have occurred prior to the date of the
issuance of a series of convertible debt securities), such
subsequent distribution shall be deemed to be the distribution of
such capital stock rights. Sovereign Bancorp may, in lieu of
making any adjustment in the conversion price upon a distribution
of separate certificates representing such capital stock rights,
make proper provision so that each holder of such a convertible
debt security who converts it (or any portion of it) before the
<PAGE 34> record date for such distribution of separate
certificates shall be entitled to receive upon such conversion
shares of common stock issued with capital stock rights. If
converted after such record date and prior to the expiration,
redemption or termination of such capital stock rights the holder
shall be entitled to receive upon such conversion, in addition to
the shares of common stock issuable upon such conversion, the
same number of such capital stock rights as would a holder of the
number of shares of common stock that such convertible debt
security so converted would have entitled its holder to acquire
in accordance with the terms and provisions applicable to the
capital stock rights if such convertible debt security were
converted immediately prior to the record date for such
distribution. Common stock owned by or held for the account of
Sovereign Bancorp or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment.
No adjustment in the conversion price of convertible debt
securities that are convertible into common stock will be made
for regular quarterly or other periodic or recurring cash
dividends or distributions or for cash dividends or distributions
to the extent paid from retained earnings. No adjustment in the
conversion price of convertible debt securities that are
convertible into common stock will be required unless such
adjustment would require a change of at least 1% in the
conversion price then in effect, provided, that any such
adjustment not so made will be carried forward and taken into
account in any subsequent adjustment. Any such adjustment not so
made shall be made no later than three years after the occurrence
of the event requiring such adjustment to be made or carried
forward. Sovereign Bancorp reserves the right to make such
reductions in the conversion price in addition to those required
in the foregoing provisions as Sovereign Bancorp in its
discretion shall determine to be advisable in order that certain
stock-related distributions hereafter made by Sovereign Bancorp
to its stockholders shall not be taxable. (Section 1806 of the
senior indenture, Section 1906 of the subordinated indenture)
Except as stated above, the conversion price will not be adjusted
for the issuance of common stock or any securities convertible
into or exchangeable for common stock or securities carrying the
right to purchase any of the foregoing.
In the case of a reclassification or change of the common
stock, a consolidation or merger involving Sovereign Bancorp, or
a sale or conveyance to another corporation of the property and
assets of Sovereign Bancorp as an entirety or substantially as an
entirety, in each case as a result of which holders of common
stock shall be entitled to receive stock, securities, other
property or assets (including cash) with respect to or in
exchange for such common stock, the holders of the convertible
debt securities then outstanding that are convertible into common
stock will be entitled thereafter to convert such convertible
debt securities into the kind and amount of shares of stock and
other securities or property which they would have received upon
<PAGE 35> such reclassification, change, consolidation, merger,
sale or conveyance had such convertible debt securities been
converted into common stock immediately prior to such
reclassification, change, consolidation, merger, sale or
conveyance. (Section 1807 of the senior indenture, Section 1907
of the subordinated indenture)
In the event of a taxable distribution to holders of
common
stock (or other transaction) which results in any adjustment of
the conversion price of convertible debt securities that are
convertible into common stock, the holders of such convertible
debt securities may, in certain circumstances, be deemed to have
received a distribution subject to United States income tax as a
dividend; in certain other circumstances, the absence of such an
adjustment may result in a taxable dividend to the holders of
common stock or such convertible debt securities.
Exchange for Capital Securities
To the extent set forth in a prospectus supplement, a
specified series of debt securities may be mandatorily
exchangeable for capital securities as described under
"Description of Capital Securities" below.
Information Concerning the Trustees
The trustee serves as trustee under indentures for other
debt of Sovereign Bancorp and as rights agent under Sovereign
Bancorp's rights agreement, described in "Description of Capital
Securities - Shareholder Rights Plan," below.
The trustee may, from time to time make loans to Sovereign
Bancorp and perform other services for Sovereign Bancorp in the
normal course of business. Under the provisions of the Trust
Indenture Act of 1939, upon the occurrence of a default under an
indenture, if a trustee has a conflicting interest (as defined in
the Trust Indenture Act) the trustee must, within 90 days, either
eliminate such conflicting interest or resign. Under the
provisions of the Trust Indenture Act, an indenture trustee shall
be deemed to have a conflicting interest if the trustee is a
creditor of the obligor. If the trustee fails either to
eliminate the conflicting interest or to resign within 10 days
after the expiration of such 90-day period, the trustee is
required to notify debt holders to this effect and any debt
holder who has been a bona fide holder for at least six months
may petition a court to remove the trustee and to appoint a
successor trustee.
DESCRIPTION OF WARRANTS
Sovereign Bancorp may issue warrants for the purchase of
common stock, preferred stock and debt securities. Warrants may
be issued separately or together with common stock, preferred
stock or debt securities offered by any prospectus supplement and
<PAGE 36> may be attached to or separate from such common stock,
preferred stock or debt securities. Each series of warrants will
be issued under a separate warrant agreement to be entered into
between Sovereign Bancorp and a bank or trust corporation, as
warrant agent, all as set forth in the prospectus supplement
relating to the particular issue of offered warrants. The
warrant agent will act solely as an agent of Sovereign Bancorp in
connection with the warrants and will not assume any obligation
or relationship of agency or trust for or with any holders of
warrants or beneficial owners of warrants. Copies of the forms
of warrant agreements, including the forms of warrant
certificates representing the warrants, are or will be filed as
exhibits to the Registration Statement. The following summaries
of certain provisions of the forms of warrant agreements and
warrant certificates do not purport to be complete and are
subject to, and are qualified in their entirety by reference to,
all the provisions of the warrant agreements and the warrant
certificates.
General
If warrants are offered, the applicable prospectus
supplement will describe the terms of such warrants, including,
in the case of warrants for the purchase of debt securities, the
following where applicable:
- the offering price;
- the currencies in which the price for such warrants
may
be payable;
- the designation, aggregate principal amount,
currencies, denominations and terms of the series
of
debt securities purchasable upon exercise of such
warrants;
- the designation and terms of any series of debt
securities or preferred stock with which the
warrants
are being offered and the number of warrants being
offered with each such share of common stock or
preferred stock, or debt security;
- if applicable, the date on and after which such
warrants and the related common stock or series of
debt
securities or preferred stock will be transferable
separately;
- the principal amount and series of debt securities
purchasable upon exercise of each such warrant and
the
price at which and currencies in which such
principal
amount of debt securities of such series may be
purchased upon such exercise;
<PAGE 37>
- the date on which the right to exercise such
warrants
shall commence and the date on which such right
shall
expire;
- whether the warrants will be issued in registered
or
bearer form;
- if applicable, a discussion of certain United
States
federal income tax, accounting and other special
considerations, procedures and limitations; and
- any other terms of such warrants, including terms,
procedures and limitations relating to the exchange
and
exercise of such warrants.
In the case of warrants for the purchase of common stock
or
preferred stock, the applicable prospectus supplement will
describe the terms of such warrants, including the following
where applicable:
- the offering price;
- the aggregate number of shares purchasable upon
exercise of such warrants and, in the case of
warrants
for preferred stock, the designation, aggregate
number
and terms of the series of preferred stock
purchasable
upon exercise of such warrants;
- if applicable, the designation and terms of the
series
of common stock, debt securities or preferred stock
with which such warrants are being offered and the
number of such warrants being offered with each
share
of common stock or preferred stock or debt
security;
- if applicable, the date on and after which such
warrants and the related common stock or preferred
stock or series of debt securities will be
transferable
separately;
- the number of shares of common stock or preferred
stock
purchasable upon exercise of each such warrant and
the
price at which such number of shares of common
stock or
preferred stock may be purchased upon such
exercise;
- the date on which the right to exercise such
warrants
shall commence and the date on which such right
shall
expire;
- United States federal income tax consequences; and
- any other terms of such warrants. Warrants for the
purchase of preferred stock or common stock will be
offered and exercisable for U.S. dollars only and
will
be in registered form only. <PAGE 38>
Warrant certificates may be exchanged for new warrant
certificates of different denominations, may be presented for
registration of transfer, and may be exercised at the corporate
trust office of the warrant agent or any other office indicated
in the applicable prospectus supplement. Prior to the exercise
of any warrant to purchase debt securities, holders of such
warrants will not have any of the rights of holders of the debt
securities purchasable upon such exercise, including the right to
receive payments of principal of, premium, if any, or interest,
if any, on the debt securities purchasable upon such exercise or
to enforce covenants in the applicable indenture. Prior to the
exercise of any warrants to purchase preferred stock or common
stock, holders of such warrants will not have any rights of
holders of the preferred stock or common stock purchasable upon
such exercise, including the right to receive payments of
dividends, if any, on the preferred stock or common stock
purchasable upon such exercise or to exercise any applicable
right to vote.
Exercise of Warrants
Each warrant will entitle the holder thereof to purchase
such principal amount of debt securities or shares of common
stock or preferred stock, as the case may be, at such exercise
price as shall in each case be set forth in, or calculable from
the prospectus supplement relating to the offered warrants.
After the close of business on the expiration date of the
warrants (or such later date to which such expiration date may be
extended by Sovereign Bancorp), unexercised warrants will become
void.
Warrants may be exercised by delivering to the warrant
agent
payment as provided in the applicable prospectus supplement of
the amount required to purchase the debt securities, preferred
stock or common stock, as the case may be, purchasable upon such
exercise together with certain information set forth on the
reverse side of the warrant certificate. Warrants will be deemed
to have been exercised upon receipt of payment of the exercise
price, subject to the receipt, within five business days, of the
warrant certificate evidencing such warrants. Upon receipt of
such payment and the warrant certificate properly completed and
duly executed at the corporate trust office of the warrant agent
or any other office indicated in the applicable prospectus
supplement, Sovereign Bancorp will, as soon as practicable, issue
and deliver the debt securities, preferred stock or common stock,
as the case may be, purchasable upon such exercise. If fewer
than all of the warrants represented by the warrant certificate
are exercised, a new warrant certificate will be issued for the
remaining amount of warrants.
<PAGE 39>
Amendments and Supplements to Warrant Agreements
The warrant agreements may be amended or supplemented
without the consent of the holders of the warrants issued
thereunder to effect changes that are not inconsistent with the
provisions of the warrants and that do not adversely affect the
interests of the holders of the warrants.
Common Stock Warrant Adjustments
Unless otherwise indicated in the applicable prospectus
supplement, the exercise price of, and the number of shares of
common stock covered by, a common stock warrant are subject to
adjustment in certain events, including:
- the issuance of common stock as a dividend or
distribution on the common stock;
- subdivisions and combinations of the common stock;
- the issuance to all holders of common stock of
certain
rights or warrants entitling them to subscribe for
or
purchase common stock within 45 days after the date
fixed for the determination of the shareholders
entitled to receive such rights or warrants, at
less
than the current market price ("Capital Stock
Rights");
- the distribution to all holders of common stock of
evidences of indebtedness or assets of Sovereign
Bancorp (excluding certain cash dividends and
distributions described below) or rights or
warrants
(excluding those referred to above).
Sovereign Bancorp may, in lieu of making any adjustment in
the exercise price of, and the number of shares of common stock
covered by, a common stock warrant, make proper provision so that
each holder of such common stock warrant who exercises such
common stock warrant (or any portion thereof):
- before the record date for such distribution of
separate certificates, shall be entitled to receive
upon such exercise shares of common stock issued
with
Capital Stock Rights; and
- after such record date and prior to the expiration,
redemption or termination of such Capital Stock
Rights,
shall be entitled to receive upon such exercise in
addition to the shares of common stock issuable
upon
such exercise, the same number of such Capital
Stock
Rights as would a holder of the number of shares of
common stock that such common stock warrants so
exercised would have entitled the holder thereof to
acquire in accordance with the terms and provisions
applicable to the Capital Stock Rights if such
common
<PAGE 40> stock warrant was exercised immediately
prior
to the record date for such distribution.
Common stock owned by or held for the account of Sovereign
Bancorp or any majority owned subsidiary shall not be deemed
outstanding for the purpose of any adjustment.
No adjustment in the exercise price of, and the number of
shares of common stock covered by, a common stock warrant will be
made for regular quarterly or other periodic or recurring cash
dividends or distributions of cash dividends or distributions to
the extent paid from retained earnings. No adjustment will be
required unless such adjustment would require a change of at
least 1% in the exercise price then in effect; provided that any
such adjustment not so made will be carried forward and taken
into account in any subsequent adjustment; and provided further
that any such adjustment not so made shall be made no later than
three years after the occurrence of the event requiring such
adjustment to be made or carried forward. Except as stated
above, the exercise price of, and the number of shares of common
stock covered by, a common stock warrant will not be adjusted for
the issuance of common stock or any securities convertible into
or exchangeable for common stock, or securities carrying the
right to purchase any of the foregoing.
In the case of a reclassification or change of the common
stock, a consolidation or merger involving Sovereign Bancorp or
sale or conveyance to another corporation of the property and
assets of Sovereign Bancorp as an entirety or substantially as an
entirety, in each case as a result of which holders of Sovereign
Bancorp's common stock shall be entitled to receive stock,
securities, other property or assets (including cash) with
respect to or in exchange for such common stock, the holders of
the common stock warrants then outstanding will be entitled
thereafter to convert such common stock warrants into the kind
and amount of shares of stock and other securities or property
which they would have received upon such reclassification,
change, consolidation, merger, sale or conveyance had such common
stock warrants been exercised immediately prior to such
reclassification, change, consolidation, merger, sale or
conveyance.
STOCK PURCHASE CONTRACTS AND STOCK PURCHASE
UNITS
Sovereign Bancorp may issue stock purchase contracts,
including contracts obligating holders to purchase from Sovereign
Bancorp, and Sovereign Bancorp to sell to the holders, a
specified number of shares of common stock at a future date or
dates. The consideration per share of common stock may be fixed
at the time the stock purchase contracts are issued or may be
determined by reference to a specific formula described in the
stock purchase contracts. Sovereign Bancorp may issue the stock
purchase contracts separately or as a part of stock purchase
units consisting of a stock purchase contract and one or more
<PAGE 41> shares of Sovereign Bancorp common stock, preferred
stock or fractions thereof or a debt security or a debt
obligation of Sovereign Bancorp or a third party, including a
U.S. Treasury security. Sovereign Bancorp's common stock,
preferred stock or debt securities or the debt obligation of a
third party may serve as collateral to secure the holders'
obligations to purchase the shares of common stock under the
stock purchase contracts. The stock purchase contracts may
require Sovereign Bancorp to make periodic payments to the
holders of stock purchase contracts. These payments may be
unsecured or prefunded on some basis. The stock purchase
contracts may require holders to secure their obligations in a
specified manner. The applicable prospectus supplement will
describe the specific terms of any stock purchase contracts or
stock purchase units.
DESCRIPTION OF CAPITAL SECURITIES
The authorized capital stock of Sovereign Bancorp consists
of 400,000,000 shares of common stock, no par value, and
7,500,000 shares of authorized preferred stock. As of August 31,
1999, there were 180,864,626 shares of Sovereign Bancorp common
stock issued and outstanding and no shares of preferred stock
issued and outstanding. There are no other shares of capital
stock of Sovereign Bancorp authorized, issued or outstanding.
Sovereign Bancorp has no options, warrants, or other rights
authorized, issued or outstanding, other than as described herein
under "Shareholder Rights Plan" and options granted under
Sovereign Bancorp's stock option plans or in connection with
pending acquisitions by Sovereign Bancorp.
Common Stock
The holders of Sovereign Bancorp common stock share
ratably
in dividends when and if declared by the Sovereign Bancorp Board
of Directors from legally available funds. Declaration and
payment of cash dividends by Sovereign Bancorp depends upon
dividend payments by Sovereign Bank, which are Sovereign
Bancorp's primary source of revenue and cash flow. Sovereign
Bancorp is a legal entity separate and distinct from its
subsidiaries. Accordingly, the right of Sovereign Bancorp, and
consequently the right of creditors and shareholders of Sovereign
Bancorp, to participate in any distribution of the assets or
earnings of any subsidiary is necessarily subject to the prior
claims of creditors of the subsidiary, except to the extent that
claims of Sovereign Bancorp in its capacity as a creditor may be
recognized.
Prior to the issuance of any Sovereign Bancorp preferred
stock which possesses voting rights (see "Preferred Stock"
below), the holders of shares of Sovereign Bancorp common stock
will possess exclusive voting rights in Sovereign Bancorp. Each
holder of shares of Sovereign Bancorp common stock has one vote
for each share held on matters upon which shareholders have the
<PAGE 42> right to vote. Sovereign Bancorp shareholders cannot
cumulate votes in the election of directors.
The holders of Sovereign Bancorp common stock have no
preemptive rights to acquire any additional shares of Sovereign
Bancorp. In addition, Sovereign Bancorp common stock is not
subject to redemption.
Sovereign Bancorp's articles of incorporation authorize
the
Sovereign Bancorp Board of Directors to issue authorized shares
of Sovereign Bancorp common stock without shareholder approval.
Sovereign Bancorp common stock is included for quotation on the
Nasdaq National Market. As a result, in order to maintain such
inclusion, approval of Sovereign Bancorp's shareholders is
required for the issuance of additional shares of Sovereign
Bancorp common stock or securities convertible into Sovereign
Bancorp common stock if the issuance of such securities:
- relates to acquisition of a company and the
securities
to be issued will have 20% or more of the voting
power
outstanding before the issuance;
- relates to acquisition of a company in which a
director, officer or substantial shareholder of
Sovereign Bancorp has a 5% or greater interest and
the
issuance of the securities could result in an
increase
in outstanding common stock or voting power of 5%
or
more;
- relates to a transaction, other than a public
offering,
at a price less than the greater of book or market
value in which the shares issued will equal 20% or
more
of the shares of Sovereign Bancorp common stock or
20%
or more of the voting power outstanding before
issuance; or
- would result in a change in control of Sovereign
Bancorp.
Under Nasdaq National Market rules, shareholders must also
approve a stock option or purchase plan applicable to officers
and directors other than a broadly-based plan in which other
security holders of Sovereign Bancorp or employees of Sovereign
Bancorp participate.
In the event of liquidation, dissolution or winding-up of
Sovereign Bancorp, whether voluntary or involuntary, holders of
Sovereign Bancorp common stock share ratably in any of its assets
or funds that are available for distribution to its shareholders
after the satisfaction of its liabilities (or after adequate
provision is made therefor) and after payment of any liquidation
preferences of any outstanding Sovereign Bancorp preferred stock.
<PAGE 43>
Preferred Stock
Sovereign Bancorp's Board of Directors is authorized to
approve the issuance of Sovereign Bancorp preferred stock,
without any required approval of shareholders. Sovereign
Bancorp's Board determines the rights, qualifications,
restrictions, and limitations on each series of Sovereign Bancorp
preferred stock at the time of issuance. These rights may
include rights to participating dividends, voting and
convertibility into shares of Sovereign Bancorp common stock.
Shares of Sovereign Bancorp preferred stock may have dividend,
redemption, voting, and liquidation rights taking priority over
Sovereign Bancorp common stock, and may be convertible into
Sovereign Bancorp common stock.
Shareholder Rights Plan
Sovereign Bancorp maintains a shareholder rights plan
designed to protect shareholders from attempts to acquire control
of Sovereign Bancorp at an inadequate price. Under the
shareholder rights plan, each outstanding share of Sovereign
Bancorp common stock has attached to it one right to purchase
one-hundredth of a share of junior participating preferred stock
at an initial exercise price of $40. The rights are not
currently exercisable or transferable, and no separate
certificates evidencing such rights will be distributed, unless
certain events occur.
A holder can exercise the rights to purchase shares of the
junior participating preferred stock if a person, group, or other
entity acquires or commences a tender offer or an exchange offer
for 9.9% or more of total voting power. A holder can also
exercise if Sovereign Bancorp's board of directors declares a
person or group who has become a beneficial owner of at least
4.9% of Sovereign Bancorp common stock or total voting power an
"adverse person," as defined in the rights plan.
After the rights become exercisable the rights (other than
rights held by a 9.9% beneficial owner or an "adverse person")
generally will entitle the holders to purchase either Sovereign
Bancorp common stock or the common stock of the potential
acquiror, in lieu of the junior participating preferred stock, at
a substantially reduced price.
Sovereign Bancorp can generally redeem the rights at $.001
per right at any time until the tenth business day following
public announcement that a 9.9% position has been acquired. At
any time prior to the date the rights become nonredeemable, the
Sovereign Bancorp board of directors can extend the redemption
period. Rights are not redeemable following an "adverse person"
determination.
<PAGE 44>
Special Charter and Pennsylvania Corporate Law Provisions
Sovereign Bancorp's articles of incorporation and bylaws
contain certain provisions which may have the effect of deterring
or discouraging, among other things, a nonnegotiated tender or
exchange offer for Sovereign Bancorp stock, a proxy contest for
control of Sovereign Bancorp, the assumption of control of
Sovereign Bancorp by a holder of a large block of Sovereign
Bancorp stock and the removal of Sovereign Bancorp's management.
These provisions:
- empower the Sovereign Bancorp board of directors,
without shareholder approval, to issue Sovereign
Bancorp preferred stock the terms of which,
including
voting power, are set by the Sovereign Bancorp
board of
directors;
- divide the Sovereign Bancorp board of directors
into
three classes serving staggered three-year terms;
- restrict the ability of shareholders to remove
directors;
- require that shares with at least 80% of total
voting
power approve mergers and other similar
transactions
with a person or entity holding stock with more
than 5%
of Sovereign Bancorp's voting power, if the
transaction
is not approved, in advance, by the Sovereign
Bancorp
board of directors;
-- prohibit shareholders' actions without a meeting;
-- require that shares with at least 80%, or in
certain
instances a majority, of total voting power approve
the
repeal or amendment of Sovereign Bancorp's articles
of
incorporation;
-- require any person who acquires stock of Sovereign
Bancorp with voting power of 25% or more to offer
to
purchase for cash all remaining shares of Sovereign
Bancorp voting stock at the highest price paid by
such
person for shares of Sovereign Bancorp voting stock
during the preceding year;
- eliminate cumulative voting in elections of
directors;
- require an affirmative vote of at least two-thirds
of
Sovereign Bancorp's total voting power in order for
shareholders to repeal or amend Sovereign Bancorp's
bylaws;
- require advance notice of nominations for the
election
of directors and the presentation of shareholder
proposals at meetings of shareholders; and <PAGE
45>
- provide that officers, directors, employees, agents
and
persons who own 5% or more of the voting securities
of
any other corporation or other entity that owns 66
2/3%
or more of Sovereign Bancorp's outstanding voting
stock
cannot constitute a majority of the members of
Sovereign Bancorp's board of directors.
The Pennsylvania Business Corporation Law of 1988 also
contains certain provisions applicable to Sovereign Bancorp which
may have the effect of impeding a change in control of Sovereign
Bancorp. These provisions, among other things:
- require that, following any acquisition of 20% of a
public corporation's voting power, the remaining
shareholders have the right to receive payment for
their shares, in cash, from the acquiring person or
group in an amount equal to the "fair value" of the
shares, including an increment representing a
proportion of any value payable for control of the
corporation; and
- prohibit for five years, subject to certain
exceptions,
a "business combination," which includes a merger
or
consolidation of the corporation or a sale, lease
or
exchange of assets, with a shareholder or group of
shareholders beneficially owning 20% or more of a
public corporation's voting power.
In 1990, Pennsylvania adopted legislation further amending
the Pennsylvania Business Corporation Law of 1988. To the extent
applicable to Sovereign Bancorp at the present time, this
legislation generally:
- expands the factors and groups (including
shareholders)
which the Sovereign Bancorp board of directors can
consider in determining whether a certain action is
in
the best interests of the corporation;
- provides that the Sovereign Bancorp board of
directors
need not consider the interests of any particular
group
as dominant or controlling;
- provides that Sovereign Bancorp's directors, in
order
to satisfy the presumption that they have acted in
the
best interests of the corporation, need not satisfy
any
greater obligation or higher burden of proof for
actions relating to an acquisition or potential
acquisition of control;
-- provides that actions relating to acquisitions of
control that are approved by a majority of
"disinterested directors" are presumed to satisfy
the
directors' standard, unless it is proven by clear
and
convincing evidence that the directors did not
assent
<PAGE 46> to such action in good faith after
reasonable
investigation; and
- provides that the fiduciary duty of Sovereign
Bancorp's
directors is solely to the corporation and may be
enforced by the corporation or by a shareholder in
a
derivative action, but not by a shareholder
directly.
The 1990 amendments to the Pennsylvania Business
Corporation
Law of 1988 explicitly provide that the fiduciary duty of
directors does not require directors to:
- redeem any rights under, or to modify or render
inapplicable, any shareholder rights plan;
- render inapplicable, or make determinations under,
provisions of the Pennsylvania Business Corporation
Law
of 1988, relating to control transactions, business
combinations, control share acquisitions or
disgorgement by certain controlling shareholders
following attempts to acquire control; or
- act as the board of directors, a committee of the
board
or an individual director solely because of the
effect
such action might have on an acquisition or
potential
or proposed acquisition of control of the
corporation
or the consideration that might be offered or paid
to
shareholders in such an acquisition.
One of the effects of the 1990 fiduciary duty statutory
provisions may be to make it more difficult for a shareholder to
successfully challenge the actions of the Sovereign Bancorp board
of directors in a potential change in control context.
Pennsylvania case law appears to provide that the fiduciary duty
standard under the 1990 amendments to the Pennsylvania Business
Corporation Law of 1988 grants directors the statutory authority
to reject or refuse to consider any potential or proposed
acquisition of the corporation.
Sovereign Bancorp opted out of coverage by the
"disgorgement" and "control-share acquisition" statutes included
in the 1990 legislation, pursuant to a bylaw amendment as
permitted by the legislation. To the extent applicable to a
Pennsylvania corporation, the "disgorgement" statute generally
requires disgorgement by any person or group who or which has
acquired or publicly disclosed an intent to acquire 20% or more
of a corporation's voting power of any profit realized from the
sale of any shares acquired within specified time periods of such
acquisition or disclosure if the shares are sold within eighteen
months thereafter. The "control share acquisition" statute
generally prohibits a person or group who or which exceeds
certain stock ownership thresholds (20%, 33 1/3% and 50%) for the
first time from voting the "control shares" (i.e., the shares
owned in excess of the applicable threshold) unless voting rights
<PAGE 47> are restored by a vote of disinterested shareholders.
As a result of Sovereign Bancorp's optout from coverage by these
statutes, neither the "disgorgement" nor the "control share
acquisition" statute would apply to a nonnegotiated attempt to
acquire control of Sovereign Bancorp, although such an attempt
would still be subject to the special charter and other
provisions described in the preceding paragraphs. Sovereign
Bancorp can reverse this action, and thereby cause the
"disgorgement" and "control share acquisition" statutes to apply
to an attempt to acquire control of Sovereign Bancorp, by means
of an amendment to Sovereign Bancorp's bylaws, which could be
adopted by the Board of Directors, without shareholder approval.
DESCRIPTION OF TRUST PREFERRED SECURITIES AND
TRUST GUARANTEES
Trust Preferred Securities
The Declaration pursuant to which each Trust is organized
will be replaced by an Amended and Restated Declaration of Trust
(the "Amended Declaration") which will authorize the trustees
(the "Trustees") of such trust to issue on behalf of such Trust
one series of trust preferred securities and one series of trust
common securities (together, the "Trust Securities"). The trust
preferred securities will be issued to the public pursuant to the
Registration Statement of which this prospectus forms a part, and
the trust common securities will be issued directly or indirectly
to Sovereign Bancorp.
The trust preferred securities will have such terms,
including dividends, redemption, voting, conversion, liquidation
rights and such other preferred, deferred or other special rights
or such restrictions as shall be set forth in the applicable
Declaration or made part of such Declaration by the Trust
Indenture Act. Reference is made to the applicable prospectus
supplement relating to the trust preferred securities of such
Trust for specific terms, including:
- the distinctive designation of trust preferred
securities;
- the number of trust preferred securities issued by
such
Trust;
- the annual dividend rate (or method of determining
such
rate) for trust preferred securities issued by such
Trust and the date or dates upon which such
dividends
shall be payable;
- whether dividends on trust preferred securities
issued
by such Trust shall be cumulative, and, in the case
of
trust preferred securities having such cumulative
dividend rights, the date or dates or method of
determining the date or dates from which dividends
on
<PAGE 48> trust preferred securities issued by such
Trust shall be cumulative;
- the amount or amounts which shall be paid out of
the
assets of such Trust to the holder of trust
preferred
securities of such Trust upon voluntary or
involuntary
dissolution, winding-up or termination of such
Trust;
- the terms and conditions, if any, under which trust
preferred securities of such Trust may be converted
into shares of capital stock of Sovereign Bancorp,
including the conversion price per share and the
circumstances, if any, under which any such
conversion
right shall expire;
- the terms and conditions, if any, upon which the
related series of the applicable debt securities
may be
distributed to holders of trust preferred
securities of
such Trust;
- the obligation, if any, of such Trust to purchase
or
redeem trust preferred securities issued by such
Trust
and the price or prices at which, the period or
periods
within which, and the terms and conditions upon
which
trust preferred securities issued by such Trust
shall
be purchased or redeemed, in whole or in part,
pursuant
to such obligation;
- the voting rights, if any, of trust preferred
securities issued by such Trust in addition to
those
required by law, including the number of votes per
trust preferred security and any requirement for
the
approval by the holders of trust preferred
securities,
or of trust preferred securities issued by such
Trust,
as a condition to specified action or amendments to
the
Declaration of such Trust; and
- any other relevant rights, preferences, privileges,
limitations or restrictions of trust preferred
securities issued by such Trust consistent with the
Declaration of such Trust or with applicable law.
Pursuant to each Declaration, the Property Trustee will
own
the debt securities purchased by the applicable Trust for the
benefit of the holders of the trust preferred securities. The
payment of dividends out of money held by the Trusts, and
payments upon redemption of trust preferred securities or
liquidation of any Trust, will be guaranteed by Sovereign Bancorp
to the extent described under "-- Trust Guarantees."
Certain federal income tax considerations applicable to an
investment in trust preferred securities will be described in the
prospectus supplement relating thereto.
<PAGE 49>
In connection with the issuance of trust preferred
securities, each Trust will also issue one series of trust common
securities. Each Amended Declaration will authorize the Regular
Trustee of a Trust to issue on behalf of such Trust one series of
trust common securities having such terms, including dividends,
conversion, redemption, voting, liquidation rights or such
restrictions as shall be set forth therein. Except as otherwise
provided in the prospectus supplement relating to the trust
preferred securities, the terms of the trust common securities
issued by such Trust will be substantially identical to the terms
of the trust preferred securities issued by such Trust, and the
trust common securities will rank on a parity, and payments will
be made thereon pro rata, with the trust preferred securities
except that, upon an event of default under the applicable
Declaration, the rights of the holders of the trust common
securities to payment in respect of dividends and payments upon
liquidation, redemption and otherwise will be subordinated to the
rights of the holders of the trust preferred securities. Except
in certain limited circumstances, the trust common securities
will also carry the right to vote and appoint, remove or replace
any of the Trustees of the related Trust which issued such trust
common securities. All of the trust Common Securities of each
Trust will be directly or indirectly owned by Sovereign Bancorp.
The Property Trustee and its affiliates may provide
customary commercial banking services to Sovereign Bancorp and
certain of its subsidiaries and may participate in various
financing agreements of Sovereign Bancorp in the ordinary course
of their business.
Trust Guarantees
Set forth below is a summary of information concerning the
trust guarantees which will be executed and delivered by
Sovereign Bancorp, from time to time, for the benefit of the
holders of trust preferred securities. The accompanying
prospectus supplement will describe any significant differences
between the actual terms of the trust guarantees and the summary
below. The following summary does not purport to be complete and
is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the trust guarantee, which will
be filed with the Commission and incorporated by reference as an
exhibit to the Registration Statement of which this prospectus
forms a part.
General. Sovereign Bancorp will irrevocably and
unconditionally agree, to the extent set forth in the trust
guarantees, to pay in full, to the holders of trust preferred
securities of each series, the Trust Guarantee Payments (as
defined below) (except to the extent paid by such Trust), as and
when due, regardless of any defense, right of set-off, or
counterclaim which such Trust may have or assert. The following
payments with respect to any series of trust preferred securities
to the extent not paid by the applicable Trust (the "Trust
<PAGE 50> Guarantee Payments") will be subject to the trust
guarantees (without duplication):
- any accrued and unpaid dividends which are required
to
be paid on the trust preferred securities of such
series, to the extent such Trust shall have funds
legally available therefor;
- the redemption price, including all accrued and
unpaid
dividends (the "Redemption Price"), payable out of
funds legally available therefor, with respect to
any
trust preferred securities called for redemption by
such Trust; and
- upon a liquidation of such Trust (other than in
connection with the distribution of debt securities
to
the holders of trust preferred securities or the
redemption of all of the trust preferred securities
issued by such Trust), the lesser of (a) the
aggregate
of the liquidation preference and all accrued and
unpaid dividends on the trust preferred securities
of
such series to the date of payment and (b) the
amount
of assets of such Trust remaining available for
distribution to holders of trust preferred
securities
of such series in liquidation of such Trust.
Sovereign Bancorp's obligation to make a Trust Guarantee
Payment may be satisfied by direct payment of the required
amounts by Sovereign Bancorp to the holders of trust preferred
securities or by causing the applicable Trust to pay such amounts
to such holders.
Covenants of Sovereign Bancorp. In each trust guarantee,
except as may be provided in an applicable prospectus supplement,
Sovereign Bancorp will covenant that, so long as any trust
preferred securities issued by the applicable Trust remain
outstanding, if there shall have occurred any event that would
constitute an event of default under such trust guarantee or the
Declaration of such Trust, then:
- Sovereign Bancorp shall not declare or pay any
dividend
on, make any distributions with respect to, or
redeem,
purchase or make a liquidation payment with respect
to,
any of its common stock other than:
- purchases or acquisitions of shares of
common
stock in connection with the satisfaction by
Sovereign Bancorp of its obligations under
any
employee benefit plan;
- as a result of a reclassification of
Sovereign
Bancorp common stock or the exchange or
conversion
of one class or series of Sovereign
Bancorp's
<PAGE 51> common stock for another class or
series
of Sovereign Bancorp's common stock;
- the purchase of fractional interests in
shares of
Sovereign Bancorp's common stock pursuant to
the
conversion or exchange provisions of such
common
stock of Sovereign Bancorp or the security
being
converted or exchanged; or
- purchases or acquisitions of shares of
common
stock to be used in connection with
acquisitions
of common stock by shareholders pursuant to
Sovereign Bancorp's dividend reinvestment
plan, or
make any guarantee payments with respect to
the
foregoing; and
- Sovereign Bancorp shall not make any payment of
principal or premium, if any, on or repurchase any
debt
securities (including guarantees), other than at
stated
maturity issued by Sovereign Bancorp which rank on
a
parity with or junior to such debt securities.
Amendment and Assignment. Except with respect to any
changes which do not adversely affect the rights of holders of
trust preferred securities of any series (in which case no vote
will be required), each trust guarantee with respect to any
series of trust preferred securities may be changed only with the
prior approval of the holders of not less than a majority in
liquidation preference of the outstanding trust preferred
securities of such series. The manner of obtaining any such
approval of holders of the trust preferred securities of each
series will be set forth in an accompanying prospectus
supplement. All guarantees and agreements contained in each
trust guarantee shall bind the successors, assigns, receivers,
trustees and representatives of Sovereign Bancorp and shall inure
to the benefit of the holders of the applicable series of trust
preferred securities then outstanding.
Termination of the Trust Guarantees. Each trust guarantee
will terminate as to the trust preferred securities issued by the
applicable Trust:
- upon full payment of the Redemption Price of all
trust
preferred securities of such Trust;
- upon distribution of the applicable debt securities
held by such Trust to the holders of the trust
preferred securities of such Trust; or
- upon full payment of the amounts payable in
accordance
with the Declaration upon liquidation of such
Trust.
Each trust guarantee will continue to be effective
or
will be reinstated, as the case may be, if at any
time
any holder of trust preferred securities issued by
the
<PAGE 52> applicable Trust must return payment of
any
sums paid under such trust preferred securities or
such
trust guarantee.
The subordination provisions of the applicable debt
securities and the trust guarantees, respectively, may provide
that in the event payment is made on debt securities or the trust
guarantees in contravention of such provisions, such payments
will be paid over to the holders of senior debt.
Ranking of the Trust Guarantees. Unless otherwise
specified
in a prospectus supplement, each trust guarantee will constitute
an unsecured obligation of Sovereign Bancorp and will rank:
- subordinate and junior in right of payment to all
other
liabilities of Sovereign Bancorp;
- on a parity with the most senior preferred or
preference stock, if any, hereafter issued by
Sovereign
Bancorp and with any guarantee hereafter entered
into
by Sovereign Bancorp in respect of any preferred or
preference stock or interests of any affiliate of
Sovereign Bancorp; and
- senior to Sovereign Bancorp's common stock.
Each Declaration will provide that each holder of trust
preferred securities by acceptance thereof agrees to the
subordination provisions and other terms of the applicable trust
guarantee.
Each trust guarantee will constitute a guarantee of
payment
and not of collection. The trust guarantees will be deposited
with the Property Trustee to be held for the benefit of any
series of trust preferred securities. The Property Trustee will
have the right to enforce the trust guarantees on behalf of the
holders of any series of trust preferred securities. The holders
of not less than 10% in aggregate liquidation preference of a
series of trust preferred securities will have the right to
direct the time, method and place of conducting any proceeding
for any remedy available in respect of the trust guarantee
applicable to such series of trust preferred securities,
including the giving of directions to the Property Trustee. If
the Property Trustee fails to enforce a trust guarantee as above
provided, any holder of trust preferred securities of a series to
which such trust guarantee pertains may institute a legal
proceeding directly against Sovereign to enforce its rights under
such trust guarantee, without first instituting a legal
proceeding against the applicable Trust, or any other person or
entity. Each trust guarantee will not be discharged except by
payment of the trust guarantee Payments in full to the extent not
paid by the applicable Trust, and by complete performance of all
obligations under such trust guarantee.
<PAGE 53>
Governing Law. Each trust guarantee will be governed by
and
construed in accordance with the laws of the State of New York.
CERTAIN TAX CONSIDERATIONS
The applicable prospectus supplement with respect to each
type of security issued under this registration statement may
contain a discussion of certain tax consequences of an investment
in the securities offered thereby.
PLAN OF DISTRIBUTION
Sovereign Bancorp or the Trusts may offer the offered
securities in one or more of the following ways from time to
time:
- to or through underwriters or dealers;
- by itself directly;
- through agents; or
- through a combination of any of these methods of
sale.
The prospectus supplement relating to an offering of
offered
securities will set forth the terms of such offering, including:
- the name or names of any underwriters, dealers or
agents;
- the purchase price of the offered securities and
the
proceeds to Sovereign Bancorp or the Trusts from
such
sale;
- any underwriting discounts and commissions or
agency
fees and other items constituting underwriters' or
agents' compensation;
- the initial public offering price;
- any discounts or concessions to be allowed or
reallowed
or paid to dealers; and
- any securities exchanges on which such offered
securities may be listed.
Any initial public offering prices, discounts or
concessions
allowed or reallowed or paid to dealers may be changed from time
to time.
If underwriters are used in an offering of offered
securities, such offered securities will be acquired by the
underwriters for their own account and may be resold from time to
time in one or more transactions, including negotiated <PAGE 54>
transactions, at a fixed public offering price or at varying
prices determined at the time of sale. The securities may be
either offered to the public through underwriting syndicates
represented by one or more managing underwriters or by one or
more underwriters without a syndicate. Unless otherwise set
forth in the prospectus supplement, the underwriters will not be
obligated to purchase offered securities unless specified
conditions are satisfied, and if the underwriters do purchase any
offered securities, they will purchase all offered securities.
In connection with underwritten offerings of the offered
securities and in accordance with applicable law and industry
practice, underwriters may over-allot or effect transactions that
stabilize, maintain or otherwise affect the market price of the
offered securities at levels above those that might otherwise
prevail in the open market, including by entering stabilizing
bids, effecting syndicate covering transactions or imposing
penalty bids, each of which is described below.
- A stabilizing bid means the placing of any bid, or
the
effecting of any purchase, for the purpose of
pegging,
fixing or maintaining the price of a security.
- A syndicate covering transaction means the placing
of
any bid on behalf of the underwriting syndicate or
the
effecting of any purchase to reduce a short
position
created in connection with the offering.
- A penalty bid means an arrangement that permits the
managing underwriter to reclaim a selling
concession
from a syndicate member in connection with the
offering
when offered securities originally sold by the
syndicate member are purchased in syndicate
covering
transactions.
These transactions may be effected through the Nasdaq
National Market system, or otherwise. Underwriters are not
required to engage in any of these activities, or to continue
such activities if commenced.
If dealers are utilized in the sale of offered securities,
Sovereign Bancorp or the Trusts will sell such offered securities
to the dealers as principals. The dealers may then resell such
offered securities to the public at varying prices to be
determined by such dealers at the time of resale. The names of
the dealers and the terms of the transaction will be set forth in
the prospectus supplement relating to that transaction.
Offered securities may be sold directly by Sovereign
Bancorp
or the Trusts to one or more institutional purchasers, or through
agents designated by Sovereign Bancorp or the Trusts from time to
time, at a fixed price or prices, which may be changed, or at
varying prices determined at the time of sale. Any agent
involved in the offer or sale of the offered securities in
<PAGE 55> respect of which this prospectus is delivered will be
named, and any commissions payable by Sovereign Bancorp to such
agent will be set forth, in the prospectus supplement relating to
that offering. Unless otherwise indicated in such prospectus
supplement, any such agent will be acting on a best efforts basis
for the period of its appointment.
If so indicated in the applicable prospectus supplement,
Sovereign Bancorp or the Trusts will authorize agents,
underwriters or dealers to solicit offers from certain types of
institutions to purchase offered securities from Sovereign
Bancorp or the Trusts at the public offering price set forth in
such prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the
future. Such contracts will be subject only to those conditions
set forth in the prospectus supplement and the prospectus
supplement will set forth the commission payable for solicitation
of such contracts.
Underwriters, dealers and agents may be entitled, under
agreements with Sovereign Bancorp, to indemnification by
Sovereign Bancorp relating to material misstatements and
omissions. Underwriters, dealers and agents may be customers of,
engage in transactions with, or perform services for, Sovereign
Bancorp and affiliates of Sovereign Bancorp in the ordinary
course of business.
Each series of offered securities will be a new issue of
securities and will have no established trading market. Any
underwriters to whom offered securities are sold for public
offering and sale may make a market in such offered securities,
but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The
offered securities may or may not be listed on a national
securities exchange. No assurance can be given that there will
be a market for the offered securities.
<PAGE 56>
ERISA CONSIDERATIONS
Sovereign Bancorp has a subsidiary, Manchester Trust Bank,
that provides services to several employee benefit plans.
Although the majority of these plans are employee-directed 401(k)
plans, Sovereign Bancorp and any direct or indirect subsidiary of
Sovereign Bancorp may each be considered a "party in interest"
within the meaning of the Employee Retirement Income Security Act
of 1974, and a "disqualified person" under corresponding
provisions of the Internal Revenue Code of 1986, relating to some
of these employee benefit plans. "Prohibited transactions"
within the meaning of ERISA and the Code may result if any
offered securities are acquired by an employee benefit plan to
which Sovereign Bancorp or any direct or indirect subsidiary of
Sovereign Bancorp is a party in interest, unless such offered
securities are acquired pursuant to an applicable exemption
issued by the U.S. Department of Labor. Any employee benefit
plan or other entity to which such provisions of ERISA or the
Code apply proposing to acquire the offered securities should
consult with its legal counsel.
LEGAL MATTERS
Stevens & Lee, P.C., Philadelphia, Pennsylvania, will act
as
legal counsel to Sovereign Bancorp and will pass upon the
validity of any securities offered by this prospectus and any
applicable prospectus supplement. Joseph E. Lewis, a director of
Sovereign Bank, is a principal of the firm of Stevens & Lee.
Stevens & Lee and its attorneys own an aggregate of approximately
300,000 shares of Sovereign Bancorp common stock, including
shares issuable upon the exercise of options issued to Mr. Lewis
in his capacity as director of Sovereign Bank. Counsel
identified in the applicable prospectus supplement will act as
legal counsel to the underwriters.
EXPERTS
The consolidated financial statements of Sovereign
Bancorp,
at December 31, 1998 and 1997 and for each of the three years in
the period ended December 31, 1998, included in Sovereign
Bancorp's Annual Report on Form 10-K for the year ended
December 31, 1998, as amended, have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference which, as
to the years 1997 and 1996, is based in part on the reports of
KPMG LLP with respect to ML Bancorp, Inc., First State Financial
Services, Inc. and Bankers Corp., Arthur Andersen LLP with
respect to First Home Bancorp Inc. and PriceWaterhouseCoopers LLP
with respect to Carnegie Bancorp, Inc., independent auditors.
The consolidated financial statements referred to above are in
reliance upon such reports given on the authority of such firms
as experts in accounting and auditing.
<PAGE 57>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee $ 556,000
NASD Fees 30,500*
Printing fees 100,000*
Trustees' fees and expenses 50,000*
Accountant's fees and expenses 250,000*
Rating agencies' fees 500,000*
Attorneys' fees and expenses 250,000*
Transfer agent fees 25,000*
Miscellaneous fees and expenses $ 238,000
Total $2,000,000
____________
* Estimated except for the registration fee.
Item 15. Indemnification of Directors and Officers.
Pennsylvania law provides that a Pennsylvania corporation
may indemnify directors, officers, employees, and agents of the
corporation against liabilities they may incur in such capacities
for any action taken or any failure to act, whether or not the
corporation would have the power to indemnify the person under
any provision of law, unless such action or failure to act is
determined by a court to have constituted recklessness or willful
misconduct. Pennsylvania law also permits the adoption of a
bylaw amendment, approved by shareholders, providing for the
elimination of a director's liability for monetary damages for
any action taken or any failure to take any action unless (1) the
director has breached or failed to perform the duties of his
office and (2) the breach or failure to perform constitutes self-
dealing, willful misconduct or recklessness.
The Bylaws of Sovereign Bancorp provide for
(1) indemnification of directors, officers, employees, and agents
of Sovereign Bancorp and its subsidiaries and (2) the elimination
of a director's liability for monetary damages to the fullest
extent permitted by Pennsylvania law.
Directors and officers are also insured against certain
liabilities for their actions, as such, by an insurance policy
obtained by Sovereign Bancorp.
The Declaration of each Trust provides that Sovereign
Bancorp shall indemnify the Property Trustee or any of its
affiliates, the Delaware Trustee or any of its affiliates, or any
officers, directors, shareholders, members, partners, employees,
<PAGE 1> representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each, a "Fiduciary
Indemnified Person") for, and hold each Fiduciary Indemnified
Person harmless against, any loss, liability or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against
or investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties under such
Declaration.
The Declaration of each Trust also provides that Sovereign
Bancorp will indemnify, to the full extent permitted by law, any
Regular Trustee, affiliate of any Regular Trustee or any
officers, directors, shareholders, members, partners, employees,
representatives or agents of any Regular Trustee or any affiliate
thereof; or any officer, employee or agent of such Trust or its
affiliates (each, a "Debenture Issuer 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 such Trust) by reason of the
fact that he is or was a Debenture Issuer Indemnified Person
against expenses (including attorney fees), 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 such 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 Debenture
Issuer 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 such Trust, and, with respect to any
criminal action or proceeding, had reasonable cause to believe
that his conduct was unlawful. The Declaration of each Trust
also provides that Sovereign Bancorp shall indemnify, to the full
extent permitted by law, any Debenture Issuer 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 a Debenture Issuer Indemnified
Person against expenses (including attorneys' fees) 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 Debenture Issuer 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
<PAGE 2> 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. The Declaration of each Trust further provides that
expenses (including attorneys' fees) incurred by a Debenture
Issuer Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding
referred to in the immediately preceding two sentences shall be
paid by Sovereign Bancorp in advance of the final disposition of
such action, suit or proceeding upon receipt of an undertaking by
or on behalf of such Debenture Issuer Indemnified Person to repay
such amount if it shall ultimately be determined that he is not
entitled to be indemnified by Sovereign Bancorp as authorized in
the Declaration.
Any underwriting agreement or agency agreement with
respect
to an offering of securities registered hereunder will provide
for indemnification of Sovereign Bancorp and its officers and
directors and the Trustees who signed this Registration Statement
by the underwriters or agents, as the case may be, against
certain liabilities including liabilities under the Securities
Act of 1933 (the "Act").
Item 16. Exhibits.
The Exhibit Index beginning on page E-1 is hereby
incorporated by reference.
Item 17. Undertakings.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers
or
sales are being made, a post-effective amendment to this
Registration Statement: (i) to include any prospectus
required by Section 10(a)(3) of the Securities Act of
1933;
(ii) to reflect in the prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent
a fundamental change in the information set forth in the
Registration Statement; and (iii) to include any material
information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any
material change to such information in the Registration
Statement; provided, however, that the undertakings in
clauses (i) and (ii) shall not apply if the information
required to be included in a post-effective amendment by
those clauses is contained in periodic reports filed by
the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in this Registration Statement. <PAGE 3>
(2) That, for the purpose of determining any
liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration
statement
relating to the securities offered therein, and the
offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a
post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(4) That, for purposes of determining any
liability
under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that
is
incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement
relating
to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial
bona fide offering thereof.
(5) For purposes of determining any liability
under
the Securities Act of 1933, the information omitted from
the
form of prospectus filed as part of this registration
statement in reliance upon Rule 430A and contained in a
form
of prospectus filed by the registrant pursuant to
Rule 424(b)(1) or (4) or 497(h) under the Securities Act
shall be deemed to be part of this registration statement
as
of the time it was declared effective.
(6) For the purpose of determining any liability
under
the Securities Act of 1933, each post-effective amendment
that contains a form of prospectus shall be deemed to be a
new registration statement relating to the securities
offered therein, and the offering of such securities at
that
time shall be deemed to be the initial bona fide offering
thereof.
(7) To file an application for the purpose of
determining the eligibility of the trustee to act under
Subsection (a) of Section 310 of the Trust Indenture Act
of
1939 in accordance with the rules and regulations
prescribed
by the Commission under Section 305(b)(2) of the Trust
Indenture Act of 1939.
Insofar as indemnification for liabilities arising under
the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of the registrant pursuant to the
provisions described under Item 15 above or otherwise, the
registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment
<PAGE 4> by the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted
against the registrant by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in
the Securities Act of 1933 and will be governed by the final
adjudication of such issue.
<PAGE 5>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the Registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on
Form S-3 and that it has duly caused this Pre-Effective Amendment
No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of
Wyomissing, Commonwealth of Pennsylvania, on September 17,
1999.
SOVEREIGN BANCORP,
INC.
By/s/ Jay S. Sidhu
Jay S. Sidhu,
President and
Chief Executive
Officer
Pursuant to the requirements of the Securities Act of
1933, this Pre-Effective Amendment No. I to Registration
Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title
/s/ Richard E. Mohn* Chairman of the September 17, 1999
Richard E. Mohn Board and Director
/s/ Jay S. Sidhu President, Chief September 17, 1999
Jay S. Sidhu Executive Officer
and Director
/s/ Rhoda S. Oberholtzer* Director September 17, 1999
Rhoda S. Oberholtzer
/s/ Patrick J. Petrone* Director September 17, 1999
Patrick J. Petrone
Director September 17, 1999
Daniel K. Rothermel
/s/ Cameron C. Troilo* Director September 17, 1999
Cameron C. Troilo
/s/ G. Arthur Weaver* Director September 17, 1999
G. Arthur Weaver
/s/ Dennis S. Marlo Chief Financial September 17, 1999
Dennis S. Marlo Officer
/s/ Mark R. McCollom Chief Accounting September 17, 1999
Mark R. McCollom Officer
<PAGE 6>
*By /s/ Jay S. Sidhu
Attorney-in-Fact
<PAGE 7>
Pursuant to the requirements of the Securities Act of
1933, Sovereign Capital Trust II certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this Pre-Effective Amendment
No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of
Wyomissing, and Commonwealth of Pennsylvania, on September 17,
1999.
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Mark R.
McCollom, Jacquelyn Blue or Joseph M. Harenza, and each of them,
his true and lawful attorney-in-fact, as agent with full power of
substitution and resubstitution of him and in his name, place and
stead, in any and all capacity, to sign any or all amendments to
this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto such
attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SOVEREIGN CAPITAL
TRUST II
By:/s/ Jacquelyn Blue
Jacquelyn Blue
as Trustee
By:/s/ Mark R.
McCollom
Mark R.
McCollom
as Trustee
<PAGE 8>
Pursuant to the requirements of the Securities Act of
1933, Sovereign Capital Trust III certifies that it has
reasonable grounds to believe that it meets all the requirements
for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the
Borough of Wyomissing, and Commonwealth of Pennsylvania, on
September 17, 1999.
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Mark R.
McCollom, Jacquelyn Blue or Joseph M. Harenza, and each of them,
his true and lawful attorney-in-fact, as agent with full power of
substitution and resubstitution of him and in his name, place and
stead, in any and all capacity, to sign any or all amendments to
this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto such
attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SOVEREIGN CAPITAL
TRUST III
By:/s/ Jacquelyn Blue
Jacquelyn Blue
as Trustee
By:/s/ Mark R.
McCollom
Mark R.
McCollom
as Trustee
<PAGE 9>
Pursuant to the requirements of the Securities Act of
1933, Sovereign Capital Trust IV certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form S-3 and has duly caused this Pre-Effective Amendment
No. 1 to Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Borough of
Wyomissing, and Commonwealth of Pennsylvania, on September 17,
1999.
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Mark R.
McCollom, Jacquelyn Blue or Joseph M. Harenza, and each of them,
his true and lawful attorney-in-fact, as agent with full power of
substitution and resubstitution of him and in his name, place and
stead, in any and all capacity, to sign any or all amendments to
this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto such
attorney-in-fact and agent full power and authority to do and
perform each and every act and thing requisite and necessary to
be done in and about the premises, as fully and to all intents
and purposes as they might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and
agents, or their substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.
SOVEREIGN CAPITAL
TRUST IV
By:/s/ Jacquelyn Blue
Jacquelyn Blue
as Trustee
By:/s/ Mark R.
McCollom
Mark R.
McCollom
as Trustee
<PAGE 10>
EXHIBIT INDEX
Number Description
1.1 Form of underwriting agreement (including delayed
delivery contract) for debt securities**
1.2 Form of underwriting agreement for preferred
stock**
1.3 Form of underwriting agreement for depositary
shares**
1.4 Form of underwriting agreement for trust preferred
securities**
1.5 Form of underwriting agreement for common stock**
1.6 Form of underwriting agreement for warrants**
1.7 Form of underwriting agreement for stock purchase
contracts**
1.8 Form of underwriting agreement for stock purchase
units**
2.1 Purchase and Assumption Agreement dated September
3,
1999 by and among Fleet Financial Group, Inc.,
Fleet
National Bank, Fleet Bank-NH, BankBoston, N.A.,
Sovereign Bank and Sovereign Bancorp, Inc.
(Incorporated by reference to Exhibit 2.1 to
Sovereign
Bancorp's Current Report on Form 8-K, filed with
the
SEC on September 10, 1999)
2.2 Letter Agreement, dated September 3, 1999, by and
among
Fleet Financial Group, Inc., Fleet National Bank,
Fleet
Bank-NH, BankBoston, N.A., Sovereign Bank and
Sovereign
Bancorp, Inc. (Incorporated by reference to Exhibit
2.2
of Sovereign Bancorp's Current Report on Form 8-K
filed
with the SEC on September 10, 1999)
3.1 Amended and Restated provisions of Articles of
Incorporation of Sovereign Bancorp, Inc.***
3.2 Bylaws of Sovereign Bancorp, Inc. (Incorporated by
reference to Exhibit 3.2 to Sovereign Bancorp's
Annual
Report on Form 10-K for the year ended December 31,
1998)
4.1 Subordinated Trust Indenture dated as of February
1,
1994, between Sovereign Bancorp, Inc. and Harris
Trust
and Savings Bank, as Trustee. (Incorporated by
reference to Exhibit 4.1 to Sovereign Bancorp's
Registration Statement No. 33-75472 on Form S-3.)
<PAGE E-1>
4.2 Senior Trust Indenture dated as of February 1,
1994,
between Sovereign Bancorp, Inc. and Harris Trust
and
Savings Bank, as Trustee. (Incorporated by
reference
to Exhibit 4.2 to Sovereign Bancorp's Registration
Statement No. 33-75472 on Form S-3.)
4.3 Form of Junior Subordinated Indenture between
Sovereign
Bancorp, Inc. and Harris Trust and Savings Bank
relating to junior subordinated securities.
4.8 Rights Agreement, dated September 19, 1989, between
Sovereign Bancorp, Inc. and Harris Trust
Corporation of
New York. (Incorporated by reference to Exhibit 4
to
Sovereign Bancorp's Current Report on Form 8-K
dated
October 12, 1989).
4.9 Form of Debt Warrant Agreement (including form of
Debt
Warrant certificate).**
4.10 Form of Preferred Stock Warrant Agreement
(including
form of Preferred Stock Warrant certificate).**
4.11 Form of Common Stock Warrant Agreement (including
form
of Common Stock Warrant certificate).**
4.12 Sovereign Bancorp, Inc. has outstanding certain
long-
term debt. None of such debt exceeds 10% of the
total
assets of Sovereign Bancorp, Inc. and its
consolidated
subsidiaries; therefore, copies of the constituent
instruments defining the rights of the holders of
such
debt are not included as exhibits to this
Registration
Statement. Sovereign Bancorp, Inc. agrees to
furnish
copies of such instruments to the Commission upon
request.
4.13 Amendment to Rights Agreement dated as of September
27,
1995, between Sovereign Bancorp, Inc. and Chemical
Bank, as successor to Harris Trust Company of New
York,
as Rights Agent (Incorporated by reference to
Exhibit 4.1 to Sovereign Bancorp's Current Report
on
Form 8-K/A No. 1 dated January 8, 1996).
4.14 Statement with Respect to Shares for the offered
preferred stock
- Upon issuance of any such stock, will be filed as
an
Exhibit to a Current Report on Form 8-K and thereby
incorporated by reference**
4.15 Form of deposit agreement with respect to the
depositary shares (including the form of depositary
receipt to be issued thereunder)**
<PAGE E-2>
4.16 Certificate of Trust for Sovereign Capital Trust II
4.17 Declaration of Trust for Sovereign Capital Trust II
4.18 Form of Amended and Restated Declaration of Trust
for
Sovereign Capital Trust II (including the forms of
preferred security and common security to be issued
thereunder)
4.19 Form of Guarantee with respect to the preferred
securities of Sovereign Capital Trust II
4.20 Certificate of Trust for Sovereign Capital Trust
III
4.21 Declaration of Trust for Sovereign Capital Trust
III
4.22 Form of Amended and Restated Declaration of Trust
for
Sovereign Capital Trust III (including the forms of
preferred security and common security to be issued
thereunder).
4.23 Form of Guarantee with respect to the preferred
securities of Sovereign Capital Trust III.
4.24 Certificate of Trust for Sovereign Capital Trust IV
4.25 Declaration of Trust for Sovereign Capital Trust IV
4.26 Form of Amended and Restated Declaration of Trust
for
Sovereign Capital Trust IV (including the forms of
preferred security and common security to be issued
thereunder).
4.27 Form of Guarantee with respect to the preferred
securities of Sovereign Capital Trust IV.
5.1 Opinion and Consent of Stevens & Lee as to the
legality
of the common stock, preferred stock, debt
securities,
depositary shares, warrants, stock purchase
contracts
and stock purchase units being registered.
5.2 Opinion and consent of Richards, Layton & Finger as
to
the validity of the trust preferred securities
being
registered*
12.1 Computation of Ratios of Earnings to Fixed Charges
and
Combined Fixed Charges and Preferred Stock
Dividends.***
23.1 Consent of Ernst & Young LLP.***
23.2 Consent of KPMG LLP.***
23.3 Consent of KPMG LLP.*** <PAGE E-3>
23.4 Consent of KPMG LLP.***
23.5 Consent of PricewaterhouseCoopers LLP.***
23.6 Consent of Arthur Andersen LLP.***
23.7 Consent of Stevens & Lee (included in Exhibit 5.1).
23.8 Consent of Richards, Layton & Finger (included in
Exhibit 5.2 above)*
24.1 Powers of Attorney of Directors and Officers
(included
on signature page).***
25.1 Form T-1 of Harris Trust and Savings Bank as
trustee
under the Subordinated Trust Indenture***
25.2 Form T-1 of Harris Trust and Savings Bank as
trustee
under the Senior Trust Indenture***
25.3 Form T-1 of The Bank of New York as trustee under
the
amended and restated declaration of trust of
Sovereign
Capital Trust II
25.4 Form T-1 of The Bank of New York as trustee under
the
amended and restated declaration of trust of
Sovereign
Capital Trust III
25.5 Form T-1 of The Bank of New York as trustee under
the
amended and restated declaration of trust of
Sovereign
Capital Trust IV
25.6 Form T-1 of The Bank of New York as trustee under
the
guarantee for the benefit of holders of trust
preferred
securities of Sovereign Capital Trust II
25.7 Form T-1 of The Bank of New York as trustee under
the
guarantee for the benefit of holders of trust
preferred
securities of Sovereign Capital Trust III
25.8 Form T-1 of The Bank of New York as trustee under
the
guarantee for the benefit of holders of trust
preferred
securities of Sovereign Capital Trust IV
25.9 Form T-1 of Harris Trust and Savings Bank as
trustee
under Junior Subordinated Indenture
- ---------------------------
* To be filed by amendment
** To be incorporated by reference herein in connection with the
offering of each applicable class of securities.
***Previously Filed. <PAGE E-4>
Exhibit 4.3
_________________________________________________________________
SOVEREIGN BANCORP, INC.
To
HARRIS TRUST AND SAVINGS BANK,
Trustee
_______________
INDENTURE
Dated as of September 1, 1999
_______________
Junior Subordinated Debt Securities
_________________________________________________________________
SOVEREIGN BANCORP, INC.
Reconciliation and tie between
Trust Indenture Act of 1939
and Indenture,
dated as of September 1, 1999
Trust Indenture Act Sections Indenture Section
Section 310(a)(1)609
(a)(2)..................................... 609
(a)(3)..................................... Not Applicable
(a)(4)..................................... Not Applicable
(a)(5)..................................... 609
(b)........................................ 608
610
(c)........................................ Not Applicable
Section 311(a)(1)..................................... 613(a)
(b)........................................ 613(b)
(b)(2)..................................... 703(a)(3)
703(b)
Section 312(a)........................................ 701
702(a)
(b)........................................ 702(b)
(c)........................................ 702(c)
Section 313(a)........................................ 703(a)
(b)........................................ 703(b)
(c)........................................ 703(c)
(d)........................................ 703(d)
Section 314(a)........................................ 704,
1007
(b)........................................ Not Applicable
(c)(1)..................................... 102
(c)(2)..................................... 102
(c)(3)..................................... Not Applicable
(d)........................................ Not Applicable
(e)........................................ 102
Section 315(a)........................................ 609(a)
601(c)
(b)........................................ 602
703(a)(7)
(c)........................................ 601(b)
(d)........................................ 601(c)
(d)(1)..................................... 601(a)
(d)(2)..................................... 601(c)(2)
(d)(3)..................................... 601(c)(3)
(e)........................................ 514
Section 316(a)........................................ 101
(a)(1)(A).................................. 104(h), 502
512
(a)(1)(B).................................. 104(h), 513
(a)(2)..................................... Not Applicable
(b)........................................ 508
Section 317(a)(1)..................................... 503
(a)(2)..................................... 504
(b)........................................ 1003
Section 318(a)........................................ 107
(c)........................................ 107
TABLE OF CONTENTS
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.................................... 1
SECTION 102. Compliance Certificates and Opinions........... 11
SECTION 103. Form of Documents Delivered to Trustee......... 12
SECTION 104. Acts of Holders................................ 12
SECTION 105. Notices, etc................................... 14
SECTION 106. Notice to Holders; Wavier...................... 15
SECTION 107. Conflict with Trust Indenture Act.............. 16
SECTION 108. Effect of Headings and Table of Contents....... 16
SECTION 109. Successors and Assigns......................... 16
SECTION 110. Separability Clause............................ 16
SECTION 111. Benefits of Indenture.......................... 16
SECTION 112. Governing Law.................................. 17
SECTION 113. Legal Holidays................................. 17
ARTICLE TWO
DEBT SECURITY FORMS
SECTION 201. Forms Generally................................ 17
SECTION 202. Form of Trustee's Certificate of
Authentication................................. 18
SECTION 203. Debt Securities in Global Form................. 18
ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited: Issuable in Series........... 19
SECTION 302. Denominations.................................. 23
SECTION 303. Execution, Authentication, Delivery and
Dating......................................... 23
SECTION 304. Temporary Debt Securities...................... 27
SECTION 305. Registration; Registration of Transfer and
Exchange....................................... 30
SECTION 306. Mutilated, Destroyed, Lost and Stolen Debt
Securities..................................... 34
SECTION 307. Payment of Interest; Interest Rights
Preserved...................................... 35
SECTION 308. Persons Deemed Owners.......................... 38
SECTION 309. Cancellation................................... 38
SECTION 310. Computation of Interest........................ 39
SECTION 311. Certification by a Person Entitled to Delivery of
a Bearer Security.............................. 39
SECTION 312. Judgments...................................... 39
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture........ 40
SECTION 402. Application of Trust Money and Eligible
Instruments.................................... 42
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.............................. 42
SECTION 502. Acceleration of Maturity; Rescission and
Annulment...................................... 43
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee......................... 44
SECTION 504. Trustee May File Proofs of Claim............... 45
SECTION 505. Trustee May Enforce Claims without Possession of
Debt Securities or Coupons..................... 46
SECTION 506. Application of Money Collected................. 47
SECTION 507. Limitation on Suits............................ 47
SECTION 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest and to Exchange
Debt Securities for Capital Securities......... 48
SECTION 509. Restoration of Rights and Remedies............. 48
SECTION 510. Rights and Remedies Cumulative................. 49
SECTION 511. Delay or Omission Not Waiver................... 49
SECTION 512. Control by Holders of Debt Securities.......... 49
SECTION 513. Waiver of Past Defaults........................ 50
SECTION 514. Undertaking for Costs.......................... 50
SECTION 515. Waiver of Stay or Extension Laws............... 51
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities............ 51
SECTION 602. Notice of Defaults............................. 52
SECTION 603. Certain Rights of Trustee...................... 53
SECTION 604. Not Responsible for Recitals or Issuance of Debt
Securities..................................... 55
SECTION 605. May Hold Debt Securities or Coupons............ 55
SECTION 606. Money Held in Trust............................ 55
SECTION 607. Compensation and Reimbursement................. 55
SECTION 608. Disqualification............................... 56
SECTION 609. Corporate Trustee Required; Eligibility........ 56
SECTION 610. Resignation and Removal; Appointment of
Successor...................................... 57
SECTION 611. Acceptance of Appointment by Successor......... 59
SECTION 612. Merger, Conversion, Consolidation or Succession to
Business....................................... 60
SECTION 613. Preferential Collection of Claims Against
Company........................................ 61
SECTION 614. Authenticating Agent........................... 65
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders........................................ 67
SECTION 702. Preservation of Information; Communications to
Holders........................................ 67
SECTION 703. Reports by Trustee............................. 69
SECTION 704. Reports by Company............................. 70
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, etc................... 71
SECTION 802. Successor Corporation Substituted.............. 72
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent of
Holders........................................ 72
SECTION 902. Supplemental Indentures with Consent of
Holders........................................ 74
SECTION 903. Execution of Supplemental Indentures........... 76
SECTION 904. Effect of Supplemental Indentures.............. 76
SECTION 905. Conformity with Trust Indenture Act............ 76
SECTION 906. Reference in Debt Securities to Supplemental
Indenture...................................... 76
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and
Interest....................................... 77
SECTION 1002. Maintenance of Office or Agency................ 77
SECTION 1003. Money for Debt Securities Payments to Be held in
Trust.......................................... 78
SECTION 1004. Officers' Certificate as to Default............ 80
SECTION 1005. Limitation on Disposition of Voting Stock of, and
Merger and Sale of Assets by, the Bank......... 80
SECTION 1006. Payment of Additional Amounts.................. 81
SECTION 1007. Waiver of Certain Covenants.................... 82
ARTICLE ELEVEN
REDEMPTION OF DEBT SECURITIES
SECTION 1101. Applicability of Article....................... 82
SECTION 1102. Election to Redeem; Notice to Trustee.......... 82
SECTION 1103. Selection by Trustee of Debt Securities to Be
Redeemed....................................... 83
SECTION 1104. Notice of Redemption........................... 83
SECTION 1105. Deposit of Redemption Price.................... 84
SECTION 1106. Debt Securities Payable on Redemption
Date........................................... 84
SECTION 1107. Debt Securities Redeemed in Part............... 85
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article....................... 86
SECTION 1202. Satisfaction of Sinking Fund Payments with Debt
Securities..................................... 86
SECTION 1203. Redemption of Debt Securities for Sinking
Fund........................................... 87
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article....................... 87
SECTION 1302. Repayment of Debt Securities................... 87
SECTION 1303. Exercise of Option; Notice..................... 88
SECTION 1304. Election of Repayment by Remarketing
Entities....................................... 89
SECTION 1305. Debt Securities Payable on the Repayment
Date........................................... 89
ARTICLE FOURTEEN
EXCHANGE OF CAPITAL SECURITIES FOR DEBT SECURITIES
SECTION 1401. Applicability of Article....................... 90
SECTION 1402. Exchange of Capital Securities for Debt Securities
at Stated Maturity............................. 90
SECTION 1403. Right of Early Exchange of Capital Securities for
Debt Securities................................ 91
SECTION 1404. Notices of Exchange............................ 92
SECTION 1405. Rights and Duties of Holders of Debt Securities to
be Exchanged for Capital Securities............ 94
SECTION 1406. Election to Exchange........................... 96
SECTION 1407. Deposit of Capital Exchange Price.............. 96
SECTION 1408. Debt Securities Due on Capital Exchange Date; Debt
Securities Exchanged in Part................... 96
SECTION 1409. Form of Capital Security Election Form......... 98
Section 1410. Fractional Capital Securities.................. 98
Section 1411. Company to Obtain Governmental and Regulatory
Approvals...................................... 99
SECTION 1412. Taxes on Exchange.............................. 99
SECTION 1413. Covenants as to Capital Securities and Secondary
Offering....................................... 99
SECTION 1414. Provision in Case of Consolidation, Merger or
Transfer of Assets.............................100
SECTION 1415. Responsibility of Trustee......................100
SECTION 1416. Revocation of Obligation to Exchange Capital
Securities for Debt Securities.................101
SECTION 1417. Optional Securities Funds......................101
ARTICLE FIFTEEN
Securities Funds
SECTION 1501. Creation of Securities Funds...................103
SECTION 1502. Designations of Securities Funds...............103
SECTION 1503. Covenant of the Company to Obtain Securities
Funds..........................................103
ARTICLE SIXTEEN
Meetings of Holders of Debt Securities
SECTION 1601. Purposes for Which Meetings May Be
Called.........104
SECTION 1602. Call, Notice and Place of Meetings.............105
SECTION 1603. Persons Entitled to Vote at Meetings...........105
SECTION 1604. Quorum; Action.................................105
SECTION 1605. Determination of Voting Rights; Conduct and
Adjournment of Meetings........................107
SECTION 1606. Counting Votes and Recording Action of
Meetings.......................................108
ARTICLE SEVENTEEN
Defeasance
SECTION 1701. Termination of Company's Obligations...........108
SECTION 1702. Repayment to Company...........................109
SECTION 1703. Indemnity for Eligible Instruments.............110
ARTICLE EIGHTEEN
Subordination of Debt Securities
SECTION 1801. Debt Securities Subordinate to Senior
Debt...........................................110
SECTION 1802. Trustee and Holders of Debt Securities May Rely on
Certificate of Liquidating Agent; Trustee May
Require Further Evidence as to Ownership of Senior
Debt; Trustee Not Fiduciary to Holders of Senior
Debt...........................................113
SECTION 1803. Payment Permitted if No Default................114
SECTION 1804. Trustee Not Charged with Knowledge of
Prohibition....................................114
SECTION 1805. Trustee to Effectuate Subordination............114
SECTION 1806. Rights of Trustee as Holder of Senior
Debt...........................................115
SECTION 1807. Article Applicable to Paying Agents............115
SECTION 1808. Subordination Rights Not Impaired by Acts or
Omissions of the Company or Holders of Senior
Debt...........................................115
ARTICLE NINETEEN
Conversion of Convertible Securities
SECTION 1901. Applicability of Article.......................116
SECTION 1902. Right to Convert...............................116
SECTION 1903. Exercise of Conversion Privilege; Delivery of
Common Stock on Conversion; No Adjustment for
Interest or Dividends..........................116
SECTION 1904. Cash Payments in Lieu of Fractional
Shares.........................................118
SECTION 1905. Conversion Price...............................118
SECTION 1906. Adjustment to Conversion Price.................118
SECTION 1907. Effect of Reclassification, Consolidation, Merger
or Sale........................................122
SECTION 1908. Taxes on Shares Issued.........................123
SECTION 1909. Shares to be Fully Paid; Compliance with
Governmental Requirements; Listing of Common
Stock..........................................123
SECTION 1910. Responsibility of Trustee......................124
SECTION 1911. Notice to Holders Prior to Certain
Actions........................................124
SECTION 1912. Covenant to Reserve Shares.....................125
INDENTURE (the "Indenture") dated as of September 1,
1999, between SOVEREIGN BANCORP, INC., a Pennsylvania corporation
(hereinafter called the "Company"), having its principal place of
business at 1130 Berkshire Boulevard, Wyomissing, Pennsylvania
19610 and HARRIS TRUST AND SAVINGS BANK, an Illinois corporation
(hereinafter called the "Trustee"), having its Corporate Trust
Office at 311 West Monroe Street, 12th Floor, Chicago, Illinois
60606.
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from time
to time of its subordinated debentures, notes, bonds or other
evidences of indebtedness (herein called the "Debt Securities"),
to be issued in one or more series.
All things necessary have been done to make this
Indenture a valid agreement of the Company, in accordance with
its terms.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Debt Securities by the Holders thereof, intending
to be legally bound, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Debt
Securities or of any series thereof, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article, and include the
plural as well as the singular.
(2) all other terms used herein which are defined
in the Trust Indenture Act or by Commission rule or
regulation under the Trust Indenture Act, either directly or
by reference therein, as in force at the date as of which
this instrument was executed, except as provided in Section
905, have the meanings assigned to them therein;
(3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance with
generally accepted accounting principles, and, except as
<PAGE 1> otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to
any computation required or permitted hereunder shall mean
such accounting principles as are generally accepted in the
United States at the date of such computation applied in a
manner consistent with past practices of the Company; and
(4) the words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Indenture as
a whole and not to any particular Article, Section or other
subdivision.
Certain terms, used principally in Article Six, are
defined in that Article.
"Act" when used with respect to any Holder has the
meaning specified in Section 104.
"Affiliate" of any specified Person means any other
Person directly or indirectly controlling or controlled by or
under direct or indirect common control with such specified
Person. For the purposes of this definition, "control" when used
with respect to any specified Person means the power to direct
the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities,
by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Authorized Newspaper" means a newspaper in an official
language of the country of publication or in the English language
customarily published on each Business Day, whether or not
published on Saturdays, Sundays or holidays, and of general
circulation in the place in connection with which the term is
used or in the financial community of such place. Where
successive publications are required to be made in Authorized
Newspapers, the successive publications may be made in the same
or in different newspapers in the same city meeting the foregoing
requirements and in each case on any Business Day.
"Bank" means Sovereign Bank, a Federal Savings Bank,
and any successors to any substantial part of the present
business thereof.
"Bearer Security" means any Debt Security established
pursuant to Section 201 which is payable to bearer including,
without limitation, unless the context otherwise indicates, a
Debt Security in global bearer form.
"Board of Directors" means either the board of
directors of the Company, or the executive or any other committee
of that board duly authorized to act in respect hereof.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
<PAGE 2> 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", when used with respect to any Place of
Payment or Place of Capital Exchange, means any day which is not
a Saturday or Sunday and which is not a legal holiday or a day on
which banking institutions or trust companies in that Place of
Payment or Place of Capital Exchange are authorized or obligated
by law or executive order to close.
"Capital Exchange Agent" means the Person or Persons
appointed by the Company to give notices and to exchange Debt
Securities of any series for Capital Securities as specified in
Article Fourteen.
"Capital Exchange Date", when used with respect to the
Debt Securities of any series, means any date on which such Debt
Securities are to be exchanged for Capital Securities pursuant to
this Indenture.
"Capital Exchange Price", when used with respect to any
Debt Security of any series to be exchanged for Capital
Securities, means the amount of Capital Securities for which such
Debt Security is to be exchanged pursuant to this Indenture or
the aggregate sale price of such Capital Securities in the
Secondary Offering for such Debt Security, as the case may be.
"Capital Securities" means any securities issued by the
Company which consist of any of the following: (i) Common Stock,
(ii) Perpetual Preferred Stock or (iii) securities which at the
date of issuance may be issued in exchange for, or the proceeds
from the sale of which may be designated as Securities Funds or
Optional Securities Funds for the payment of the principal of,
"mandatory convertible securities" under applicable regulations
of the Primary Federal Regulator. Capital Securities may have
such terms, rights and preferences as may be determined by the
Company.
"Capital Security Election Form" means a form
substantially in the form included in Section 1409.
"CEDEL" or "CEDEL S.A." means Centrale de Livraison de
Valeurs Mobilieres S.A.
"Closing Price" has the meaning specified in Section
1906(d).
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under the
Securities Exchange Act of 1934, or if at any time after the
execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
<PAGE 3>
"Common Stock" means when used with reference to the
capital stock of the Company, the class of stock which, at the
date of execution of this Indenture, is designated as common
stock of the Company and stock of any class or classes into which
such common stock or any such other class may thereafter be
changed or reclassified. In case by reason of the operation of
Article Nineteen, the Convertible Securities shall be convertible
into any other shares or other securities or property of the
Company or any other corporation, any reference in this Indenture
to the conversion of Convertible Securities pursuant to Article
Nineteen shall be deemed to refer to and include conversion of
Convertible Securities into such other shares or other securities
or property.
"Company" means the Person named as the "Company" in
the first paragraph of this instrument until a successor Person
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Company" shall mean such
successor Person.
"Company Request" and "Company Order" mean,
respectively, a written request or order signed in the name of
the Company by the Chairman of the Board, the Chairman of the
Executive Committee of the Board, a Vice Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating
Officer, a Vice Chairman, the Chief Financial Officer, or a Vice
President (any reference to a Vice President of the Company
herein shall be deemed to include any Vice President of the
Company whether or not designated by a number or word or words
before or after the title "Vice President"), and by the
Treasurer, an Assistant Treasurer, Secretary or an Assistant
Secretary of the Company, and delivered to the Trustee.
"Controlled Subsidiary" means any corporation more than
80% of the outstanding shares of Voting Stock, except for
directors' qualifying shares, of which shall at the time be owned
directly by the Company.
"Conversion Price" has the meaning specified in
Section 1905.
"Convertible Securities" means any series of Debt
Securities that are designated as such pursuant to Section 301.
"Corporate Trust Office" means the principal corporate
trust office of the Trustee at which at any particular time its
corporate trust business shall be administered.
The term "corporation" includes corporations,
associations, companies and business trusts.
<PAGE 4>
The term "coupon" means any interest coupon
appertaining to a Bearer Security.
"Debt Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any Debt
Securities authenticated and delivered under this Indenture.
"Defaulted Interest" has the meaning specified in
Section 307.
"Depositary" means, with respect to the Debt Securities
of any series issuable or issued in the form of a Global
Security, the Person designated as Depositary by the Company
pursuant to Section 301 until a successor Depositary shall have
become such pursuant to the applicable provisions of this
Indenture, and thereafter "Depositary" shall mean or include each
Person who is then a Depositary hereunder, and if at any time
there is more than one such Person, "Depositary" as used with
respect to the Debt Securities of any such series shall mean the
Depositary with respect to the Debt Securities of that series.
"Designated Currency" has the meaning specified in
Section 312.
"Dollar" or "$" means the coin or currency of the
United States of America as at the time of payment is legal
tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and
revised from time to time by the Council of the European
Communities.
"Eligible Instruments" means monetary assets, money
market instruments and securities that are payable in Dollars
only and essentially risk free as to collection of principal and
interest, including U.S. Government Obligations.
"Euroclear" means Morgan Guaranty Trust Company of New
York, Brussels Office, as operator of the Euroclear System.
"European Communities" means the European Economic
Community, the European Coal and Steel Community and the European
Atomic Energy Community.
"Event of Default" has the meaning specified in
Section 501.
"Exchange Rate" shall have the meaning specified as
contemplated in Section 301.
"Exchange Rate Agent" shall have the meaning specified
as contemplated in Section 301.
<PAGE 5>
"Exchange Rate Officer's Certificate", with respect to
any date for the payment of principal of (and premium, if any)
and interest on any series of Debt Securities, means a
certificate setting forth the applicable Exchange Rate and the
amounts payable in Dollars and Foreign Currencies in respect of
the principal of (and premium, if any) and interest on Debt
Securities denominated in ECU, and other composite currency or
Foreign Currency, and signed by the Chairman of the Board, the
Chairman of the Executive Committee of the Board, a Vice Chairman
of the Board, the President, the Chief Financial Officer, the
Treasurer or any Assistant Treasurer of the Company or the
Exchange Rate Agent appointed pursuant to Section 301 and
delivered to the Trustee.
"Foreign Currency" means a currency issued by the
government of any country other than the United States of
America.
"Global Exchange Agent" has the meaning specified in
Section 304.
"Global Exchange Date" has the meaning specified in
Section 304.
"Global Security" means a Debt Security issued to
evidence all or part of a series of Debt Securities in accordance
with Section 303.
"Holder", with respect to a Registered Security, means
a Person in whose name such Registered Security is registered in
the Security Register and, with respect to a Bearer Security or a
coupon, means the bearer thereof.
"Indenture" means this instrument as originally
executed or as it may from time to time be supplemented, amended
or restated by or pursuant to one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof
and, unless the context otherwise requires, shall include the
terms of a particular series of Debt Securities established as
contemplated by Section 301.
The term "interest", when used with respect to an
Original Issue Discount Security which by its terms bears
interest only after Maturity, means interest payable after
Maturity.
"Interest Payment Date", with respect to any Debt
Security, means the Stated Maturity of an installment of interest
on such Debt Security.
"Market Value" of any Capital Securities issued on any
Capital Exchange Date for Debt Securities of any series shall be
the sale price of such Capital Securities which are sold in the
Secondary Offering for the Debt Securities of such series. In
<PAGE 6> the event no such Secondary Offering takes place, the
Market Value of such Capital Securities shall be the fair value
of such Capital Securities on such Capital Exchange Date for Debt
Securities of such series as determined by three independent
nationally recognized investment banking firms selected by the
Company.
"Maturity", when used with respect to any Debt
Security, means the date on which the principal of such Debt
Security becomes due and payable as therein or herein provided,
whether at the Stated Maturity or by declaration of acceleration,
call for redemption or exchange, repayment at the option of the
Holder or otherwise.
"Officers' Certificate" means a certificate signed by
the Chairman of the Board, the Chairman of the Executive
Committee of the Board, a Vice Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, a
Vice Chairman, the Chief Financial Officer, or a Vice President,
and by the Treasurer, an Assistant Treasurer, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of
counsel, who may (except as otherwise expressly provided in this
Indenture) be counsel for the Company, or who may be other
counsel acceptable to the Trustee, which is delivered to the
Trustee.
"Optional Securities Fund" means a fund pursuant to
which the proceeds of sales of Capital Securities may be
designated on the books of the Company for the payment of any of
the principal of any Debt Security pursuant to Section 1417 of
this Indenture.
"Original Issue Discount Security" means any Debt
Security which provides for an amount less than the principal
amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding", when used with respect to Debt
Securities means, as of the date of determination, all Debt
Securities theretofore authenticated and delivered under this
Indenture, except:
(i) Debt Securities theretofore cancelled by the
Trustee or delivered to the Trustee for cancellation;
(ii) Debt Securities or portions thereof for
whose payment or redemption money in the necessary amount
has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the Holders of such Debt
Securities and any coupons appertaining thereto; provided,
<PAGE 7> however, that if such Debt Securities are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made; and
(iii) Debt Securities in exchange for or in lieu
of which other Debt Securities have been authenticated and
delivered, or which have been paid, pursuant to this
Indenture;
provided, however, that in determining whether the Holders of the
requisite principal amount of Debt Securities Outstanding have
given any request, demand, authorization, direction, notice,
consent or waiver hereunder, Debt Securities owned by the Company
or any other obligor upon the Debt Securities or any Affiliate of
the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether
the Trustee shall be protected in relying upon such request,
demand, authorization, direction, notice, consent or waiver, only
Debt Securities which the Trustee knows to be so owned shall be
so disregarded. Debt Securities so owned which have been pledged
in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's
right so to act with respect to such Debt Securities and that the
pledgee is not the Company or any other obligor upon the Debt
Securities or any Affiliate of the Company or of such other
obligor.
"Paying Agent" means any Person authorized by the
Company to pay the principal of (and premium, if any) or interest
on any Debt Securities on behalf of the Company.
"Perpetual Preferred Stock" means any stock of any
class of the Company which has a preference over Common Stock in
respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not mandatorily redeemable or
repayable, or redeemable or repayable at the option of the
Holder, other than in shares of Common Stock or Perpetual
Preferred Stock of another class or series or with the proceeds
of the sale of Common Stock or Perpetual Preferred Stock.
"Person" means any individual, corporation,
partnership, joint venture, association, joint-stock company,
trust, unincorporated organization, limited liability company, or
government or any agency or political subdivision.
"Place of Capital Exchange", when used with respect to
Debt Securities of any series, means any place where the Debt
Securities of such series are exchangeable for Capital Securities
as specified pursuant to Section 301.
"Place of Payment," when used with respect to the Debt
Securities of any series means any place where the principal of
<PAGE 8> (and premium, if any) and interest on the Debt
Securities of that series are payable as specified as
contemplated by Section 301.
"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 306 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 Federal Regulator" means the primary United
States federal regulator of the Company (which at the date of
this Indenture is the Office of Thrift Supervision), or any
successor body or institution.
"Redemption Date", when used with respect to any Debt
Security to be redeemed, means the date fixed for such redemption
by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Debt
Security to be redeemed, means the price at which it is to be
redeemed pursuant to this Indenture.
"Registered Security" means any Debt Security in the
form of Registered Securities established pursuant to Section 201
which is registered in the Security Register.
"Regular Record Date" for the interest payable on any
Interest Payment Date on the Registered Securities of any series
means the date specified for that purpose as contemplated by
Section 301.
"Remarketing Entity", when used with respect to Debt
Securities of any series which are repayable at the option of the
Holders thereof before their Stated Maturity, means any person
designated by the Company to purchase any such Debt Securities.
"Repayment Date", when used with respect to any Debt
Security to be repaid upon exercise of option for repayment by
the Holder, means the date fixed for such repayment pursuant to
this Indenture.
"Repayment Price", when used with respect to any Debt
Security to be repaid upon exercise of option for repayment by
the Holder, means the price at which it is to be repaid pursuant
to this Indenture.
"Responsible Officer" when used with respect to the
Trustee, means any officer within the Corporate Trust Department
(or any successor group) of the Trustee, including any vice
president, assistant vice president, trust officer, assistant
secretary or any other officer or assistant officer of the
<PAGE 9> Trustee customarily performing functions similar to
those performed by the persons who at the time shall be such
officers, or to whom any corporate trust matter is referred at
the Trustee's Corporate Trust Office because of such officer's
knowledge of and familiarity with the particular subject.
"Rights" has the meaning specified in Section 1906(c).
"Secondary Offering", when used with respect to the
Debt Securities of any series, means the offering and sale by the
Company of Capital Securities for the account of Holders of Debt
Securities of such series who elect to receive cash and not
Capital Securities on the Capital Exchange Date for such series.
"Securities Fund" means a fund pursuant to which the
proceeds of sales of Capital Securities are designated on the
books of the Company for the payment of any principal of any Debt
Security pursuant to the provisions of Section 1501.
"Security Register" and "Security Registrar" have the
respective meanings specified in Section 305.
"Senior Debt" means any obligation of the Company to
its creditors whether now outstanding or subsequently incurred
other than (i) any obligation as to which, in the instrument
creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such obligation is not Senior
Debt, (ii) obligations evidenced by the Debt Securities, and
(iii) obligations that are expressly stated in the terms of the
Debt Securities (or in this Indenture, any indenture supplement,
or any Officers' Certificate delivered under Section 301 hereof
with respect to such Debt Securities) to be Senior Debt.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to
Section 307.
"Stated Maturity", when used with respect to any Debt
Security or any installment of interest thereon, means the date
specified in such Debt Security or a coupon representing such
installment of interest as the fixed date on which the principal
of such Debt Security or such installment of interest is due and
payable.
"Trust Indenture Act" means the Trust Indenture Act of
1939 as in force at the date as of which this instrument was
executed, except as provided in Section 905.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this instrument until a successor Trustee
shall have become such pursuant to the applicable provisions of
this Indenture, and thereafter "Trustee" shall mean or include
each Person who is then a Trustee hereunder, and if at any time
there is more than one such Person, "Trustee" as used with
<PAGE 10> respect to the Debt Securities of any series shall mean
the Trustee with respect to Debt Securities of that series.
"United States" means the United States of America
(including the District of Columbia) and its possessions.
"United States Alien" means any Person who, for United
States Federal income tax purposes, is a foreign corporation, a
non-resident alien individual, a non-resident alien fiduciary of
a foreign estate or trust, or a foreign partnership one or more
of the members of which is, for United States Federal income tax
purposes, a foreign corporation, a non-resident alien individual
or a non-resident alien fiduciary of a foreign estate or trust.
"U.S. Government Obligations" means direct obligations
of the United States for the payment of which its full faith and
credit is pledged, or obligations of a person controlled or
supervised by and acting as an agency or instrumentality of the
United States the timely payment of which is unconditionally
guaranteed as a full faith and credit obligation by the United
States.
"Voting Stock", as applied to the stock (or equivalent
thereof) of any corporation, means stock (or the equivalent
thereof) of any class or classes, however designated, having
ordinary voting power for the election of a majority of the
directors of such corporation, other than stock (or such
equivalent) having such power only by reason of the happening of
a contingency.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the
Trustee to take any action under any provision of this Indenture
(other than the delivery of any Debt Security to the Trustee for
authentication pursuant to Section 303), the Company shall
furnish to the Trustee an Officers' Certificate stating that 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, if any, have been complied with,
except that in the case of any such application or request as to
which the furnishing of such documents is specifically required
by any provision of this Indenture relating to such particular
application or request, no additional certificate or opinion need
be furnished.
Every certificate or opinion with respect to compliance
with a condition or covenant provided for in this Indenture
(other than certificates provided pursuant to Section 704(4))
shall include
<PAGE 11>
(1) a statement that each individual signing such
certificate or opinion has read such covenant or condition
and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of each such
individual, he or she has made such examination or
investigation as is necessary to enable him or her to
express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(4) a statement as to whether, in the opinion of
each such individual, such condition or covenant has been
complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be
certified by, or covered by an opinion of, any specified Person,
it is not necessary that all such matters be certified by, or
covered by the opinion of, only one such Person, or that they be
so certified or covered by only one document, but one such Person
may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such
Person may certify or give an opinion as to such matters in one
or several documents.
Any certificate or opinion of an officer of the Company
may be based, insofar as it relates to legal matters, upon a
certificate or opinion of, or representations by, counsel, unless
such officer knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with
respect to the matters upon which his or her certificate or
opinion is based is erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual
matters, upon a certificate or opinion of, or representations by,
an officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or
opinion or representations with respect to such matters is
erroneous.
Where any Person is required to make, give or execute
two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture,
they may, but need not, be consolidated and form one instrument.
SECTION 104. Acts of Holders.
<PAGE 12>
(a) Any request, demand, authorization, direction,
notice, consent, waiver or other action provided in this
Indenture to be given or taken by Holders may be embodied in and
evidenced by one or more instruments of substantially similar
tenor signed by such Holders in person or by an agent duly
appointed in writing. If Debt Securities of a series are
issuable in whole or in part as Bearer Securities, any request,
demand, authorization, direction, notice, consent, waiver or
other action provided in this Indenture to be given or taken by
Holders may, alternatively, be embodied in and evidenced by the
record of Holders of Debt Securities voting in favor thereof,
either in person or by proxies duly appointed in writing, at any
meeting of Holders of Debt Securities duly called and held in
accordance with the provisions of Article Sixteen, or a
combination of such instruments and any such record. Except as
herein otherwise expressly provided, such action shall become
effective when such instrument or instruments or record or both
are delivered to the Trustee, and, where it is hereby expressly
required, to the Company. Such instrument or instruments and any
such record (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments and so voting at
any such meeting. Proof of execution of any such instrument or
of a writing appointing any such agent, or of the holding by any
Person of a Debt Security shall be sufficient for any purpose of
this Indenture and (subject to Section 601) conclusive in favor
of the Trustee and the Company, if made in the manner provided in
this Section. The record of any meeting of Holders of Debt
Security shall be proved in the manner provided in Section 1606.
(b) The fact and date of the execution by any Person
of any such instrument or writing may be proved in any manner
which the Trustee deems sufficient.
(c) The ownership of Registered Securities shall be
proved by the Security Register.
(d) The principal amount and serial numbers of Bearer
Securities held by any Person, and the date of holding the same,
may be proved by the production of such Bearer Securities or by a
certificate executed, as depositary, by any trust company, bank,
banker or other depositary, wherever situated, if such
certificate shall be deemed by the Trustee to be satisfactory,
showing that at the date therein mentioned such Person had on
deposit with such depositary, or exhibited to it, the Bearer
Securities in the amount and with the serial numbers therein
described; or such facts may be proved by the certificate or
affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be
satisfactory. The Trustee and the Company may assume that such
ownership of any Bearer Security continues until (1) another
certificate or affidavit bearing a later date issued in respect
of the same Bearer Security is produced, or (2) such Bearer
Security is produced to the Trustee by some other Person, or
<PAGE 13> (3) such Bearer Security is surrendered in exchange for
a Registered Security, or (4) such Bearer Security is no longer
Outstanding.
(e) The fact and date of execution of any such
instrument or writing, the authority of the Person executing the
same and the principal amount and serial numbers of Bearer
Securities held by the Person so executing such instrument or
writing and the date of holding the same may also be proved in
other manner which the Trustee deems sufficient; and the Trustee
may in any instance require further proof with respect to any of
the matters referred to in this Section.
(f) Any request, demand, authorization, direction,
notice, consent, waiver or other Act of the Holder of any Debt
Security shall bind every future holder of the same Debt Security
and the Holder of every Debt Security issued upon the
registration of transfer thereof or in exchange therefor or in
lieu thereof in respect of anything done, suffered or omitted by
the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Debt Security.
(g) For purposes of determining the principal amount
of Outstanding Debt Securities of any series the Holders of which
are required, requested or permitted to give any request, demand,
authorization, direction, notice, consent, waiver or take any
other Act under this Indenture, (i) each Original Issue Discount
Security shall be deemed to have the principal amount determined
by the Trustee that could be declared to be due and payable
pursuant to the terms of such Original Issue Discount Security as
of the date there is delivered to the Trustee and, where it is
hereby expressly required, to the Company, such Act by Holders of
the required aggregate principal amount of the Outstanding Debt
Securities of such series and (ii) each Debt Security denominated
in a Foreign Currency or composite currency shall be deemed to
have the principal amount determined by the Exchange Rate Agent
by converting the principal amount of such Debt Security in the
currency in which such Debt Security is denominated into Dollars
at the Exchange Rate as of the date such Act is delivered to the
Trustee and, where it is hereby expressly required, to the
Company by Holders of the required aggregate principal amount of
the Outstanding Debt Securities of such series (or, if there is
no such rate on such date, such rate on the date determined as
specified as contemplated in Section 301).
(h) The Company may set a record for purposes of
determining the identity of Holders of Debt Securities of any
series entitled to vote or consent to any action by vote or
consent authorized or permitted by Section 512 or Section 513.
Such record date shall be the later of 30 days prior to the first
solicitation of such consent or the date of the most recent list
of Holders of such Debt Securities furnished to the Trustee
pursuant to Section 701 prior to such solicitation.
<PAGE 14>
SECTION 105. Notices, etc. to Trustee and Company.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of Holders or other document
provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided), if made, given,
furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Indenture Trust
Division.
(2) the Company by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless
otherwise herein expressly provided) if in writing and
mailed, first-class postage prepaid, to the Company
addressed to the attention of its Secretary at the address
of its principal office specified in the first paragraph of
this instrument or at any other address previously furnished
in writing to the Trustee by the Company.
SECTION 106. Notice to Holders; Wavier.
Except as otherwise expressly provided herein, where
this Indenture provides for notice to Holders of any event,
(1) such notice shall be sufficiently given to Holders of
Registered Securities if in writing and mailed, first-class
postage prepaid, to each Holder of a Registered Security affected
by such event, at such Holder's address as it appears in the
Security Register, not later than the latest date, and not
earlier than the earliest date, prescribed for the giving of such
notice; and (2) such notice shall be sufficiently given to
Holders of Bearer Securities by publication thereof in an
Authorized Newspaper in The City of New York and, if the Debt
Securities of such series are then listed on The International
Stock Exchange of the United Kingdom and the Republic of Ireland
and such stock exchange shall so require, in London, and, if the
Debt Securities of such series are then listed on the Luxembourg
Stock Exchange and such stock exchange shall so require, in
Luxembourg and, if the Debt Securities of such series are then
listed on any other stock exchange outside the United States and
such stock exchange shall so require, in any other required city
outside the United States or, if not practicable, in Europe on a
Business Day at least twice, the first such publication to be not
earlier than the earliest date and not later than the latest date
prescribed for the giving of such notice.
In case, by reason of the suspension of or
irregularities in regular mail service or for any reason, it
shall be impossible or impracticable to mail notice of any event
to Holders when said notice is required to be given pursuant to
any provision of this Indenture or of the Debt Securities, then
<PAGE 15> any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient
giving of such notice. In any case where notice to Holders of
Registered Securities is to be given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to
any particular Holder of a Registered Security shall affect the
sufficiency of such notice with respect to other Holders of
Registered Securities or the sufficiency of any notice by
publication to Holders of Bearer Securities given as provided
above.
In case, by reason of the suspension of publication of
any Authorized Newspaper, or by reason of any other cause, it
shall be impossible or impracticable to make publication of any
notice to Holders of Bearer Securities as provided above, then
such method of publication or notification as shall be made with
approval of the Trustee shall constitute a sufficient publication
of such notice. Neither failure to give notice by publication to
Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any
notice mailed to Holders of Registered Securities as provided
above.
Where this Indenture provides for notice in any manner,
such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such
wavier shall be the equivalent of such notice. Waivers of notice
by Holders shall be filed with the Trustee, but such filing shall
not be a condition precedent to the validity of any action taken
in reliance upon such wavier.
Any request, demand, authorization, direction, notice,
consent, election, waiver or other Act required or permitted
under this Indenture shall be in the English language, except
that any published notice may be in an official language of the
country of publication.
SECTION 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts
with another provision hereof which is required to be included in
this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.
SECTION 108. Effect of Headings and Table of
Contents.
The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 109. Successors and Assigns.
<PAGE 16>
All covenants and agreements in this Indenture by the
Company shall bind its successors and assigns, whether expressed
or not.
SECTION 110. Separability Clause.
In case any provision in this Indenture or in the Debt
Securities or coupons shall be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 4-3. Benefits of Indenture.
Nothing in this Indenture or in the Debt Securities or
coupons, express or implied, shall give to any Person, other than
the parties hereto and their successors hereunder, any Paying
Agent and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Debt Securities and coupons
shall be governed by and construed in accordance with the laws of
the Commonwealth of Pennsylvania.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption
Date, Capital Exchange Date or Stated Maturity of any Debt
Security shall not be a Business Day at any Place of Payment or
Place of Capital Exchange, then (notwithstanding any other
provision of this Indenture or of the Debt Securities or coupons)
payment of interest or principal (and premium, if any) or
exchange of Debt Securities for Capital Securities or cash need
not be made at such Place of Payment or Place of Capital Exchange
on such date, but may be made on the next succeeding Business Day
at such Place of Payment or Place of Capital Exchange with the
same force and effect as if made on the Interest Payment Date,
Redemption Date, Repayment Date, Capital Exchange Date or Stated
Maturity, and no interest shall accrue for the period from and
after such Interest Payment Date, Redemption Date, Repayment
Date, Capital Exchange Date or Stated Maturity, as the case may
be.
SECTION 114. Counterparts.
This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same Indenture.
ARTICLE TWO
DEBT SECURITY FORMS <PAGE 17>
SECTION 201. Forms Generally.
The Registered Securities, if any, and the Bearer
Securities and related coupons, if any, of each series shall be
in substantially the form (including temporary or permanent
global form) as shall be established in or pursuant to a Board
Resolution or in one or more indentures supplemental hereto, in
each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted
by this Indenture, and may have such letters, numbers or other
marks of identification and such legends or endorsements placed
thereon, as may be required to comply with the rules of any
securities exchange, or as may, consistently herewith, be
determined by the officers executing such Debt Securities or
coupons, as evidenced by their signatures on the Debt Securities
or coupons. If the form of Debt Securities of any series or
coupons (including any such Global Security) is established by
action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and delivered
to the Trustee at or prior to the delivery of the Company Order
contemplated by Section 303 or the authentication and delivery of
such Debt Securities or coupons.
Unless otherwise specified as contemplated by Section
301, Debt Securities in bearer form, other than Debt Securities
in temporary or permanent global form, shall have coupons
attached.
The definitive Debt Securities and coupons, if any,
shall be printed, lithographed or engraved on steel engraved
borders or may be produced in any manner, all as determined by
the officers executing such Debt Securities, as evidenced by the
execution of such Debt Securities and coupons.
SECTION 202. Form of Trustee's Certificate of
Authentication.
This is one of the Debt Securities, of the series
designated herein, described in the within-mentioned Indenture
HARRIS TRUST AND SAVINGS BANK
as Trustee
By_________________________________
Authorized Signatory
SECTION 203. Debt Securities in Global Form.
If Debt Securities of a series are issuable in whole or
in part in global form, as specified as contemplated by
Section 301, then, notwithstanding clause (12) of Section 301 and
the provisions of Section 302, such Global Security shall
<PAGE 18> represent the aggregate amount of Outstanding Debt
Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Debt Securities represented
thereby may from time to time be reduced to reflect exchanges.
Any endorsement of a Global Security to reflect the amount, or
any increase or decrease in the amount, of Outstanding Debt
Securities represented thereby shall be made in such manner and
upon instructions given by such Person or Persons as shall be
specified therein or in the Company Order to be delivered to the
Trustee pursuant to Section 303 or Section 304.
The provisions of the last sentence of Section 303(g)
shall apply to any Debt Securities represented by a Debt Security
in global form if such Debt Security was never issued and sold by
the Company and the Company delivers to the Trustee the Debt
Security in global form together with written instructions (which
need not comply with Section 102 and need not be accompanied by
an Opinion of Counsel) with regard to the reduction in the
principal amount of Debt Securities represented thereby, together
with the written statement contemplated by the last sentence of
Section 303(g).
Global Securities may be issued in either registered or
bearer form and in either temporary or permanent form.
ARTICLE THREE
THE DEBT SECURITIES
SECTION 301. Amount Unlimited: Issuable in Series.
The aggregate principal amount of Debt Securities which
may be authenticated and delivered under this Indenture is
unlimited.
The Debt Securities may be issued in one or more
series. There shall be established in or pursuant to a Board
Resolution, and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, prior
to the issuance of Debt Securities of any series:
(1) the title of the Debt Securities of the
series (which shall distinguish the Debt Securities of the
series from all other Debt Securities);
(2) the limit, if any, upon the aggregate
principal amount of the Debt Securities of the series which
may be authenticated and delivered under this Indenture
(except for Debt Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu
of, other Debt Securities of the series pursuant to
Section 304, 305, 306, 906, 1107, 1303, 1408 or 1903 and
except for any Debt Securities which, pursuant to <PAGE 19>
Section 303, are deemed never to have been authenticated and
delivered hereunder);
(3) the date or dates on which the principal and
premium, if any, of the Debt Securities of the series are
payable;
(4) the rate or rates, if any, at which the Debt
Securities of the series shall bear interest, or the method
or methods by which such rate or rates may be determined,
the date or dates from which such interest shall accrue, the
Interest Payment Dates on which such interest shall be
payable, the Regular Record Date for the interest payable on
any Registered Security on any Interest Payment Date and the
circumstances, if any, in which the Company may defer
interest payments;
(5) the place or places where, subject to the
provisions of Section 1002, the principal of (and premium,
if any) and interest on Debt Securities of the series shall
be payable, any Registered Securities of the series may be
surrendered for registration of transfer, Debt Securities of
the series may be surrendered for exchange and notices and
demands to or upon the Company in respect of the Debt
Securities of the series and this Indenture may be served
and where notices to Holders pursuant to Section 106 will be
published;
(6) if applicable, the period or periods within
which or the date or dates on which, the price or prices at
which and the terms and conditions upon which Debt
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(7) if applicable, the place or places at which,
the period or periods within which, the price or prices at
which and the terms and conditions upon which Debt
Securities shall be exchangeable for Capital Securities of
the Company, which terms and conditions shall not be
inconsistent with Article Fourteen;
(8) any covenant or option of the Company to
create a Securities Fund for the repayment of the Debt
Securities and the terms and conditions of such Securities
Fund, which terms and conditions shall not be inconsistent
with Article Fifteen;
(9) the obligation, if any, of the Company to
redeem, repay or purchase Debt Securities of the series
pursuant to any sinking fund or analogous provisions or at
the option of a Holder thereof and the period or periods
within which, the price or prices at which and the terms and
conditions upon which Debt Securities of the series shall be
<PAGE 20> redeemed, repaid or purchased, in whole or in
part, pursuant to such obligation;
(10) whether Debt Securities of the series are to
be issuable as Registered Securities, Bearer Securities or
both, whether Debt Securities of the series are to be
issuable with or without coupons or both and, in the case of
Bearer Securities, the date as of which such Bearer
Securities shall be dated if other than the date of original
issuance of the first Debt Security of such series of like
tenor and term to be issued;
(11) whether the Debt Securities of the series
shall be issued in whole or in part in the form of a Global
Security or Securities and, in such case, the Depositary and
Global Exchange Agent for such Global Security or
Securities, whether such global form shall be permanent or
temporary and, if applicable, the Global Exchange Date;
(12) if Debt Securities of the series are to be
issuable initially in the form of a temporary Global
Security, the circumstances under which the temporary Global
Security can be exchanged for definitive Debt Securities and
whether the definitive Debt Securities will be Registered
and/or Bearer Securities and will be in global form and
whether interest in respect of any portion of such Global
Security payable in respect of an Interest Payment Date
prior to the Global Exchange Date shall be paid to any
clearing organization with respect to a portion of such
Global Security held for its account and, in such event, the
terms and conditions (including any certification
requirements) upon which any such interest payment received
by a clearing organization will be credited to the Persons
entitled to interest payable on such Interest Payment Date
if other than as provided in this Article Three;
(13) whether, and under what conditions,
additional amounts will be payable to Holders of Debt
Securities of the series pursuant to Section 1006;
(14) the denominations in which any Registered
Securities of the series shall be issuable, if other than
denominations of $1,000 and any integral multiple thereof,
and the denominations in which any Bearer Securities of such
series, shall be issuable, if other than the denominations
of $5,000;
(15) if other than the principal amount thereof,
the portion of the principal amount of Debt Securities of
the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to Section
502;
<PAGE 21>
(16) the currency or currencies of denomination of
the Debt Securities of any series, which may be in Dollars,
any Foreign Currency or any composite currency, including
but not limited to the ECU, and, if any such currency of
denomination is a composite currency other than the ECU, the
agency or organization, if any, responsible for overseeing
such composite currency;
(17) the currency or currencies in which payment
of the principal of (and premium, if any) and interest on
the Debt Securities will be made, the currency or
currencies, if any, in which payment of the principal of
(and premium, if any) or the interest on Registered
Securities, at the election of each of the Holders thereof,
may also be payable and the periods within which the terms
and conditions upon which such election is to be made and
the Exchange Rate and Exchange Rate Agent;
(18) if the amount of payments of principal of
(and premium, if any) or interest on the Debt Securities of
the series may be determined with reference to an index
based on a currency or currencies other than that in which
the Debt Securities are denominated or designated to be
payable, the manner in which such amounts shall be
determined;
(19) if payments of principal of (and premium, if
any) or interest on the Debt Securities of the series are to
be made in a Foreign Currency other than the currency in
which such Debt Securities are denominated, the manner in
which the Exchange Rate with respect to such payments shall
be determined or if the Exchange Rate is to be determined
otherwise than as provided in Section 101;
(20) any Events of Default with respect to Debt
Securities of such series, if not set forth herein;
(21) the terms and conditions, if any, pursuant to
which the Company's obligations under this Indenture may be
terminated through the deposit of money or Eligible
Instruments as provided in Articles Four or Seventeen;
(22) the Person or Persons who shall be Security
Registrar for the Debt Securities of such series if other
than the Trustee, and the place or places where the Security
Register for such series shall be maintained and the Person
or Persons who will be the initial Paying Agent or Agents,
if other than the Trustee;
(23) whether the Debt Securities of the series are
Convertible Securities and the terms related thereto
including the Conversion Price and the date on which the
right to convert expires; and
<PAGE 22>
(24) any other terms of the series (which terms
shall not be inconsistent with the provisions of this
Indenture).
All Debt Securities of any one series and the coupons
appertaining to Bearer Securities of such series, if any, shall
be substantially identical except, in the case of Registered
Securities, as to denomination and except as may otherwise be
provided in or pursuant to such Board Resolutions and set forth
in such Officers' Certificate or in any such indenture
supplemental hereto.
Debt Securities of any particular series may be issued
at various times, with different dates on which the principal or
any installment of principal is payable, with different rates of
interest, if any, or different methods by which rates of interest
may be determined, with different dates on which such interest
may be payable and with different Redemption or Repayment Dates
and may be denominated in different currencies or payable in
different currencies.
If any of the terms of a series of Debt Securities are
established by action taken pursuant to a Board Resolution, a
copy of an appropriate record of such action shall be certified
by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth the terms of the series.
SECTION 302. Denominations.
Debt Securities of each series shall be issuable in
such form and denominations as shall be specified in the form of
Debt Security for such series approved or established pursuant to
Section 201 or in the Officers' Certificate delivered pursuant to
Section 01. In the absence of any specification with respect to
the Debt Securities of any series, the Registered Securities of
such series, if any, shall be issuable in denominations of $1,000
and any integral multiple thereof and the Bearer Securities of
such series, if any, shall be issuable in the denomination of
$5,000.
SECTION 303. Execution, Authentication, Delivery and
Dating.
(a) The Debt Securities shall be executed on behalf of
the Company by its Chairman of the Board, the Chairman of the
Executive Committee of the Board, a Vice Chairman of the Board,
the Chief Executive Officer, the President, the Chief Operating
Officer, a Vice Chairman, the Chief Financial Officer, or a Vice
President, and by its Treasurer or one of its Assistant
Treasurers or its Secretary or one of its Assistant Secretaries
under its corporate seal reproduced thereon. The signature of
any of these officers on the Debt Securities may be manual or
<PAGE 23> facsimile. Coupons shall bear the facsimile signature
of the Treasurer or any Assistant Treasurer of the Company.
Debt Securities and coupons bearing the manual or
facsimile signatures of individuals who were at any time the
proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of
such Debt Securities or coupons of any series or did not hold
such offices at the date of such Debt Securities or coupons.
(b) At any time and from time to time after the
execution and delivery of this Indenture, Debt Securities of any
series may be executed by the Company and delivered to the
Trustee for authentication, and, except as otherwise provided in
this Article Three, shall thereupon be authenticated and
delivered by the Trustee upon Company Order, without any further
action by the Company; provided, however, that, in connection
with its original issuance, a Bearer Security may be delivered
only outside the United States and, except in the case of a
temporary Global Security, only if the Company or its agent shall
have received the certification required pursuant to Sections
304(b)(iii) and (iv), unless such certification shall have been
provided earlier pursuant to Section 304(b)(v) hereof, and only
if the Company has no reason to know that such certification is
false.
To the extent authorized in or pursuant to a Board
Resolution and set forth in an Officers' Certificate, or
established in one or more indentures supplemental hereto, such
written Company Order may be given by any one officer of the
Company, may be electronically transmitted, and may provide
instructions as to registration of holders, principal amounts,
rates of interest, maturity dates and other matters contemplated
by such Board Resolution and Officers' Certificate or
supplemental indenture to be so instructed in respect thereof.
Before authorizing and delivering the first Debt Securities of
any series (and upon request of the Trustee thereafter), the
Company shall deliver to the Trustee (i) the certificates called
for under Sections 201 and 301 hereof and (ii) an Opinion of
Counsel described in the next sentence.
In authenticating such Debt Securities, and accepting
the additional responsibilities under this Indenture in relation
to any Debt Securities, the Trustee shall be entitled to receive,
prior to the initial authentication of such Debt Securities, and
(subject to Section 601) shall be fully protected in relying
upon:
(i) a Board Resolution relating thereto and, if
applicable, an appropriate record of any action taken
pursuant to such resolution certified by the Secretary or an
Assistant Secretary of the Company;
<PAGE 24>
(ii) an executed supplemental indenture, if any,
relating thereto;
(iii) an Officers' Certificate setting forth the
form and terms of the Debt Securities of such series and
coupons, if any, pursuant to Sections 201 and 301 and
stating that all conditions precedent provided for in this
Indenture relating to the issuance of such Debt Securities
have been complied with, that no Event of Default with
respect to any series of Debt Securities has occurred and is
continuing and that the issuance of such Debt Securities is
not and will not result in an Event of Default or an event
or condition which, upon the giving of notice (or the
acquisition of knowledge) or the lapse of time or both,
would become an Event of Default; and
(iv) an Opinion of Counsel stating
(A) that the form of such Debt Securities
and coupons, if any, has been established in or
pursuant to a Board Resolution or by a supplemental
indenture as permitted by Section 201 in conformity
with the provisions of this Indenture;
4-3 that the terms of such Debt Securities
and coupons, if any, have been established in or
pursuant to a Board Resolution or by a supplemental
indenture as permitted by Section 301 in conformity
with the provisions of this Indenture;
(C) that such Debt Securities and coupons,
if any, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel,
will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms,
subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or
other laws affecting creditors' rights generally and
the application of general principles of equity, except
that where the Debt Securities of any series are to be
exchanged for Capital Securities or paid from the
Securities Fund, the issuance of Capital Securities
will require further action by the Board of Directors;
(D) that the Company has the corporate power
to issue such Debt Securities and coupons, if any, and
has duly taken all necessary corporate action with
respect to such issuance;
(E) that the issuance of such Debt
Securities and coupons, if any, will not contravene the
charter or by-laws of the Company or result in any
violation of any of the terms or provisions of any law
<PAGE 25> or regulation or of any material indenture,
mortgage or other agreement known to such counsel by
which the Company or any of its subsidiaries is bound;
(F) that all laws and requirements in
respect of the execution and delivery by the Company of
such Debt Securities and coupons, if any, have been
complied with and that authentication and delivery of
such Debt Securities by the Trustee will not violate
the terms of the Indenture; and
(G) such other matters as the Trustee may
reasonably request.
(c) If the Company shall establish pursuant to
Section 301 that the Debt Securities of a series are to be issued
in whole or in part in the form of one or more Global Securities,
then the Company shall execute and the Trustee shall, in
accordance with this Section and the Company Order with respect
to such series, authenticate and deliver one or more Global
Securities in permanent or temporary form that (i) shall
represent and shall be denominated in an aggregate amount equal
to the aggregate principal amount of the Outstanding Debt
Securities of such series to be represented by one or more Global
Securities, (ii) shall be registered in the name of the
Depositary for such Global Security or Securities or the nominee
of such Depositary and (iii) shall be delivered by the Trustee to
such Depositary or pursuant to such Depositary's instruction.
(d) The Trustee shall have the right to decline to
authenticate and deliver any Debt Securities under this
Section 303 if (i) the Trustee, being advised by counsel,
determines that such action may not lawfully be taken or (ii) the
issuance of such Debt Securities will adversely affect the
Trustee's own rights, duties or immunities under the Debt
Securities and this Indenture or otherwise in a manner which is
not reasonably acceptable to the Trustee.
(e) If all the Debt Securities of any series are not
to be issued at one time, it shall not be necessary to deliver an
Opinion of Counsel at the time of issuance of each Debt Security,
but such Opinion of Counsel, with appropriate modifications, may
instead be delivered at or prior to the time of the first
issuance of Debt Securities of such series.
(f) Each Registered Security shall be dated the date
of its authentication. Each Bearer Security shall be dated as of
the date specified as contemplated by Section 301.
(g) No Debt Security or coupon attached thereto shall
be entitled to any benefit under this Indenture or be valid or
obligatory for any purpose, unless there appears on such Debt
Security a certificate of authentication substantially in the
form provided for herein executed by the Trustee, and such
<PAGE 26> certificate upon any Debt Security shall be conclusive
evidence, and the only evidence, that such Debt Security has been
duly authenticated and delivered hereunder. Except as permitted
by Section 306, the Trustee shall not authenticate and deliver
any Bearer Security unless all appurtenant coupons for interest
then matured have been detached and cancelled. Notwithstanding
the foregoing, if any Debt Security or portion thereof shall have
been duly authenticated and delivered hereunder but never issued
and sold by the Company, and the Company shall deliver such Debt
Security to the Trustee for cancellation as provided in Section
309 together with a written statement (which need not comply with
Section 102 and need not be accompanied by an Opinion of Counsel)
stating that such Debt Security or portion thereof has never been
issued and sold by the Company, for all purposes of this
Indenture such Debt Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled
to the benefits of this Indenture.
(h) Each Depositary designated pursuant to Section 301
for a Global Security in registered form must, at the time of its
designation and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act of
1934 and any other applicable statute or regulation.
SECTION 304. Temporary Debt Securities.
(a) Pending the preparation of definitive Debt
Securities of any series, the Company may execute, and upon
receipt of documents required by Section 301 and 303, together
with a Company Order, the Trustee shall authenticate and deliver,
temporary Debt Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor and terms of the
definitive Debt Securities in lieu of which they are issued in
registered form or, if authorized, in bearer form with one or
more coupons or without coupons, and with such appropriate
insertions, omissions, substitutions and other variations as the
officers executing such Debt Securities may determine, as
evidenced by their signatures on such Debt Securities. In the
case of Debt Securities of any series issuable as Bearer
Securities, such temporary Debt Securities may be in global form
representing all or any part of the Outstanding Debt Securities
of such series.
(b) Unless otherwise provided pursuant to Section 301:
(i) Except in the case of temporary Debt
Securities in global form, if temporary Debt Securities of
any series are issued, the Company will cause definitive
Debt Securities of such series to be prepared without
unreasonable delay. After the preparation of definitive
Debt Securities of such series, the related temporary Debt
Securities shall be exchangeable for such definitive Debt
Securities upon surrender of the temporary Debt Securities
<PAGE 27> of such series at the office or agency of the
Company in a Place of Payment for such series, without
charge to the Holder. Upon surrender for cancellation of
any one or more temporary Debt Securities of any series
(accompanied, if applicable, by all unmatured coupons and
all matured coupons in default appertaining thereto), the
Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a like principal amount of
definitive Debt Securities of the same series of like tenor
and terms and of authorized denominations; provided,
however, that no Bearer Security shall be delivered in
exchange for a Registered Security; and provided, further,
that a Bearer Security shall be delivered in exchange for a
Bearer Security only in compliance with the conditions set
forth in Section 305.
(ii) If Debt Securities of any series are issued
in temporary global form, any such temporary Global Security
shall, unless otherwise provided pursuant to Section 301, be
delivered to the Depositary for the benefit of Euroclear and
CEDEL S.A., for credit to the respective accounts of the
beneficial owners of such Debt Securities (or to such other
accounts as they may direct).
(iii) Without unnecessary delay but in any event
not later than the date specified in, or determined pursuant
to the terms of, any such temporary Global Security (the
"Global Exchange Date"), the Company shall deliver
definitive Debt Securities to the Trustee or the agent
appointed by the Company pursuant to Section 301 to effect
the exchange of the temporary Global Security for definitive
Debt Securities (the "Global Exchange Agent"), in an
aggregate principal amount equal to the principal amount of
such temporary Global Security, executed by the Company. On
or after the Global Exchange Date, such temporary Global
Security shall be surrendered by the Depository to the
Global Exchange Agent, to be exchanged, in whole or from
time to time in part, for definitive Debt Securities without
charge and the Trustee or the Global Exchange Agent, if
authorized by the Trustee pursuant to Section 614, shall
authenticate and deliver, in exchange for each portion of
such temporary Global Security, an equal aggregate principal
amount of definitive Debt Securities of the same series of
authorized denominations and of like tenor and terms as the
portion of such temporary Global Security to be exchanged.
Upon any exchange of a part of such temporary Global
Security for definitive Debt Securities, the portion of the
principal amount and any interest thereon so exchanged shall
be endorsed by the Global Exchange Agent on a schedule to
such temporary Global Security, whereupon the principal
amount and interest payable with respect to such temporary
Global Security shall be reduced for all purposes by the
amount so exchanged and endorsed. The definitive Debt
Securities to be delivered in exchange for any such
<PAGE 28> temporary Global Security shall be in bearer form,
registered form, global registered form or global bearer
form, or any combination thereof, as specified as
contemplated by Section 301, and, if any combination thereof
is so specified, as requested by the beneficial owner
thereof; provided, however, that, in the case of the
exchange of the temporary Global Security for definitive
Bearer Securities (including a definitive Global Bearer
Security), upon such presentation by the Depositary, such
temporary Global Security shall be accompanied by a
certificate signed by Euroclear as to the portion of such
temporary Global Security held for its account then to be
exchanged and a certificate signed by CEDEL S.A. as to the
portion of such temporary Global Security held for its
account then to be exchanged, each in form set forth in
Exhibit B to this Indenture, unless such certificate(s)
shall have been provided earlier pursuant to Section
304(b)(v) hereof; and provided, further, that definitive
Bearer Securities (including a definitive Global Bearer
Security) shall be delivered in exchange for a portion of a
temporary Global Security only in compliance with the
requirements of Section 303.
(iv) The interest of a beneficial owner of Debt
Securities in a temporary Global Security shall be exchanged
for definitive Debt Securities of the same series of like
tenor and terms following the Global Exchange Date when the
account holder instructs Euroclear or CEDEL S.A., as the
case may be, to request such exchange on such account
holder's behalf and in the case of the exchange of the
temporary Global Security for definitive Bearer Securities
(including a definitive Global Bearer Security), unless such
certificate(s) shall have been earlier provided pursuant to
Section 304(b)(v) hereof, the account holder delivers to
Euroclear or CEDEL S.A., as the case may be, a certificate
in the form set forth in Exhibit A-1 and, if applicable A-2
to this Indenture, dated no earlier that 15 days prior to
the Global Exchange Date, copies of which certificate shall
be available from the offices of Euroclear and CEDEL S.A.,
the Global Exchange Agent, any authenticating agent
appointed for such series of Debt Securities and each Paying
Agent. Unless otherwise specified in such temporary Global
Security, any such exchange shall be made free of charge to
the beneficial owners of such temporary Global Security,
except that a Person receiving definitive Debt Securities
must bear the cost of insurance, postage, transportation and
the like in the event that such Person does not take
delivery of such definitive Debt Securities in person at the
offices of Euroclear and CEDEL S.A. Definitive Debt
Securities in bearer form to be delivered in exchange for
any portion of a temporary Global Security shall be
delivered only outside the United States.
<PAGE 29>
(v) Until exchanged in full as hereinabove
provided, the temporary Debt Securities of any series shall
in all respects be entitled to the same benefits under this
Indenture as definitive Debt Securities of the same series
and of like tenor and terms authenticated and delivered
hereunder, except that interest payable on a temporary
Global Security on an Interest Payment Date shall be payable
to Euroclear and CEDEL S.A. on such Interest Payment Date
only if there has been delivery by Euroclear and CEDEL S.A.
to the Global Exchange Agent of a certificate or
certificates in form set forth in Exhibit B to this
Indenture dated no earlier that the first Interest Payment
Date, for credit without further interest on or after such
Interest Payment Date to the respective accounts of the
Persons who are the beneficial owners of such temporary
Global Security on such Interest Payment Date and who have
each delivered to Euroclear or CEDEL S.A., as the case may
be, a certificate in the form set forth in Exhibit A-1 and,
if applicable, A-2 to this Indenture dated no earlier than
the first Interest Payment Date. Any interest so received
by Euroclear and CEDEL S.A. and not paid as herein provided
prior to the Global Exchange Date shall be returned to the
Global Exchange Agent which, upon expiration of two years
after such Interest Payment Date shall repay such interest
to the Company in accordance with Section 1003.
SECTION 305. Registration; Registration of Transfer
and Exchange.
The Company shall cause to be kept at one of the
offices or agencies to be maintained by the Company in accordance
with the provisions of this Section 305 and Section 1002, with
respect to the Debt Securities of each series which are
Registered Securities, a register (herein sometimes referred to
as the "Security Register") in which, subject to such reasonable
regulations as it may prescribe, the Company shall provide for
the registration of Registered Securities and of transfers of
Registered Securities. Pursuant to Section 301, the Company
shall appoint, with respect to Debt Securities of each series
which are Registered Securities, a "Security Registrar" for the
purposes of registering such Debt Securities and transfers and
exchanges of such Debt Securities as herein provided.
Upon surrender for registration of transfer of any
Registered Security of any series at the office or agency of the
Company maintained for such purpose, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new
Registered Securities of the same series of any authorized
denomination or denominations, of like tenor and terms and
aggregate principal amount.
At the option of the Holder, Registered Securities of
any series may be exchanged for other Registered Securities of
<PAGE 30> the same series of any authorized denomination or
denominations, of like tenor and terms and aggregate principal
amount, upon surrender of the Registered Securities to be
exchanged at such office or agency. Bearer Securities may not be
delivered in exchange for Registered Securities.
At the option of the Holder, Registered Securities or
Bearer Securities of any series may be issued in exchange for
Bearer Securities (except as otherwise specified as contemplated
by Section 301 with respect to a Bearer Security in global form)
of the same series, of any authorized denominations and of like
tenor and terms and aggregate principal amount, upon surrender of
the Bearer Securities to be exchanged at any such office or
agency, with all unmatured coupons and all matured coupons in
default thereto appertaining. If the Holder of a Bearer Security
is unable to produce any such unmatured coupon or coupons or
matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in
funds acceptable to the Company and the Trustee in an amount
equal to the face amount of such missing coupon or coupons, or
the surrender of such missing coupon or coupons may be waived by
the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them
and any Paying Agent harmless. If thereafter the Holder of such
Security shall surrender to any Paying Agent any such missing
coupon in respect of which such a payment shall have been made,
such Holder shall be entitled to receive the amount of such
payment; provided, however, that, except as other provided in
Section 1002, interest represented by coupons shall be payable
only upon presentation and surrender of those coupons at an
office or agency located outside the United States.
Notwithstanding the foregoing, in case a Bearer Security of any
series is surrendered at any such office or agency in exchange
for a Registered Security of the same series and like tenor and
terms after the close of business at such office or agency on
(i) any Regular Record Date and before the opening of business at
such office or agency on the relevant Interest Payment Date, or
(ii) any Special Record Date and before the opening of business
at such office or agency on the related date for payment of
Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or
proposed date of payment, as the case may be.
Whenever any Debt Securities are so surrendered for
exchange, the Company shall execute, and the Trustee shall
authenticate and deliver, the Debt Securities which the Holder
marking the exchange is entitled to receive.
If at any time the Depositary for the Debt Securities
of a series notifies the Company that it is unwilling or unable
to continue as Depositary for the Debt Securities of such series
or if at any time the Depositary for the Debt Securities of such
series shall no longer be eligible under Section 303(h), the
Company shall appoint a successor Depositary with respect to the
<PAGE 31> Debt Security of such series. If a successor
Depositary for the Debt Securities of such series is not
appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the
Company's election pursuant to Section 301(11) shall no longer be
effective with respect to the Debt Securities of such series and
the Company will execute, and the Trustee, upon receipt of a
Company Order for the authentication and delivery of definitive
Debt Securities of such series, will authenticate and deliver,
Debt Securities of such series in definitive form in an aggregate
principal amount equal to the principal amount of the Global
Security or Securities representing such series in exchange for
such Global Security or Securities.
The Company may at any time and in its sole discretion
determine that the Debt Securities of any series issued in the
form of one or Global Securities shall no longer be represented
by such Global Security or Securities. In such event the Company
will execute, and the Trustee, upon receipt of a Company Order
for the authentication and delivery of definitive Debt Securities
of such series, will authenticate and deliver, Debt Securities of
such series in definitive form and in an aggregate principal
amount equal to the principal amount of the Global Security or
Securities representing such series in exchange for such Global
Security or Securities.
If specified by the Company pursuant to Section 301
with respect to a series of Debt Securities, the Depositary for
such series of Debt Securities may surrender a Global Security
for such series of Debt Securities in exchange in whole or in
part for Debt Securities of such series of like tenor and terms
and in definitive form on such terms as are acceptable to the
Company and such Depositary. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without
service charge,
(a) to each Person specified by such Depositary a new
Debt Security or Securities of the same series of like tenor and
terms and of any authorized denomination as requested by such
Person in aggregate principal amount equal to and in exchange for
such Person's beneficial interest in the Global Security; and
(b) to such Depositary a new Global Security of like
tenor and terms and in denomination equal to the difference, if
any, between the principal amount of the surrendered Global
Security and the aggregate principal amount of Debt Securities
delivered to Holders thereof.
In any exchange provided for in any of the proceeding
three paragraphs, the Company will execute and the Trustee will
authenticate and deliver Debt Securities (a) in definitive
registered form in authorized denominations if the Debt
Securities of such series are issuable as Registered Security,
(b) in definitive bearer form in authorized denominations, with
<PAGE 32> coupons attached, if the Debt Securities of each such
series are issuable as Bearer Securities or (c) as either
Registered or Bearer Securities, as shall be specified by the
beneficial owner thereof, if the Debt Security of such series are
issuable in either form; provided, however, that no definitive
Bearer Security shall be delivered in exchange for a temporary
Global Security unless the Company or its agent shall have
received from the person entitled to receive the definitive
Bearer Security a certificate substantially in the form set forth
in Exhibit A-1 and, if applicable, A-2 hereto; and provided,
further, that no delivery of a Bearer Security will be issued if
the Company has reason to know that any such certificate is
false.
Upon the exchange of a Global Security for Debt
Securities in definitive form, such Global Security shall be
cancelled by the Trustee. Registered Securities issued in
exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as
the Depositary for such Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Registered
Securities to the persons in whose names such Debt Securities are
so registered. The Trustee shall deliver Bearer Securities
issued in exchange for a Global Security pursuant to this Section
to the persons, and in such authorized denominations, as the
Depositary for such Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall
instruct the Trustee; provided, however, that no definitive
Bearer Security shall be delivered in exchange for a temporary
Global Security unless the Company or its agent shall have
received from the person entitled to receive the definitive
Bearer Security a certificate substantially in the form set forth
in Exhibit A-1 and, if applicable, A-2 hereto; and provided,
further, that delivery of a Bearer Security shall occur only
outside the United States; and provided, further that no
definitive Bearer Security will be issued if the Company has
reason to know that any such certificate is false.
All Debt Securities issued upon any registration of
transfer or exchange for Debt Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Debt
Securities surrendered upon such registration of transfer or
exchange.
Every Registered Security presented or surrendered for
registration of transfer or for exchange shall (if so required by
the Company, the Security Registrar or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to the Company, the Security Registrar and
the Trustee duly executed by the Holder thereof or such Holder's
attorney duly authorized in writing.
<PAGE 33>
No service charge shall be made for any registration of
transfer or exchange of Debt Securities, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any
transfer, registration of transfer or exchange of Debt
Securities, other than exchanges expressly provided in this
Indenture to be made at the Company's own expense or without
expense or without charge to the Holders.
The Company shall not be required (i) to issue,
register the transfer of or exchange Debt Securities of any
particular series to be redeemed or exchanged for Capital
Securities for a period of fifteen days preceding the first
publication of the relevant notice of redemption or, if
Registered Securities are outstanding and there is no
publication, the mailing of the relevant notice of redemption or
exchange, or (ii) to register the transfer of or exchange any
Registered Security so selected for redemption or exchange in
whole or in part, except the unredeemed or unexchanged portion of
such Registered Security being redeemed or exchanged in part, or
(iii) to exchange any Bearer Security so selected for redemption
or exchange except that such a Bearer Security may be exchanged
for a Registered Security of like tenor and terms of that series,
provided that such Registered Security shall be simultaneously
surrendered for redemption or exchange.
Notwithstanding anything herein to the contrary, the
exchange of Bearer Securities into Registered Securities shall be
subject to applicable laws and regulations in effect at the time
of exchange; neither the Company, the Trustee nor the Security
Registrar shall exchange any Bearer Securities into Registered
Securities if it has received an Opinion of Counsel that as a
result of such exchanges the Company would suffer adverse
consequences under the United States federal income tax laws and
regulations then in effect and the Company has delivered to the
Trustee a Company Order directing the Trustee not to make such
exchanges thereafter unless and until the Trustee receives a
subsequent Company Order to the contrary. The Company shall
deliver copies of such Company Orders to the Security Registrar.
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Debt Securities.
If (i) any mutilated Debt Security or a Bearer Security
with a mutilated coupon appertaining to it is surrendered to a
Paying Agent outside the United States designated by the Company,
or, in the case of any Registered Security, to the Trustee, or
(ii) the Company and the Trustee receive evidence to their
satisfaction of the destruction, loss or theft of any Debt
Security or coupon, and there is delivered to the Company and the
Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the
Company and the Trustee that such Debt Security or coupon has
been acquired by a bona fide purchaser, the Company shall execute
<PAGE 34> and upon its written request the Trustee shall
authenticate and deliver, in exchange for any such mutilated Debt
Security or Bearer Security with a mutilated coupon appertaining
to it or to which a destroyed, lost or stolen coupon appertains
(with all appurtenant coupons not destroyed, lost or stolen) or
in lieu of any such number not contemporaneously outstanding,
with coupons corresponding to the coupons, if any, appertaining
to such destroyed, lost or stolen Security or to the Security to
which such destroyed, lost or stolen coupon appertains; provided,
however, that any such new Bearer Security will be delivered only
in compliance with the conditions set forth in Section 305.
In case any such mutilated, destroyed, lost or stolen
Debt Security or coupon has become or is about to become due and
payable, the Company in its discretion may, instead of issuing a
new Debt Security, pay such Debt Security or coupon; provided,
however, that payment of principal of (and premium, if any) and
any interest on Bearer Securities shall, except as otherwise
provided in Section 1002, be payable only at an office or agency
located outside the United States; and provided, further, that,
with respect to any such coupons, interest represented thereby
(but not any additional amounts payable as provided in Section
1006), shall be payable only upon presentation and surrender of
the coupons appertaining thereto.
Upon the issuance of any new Debt Security or coupon
under this Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee and printing expenses)
connected therewith.
Every new Debt Security of any series, with its
coupons, if any, issued pursuant to this Section in lieu of any
destroyed, lost or stolen Debt Security, or in exchange for a
Bearer Security to which a destroyed, lost or stolen coupon
appertains, shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed, lost or
stolen Debt Security and its coupons, if any, or the destroyed,
lost or stolen coupon shall be at any time enforceable by anyone,
and any such new Debt Security and coupons, if any, shall be
entitled to all the benefits of this Indenture equally and
proportionately with any and all other Debt Securities of that
series and their coupons, if any, duly issued hereunder.
The provisions of this Section are exclusive and shall
preclude (to the extent lawful) all other rights and remedies
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Debt Securities or coupons.
SECTION 307. Payment of Interest; Interest Rights
Preserved.
<PAGE 35>
Interest on any Registered Security which is payable,
and is punctually paid or duly provided for, on any Interest
Payment Date shall be paid to the Person in whose name that
Registered Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date
for such interest. In case a Bearer Security of any series is
surrendered in exchange for a Registered Security of such series
after the close of business (at an office or agency in a Place of
Payment for such series) on any Regular Record Date and before
the opening of business (at such office or agency) on the next
succeeding Interest Payment Date, such Bearer Security shall be
surrendered without the coupon relating to such Interest Payment
Date and interest will not be payable on such Interest Payment
Date in respect of the Registered Security issued in exchange for
such Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of this
Indenture. At the option of the Company, payment of interest on
any Registered Security may be made by check in the currency
designated for such payment pursuant to the terms of such
Registered Security mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register or
by wire transfer to an account in such currency designated by
such Person in writing not less than ten days prior to the date
of such payment.
Any interest on any Registered Security of any series
which is payable, but is not punctually paid or duly provided
for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
Holder on the relevant Regular Record Date by virtue of his
having been such Holder; and such Defaulted Interest may be paid
by the Company, at its election in each case, as provided in
Clause (1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Registered Securities of such series (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
Registered Security of such series and the date of the
proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money and/or, to the
extent such Debt Securities are denominated and payable in
Dollars only, Eligible Instruments the payments of principal
and interest on which when due (and without reinvestment and
providing no tax liability will be imposed upon the Trustee
or the Holder of such Registered Securities) will provide
money in such amounts as will (together with any money
irrevocably deposited in trust with the Trustee, without
investments) be equal to the aggregate amount proposed to be
paid in respect of such Defaulted Interest or shall make
<PAGE 36> arrangements satisfactory to the Trustee for such
deposit to the date of the proposed payment, such money
and/or Eligible Instruments when deposited to be held in
trust for the benefit of the Persons entitled to such
Defaulted Interest as in this Clause provided. Thereupon
the Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt
by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company of such Special
Record Date. Unless the Trustee is acting as the Security
Registrar, promptly after such Special Record Date, the
Company shall furnish the Trustee with a list, or shall make
special arrangements satisfactory to the Trustee with
respect thereto, of the names and addresses of, and
principal amounts of Registered Securities of such series
held by, the Holders appearing on the Security Register at
the close of business on such Special Record Date. In the
name and at the expense of the Company, the Trustee shall
cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in
the Security Register, not less than 10 days prior to such
Special Record Date. Notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor
having been mailed as aforesaid, such Defaulted Interest
shall be paid to the Persons in whose names the Registered
Securities of such series (or their respective Predecessor
Securities) are registered at the close of business on such
Special Record Date and shall no longer be payable pursuant
to the following Clause (2). In case a Bearer Security of
any series is surrendered at the office or agency in a Place
of Payment for such series in exchange for a Registered
Security of such series after the close of business at such
office or agency on any Special Record Date and before the
opening of business at such office or agency on the related
proposed date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to
such proposed date of payment and Defaulted Interest will
not be payable on such proposed date of payment in respect
of the Registered Security issued in exchange for such
Bearer Security, but will be payable only to the Holder of
such coupon when due in accordance with the provisions of
this Indenture.
(2) The Company may make payment of any Defaulted
Interest on the Registered Securities of any series in any
other lawful manner not inconsistent with the requirements
of any securities exchange on which the Registered
Securities may be listed, and upon such notice as may be
required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to
<PAGE 37> this Clause, such manner of payment shall be
deemed practicable by the Trustee.
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, which were carried by such other Debt
Security.
Subject to the limitations set forth in Section 1002,
the Holder of any coupon appertaining to a Bearer Security shall
be entitled to receive interest payable on such coupon upon
presentation and surrender of such coupon on or after the
Interest Payment Date of such coupon at an office or agency
maintained for such purpose pursuant to Section 1002.
If any Registered Security is exchanged for Capital
Securities after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Debt Security
whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be
paid by the Company on such Interest Payment Date notwithstanding
such exchange, and such interest (whether or not punctually paid
or duly provided for) shall be paid to the Person in whose name
that Debt Security is registered at the close of business on such
record date.
If any Bearer Security is exchanged for Capital
Securities after any record date and on or prior to the next
succeeding Interest Payment Date (other than any Debt Security
whose Maturity is prior to such Interest Payment Date), interest
whose Stated Maturity is on such Interest Payment Date shall be
payable on such Interest Payment Date notwithstanding such
exchange, and such interest (whether or not punctually paid or
duly provided for) shall be paid by the Company pursuant to such
procedures as may be satisfactory to the Trustee.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Registered Security for
registration of transfer, the Company, the Trustee and any agent
of the Company or of the Trustee may treat the Person in whose
name such Registered Security is registered as the owner of such
Registered Security for the purpose of receiving payment of
principal of (and premium, if any) and (subject to Section 307)
interest on such Registered Security and for all other purposes
whatsoever, whether or not such Registered Security be overdue,
and neither the Company, the Trustee nor any agent of the Company
or the Trustee shall be affected by notice to the contrary.
The Company, the Trustee and any agent of the Company
or the Trustee may treat the bearer of any Bearer Security and
the bearer of any coupon as the absolute owner of such Bearer
<PAGE 38> Security or coupon for the purpose of receiving payment
thereof or on account thereof and for all other purposes
whatsoever, whether or not such Bearer Security or coupon be
overdue, and neither the Company, the Trustee nor any agent of
the Company or the Trustee shall be affected by notice to the
contrary.
None of the Company, the Trustee, any Paying Agent or
the Security Registrar will have any responsibility or liability
for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Global Security or
for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
SECTION 309. Cancellation.
Unless otherwise provided with respect to a series of
Debt Securities, all Debt Securities and coupons surrendered for
payment, redemption, repayment, transfer, exchange or credit
against any sinking fund payment pursuant to this Indenture,
shall, if surrendered to the Company or any agent of the Company,
be delivered to the Trustee and shall be promptly cancelled by
it. The Company may at any time deliver to the Trustee for
cancellation any Debt Securities previously authenticated and
delivered hereunder which the Company may have acquired in any
manner whatsoever, and all Debt Securities so delivered shall be
promptly cancelled by the Trustee. No Debt Securities shall be
authenticated in lieu of or in exchange for any Debt Securities
cancelled as provided in this Section, except as expressly
permitted by this Indenture. All cancelled Debt Securities and
coupons held by the Trustee shall be destroyed and certification
of their destruction delivered to the Company unless by a Company
Order the Company shall direct that the cancelled Debt Securities
or coupons be returned to it.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by
Section 301 for Debt Securities of any series, interest on the
Debt Securities of each series shall be computed on the basis of
a 360-day year of twelve 30-day months.
SECTION 311. Certification by a Person Entitled to
Delivery of a Bearer Security.
Whenever any provision of this Indenture or a Debt
Security contemplates that certification be given by a Person
entitled to delivery of a Bearer Security, such certification
shall be provided substantially in the form of Exhibit A-1 and,
if applicable, A-2 hereto, with only such changes as shall be
approved by the Company and consented to by the Trustee whose
consent shall not unreasonably be withheld.
SECTION 31
The Company may provide, pursuant to Section 301, for
the Debt Securities of any series that, to the fullest extent
possible under applicable law and except as may otherwise be
specified as contemplated in Section 301, (a) the obligation, if
any, of the Company to pay the principal of (and premium, if any)
and interest on the Debt Securities of any series and any
appurtenant coupons in a Foreign Currency, composite currency or
Dollars (the "Designated Currency") as may be specified pursuant
to Section 301 is of the essence and agrees that judgments in
respect of such Debt Securities shall be given in the Designated
Currency; (b) the obligation of the Company to make payments in
the Designated Currency of the principal of (and premium, if any)
and interest on such Debt Securities and any appurtenant coupons
shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the
extent of the amount in the Designated Currency that the Holder
receiving such payment may, in accordance with normal banking
procedures, purchase with the sum paid in such other currency
(after any premium and cost of exchange) in the country of issue
of the Designated Currency in the case of Foreign Currency or
Dollars or in the international banking community in the case of
a composite currency on the Business Day immediately following
the day on which such Holder receives such payment; (c) if the
amount in the Designated Currency that may be so purchased for
any reasons falls short of the amount originally due, the Company
shall pay such additional amounts as may be necessary to
compensate for such shortfall; and (d) any obligation of the
Company not discharged by such payment shall be due as a separate
and independent obligation and, until discharged as provided
herein, shall continue in full force and effect.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall upon Company Request cease to be
of further effect (except as to any surviving rights of
registration of transfer or exchange of Debt Securities herein
expressly provided for and rights to receive payments of
principal and interest thereon and any right to receive
additional amounts, as provided in Section 1006) and the Trustee,
at the expense of the Company, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when
(1) either
(A) all Debt Securities theretofore
authenticated and delivered and all coupons
appertaining thereto (other than (i) coupons
appertaining to Bearer Securities surrendered in
exchange for Registered Securities and maturing after
such exchange, surrender of which is not required or
<PAGE 40> has been waived as provided in Section 305,
(ii) Debt Securities and coupons which have been
destroyed, lost or stolen and which have been replaced
or paid as provided in Section 306, (iii) coupons
appertaining to Bearer Securities called for redemption
or surrendered for repayment and maturing after the
relevant Redemption Date or Repayment Date, as
appropriate, surrender of which has been waived as
provided in Section 1106 or 1303 and (iv) Debt
Securities and coupons for whose payment money and/or
Eligible Instruments have theretofore been deposited in
trust or segregated and held in trust by the Company
and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been
delivered to the Trustee canceled or for cancellation;
or
(B) all such Debt Securities not theretofore
delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at
their Stated Maturity within one year, or
(iii) are to be called for redemption
within one year under arrangements satisfactory to
the Trustee for the giving of notice by the
Trustee in the name, and at the expense, of the
Company.
and the Company, in the case of (B)(i), (B)(ii) or (B)(iii)
above, has irrevocably deposited or caused to be deposited
with the Trustee, as trust funds in trust for the purpose,
money and/or, to the extent such Debt Securities are
denominated and payable in Dollars only, Eligible
Instruments the payments of principal and interest on which
when due (and without reinvestment and providing no tax
liability will be imposed upon the Trustee or the Holders of
Debt Securities) will provide money in such amounts as will
(together with any money irrevocably deposited in trust with
the Trustee, without investment) be sufficient to pay and
discharge the entire indebtedness on such Debt Securities
and coupons of such series for principal (and premium, if
any) and interest, and any mandatory sinking fund, repayment
or analogous payments thereon, on the scheduled due dates
therefor to the date of such deposit (in the case of Debt
Securities and coupons which have become due and payable) or
to the Stated Maturity or Redemption Date, if any, and all
Repayment Dates (in the case of Debt Securities repayable at
the option of the Holders thereof); provided, however, that
in the event a petition for relief under the Bankruptcy
Reform Act of 1978 or a successor statute is filed with
respect to the Company within 91 days after the deposit, the
<PAGE 41> obligations of the Company under the Indenture
with respect to the Debt Securities of such series shall not
be deemed terminated or discharged, and in such event the
Trustee shall be required to return the deposited money and
Eligible Instruments to the Company;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating
that all conditions precedent herein provided for relating
to the satisfaction and discharge of this Indenture have
been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Sections 607
and, if money or Eligible Instruments shall have been deposited
with the Trustee pursuant to Subclause (B) of Clause (1) of this
Section, the obligations of the Trustee under Section 402 and the
last paragraph of Section 1003 shall survive.
SECTION 402. Application of Trust Money and Eligible
Instruments.
Subject to the provisions of the last paragraph of
Section 1003, all money and Eligible Instruments deposited with
the Trustee pursuant to Section 401 shall be held in trust and
such money and the principal and interest received on such
Eligible Instruments shall be applied by it, in accordance with
the provisions of the Debt Securities, the coupons and this
Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as
the Trustee may determine, to the Persons entitled thereto, of
the principal (and premium, if any) and interest for whose
payment such money or Eligible Instruments have been deposited
with the Trustee.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default", wherever used herein with respect
to Debt Securities of any series, means any one of the following
events (whatever the reason for such Event of Default and whether
it shall be voluntary or involuntary or be effected by operation
of law, pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body):
(1) the entry of a decree or order for relief in
respect of the Company or the Bank by a court having
<PAGE 42> jurisdiction in the premises in an involuntary
case under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, or appointing a
receiver, liquidator, assignee, custodian, trustee,
sequestrator (or other similar official) of the Company or
the Bank or of any substantial part of the property of
either, or ordering the winding up or liquidation of the
affairs of either, and the continuance of any such decree or
order unstayed and in effect for a period of 60 consecutive
days; or
(2) the commencement by the Company or the Bank
of a voluntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or other similar
law, or the consent by the Company or the Bank to the entry
of a decree or order for relief in an involuntary case under
any such law or to the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator or
other similar official of either of the foregoing or of any
substantial part of the property of either, or the making by
the Company or the Bank of an assignment for the benefit of
creditors, or the admission by the Company or the Bank in
writing of its inability to pay its debts generally as they
become due, or the taking of corporate action by the Company
or the Bank in furtherance of any such action; or
(3) any other Event of Default, if any, provided
with respect to Debt Securities of such series specified as
contemplated by Section 301.
SECTION 502. Acceleration of Maturity; Rescission and
Annulment.
If an Event of Default with respect to Debt Securities
of any series at the time Outstanding occurs and is continuing,
then and in every such case the Trustee or the Holders of not
less than 25% in principal amount of Outstanding Debt Securities
of such series may declare the principal amount (or, if the Debt
Securities of such series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the
terms of such series) of and all accrued but unpaid interest on
all the Debt Securities of such series to be due and payable
immediately, by a notice in writing to the Company (and to the
Trustee if given by such Holders), and upon any such declaration
such principal amount (or specified amount) shall become
immediately due and payable. Upon payment of such amount, all
obligations of the Company in respect of the payment of principal
of the Debt Securities of such series shall terminate.
At any time after such a declaration of acceleration
with respect to Debt Securities of any series has been made and
before a judgment or decree for payment of the money due has been
<PAGE 43> obtained by the Trustee as hereinafter in this Article
provided, the holders of a majority in principal amount of the
Outstanding Debt Securities of such series, by written notice to
the Company and the Trustee, may rescind and annul such
declaration and its consequences if
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue installments of interest on
all Debt Securities of such series and any related
coupons,
(B) the principal of (and premium, if any,
on) any Debt Securities of such series which have
become due otherwise than by such declaration of
acceleration and interest thereon at the rate or rates
prescribed therefor in such Debt Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue installments
for interest on each Debt Security and any related
coupons at the rate or rates prescribed therefor in
such Debt Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents
and counsel;
and
(2) all Events of Default with respect to Debt
Securities of such series have been cured or waived as
provided in Section 513.
No such rescission shall affect any subsequent default or impair
any right consequent thereon.
SECTION DIE\ Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if:
(1) default is made in the payment of any
installment of interest on any Debt Security or any related
coupon when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the
principal of (or premium, if any, on) any Debt Security at
the Maturity thereof, or
<PAGE 44>
(3) defaults in the deposit of any sinking fund
payment, when and as due by the terms of a Debt Security of
such series, or
(4) defaults in any required designation of funds
as Securities Funds, or
(5) defaults in the performance, or breach, of
any covenant or warranty of the Company in this Indenture
(other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section
specifically dealt with or which has been expressly included
in this Indenture solely for the benefit of series of Debt
Securities other than such series), and such default or
breach continues for a period of 30 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 principal amount of the
Outstanding Debt Securities of such series 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,
the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Debt Securities and coupons, the
amount then due and payable on such Debt Securities and coupons
for any overdue principal (and premium, if any) and interest,
sinking fund installment and interest, including the delivery of
any Capital Securities then required to be delivered, and, to the
extent that payment of such interest shall be legally
enforceable, interest upon the overdue principal (and premium, if
any) and, upon overdue installments of interest, at the rate or
rates prescribed therefor in such Debt Securities; and, in
addition thereto, such further amount as shall be sufficient to
cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel.
If the Company fails to pay such amounts (including the
delivery of any Capital Securities then required to be delivered)
forthwith upon such demand, the Trustee, in its own name and as
trustee of an express trust, may institute a judicial proceeding
for the collection of the sums so due and unpaid and the delivery
of any Capital Securities required to be delivered and not so
delivered, or, in the case of the failure to deliver Capital
Securities, money equal to the principal amount of the Debt
Securities for which the Capital Securities were to be exchanged,
and may prosecute such proceeding to judgment or final decree,
and may enforce the same against the Company or any other obligor
upon such Debt Securities and coupons and collect the moneys (or
money equal to the principal amount of the Debt Securities for
which Capital Securities were to be exchanged) adjudged or
decreed to be payable in the manner provided by law out of the
<PAGE 45> property of the Company or any other obligor upon such
Debt Securities and coupons, wherever situated.
If an Event of Default or a default specified in this
Section will respect to Debt Securities of any series occurs and
is containing, the Trustee may in its discretion proceed to
protect and enforce its rights and the rights of the Holders of
Debt Securities of such series and any related coupons by such
appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein,
or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership,
insolvency, liquidation, bankruptcy, reorganization, arrangement,
adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under the Federal bankruptcy laws
as now or hereafter constituted, relative to the Company or any
other obligor upon the Debt Securities of a particular series or
any related coupons or the property of the Company or of such
other obligor or their creditors, the Trustee (irrespective of
whether the principal of such Debt Securities shall then be due
and payable as therein expressed or by declaration or otherwise
and irrespective of whether the Trustee shall have made any
demand on the Company for the payment of overdue principal or
interest) shall be entitled and empowered, by intervention in
such proceeding or otherwise,
(1) to file and prove a claim for the whole
amount of principal (and premium, if any) and interest owing
and unpaid in respect of the Debt Securities of such series
and any appurtenant coupons and to file such other papers or
documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the
Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any receiver, assignee, trustee, custodian, liquidator,
sequestrator or other similar official in any such proceeding is
hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the
Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts due the Trustee under
Section 607. <PAGE 46>
Nothing herein contained shall be deemed to authorize
the Trustee to authorize or consent to or accept or adopt on
behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Debt Securities or
coupons or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Holder in any such
proceeding.
SECTION 505. Trustee May Enforce Claims without
Possession of Debt Securities or Coupons.
All rights of action and claims under this Indenture or
the Debt Securities or coupons may be prosecuted and enforced by
the Trustee without the possession of any of the Debt Securities
or coupons or the production thereof in any proceeding relating
hereto, and any such proceeding instituted by the Trustee shall
be brought in its own name, as trustee of an express trust, and
any recovery of judgment shall, after provision for the payment
of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Debt Securities and coupons
in respect of which such judgment has been recovered.
SECTION PS\E Application of Money Collected.
Any money collected by the Trustee pursuant to this
Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of
such money on account of principal (and premium, if any) or
interest, upon presentation of the Debt Securities or coupons, or
both, as the case may be, and the notation thereon of the payment
if only partially paid and upon surrender thereof if fully paid:
FIRST: To the Trustee for payment of all costs
and expenses of collection, including all sums paid or
advanced by the Trustee and the reasonable compensation,
expenses and disbursements of the Trustee, its agents and
counsel, and any other amounts due the Trustee under Section
607;
SECOND: To the payment of amounts then due and
unpaid to the holders of Senior Debt, to the extent required
by Article Eighteen;
THIRD: To the payment of the amounts then due and
unpaid for principal of (and premium, if any) and interest
on the Debt Securities and any coupons, in respect of which
or for the benefit of which such money has been collected
ratably, without preference or priority of any kind,
according to the amounts due and payable on such Debt
Securities and any coupons for principal (and premium, if
any) and interest, respectively. The Holders of each series
of Debt Securities denominated in ECU, any other composite
currency or a Foreign Currency and any matured coupons
<PAGE 47> relating thereto shall be entitled to receive a
ratable portion of the amount determined by the Exchange
Rate Agent by converting the principal amount Outstanding of
such series of Debt Securities and matured but unpaid
interest on such series of Debt Securities in the currency
in which such series of Debt Securities is denominated into
Dollars at the Exchange Rate as of the date of declaration
of acceleration of the Maturity of the Debt Securities; and
FOURTH: The balance, if any, to the Person or
Persons entitled thereto.
SECTION 507. Limitation on Suits.
No Holder of any Debt Security of any series or any
related coupons shall have any right to institute any proceeding,
judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written
notice to the Trustee of a continuing Event of Default with
respect to the Debt Securities of such series;
(2) the Holders of not less than 25% in principal
amount of the Outstanding Debt Securities of such series
shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered indemnity
reasonable to the Trustee against the costs, expenses and
liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed to
institute any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee during such 60-day
period by the Holders of a majority in principal amount of
the Outstanding Debt Securities of such series;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by virtue of,
or by availing of, any provision of this Indenture to affect,
disturb or prejudice the rights of any other such Holders, or to
obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture,
except in the manner herein provided and for the equal and
ratable benefit of all of such Holders.
<PAGE 48>
SECTION 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest and to Exchange Debt
Securities for Capital Securities.
Notwithstanding any other provision in this Indenture,
the Holder of any Debt Security or coupon shall have the right
which is absolute and unconditional to receive payment of such
coupon on the respective Stated Maturity or Maturities expressed
in such Debt Security or coupon (or, in the case of redemption,
on the Redemption Date or the Repayment Date, as the case may
be), to have the Debt Securities exchanged for Capital Securities
pursuant to Article Fourteen, if applicable, and to institute
suit for the enforcement of any such payment or exchange, and
such right shall not be impaired without the consent of such
Holder, subject, however, to the provisions of Article Eighteen.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this Indenture
and such proceeding has been discontinued or abandoned for any
reason, or has been determined adversely to the Trustee or to
such Holder, then and in every such case the Company, the Trustee
and the Holders shall, subject to any determination in such
proceeding, be restored severally and respectively to their
former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided in Section 306, no right
or remedy herein conferred upon or reserved to the Trustee or to
the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted
by law, be cumulative and in addition to every other right and
remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of
any Debt Security or coupon to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or
remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
SECTION 512. Control by Holders of Debt Securities.
<PAGE 49>
The Holders of a majority in principal amount of the
Outstanding Debt Securities of any series shall have the right to
direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or exercising any trust
or power conferred on the Trustee with respect to the Debt
Securities of such series, provided, that
(1) such direction shall not be in conflict with
any rule of law or with this Indenture;
(2) subject to the provisions of Section 601, the
Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a
Responsible Officer or Responsible Officers of the Trustee,
determine that the proceeding so directed would be unjustly
prejudicial to the Holders of Debt Securities of such series
not joining in any such direction (it being understood that
the Trustee does not have an affirmative duty to ascertain
whether or not such actions or forbearances are unduly
prejudicial to such Holders); and
(3) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with such
direction.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal
amount of the Outstanding Debt Securities of any series may on
behalf of the Holders of all the Debt Securities of any such
series and any related coupons waive any past default hereunder
with respect to such series and its consequences, except a
default
(1) in the payment of the principal of (or
premium, if any) or interest on any Debt Security of such
series, or
(2) in respect of a covenant or provision hereof
which under Article Nine cannot be modified or amended
without the consent of the Holder of each Outstanding Debt
Security of such series or coupon affected.
Upon any such waiver, such default shall cease to
exist, and any Event of Default arising therefrom shall be deemed
to have been cured, for every purpose of this Indenture; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of
any Debt Security or coupon by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion
<PAGE 50> 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, suffered or omitted by it as
Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted
by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal
amount of the Outstanding Debt Securities of any series, or to
any suit instituted by any Holder for the enforcement of the
payment of the principal of (or premium, if any) or interest on
any Debt Security or the payment of any coupon on or after the
respective Stated Maturity or Maturities expressed in such Debt
Security or coupon (or, in the case of redemption or repayment,
on or after the Redemption Date or Repayment Date, as the case
may be) or for the enforcement of the right to exchange any Debt
Securities for Capital Securities as provided in Article
Fourteen.
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law whenever enacted, now or
at any time hereafter in force, which may affect the covenants or
the performance of this Indenture; and the Company (to the extent
that it may lawfully do so) hereby expressly waives all benefits
or advantage of any such law, and covenants that it will not
hinder, delay or impede the execution of any power herein granted
to the Trustee, but will suffer and permit the execution of every
such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) With respect to Debt Securities of any series,
except during the continuance of an Event of Default with respect
to the Debt Securities of such series,
(1) the Trustee undertakes to perform such duties
as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the
Trustee may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed
<PAGE 51> therein, upon Officers' 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 provisions hereof are specifically
required to be furnished to the Trustee, the Trustee shall
be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture.
(b) In case an Event of Default with respect to Debt
Securities of any series has occurred and is continuing, the
Trustee shall, with respect to the Debt Securities of such series
or any coupons, as the case may be, exercise such of the rights
and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of
such person's own affairs.
(c) No provision of this Indenture shall be construed
to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful
misconduct, except that
(1) this Subsection shall not be construed to
limit the effect of Subsection (a) of this Section.
(2) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer,
unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect
to any action taken, suffered, or omitted to be taken by it
with respect to Debt Securities of any series in good faith
in accordance with the direction of the Holders of a
majority in principal amount of Outstanding Debt Securities
of such series relating to the time, method and place of
conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the
Trustee, under this Indenture with respect to the Debt
Securities of such series.
(d) No provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers, if
it shall have reasonable grounds for believing that repayment of
such funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
(e) Whether or not therein expressly so provided,
every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee
shall be subject to the provisions of this Section.
<PAGE 52>
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default
hereunder with respect to Debt Securities of any series the
Trustee shall transmit by mail to all Holders of Debt Securities
of such series, entitled to receive reports pursuant to Section
703(c), notice of such default hereunder known to the Trustee,
unless such default shall have been cured or waived; provided,
however, that, except in the case of a default in the payment of
the principal of (or premium, if any) or interest on any Debt
Security of such series or any related coupons or in the payment
of any sinking fund installment with respect to Debt Securities
of such series or in the exchange of Capital Securities for Debt
Securities of such series, the Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee or a trust committee of directors and/or
Responsible Officers of the Trustee in good faith determines that
the withholding of such notice is in the interest of the Holders
of Debt Securities of such series. For the purpose of this
Section, the term "default" means any event which is, or after
notice or lapse of time or both would become, an Event of Default
with respect to Debt Securities of such series.
SECTION 603. Certain Rights of Trustee.
Except as otherwise provided in Section 601:
(a) the Trustee may rely and shall be protected in
acting or refraining from acting upon any resolution, Officers'
Certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, coupon
or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned
herein shall be sufficiently evidenced by a Company Request or
Company Order and any resolution of the Board of Directors shall
be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the
advise of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this
<PAGE 53> Indenture at the request or direction of any of the
Holders of Debt Securities of such series or any related coupons
pursuant to this Indenture, unless such Holders shall have
offered security or indemnity reasonable to the Trustee against
the costs, expenses and liabilities which might be incurred by it
in compliance with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note,
coupon, other evidence of indebtedness or other paper or
document, but the Trustee, in its discretion, may make such
further inquiry or investigation into such facts or matters as it
may see fit, and, if the Trustee shall determine to make such
further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by
agent or attorney, other than any such books or records
containing information as to the affairs of the customers of the
Company or any of its subsidiaries; provided that the Trustee may
examine such books and records relating to customers to the
extent that such books and records contain information as to any
payments made to such customers in their capacity as Holders of
Debt Securities; and
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly
or by or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder; no
Exchange Rate Agent, Global Exchange Agent, Capital Exchange
Agent, Depositary or Paying Agent shall be deemed an agent of the
Trustee and the Trustee shall not be responsible for any act or
omission by any of them.
(h) Whenever in the administration of this Indenture
the Trustee shall deem it desirable that a matter be proved or
established prior to taking, suffering or omitting any action
hereunder, or where information is required or necessary to be
furnished by the Company in order for the Trustee to act, the
Trustee (unless other evidence be herein specifically
prescribed), shall not be liable for any action it takes or omits
to take in good faith in reliance upon an Officer's Certificate;
(i) The Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenants,
conditions or agreements on the part of the Company, except as
otherwise specifically set forth in this Indenture, but the
Trustee may require of the Company full information and advice as
to the performance of the covenants, conditions and agreements
contained herein and should be entitled in connection therewith
to examine the books, records and premises of the Company;
provided, however, the Trustee agrees to maintain the
confidentiality of any nonpublic information relating to the
<PAGE 54> Company obtained by the Trustee in its capacity as
Trustee and not to reveal any such confidential information
except as necessary to comply with any court order or discovery
request; and further provided that the Trustee shall give prompt
notice to the Company of any such court order or discovery
request received by the Trustee;
(j) The permissive rights of the Trustee to do things
enumerated in this Indenture shall not be construed as a duty;
(k) Except for (i) the failure of the Company to file
any financial statements, documents or certificates specifically
required to be filed with the Trustee pursuant to the provisions
of this Indenture or (ii) any other event of which the Trustee
has "actual knowledge" and which event, with the giving of notice
or the passage of time or both, would constitute an Event of
Default under this Indenture, the Trustee shall not be deemed to
have notice of any default or event unless specifically notified
in writing by the Company or the Holders of not less than 25% in
aggregate principal amount of the Debt Securities Outstanding; as
used herein, the term "actual knowledge" means the actual fact of
knowing, without a duty to make any investigation with regard
thereto; and
(l) The Trustee shall not be required to give any note
or surety in respect of the execution of the trusts and powers
under this Indenture.
SECTION 604. Not Responsible for Recitals or Issuance
of Debt Securities.
The recitals contained herein and in the Debt
Securities, except the Trustee's certificates of authentication,
and in any coupons, and the information in any registration
statement, including all attachments thereto, except information
provided by the Trustee therein, shall be taken as the statements
of the Company, and the Trustee assumes no responsibility for
this correctness. The Trustee makes no representations as to the
validity or sufficiency of this Indenture or of the Debt
Securities of any series or any coupons or any Capital
Securities. The Trustee shall not be accountable for the use or
application by the Company of any Debt Securities or the proceeds
thereof. The Trustee shall not be responsible for and makes no
representations to the Company's ability or authority to issue
Bearer Securities or the lawfulness thereof.
SECTION 605. May Hold Debt Securities or Coupons.
The Trustee, any Paying Agent, the Security Registrar
or any other agent of the Company or the Trustee, in its
individual or any other capacity, may become the owner or pledgee
of Debt Securities and coupons, and, subject to Sections 608 and
613, may otherwise deal with the Company with the same rights it
<PAGE 55> would have if it were not Trustee, Paying Agent,
Security Registrar or such agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in trust
hereunder need not be segregated from other funds except to the
extent required by law. Neither the Trustee nor any Paying Agent
shall be under any liability for interest on any money received
by it hereunder except as otherwise agreed with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time
reasonable compensation for all services rendered by it
hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee
of an express trust);
(2) except as otherwise expressly provided
herein, to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the
expenses and disbursements of its agents and counsel),
except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct; and
(3) to indemnify the Trustee for, and to hold it
harmless against, any loss, liability or expense incurred
without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or
administration of this trust or performance of its duties
hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties
hereunder.
As security for the performance of the obligations of
the Company under this Section the Trustee shall have a claim
prior to the Debt Securities and any coupons upon all property
and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of (and premium, if
any) or interest on particular Debt Securities or any coupons.
The claims of the Trustee under this Section shall not be subject
to the provisions or Article Eighteen.
When the Trustee incurs expenses or renders services in
connection with an Event of Default specified in Article Five,
the expenses (including reasonable fees and expenses of its
counsel) and the compensation for the services in connection
<PAGE 56> therewith are intended to constitute expenses of
administration under Bankruptcy Law.
SECTION 608. Disqualification.
This Indenture shall always have a Trustee who
satisfies the requirements of Section 310(a)(1) of the Trust
Indenture Act. The Trustee is subject to Section 310(b) of the
Trust Indenture Act.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which
shall be a corporation organized and doing business under the
laws of the United States, any State thereof or the District of
Columbia, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least
$5,000,000, and subject to supervision or examination by Federal
or State authority; provided, however, that if Section 310(a) of
the Trust Indenture Act or the rules and regulations of the
Commission under the Trust Indenture Act at any time permit a
corporation organized and doing business under the laws of any
other jurisdiction to serve as trustee of an indenture qualified
under the Trust Indenture Act, this Section 609 shall be
automatically amended to permit a corporation organized and doing
business under the laws of any such other jurisdiction to serve
as Trustee hereunder. 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, 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. Neither the Company nor any person
directly or indirectly controlling, controlled by or under common
control with the Company may serve as Trustee. If at any time
the Trustee shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the
manner and with the effect hereinafter specified in this Article.
SECTION 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall
become effective until the acceptance of appointment by the
successor Trustee under Section 611.
(b) The Trustee may resign at any time with respect to
the Debt Securities of one or more series by giving written
notice thereof to the Company. If an instrument of acceptance by
a successor Trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignation,
the resigning Trustee may petition any court of competent
<PAGE 57> jurisdiction for the appointment of a successor Trustee
with respect to the Debt Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Debt Securities of any series by Act of the
Holders of a majority in principal amount of the Outstanding Debt
Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time:
(1) the Trustee shall cease to be eligible under
Section 609 with respect to any series of Debt Securities
and shall fail to resign after written request therefor by
the Company or by any such Holder, or
(2) the Trustee shall become incapable of acting
with respect to any series of Debt Securities or a decree or
order for relief by a court having jurisdiction in the
premises shall have been entered in respect of the Trustee
in an involuntary case under the Federal bankruptcy laws, as
now or hereafter constituted, or any other applicable
Federal or State bankruptcy, insolvency or similar law; or a
decree or order by a court having jurisdiction in the
premises shall have been entered for the appointment of a
receiver, custodian, liquidator, assignee, trustee,
sequestrator or other similar official of the Trustee or of
its property or affairs, or any public officer shall take
charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation,
winding up or liquidation, or
(3) the Trustee shall commence a voluntary case
under the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State
bankruptcy, insolvency or similar law or shall consent to
the appointment of or taking possession by a receiver,
custodian, liquidator, assignee, trustee, sequestrator or
other similar official of the Trustee or its property or
affairs, or shall make an assignment for the benefit of
creditors, or shall admit in writing its inability to pay
its debts generally as they become due, or shall take
corporate action in furtherance of any such action,
then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to such series or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a Debt
Security of any series 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 for the
Debt Securities of such series and the appointment of a successor
Trustee.
<PAGE 58>
(e) If the Trustee shall resign, be removed or become
incapable of acting with respect to any series of Debt
Securities, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Debt Securities or one or more
series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the Debt
Securities of that or those series (it being understood that any
such successor Trustee may be appointed with respect to the Debt
Securities of one or more or all of such series and that at any
time there shall be only one Trustee with respect to the Debt
Securities of any particular series) and shall comply with the
applicable requirements of Section 611. If, within one year
after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect to
the Debt Securities of any series shall be appointed by Act of
the Holders of a majority in principal amount of the Outstanding
Debt Securities of such series delivered to the Company and the
retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the
successor Trustee with respect to the Debt Securities of such
series and to that extent supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect
to the Debt Securities of any series shall have been so appointed
by the Company or the Holders and accepted anointment in the
manner hereinafter provided, any Holder who has been a bona fide
Holder of a Debt Security of such series for at least six months
may, subject to Section 514, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the appointment of a successor Trustee with respect to the
Debt Securities of such series.
(f) The Company shall give notice of each resignation
and each removal of the Trustee with respect to the Debt
Securities of any series and each appointment of a successor
Trustee with respect to the Debt Securities of any series by
mailing written notice of such event by first-class mail, postage
prepaid, to the Holders of Registered Securities, if any, of such
series as their names and addresses appear in the Security
Register and, if Debt Securities of such series are issuable as
Bearer Securities, by publishing notice of such event once in an
Authorized Newspaper in each Place of Payment located outside the
United States. Each notice shall include the name of the
successor Trustee with respect to the Debt Securities of such
series and the address of its Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In the case of an appointment hereunder of a
successor Trustee with respect to all Debt Securities, every such
successor Trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor Trustee, without any further act, deed or conveyance,
<PAGE 59> shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the
Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer
and deliver to such successor Trustee all property and money held
by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Debt Securities of one or
more (but not all) series, the Company, the retiring Trustee upon
payment of its charges, and each successor Trustee with respect
to the Debt Securities of one or more series shall execute and
deliver an indenture supplemental hereto wherein each successor
Trustee shall accept such appointment and which (1) shall contain
such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Debt Securities of that or those series to which
the appointment of such successor Trustee relates, (2) if the
retiring Trustee is not retiring with respect to all Debt
Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee; and upon the execution and delivery of such supplemental
indenture, the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each
such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Debt Securities of that or those series to which the appointment
of such successor Trustee relates; but, on the request of the
Company or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder with
respect to the Debt Securities of that or those series to which
the appointment of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the
Company shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor Trustee all
such rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be. <PAGE 60>
(d) No successor Trustee shall accept its appointment
unless at the time of such acceptance such successor Trustee
shall be qualified and eligible under this Article.
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor
of the Trustee hereunder, provided such corporation shall be
otherwise qualified and eligible under this Article, without the
executing or filing of any paper or any further act on the part
of any of the parties hereto. In case any Debt Securities shall
have been authenticated, but not delivered, by the Trustee then
in office, any successor by merger, conversion or consolidation
to such authenticating Trustee may adopt such authentication and
deliver the Debt Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Debt
Securities. In case any Debt Securities shall not have been
authenticated by such predecessor Trustee, any such successor
Trustee may authenticate and deliver such Debt Securities, in
either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the
certificate of authentication of the Trustee.
SECTION 613. Preferential Collection of Claims
Against Company.
(a) Subject to Subsection (b) of this Section, if the
Trustee shall be or shall become a creditor, directly or
indirectly, secured or unsecured, of the Company within three
months prior to a default, as defined in Subsection (c) of this
Section, or subsequent to such a default, then, unless and until
such default shall be cured, the Trustee shall set apart and hold
in a special account for the benefit of the Trustee individually,
the Holders of the Debt Securities and coupons and the holders of
other indenture securities (as defined in Subsection (c) of this
Section):
(1) an amount equal to any and all reductions in
the amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the
beginning of such three-month period and valid as against
the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this Subsection, or
from the exercise of any right of set-off which the Trustee
could have exercised if a voluntary or involuntary case had
been commenced in respect of the Company under the Federal
bankruptcy laws, as now or hereafter constituted, or any
<PAGE 61> other applicable Federal or State bankruptcy,
insolvency or other similar law upon the date of such
default; and
(2) all property received by the Trustee in
respect of any claims as such creditor, either as security
therefor, or in satisfaction or composition thereof, or
otherwise, after the beginning of such three-month period,
or an amount equal to the proceeds of any such property, if
disposed of, subject, however, to the rights, if any, of the
Company and its other creditors in such property or such
proceeds.
Nothing herein contained, however, shall affect the right of the
Trustee:
(A) to retain for its own account
(i) payments made on account of any such claim by any
Person (other than the Company) who is liable thereon,
and (ii) the proceeds of the bona fide sale of any such
claim by the Trustee to a third Person, and
(iii) distributions made in cash, securities or other
property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal bankruptcy laws,
as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or
other similar law;
(B) to realize, for its own account, upon
any property held by it as security for any such claim
if such property was so held prior to the beginning of
such three-month period;
(C) to realize, for its own account, but
only to the extent of the claim hereinafter mentioned,
upon any property held by it as security for any such
claim, if such claim was created after the beginning of
such three-month period and such property was received
as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of
proving that at the time such property was so received
the Trustee had no reasonable cause to believe that a
default as defined in Subsection (c) of this Section
would occur within three months; or
(D) to receive payment on any claim referred
to in paragraph (B) or (C), against the release of any
property held as security for such claim as provided in
paragraph (B) or (C), as the case may be, to the extent
of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D),
property substituted after the beginning of such three-month
<PAGE 62> period for property held as security at the time of
such substitution shall, to the extent of the fair value of the
property released, have the same status as the property released,
and, to the extent that any claim referred to in any of such
paragraphs is created in renewal of or in substitution for or for
the purpose of repaying or refunding any pre-existing claim of
the Trustee as such creditor, such claim shall have the same
status as such pre-existing claim.
If the Trustee shall be required to account, the funds
and property held in such special account and the proceeds
thereof shall be apportioned among the Trustee, the Holders and
the holders of other indenture securities in such manner that the
Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal bankruptcy laws, as now or
hereafter constituted, or any other applicable Federal or State
bankruptcy, insolvency or other similar law, the same percentage
of their respective claims, figured before crediting to the claim
of the Trustee anything on account of the receipt by it from the
Company of the funds and property in such special account and
before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends
on claims filed against the Company in bankruptcy or receivership
or in proceedings for reorganization pursuant to the Federal
bankruptcy laws, as now or hereafter constituted, or any other
applicable Federal or State bankruptcy, insolvency or other
similar law, but after crediting thereon receipts on account of
the indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and
property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in
bankruptcy or receivership or proceedings for reorganization
pursuant to the Federal bankruptcy laws, as now or hereafter
constituted, or any other applicable Federal or State bankruptcy,
insolvency or other similar law, whether such distribution is
made in cash, securities, or other property, but shall not
include any such distribution with respect to the secured
portion, if any, of such claim. The court in which such
bankruptcy, receivership or proceedings for reorganization is
pending shall have jurisdiction (i) to apportion among the
Trustee and the Holders and the holders of other indenture
securities, in accordance with the provisions of this paragraph,
the funds and property held in such special account and proceeds
thereof, or (ii) in lieu of such apportionment, in whole or in
part, to give to the provisions of this paragraph due
consideration in determining the fairness of the distributions to
be made to the Trustee and the Holders and the holders of other
indenture securities with respect to their respective claims, in
which event it shall not be necessary to liquidate or to appraise
the value of any securities or other property held in such
<PAGE 63> special account or as security for any such claim, or
to make a specific allocation of such distributions as between
the secured and unsecured portions of such claims, or otherwise
to apply the provisions of this paragraph as a mathematical
formula.
Any Trustee which has resigned or been removed after
the beginning of such three-month period shall be subject to the
provisions of this Subsection as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three-month period, it
shall be subject to the provisions of this Subsection if and only
if the following conditions exist:
(i) the receipt of property or reduction of
claim, which would have given rise to the obligation to
account, if such Trustee had continued as Trustee, occurred
after the beginning of such three-month period; and
(ii) such receipt of property or reduction of
claim occurred within three months after such resignation or
removal.
(b) There shall be excluded from the operation of
Subsection (a) of this Section a creditor relationship arising
from
(1) the ownership or acquisition of securities
issued under any indenture, or any security or securities
having a maturity of one year or more at the time of
acquisition by the Trustee;
(2) advances authorized by a receivership or
bankruptcy court of competent jurisdiction or by this
Indenture, for the purpose of preserving any property which
shall at any time be subject to the lien of this Indenture
or of discharging tax liens or other prior liens or
encumbrances thereon, if notice of such advances and of the
circumstances surrounding the making thereof is given to the
Holders at the time and in the manner provided in this
Indenture;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of
services rendered or premises rented; or an indebtedness
created as a result of goods or securities sold in a cash
transaction as defined in Subsection (c) of this Section;
(5) the ownership of stock or of other securities
of a corporation organized under the provisions of
<PAGE 64> Section 25(a) of the Federal Reserve Act, as
amended, which is directly or indirectly a creditor of the
Company; or
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of self-
liquidating paper as defined in Subsection (c) of this
Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make
payment in full of the principal of or interest on any of
the Debt Securities or upon the other indenture securities
when and as such principal or interest becomes due and
payable.
(2) The term "other indenture securities" means
securities upon which the Company is an obligor outstanding
under any other indenture (i) under which the Trustee is
also trustee, (ii) which contains provisions substantially
similar to the provisions of this Section, and (iii) under
which a default exists at the time of the apportionment of
the funds and property held in such special account.
(3) The term "cash transaction" means any
transaction in which full payment for goods or securities
sold is made seven days after delivery of the goods or
securities in currency or in checks or other orders drawn
upon banks and payable upon demand.
(4) The term "self-liquidating paper" means any
draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing,
manufacturing, shipment, storage or sale of goods, wares or
merchandise and which is secured by documents evidencing
title to, possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
constituting the security, provided the security is received
by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
(5) The term "Company" means any obligor upon the
Debt Securities.
SECTION 614. Authenticating Agent.
The Trustee shall upon Company request appoint one or
more authenticating agents (including, without limitation, the
<PAGE 65> Company or any Affiliate thereof) with respect to one
or more series of Debt Securities which shall be authorized on
behalf of the Trustee in authenticating Debt Securities of such
series in connection with the issue, delivery, registration of
transfer, exchange, partial redemption or repayment of such Debt
Securities. Wherever reference is made in this Indenture to the
authentication on behalf of the Trustee by the Trustee or the
Trustee's certificate of authentication, such reference shall be
deemed to include authentication on behalf of the Trustee by an
authenticating agent and a certificate of authentication executed
on behalf of the Trustee by an authenticating agent. Each
authenticating agent must be acceptable to the Company and must
be a corporation organized and doing business under the laws of
the United States or of any State, having a principal office in
the Commonwealth of Pennsylvania or the Borough of Manhattan, The
City of New York, having a combined capital surplus of at least
$1,000,000, authorized under such laws to do a trust business and
subject to supervision or examination by Federal or State
authorities or the equivalent foreign authority in the case of an
authenticating agent who is not organized and doing business
under the laws of the United States or of any State thereof or
the District of Columbia.
Any corporation succeeding to the corporate agency
business of an authenticating agent shall continue to be an
authenticating agent without the execution or filing of any paper
or any further act on the part of the Trustee or such
authenticating agent.
An authenticating agent may at any time resign with
respect to one or more series of Debt Securities by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time terminate the agency of an
authenticating agent with respect to one or more series of 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 an authenticating agent shall cease to be eligible in
accordance with the provisions of this Section, the Trustee
promptly may appoint a successor authenticating agent. Any
successor authenticating agent upon acceptance of its appointment
hereunder shall become vested with all rights, powers and duties
of its predecessor hereunder, with like effect as if originally
named as an authenticating agent herein. No successor
authenticating agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each authenticating agent
from time to time reasonable compensation for its services under
this Section, subject to the provisions of Section 607.
The provisions of Sections 104, 111, 306, 309, 603, 604
and 605 shall be applicable to any authenticating agent.
<PAGE 66>
Pursuant to each appointment made under this Section,
the Debt Securities of each series covered by such appointment
may have endorsed thereon, in lieu of the Trustee's certificate
of authentication, an alternate certificate of authentication in
substantially the following form:
This is one of the Debt Securities, of the series
designated herein, described in the within-mentioned Indenture.
HARRIS TRUST AND SAVINGS BANK
By_________________________________
As Authenticating Agent for
the Trustee
By_________________________________
Authorized Signatory
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and
Addresses of Holders.
The Company will furnish or cause to be furnished to
the Trustee with respect to Debt Securities of each series for
which it acts as Trustee:
(1) semi-annually, not more than 15 days after
the Regular Record Date in respect of the Debt Securities of
such series or on June 30 and December 31 of each year with
respect to each series of Debt Securities for which there
are no Regular Record Dates, a list, in such form as the
Trustee may reasonably require, of the names and addresses
of the Holders of Registered Securities as of such Regular
Record Date or June 15 or December 15, as the case may be,
and
(2) 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.
provided, however, that if and so long as the Trustee shall be
the Security Registrar, no such list need be furnished.
SECTION 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a form
as is reasonably practicable, the names and addresses of Holders
of Registered Securities contained in the most recent list
<PAGE 67> furnished to the Trustee as provided in Section 701 and
the names and addresses of Holders of Registered Securities
received by the Trustee in its capacity as Paying Agent or
Security Registrar,if so acting. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a
new list so furnished. The Trustee shall preserve for at least
two years the names and addresses of Holders of Bearer Securities
filed with the Trustee pursuant to Section 703(c).
(b) If three or more Holders of Debt Securities of any
series (hereinafter referred to as "applicants") apply in writing
to the Trustee, and furnish to the Trustee 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 of such series (in which case
the applicants must hold Debt Securities of such series) or with
all Holders of Debt Securities with respect to their rights under
this Indenture or under the 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
(i) afford such applicants access to the
information preserved at the time by the Trustee in
accordance with Section 702(a), or
(ii) inform such applicants as to the approximate
number of Holders of Debt Securities of such series or of
all Debt Securities, as the case may be, whose names and
addresses appear in the information preserved at the time by
the Trustee in accordance with Section 702(a), and as to the
approximate time of mailing to such Holders 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 Holder whose
name and address appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), 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 Commission, 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 or would be in
violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after
opportunity for a hearing upon the objections specified in the
<PAGE 68> 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, the
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 Holders 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 applications.
(c) Every Holder of Debt Securities or coupons, by
receiving and holding the same, agrees with the Company and the
Trustee that neither the Company nor the Trustee shall be held
accountable by reason of the disclosure of any such information
as to the names and addresses of the Holders in accordance with
Section 702(b), 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 Section 702(b).
SECTION 703. Reports by Trustee.
(a) Within 60 days after May 15 of each year
commencing with the year 1994, the Trustee shall transmit by mail
to all Holders of Debt Securities of any series with respect to
which it acts as Trustee, as provided in Subsection (c) of this
Section, a brief report dated as of such May 15 with respect to
any of the following events which may have occurred within the
previous twelve months (but if no such event has occurred within
such period, no report need be transmitted):
(1) any change to its eligibility under
Section 609 and its qualifications under Section 608;
(2) the character and amount of any advances (and
if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as
such)which remain unpaid on the date of such report, and for
the reimbursement of which it claims or may claim a lien or
charge, prior to that of the Debt Securities of such series
or any related coupons, on any property or funds held or
collected by it as Trustee, except that the Trustee shall
not be required (but may elect) to report such advances if
such advances so remaining unpaid aggregate not more than
1/2% of the principal amount of the Outstanding Debt
Securities of such series on the date of such report;
(3) the amount, interest rate and maturity date
of all other indebtedness owing by the Company (or any other
obligor on the Debt Securities of such series) to the
Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as
collateral security therefor, except an indebtedness based
<PAGE 69> upon a creditor relationship arising in any manner
described in Section 613(b)(2), (3), (4) or (6);
(4) any change to the property and funds, if any,
physically in the possession of the Trustee as such on the
date of such report;
(5) any additional issue of Debt Securities which
the Trustee has not previously reported; and
(6) any action taken by the Trustee in the
performance of its duties hereunder which it has not
previously reported and which in its opinion materially
affects the Debt Securities, except action in respect of a
default, notice of which has been or is to be withheld by
the Trustee in accordance with Section 602;
provided, however, that if the Trust Indenture Act is amended
subsequent to the date hereof to eliminate the requirement of the
Trustee's brief report, the report required by this Section need
not be transmitted to any Holders.
(b) The Trustee shall transmit by mail to all Holders
of Debt Securities of any series for which it acts as the
Trustee, as provided in Subsection (c) of this Section, a brief
report with respect to the character and amount of any advances
(and if the Trustee elects so to state, the circumstances
surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to
Subsection (a) of this Section (or if no such report has yet been
so transmitted, since the date of execution of this instrument)
for the reimbursement of which it claims or may claim a right or
charge, prior to that of the Debt Securities of such series, on
property or funds held or collected by it as Trustee, and which
it has not previously reported pursuant to this Subsection,
except that the Trustee for each series shall not be required
(but may elect) to report such advances if such advances
remaining unpaid at any time aggregate 10% or less of the
principal amount of the Debt Securities of such series
Outstanding at such time, such report to be transmitted within
90 days after such time.
(c) Reports pursuant to this Section shall be
transmitted by mail:
(1) to all Holders of Registered Securities, as
the names and addresses of such Holders appear in the
Security Register;
(2) to such Holders of Bearer Securities as have,
within the two years preceding such transmissions, filed
their names and addresses with the Trustee for that purpose;
and
<PAGE 70>
(3) except in the case of reports pursuant to
Subsection (b) of this Section, to each Holder of a Debt
Security whose name and address is preserved at the time by
the Trustee, as provided in Section 702(a).
(d) A copy of each such report shall, at the time of
such transmission to Holders, be filed by the Trustee with each
stock exchange upon which any Debt Securities of such series are
listed, with the Commission and also with the Company. The
Company will notify the Trustee when any series of Debt
Securities are listed on any stock exchange.
SECTION 704. Reports by Company.
The Company will:
(a) file with the Trustee, within 15 days after the
Company is required to file the same with the Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
the Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to
either of said Sections, then it will file with the Trustee and
the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports
which may be required pursuant to Section 13 of the Securities
Exchange Act of 1934 in respect of a security listed and
registered on a National Securities Exchange as may be prescribed
from time to time in such rules and regulations;
(b) file with the Trustee and the Commission, in
accordance with rules and regulations prescribed from time to
time by the Commission, such additional information, documents
and reports with respect to compliance by the Company with the
conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations; and
(c) transmit by mail to all Holders of Debt
Securities, in the manner and to the extent provided in
Section 703(c) with respect to reports pursuant to
Section 703(a), within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports
required to be filed by the Company pursuant to paragraphs (1)
and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
<PAGE 71>
SECTION 801. Company May Consolidate, etc., Only on
Certain Terms.
The Company shall not consolidate with or merge into
any other corporation or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, unless:
(a) the corporation formed by such consolidation or
into which the Company is merged or the Person which acquires by
conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety shall be a
corporation organized and existing under the laws of the United
States of America, any political subdivision thereof or any State
thereof and shall expressly assume, by an indenture supplemental
hereto, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the
principal of (and premium, if any) and interest (including all
additional amounts, if any, payable pursuant to Section 1006) on
all the Debt Securities and any related coupons and the
performance of every covenant of this Indenture on the part of
the Company to be performed or observed;
(b) immediately after giving effect to such
transaction, no Event of Default, and no event which, after
notice or lapse of time, or both, would become an Event of
Default, shall have happened and be continuing;
(c) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel each stating that
such consolidation, merger, conveyance, transfer or lease and,
such supplemental indenture comply with this Article and that all
conditions precedent herein provided for relating to such
transaction have been met.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation with or merger into any other
corporation, or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety
in accordance with Section 801, the successor corporation formed
by such consolidation or into which the Company is merged or to
which such conveyance, transfer or lease is made shall succeed
to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect
as if such successor had been named as the Company herein, and
thereafter, except in the case of a lease, the Company (which
term for this purpose shall mean the Person named as the
"Company" in the first paragraph of this instrument or any
successor corporation which shall theretofore have become such in
the manner presented in this Article) shall be relieved of all
obligations and covenants under this Indenture and the Debt
Securities and coupons.
ARTICLE NINE <PAGE 72>
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures without Consent
of Holders.
Without the consent of any Holders, the Company, when
authorized by a Board Resolution, and the Trustee, at any time
and from time to time, may enter onto one or more indentures
supplemental hereto, in form satisfactory to the Trustee, for any
of the following purposes:
PS\ to evidence the succession of another
corporation to the Company, and the assumption by such
successor of the covenants of the Company herein and in the
Debt Securities contained; or
(2) to add to the covenants of the Company, for
the benefit of the Holders of all or any series of Debt
Securities or coupons (and if such covenants are to be for
the benefit of less than all series of Debt Securities, or
coupons stating that such covenants are expressly being
included solely for the benefit of such series), to convey,
transfer, assign, mortgage or pledge any property to or with
the Trustee, or to surrender any right or power herein
conferred upon the Company; or
(3) to add to any additional Events of Default
(and if such Events of Default are to be applicable to less
than all series of Debt Securities, stating that such Events
of Default are expressly being included solely to be
applicable to such series); or
(4) to add to, change or eliminate any of the
provisions of this Indenture to provide that Bearer
Securities may be registrable as to principal, to change or
eliminate any restrictions on the payment of principal (or
premium, if any) on Registered Securities or of principal
(or premium, if any) or any interest on Bearer Securities,
to permit Bearer Securities to be issued in exchange for
Registered Securities, to permit Bearer Securities to be
issued in exchange for Bearer Securities of other authorized
denominations or to permit or facilitate the issuance of
Debt Securities in uncertificated form, provided any such
action shall not adversely affect the interests of the
Holders of Debt Securities of any series or any related
coupons in any material respect; or
(5 of this Indenture, provided that any such
change or
elimination (a) shall become effective only when there is no
Debt Security Outstanding of any series created prior to the
execution of such supplemental indenture which is entitled
to the benefit of such provision or (b) shall not apply to
any Debt Security Outstanding; or <PAGE 73>
(6) to establish the form or terms of Debt
Securities of any series as permitted by Sections 201 and
301; or
(7) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with respect to
the Debt Securities of one or more series and to add to or
change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to
the requirements of Section 611(b); or
(8) to evidence any changes to Section 608, 609
or 703(a) permitted by the terms thereof; or
(9) to cure any ambiguity, to correct or
supplement any provision herein which may be defective or
inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions
arising under this Indenture which shall not be inconsistent
with any provision of this Indenture, provided such other
provisions shall not adversely affect the interests of the
Holders of Debt Securities of any series or any related
coupons in any material respect; or
(10) to add to or change or eliminate any
provision of this Indenture as shall be necessary or
desirable in accordance with any amendments to the Trust
Indenture Act, provided such action shall not adversely
affect the interest of Holders of the Debt Securities of any
series or any appurtenant coupons in any material respect.
SECTION 902. Supplemental Indentures with Consent of
Holders.
With the consent of the Holders of not less than
66-2/3% in principal amount of the Outstanding Debt Securities of
each series affected by such supplemental indenture, by Act of
said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee
may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this
Indenture of such Debt Securities of such series and any related
coupons; provided, however, that an indenture supplemental hereto
which changes the required ownership set forth in the definition
of Controlled Subsidiary in Section 101 hereof from 80% to a
majority but does not change any other provision of this
Indenture or modify in any other manner the rights of the Holders
of all the Debt Securities under this Indenture may be entered
into with the consent of the Holders of at least a majority in
principal amount of the Outstanding Debt Securities of each
series; and provided, further, that no such supplemental
<PAGE 74> indenture shall, without the consent of the Holder of
each Outstanding Debt Security or coupon affected thereby,
(1) change the Stated Maturity of the principal
or any installment of principal of, or any installment of
interest on, any Debt Security, or reduce the principal
amount thereof or the interest hereon or any premium payable
upon redemption or repayment thereof, or change any
obligation of the Company to pay additional amounts pursuant
to Section 1006 (except as contemplated by Section 801(1)
and permitted by Section 901(1)), or reduce the amount of
the principal of an Original Issue Discount Security that
would be due and payable upon a declaration of acceleration
of the Maturity thereof pursuant to Section 502, or change
any Place of Payment, or the coin or currency in which any
Debt Security or the interest thereon or any coupon is
payable, or impair any right to the delivery of Capital
Securities in exchange for Debt Securities provided for in
this Indenture or the right to institute suit for the
enforcement of any such payment or delivery on or after the
Stated Maturity thereof (or, in the case of redemption,
repayment or exchange, on or after the Redemption Date,
Repayment Date or Capital Exchange Date, as the case may
be); or
(2) reduce the percentage in principal amount of
the Outstanding Debt Securities of any series, the consent
of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for
any waiver (or compliance with certain provisions of this
Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture, or reduce the
requirements of Section 1604 for quorum or voting; or
(3) modify any of the provisions of this Section,
Section 513 or Section 1007, except to increase any such
percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Debt Security
affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 1007, or the
deletion of this provision, in accordance with the
requirements of Section 611(b) and 901(7); or
(4) adversely affect the right to repayment, if
any, of Debt Securities of any series at the option of the
Holders thereof; or
(5) impair the right of any Holder of Debt
Securities of any series to receive Capital Securities on
any Capital Exchange Date for Debt Securities of such series
with a Market Value equal to the principal amount of such
<PAGE 75> Holder's Debt Securities of such series or in an
amount sufficient to provide proceeds upon sale by the
Company in the Secondary Offering equal to the principal
amount of such Holder's Debt Securities of such series; or
(6) impair the right of any Holder of Convertible
Securities of any series to convert such Debt Securities
pursuant to Article Nineteen;
and provided, further, that no change shall be made in the
provisions of Article Eighteen that will affect adversely the
holders of Senior Debt without the consent of the holders of all
Senior Debt Outstanding.
A supplemental indenture which changes or eliminates
any covenant or other provision of this Indenture which has
expressly been included solely for the benefit of one or more
particular series of Debt Securities, or which modifies the
rights of the Holders of Debt Securities of such series with
respect to such covenant or other provision, shall be deemed not
to affect the rights under this Indenture of the Holders of Debt
Securities of any other series.
It shall not be necessary for any Act of Holders of the
Debt Securities under this Section to approve the particular form
of any proposed supplemental indenture, but it shall be
sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this Article
or the modifications thereby of the trust created by this
Indenture, the Trustee shall be entitled to receive, and (subject
to Section 601) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this
Indenture. The Trustee may, but shall not be obligated to, enter
into any such supplemental indenture which affects the Trustee's
own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under
this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Debt
Securities theretofore or thereafter authenticated and delivered
hereunder and of any coupons appertaining thereto shall be bound
thereby.
SECTION 905. Conformity with Trust Indenture Act.
<PAGE 76>
Every supplemental indenture executed pursuant to this
Article shall conform to the requirements of the Trust Indenture
Act as then in effect.
SECTION 906. Reference in Debt Securities to
Supplemental Indenture.
Debt Securities of any series authenticated and
delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the
Company shall so determine, new Debt Securities of any series and
any appurtenant coupons so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any such
supplemental indenture may be prepared and executed by the
Company and authenticated and delivered by the Trustee in
exchange for Outstanding Debt Securities of such series and any
appurtenant coupons.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and
Interest.
The Company covenants and agrees for the benefit of
each series of Debt Securities and any appurtenant coupons that
it will duly and punctually pay the principal of (and premium, if
any) and interest on the Debt Securities and any appurtenant
coupons in accordance with the terms of the Debt Securities, any
appurtenant coupons and this Indenture. Any interest due on
Bearer Securities on or before Maturity, other than additional
amounts, if any, payable as provided in Section 1006 in respect
of principal of (or premium, if any, on) such a Debt Security,
shall be payable only upon presentation and surrender of the
several coupons for such interest installments as are evidenced
thereby as they severally mature. For all purposes of this
Indenture, the exchange of Capital Securities for Debt Securities
of any series pursuant to the Indenture shall constitute full
payment of principal of the Debt Securities of such series being
exchanged on any Capital Exchange Date for Debt Securities of
such series, without prejudice to any Holder's rights pursuant to
Section 1413.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for
any series of Debt Securities an office or agency where Debt
Securities (but, except as otherwise provided below, unless such
Place of Payment is located outside the United States, not Bearer
Securities) may be presented or surrendered for payment, where
Debt Securities may be surrendered for registration of transfer
<PAGE 77> or exchange and where notices and demands to or upon
the Company in respect of the Debt Securities and this Indenture
may be served. If Debt Securities of a series are issuable as
Bearer Securities, the Company will maintain, subject to any laws
or regulations applicable thereto, an office or agency in a Place
of Payment for such series which is located outside the United
States where Debt Securities of such series and the related
coupons may be presented and surrendered for payment (including
payment of any additional amounts payable on Debt Securities of
such series pursuant to Section 1006); provided, however, that if
the Debt Securities of such series are listed on the Stock
Exchange of the United Kingdom and the Republic of Ireland or the
Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so
require, the Company will maintain a Paying Agent in London or
Luxembourg or any other required city located outside the United
States, as the case may be, so long as the Debt Securities of
such series are listed on such exchange. The Company will give
prompt written notice to the Trustee of the location, and any
change in the location, of any such office or agency. If at any
time the Company shall fail to maintain any such required office
or agency or shall fail to furnish the Trustee with the address
thereof, such presentations, surrenders, notices and demands may
be made or served at the Corporate Trust Office of the Trustee,
and the Company hereby appoints the Trustee its agent to receive
all presentations, surrenders, notices and demands, except that
Bearer Securities of that series and the related coupons may be
presented and surrendered for payment (including payment of any
additional amounts payable on Bearer Securities of that series
pursuant to Section 1006) at the place specified for the purpose
pursuant to Section 301(5).
No payment of principal of, premium or interest on
Bearer Securities shall be made at any office or agency of the
Company in the United States or by check mailed to any address in
the United States or by transfer to an account maintained with a
bank located in the United States; provided, however, payment of
principal of and any premium and interest denominated in Dollars
(including additional amounts payable in respect thereof) on any
Bearer Security may be made at an office or agency of, and
designated by, the Company located in the United States if (but
only if) payment of the full amount of such principal, premium,,
interest or additional amounts in Dollars at all offices outside
the United States maintained for the purpose by the Company in
accordance with this Indenture is illegal or effectively
precluded by exchange controls or other similar restrictions and
the Trustee receives an Opinion of Counsel that such payment
within the United States is legal. Unless otherwise provided as
contemplated by Section 301 with respect to any series of Debt
Securities, at the option of the Holder of any Bearer Security or
related coupon, payment may be made by check in the currency
designated for such payment pursuant to the terms of such Bearer
Security presented or mailed to an address outside the United
<PAGE 78> States or by transfer to an account in such currency
maintained by the payee with a bank located outside the United
States.
The Company may also from time to time designate one or
more other offices or agencies (in or outside of such Place of
Payment) where the Debt Securities of one or more series and any
appurtenant coupons (subject to the preceding paragraph) may be
presented or surrendered for any or all such purposes, and may
from time to time rescind such designations; provided, however,
that no such designation or rescission shall in any manner
relieve the Company of its obligations to maintain an office or
agency in each Place of Payment for any series of Debt
Securities, for such purposes. The Company will give prompt
written notice to the Trustee of any such designation and any
change in the location of any such other office or agency.
SECTION 1003. Money for Debt Securities Payments to Be
held in Trust.
If the Company shall at any time act as its own Paying
Agent with respect to any series of Debt Securities, it will, on
or before each due date of the principal of (and premium, if any)
or interest on any of the Debt Securities of such series and any
appurtenant coupons, segregate and hold in trust for the benefit
of the Persons entitled thereto a sum sufficient to pay the
principal (and premium, if any) or interest so becoming due until
such sums shall be paid to such Persons or otherwise disposed of
as herein provided, and will promptly notify the Trustee of its
action or failure to so act.
Whenever the Company shall have one or more Paying
Agents with respect to any series of Debt Securities, it will
prior to each due date of the principal of (and premium, if any)
or interest on any Debt Securities of such series and any
appurtenant coupons, deposit with a Paying Agent a sum sufficient
to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium or interest, and
(unless such Paying Agent is the Trustee) the Company will
promptly notify the Trustee of its actions or failure to so act.
The Company will cause each Paying Agent with respect
to any series of Debt Securities other than the Trustee to
execute and deliver to the Trustee an instrument in which Paying
Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will
(1) hold all sums held by it for the payment of
the principal of (and premium, if any) or interest on Debt
Securities of such series and any appurtenant coupons in
trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise
disposed of as herein provided; <PAGE 79>
(2) give the Trustee notice of any default by the
Company (or any other obligor upon the Debt Securities of
such series or any appurtenant coupons) in the making of any
payment of principal of (and premium, if any) or interest on
the Debt Securities of such series or any appurtenant
coupons; and
(3) at any time during the continuance of any
such default, upon the written request of the Trustee,
forthwith pay to the Trustee all sums so held in trust by
such Paying Agent.
The Company may at any time, for the purpose of
terminating its obligations under this Indenture with respect to
Debt Securities of any series or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee
all sums held in trust by the Company or such Paying Agent, such
sums to be held by the Trustee upon the same trusts as those upon
which such sums were held by the Company or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with
respect to such money.
Any principal and interest received on the Eligible
Instruments deposited with the Trustee or any money deposited
with the Trustee or any Paying Agent, or then held by the
Company, in trust for the payment of the principal of (and
premium, if any) or interest on any Debt Security of any series
or any appurtenant coupon or any money on deposit with the
Trustee or any Paying Agent representing amounts deducted from
the Redemption Price or Repayment Price with respect to unmatured
coupons not presented upon redemption or exercise of the Holder's
option for repayment pursuant to Section 1106 or 1303 and
remaining unclaimed for two years after such principal (and
premium, if any) or interest has become due and payable shall be
paid to the Company on Company Request, or (if then held by the
Company) shall be discharged from such trust; and the Holder of
such Debt Security or any coupon appertaining thereto shall
thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such trust money (including the
principal and interest received on Eligible Instruments deposited
with the Trustee), and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the
Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be
published once, in an Authorized Newspaper of general circulation
in the Borough of Manhattan, The City of New York, and each Place
of Payment or mailed to each such Holder, or both, notice that
such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of
such publication or mailing, any unclaimed balance of such money
then remaining will be repaid to the Company.
<PAGE 80>
SECTION 1004. Officers' Certificate as to Default.
The Company will deliver to the Trustee, on or before a
date not more than four months after the end of each fiscal year
of the Company (which on the date hereof is the calendar year)
ending after the date hereof, an Officers' Certificate, stating
whether or not to the best knowledge of the signers thereof the
Company is in default in the performance and observance of any of
the terms, provisions and conditions of this Indenture, and, if
the Company shall be in default, specifying all such defaults and
the nature thereof of which they may have knowledge.
SECTION 1005. Limitation on Disposition of Voting
Stock of, and Merger and Sale of Assets by, the Bank.
The Company will not:
(1) sell, transfer or otherwise dispose of any
shares of Voting Stock of the Bank or permit the Bank to
issue, sell or otherwise dispose of any shares of its Voting
Stock, unless, after giving effect to any such transaction,
the Bank remains a Controlled Subsidiary; or
(2) permit the Bank to
(a) merge or consolidate, unless the
surviving corporation is a Controlled Subsidiary; or
(b) convey or transfer its properties and
assets substantially as an entirety to any Person,
except to a Controlled Subsidiary.
SECTION 1006. Payment of Additional Amounts.
If the Debt Securities of a series provide for the
payment of additional amounts, the Company will pay to the Holder
of any Debt Security of any series or any coupon appertaining
thereto additional amounts upon the terms and subject to the
conditions provided therein. Whenever in this Indenture there is
mentioned, in any context, the payment of the principal of (or
premium, if any) or interest on, or in respect of, any Debt
Security of any series or any related coupon or the net proceeds
received on the sale or exchange of any Debt Security of any
series, such mention shall be deemed to include mention of the
payment of additional amounts provided for in the terms of such
Debt Securities and this Section to the extent that, in such
context, additional amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and
express mention of the payment of additional amounts (if
applicable) in any provisions hereof shall not be construed as
excluding additional amounts in those provisions hereof where
such express mention is not made.
<PAGE 81>
If the Debt Securities of a series provide for the
payment of additional amounts, at least 10 days prior to the
first Interest Payment Date with respect to that series of Debt
Securities (or if the Debt Securities of that series will not
bear interest prior to Maturity, the first day on which a payment
of principal (and premium, if any) is made), and at least 10 days
prior to each date of payment of principal (and premium, if any)
or interest if there has been any change with respect to the
matters set forth in the below-mentioned Officers' Certificate,
the Company will furnish the Trustee and the Company's principal
Paying Agent or Paying Agents, if other than the Trustee, with an
Officers' Certificate instructing the Trustee and such Paying
Agent or Paying Agents whether such payment of principal of (and
premium, if any) or interest on the Debt Securities of that
series shall be made to Holders of Debt Securities of that series
or the related coupons who are United States Aliens without
withholding for or on account of any tax, assessment or other
governmental charge described in the Debt Securities of that
series. If any such withholding shall be required, then such
Officers' Certificate shall specify by country the amount, if
any, required to be withheld on such payments to such Holders of
Debt Securities or coupons and the Company will pay to the
Trustee or such Paying Agent the additional amounts, if any,
required by the terms of such Debt Securities and the first
paragraph of this Section. The Company covenants to indemnify
the Trustee and any Paying Agent for, and to hold them harmless
against, any loss, liability or expense reasonably incurred
without negligence or bad faith on their part arising out of or
in connection with actions taken or omitted by any of them in
reliance on any Officers' Certificate furnished pursuant to this
Section.
SECTION 1007. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any covenant or condition set forth in Section 1005,
with respect to the Debt Securities of any series if, before the
time for such compliance the Holders of at least 66 2/3% in
principal amount of the Debt Securities of such series at the
time Outstanding shall, by Act of such Holders, either waive such
compliance in such instance or generally waive compliance with
such covenant or condition, but no such waiver shall extend to or
affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective,
the obligations of the Company and the duties of the Trustee in
respect of any such covenant or condition shall remain in full
force and effect.
ARTICLE ELEVEN
REDEMPTION OF DEBT SECURITIES
SECTION 1101. Applicability of Article.
<PAGE 82>
Debt Securities of any series which are redeemable
before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as
contemplated by Section 301 for Debt Securities of any series) in
accordance with this Article.
SECTION 4-3.S Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Debt
Securities shall be evidenced by an Officers' Certificate
authorized by or pursuant to a Board Resolution. In case of any
redemption at the election of the Company of less than all of the
Debt Securities of any series, the Company shall, at least
45 days prior to the Redemption Date fixed by the Company (unless
a shorter notice shall be satisfactory to the Trustee), notify
the Trustee of such Redemption Date and of the principal amount
and the tenor and terms of the Debt Securities of any series to
be redeemed. In the case of any redemption of Debt Securities
prior to the expiration of any restriction on such redemption
provided in the terms of such Debt Securities or elsewhere in
this Indenture, the Company shall furnish the Trustee with an
Officers' Certificate evidencing compliance with such
restriction.
SECTION 1103. Selection by Trustee of Debt Securities
to Be Redeemed.
Except as otherwise specified as contemplated by
Section 301 for Debt Securities of any series, if less than all
the Debt Securities of any series with like tenor and terms are
to be redeemed, the particular Debt Securities to be redeemed
shall be selected not more than 60 days prior to the Redemption
Date by the Trustee, from the Outstanding Debt Securities of such
series with like tenor and terms not previously called for
redemption, by such method as the Trustee shall deem fair and
appropriate and which may provide for the selection for
redemption of portions (equal to the minimum authorized
denomination for Debt Securities of such series or any integral
multiple thereof which is also an authorized denomination) of the
principal amount of Registered Securities or Bearer Securities
(if issued in more than one authorized denomination) of such
series of a denomination larger than the minimum authorized
denomination for Debt Securities of such series.
The Trustee shall promptly notify the Company in
writing of the Debt Securities selected for redemption and, in
the case of any Debt Securities selected for partial redemption,
the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of
Debt Securities shall relate, in the case of any Debt Security
redeemed or to be redeemed only in part, to the portion of the
<PAGE 83> principal amount of such Debt Security which has been
or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner
provided in Section 106 not less than 30 nor more than 60 days
prior to the Redemption Date, to each Holder of Debt Securities
to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all Outstanding Debt Securities
of any series are to be redeemed, the identification (and,
in the case of partial redemption, the principal amount) of
the particular Debt Securities to be redeemed.
(4) that on the Redemption Date the Redemption
Price will become due and payable upon each such Debt
Security to be redeemed, and that interest thereon shall
cease to accrue on and after said date,
(5) the Place or Places of Payment where such
Debt Securities, together in the case of Bearer Securities
with all coupons, if any, appertaining thereto maturing
after the Redemption Date, are to be surrendered for payment
of the Redemption Price,
(6) that Bearer Securities may be surrendered for
payment only at such place or places which are outside the
United States, except as otherwise provided in Section 1002,
(7) that the redemption is for a sinking fund, if
such is the case, and
(8) the CUSIP number, if any.
A notice of redemption published as contemplated by
Section 106 need not identify particular Registered Securities to
be redeemed.
Notice of redemption of Debt Securities to be redeemed
at the election of the Company shall be given by the Company or,
at the Company's request, by the Trustee in the name and at the
expense of the Company.
SECTION 1105. Deposit of Redemption Price.
On or prior to any Redemption Date, the Company shall
deposit with the Trustee or with a Paying Agent (or, if the
<PAGE 84> Company is acting as its own Paying Agent, segregate
and hold in trust as provided in Section 1003) an amount of money
and/or, to the extent such Debt Securities to be redeemed are
denominated and payable in Dollars only, Eligible Instruments the
payments of principal and interest on which when due (and without
reinvestment and providing no tax liability will be imposed upon
the Trustee or the Holders of the Debt Securities to be redeemed)
will provide money on or prior to the Redemption Date in such
amounts as will (together with any money irrevocably deposited in
trust with the Trustee, without investment) be sufficient to pay
the Redemption Price of, and (except if the Redemption Date shall
be an Interest Payment Date) accrued interest on, all the Debt
Securities or portions thereof which are to be redeemed on that
date; provided, however, that deposits with respect to Bearer
Securities shall be made with a Pay Agent or Paying Agents
located outside the United States except as otherwise provided in
Section 1002, unless otherwise specified as contemplated by
Section 301.
SECTION 1106. Debt Securities Payable on Redemption
Date.
Notice of redemption having been given as aforesaid,
the Debt Securities so to be redeemed shall, on the Redemption
Date, become due and payable at the Redemption Price therein
specified and from and after such date (unless the Company shall
default in the payment of the Redemption Price and accrued
interest) such Debt Securities shall cease to bear interest and
the coupons for such interest appertaining to any Bearer
Securities so to be redeemed, except to the extent provided
below, shall be void. Upon surrender of any such Debt Security
for redemption in accordance with said notice, such Debt Security
shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however,
that installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable
only upon presentation and surrender of coupons for such interest
(at an office or agency located outside the United States except
as otherwise provided in Section 1002), and provided further,
that installments of interest on Registered Securities whose
Stated Maturity is on or prior to the Redemption Date shall be
payable to the Holders of such Debt Securities, or one or more
Predecessor Securities, registered as such on the relevant Record
Dates according to their terms and provisions of Section 307.
If any Bearer Security surrendered for redemption shall
not be accompanied by all appurtenant coupons maturing after the
Redemption Date, such Bearer Security may be paid after deducting
from the Redemption Price an amount equal to the face amount of
all such missing coupons, or the surrender of such missing coupon
or coupons may be waived by the Company and the Trustee if there
be furnished to them such security or indemnity as they may
require to save each of them and any Paying Agent harmless. If
thereafter the Holder of such Bearer Security shall surrender to
<PAGE 85> the Trustee or any Paying Agent any such missing coupon
in respect of which a deduction shall have been made from the
Redemption Price, such Holder shall be entitled to receive the
amount so deducted without interest thereon; provided, however,
that interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or
agency located outside of the United States except as otherwise
provided in Section 1002.
If any Debt Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal (and
premium, if any) shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the Debt
Security.
SECTION 1107. Debt Securities Redeemed in Part.
Any Registered Security which is to be redeemed only in
part shall be surrendered at a Place of Payment therefor (with,
if the Company, the Security Registrar or the Trustee so
requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Security Registrar and
the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such
Debt Security without service charge, a new Registered Security
or Registered Securities of the same series and of like tenor and
terms, of any authorized denominations as requested by such
Holder in aggregate principal amount equal to and in exchange for
the unredeemed portion of the principal of the Debt Security so
surrendered.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to
any sinking fund for the retirement of Debt Securities of a
series except as otherwise specified as contemplated by Section
301 for Debt Securities of such series.
The minimum amount of any sinking fund payment provided
for by the terms of Debt Securities of any series is herein
referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the term
of Debt Securities of any series is herein referred to as an
"optional sinking fund payment." If provided for by the terms of
Debt Securities of any series, the amount of any sinking fund
payment may be subject to reduction as provided in Section 1202.
Each sinking fund payment shall be applied to the redemption of
Debt Securities of any series as provided for by the terms of
Debt Securities of such series. <PAGE 86>
SECTION 1202. Satisfaction of Sinking Fund Payments
with Debt Securities.
The Company (1) may deliver Outstanding Debt Securities
of a series (other than any previously called for redemption),
together in the case of any Bearer Securities of such series with
all unmatured coupons appertaining thereto, and (2) may apply as
a credit Debt Securities of a series which have been redeemed
either at the election of the Company pursuant to the terms of
such Debt Securities or through the application of permitted
optional sinking fund payments pursuant to the terms of such Debt
Securities, in each case in satisfaction of all or any part of
any sinking fund payment with respect to the Debt Securities of
such series required to be made pursuant to the terms of such
Debt Securities as provided for by the terms of such series;
provided that such Debt Securities have not been previously so
credited. Such Debt Securities shall be received and credited
for such purpose by the Trustee at the Redemption Price specified
in such Debt Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be
reduced accordingly. If as a result of the delivery or credit of
Debt Securities in lieu of cash payments pursuant to this
Section 1202, the principal amount of Debt Securities to be
redeemed in order to exhaust the aforesaid cash payment shall be
less than $100,000, the Trustee need not call Debt Securities for
redemption, except upon Company Request, and such cash payment
shall be held by the Trustee or a Paying Agent and applied to the
next succeeding sinking fund payment, provided, however, that the
Trustee or such Paying Agent shall at the request of the Company
from time to time pay over and deliver to the Company any cash
payment so being held by the Trustee or such Paying Agent upon
delivery by the Company to the Trustee of Debt Securities
purchased by the Company having an unpaid principal amount equal
to the cash payment requested to be released to the Company.
SECTION 1203. Redemption of Debt Securities for
Sinking Fund.
Not less than 60 days prior to each sinking fund
payment date for any series of Debt Securities (unless a shorter
period shall be satisfactory to the Trustee), the Company will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by payment of cash, the portion
thereof, if any, which is to be satisfied by crediting Debt
Securities of that series pursuant to Section 1202 and the basis
for any such credit and, prior to or concurrently with the
delivery of such Officers' Certificate, will also deliver to the
Trustee any Debt Securities to be so credited and not theretofore
delivered to the Trustee. Not less than 30 days (unless a
shorter period shall be satisfactory to the Trustee) before each
such sinking fund payment date the Trustee shall select the Debt
Securities to be redeemed upon such sinking fund payment date in
<PAGE 87> the manner specified in Section 1103 and cause notice
of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104.
Such notice having been duly given, the redemption of such Debt
Securities shall be made upon the terms and in the manner stated
in Sections 1105, 1106 and 1107.
ARTICLE THIRTEEN
REPAYMENT AT THE OPTION OF HOLDERS
SECTION 1301. Applicability of Article.
Debt Securities of any series which are repayable at
the option of the Holders thereof before their Stated Maturity
shall be repaid in accordance with their terms and (except as
otherwise specified pursuant to Section 301 for Debt Securities
of such series) in accordance with this Article.
SECTION 1302. Repayment of Debt Securities.
Each Debt Security which is subject to repayment in
whole or in part at the option of the Holder thereof on a
Repayment Date shall be repaid at the applicable Repayment Price
together with interest accrued to such Repayment Date as
specified pursuant to Section 301.
SECTION 1303. Exercise of Option; Notice.
Each Holder desiring to exercise such Holder's option
for repayment shall, as conditions to such repayment, surrender
the Debt Security to be repaid in whole or in part together with
written notice of the exercise of such option at any office or
agency of the Company in a Place of Payment, not less than 30 nor
more than 45 days prior to the Repayment Date; provided, however,
that surrender of Bearer Securities together with written notice
of exercise of such option shall be made at an office or agency
located outside the United States except as otherwise provided in
Section 1002. Such notice, which shall be irrevocable, shall
specify the principal amount of such Debt Security to be repaid,
which shall be equal to the minimum authorized denomination for
such Debt Security or an integral multiple thereof, and shall
identify the Debt Security to be repaid and, in the case of a
partial repayment of the Debt Security, shall specify the
denomination or denominations of the Debt Security or Debt
Securities of the same series to be issued to the Holder for the
portion of the principal of the Debt Security surrendered which
is not to be repaid.
If any Bearer Security surrendered for repayment shall
not be accompanied by all unmatured coupons and all matured
coupons in default, such Bearer Security may be paid after
deducting from the Repayment Price an amount equal to the face
amount of all such missing coupons, or the surrender of such
<PAGE 88> missing coupon or coupons may be waived by the Company
and the Trustee if there be furnished to them such security or
indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Bearer Security
shall surrender to the Trustee or any Paying Agent any such
missing coupon in respect of which a deduction shall have been
made from the Repayment Price, such Holder shall be entitled to
receive the amount so deducted without interest thereon;
provided, however, that interest represented by coupons shall be
payable only at an office or agency located outside the United
States except as otherwise provided in Section 1002.
The Company shall execute and the Trustee shall
authenticate and deliver without service charge to the Holder of
any Registered Security so surrendered a new Registered Security
or Securities of the same series, of any authorized denomination
specified in the foregoing notice, in an aggregate principal
amount equal to any portion of the principal of the Registered
Security so surrendered which is not to be repaid.
The Company shall execute and the Trustee shall
authenticate and deliver without service charge to the Holder of
any Bearer Security so surrendered a new Registered Security or
Securities or new Bearer Security or Securities (and all
appurtenant unmatured coupons and matured coupons in default) or
any combination thereof of the same series of any authorized
denomination or denominations specified in the foregoing notice,
in an aggregate principal amount equal to any portion of the
principal of the Debt Security so surrendered which is not to be
paid; provided, however, that the issuance of a Registered
Security therefor shall be subject to applicable laws and
regulations, including provisions of the United States federal
income tax laws and regulations in effect at the time of the
exchange; neither the Company, the Trustee nor the Security
Registrar shall issue Registered Securities for Bearer Securities
if it has received an Opinion of Counsel that as a result of such
issuance the Company would suffer adverse consequences under the
United States federal income tax laws then in effect and the
Company has delivered to the Trustee a Company Order directing
the Trustee not to make such issuances thereafter unless and
until the Trustee receives a subsequent Company Order to the
contrary. The Company shall deliver copies of such Company Order
to the Security Registrar.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the repayment of
Debt Securities shall relate, in the case of any Debt Security
repaid or to be repaid only in part, to the portion of the
principal of such Debt Security which has been or is to be
repaid.
SECTION 1304. Election of Repayment by Remarketing
Entities.
<PAGE 89>
The Company may elect, with respect to Debt Securities
of any series which are repayable at the option of the Holders
thereof before their Stated Maturity, at any time prior to any
Repayment Date to designate one or more Remarketing Entities to
purchase, at a price equal to the Repayment Price, Debt
Securities of such series from the Holders thereof who give
notice and surrender their Debt Securities in accordance with
Section 1303.
SECTION 1305. Debt Securities Payable on the Repayment
Date.
Notice of exercise of the option of repayment having
been given and the Debt Securities so to be repaid having been
surrendered as aforesaid, such Debt Securities shall, unless
purchased in accordance with Section 1304, on the Repayment Date
become due and payable at the price therein specified and from
and after the Repayment Date such Debt Securities shall cease to
bear interest and shall be paid on the Repayment Date, and the
coupons for such interest appertaining to Bearer Securities so to
be repaid, except to the extent provided above, shall be void,
unless the Company shall default in the payment of such price, in
which case the Company shall continue to be obligated for the
principal amount of such Debt Securities and shall be obligated
to pay interest on such principal amount at the rate borne by
such Debt Securities from time to time until payment in full of
such principal amount.
ARTICLE FOURTEEN
EXCHANGE OF CAPITAL SECURITIES FOR DEBT SECURITIES
SECTION 1401. Applicability of Article.
If an Officers' Certificate or supplemental indenture
pursuant to Section 301 provides for the exchange of Capital
Securities for Debt Securities of any series at the election of
the Company or otherwise, Debt Securities of such series shall be
exchanged for Capital Securities in accordance with their terms
and (except as otherwise specified in such Officers' Certificate
or supplemental indenture) in accordance with this Article.
SECTION 1402. Exchange of Capital Securities for Debt
Securities at Stated Maturity.
At the Stated Maturity of Debt Securities of any series
which may be exchanged, subject to prepayment prior to such
Stated Maturity on the Capital Exchange Date selected by the
Company for Debt Securities of such series, as described below,
early exchange pursuant to Section 1403 or payment in cash
pursuant to Section 502, 1416 or 1417, the Company shall exchange
Capital Securities with a Market Value equal to the principal
amount of the Outstanding Debt Securities of such series for the
Debt Securities of such series in whole. <PAGE 90>
The Company shall give notice in the manner provided in
Section 106 to Holders of the Debt Securities of any series to be
exchanged, the Trustee and the Capital Exchange Agent as to the
type of Capital Securities to be exchanged for the Debt
Securities of such series on the Capital Exchange Date for Debt
Securities of such series. Such notice shall include a form of
Capital Security Election Form substantially as set forth in
Section 1409, shall make the statements and contain the
information included in Section 1404(a), and shall be given no
less than 90 days prior to the Stated Maturity of such Debt
Securities. Notice of such Capital Exchange Date, together with
the amount of Capital Securities being exchanged for each $1,000
principal amount of Debt Securities of such series, or the
minimum denomination of the Debt Securities of such series, if
larger, shall also be given by the Company in the manner required
by Section 1404(b) not less than three Business days prior to
such Capital Exchange Date.
The Capital Exchange Date for any prepayment of Debt
Securities of each series may be selected by the Company to be
any date between a date 60 days prior to the Stated Maturity of
such Debt Securities and such Stated Maturity, inclusive, and to
be the date of the closing of the Secondary Offering for Debt
Securities of such series. In the event the Company fails to
effect such Secondary Offering, the Capital Exchange Date will be
the Stated Maturity of the Debt Securities of such series.
Notice of each such Capital Exchange Date, together with the
amount of Capital Securities being exchanged for each $1,000
principal amount of Debt Securities of such series, or the
minimum denomination of the Debt Securities of such series, if
larger, shall also be given by the Company in the manner required
by Section 1404(b) not less than three Business days prior to
such Capital Exchange Date.
The Company will effect each Secondary Offering such
that the closing of the Secondary Offering will occur on the
Capital Exchange Date.
SECTION 1403. Right of Early Exchange of Capital
Securities for Debt Securities.
The Debt Securities of any series to be exchanged may
be exchanged at the election of the Company, as a whole or from
time to time in part, prior to the Stated Maturity thereof for
Capital Securities with a Market Value equal to the principal
amount of such Debt Securities on any early Capital Exchange
Date, together with accrued interest to such Capital Exchange
Date.
The Company shall give notice in the manner provided in
Section 106 to Holders of the Debt Securities of any series to be
exchanged, the Trustee and the Capital Exchange Agent not less
than 90 days nor more than 120 days prior to any early Capital
Exchange Date for Debt Securities of such series, which notice
<PAGE 91> shall include a form of Capital Security Election Form
substantially as set forth in Section 1409 and make the
statements and contain the information included in
Section 1404(a). Notice of each such early Capital Exchange
Date, together with the amount of Capital Securities being
exchanged for each $1,000 principal amount of Debt Securities of
such series, or the minimum denomination of such series, if
larger, shall also be given by the Company in the manner required
by Section 1404(b) not less than three Business days prior to
such early Capital Exchange Date.
The Company may at its option accelerate any such
Capital Exchange Date within the 60-day period prior to such
Capital Exchange Date by giving notice of such accelerated
Capital Exchange Date, together with the amount of Capital
Securities being exchanged for each $1,000 principal amount of
Debt Securities of such series, or the minimum denomination of
such series, if larger, in the manner required by Section 1404(b)
not less than three Business days prior to such accelerated
Capital Exchange Date.
The Company will effect each Secondary Offering such
that the closing of such Secondary Offering will occur on the
Capital Exchange Date.
SECTION 1404. Notices of Exchange.
(a) All notices of exchange subject to this paragraph
shall state:
(1) the types of Capital Securities to be
exchanged for the Debt Securities of such series on the
Capital Exchange Date for Debt Securities of such series;
(2) the proposed Capital Exchange Date;
(3) that each Holder of Debt Securities of such
series being exchanged will receive on such Capital Exchange
Date accrued and unpaid interest in cash and may elect to
receive on such Capital Exchange Date Capital Securities
with a Market Value equal to the principal amount of the
Debt Securities of such series owned by such Holder and
that, in the absence of any such election by the Holder,
such Holder will be deemed to have received on such Capital
Exchange Date Capital Securities having such Market Value
and to have elected to have such Capital Securities sold for
such Holder by the Company in the related Secondary Offering
for cash proceeds to such Holder on such Capital Exchange
Date equal to the aggregate principal amount of all Debt
Securities of such series being exchanged owned by such
Holder;
(4) that on such Capital Exchange Date the
Capital Exchange Price will become due and payable upon each
<PAGE 92> such Debt Security to be exchanged and that
interest thereon will cease to accrue on and after said
date;
(5) if less than all Outstanding Debt Securities
of any series are to be exchanged, the identification and
principal amount of the particular Debt Securities to be
exchanged;
(6) that each Holder for whom Capital Securities
are being offered in the Secondary Offering shall be deemed
to have appointed the Company its attorney-in-fact to
execute any and all documents and agreements the Company
deems necessary or appropriate to effect such Secondary
Offering;
(7) (A) that the Company will assume, unless
advised to the contrary in writing within 30 days after the
date of the notice of exchange, that the Capital Securities
are to be offered for the account of the Holder, that such
Holder has not held any position, office of other material
relationship with the Company within three years preceding
the Secondary Offering, that the Holder owns no other
Capital Securities, and that after completion of the
Secondary Offering the Holder will own less than one percent
of the class of such Capital Securities, and (B) that if any
of these assumptions is not correct, the Holder shall
promptly so advise the Company;
(8) the Place or Places of Capital Exchange;
(9) that Bearer Securities may be surrendered for
payment or exchange only at a Place or Places of Capital
Exchange which are outside the United States, except as
otherwise provided in Section 1002; and
(10) the CUSIP number, if any.
(b) Each notice of exchange subject to this paragraph
shall be given in the manner provided in Section 106 to each
Holder of Debt Securities to be exchanged, and the Company shall
forthwith give such notice by telephone to the Trustee and the
Capital Exchange Agent, promptly confirmed in writing.
(c) (1) Except as may otherwise be specified
pursuant to Section 301 for Debt Securities of any series,
if less than all the Debt Securities of any series are to be
exchanged, the Company shall at least 135 days prior to the
related Capital Exchange Date (unless a shorter period shall
be satisfactory to the Trustee) notify the Trustee of such
Capital Exchange Date and of the principal amount of Debt
Securities of such series to be exchanged and the particular
Debt Securities to be exchanged shall be selected not more
than 135 days prior to the related Capital Exchange Date by
<PAGE 93> the Trustee, from the Outstanding Debt Securities
of such series not previously exchanged, by such method as
the Trustee shall deem fair and appropriate and which may
provide for the selection for exchange of portions (equal to
the minimum authorized denomination for Debt Securities of
such series or any integral multiple thereof) of the
principal amount of Registered or Bearer Securities of such
series of a denomination larger than the minimum authorized
denomination for Debt Securities of such series.
In any case where Debt Securities of such series are
registered in the same name, the Trustee in its discretion may
treat the aggregate principal amount so registered as if it were
represented by one Debt Security of such series.
(2) The Trustee shall promptly notify the Company
in writing of the Debt Securities selected for exchange and,
in the case of any Debt Securities selected for partial
exchange, the principal amount thereof to be exchanged.
(3) For all purposes of this Indenture, unless
the context otherwise requires, all provisions relating to
the exchange of Debt Securities shall relate, in the case of
any Debt Securities exchanged or to be exchanged only in
part, to the portion of the principal amount of such Debt
Security which has been or is to be exchanged.
SECTION 1405. Rights and Duties of Holders of Debt
Securities to be Exchanged for Capital Securities.
(a) Subject to Section 503, and without prejudice to
the rights pursuant to Section 1413 of Holders of Debt Securities
of any series to be exchanged, no Holder of Debt Securities of
such series shall be entitled to receive any cash from the
Company on any Capital Exchange Date or at the Stated Maturity of
any Debt Security of such series except from the proceeds of the
sale of such Holder's Capital Securities in the related Secondary
Offering and except as provided herein with respect to fractional
Capital Securities, amounts equal to expenses of the sale in the
related Secondary Offering of such Capital Securities, accrued
and unpaid interest and acceleration upon an Event of Default.
In the event that the Company does not effect such Secondary
Offering, such Holder will receive Capital Securities with a
Market Value equal to the principal amount of Debt Securities of
such series owned by such Holder which are subject to such
exchange and not cash other than in lieu of any fractional
Capital Securities and for accrued and unpaid interest, without
prejudice to such Holder's rights pursuant to Section 1413.
(b) Each Holder for whom Capital Securities are being
offered in the Secondary Offering shall be deemed to have
appointed the Company its attorney-in-fact to execute any and all
documents and agreements the Company deems necessary or
appropriate to effect such Secondary Offering. <PAGE 94>
(c) Unless advised to the contrary in writing within
30 days following the date of the notice described in
Section 1404(a) by any Holder for whom Capital Securities are
being offered in the Secondary Offering, the Company shall assume
for the purposes of any Secondary Offering that the Capital
Securities are to be offered for the account of such Holder, that
such Holder has not held any position, office or other material
relationship with the Company within three years preceding the
Secondary Offering, that such Holder owns no other Capital
Securities, and that after completion of the Secondary Offering
such Holder will own less than one percent of the class of such
Capital Securities.
(d) Each Holder for whom Capital Securities are being
offered in the Secondary Offering agrees to indemnify and hold
harmless the Company, any other Holder, and any underwriter,
agent or other similar person from and against any and all
losses, claims, damages and liabilities resulting from or based
upon any untrue statement or alleged untrue statement of any
material fact contained in any notice of exchange, any offering
memorandum or selling document or registration statement relating
to the Secondary Offering, any preliminary prospectus or
prospectus contained therein, or any amendment thereof or
supplement thereto, or resulting from or based upon the omission
or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, which untrue statement, alleged untrue statement,
omission or alleged omission is made therein (i) in reliance upon
and in conformity with any written information furnished to the
Company by or on behalf of any such Holder specifically for use
in connection with the preparation thereof or (ii) because of
such Holder's failure to advise the Company in writing that any
of the assumptions described in Section 1404(a)(7)(A) and
Subsection (c) of this Section is incorrect;
(e) In order for any Holder who has duly returned a
Capital Security Election Form to receive Capital Securities on
any Capital Exchange Date for any Debt Security of any series,
(1) the Holder of any Registered Security to be exchanged shall
surrender such Debt Security (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of
transfer in form satisfactory to the Company and the Trustee duly
executed by, the Holder of any Registered Security or his
attorney duly authorized in writing), to the Capital Exchange
Agent on the Capital Exchange Date, and (2) the Holder of any
Bearer Security to be exchanged shall surrender such Debt
Security and all unmatured coupons and all matured coupons in
default with the Capital Security Election Form at a Place of
Capital Exchange outside the United States designated pursuant to
Section 1404(a)(8) except as otherwise provided in Section 1002.
If the Holder of a Bearer Security is unable to produce any such
Debt Security or coupons, the surrender of such Debt Security or
coupons may be waived by the Company and the Trustee, if there be
furnished to them such security or indemnity as they may require
<PAGE 95> to save each of them and any Capital Exchange Agent
harmless in respect of such Debt Security or coupons. Except as
provided in Section 307, no payment or adjustment shall be made
upon any exchange on account of any interest accrued on any Debt
Securities surrendered for exchange or on account of any
dividends or interest on the Capital Securities issued upon
exchange.
(f) Debt Securities of any series to be exchanged
shall be deemed to have been exchanged on the Capital Exchange
Date therefor in accordance with the foregoing provision, and at
such time the rights of the Holders of such Debt Securities as
Holder shall cease (subject to the provisions of Section 307 and
without prejudice to the rights of Holders of Debt Securities of
such series pursuant to Section 1413), and the Person or Persons
entitled to receive the Capital Securities issuable upon such
exchange shall be treated for all purposes as the record holder
or holders of such Capital Securities at such time.
SECTION 1406. Election to Exchange.
The election of the Company to exchange Capital
Securities for Debt Securities pursuant to Section 1403 shall be
evidenced by a Board Resolution.
SECTION 1407. Deposit of Capital Exchange Price.
On any Capital Exchange Date for Debt Securities of any
series which may be exchanged, the Company shall deposit with the
Trustee or with a Capital Exchange Agent in the Borough of
Manhattan, The City of New York (or, of the Company is acting as
Capital Exchange Agent, segregate and hold in trust as provided
in Section 1003) Capital Securities and an amount of money which
together are sufficient to pay the Capital Exchange Price of, and
(except if such Capital Exchange Date shall be an Interest
Payment Date) accrued interest on, all the Debt Securities of
such series or portions thereof which are to be exchanged on that
date; provided, however, that deposits with respect to Bearer
Securities shall be made with a Capital Exchange Agent or Capital
Exchange Agents, located outside the United States except as
otherwise provided in Section 1002, unless otherwise specified as
contemplated by Section 301.
SECTION 1408. Debt Securities Due on Capital Exchange
Date; Debt Securities Exchanged in Part.
Notice of exchange having been given as aforesaid, the
Debt Securities of any series so to be exchanged shall, on the
Capital Exchange Date for such Debt Securities, become due and
payable at the Capital Exchange Price therein specified, and from
and after such date (unless the Company shall default in the
payment of the Capital Exchange Price and accrued interest) Debt
Securities of such series to be exchanged shall cease to bear
interest and the coupons for such interest appertaining to any
<PAGE 96> Bearer Securities so to be exchanged, except to the
extent provided below, shall be void. Upon surrender of any Debt
Security of such series for exchange in accordance with said
notice, such Debt Security shall be paid by the Company at the
Capital Exchange Price, together with accrued interest to the
Capital Exchange Date; provided, however, that if such Capital
Exchange Date is an Interest Payment Date, the interest payable
on such date shall be paid to the Holder of Debt Securities of
such series according to the terms of the Debt Securities of such
series and the provisions of Section 307; and provided further,
that exchanges of Bearer Securities shall be made only and
installments of interest on Bearer Securities whose Stated
Maturity is on or prior to the Capital Exchange Date shall be
payable only at an office or agency located outside the United
States except as otherwise provided in Section 1002 and, unless
otherwise specified as contemplated by Section 301, only upon
presentation and surrender of those Bearer Securities and
coupons.
If any Bearer Security surrendered for exchange shall
not be accompanied by all unmatured coupons and all matured
coupons in default such Bearer Security may be paid after
deducting from the Capital Exchange Price an amount equal to the
face amount of all missing coupons, or the surrender of such
missing coupons may be waived by the Company and the Trustee if
there be furnished to them such security or indemnity as they may
require to save each of them and any Capital Exchange Agent
harmless. If thereafter the Holder of such Bearer Security shall
surrender to the Trustee or Capital Exchange Agent any such
missing coupon in respect of which a deduction shall have been
made from the Capital Exchange Price, such Holder shall be
entitled to received the amount so deducted; provided, however,
that interest on Bearer Securities shall be payable only at an
office or agency located outside of the United States except as
otherwise provided in Section 1002.
If any Debt Security of any series called for exchange
shall not be so paid or exchanged upon surrender thereof for
exchange, the principal shall, until paid, bear interest from
such Capital Exchange Date at the rate or rates prescribed
therefor in such Debt Security; provided, however, that in the
case of Bearer Securities, any such principal and interest
thereon shall be paid at an office or agency located outside the
United States except as otherwise provided in Section 1002.
Any Registered Security which is to be exchanged only
in part shall be surrendered as provided herein (with, if the
Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder or his
attorney duly authorized in writing) and the Company shall
execute, the Trustee shall authenticate and there shall be
delivered to the Holder of such Debt Security without service
charge a new Registered Security or Securities of the same
<PAGE 97> series, of any authorized denomination or denominations
as requested by such Holder in aggregate principal amount equal
to and in exchange for the unexchanged portion of principal of
the Debt Security so surrendered.
Any Bearer Security which is to be exchanged only in
part shall be surrendered as provided herein and the Company
shall execute, the Trustee shall authenticate and there shall be
delivered to the Holder of such Debt Security without service
charge a new Registered Security or Securities or new Bearer
Security or Securities (and all appurtenant unmatured coupons and
coupons in default) or any combination thereof of the same
series, of any authorized denomination or denominations as
requested by such Holder in aggregate principal amount equal to
and in exchange for the unexchanged portion of principal of the
Debt Security so surrendered; provided, however, the issuance of
a Registered Security therefor shall be subject to applicable
laws and regulations, including provisions of the United States
federal income tax laws and regulations in effect at the time of
the exchange; neither the Company, the Trustee nor the Security
Registrar shall issue Registered Securities in exchange for
Bearer Securities if it has received an Opinion of Counsel that
as a result of such exchanges the Company would suffer adverse
consequences under the United States federal income tax laws then
in effect and the Company has delivered to the Trustee a Company
Order directing the Trustee not to make such exchanges thereafter
unless and until the Company delivers to the Trustee a subsequent
Company Order to the contrary. The Company shall deliver copies
of such Company Orders to the Security Registrar.
SECTION 1409. Form of Capital Security Election Form.
The form of Capital Security Election Form shall be
substantially as follows with such additions, deletions, or
changes thereto as may be approved by the Company:
CAPITAL SECURITY ELECTION FORM
To: [Insert Names and Addresses of
Capital Exchange Agents]
The undersigned Holder of [insert title of Debt
Security] ("Debt Securities") of Sovereign Bancorp, Inc. hereby
elects to receive on the Capital Exchange Date determined
pursuant to the Indenture dated as of __________________, 1999
("Indenture"), between Sovereign Bancorp, Inc. and Harris Trust
and Savings Bank, as Trustee, and referred to in the notice of
exchange published or delivered to the undersigned with this
Capital Security Election Form, Capital Securities of Sovereign
Bancorp, Inc. with a Market Value equal to the principal amount
of the Debt Securities being exchanged owned by the undersigned
Holder and, in the case of Bearer Securities, delivered herewith
together with all coupons appertaining thereto. Unless this
Capital Security Election Form together with, in the case of
<PAGE 98> Bearer Securities, such Bearer Securities and coupons,
is received by any Capital Exchange Agent named above at an
address shown above on or prior to ___________, the Holder will
be deemed to have elected to participate in the sale of the
Holder's Capital Securities in the Secondary Offering and will
receive cash on the Capital Exchange Date in an amount equal to
the principal amount of all Debt Securities being exchanged owned
by the Holder. All terms used herein and not otherwise defined
herein shall have the meanings specified in the Indenture.
Dated ___________________ ___________________________________
Name of Holder
Section 1410. Fractional Capital Securities.
No fractional Capital Securities shall be issued upon
exchange for any Debt Securities. If more than one Debt Security
of any series shall be surrendered for exchange at one time by
the same Holder, the amount of all Capital Securities which shall
be issuable upon exchange thereof shall be computed on the basis
of the aggregate principal amount of Debt Securities of such
series so surrendered. In lieu of issuing any fractional Capital
Security, the Company shall pay a cash adjustment in respect of
such fraction in an amount equal to the same fraction of the
Market Value of the Capital Security.
Section 1411. Company to Obtain Governmental and
Regulatory Approvals.
The Company covenants that if any Capital Securities
required to be exchanged for Debt Securities hereunder require
registration with or approval of any governmental authority under
any federal or state law, of any national securities exchange,
before such Capital Securities may be issued, the Company will in
good faith and as expeditiously as possible endeavor to cause
such Capital Securities to be duly registered or approved, as the
case may be; provided, however, that nothing in this Section
shall be deemed to affect in any way the obligation of the
Company to exchange Capital Securities for Debt Securities as
provided in this Article.
SECTION 1412. Taxes on Exchange.
The Company will pay any and all transfer, stamp or
similar taxes that may be payable in respect of the issue or
delivery of Capital Securities in exchange for Debt Securities
pursuant hereto.
SECTION 1413. Covenants as to Capital Securities and
Secondary Offering.
(a) The Company covenants that it will issue, or cause
to be issued, Capital Securities of the type, in the amounts and
at the times required by this Indenture. <PAGE 99>
(b) The Company covenants that all Capital Securities
which may be issued in exchange for Debt Securities will upon
issuance be duly and validly issued and, if applicable, fully
paid and nonassessable.
(c) The Company unconditionally undertakes to sell
Capital Securities in each Secondary Offering (and to bear all
expenses of each Secondary Offering, including underwriting
discounts and commissions) at the times and in the manner
required by this Indenture unless all Holders have duly elected
to receive Capital Securities on the related Capital Exchange
Date.
(d) The Company agrees to indemnify and hold harmless
in connection with any Secondary Offering any Holder for the
account of whom Capital Securities are being offered and sold
from and against any and all losses, claims, damages and
liabilities resulting from or based upon any untrue statement or
alleged untrue statement of any material fact contained in any
notice of exchange, any offering memorandum or selling document
or registration statement relating to the Secondary Offering, any
preliminary prospectus or prospectus contained therein, or any
amendment thereof or supplement thereto, or resulting from or
based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make
the statements therein not misleading, or resulting from the
Company's failure to comply with Section 1411; provided, however,
the Company will not be liable in any such case to the extent
that any such loss, claim, damage or liability arises out of or
is based upon any such untrue statement, alleged untrue
statement, omission or alleged omission made therein (i) in
reliance upon and in conformity with written information
furnished to the Company by or on behalf of any such Holder
specifically for use in connection with the preparation thereof
or (ii) because of such Holder's failure to advise the Company in
writing that any of the assumptions described in Section
1404(a)(7)(A) is incorrect. In connection with any Secondary
Offering, the Company agrees to obtain appropriate
indemnification of any Holder for the account of whom Capital
Securities are being offered and sold in any Secondary Offering
from any underwriter, agent or other similar person.
SECTION 1414. Provision in Case of Consolidation,
Merger or Transfer of Assets.
In case of any consolidation of the Company with, or
merger of the Company into, any other corporation (other than a
consolidation or merger in which the Company is the continuing
corporation), or in case of any conveyance or transfer of the
properties and assets of the Company substantially as an
entirety, the corporation formed by such consolidation or the
corporation into which the Company shall have been merged or the
corporation with shall have acquired such assets of the Company,
as the case may be, shall execute and deliver to the Trustee a
<PAGE 100> supplemental indenture providing that the Holder of
each Debt Security then Outstanding shall have the right
thereafter to receive securities of such successor on the Capital
Exchange Date for such Debt Security with a Market Value equal to
the principal amount of such Debtor Security. The above
provisions of this Section shall similarly apply to successive
consolidations, mergers, conveyances or transfers.
SECTION 1415. Responsibility of Trustee.
The Trustee shall not at any time be under any duty or
responsibility to any Holder of Debt Securities of any series to
be exchanged to determine the Market Value of any Capital
Securities delivered in exchange for Debt Securities of such
series and may rely on and shall be entitled to receive prior to
any Capital Exchange Date for Debt Securities of such series an
Officers' Certificate of the Company as to the Market Value of
the Capital Securities being exchanged for the Debt Securities of
such series and the amount of Capital Securities being exchanged
for each $1,000 principal amount of Debt Securities of such
series or the minimum denomination of such series, if larger, and
that such Capital Securities qualify as Capital Securities under
the definition thereof contained herein. The Trust shall not be
accountable with respect to the validity or value (or the kind or
amount) of any Capital Securities which may at any time be issued
or delivered in exchange for any Debt Security; and the Trustee
does not make any representation with respect thereto. The
Trustee shall not be responsible for any failure of the Company
to issue, transfer or deliver any Capital Securities or Capital
Security certificates or other securities or property upon the
surrender of any Debt Security for the purpose of exchange or to
comply with any of the covenants of the Company contained in this
Article.
SECTION 1416. Revocation of Obligation to Exchange
Capital Securities for Debt Securities.
The Company's obligation to exchange Capital Securities
for Debt Securities of any series as provided in Section 1402 is
absolute and unconditional; provided, however, that such
obligation may be revoked at the option of the Company at any
time on not less than 60 days' prior notice given in the manner
provided in Section 106 to the Holders of Debt Securities of such
series, the Trustee and the Capital Exchange Agent, if the
Company shall determine that under then regulations of the
Company's Primary Federal Regulator either the Debt Securities
are no longer includable as capital or it is no longer necessary
for the Company to be obligated to exchange Capital Securities
for Debt Securities in order for the Debt Securities to maintain
the same capital treatment as they are then receiving under such
regulations or if approval of the Primary Federal Regulator is
obtained for such revocation.
In the event such obligation is revoked <PAGE 101>
(a) the Company will pay the Debt Securities of such
series in cash at 100% of the principal amount thereof on the
Stated Maturity thereof, and
(b) the Company may, at any time on or after a date
selected by the Company, on not less than 60 days' prior notice
given in the manner provided in Section 106 to the Holders of
Debt Securities of such series and the Trustee, redeem the Debt
Securities of such series, in whole or in part, for cash at 100%
of the principal amount thereof, plus accrued interest to the
Redemption Date.
SECTION 1417. Optional Securities Funds.
(a) (1) With respect to Debt Securities of any series
for which an Officers' Certificate or supplemental indenture
pursuant to Section 301 provides that the Debt Securities of
such series are exchangeable for Capital Securities, the
Company may elect to establish a fund (referred to herein as
the "Optional Securities Funds") to which funds may at any
time be designated by the Company as provided in
Section 1502 as if such Optional Securities Funds were
Securities Funds (as defined in Article Fifteen) to be used
to pay the principal of the Debt Securities of such series.
(2) Notwithstanding any provisions to the
contrary contained in this Indenture or in the Debt
Securities of any series, neither funds designated as
Optional Securities Funds nor any other property from time
to time held as Optional Securities Funds shall be deemed to
be for any purpose property of the Holders or trust funds
for the benefit of the Holders, and the Optional Securities
Funds shall not constitute security for the payment of the
Debt Securities.
(b) In lieu of, or in addition to, any exchange of
Capital Securities for Debt Securities of any series which may be
made in accordance with the provisions of Sections 1402 and 1403,
the Company may elect to redeem the Debt Securities of such
series in accordance with the provisions of Section 1106 and the
terms of the Debt Securities of each series, in whole or in part,
by paying the principal of such Debt Securities with funds
designated as Optional Securities Funds at a price equal to the
percentage of the principal amount established in the terms of
the Debt Securities of such series on the Redemption Date of the
Debt Securities to be so redeemed, and (except if such Redemption
Date shall be an Interest Payment Date) by paying accrued
interest on such Debt Securities. If such Redemption Date is an
Interest Payment Date, the interest payable on such date shall be
paid to the Holder of Debt Securities of such series according to
the terms of the Debt Securities of such series and the
provisions of Section 307.
<PAGE 102>
(c) The Company shall give notice of such proposed
redemption in the manner provided in Section 106 to the Holders
of the Debt Securities of such series within the time prescribed
for the giving of the initial notice in Section 1402 or 1403,
depending upon the Redemption Date selected by the Company. Such
notice shall state the Redemption Date and the place or places
where the Debt Securities of the series to be paid are to be
surrendered for payment; provided, however, if such redemption is
of less than all of the Debt Securities of such series and is to
be made on a Capital Exchange Date specified in accordance with
Section 1402 or 1403, then such notice may be incorporated into
any initial notice of such Capital Exchange Date and provided
that no notice of any redemption may be given unless there are
sufficient Optional Securities Funds to pay the principal amount
of the Debt Securities to be redeemed.
(d) If less than all the Debt Securities of any series
are to be so redeemed, then Sections 1404(c) and 1408 shall apply
to the redemption in the same manner as if such Debt Securities
were to be exchanged for Capital Securities.
(e) Funds designated as Optional Securities Funds
shall be released from such designation under the circumstances
described in Section 1503.
ARTICLE FIFTEEN
Securities Funds
SECTION 1501. Creation of Securities Funds.
A fund (the "Securities Funds") will be established
when specified in an Officers' Certificate or supplemental
indenture pursuant to Section 1502, to be used to pay the
principal of the Debt Securities of that series.
Notwithstanding any provision to the contrary contained
in this Indenture or in the Debt Securities of any series,
neither funds designated as Securities Funds nor any other
property from time to time held as Securities Funds shall be
deemed to be for any purpose property of the Holders or trust
funds for the benefit of the Holders, and the Securities Funds
shall not constitute security for the payment of the Debt
Securities.
SECTION 1502. Designations of Securities Funds.
The Securities Funds will consist of amounts equal to
(i) the net proceeds of the sale of Capital Securities for cash
from time to time after the date of initial issuance of the Debt
Securities of any series for which funds may be designated by the
Company as provided in this Section, and (ii) the market value,
as determined by the Company, of Capital Securities sold from
time to time after the date of initial issuance of the Debt
<PAGE 103> Securities of such series in exchange for other
property, less the expenses to effect any such exchanges, and
(iii) other funds which the regulations of the Primary Federal
Regulator then permit for the payment of principal of "mandatory
convertible securities (equity commitment notes or equity
contract notes)" as defined in such regulations; provided that
(x) the Company has designated such amounts as Securities Funds
on its books and records in the manner required by the Primary
Federal Regulator, and (y) there shall be deducted from the
Securities Funds an amount equal to the amount of any funds used
to redeem or repay the Debt Securities of such series for which
Securities Funds are required to be designated or any similar
securities.
SECTION 1503. Covenant of the Company to Obtain
Securities Funds.
Notwithstanding anything else contained herein, the
Company hereby covenants and agrees that with regard to the Debt
Securities of any series which by its terms require the
designation of Securities Funds (i) by the Interest Payment Date
which occurs on or next preceding the date when one-third of the
period from the date of issuance of the Debt Securities of such
series to their Stated Maturity has elapsed, it will have
obtained Securities Funds in an amount that will equal at least
one-third of the original aggregate principal amount of the Debt
Securities of such series (or such lesser amount as the Primary
Federal Regulator may permit from time to time) and will have
prepared and delivered to the Trustee an Officer's Certificate to
the foregoing effect, (ii) by the Interest Payment Date which
occurs on or next preceding the date when two-thirds of the
period from the date of issuance of the Debt Securities of such
series to their Stated Maturity has elapsed, it will have
obtained Securities Funds in the amount that will equal at least
two-thirds of the original aggregate principal amount of the Debt
Securities of such series (or such lesser amount as the Primary
Federal Regulator may permit from time to time) and will have
prepared and delivered to the Trustee an Officers' Certificate to
the foregoing effect, and (iii) by 60 days prior to the Stated
Maturity of the Debt Securities of such series, it will have
obtained Securities Funds in an amount that will equal not less
than the original aggregate principal amount of the Debt
Securities of such series (or such lesser amount as the Primary
Federal Regulator may permit from time to time) and will have
prepared and delivered to the Trustee an Officers' Certificate to
the foregoing effect; provided, however, that such covenant and
agreement of the Company shall be canceled, and amounts therefore
designated as Securities Funds will be released from such
designation in the event and to the extent that the Company shall
determine that under then regulations of the Company's Primary
Federal Regulator either the Debt Securities are no longer
includable as capital or it is no longer necessary for the
Company to be obligated to pay the principal of the Debt
Securities out of Securities Funds in order for the Debt
<PAGE 104> Securities to maintain the same capital treatment as
they are then receiving under such regulations, in the event and
to the extent that approval of the Primary Federal Regulator is
obtained for such cancellation and release or in the event and to
the extent that the Company shall have exchanged or redeemed such
Debt Securities pursuant to the terms of such Debt Securities of
such series from a source other than amounts designated as
Securities Funds.
ARTICLE SIXTEEN
Meetings of Holders of Debt Securities
SECTION 1601. Purposes for Which Meetings May Be
Called.
If Debt Securities of a series are issuable in whole or
in part as Bearer Securities, a meeting of Holders of Debt
Securities of such series may be called at any time and from time
to time pursuant to this Article to make, give or take any
request, demand, authorization, direction, notice, consent,
waiver or other Act provided by this Indenture to be made, given
or taken by Holders of Debt Securities of such series.
SECTION :\APP Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of
Holders of Debt Securities of any series issuable as Bearer
Securities for any purpose specified in Section 1601, to be held
at such time and at such place in the Borough of Manhattan, The
City of New York, or in London as the Trustee shall determine.
Notice of every meeting of Holders of Debt Securities of any
series, 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 given, in the manner provided in Section 106, not less
than 21 nor more than 180 days prior to the date fixed for the
meeting.
(b) In case at any time the Company, pursuant to a
Board Resolution, or the Holders of at least 10% in principal
amount of the Outstanding Debt Securities of any series shall
have requested the Trustee to call a meeting of the Holders of
Debt Securities of such series for any purpose specified in
Section 1601, by written request setting forth in reasonable
detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication for the notice
to such meeting within 21 days after receipt of such request or
shall not thereafter proceed to cause the meeting to be held as
provided herein, then the Company or the Holders of Debt
Securities of such series in the amount above specified, as the
case may be, may determine the time and place in the Borough of
Manhattan, The City of New York, or in London for such meeting
and may call such meeting for purposes by giving notice thereof
as provided in subsection (a) of this Section. <PAGE 105>
SECTION 1603. Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of
Debt Securities of any series, a Person shall be (1) a Holder of
one or more Outstanding Debt Securities of such series, or (2) a
Person appointed by an instrument in writing as proxy for a
Holder or Holders of one or more Outstanding Debt Securities of
such series by such Holder or Holders. The only Persons who
shall be entitled to be present or to speak at any meeting of
Holders of Debt Securities of any series shall be the persons
entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any
representatives of the Company and its counsel.
SECTION 1604. Quorum; Action.
The Persons entitled to vote a majority in principal
amount of the Outstanding Debt Securities of a series shall
constitute a quorum for a meeting of Holders of Debt Securities
of such series; provided, however, that if any action is to be
taken at such meeting with respect to a consent or waiver which
this Indenture expressly provides may be given by the Holders of
not less than 66 2/3% in principal amount of the Outstanding Debt
Securities of a series, the Persons entitled to vote 66 2/3% in
principal amount of the Outstanding Debt Securities of such
series shall 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 Holders of Debt
Securities of such series, be dissolved. In the absence of a
quorum in any other case the meeting may be adjourned for a
period of not less than 10 days as determined by the 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 chairperson of the meeting prior to
the adjournment of such adjourned meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided
Section 1602(a), except than 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 Outstanding Debt
Securities of such series which shall constitute a quorum.
Except as limited by the provisos to Section 902, any
resolution presented to a meeting or adjourned meeting duly
reconvened at which a quorum is present as aforesaid may be
adopted only by the affirmative vote of the Holders of a majority
in principal amount of the Outstanding Debt Securities of that
series, provided, however, that, except as limited by the
provisos to Section 902, any resolution with respect to any
consent or waiver which this Indenture expressly provides may be
given by the Holders of not less than 66 2/3% in principal amount
of the Outstanding Debt Securities of a series may be adopted at
<PAGE 106> 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 66 2/3% in the principal amount of the
Outstanding Debt Securities of that series; and provided,
further, that, except as limited by the provisos to Section 902,
any resolution with respect to any request, demand,
authorization, direction, notice, consent, waiver or other Act
which this Indenture expressly provides may be made, given or
taken by the Holders of a specified percentage, which is less
than a majority, in principal amount of the Outstanding Debt
Securities of a series may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is
present as aforesaid by the affirmative vote of the Holders of
such specified percentage in principal amount of the Outstanding
Debut Securities of that series.
Any resolution passed or decision taken at any meeting
of Holders of Debt Securities of any series duly held in
accordance with this Section shall be binding on all the Holders
of Debt Securities of such series and the related coupons,
whether or not present or represented at the meeting.
SECTION 1605. Determination of Voting Rights; Conduct
and Adjournment of Meetings.
(a) Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it
may deem advisable for any meeting of Holders of Debt Securities
of such series in regard to proof of the holding of Debt
Securities of such series 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 deem appropriate. Except
as otherwise permitted or required by any such regulations, the
holder of Debt Securities shall be proved in the manner specified
in Section 104 or, in the case of Bearer Securities, by having
the signature of the person executing the proxy witnessed or
guaranteed by any trust company, bank or banker authorized by
Section 104 to certify to the holding of Bearer Securities. Such
regulations may provide that written instruments appointing
proxies, regular on their face, may be presumed valid and genuine
without the proof specified in Section 104 or other proof.
(b) The Trustee shall, by an instrument in writing,
appoint a temporary chairperson of the meeting, unless the
meeting shall have been called by the Company or by Holders of
Debt Securities as provided in Section 1602(b), in which case the
Company or the Holders of Debt Securities of the series calling
the meeting, as the case may be, shall in like manner appoint a
temporary chairperson. A permanent chairperson and a permanent
secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the
<PAGE 107> Outstanding Debt Securities of such series represented
at the meeting.
(c) At any meeting each Holder of a Debt Security of
such series or proxy shall be entitled to one vote for each
$1,000 principal amount (or the equivalent in ECU, any other
composite currency or a Foreign Currency) of Debt Securities of
such series 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
chairperson of the meeting not to be Outstanding. The
chairperson of the meeting shall have no right to vote, except as
a Holder of a Debt Security of such series or proxy.
(d) Any meeting of Holders of Debt Securities of any
series duly called pursuant to Section 1602 at which a quorum is
present may be adjourned from time to time by Persons entitled to
vote a majority in principal amount of the Outstanding Debt
Securities of such series represented at the meeting; and the
meeting may be held as so adjourned without further notice.
SECTION 1606. Counting Votes and Recording Action of
Meetings.
The vote upon any resolution submitted to any meeting
of Holders of Debt Securities of any series shall be by written
ballots on which shall be subscribed the signatures of the
Holders of Debt Securities of such series or of their
representatives by proxy and the principal amounts and serial
numbers of the Outstanding Debt Securities of such series held or
represented by them. The permanent chairperson 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, at least in triplicate, of the proceedings of each
meeting of Holders of Debt Securities of any series 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 given as provided in Section 1602 and, if applicable,
Section 1604. Each copy shall be signed and verified by the
affidavits of the permanent chairperson and secretary of the
meeting and one such copy shall be delivered to the Company, and
another to the Trustee to be preserved by the Trustee, the latter
to have attached thereto the ballots voted at the meeting. Any
records so signed and verified shall be conclusive evidence of
the matters therein stated.
ARTICLE SEVENTEEN
Defeasance <PAGE 108>
SECTION 1701. Termination of Company's Obligations.
With respect to any series of Debt Securities, if the
Company deposits irrevocably in trust with the Trustee money
and/or, to the extent such Debt Securities are denominated and
payable in Dollars only, Eligible Instruments the payments of
principal and interest on which when due (and without
reinvestment and providing no tax liability will be imposed upon
the Trustee or the Holders of such Debt Securities) will provide
money in such amounts as will (together with any money
irrevocably deposited in trust with the Trustee, without
investment) be sufficient to pay principal (and premium, if any)
and interest when due on the Debt Securities of such series and
any coupons appertaining thereto and any mandatory sinking fund,
repayment or analogous payments thereon on the scheduled due
dates therefor at the Stated Maturity thereof, the Company's
obligations under Section 1005 shall terminate with respect to
the Debt Securities of the series for which such deposit was
made; provided, however, that (i) no Event of Default with
respect to the Debt Securities of such series under
Section 501(1) or 501(2) or event that with notice or lapse of
time or both would constitute such an Event of Default shall have
occurred and be continuing on such date and (ii) such termination
shall not relieve the Company of its obligations under the Debt
Securities of such series and this Indenture to pay when due the
principal of (and premium, if any) and interest and additional
amounts on such Debt Securities and any coupons appertaining
thereto if such Debt Securities or coupons are not paid (or
payment is not provided for) when due from the money and Eligible
Instruments (and the proceeds thereof) so deposited.
It shall be a condition to the deposit of cash and/or
Eligible Instruments and the termination of the Company's
obligations with respect to the Debt Securities of any series
under Section 1005 pursuant to the provisions of this Section
that the Company deliver to the Trustee (i) an opinion of
nationally recognized independent tax counsel to the effect that:
(a) Holders of Debt Securities of such series and any coupons
appertaining thereto will not recognize income, gain or loss for
Federal income tax purposes as a result of such deposit and
termination and (b) such Holders (and future Holders) will be
subject to tax in the same amount, manner and timing as if such
deposit and termination has not occurred and (ii) an Officers'
Certificate to the effect that under the laws in effect on the
date such money and/or Eligible Instruments are deposited with
the Trustee, the amount thereof will be sufficient, after payment
of all Federal, state and local taxes in respect thereof payable
by the Trustee, to pay principal (and premium, if any) and
interest when due on the Debt Securities of such series and any
coupons appertaining thereto.
It shall be an additional condition to the deposit of
cash and/or Eligible Instruments and the termination of the
Company's obligations under Section 1005 pursuant to the
<PAGE 109> provisions of this Section, with respect to the Debt
Securities of any series then listed on the New York Stock
Exchange, that the Company deliver an Opinion of Counsel that the
Debt Securities of such series will not be delisted from the New
York Stock Exchange as a result of such deposit and termination.
After a deposit as provided herein, the Trustee shall,
upon Company Request, acknowledge in writing the discharge of the
Company's obligations with respect to the Debt Securities of such
series under Section 1005 pursuant to the provisions of this
Section.
SECTION 1702. Repayment to Company.
The Trustee and any Paying Agent shall pay to the
Company upon Company Request any money or Eligible Instruments
not required for the payment of the principal of (and premium, if
any) and interest on the Debt Securities of any series and any
related coupons for which money or Eligible Instruments have been
deposited pursuant to Section 1701 held by them at any time.
The Trustee and any Paying Agent shall pay to the
Company upon Company Request any money held by them for the
payment of principal (and premium, if any) and interest that
remains unclaimed for two years after the Maturity of the Debt
Securities for which a deposit has been made pursuant to Section
1701. After such payment to the Company, the Holders of the Debt
Securities of such series and any related coupons shall
thereafter, as unsecured general creditors, look only to the
Company for the payment thereof.
SECTION 1703. Indemnity for Eligible Instruments.
The Company shall pay and shall indemnify the Trustee
against any tax, fee or other charge imposed on or assessed
against the deposited Eligible Instruments or the principal or
interest received on such Eligible Instruments.
ARTICLE EIGHTEEN
Subordination of Debt Securities
SECTION 1801. Debt Securities Subordinate to Senior
Debt.
The Company covenants and agrees that anything in this
Indenture or the Debt Securities of any series to the contrary
notwithstanding, the indebtedness evidenced by the Debt
Securities of each series and any coupons appurtenant thereto is
subordinate and junior in right of payment to all Senior Debt to
the extent provided herein, and each Holder of Debt Securities of
each series and coupons appurtenant thereto, by such Holder's
acceptance thereof, likewise covenants and agrees to the
subordination herein provided and shall be bound by the
<PAGE 110> provisions hereof. Senior Debt shall continue to be
Senior Debt and entitled to the benefits of these subordination
provisions irrespective of any amendment, modification or waiver
of any term of the Senior Debt or extension or renewal of the
Senior Debt.
In the event that the Company shall default in the
payment of any principal of (or premium, if any) or interest on
any Senior Debt when the same become due and payable, whether at
maturity or at a date fixed for prepayment or by declaration of
acceleration or otherwise, then, upon written notice of such
default to the Company by the Holders of Senior Debt or any
trustee therefor, unless and until such default shall have been
cured or waived or shall have ceased to exist, no direct or
indirect payment (in cash, property, securities, by set-off or
otherwise) shall be made or agreed to be made on account of the
principal of (or premium, if any) or interest on any of the Debt
Securities, or in respect of any redemption, repayment,
retirement, purchase or other acquisition of any of the Debt
Securities.
In the event of
(a) any insolvency, bankruptcy, receivership,
liquidation, reorganization, readjustment, composition or other
similar proceeding relating to the Company, its creditors or its
property,
(b) any proceeding for the liquidation, dissolution or
other winding up of the Company, voluntary or involuntary,
whether or not involving insolvency or bankruptcy proceedings,
(c) any assignment by the Company for the benefit of
creditors, or
(d) any other marshalling of the assets of the
Company,
all Senior Debt (including any interest thereon accruing after
the commencement of any such proceedings) shall first be paid in
full before any payment or distribution, whether in cash,
securities or other property, shall be made to any Holder of any
of the Debt Securities or coupons appurtenant thereto on account
thereof. Any payment or distribution, whether in cash,
securities or other property (other than securities of the
Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness
evidenced by the Debt Securities, to the payment of all Senior
Debt at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or
readjustment), which would otherwise (but for these subordination
provisions) be payable or deliverable in respect of the Debt
<PAGE 111> Securities of any series or coupons appurtenant
thereto shall be paid or delivered directly to the Holders of
Senior Debt in accordance with the priorities then existing among
such Holders until all Senior Debt (including any interest
thereon accruing after the commencement of any such proceedings)
shall have been paid in full. In the event of any such
proceeding, after payment in full of all sums owing with respect
to Senior Debt, the Holders of the Debt Securities and coupons
appurtenant thereto, together with the Holders of any obligations
of the Company ranking on a parity with the Debt Securities,
shall be entitled to be paid from the remaining assets of the
Company the amounts at the time due and owing on account of
unpaid principal of (and premium, if any) and interest on the
Debt Securities and such other obligations before any payment or
other distribution, whether in cash, property or otherwise, shall
be made on account of any capital stock or any obligations of the
Company ranking junior to the Debt Securities and such other
obligations.
In the event that, notwithstanding the foregoing, any
payment or distribution of any character or any security, whether
in cash, securities or other property (other than securities of
the Company or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is
subordinate, at least to the extent provided in these
subordination provisions with respect to the indebtedness
evidenced by the Debt Securities, to the payment of all Senior
Debt at the time outstanding and to any securities issued in
respect thereof under any such plan of reorganization or
readjustment), shall be received by the Trustee or any Holder in
contravention of any of the terms hereof such payment or
distribution or security shall be received in trust for the
benefit of, and shall be paid over or delivered and transferred
to, the holders of the Senior Debt at the time outstanding in
accordance with the priorities then existing among such holders
for application to the payment of all Senior Debt remaining
unpaid, to the extent necessary to pay all such Senior Debt in
full. In the event of the failure of the Trustee or any Holder
to endorse or assign any such payment, distribution or security,
each holder of Senior Debt is hereby irrevocably authorized to
endorse or assign the same.
No present or future holder of any Senior Debt shall be
prejudiced in the right to enforce subordination of the
indebtedness evidenced by the Debt Securities by any act or
failure to act on the part of the Company. Nothing contained
herein shall impair, as between the Company and the Holders of
Debt Securities of each series, the obligation of the Company to
pay to such Holders the principal of (and premium, if any) and
interest upon such Debt Securities and coupons appurtenant
thereto or prevent the Trustee or the Holder from exercising all
rights, powers and remedies otherwise permitted by applicable law
or hereunder upon a default or Event of Default hereunder, all
subject to the rights of the holders of the Senior Debt to
<PAGE 112> receive cash, securities or other property otherwise
payable or deliverable to the Holders.
Senior Debt shall not be deemed to have been paid in
full unless the holders thereof shall have received cash,
securities or other property equal to the amount of such Senior
Debt then outstanding. Upon the payment in full of all Senior
Debt, the Holders of Debt Securities of each series and coupons
appurtenant thereto, if any, shall be subrogated to all rights of
any holders of Senior Debt to receive any further payments or
distributions applicable to the Senior Debt until the
indebtedness evidenced by the Debt Securities of such series and
coupons appertaining thereto, if any, shall have been paid in
full, and such payments or distributions received by such
Holders, by reason of such subrogation, of cash, securities or
other property which otherwise would be paid or distributed to
the holders of Senior Debt, shall, as between the Company and its
creditors other than the holders of Senior Debt, on the one hand,
and such Holders, on the other hand, be deemed to be a payment by
the Company on account of Senior Debt, and not on account of the
Debt Securities of such series.
The Trustee and Holders will taken action (including,
without limitation, the delivery of this Indenture to an agent
for the holders of Senior Debt or consent to the filing of a
financing statement with respect hereto) as may, in the opinion
of counsel designated by the holders of a majority in principal
amount of the Senior Debt at the time outstanding, be necessary
or appropriate to assure the effectiveness of the subordination
effected by these provisions.
The provisions of this Section 1801 shall not impair
any rights, interests, remedies or powers of any secured creditor
of the Company in respect of any security interest the creation
of which is not prohibited by the provisions of this Indenture.
The securing of any obligations of the Company,
otherwise ranking on a parity with the Debt Securities or ranking
junior to the Debt Securities, shall not be deemed to prevent
such obligations from constituting, respectively, obligations
ranking on a parity with the Debt Securities or ranking junior to
the Debt Securities.
SECTION 1802. Trustee and Holders of Debt Securities
May Rely on Certificate of Liquidating Agent; Trustee May Require
Further Evidence as to Ownership of Senior Debt; Trustee Not
Fiduciary to Holders of Senior Debt.
Upon any payment or distribution of assets of the
Company referred to in this Article Eighteen, the Trustee and the
Holders shall be entitled to rely upon an order or decree made by
any court of competent jurisdiction in which such dissolution or
winding up or liquidation or reorganization or arrangement
proceedings are pending or upon a certificate of the trustee in
<PAGE 113> bankruptcy, receiver, assignee for the benefit of
creditors or other Person making such payment or distribution,
delivered to the Trustee or to the Holders, for the purpose of
ascertaining the persons entitled to participate in such
distribution, the holders of the Senior Debt 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 Eighteen.
In the absence of any such bankruptcy trustee, receiver, assignee
or other Person, the Trustee shall be entitled to rely upon a
written notice by a Person representing himself or herself to be
a holder of Senior Debt (or a trustee or representative on behalf
of such holder) as evidence that such Person is a holder of such
Senior Debt (or is such a trustee or representative). In the
event that the Trustee determines, in good faith, that further
evidence is required with respect to the right of any person as
holder of Senior Debt to participate in any payments or
distributions pursuant to this Article Eighteen, the Trustee may
request such person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of Senior Debt held
by such Person, as to the extent to which such Person is entitled
to participate in such payment or distribution, and as to other
facts pertinent to the rights of such Person under this Article
Eighteen, and if such evidence is not furnished, the Trustee may
offer any payment to such Person pending judicial determination
as to the right of such Person to receive payment. The Trustee,
however, shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt.
SECTION 1803. Payment Permitted if No Default.
Nothing contained in this Article Eighteen or elsewhere
in this Indenture, or in any of the Debt Securities, shall
prevent (a) the Company at any time, except during the pendency
of any dissolution, winding up, liquidation or reorganization
proceedings referred to in, or under the conditions described in,
Section 1801, from making payments of the principal of (or
premium, if any) or interest on the Debt Securities or (b) the
application by the Trustee or any Paying Agent of any moneys
deposited with it hereunder to payments of the principal of or
interest on the Debt Securities, if, at the time of such deposit,
the Trustee or such Paying Agent, as the case may be, did not
have the written notice provided for in Section 1804 of any event
prohibiting the making of such deposit, or if, at the time of
such deposit (whether or not in trust) by the Company with the
Trustee or any Paying Agent (other than the Company) such payment
would not have been prohibited by the provisions of this Article,
and the Trustee or any Paying Agent shall not be affected by any
notice to the contrary received by it on or after such date.
SECTION 1804. Trustee Not Charged with Knowledge of
Prohibition.
<PAGE 114>
Anything in this Article Eighteen or elsewhere in this
Indenture contained to the contrary notwithstanding, the Trustee
shall not at any time be charged with knowledge of the existence
of any facts which would prohibit the making of any payment of
money to or by the Trustee and shall be entitled conclusively to
assume that no such facts exist and that no event specified in
Section 1801 has happened, until the Trustee shall have received
an Officers' Certificate to that effect or notice in writing to
that effect signed by or on behalf of the holder or holders or
their representatives, of Senior Debt who shall have been
certified by the Company or otherwise established to the
reasonable satisfaction of the Trustee to be such holder or
holders or representatives or from any trustee under the
indenture pursuant to which such Senior Debt shall be
outstanding. The Company shall give prompt written notice to the
Trustee and to the Paying Agent of any facts which would prohibit
the payment of money to or by the Trustee or any Paying Agent.
SECTION 1805. Trustee to Effectuate Subordination.
Each Holder of Debt Securities or coupons by such
Holder's acceptance thereof authorizes and directs the Trustee in
such Holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as between such
Holder and holders of Senior Debt as provided in this Article and
appoints the Trustee its attorney-in-fact for any and all such
purposes.
SECTION 1806. Rights of Trustee as Holder of Senior
Debt.
The Trustee shall be entitled to all the rights set
forth in this Article with respect to any Senior Debt which may
at the time be held by it, to the same extent as any other holder
of Senior Debt, provided that nothing in this Article shall
deprive the Trustee of any rights as such holder and provided
further that nothing in this Article shall apply to claims of, or
payments to, the Trustee under or pursuant to Section 607.
SECTION 1807. Article Applicable to Paying Agents.
In case at any time any Paying Agent other than the
Trustee shall have been appointed by the Company and be then
acting hereunder, the term "Trustee" as used in this Article
shall in such case (unless the context shall otherwise require)
be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if
the Paying Agent were named in this Article in addition to or in
place of the Trustee; provided, however, that Sections 1804 and
1806 shall not apply to the Company or any Affiliate of the
Company if the Company or such Affiliate acts as Paying Agent.
SECTION 1808. Subordination Rights Not Impaired by
Acts or Omissions of the Company or Holders of Senior Debt.
<PAGE 115>
No right of any present or future holders of any Senior
Debt to enforce subordination as herein provided shall at any
time or 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, provision and
covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or be otherwise charged with. The
holders of Senior Debt may, at any time or from time to time and
in their absolute discretion, change the manner, place or terms
of payment, change or extend the time of payment of, or renew or
alter any such Senior Debt, or amend or supplement any instrument
pursuant to which any such Senior Debt is issued or by which it
may be secured, or release any security therefor, or exercise or
refrain from exercising any other of their rights under the
Senior Debt including, without limitation, the waiver of default
thereunder, all without notice to or assent from the Holders of
the Debt Securities or the Trustee and without affecting the
obligations of the Company, the Trustee or the Holders of the
Debt Securities under this Article.
ARTICLE NINETEEN
Conversion of Convertible Securities
SECTION 1901. Applicability of Article.
If an Officers' Certificate or supplemental indenture
pursuant to Section 301 provides that the Debt Securities of a
series shall be Convertible Securities, Debt Securities of such
series shall be convertible in accordance with their terms and
(except as otherwise specified in such Officers' Certificate or
supplemental indenture) in accordance with this Article.
SECTION 1902. Right to Convert.
Subject to and upon compliance with the provisions of
this Article, the Holder of any Convertible Security shall have
the right, at such Holder's option, at any time prior to the
close of business on the date set forth in the Officers'
Certificate delivered pursuant to Section 301 hereof (or if such
Convertible Security is called for redemption or submitted for
repayment, then in respect of such Convertible Security to and
including but not after the close of business on the Redemption
or Repayment Date, as the case may be, unless the Company shall
default in the payment due) to convert the principal amount of
any such Convertible Security, or, in the case of any Convertible
Security of a denomination greater than $1,000, any portion of
such principal which is $1,000 or an integral multiple thereof,
into that number of fully paid and nonassessable shares of Common
<PAGE 116> Stock (as such shares shall then be constituted)
obtained by dividing the principal amount of the Convertible
Security or portion thereof surrendered for conversion by the
Conversion Price, by surrender of the Convertible Security so to
be converted in whole or in part in the manner provided in
Section 1903. Such conversion shall be effected by the Company.
SECTION 1903. Exercise of Conversion Privilege;
Delivery of Common Stock on Conversion; No Adjustment for
Interest or Dividends.
In order to exercise the conversion privilege, the
Holder of any Convertible Security to be converted in whole or in
part shall surrender such Convertible Security at an office or
agency maintained by the Company pursuant to Section 1002,
accompanied by the funds, if any, required by the last paragraph
of this Section, together with written notice of conversion in
the form provided on the Convertible Securities, that the Holder
elects to convert such Convertible Security or the portion
thereof specified in said notice. Such notice shall also state
the name or names (with address) in which the certificate or
certificates for shares of Common Stock which shall be
deliverable on such conversion shall be registered, and shall be
accompanied by transfer taxes, if required pursuant to
Section 1908. Each Convertible Security surrendered for
conversion shall, unless the shares deliverable on conversion are
to be registered in the same name as the registration of such
Convertible Security, be duly endorsed by, or accompanied by
instruments of transfer in form satisfactory to the Company duly
executed by, the Holder or such Holder's duly authorized
attorney.
As promptly as practicable after the surrender of such
Convertible Security and the receipt of such notice and funds, if
any, as aforesaid, the Company shall deliver at such office or
agency to such Holder, or on such Holder's written order, a
certificate or certificates for the number of full shares
deliverable upon the conversion of such Convertible Security or
portion thereof in accordance with the provisions of this Article
and a check or cash in respect of any factional interest in
respect of a share of Common Stock arising upon such conversion
as provided in Section 1904. In case any Convertible Security of
a denomination greater than $1,000 shall be surrendered for
partial conversion and subject to Section 302, the Company shall
execute and the Trustee shall authenticate and deliver to or upon
the written order of the Holder of the Convertible Security so
surrendered, without charge to such Holder, a new Convertible
Security or Convertible Securities in authorized denominations in
an aggregate principal amount equal to the unconverted portion of
the surrendered Convertible Security.
Each conversion shall be deemed to have been effected
on the date on which such Convertible Security shall have been
surrendered (accompanied by the funds, if any, required by the
<PAGE 117> last paragraph of this Section) and such notice shall
have been received by the Company, as aforesaid, and the person
in whose name any certificate or certificates for shares of
Common Stock shall be registrable upon such conversion shall be
deemed to have become on said date the holder of record of the
shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the
Company shall be closed shall constitute the person in whose name
the certificates are to be registered as the record holder
thereof for all purposes on the next succeeding day on which
stock transfer books are open, but such conversion shall be at
the Conversion Price in effect on the date upon which such
Convertible Security shall have been surrendered.
Any Convertible Security or portion thereof surrendered
for conversion during the period from the close of business on
the Regular Record Date for any Interest Payment Date shall
(unless such Convertible Security or portion thereof being
converted shall have been called for redemption or submitted for
repayment on a date in such period) be accompanied by payment, in
legal tender or other funds acceptable to the Company, of an
amount equal to the interest otherwise payable on such Interest
Payment Date on the principal amount being converted; provided,
however, that no such payment need be made if there shall exist
at the time of conversion a default on the payment of interest on
the Convertible Securities. An amount equal to such payment
shall be paid by the Company on such Interest Payment Date to the
Holder of such Convertible Security on such Regular Record Date,
provided, however, that if the Company shall default in the
payment of interest on such Interest Payment Date, such amount
shall be paid to the person who made such required payment.
Except as provided above in this Section, no adjustment shall be
made for interest accrued on any Convertible Security converted
or for dividends on any shares issued upon the conversion of such
Convertible Security as provided in this Article.
SECTION 1904. Cash Payments in Lieu of Fractional
Shares.
No fractional shares of Common Stock or scrip
representing fractional shares shall be delivered upon conversion
of Convertible Securities. If more than one Convertible Security
shall be surrendered for conversion at one time by the same
Holder, the number of full shares which shall be deliverable upon
conversion shall be computed on the basis of the aggregate
principal amount of the Convertible Securities (or specified
portions thereof to the extent permitted hereby) so surrendered.
If any fractional share of stock would be deliverable upon the
conversion of any Convertible Security or Convertible Securities,
the Company shall make an adjustment therefor in cash at the
current market value of such fractional share of stock. The
market value of a share of Common Stock shall be the Closing
Price on the Business day immediately preceding the day on which
<PAGE 118> the Convertible Securities (or specified portions
thereof) are deemed to have been converted.
SECTION 1905. Conversion Price.
The Conversion Price shall be as specified in the form
of Convertible Security hereinafter set forth, subject to
adjustment as provided in this Article.
SECTION 1906. Adjustment to Conversion Price.
The Conversion Price shall be adjusted from time to
time as follows:
(a) In case the Company shall (i) pay a dividend or
make a distribution on the Common Stock in shares of its capital
stock (whether shares of Common Stock or of capital stock of any
other class), (ii) subdivide or reclassify its outstanding Common
Stock into a greater number of securities (including Common
Stock), or (iii) combine or reclassify its outstanding Common
Stock into a smaller number of securities (including Common
Stock), the Conversion Price in effect immediately prior thereto
shall be adjusted so that the Holder of any Convertible Security
thereafter surrendered for conversion shall be entitled to
receive the number of shares of capital stock of the Company
which such Holder would have owned or have been entitled to
receive after the happening of any of the events described above
had such Convertible Security been converted immediately prior to
the happening of such event. An adjustment made pursuant to this
subsection (a) shall become effective immediately after the
record date in the case of a dividend and shall become effective
immediately after the effective date in the case of a subdivision
or combination. If, as a result of an adjustment made pursuant
to this subsection (a), the Holder of any Convertible Security
thereafter surrendered for conversion shall become entitled to
receive shares of two or more classes of capital stock of the
Company, the Board of Directors of the Company (whose
determination shall be conclusive and shall be described in a
written statement filed with the Trustee and any conversion
agent) shall determine the allocation of the adjusted Conversion
Price between or among shares of such classes of capital stock.
In the event that at any time, as a result of an
adjustment made pursuant to this subsection (a) of this Section
1906, the Holder of any Convertible Security thereafter converted
shall become entitled to receive any shares or other securities
of the Company other than shares of Common Stock, thereafter the
number of such other shares so received upon conversion of any
Convertible Security shall be subject to adjustment from time to
time in any manner and on terms as nearly equivalent as
practicable to the provisions with respect to the shares of
Common Stock contained in this Section 1906, and other provisions
of this Article Nineteen with respect to the shares of Common
<PAGE 119> Stock shall apply on like terms to any such other
shares or other securities.
(b) In case the Company shall fix a record date for
the issuance of rights or warrants to all holders of its Common
Stock (or securities convertible into Common Stock) entitling
them (for a period expiring within 45 days after such record
date) to subscribe for or purchase Common Stock at a price per
share (or a conversion price per share)less than the current
market price per share of Common Stock (as defined in subsection
(d) below) at such record date, the Conversion Price in effect
immediately prior thereto shall be adjusted so that the same
shall equal the price determined by multiplying the Conversion
Price in effect immediately prior to such record date by a
fraction of which the numerator shall be the number of shares of
Common Stock outstanding on such record date plus the number of
shares which the aggregate offering price of the total number of
shares so offered (or the aggregate initial conversion price of
the convertible securities so offered) would purchase at such
current market price, and of which the denominator shall be the
number of shares of Common Stock outstanding on such record date
plus the number of additional shares of Common Stock offered for
subscription or purchase (or into which the convertible
securities so offered are initially convertible). Such
adjustment shall be made successively whenever such a record is
fixed, and shall become effective immediately after such record
date. In determining whether any rights or warrants entitle the
holders to subscribe for or purchase shares of Common Stock at
less than such current market price, and in determining the
aggregate offering price of such shares, there shall be taken
into account any consideration determined by the Board of
Directors of the Company. Common Stock owned by or held for the
account of the Company or any majority owned subsidiary shall not
be deemed outstanding for the purpose of any adjustment required
under this subsection (b).
(c) In case the Company shall fix a record date for
making a distribution to all holders of its Common Stock
evidences of its indebtedness or assets (excluding regular
quarterly or other periodic or recurrent cash dividends or
distributions paid from retained earnings of the Company or
dividends or distributions referred to in subsection (a) above)
or rights or warrants to subscribe or purchase (excluding those
referred to in subsection (b) above), then in each case the
Conversion Price shall be adjusted so that the same shall equal
the price determined by multiplying the Conversion Price in
effect immediately prior to such record date by a fraction of
which the numerator shall be the current market price per share
(as defined in subsection (d) below) of the Common Stock on such
record date less the then fair market value (as determined by the
Board of Directors of the Company whose determination shall be
conclusive, and described in a certificate filed with the
Trustee) of the portion of the assets or evidences of
indebtedness so distributed or of such rights or warrants
<PAGE 120> applicable to one share of Common Stock, and the
denominator shall be the current market price per share (as
defined in subsection (d) below) of the Common Stock. Such
adjustment shall be made successively when ever such a record
date is fixed and shall become effective immediately after such
record date. Notwithstanding the foregoing, in the event that
the Company shall distribute any rights or warrants to acquire
capital stock ("Rights") pursuant to this subsection (c), the
distribution of separate certificates representing such Rights
subsequent to their initial distribution (whether or not such
distribution shall have occurred prior to the date of the
issuance of such Convertible Securities) shall be deemed to be
the distribution of such Rights for purposes of this
subsection (c); provided that the Company may, in lieu of making
any adjustment pursuant to this subsection (c) upon a
distribution of separate certificates representing such Rights,
make proper provision so that each Holder of such Convertible
Security who converts such Convertible Security (or any portion
thereof) (i) before the record date for such distribution of
separate certificates shall be entitled to receive upon such
conversion shares of Common Stock issued with Rights and
(ii) after such record date and prior to the expiration,
redemption or termination of such Rights shall be entitled to
receive upon such conversion, in addition to the shares of Common
Stock issuable upon such conversion, the same number of such
Rights as would a holder of the number of shares of Common Stock
that such Convertible Security so converted would have entitled
the holder thereof to purchase in accordance with the terms and
provisions of and applicable to the Rights if such Convertible
Security were converted immediately prior to the record date for
such distribution. Common Stock owned by or held for the account
of the Company or any majority owned subsidiary shall not be
deemed outstanding for the purpose of any adjustment required
under this subsection (c).
(d) For the purpose of any computation under
subsection (b) and (c) above, the current market price per share
of Common Stock at any date shall be deemed to be the average of
the daily Closing Prices for the thirty days (which are not legal
holidays as defined in Section 113) commencing forty-five days
(which are not legal holidays as defined in Section 113) before
the day in question. The Closing Price for any day shall be
(i) if the Common Stock is listed or admitted for trading on any
national securities exchange or the National Market System of the
National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ"), the last sale price (regular way),
or the average of the closing bid and ask prices if no sale
occurred, of Common Stock on the principal securities exchange on
which the Common Stock is listed, (ii) if not listed as described
in (i), the mean between the closing high bid and low asked
quotations of Common Stock on NASDAQ, or any similar system or
automated dissemination of quotations of securities prices then
in common use, if so quoted, or (iii) if not quoted as described
in clause (ii), the mean between the high bid and low asked
<PAGE 121> quotations for Common Stock as reported by the
National Quotation Bureau Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common
Stock on at least 5 of the 10 preceding days. If none of the
conditions set forth above is met, the Closing Price of Common
Stock on any day or the average of such Closing Prices for any
period shall be the fair market value of Common Stock as
determined by a member firm of the New York Stock Exchange, Inc.
selected by the Company.
(e) (i) No adjustment in the Conversion price shall
be required unless such adjustment would require an increase
or decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this
subsection (e)(i) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment; further provided, however, that any adjustments
which by reason of this subsection (e)(i) are not otherwise
required to be made shall be made no later than 3 years
after the date on which occurs an event that requires an
adjustment to be made or carried forward.
(ii) All calculations under this Article Nineteen
shall be made to the nearest cent or to the nearest one-
hundredth of a share, as the case may be. Anything in this
Section 1906 to the contrary notwithstanding, the Company
shall be entitled to make such reductions in the Conversion
Price, in addition to those required by this Section 1906,
as it in its discretion shall determine to be advisable in
order that any stock dividends, subdivision of shares,
distribution of rights to purchase stock or securities, or
distribution of securities convertible into or exchangeable
for stock hereafter made by the Company to its shareholders
shall not be taxable.
(f) Whenever the Conversion Price is adjusted, as
herein provided, the Company shall promptly file with the Trustee
and any conversion agent other than the Trustee an Officers'
Certificate setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts
requiring such adjustment. Promptly after delivery of such
certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted
Conversion Price and the date on which such adjustment becomes
effective and shall mail such notice of such adjustment of the
Conversion Price to the Holder of each Convertible Security at
such Holder's last address appearing on the Security Register
provided for in Section 305 of this Indenture.
(g) In any case in which this Section 1906 provides
that an adjustment shall become effective immediately after a
record date for an event, the Company may defer until the
occurrence of such event (i) delivering to the Holder of any
Convertible Security converted after such record date and before
<PAGE 122> the occurrence of such event the additional shares of
Common Stock deliverable upon such conversion by reason of the
adjustment required by such event over and above the Common Stock
deliverable upon such conversion before giving effect to such
adjustment and (ii) paying to such Holder any amount in cash in
lieu of any fraction pursuant to Section 1904, provided, however,
that the Company shall deliver to such Holder a due bill or other
appropriate instrument evidencing such Holder's rights to receive
such additional shares, and such cash, upon the occurrence of the
event requiring such adjustment. If such event does not occur,
no adjustments shall be made pursuant to this Section 1906.
SECTION 1907. Effect of Reclassification,
Consolidation, Merger or Sale.
If any of the following events occur, namely (i) any
reclassification or change of outstanding shares of Common Stock
deliverable upon conversion of the Convertible Securities (other
than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a subdivision
or combination, but including any change in the shares of Common
Stock into two or more classes or series of securities), (ii) any
consolidation or merger to which the Company is a party (other
than a consolidation or merger in which the Company is the
continuing corporation and which does not result in any
reclassification of, or change (other than a change in par value,
or from par value to no par value, or from no par value to par
value, or as a result of a subdivision or combination) in,
outstanding shares of its Common Stock) or (iii) any sale or
conveyance of the properties and assets of the Company as, or
substantially as, an entirety to any other corporation; then the
Company or such successor or purchasing corporation, as the case
may be, shall execute with the Trustee a supplemental indenture
(which shall conform to the Trust Indenture Act as in force at
the date of execution of such supplemental indenture and comply
with the provisions of Article Nine) providing that each
Convertible Security shall be convertible into the kind and
amount of shares of stock and other securities or property,
including cash, receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of a number
of shares of Common Stock deliverable upon conversion of such
Convertible Securities immediately prior to such
reclassification, change, consolidation, merger, sale or
conveyance. Such supplemental indenture shall provide for
adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Article. The
Company shall cause notice of the execution of such supplemental
indenture to be mailed to each Holder of Convertible Securities,
at his address appearing on the Security Register provided for in
Section 305 of this Indenture.
The above provisions of this Section shall similarly
apply to successive reclassifications, consolidations, mergers
and sales. <PAGE 123>
SECTION 1908. Taxes on Shares Issued.
The delivery of stock certificates on conversions of
Convertible Securities shall be made without charge to the
Holder converting a Convertible Security for any tax in respect
of the issue thereof. The Company shall not, however, be
required to pay any tax which may be payable in respect of any
transfer involved in the delivery of stock registered in any name
other than of the Holder of any Convertible Security converted,
and the Company shall not be required to deliver any such stock
certificate unless and until the person or persons requesting the
delivery thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the
Company that such tax has been paid.
SECTION 1909. Shares to be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock.
The Company covenants that all shares of Common Stock
which may be delivered upon conversion of Convertible Securities
will upon delivery be fully paid and nonassessable by the Company
and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that if any shares of Common
Stock to be provided for the purpose of conversion of Convertible
Securities hereunder require registration with or approval of any
governmental authority under any Federal or state law before such
shares may be validly delivered upon conversion, the Company
will in good faith and as expeditiously as possible endeavor to
secure such registration or approval, as the case may be.
The Company further covenants that it will, if
permitted by the rules of the National Association of Securities
Dealers, Inc., qualify for trading on NASDAQ, upon official
notice of issuance, all Common Stock deliverable upon conversion
of the Convertible Securities.
SECTION 1910. Responsibility of Trustee.
Neither the Trustee nor any authenticating agent nor
any conversion agent shall at any time be under any duty or
responsibility to any Holder of Convertible Securities to
determine whether any facts exist which may require any
adjustment of the Conversion Price, or with respect to the nature
or extent of any such adjustment when made, or with respect to
the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. Neither the Trustee
nor any authenticating agent nor any conversion agent shall be
accountable with respect to the validity or value (or the kind or
amount) of any shares of Common Stock, or of any securities or
property, which may at any time be delivered upon the conversion
of any Convertible Security; and neither the Trustee nor any
authenticating agent nor any conversion agent makes any
<PAGE 124> representation with respect thereto. Subject to the
provisions of Section 601, neither the Trustee nor any
authenticating agent nor any conversion agent shall be
responsible for any failure of the Company to deliver any shares
of Common Stock or stock certificates or other securities or
property or cash upon the surrender of any Convertible Security
for the purpose of conversion or for any failure of the Company
to comply with any of the covenants contained in this Article.
SECTION 1911. Notice to Holders Prior to Certain
Actions.
In case:
(a) the Company shall declare a dividend (or any other
distribution) on the Common Stock (other than in cash out of its
current or retained earnings); or
(b) the Company shall authorize the granting to the
holders of the Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or
warrants; or
(c) of any reclassification or change of the Common
Stock (other than a subdivision or combination of its outstanding
Common Stock, or a change in par value, or from par value to no
par value, or from no par value to par value) or, of any
consolidation or merger to which the Company is a party and for
which approval of any stockholders of the Corporation is required
or for the sale or transfer of all or substantially all of the
assets of the Company; or
\AP of the voluntary or involuntary dissolution,
liquidation or winding up of the Company; the Company shall cause
to be filed with the Trustee and the Company shall cause to be
mailed to each holder of Convertible Securities at his address
appearing on the Security Register, provided for in Section 305
of this Indenture, as promptly as possible but in any event no
less than fifteen days prior to the applicable date hereinafter
specified, a notice stating (x) the date on which a record is to
be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of
which the holders of Common Stock of record to be entitled to
such dividend, distribution or rights are to be determined, or
(y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is
expected that holders of Common Stock of record shall be entitled
to exchange their Common Stock for securities or other property
deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up. Failure
to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer,
<PAGE 125> dissolution, liquidation or winding up or any
adjustment in the Conversion Price required by this Article
Nineteen.
SECTION 1912. Covenant to Reserve Shares.
The Company covenants that it will at all times reserve
and keep available, free from pre-emptive rights, out of its
authorized but unissued Common Stock, such number of shares of
Common Stock as shall then be deliverable upon the conversion of
all outstanding Convertible Securities.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
SOVEREIGN BANCORP, INC.
By ________________________________
[CORPORATE SEAL]
Attest:
___________________________
Secretary
HARRIS TRUST AND SAVINGS BANK
By ________________________________
[CORPORATE SEAL]
Attest:
____________________________
Assistant Secretary
<PAGE 126>
COMMONWEALTH OF PENNSYLVANIA :
:ss.
COUNTY OF BERKS :
On this _____ day of __________________, 1999, before
me, a notary public, the undersigned officer, personally appeared
___________________________, who acknowledged himself to be
__________________ of SOVEREIGN BANCORP, INC., a Pennsylvania
corporation, and that he as such officer, being authorized to do
so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as
such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
___________________________________
Notary Public
<PAGE 127>
STATE OF ILLINOIS :
:ss.
COUNTY OF __________________ :
On this _____ day of __________________, 1999, before
me, a notary public, the undersigned officer, personally appeared
___________________________, who acknowledged himself to be
__________________ of HARRIS TRUST AND SAVINGS BANK, an Illinois
corporation, and that he as such officer, being authorized to do
so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as
such officer.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal.
___________________________________
Notary Public
<PAGE 128>
EXHIBIT A-1
[Form of Certificate of Beneficial Ownership by a Non-United
States Person or by Certain Other Persons]
Certificate
SOVEREIGN BANCORP, INC.
[Insert title or sufficient description of Debt Securities to be
Delivered]
Reference is hereby made to the Indenture dated as of
__________________, 1999 (the "Indenture") between Sovereign
Bancorp, Inc. and Harris Trust and Savings Bank, as trustee (the
"Trustee") covering the above-captioned Debt Securities. This is
to certify that as of the date hereof, ________________ principal
amount of Debt Securities credited to you for our account (i) is
owned by persons that are not United States Persons, as defined
below; (ii) is owned by United States Persons that are
(a) foreign branches of United States financial institutions (as
defined in the U.S. Treasury Regulations Section 1.165-
12(c)(1)(v)) ("financial institutions") purchasing for their own
accounts or for resale, or (b) United States Persons who acquired
the Notes through foreign branches of United States financial
institutions and who hold the Notes through such United States
financial institutions on the date hereof (and in either case (a)
or (b), each such United States financial institution encloses
herewith a certificate in the form of Exhibit A-2 to the
Indenture); or (iii) is owned by United States or foreign
financial institutions for purposes of resale during the
restricted period (as defined in U.S. Treasury Regulations
Section 1.163-5(c)(2)(i)(D)(7)), which United States or foreign
financial institutions described in clause (iii) above (whether
or not also described in clause (i) or (ii)) certify that they
have not acquired the Notes for purposes of resale directly or
indirectly to a United States Person or to a person within the
United States or its possessions.
[Insert if certificate does not relate to an interest
payment--We undertake to advise you by tested telex followed by
written confirmation if the above statement as to beneficial
ownership is not correct on the date of delivery of the above-
captioned Debt Securities in bearer form as to all of such Debt
Securities with respect to such of said Debt Securities as then
appear in your books as being held for our account.] We
understand that this certificate is required in connection with
United States tax laws. We irrevocably authorize you to produce
this certificate or a copy hereof to any interested party in any
administrative or legal proceedings with respect to the matters
covered by this certificate. "United States Persons" shall mean
a citizen or resident of the United States of America (including
the District of Columbia), a corporation, partnership or other
<PAGE A-1> entity created or organized in or under the laws of
the United States or any political subdivision thereof or an
estate or trust that is subject to United States federal income
taxation regardless of the source of its income.
[This certificate excepts and does not relate to
___________ principal amount of Debt Securities credited to you
for our account and to which we are not now able to make the
certification set forth above. We understand that definitive
Debt Securities cannot be delivered and interest cannot be paid
until we are able to so certify with respect to such principal
amount of Debt Securities.]*
Dated:_________________________
[To be dated on or after
___________________ (the date
determined as provided in the
Indenture)]
[Name of Person Entitled to
Receive Bearer Security]
______________________________
(Authorized Signatory)
Name:_________________________
Title:________________________
__________________
* Delete if appropriate
<PAGE A-2>
EXHIBIT A-2
[Form of Certificate of Status as a
Foreign Branch of a United States Financial Institution]
Certificate
SOVEREIGN BANCORP, INC.
[Insert title or sufficient description of Debt Securities to be
delivered]
Reference is hereby made to the Indenture dated as of
__________________, 1999, (the "Indenture"), between Sovereign
Bancorp, Inc. and Harris Trust and Savings Bank, as trustee,
relating to the offering of the above-captioned Debt Securities
(the "Debt Securities"). Unless herein defined, terms used
herein have the same meaning as given to them in the Indenture.
The undersigned represents that it is a branch located
outside the United States of a United States securities clearing
organization, bank or other financial institution (as defined in
U.S. Treasury Regulations Section 1.165-12(c)(1)(v)) that holds
customers' securities in the ordinary course of its trade or
business and agrees, and authorizes you to advise the issuer or
the issuer's agent, that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Internal Revenue Code of
1986 and the regulations thereunder and is not purchasing for
resale directly or indirectly to a United States Person or to a
person within the United States or its possession. We undertake
to advise you by tested telex followed by written confirmation if
the statement in the immediately preceding sentence is not
correct on the date of delivery of the above-captioned Debt
Securities in bearer form.
We understand that this certificate is required in
connection with the United States tax laws. We irrevocably
authorize you to produce this certificate or a copy hereof to any
interested party in any administrative or legal proceedings with
respect to the matters covered by this certificate.
Dated:________________________
[To be dated on or after
______________________ (the
date determined as provided
in the Indenture)]
[Name of Person Entitled to
Receive Bearer Security]
______________________________
(Authorized Signatory)
<PAGE A-3>
Name:_________________________
Title:________________________
<PAGE A-4>
EXHIBIT B
[Form of Certificate to be Given by Euroclear
and Cedel S.A. in Connection with the Exchange of
All or a Portion of a Temporary Global Security
or to Obtain Interest Prior to Exchange]
Certificate
SOVEREIGN BANCORP, INC.
[Insert title or sufficient description of Debt Securities
to be delivered]
We refer to that portion, _______________, of the
Global Security representing the above-captioned issue [which is
herewith submitted to be exchanged for definitive Debt
Securities]* [for which we are seeking to obtain payment of
interest]* (the "Submitted Portion"). This is to certify,
pursuant to the Indenture dated as of __________________, 1999
(the "Indenture") between Sovereign Bancorp, Inc. and Harris
Trust and Savings Bank, as trustee (the "Trustee"), that we have
received in writing, by tested telex or by electronic
transmission from member organizations with respect to each of
the persons appearing in our records as being entitled to a
beneficial interest in the Submitted Portion a Certificate of
Beneficial Ownership by a Non-United States Person or by Certain
Other Persons, [and, in some cases, a Certificate of Status as a
Foreign Branch of a United States Financial Institution,
authorizing us to inform the issuer or the issuer's agent that it
will comply with the requirements of Section 165(j)(3)(A), (B) or
(C) of the Internal Revenue Code of 1986 and the regulations
thereunder]* substantially in the form of Exhibit A-1 [and A-2]*
to the Indenture.
We hereby request that you deliver to the office of
___________________ in ________________ definitive Bearer
Securities in the denominations on the attached Schedule A.
We further certify that as of the date hereof we have
not received any notification from any of the persons giving such
certificates to the effect that the statements made by them with
respect to any part of the Submitted Portion are no longer true
and cannot be relied on as of the date hereof.
Date:_________________________
[MORGAN GUARANTY TRUST COMPANY OF
NEW YORK, BRUSSELS OFFICE, as
Operator of the Euroclear System]
[Cedel S.A.]
<PAGE B-1>
By_________________________________
_______________
*Delete if inappropriate
<PAGE B-2>
Exhibit 4.16
CERTIFICATE OF TRUST OF
SOVEREIGN CAPITAL TRUST II
THIS Certificate of Trust of Sovereign Capital Trust II (the
"Trust") is being duly executed and filed by The Bank of New York
(Delaware), The Bank of New York, Mark R. McCollom and Jacquelyn
Blue, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby is
Sovereign Capital Trust II.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is The Bank of New
York (Delaware), White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being all of the
trustees of the Trust, have duly executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but
solely as Trustee of the Trust
By:/s/Frederick W. Clark
Name: Frederick W. Clark
Title:Authorized Signatory
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Trustee of the Trust
By:/s/Van K. Brown
Name: Van K. Brown
Title:Assistant Vice President
/s/Mark R. McCollom
MARK R. McCOLLOM, not in his
individual capacity but solely as
Trustee of the Trust
/s/Jacquelyn Blue
JACQUELYN BLUE, not in her
individual capacity but solely as
Trustee of the Trust
Exhibit 4.17
DECLARATION OF TRUST
This DECLARATION OF TRUST, dated as of September 8, 1999
(this "Declaration"), among (i) Sovereign Bancorp Inc., a
Pennsylvania corporation (the "Depositor"), (ii) The Bank of New
York (Delaware), a Delaware banking corporation, as trustee,
(iii) The Bank of New York, a New York banking corporation, as
trustee, and (iv) Mark R. McCollom and Jacquelyn Blue, each an
individual, as trustees (each of such trustees in (ii), (iii) and
(iv) a "Trustee" and collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be
known as "Sovereign Capital Trust II" in which name the Trustees,
or the Depositor to the extent provided herein, may engage in the
transactions contemplated hereby, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and
that
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Declaration, satisfactory to each such party
and substantially in the form included as an exhibit to the 1933
Act Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the
issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended
and restated Declaration, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except
as otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor, as the sponsor of the Trust, and
each of the Trustees are hereby authorized (i) to file with the
Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the
Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to
<PAGE 1> the registration under the Securities Act of 1933, as
amended, of the Capital Securities of the Trust and possibly
certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to
the registration of the Capital Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) to file with
the New York Stock Exchange or any other national stock exchange
or The Nasdaq National Market (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as
shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable and (iv) to execute on behalf of the Trust
that certain Underwriting Agreement relating to the Capital
Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as
an exhibit to the 1933 Act Registration Statement. In the event
that any filing referred to in clauses (i), (ii) and (iii) above
is required by the rules and regulations of the Commission, an
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by one or more of the Trustees, each of the
individual Trustees, in his capacity as a Trustee of the Trust,
is hereby authorized and directed to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing.
In connection with the filings referred to above, the Depositor
and Mark R. McCollom and Jacquelyn Blue, each as a Trustee and
not in his individual capacity, hereby constitutes and appoints
Mark R. McCollom and Jacquelyn Blue, and each of them, as their
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such
Trustee or in the Depositor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Commission, the
Exchanges and administrators of state securities or blue sky
laws, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as the Depositor or such
Trustee might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
<PAGE 2>
5. This Declaration may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4)
and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be 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 otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Declaration shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws of principles).
[SIGNATURE PAGE FOLLOWS]
<PAGE 3>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration to be duly executed as of the day and year first
above written.
SOVEREIGN BANCORP INC., as
Depositor
By: /s/ Mark R. McCollom
Name: Mark R. McCollom
Title: Senior Vice President
THE BANK OF NEW YORK (DELAWARE), as
Trustee of the Trust
By: /s/ Frederick W. Clark
Name: Frederick W. Clark
Title: Authorized Signatory
THE BANK OF NEW YORK, as Trustee of
the Trust
By: /s/ Van K. Brown
Name: Van K. Brown
Title: Assistant Vice President
/s/ Mark R. McCollom
MARK R. McCOLLOM, as Trustee of the
Trust
/s/ Jacquelyn Blue
JACQUELYN BLUE, as Trustee of the
Trust
<PAGE 4>
Exhibit 4.18
AMENDED AND RESTATED DECLARATION
OF TRUST
SOVEREIGN CAPITAL TRUST II
Dated as of _______________
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions......... 3
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application............... 15
Section 2.2 Lists of Holders of Securities................. 16
Section 2.3 Reports by the Property Trustee................ 17
Section 2.4 Periodic Reports to Property Trustee........... 17
Section 2.5 Evidence of Compliance with Conditions
Precedent...................................... 17
Section 2.6 Events of Default; Waiver...................... 18
Section 2.7 Event of Default; Notice....................... 21
ARTICLE III
ORGANIZATION
Section 3.1 Name........................................... 22
Section 3.2 Office......................................... 23
Section 3.3 Purpose........................................ 23
Section 3.4 Authority...................................... 23
Section 3.5 Title to Property of the Trust................. 24
Section 3.6 Powers and Duties of the Administrative
Trustees....................................... 24
Section 3.7 Prohibition of Actions by the Trust and the
Trustees....................................... 30
Section 3.8 Powers and Duties of the Property Trustee...... 31
Section 3.9 Certain Duties and Responsibilities of the
Property Trustee............................... 36
Section 3.10 Certain Rights of Property Trustee............. 39
Section 3.11 Delaware Trustee............................... 43
Section 3.12 Execution of Documents......................... 44
Section 3.13 Not Responsible for Recitals or Issuance of
Securities..................................... 44
Section 3.14 Duration of Trust.............................. 44
Section 3.15 Mergers........................................ 45
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities........ 48
Section 4.2 Responsibilities of the Sponsor................ 48
Section 4.3 Right to Proceed............................... 49
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-
Trustee........................................ 50
Section 5.2 Delaware Trustee............................... 51
Section 5.3 Property Trustee; Eligibility.................. 52
Section 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally................. 54
Section 5.5 Administrative Trustees........................ 54
Section 5.6 Delaware Trustee............................... 55
Section 5.7 Appointment, Removal and Resignation of
Trustees....................................... 55
Section 5.8 Vacancies among Trustees....................... 58
Section 5.9 Effect of Vacancies............................ 59
Section 5.10 Meetings....................................... 59
Section 5.11 Delegation of Power............................ 60
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business....................................... 61
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.................................. 61
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities........ 62
Section 7.2 Execution and Authentication................... 63
Section 7.3 Form and Dating................................ 64
Section 7.4 Registrar, Paying Agent and Exchange
Agent.......................................... 67
Section 7.5 Paying Agent to Hold Money in Trust............ 68
Section 7.6 Replacement Securities......................... 69
Section 7.7 Outstanding Capital Securities................. 69
Section 7.8 Capital Securities in Treasury................. 70
Section 7.9 Temporary Securities........................... 70
Section 7.10 Cancellation................................... 72
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust........................... 73
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities......................... 75
Section 9.2 Transfer Procedures and Restrictions........... 77
Section 9.3 Deemed Security Holders........................ 84
Section 9.4 Book Entry Interests........................... 85
Section 9.5 Notices to Clearing Agency..................... 86
Section 9.6 Appointment of Successor Clearing Agency....... 86
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability...................................... 87
Section 10.2 Exculpation.................................... 88
Section 10.3 Fiduciary Duty................................. 89
Section 10.4 Indemnification................................ 90
Section 10.5 Outside Businesses............................. 96
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.................................... 97
Section 11.2 Certain Accounting Matters..................... 97
Section 11.3 Banking........................................ 98
Section 11.4 Withholding.................................... 99
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.....................................100
Section 12.2 Meetings of the Holders; Action by Written
Consent........................................103
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee........................................106
Section 13.2 Representations and Warranties of Delaware
Trustee........................................107
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement..................108
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices........................................109
Section 15.2 Governing Law..................................111
Section 15.3 Intention of the Parties.......................111
Section 15.4 Headings.......................................111
Section 15.5 Successors and Assigns.........................111
Section 15.6 Partial Enforceability.........................112
Section 15.7 Counterparts...................................112
ANNEX I TERMS OF SECURITIES.......................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE.... A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..... A2-1
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Trust Agreement
310(a)........................................... 5.3
310(b)........................................... 5.3(c); 5.3(d)
311(a)........................................... 2.2(b)
311(b)........................................... 2.2(b)
312(a)........................................... 2.2(a)
312(b)........................................... 2.2(b)
313.............................................. 2.3
314(a)........................................... 2.4; 3.6(j)
314(c)........................................... 2.5
315(a)........................................... 3.9
315(b)........................................... 2.7(a)
315(c)........................................... 3.9(a)
315(d)........................................... 3.9(b)
316(a)........................................... 2.6
316(c)........................................... 3.6(e)
317(a)........................................... 3.8(e); 3.8(h)
317(b)........................................... 3.8(i); 7.5
_______________
* This Cross-Reference Table does not constitute part of the
Trust Agreement and shall not affect the interpretation of
any of its terms or provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SOVEREIGN CAPITAL TRUST II
_________________, [1999] [2000]
AMENDED AND RESTATED DECLARATION OF TRUST ("Trust
Agreement") dated and effective as of ____________________, by
the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this
Trust Agreement;
WHEREAS, the Trustees and the Sponsor established
Sovereign Capital Trust II (the "Trust"), a trust formed under
the Delaware Business Trust Act pursuant to a Declaration of
Trust dated as of September 8, 1999 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on September 10, 1999, 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
(each as hereinafter defined), and engaging in only those other
activities necessary, advisable or incidental thereto;
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Trust Agreement, 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 and that this Trust Agreement constitute
the governing instrument of such 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 Trust Agreement.
<PAGE 1>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement 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 Trust Agreement
has the same meaning throughout;
(c) all references to "the Trust Agreement" or "this
Trust Agreement" are to this Trust Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles
and Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Trust Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Trust Agreement unless
otherwise defined in this Trust Agreement or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural
and vice versa.
"Administrative Trustee" has the meaning set forth in
Section 5.1.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act or any successor rule
thereunder.
"Agent" means any Paying Agent, Registrar or Exchange
Agent.
"Authorized Officer" of a Person means any other Person
that is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a
Global Certificate registered in the name of a Clearing Agency or
its nominee, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described
in Section 9.4.
"Business Day" means any day other than a Saturday or a
Sunday or a day on which banking institutions in the City of New
<PAGE 2> York are authorized or required by law or executive
order to close.
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as it may
be amended from time to time, or any successor legislation.
"Capital Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of
such Book Entry Interest, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Capital Securities" means the Series A Capital
Securities.
"Capital Securities Guarantee" means the Series A
Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as depositary for the Capital Securities and in
whose name or in the name of a nominee of that organization shall
be registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"Closing Time" means the "Closing Time" under the
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the United States Securities and
Exchange Commission as from time to time constituted, or if at
any time after the execution of this Trust Agreement such
Commission is not existing and performing the duties now assigned
to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Company Indemnified Person" means (a) any
Administrative Trustee; (b) any Affiliate of any Administrative
Trustee; (c) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any <PAGE 3>
Administrative Trustee; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
Property Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, 21 West, New York,
New York 10286.
"Covered Person" means: (a) any 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 Sovereign Bancorp, Inc., a
Pennsylvania corporation, or any successor entity resulting from
any consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Debentures under
the Indenture.
"Debenture Trustee" means Harris Trust and Savings
Bank, an Illinois banking corporation, as trustee under the
Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the Series A Debentures.
"Default" means an event, act or condition that with
notice or lapse of time, or both, would constitute an Event of
Default.
"Definitive Capital Securities" shall have the meaning
set forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direct Action" shall have the meaning set forth in
Section 3.8(e).
"Distribution" means a distribution payable to Holders
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means
an Event of Default (as defined in the Indenture) that has
occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor legislation.
<PAGE 4>
"Exchange Agent" has the meaning set forth in
Section 7.4.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Fiscal Year" has the meaning set forth in
Section 11.1.
"Global Capital Security" has the meaning set forth in
Section 7.3(a).
"Holder" means a Person in whose name 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
September 1, 1999, among the Debenture Issuer and the Debenture
Trustee, as amended from time to time.
"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.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"List of Holders" has the meaning set forth in
Section 2.2(a).
"Majority in liquidation amount" means, with respect to
the Trust Securities, except as provided in the terms of the
Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"Prospectus" has the meaning set forth in
Section 3.6(b). <PAGE 5>
"Officers' Certificate" means, with respect to any
Person, a certificate signed by any two of the Chairman, a Vice
Chairman, the Chief Executive Officer, the President, a Vice
President, the Chief Financial Officer, the Treasurer, the
Comptroller, the Secretary, or an Assistant Secretary of such
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Trust Agreement 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.
"Opinion of Counsel" means a written opinion of
counsel, who may be an employee of the Sponsor, and who shall be
acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in
Section 7.4.
"Payment Amount" has the meaning specified in
Section 6.1.
"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.
"PORTAL" has the meaning set forth in
Section 3.6(b)(iii).
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
<PAGE 6>
"QIBs" shall mean qualified institutional buyers as
defined in Rule 144A.
"Quorum" means a majority of the Administrative
Trustees or, if there are only two Administrative Trustees, both
of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Statement" means the Registration
Statement on Form S-3 (333-86961-01) filed with the Commission.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any
other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act, or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as
such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act,
as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
"Securities" or "Trust Securities" means the Common
Securities and the outstanding Capital Securities.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Securities Guarantee" means the Capital Securities
Guarantee.
"Series A Capital Securities" has the meaning specified
in Section 7.1(a).
"Series A Capital Securities Guarantee" means the
guarantee agreement dated as of ___________________, by the
Sponsor in respect of the Series A Capital Securities. <PAGE 7>
"Series A Debentures" means the Series A ______% Junior
Subordinated Deferrable Interest Debentures due
_____________________ of the Debenture Issuer issued pursuant to
the Indenture.
"Special Event" has the meaning set forth in Annex I
hereto.
"Sponsor" means Sovereign Bancorp, Inc., a Pennsylvania
corporation, or any successor entity resulting from any merger,
consolidation, amalgamation or other business combination, in its
capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital
Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"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).
"Trustee" or "Trustees" means each Person who has
signed this Trust Agreement 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 Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Underwriting Agreement" means any underwriting or
placement agreement for the initial offering and sale of Capital
Securities.
<PAGE 8>
"Unrestricted Global Capital Security" has the meaning
set forth in Section 9.2(a).
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Trust Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part of this
Trust Agreement in order for this Trust Agreement to be qualified
under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Trust Agreement limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in
the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative
Trustees on behalf of the Trust shall provide the Property
Trustee, unless the Property Trustee is Registrar for the
Securities (i) within 14 days after each record date for payment
of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders
("List of Holders") as of such record date, provided that neither
the Sponsor nor the Administrative Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act. <PAGE 9>
Section 2.3 Reports by the Property Trustee.
Within 60 days after January 15 of each year,
commencing January 15, ____, the Property Trustee shall provide
to the Holders of the Capital Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as are required by Section 314
(if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent provided for
in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Capital Securities may, by vote or written consent, on behalf of
the Holders of all of the Capital Securities, waive any past
Event of Default in respect of the Capital Securities and its
consequences, provided that, if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of greater than
a majority in aggregate principal amount of the holders of
the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Trust Agreement
may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the
Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding.
<PAGE 10>
The foregoing provisions of this Section 2.6(a) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with
respect to the Capital Securities 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 an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by
the Holders of the Capital Securities of an Event of Default with
respect to the Capital Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities
for all purposes of this Trust Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of
all of the Common Securities, waive any past Event of Default
with respect to the Common Securities and its consequences,
provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Trust Agreement
as provided below in this Section 2.6(b), the Event of
Default under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the
Common Securities are deemed to have waived such Event of
Default under the Trust Agreement as provided below in this
Section 2.6(b), the Event of Default under the Trust
Agreement may only be waived by the vote of the Holders of
at least the proportion in aggregate liquidation amount of
the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding;
provided further, the Holders of Common Securities will be deemed
to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its
consequences if all Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Capital Securities
and only the Holders of the Capital Securities will have the
right to direct the Property Trustee in accordance with the terms
of the Securities. The foregoing provisions of this <PAGE 11>
Section 2.6(b) shall be in lieu of Section 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such
Sections 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act
are hereby expressly excluded from this Trust Agreement and the
Securities, as permitted by the Trust Indenture Act. Subject to
the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities 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 with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the
Indenture by the Property Trustee, at the direction of the
Holders of the Capital Securities, constitutes a waiver of the
corresponding Event of Default under this Trust Agreement. The
foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, notices of all defaults
with respect to the Securities actually known to a Responsible
Officer, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as
defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice
provided therein); provided that, except for a default in the
payment of principal of (or premium, if any) or interest on any
of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer
in good faith determines that the withholding of such notice is
in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.01(a) and 5.01(b)
of the Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer charged with the administration of the Trust
Agreement shall have actual knowledge.
(c) Within five Business Days after the occurrence of
any Event of Default actually known to the Property Trustee, the
<PAGE 12> Property Trustee shall transmit notice of such Event of
Default to the Holders of the Capital Securities, the
Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the
Administrative Trustees shall file annually with the Property
Trustee a certification as to whether or not they are in
compliance with all the conditions and covenants applicable to
them under this Trust Agreement.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "Sovereign Capital Trust II" as such
name may be modified from time to time by the Administrative
Trustees following written notice to the Holders. The Trust's
activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrative Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o
Sovereign Bancorp, Inc., 1130 Berkshire Boulevard, Wyomissing,
Pennsylvania 19610. On ten Business Days written notice to the
Holders of Securities, the Administrative Trustees may designate
another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are
(a) to issue and sell Securities, (b) use the proceeds from the
sale of the Securities to acquire the Debentures, and (c) except
as otherwise limited herein, to engage in only those other
activities necessary, advisable or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived
from investments, mortgage or 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 3.4 Authority.
Subject to the limitations provided in this Trust
Agreement and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action
taken by the Administrative Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust
and an action taken by the Property Trustee on behalf of the
Trust 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
<PAGE 13> dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set
forth in this Trust Agreement.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise
provided in this Trust Agreement, 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 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive
power, duty and authority to cause the Trust to engage in the
following activities:
(a) to issue and sell the Securities in accordance
with this Trust Agreement; provided, however, that (i) the Trust
may issue no more than one series of Capital Securities and no
more than one series of Common Securities, (ii) there shall be no
interests in the Trust other than the Securities, and (iii) the
issuance of Securities shall be limited to a simultaneous
issuance of both the Capital Securities and Common Securities at
the Closing Time;
(b) in connection with the issue and sale of the
Capital Securities, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, a
prospectus and prospectus supplement (the "Prospectus") in
preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Series A Capital
Securities, and to execute and file with the Commission, at
such time as determined by the Sponsor, any Registration
Statement, including any amendments thereto;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor
to be necessary in order to qualify or register all or part
of the Capital Securities in any State in which the Sponsor
has determined to qualify or register such Capital
Securities for sale;
(iii) execute and file an application, prepared
by the Sponsor, to permit the Capital Securities to trade or
be quoted or listed in or on the New York Stock Exchange or
any other securities exchange, quotation system or the
Nasdaq Stock Market's National Market;
<PAGE 14>
(iv) execute and deliver letters, documents, or
instruments with DTC and other Clearing Agencies relating to
the Capital Securities;
(v) if required, execute and file with the
Commission a registration statement on Form 8-A, including
any amendments thereto, prepared by the Sponsor, relating to
the registration of the Capital Securities under Section 12
of the Exchange Act; and
(vi) execute and enter into the Underwriting
Agreement providing for, among other things, the sale and
registration of the Capital Securities;
(c) to acquire the Series A Debentures with the
proceeds of the sale of the Series A Capital Securities and the
Common Securities; provided, however, that the Administrative
Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the
Holders;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices
to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may
be required of the Administrative Trustees pursuant to the terms
of the Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant
to Section 3.8(e) the Property Trustee has the exclusive power to
bring such Legal Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable
compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by
Section 314(a)(4) of the Trust Indenture Act to the Property
Trustee, which certificate may be executed by any Administrative
Trustee; <PAGE 15>
(k) to incur expenses that are necessary or incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a
Paying Agent for the Securities as provided in Section 7.4 except
for such time as such power to appoint a Paying Agent is vested
in the Property Trustee;
(m) to give prompt written notice to the Property
Trustee and to Holders of any notice received from the Debenture
Issuer of its election to defer payments of interest on the
Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or
appropriate 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 or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this
Trust Agreement or with applicable law, that the Administrative
Trustees determine in their discretion to be necessary or
desirable in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness
of the Debenture Issuer for United States federal income tax
purposes;
(p) to take all action necessary to cause the Capital
Securities to be registered pursuant to an effective registration
statement under the Securities Act;
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
<PAGE 16>
(r) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers
set forth in this Section 3.6 in a manner that is consistent with
the purposes and functions of the Trust set out in Section 3.3,
and the Administrative Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative
Trustees shall have none of the powers or the authority of the
Property Trustee set forth in Section 3.8.
Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Debenture
Issuer.
Section 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including
the Property Trustee and the Delaware Trustee) shall not, engage
in any activity other than as required or authorized by this
Trust Agreement. The Trust shall not:
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such
proceeds to Holders pursuant to the terms of this Trust
Agreement 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 in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities;
(vii) other than as provided in this Trust
Agreement or Annex I, (A) direct the time, method and place
of conducting any proceeding with respect to any remedy
available to the Debenture Trustee, or exercising any trust
or power conferred upon the Debenture Trustee with respect
<PAGE 17> to the Debentures, (B) waive any past default that
is waivable under the Indenture, or (C) exercise any right
to rescind or annul any declaration that the principal of
all the Debentures shall be due and payable; or
(viii) 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 a nationally recognized independent
tax counsel experienced in such matters to the effect that
such amendment, modification or termination will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will not be classified
as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned
by and held of record in the name of the Property Trustee in
trust for the benefit of the Holders. The right, title and
interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. 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 Property Trustee shall not transfer its right,
title and interest in the Debentures to the Administrative
Trustees or to the Delaware Trustee (if the Property Trustee does
not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-
interest bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control of
the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments or cause
the Paying Agent to make payments to the Holders from the
Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Trust
Agreement. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act, is at least investment grade;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption
<PAGE 18> of the Trust Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued
by the Administrative Trustees 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 upon the occurrence of certain
events.
(d) The Property Trustee shall take all actions and
perform such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Securities.
(e) Subject to Section 3.9(a), the Property Trustee
shall take any Legal Action which arises out of or in connection
with an Event of Default of which a Responsible Officer has
actual knowledge or the Property Trustee's duties and obligations
under this Trust Agreement or the Trust Indenture Act and if such
Property Trustee shall have failed to take such Legal Action, the
Holders of the Capital Securities may take such Legal Action, to
the same extent as if such Holders of Capital Securities held an
aggregate principal amount of Debentures equal to the aggregate
liquidation amount of such Capital Securities, without first
proceeding against the Property Trustee or the Trust; 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 the principal of or premium, if any, or
interest on the Debentures on the date such principal, premium,
if any, or interest is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, 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 Capital Securities
to the extent of any payment made by the Debenture Issuer to such
Holder of Capital Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed to the Holders
pursuant to the terms of the Securities; or
<PAGE 19>
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance
with Section 5.7 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default
actually known to a Responsible Officer occurs and is continuing,
the Property Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures subject to the rights of
the Holders pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in Section 317(a) of the Trust
Indenture Act.
(i) For such time as the Property Trustee is the
Paying Agent, the Property Trustee may authorize one or more
Persons to act as additional Paying Agents and to pay
Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any such additional Paying Agent may be removed
by the Property Trustee at any time the Property Trustee remains
as Paying Agent and a successor Paying Agent or additional Paying
Agents may be (but are not required to be) appointed at any time
by the Property Trustee while the Property Trustee is so acting
as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in
Section 3.6.
Notwithstanding anything expressed or implied to the
contrary in this Trust Agreement or any Annex or Exhibit hereto,
(i) the Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and (ii) the
Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in
Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Agreement and
in the Securities and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer has
<PAGE 20> actual knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be
construed to relieve the Property Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such Events
of Default that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Trust Agreement and in the
Securities and the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this Trust
Agreement and in the Securities, and no implied
covenants or obligations shall be read into this Trust
Agreement against the Property Trustee; and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Trust Agreement; provided, however, that in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Trust Agreement;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
<PAGE 21>
(iv) no provision of this Trust Agreement shall
require the Property Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Trust Agreement or indemnity reasonably satisfactory to the
Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of
the Debentures and the Property Trustee Account shall be to
deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account,
subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the payment of
any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable
for any interest on any money received by it except as it
may otherwise agree in writing with the Sponsor. Money held
by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee
Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the
Administrative Trustees or the Sponsor with their respective
duties under this Trust Agreement, nor shall the Property
Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely
and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the
proper party or parties; <PAGE 22>
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Trust Agreement
may be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Trust Agreement, the Property Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel
or other experts of its selection and the advice or opinion
of such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its employees.
The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Trust Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses
and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Trust Agreement;
:\APP the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion,
<PAGE 23> report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness
or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of
the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust and the Holders,
and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this
Trust Agreement, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would
be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such
instructions;
(xi) except as otherwise expressly provided by
this Trust Agreement, the Property Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
and
(xii) the Property Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it
in good faith, without negligence, and reasonably believed
by it to be authorized or within the discretion or rights or
powers conferred upon it by this Trust Agreement.
(b) No provision of this Trust Agreement shall be
deemed to impose any duty or obligation on the Property Trustee
<PAGE 24> 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
Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Trust
Agreement other than Section 5.2, the Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this
Trust Agreement. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust
Act, a majority of the Administrative Trustees or, if there are
only two, any Administrative Trustee or, if there is only one,
such Administrative Trustee is authorized to execute on behalf of
the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.6; provided
that, the Registration Statements contemplated by the
Registration Rights Agreement and referred to in
Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Trust Agreement 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 Trust Agreement or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions
of Article VIII hereof, shall have existence up to _____________.
Section 3.15 Mergers.
<PAGE 25>
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with
the consent of the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees and without
the consent of the Holders, the Delaware Trustee or the Property
Trustee, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) 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 long as the
Successor Securities rank the same as the Securities
rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of
the Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the
Debentures;
(iii) the 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;
(iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally recognized
statistical rating organization prior to such transaction,
such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities), or if the
Debentures are so rated, the Debentures, to be downgraded by
any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of
the Holders (including the holders of any Successor
Securities) in any material respect (other than with respect
to any dilution of such Holders' interests in the new
entity); <PAGE 26>
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
the Sponsor has received an opinion of an independent
counsel to the Trust experienced in such matters to the
effect that:
(A) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences
and privileges of the Holders (including the holders of
any Successor Securities) in any material respect
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will
be required to register as an Investment Company; and
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor
Entity and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(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 be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an
entirety to, any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of
the Common Securities then issued by the Trust, in an amount at
least equal to approximately, but not less than, 3% of the
capital of the Trust, at the same time as the Series A Capital
Securities are issued and sold.
Section 4.2 Responsibilities of the Sponsor.
<PAGE 27>
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 prepare the Prospectus and to prepare for
filing by the Trust with the Commission any Registration
Statement, including any amendments thereto;
4-3 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;
(c) if deemed necessary or advisable by the Sponsor,
to prepare for filing by the Trust an application to permit the
Capital Securities to trade or be quoted or listed in or on the
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market, or any other securities exchange, quotation
system or the Nasdaq Stock Market's National Market for listing
or quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A, including any
amendments thereto, relating to the registration of the Capital
Securities under Section 12 of the Exchange Act; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities.
Section 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of
Capital Securities, in the event that a failure of the Trust to
pay Distributions on the Capital Securities is attributable to
the failure of the Company to pay interest or principal on the
Debentures, to institute a proceeding directly against the
Debenture Issuer for enforcement of its payment obligations on
the Debentures.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be four (4),
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 <PAGE 28>
(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 Common Securities
voting as a class at a meeting of the Holders of the Common
Securities;
provided, however, that, the number of Trustees shall in no event
be less than two (2); provided further that (1) one Trustee, in
the case of a natural person, shall be a person who is a resident
of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (an "Administrative Trustee"); and (3) one
Trustee shall be the Property Trustee for so long as this Trust
Agreement is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding
the above, unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in liquidation amount
of the Common Securities acting as a class at a meeting of the
Holders of the Common Securities, and the Administrative Trustees
shall have power to appoint one or more Persons either to act as
a co-trustee, jointly with the Property Trustee, of all or any
part of the Trust's property, or to act as separate trustee of
any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such
Person or Persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of
this Trust Agreement. In case an Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to
make any such appointment of a co-trustee.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no
application.
<PAGE 29>
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the
"Property Trustee") which shall act as Property Trustee which
shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America or
any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least 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 5.3(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 Property Trustee shall cease to
be eligible to so act under Section 5.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set
forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of
the Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Capital Securities Guarantee shall be deemed
to be specifically described in this Trust Agreement for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Section 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally. <PAGE 30>
Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall
be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more Authorized
Officers.
Section 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Mark R. McCollom
Jacquelyn Blue
(a) Except as expressly set forth in this Trust
Agreement and except if a meeting of the Administrative Trustees
is called with respect to any matter over which the
Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent
of, any one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust
Act or applicable law, any Administrative Trustee is authorized
to execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any
amendments thereto, shall be signed by all of the Administrative
Trustees; and
(c) An Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
Section 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Section 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) and to Section 6(b) of
Annex I hereto, Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor; <PAGE 31>
(ii) unless an Event of Default shall have
occurred and be continuing after the issuance of any
Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities;
and
(iii) if an Event of Default shall have occurred
and be continuing after the issuance of the Securities, with
respect to the Property Trustee or the Delaware Trustee, by
vote of Holders of a Majority in liquidation amount of the
Capital Securities voting as a class at a meeting of Holders
of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.7(a) until a
Successor Property Trustee ("Successor Property Trustee") has
been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and
delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(a)
until a successor Trustee possessing the qualifications to
act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death,
removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the
Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee
and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the Holders; and
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor
<PAGE 32> Delaware Trustee has been appointed and has
accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the
Sponsor and the resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an
Event of Default shall have occurred and be continuing after the
issuance of the Securities, the Holders of the Capital
Securities, shall use their best efforts to promptly appoint a
Successor Delaware Trustee or Successor Property Trustee, as the
case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this
Section 5.7.
(e) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.7 within 60 days after
delivery of an instrument of resignation or removal, the Property
Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the
case may be.
(f) No Property Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
Section 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and
the number of Trustees is not reduced pursuant to Section 5.1, or
if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance
with Section 5.7.
Section 5.9 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 Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in
accordance with Section 5.7, the Administrative Trustees in
office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all
<PAGE 33> the duties imposed upon the Administrative Trustees by
this Trust Agreement.
Section 5.10 Meetings.
If there is more than one Administrative Trustee,
meetings of the Administrative Trustees shall be held from time
to time upon the call of any Administrative Trustee. Regular
meetings of the Administrative Trustees may be held at a time and
place fixed by resolution of the Administrative Trustees. Notice
of any in-person meetings of the Administrative Trustees 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 such meeting. Notice of any telephonic meetings
of the Administrative Trustees 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 an
Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where an Administrative Trustee
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 Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the
Administrative Trustees 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 Administrative Trustees. In the
event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
Section 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purpose of executing any documents contemplated in Section 3.6,
including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to
delegate from time to time to such of their number or to officers
of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
<PAGE 34>
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the
Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, may be merged or converted or
with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property
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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the
Property 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 VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with
the applicable terms of the relevant Holder's Securities. If and
to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the
Indenture) and Additional Sums (as defined in the Indenture)),
premium and/or principal on the Debentures held by the Property
Trustee or any other payments with respect to the Debentures held
by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property 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 VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the
Trust issue one class of capital securities representing
undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Series A Capital
Securities") and one class 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").
(b) 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.
<PAGE 35>
(c) Upon issuance of the Securities as provided in
this Trust Agreement, the Securities so issued shall be deemed to
be validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder
or a Capital Security Beneficial Owner in accordance with the
terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this
Trust Agreement.
Section 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the
Trust by an Administrative Trustee by manual or facsimile
signature. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not
ceased to be such Administrative Trustee; and any Securities may
be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Trust Agreement any such person was
not such a Administrative Trustee.
(b) One Administrative Trustee shall sign the
Securities for the Trust by manual or facsimile signature.
A Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property
Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Trust Agreement.
Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate
the Securities for original issue. The aggregate number of
Capital Securities outstanding at any time shall not exceed the
number set forth in the Terms in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating
agent acceptable to the Trust to authenticate Securities. An
authenticating agent may authenticate Securities whenever the
Property Trustee may do so. Each reference in this Trust
Agreement to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the
same rights as the Property Trustee to deal with the Sponsor or
an Affiliate.
Section 7.3 Form and Dating.
The Capital Securities shall be substantially in the
form of Exhibit A-1 and the Common Securities shall be <PAGE 36>
substantially in the form of Exhibit A-2, each of which is hereby
incorporated in and expressly made a part of this Trust
Agreement. The Property Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibits A-1 and
A-2. Certificates representing the Securities may be printed,
lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof. The Securities may have
letters, CUSIP or other 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
Trust). The Trust at the direction of the Sponsor shall furnish
any such legend not contained in Exhibit A-1 to the Property
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 Trust
Agreement and to the extent applicable, the Property Trustee and
the Sponsor, by their execution and delivery of this Trust
Agreement, expressly agree to such terms and provisions and to be
bound thereby.
(a) Global Securities. Securities may be issued in
the form of one or more, permanent global Securities in
definitive, fully registered form without distribution coupons
with the appropriate global legends (a "Global Capital
Security"), which shall be deposited on behalf of the purchasers
of the Capital Securities represented thereby with the Property
Trustee, at its New York office, as custodian for the Clearing
Agency, and registered in the name of the Clearing Agency or a
nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided.
The number of Capital Securities represented by a Global Capital
Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall
apply only to the Global Capital Securities and such other
Capital Securities in global form as may be authorized by the
Trust to be deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall,
in accordance with this Section 7.3, authenticate and make
available for delivery initially one or more Global Capital
Securities that (i) shall be registered in the name of Cede & Co.
or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to
such Clearing Agency's written instructions or held by the
Property Trustee as custodian for the Clearing Agency.
<PAGE 37>
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Trust Agreement
with respect to any Global Capital Security held on their behalf
by the Clearing Agency or by the Property Trustee as the
custodian of the Clearing Agency or under such Global Capital
Security, and the Clearing Agency may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for
all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Trust, the Property Trustee or any agent
of the Trust or the Property Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such
Clearing Agency governing the exercise of the rights of a holder
of a beneficial interest in any Global Capital Security.
(c) Definitive Capital Securities. Except as provided
in Section 7.9 or 9.2(e)(i), owners of beneficial interests in a
Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital
Securities").
(d) Authorized Denominations. The Capital Securities
are issuable only in denominations of $______ and any integral
multiple thereof.
Section 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Borough of Manhattan,
The City of New York, (i) an office or agency where Capital
Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities
may be presented for payment ("Paying Agent") and (iii) an office
or agency where Securities may be presented for exchange
("Exchange Agent"). The Registrar shall keep a register of the
Capital Securities and of their transfer. The Trust may appoint
the Registrar, the Paying Agent and the Exchange Agent and may
appoint one or more co-registrars, one or more additional paying
agents and one or more additional exchange agents in such other
locations as it shall determine. The term "Registrar" includes
any additional registrar, "Paying Agent" includes any additional
paying agent and the term "Exchange Agent" includes any
additional exchange agent. The Trust may change any Paying
Agent, Registrar, co-registrar or Exchange Agent without prior
notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees. The Trust shall notify the Property
Trustee of the name and address of any Agent not a party to this
Trust Agreement. If the Trust fails to appoint or maintain
another entity as Registrar, Paying Agent or Exchange Agent, the
Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar, or Exchange Agent.
<PAGE 38> The Trust shall act as Paying Agent, Registrar, co-
registrar, and Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Exchange Agent for the Capital
Securities.
Section 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than
the Property Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit of Holders or the Property
Trustee all money held by the Paying Agent for the payment of
liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying
Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the
Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or an Affiliate of the Trust
or the Sponsor acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money
held by it as Paying Agent.
Section 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if such Security is
mutilated and is surrendered to the Trust or in the case of the
Capital Securities to the Property Trustee, the Trust shall issue
and the Property Trustee shall, upon written order of the Trust,
authenticate a replacement Security if the Property Trustee's and
the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the
judgment of the Property Trustee, is sufficient to protect the
Trustees, the Sponsor, the Trust or any authenticating agent from
any loss which any of them may suffer if a Security is replaced.
The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional beneficial
interest in the Trust.
Section 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all
the Capital Securities authenticated by the Property Trustee
except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not
outstanding.
<PAGE 39>
If a Capital Security is replaced, paid or purchased
pursuant to Section 7.6 hereof, it ceases to be outstanding
unless the Property Trustee receives proof satisfactory to it
that the replaced, paid or purchased Capital Security is held by
a bona fide purchaser.
If Capital Securities are considered paid in accordance
with the terms of this Trust Agreement, they cease to be
outstanding and Distributions on them shall cease to accumulate.
A Capital Security does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the
Sponsor holds the Security.
Section 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required
amount of Securities have concurred in any direction, waiver or
consent, Capital Securities owned by the Trust, the Sponsor or an
Affiliate of the Sponsor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be
fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee actually
knows are so owned shall be so disregarded.
Section 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for
delivery, the Trust may prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the
form of Definitive Securities but may have variations that the
Trust considers appropriate for temporary Securities. Without
unreasonable delay, the Trust shall prepare and, in the case of
the Capital Securities, the Property Trustee shall authenticate
Definitive Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the
Clearing Agency or with the Property Trustee as custodian for the
Clearing Agency pursuant to Section 7.3 shall be transferred to
the beneficial owners thereof in the form of certificated Capital
Securities only if such transfer complies with Section 9.2 and
(i) the Clearing Agency notifies the Sponsor that it is unwilling
or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and a
clearing agency is not appointed by the Sponsor within 90 days of
such notice, (ii) a Default or an Event of Default has occurred
and is continuing or (iii) the Trust at its sole discretion
elects to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable
to the beneficial owners thereof in the form of certificated
<PAGE 40> Capital Securities pursuant to this Section 7.9 shall
be surrendered by the Clearing Agency to the Property Trustee
located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without
charge, and the Property Trustee shall authenticate and make
available for delivery, upon such transfer of each portion of
such Global Capital Security, an equal aggregate liquidation
amount of Securities of authorized denominations in the form of
certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered
in such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the
Holder of a Global Capital Security may grant proxies and
otherwise authorize any Person, including Participants and
Persons that may hold interests through Participants, to take any
action which such Holder is entitled to take under this Trust
Agreement or the Securities.
(e) In the event of the occurrence of any of the
events specified in Section 7.9(b), the Trust will promptly make
available to the Property Trustee a reasonable supply of
certificated Capital Securities in fully registered form without
distribution coupons.
Section 7.10 Cancellation.
The Trust at any time may deliver Capital Securities to
the Property Trustee for cancellation. The Registrar, Paying
Agent and Exchange Agent shall forward to the Property Trustee
any Capital Securities surrendered to them for registration of
transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment,
replacement or cancellation and shall dispose of cancelled
Capital Securities as the Trust directs, provided that the
Property Trustee shall not be obligated to destroy Capital
Securities. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any
Holder has exchanged.
Section 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the
Property Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders of Capital Securities;
provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on
the Capital 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 Capital Securities, and any
such redemption shall not be affected by any defect in or
<PAGE 41> omission of such numbers. The Sponsor will promptly
notify the Property Trustee of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect to
the Sponsor; or the revocation of the Sponsor's charter and
the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) following the distribution of a Like Amount
of the Debentures to the Holders, provided that, the
Property Trustee has received written notice from the
Sponsor directing the Property Trustee to terminate the
Trust (which direction is optional, and except as otherwise
expressly provided below, within the discretion of the
Sponsor) and provided, further, that such direction and such
distribution is conditioned on (i) the receipt by the
Sponsor of any required regulatory approval and (ii) the
Administrative Trustees' receipt of an opinion of an
independent tax counsel experienced in such matters, which
opinion may rely on published rulings of the Internal
Revenue Service, to the effect that the Holders will not
recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and
the distribution of Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent
jurisdiction;
(v) 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;
(vi) upon the repayment of the Debentures or at
such time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.14.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a), the Administrative
Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware. <PAGE 42>
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in
this Trust Agreement and in the terms of the Securities. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(b) Subject to this Article IX, Capital Securities may
only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Trust Agreement. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(c) For so long as the Trust Securities remain
outstanding, the Sponsor will covenant (i) to directly or
indirectly maintain 100% direct or indirect ownership of the
Common Securities of the Trust; provided, however, that any
permitted successor of the Sponsor under the Indenture may
succeed to the Sponsor's ownership of such Common Securities,
(ii) not to cause, as sponsor of the Trust, or to permit, as
Holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a
distribution of the Debentures as provided in the Trust Agreement
and in connection with certain mergers, consolidations or
amalgamations permitted by this Trust Agreement and (iii) to use
its reasonable efforts to cause the Trust (a) to remain a
business trust, except in connection with the distribution of
Debentures 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 this Trust Agreement, and (b) to otherwise continue
to be classified as a grantor trust for United States federal
income tax purposes.
(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities,
which will be effected without charge but only upon payment (with
such indemnity as the Administrative Trustees 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 Administrative Trustees 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 Administrative
Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for
<PAGE 43> registration of transfer shall be canceled by the
Property Trustee (in the case of Capital Securities) or the Trust
(in the case of Common Securities). 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 Trust Agreement.
Section 9.2 Transfer Procedures and Restrictions.
(a) General. No transfer or exchange of a Definitive
Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Trust a
certificate in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1.
(b) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to
the Registrar or co-Registrar
(x) to register the transfer of such Definitive
Capital Securities; or
(y) to exchange such Definitive Capital
Securities which became mutilated, destroyed, defaced,
stolen or lost, for an equal number of Definitive Capital
Securities,
the Registrar or co-registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such
transaction are met; provided, however, that the Definitive
Capital Securities surrendered for 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 or
co-registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
(c) Restrictions on Transfer of a Definitive Capital
Security for a Beneficial Interest in a Global Capital Security.
A Definitive Capital Security may not be exchanged for a
beneficial interest in a Global Capital Security except upon
satisfaction of the requirements set forth below. Upon receipt
by the Property Trustee of a Definitive Capital Security, duly
endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Property Trustee, together with
written instructions directing the Property Trustee to make, or
to direct the Clearing Agency to make, an adjustment on its books
and records with respect to the appropriate Global Capital
Security to reflect an increase in the number of the Capital
Securities represented by such Global Capital Security, then the
Property Trustee shall cancel such Definitive Capital Security
and cause, or direct the Clearing Agency to cause, the aggregate
number of Capital Securities represented by the appropriate
Global Capital Security to be increased accordingly. If no
<PAGE 44> Global Capital Securities are then outstanding, the
Trust shall issue and the Property Trustee shall authenticate,
upon written order of any Administrative Trustee, an appropriate
number of Capital Securities in global form.
(d) Transfer and Exchange of Global Capital
Securities. Subject to Section 9.2(e), the transfer and exchange
of Global Capital Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with
this Trust Agreement (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(e) Transfer of a Beneficial Interest in a Global
Capital Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a
Global Capital Security may upon request, but only upon 20
days prior notice to the Property Trustee, and if
accompanied by the information specified below, exchange
such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon
receipt by the Property Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial
interest in a Global Capital Security of written
instructions or such other form of instructions as is
customary for the Clearing Agency or the Person designated
by the Clearing Agency as having such a beneficial interest
in a Capital Security and a certification from the
transferor (in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1), which
may be submitted by facsimile, then the Property Trustee
will cause the aggregate number of Capital Securities
represented by Global Capital Securities to be reduced on
its books and records and, following such reduction, the
Trust will execute and the Property Trustee will
authenticate and make available for delivery to the
transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in
exchange for a beneficial interest in a Global Capital
Security pursuant to this Section 9.2(e) shall be registered
in such names and in such authorized denominations as the
Clearing Agency, pursuant to instructions from its Clearing
Agency Participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall
deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in
accordance with such instructions of the Clearing Agency.
(f) Restrictions on Transfer and Exchange of Global
Capital Securities. Notwithstanding any other provisions of this
Trust Agreement (other than the provisions set forth in
subsection (g) of this Section 9.2), a Global Capital Security
<PAGE 45> may not be transferred as a whole except by the
Clearing Agency to a nominee of the Clearing Agency or another
nominee of the Clearing Agency or by the Clearing Agency or any
such nominee to a successor Clearing Agency or a nominee of such
successor Clearing Agency.
(g) Authentication of Definitive Capital Securities.
If at any time:
(i) there occurs a Default or an Event of Default
which is continuing, or
(ii) the Trust, in its sole discretion, notifies
the Property Trustee in writing that it elects to cause the
issuance of Definitive Capital Securities under this Trust
Agreement,
then the Trust will execute, and the Property Trustee, upon
receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery
of Definitive Capital Securities to the Persons designated by the
Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of
Capital Securities represented by the Global Capital Securities,
in exchange for such Global Capital Securities.
(h) Cancellation or Adjustment of Global Capital
Security. At such time as all beneficial interests in a Global
Capital Security have either been exchanged for Definitive
Capital Securities to the extent permitted by this Trust
Agreement or redeemed, repurchased or canceled in accordance with
the terms of this Trust Agreement, such Global Capital Security
shall be returned to the Clearing Agency for cancellation or
retained and canceled by the Property Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities,
Capital Securities represented by such Global Capital Security
shall be reduced and an adjustment shall be made on the books and
records of the Clearing Agency and the Registrar, to reflect such
reduction.
(i) Obligations with Respect to Transfers and
Exchanges of Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property Trustee
shall authenticate Definitive Capital Securities and Global
Capital Securities at the Registrar's or co-registrar's
request in accordance with the terms of this Trust
Agreement.
(ii) Registrations of transfers or exchanges will
be effected without charge, but only upon payment (with such
indemnity as the Trust or the Sponsor may require) in
<PAGE 46> respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be
required to register the transfer of or exchange of
(a) Capital Securities during a period beginning at the
opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of
business on the day of such mailing; or (b) any Capital
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security being
redeemed in part.
(iv) Prior to the due presentation for
registration of transfer of any Capital Security, the Trust,
the Property Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a
Capital Security is registered as the absolute owner of such
Capital Security for the purpose of receiving Distributions
on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Capital Securities issued upon any
transfer or exchange pursuant to the terms of this Trust
Agreement shall evidence the same security and shall be
entitled to the same benefits under this Trust Agreement as
the Capital Securities surrendered upon such transfer or
exchange.
(j) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial owner of a
Global Capital Security, a Clearing Agency Participant in
the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its
nominee or of any Clearing Agency Participant thereof, with
respect to any ownership interest in the Capital Securities
or with respect to the delivery to any Clearing Agency
Participant, beneficial owner or other Person (other than
the Clearing Agency) of any notice (including any notice of
redemption) or the payment of any amount, under or with
respect to such Capital Securities. All notices and
communications to be given to the Holders and all payments
to be made to Holders under the Capital Securities shall be
given or made only to or upon the order of the registered
Holders (which shall be the Clearing Agency or its nominee
in the case of a Global Capital Security). The rights of
beneficial owners in any Global Capital Security shall be
exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency. The
<PAGE 47> Property Trustee may conclusively rely and shall
be fully protected in relying upon information furnished by
the Clearing Agency or any agent thereof with respect to its
Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar shall
have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed
under this Trust Agreement or under applicable law with
respect to any transfer of any interest in any Capital
Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global
Capital Security) other than to require delivery of such
certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by, the terms of this Trust Agreement, and to
examine the same to determine substantial compliance as to
form with the express requirements hereof.
PS\ Minimum Transfers. Series A Capital Securities
may only be transferred in minimum blocks of $___________
aggregate liquidation amount. Any transfer of Series A Capital
Securities in a block having an aggregate liquidation amount of
less than $___________ shall be deemed to be void and of no legal
effect whatsoever. Any such transferee shall be deemed not to be
a Holder of such Series A 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.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Security shall be registered on the books and records of the
Trust as the sole owner of such Security 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 Security on the part of any
Person, whether or not the Trust shall have actual or other
notice thereof.
Section 9.4 Book Entry Interests.
Global Capital Securities shall initially be registered
on the books and records of the Trust in the name of Cede & Co.,
the nominee of the Clearing Agency, and no Capital Security
Beneficial Owner will receive a definitive Capital Security
Certificate representing such Capital Security Beneficial Owner's
interests in such Global Capital Securities, except as provided
in Section 9.2 and Section 7.9. Unless and until definitive,
fully registered Capital Securities certificates have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.2
and Section 7.9:
<PAGE 48>
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust
Agreement (including the payment of Distributions on the
Global Capital Securities and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities
and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial
Owners;
(c) to the extent that the provisions of this
Section 9.4 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 9.4 shall control;
and
(d) the rights of the Capital Security Beneficial
Owners shall be exercised only through the Clearing Agency
and shall be limited to those established by law and
agreements between such Capital Security Beneficial Owners
and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing
Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Trust Agreement, the
Trustees shall give all such notices and communications specified
herein to be given to the Holders of Global Capital Securities to
the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities, the Administrative Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to
such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Trust
Agreement, the Securities Guarantees and the terms of the
Securities, the Sponsor shall not be:
<PAGE 49>
(i) personally liable for the return of any
portion of the capital contributions (or any return
thereon) of the Holders which shall be made solely from
assets of the Trust; and
(ii) required to pay to the Trust or to any
Holder any deficit upon dissolution of the Trust or
otherwise.
(b) The Debenture Issuer shall be liable for all of
the debts and obligations of the Trust (other than in respect of
the Securities) to the extent not satisfied out of the Trust's
assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders 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 10.2 Exculpation.
(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 Trust
Agreement 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 gross 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 who has been selected 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 might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Trust Agreement
shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust
<PAGE 50> Agreement. The provisions of this Trust Agreement, 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 Property Trustee under the Trust
Indenture Act), are agreed by the parties hereto to replace such
other duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; or
(ii) whenever this Trust Agreement or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest)
to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of
bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall
not constitute a breach of this Trust Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Trust Agreement 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 Trust Agreement.
Section 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of
<PAGE 51> the Trust) by reason of the fact that he is or was
a Company Indemnified Person against expenses (including
attorneys' fees and expenses), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of 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 Company Indemnified Person did
not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of
the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct
was unlawful.
(ii) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to
be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of
all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(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) actually and reasonably
incurred by him in connection therewith.
<PAGE 52>
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a
court) shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper
in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Administrative
Trustees by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such action,
suit or proceeding, (2) if such a Quorum is not obtainable,
or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture
Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Debenture Issuer as
authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by
the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrative Trustees so directs,
by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Administrative Trustees, counsel
or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed
exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled
<PAGE 53> under any agreement, vote of stockholders or
disinterested directors of the Debenture Issuer 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 10.4(a) shall be deemed
to be provided by a contract between the Debenture Issuer
and each Company Indemnified Person who serves in such
capacity at any time while this Section 10.4(a) is in
effect. Any repeal or modification of this Section 10.4(a)
shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may
purchase and maintain insurance on behalf of any person who
is or was a Company Indemnified Person against any liability
asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or
not the Debenture Issuer would have the power to indemnify
him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
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 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this
Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify the
(i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee and the Delaware Trustee, and
(iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in
(i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person
harmless against, any and all loss, liability, damage, claim or
expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or
<PAGE 54> bad faith on its part, arising out of or in connection
with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against or
investigating any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 10.4(b)
shall survive the satisfaction and discharge of this Trust
Agreement.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee may engage in or possess an interest in
other business ventures of any nature or description,
independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders shall have
no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the
Property 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 Property Trustee shall have the
right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust,
the Administrative Trustees shall keep, or cause to be kept, full
books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the 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
<PAGE 55> 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
Administrative Trustees.
(b) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders, any 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 Administrative Trustees
shall endeavor to deliver all such information statements within
30 days after the end of each Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an
annual United States federal income tax return, on a Form 1041 or
such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by
the Administrative Trustees on behalf of the Trust with any state
or local taxing authority.
Section 11.3 Banking.
The Trust may maintain one or more bank accounts 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 Property Trustee shall be made directly to the Property
Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Administrative Trustees shall comply
with all withholding requirements under United States federal,
state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect
to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations.
The Administrative Trustees 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 Trust 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 in the amount of
the withholding to the Holder. In the event of any claimed over
<PAGE 56> withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to
be withheld was not withheld from actual Distributions made, the
Trust may reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Trust
Agreement or by any applicable terms of the Securities, this
Trust Agreement may only be amended by a written instrument
approved and executed by:
(i) the Administrative Trustees (or if there are
more than two Administrative Trustees a majority of the
Administrative Trustees);
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee,
the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed
amendment, the Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the Sponsor
that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the
Securities);
(ii) unless, in the case of any proposed
amendment which affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the
Property 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 Trust
Agreement (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 Trust Agreement (including the terms of the
Securities) and that all conditions precedent, if any,
<PAGE 57> in this Trust Agreement to the execution and
delivery of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be
required to sign any such amendment; and
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue 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 Property Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) At such time after the Trust has issued any
Securities that remain outstanding, any amendment that would
adversely affect the rights, privileges or preferences of any
Holder may be effected only with such additional requirements as
may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders;
X4- Article Four shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the
Common Securities and;
(f) The rights of the holders of the Common Securities
under Article Five 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
Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust
Agreement may be amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any
provision in this Trust Agreement that may be inconsistent
with any other provision of this Trust Agreement or to make
any other provisions with respect to matters or questions
arising under this Trust Agreement which shall not be
inconsistent with the other provisions of the Trust
Agreement; and
(ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for
<PAGE 58> United States federal income tax purposes as a
grantor trust at all times that any Securities are
outstanding or to ensure that the Trust will not be required
to register as an Investment Company under the Investment
Company Act.
provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests
of the Holders, and any amendments of this Trust Agreement shall
become effective when notice thereof is given to the Holders.
Section 12.2 Meetings of the Holders; Action by Written
Consent.
EDD Meetings of the Holders of any class of Securities
may be called at any time by the Administrative Trustees (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 Trust Agreement, the
terms of the Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading.
The Administrative Trustees 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 Administrative
Trustees one or more notices in writing stating that the signing
Holders wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a
meeting and only those Securities specified shall be counted for
purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to
meetings of Holders:
(i) notice of any such meeting shall be given to
all the Holders having a right to vote thereat at least
seven days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Trust Agreement
or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the
Holders 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 having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a
<PAGE 59> meeting shall be given to the Holders entitled to
vote who have not consented in writing. The Administrative
Trustees may specify that any written ballot submitted to
the Security Holder for the purpose of taking any action
without a meeting shall be returned to the Trust within the
time specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act
for it by proxy on all matters in which a Holder 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 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 were stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrative Trustees or by such other
Person that the Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Trust
Agreement, 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 or trading, otherwise
provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on
by any Holders, waiver of any such notice, action by consent
without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right
to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Trust Agreement, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Property Trustee's acceptance of its appointment
as Property Trustee that:
<PAGE 60>
(a) The Property Trustee is a New York banking
corporation with trust powers and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, this Trust Agreement;
(b) The execution, delivery and performance by the
Property Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Property
Trustee. This Trust Agreement has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property 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 and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this
Trust Agreement by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property
Trustee; and
(d) No consent, approval or authorization of, or
registration with or notice to, any New York State or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee of this Trust Agreement.
Section 13.2 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 Trust Agreement, 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 Trust Agreement;
(b) The execution, delivery and performance by the
Delaware Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Delaware
Trustee. This Trust Agreement has been duly executed and
delivered by the Delaware Trustee and 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 and the discretion of the court (regardless
<PAGE 61> of whether the enforcement of such remedies is
considered in a proceeding in equity or at law);
(c) No consent, approval or authorization of, or
registration with or notice to, any federal banking authority is
required for the execution, delivery or performance by the
Delaware Trustee of this Trust Agreement; and
(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.
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement. [Intentionally
Omitted]
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.
All notices provided for in this Trust Agreement 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 Trust, in care of the
Administrative Trustees at the Trust's mailing address set forth
below (or such other address as the Trust may give notice of to
the Holders):
Sovereign Capital Trust II
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
(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):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address
as the Property Trustee may give notice of to the Holders):
<PAGE 62>
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10283
Attention: Corporate Trust
Trustee Administration
(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 to the Trust):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Chief Financial 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.
Section 15.2 Governing Law.
This Trust Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies
shall be governed by such laws without regard to principles of
conflict of laws.
Section 15.3 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 Trust Agreement shall
be interpreted to further this intention of the parties.
Section 15.4 Headings.
Headings contained in this Trust Agreement are inserted
for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
Section 15.5 Successors and Assigns.
Whenever in this Trust Agreement any of the parties
hereto is named or referred to, the successors and assigns of
<PAGE 63> such party shall be deemed to be included, and all
covenants and agreements in this Trust Agreement by the Sponsor
and the Trustees shall bind and inure to the benefit of their
respective successors and assigns, whether so expressed.
Section 15.6 Partial Enforceability.
If any provision of this Trust Agreement, or the
application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, 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 15.7 Counterparts.
This Trust Agreement may contain more than one
counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees
to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers
had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
___________________________________
Mark R. McCollom, as Administrative
Trustee
___________________________________
Jacquelyn Blue, as Administrative
Trustee
THE BANK OF NEW YORK (Delaware) as
Delaware Trustee
By:________________________________
Name:
Title:
THE BANK OF NEW YORK as Property
Trustee
By:________________________________
Name:
Title:
SOVEREIGN BANCORP, INC., as Sponsor
<PAGE 64>
By:________________________________
Name:
Title:
<PAGE 65>
ANNEX I
TERMS OF
_____% Series A CAPITAL SECURITIES
______% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of ___________________ (as amended
from time to time, the "Trust Agreement"), the designation,
rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized
term used but not defined herein has the meaning set forth in the
Trust Agreement or, if not defined in such Trust Agreement, as
defined in the Prospectus referred to below in Section 2(c) of
this Annex I):
1. Designation and Number.
(a) Capital Securities. ______ Series A Capital
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of ______________________
Dollars ($____________________), and each with a liquidation
amount with respect to the assets of the Trust of $______ per
security, are hereby designated for the purposes of
identification only as "_______% Series A Capital Securities"
(collectively, the "Capital Securities"). The certificates
evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Trust Agreement, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of
any exchange or quotation system on or in which the Capital
Securities are listed, traded or quoted.
(b) Common Securities. ______ Common Securities
of the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of _________________________ Dollars
($_______________) and a liquidation amount with respect to the
assets of the Trust of $______ per security, are hereby
designated for the purposes of identification only as "_______%
Common Securities" (collectively, the "Common Securities"). The
certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Trust Agreement,
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 fixed at a rate per annum of ______% (the "Coupon Rate") of
the liquidation amount of $______ per Security (the "Liquidation
Amount"), such rate being the rate of interest payable on the
<PAGE I-1> Debentures to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual period
will bear additional distributions thereon compounded semi-
annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein,
includes distributions of any such interest. A Distribution is
payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from _______________, and will be payable semi-annually in
arrears on ______________ and __________________ of each year,
commencing on ______________________ (each, a "Distribution
Date"), except as otherwise described below. Distributions will
be computed on the basis of a 360-day year consisting of twelve
30-day months and for any period less than a full calendar month
on the basis of the actual number of days elapsed in such month.
As long as no Event of Default has occurred and is continuing
under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest
payment period at any time and from time to time on the
Debentures for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such
period (each an "Extension Period"), during which Extension
Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall end on a date other than
an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with
additional Distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Maturity Date of the
Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above
requirements.
(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 fifteenth day of the month preceding
the month in which the relevant Distribution Date occurs, which
Distribution Dates correspond to the interest payment dates on
<PAGE I-2> the Debentures. Subject to any applicable laws and
regulations and the provisions of the Trust Agreement, each such
payment in respect of the Capital Securities will be made as
described under the heading "____________________________" in the
Prospectus dated _______________________, of the Debenture Issuer
and the Trust relating to the Securities and the Debentures. The
relevant record dates for the Common Securities shall be the same
as the record dates for the Capital Securities. Distributions
payable on any Securities that are not punctually paid on any
Distribution Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be
payable to the Holder 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 next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made
on such 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.
3. Liquidation Distribution Upon Dissolution.
In the event of any termination of the Trust or the
Sponsor otherwise gives notice of its election to liquidate the
Trust pursuant to Section 8.1(a)(iii) of the Trust Agreement, the
Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be
possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the
Holders a Like Amount (as defined below) of the Debentures,
unless such distribution is determined by the Property Trustee
not to be practicable, in which event such Holders will be
entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction
of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the aggregate of the
liquidation amount of $______ per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of
the Securities, Securities having a Liquidation Amount equal to
the principal amount of Debentures to be paid in accordance with
their terms and (ii) with respect to a distribution of Debentures
<PAGE I-3> upon the liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro
Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole
or in part, at maturity or upon early redemption (either at the
option of the Debenture Issuer or pursuant to a Special Event, as
described below), the proceeds from such repayment shall be
simultaneously applied by the Property Trustee (subject to the
Property Trustee having received notice no later than 45 days
prior to such repayment) to redeem a Like Amount of the
Securities at a redemption price equal to (i) in the case of the
repayment of the Debentures at maturity, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional
redemption of the Debentures upon the occurrence and continuation
of a Special Event, the Special Event Redemption Price (as
defined below) and (iii) in the case of the optional redemption
of the Debentures on or after ______________________, the
Optional Redemption Price (as defined below). The Maturity
Redemption Price, the Special Event Redemption Price and the
Optional Redemption Price are referred to collectively as the
"Redemption Price". Holders will be given not less than 30 nor
more than 60 days notice of such redemption.
(b) (i) The "Maturity Redemption Price", with
respect to a redemption of Securities, shall mean an amount equal
to the principal of and accrued and unpaid interest on the
Debentures as of the maturity date thereof.
(ii) In the case of an optional redemption,
if fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be determined as described
in Section 4(f)(ii) below. Upon the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction,
the Debentures thereafter will be subject to optional repayment,
in whole, but not in part, on or after _________________ (the
"Initial Optional Redemption Date").
The Debenture Issuer shall have the right (subject to
the conditions in the Indenture) to elect to redeem the
Debentures in whole or in part at any time on or after the
Initial Optional Redemption Date, upon not less than 30 days and
not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of
<PAGE I-4> the Securities to be redeemed by the Trust at the
Optional Redemption Price on a Pro Rata basis. "Optional
Redemption Price" shall mean a price equal to the percentage of
the liquidation amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date
of such redemption if redeemed during the 12-month period
beginning ______________, of the years indicated below:
Year Percentage
(c) If at any time a Tax Event or a Regulatory
Capital Event (each as defined below, and each a "Special
Event") occurs, the Debenture Issuer shall have the right
(subject to the conditions set forth in the Indenture) at any
time prior to the Initial Optional Redemption Date, upon not less
than 30 nor more than 60 days notice, to redeem the Debentures in
whole, but not in part, within the 90 days following the
occurrence of such Special Event (the "90 Day Period"), and,
simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Special Event
Redemption Price on a Pro Rata basis.
"Tax Event" shall occur upon 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 or
judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after
_________________, 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.
"Regulatory Capital Event" shall mean that the Sponsor
shall have become, or pursuant to law or regulation will become
within 180 days, subject to capital requirements under which, in
the written opinion of independent bank regulatory counsel
experienced in such matters, the Capital Securities would not
constitute Tier 1 Capital applied as if the Sponsor (or its
successor) were a bank holding company (as that concept is used
<PAGE I-5> in the guidelines or regulations issued by the Federal
Reserve Board or its then equivalent); 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 Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event.
"Special Event Redemption Price" shall mean, with
respect to a redemption of Securities, a price equal to 100% of
the principal of a Like Amount of Debentures to be redeemed plus
accumulated but unpaid Distributions thereon, if any, to the date
of such redemption.
(d) On and from the date fixed by the
Administrative Trustees for any distribution of Debentures and
liquidation of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder
of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates
representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of
Debentures until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.
(e) The Trust may not redeem fewer than all the
outstanding Securities unless all accumulated and unpaid
Distributions have been paid on all Securities for all semi-
annual Distribution periods terminating on or before the date of
redemption.
E\E The procedure with respect to redemptions or
distributions of Securities shall be as follows:
(i) Notice of any redemption of, or notice
of distribution of Debentures in exchange for, the
Securities (a "Redemption/Distribution Notice") will be
given by the Trust by mail to each Holder 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(f)(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. Each Redemption/Distribution
Notice shall be addressed to the Holders at the address of
each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or
in the mailing of either thereof with respect to any Holder
<PAGE I-6> 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, it
being understood that, in respect of Capital Securities
registered in the name of and held of record by the Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to the Clearing
Agency and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and
the Trust gives a Redemption/Distribution Notice, (which
notice will be irrevocable), then (A) with respect to
Capital Securities issued in book-entry form, by 12:00 noon,
New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures by 10:00 a.m., New
York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will
deposit irrevocably with the Clearing Agency or its nominee
(or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with
respect to such Capital Securities and will give the
Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the relevant Clearing Agency
Participants, and (B) with respect to Capital Securities
issued in certificated form and Common Securities, provided
that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property
Trustee will pay the relevant Redemption Price to the
Holders by check mailed to the address of the relevant
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, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of
Holders so called for redemption will cease, except the
right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid
Distributions on the Redemption Date of the Securities will
be subject to the rights of Holders on the close of business
on a regular record date in respect of a Distribution Date
occurring on or prior to such Redemption Date. <PAGE I-7>
Neither the Administrative Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of (i) any Securities beginning on
the opening of business 15 days before the day of mailing of
a notice of redemption or any notice of selection of
Securities for redemption or (ii) any Securities selected
for redemption except the unredeemed portion of any Security
being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such next succeeding Business Day falls in
the next calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the
same force and effect as if made on such date 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 Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accumulate
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.
(v) Redemption/Distribution Notices shall be
sent by the Property Trustee on behalf of the Trust to
(A) in respect of the Capital Securities, the Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) if the Global Certificates have been issued or,
if Definitive Capital Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable
law (including, without limitation, United States federal
securities laws and banking laws), provided 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 Trust Agreement, the
Holders of the Capital Securities will have no voting rights.
(b) So long as any Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
<PAGE I-8> power conferred on such Debenture Trustee with respect
to the Debentures, (ii) waive any past default that is waivable
under Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in
liquidation amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee
without the prior approval of each Holder of the Capital
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital
Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities
of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Capital Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a
"Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to
the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of
Capital Securities in such Direct Action. Except as provided in
the second preceding sentence, the Holders of Capital Securities
will not be able to exercise directly any other remedy available
to the holders of the Debentures.
Any approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of
Capital Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Property Trustees will cause a notice of any
meeting at which Holders of 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 Capital Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date
<PAGE I-9> 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 Trust Agreement and the terms of the Securities.
Notwithstanding that Holders of 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 be entitled
to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
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 Trust Agreement,
the Holders of the Common Securities will have no voting rights.
(b) Unless an Event of Default shall have
occurred and be continuing, any Trustee may be removed at any
time by the holder of the Common Securities. If an Event of
Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders
of a Majority in liquidation amount of the outstanding Capital
Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested
exclusively in the Sponsor as the holder of the Common
Securities. No resignation or removal of a Trustee and no
appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance
with the provisions of the Trust Agreement.
(c) So long as any Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under
Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in
liquidation amount of all outstanding Common Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
<PAGE I-10> thereby, no such consent shall be given by the
Property Trustee without the prior approval of each Holder of the
Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Common Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Common Securities of
any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement
of payment to such Holder of the principal of or premium, if any,
or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities
Holder will be subordinated to the rights of such Holder of
Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Common Securities in such
Direct Action. Except as provided in the second preceding
sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of
the Debentures.
Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of any
meeting at which Holders of 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
record of 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 Trust Agreement and the terms of the Securities.
<PAGE I-11>
7. Amendments to Trust Agreement and Indenture.
In addition to the requirements set out in Section 12.1
of the Trust Agreement, the Trust Agreement may be amended from
time to time by the Sponsor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders
(i) to cure any ambiguity, correct or supplement any provisions
in the Trust Agreement that may be inconsistent with any other
provisions, or to make any other provisions with respect to
matters or questions arising under the Trust Agreement which
shall not be inconsistent with the other provisions of the Trust
Agreement, or (ii) to modify, eliminate or add to any provisions
of the Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times that
any Securities are outstanding or to ensure that the Trust will
not be required to register as an "Investment Company" under the
Investment Company Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any
material respect the interests of any Holder, any amendments of
the Trust Agreement shall become effective when notice thereof is
given to the Holders. The Trust Agreement may also be amended by
the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from
status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust
Securities, the Trust Agreement may not be amended to (i) change
the amount or timing of any Distribution on the Trust Securities
or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such
payment on or after such date.
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 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 under the
Trust Agreement 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 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
<PAGE I-12> each Holder of Common Securities pro rata according
to the aggregate liquidation amount of 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 the Common
Securities and payment thereon shall be made Pro Rata with the
Common Securities, except that, if an Event of Default under the
Trust Agreement occurs and is continuing, no payments in respect
of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made
until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and
other payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common
Securities, by the acceptance thereof, agrees to the provisions
of the Capital Securities Guarantee, including the subordination
provisions therein, and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Trust Agreement.
The Sponsor will provide a copy of the Trust Agreement,
the Capital Securities Guarantee, or the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Sponsor at its principal place of business.
<PAGE I-13>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY,
INSERT: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY
WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY.
THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
TRUST AGREEMENT AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER
THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER
NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.]
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT
LESS THAN $_____________ (____ CAPITAL SECURITIES). ANY SUCH
TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $_____________ SHALL BE DEEMED TO BE VOID AND
OF NO LEGAL EFFECT WHATSOEVER. 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 OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR (ii) THE
ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM
ANY SUCH PROHIBITION.
<PAGE A-1>
Certificate Number Aggregate Liquidation Amount
CUSIP NO. __________
Certificate Evidencing Capital Securities
of
Sovereign Capital Trust II
________% Capital Securities
(liquidation amount $_______ per Capital Security)
Sovereign Capital Trust II, a statutory business trust
created under the laws of the State of Delaware (the "Trust"),
hereby certifies that ______________ (the "Holder") is the
registered owner of [$_________ in aggregate liquidation amount
of Capital Securities of the Trust](1) [the aggregate liquidation
amount of Capital Securities of the Trust specified in Schedule A
hereto](2) representing undivided beneficial interests in the
assets of the Trust designated the ______% Series A Capital
Securities (liquidation amount $______ per Capital Security) (the
"Capital Securities"). 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 and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust of the Trust dated
as of _________________, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the
terms of the Capital Securities as set forth in Annex I to the
Trust Agreement. Capitalized terms used but not defined herein
shall have the meaning given them in the Trust Agreement. The
Sponsor will provide a copy of the Trust Agreement, the Capital
Securities Guarantee, and the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Trust at its principal place of business.
________
(1) Insert in Definitive Capital Securities only.
(2) Insert in Global Capital Securities only. <PAGE A-2>
Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder
and to the benefits of the Capital Securities Guarantee to the
extent provided therein.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as
indebtedness and the Capital Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this ______ day of _________________, ______.
SOVEREIGN CAPITAL TRUST II
By:________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in
the within-mentioned Trust Agreement.
Dated: _______________
THE BANK OF NEW YORK,
as Property Trustee
By:________________________________
Authorized Signatory
<PAGE A-3>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be
fixed at a rate per annum of ___% (the "Coupon Rate") of the
liquidation amount of $________ per Capital Security, such rate
being the rate of interest payable on the Debentures to be held
by the Property Trustee. 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 such cash distributions and any such interest unless
otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
on hand legally available therefor.
Distributions on the Capital Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from ________________ and will be payable semi-annually in
arrears, on _______________ and _________________ of each year,
commencing on ________________, except as otherwise described
below. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10
consecutive calendar semi-annual periods, including the first
such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be
deferred. Despite such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate
of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. Payments of accumulated Distributions
will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension
<PAGE A-4> Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to
the above requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at the direction of the Sponsor, at any time liquidate the Trust
and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided
in the Trust Agreement.
<PAGE A-5>
_____________________
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
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*:
_________
* Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
<PAGE A-6>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.
NEITHER THIS COMMON 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, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE FOR RESALE
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, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF
THIS COMMON SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE
TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS COMMON SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
<PAGE A-7>
Certificate Evidencing Common Securities
of
Sovereign Capital Trust II
______% Common Securities
(liquidation amount $________ per Common Security)
Sovereign Capital Trust II, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Sovereign Bancorp, Inc. (the "Holder") is
the registered owner of _____ common securities of the Trust
representing undivided beneficial interests in the assets of the
Trust designated the _______% Common Securities (liquidation
amount $_________ per Common Security) (the "Common Securities").
The Common 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 Common
Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of ________________,
as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Trust Agreement.
Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide
a copy of the Trust Agreement, the Capital Securities Guarantee
and the Indenture (including any supplemental indenture) to a
Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder
to the extent provided therein.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as <PAGE A-8>
indebtedness and the Common Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this _____ day of ___________, ______.
Sovereign Capital Trust II
By:_______________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Trust Agreement.
Dated: _____________ THE BANK OF NEW YORK, as Property
Trustee
By:________________________________
Authorized Signatory
<PAGE A-9>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be
fixed at a rate per annum of _______% (the "Coupon Rate") of the
liquidation amount of $_________ per Common Security, such rate
being the rate of interest payable on the Debentures to be held
by the Property Trustee. 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 such cash distributions and any such interest unless
otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
available therefor.
Distributions on the Common Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from ___________________ and will be payable semi-annually
in arrears, on ________________ and ______________ of each year,
commencing on _________________, except as otherwise described
below. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10
consecutive calendar semi-annual periods, including the first
such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to
accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer
may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such
Extension Period, may not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such
Extension Period, or end on a date other than an Interest Payment
Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accrued Distributions will be payable to
<PAGE A-10> Holders as they appear on the books and records of
the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above
requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at the direction of the Sponsor, at any time liquidate the Trust
and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
Under certain circumstances, the right of the holders
of the Common Securities shall be subordinate to the rights of
the holders of the Capital Securities (as defined in the Trust
Agreement), as provided in the Declaration.
The Common Securities shall be redeemable as provided
in the Trust Agreement.
<PAGE A-11>
Exhibit 4.19
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Sovereign Bancorp, Inc.
Dated as of _______________
====================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation........... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application........ 5
SECTION 2.2 Lists of Holders of Securities.......... 5
SECTION 2.3 Reports by the Preferred Securities
Guarantee Trustee....................... 6
SECTION 2.4 Periodic Reports to Preferred Securities
Guarantee Trustee....................... 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent............................... 6
SECTION 2.6 Events of Default; Waiver............... 7
SECTION 2.7 Event of Default; Notice................ 7
SECTION 2.8 Conflicting Interests................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities
Guarantee Trustee....................... 7
SECTION 3.2 Certain Rights of Preferred Securities
Guarantee Trustee...................... 9
SECTION 3.3 Not Responsible for Recitals or Issuance
of Preferred Securities Guarantee...... 12
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee;
Eligibility............................12
SECTION 4.2 Appointment, Removal and Resignation of
Preferred Securities Guarantee Trustee 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee............................. 14
SECTION 5.2 Waiver of Notice and Demand........... 14
SECTION 5.3 Obligations Not Affected.............. 14
SECTION 5.4 Rights of Holders..................... 15
SECTION 5.5 Guarantee of Payment.................. 16
SECTION 5.6 Subrogation........................... 16
SECTION 5.7 Independent Obligations............... 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........... 16
SECTION 6.2 Ranking.............................. 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................... 18
SECTION 8.2 Indemnification...................... 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................19
SECTION 9.2 Amendments............................19
SECTION 9.3 Notices...............................19
SECTION 9.4 Benefit...............................20
SECTION 9.5 Governing Law........................ 20
<PAGE>
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _______________, is executed and
delivered by Sovereign Bancorp, Inc., a Pennsylvania corporation
(the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Preferred Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein)
of Sovereign Capital Trust II, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Trust Agreement"), dated as of
_____________, among the trustees of the Issuer, the Guarantor,
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 __________ preferred securities,
having an aggregate liquidation amount of $______________, such
capital securities being designated the Series A ___% Preferred
Securities (collectively the "Preferred Securities").
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Preferred Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the
Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION A. Definitions and Interpretation
In this Preferred Securities Guarantee, unless the
context otherwise requires:
1. Capitalized terms used in this Preferred
Securities Guarantee but not defined in the preamble above
have the respective meanings assigned to them in this
Section 1.1;
2. Terms defined in the Trust Agreement as at
the date of execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred Securities
Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
3. a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
4. all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to
this Preferred Securities Guarantee as modified,
supplemented or amended from time to time;
5. all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and
Sections of this Preferred Securities Guarantee, unless
otherwise specified;
6. a term defined in the Trust Indenture Act has
the same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
7. a reference to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
close.
"Preferred Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor
Preferred Securities Guarantee Trustee.
"Common Securities" means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
Preferred Securities Guarantee Trustee at which the corporate
trust business of the Preferred Securities Guarantee Trustee
shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at
101 Barclay Street, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"Debentures" means the series of subordinated debt
securities of the Guarantor designated the Series A _____% Junior
Subordinated Deferrable Interest Debentures due _____________
held by the Property Trustee (as defined in the Trust Agreement)
of the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Preferred
Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Capital Securities, to the extent not paid or made by the Issuer:
(i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds on hand legally
available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has
funds on hand legally available therefor at such time, with
respect to any Preferred Securities called for redemption by the
Issuer, and (iii) upon a voluntary or involuntary termination and
liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer has funds on
hand legally available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in
liquidation of the Issuer.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities;
provided, however, that, in determining whether the holders of
the requisite percentage of Preferred 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 Preferred Securities
Guarantee Trustee, any Affiliate of the Preferred Securities
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Securities Guarantee
Trustee.
"Indenture" means the Indenture dated as of
September 1, 1999, among the Guarantor (the "Debenture Issuer")
and Harris Trust and Savings Bank, as trustee, pursuant to which
the Debentures are to be issued to the Property Trustee of the
Issuer.
"Indenture Event of Default" shall mean any event
specified in Section ____ of the Indenture.
"Majority in liquidation amount of the Preferred
Securities" means, except as provided by the Trust Indenture Act,
a vote by Holder(s) of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any
person, a certificate signed by the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Comptroller, and the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Preferred Securities Guarantee (other than pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a statement that each such officer has made
such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(c) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
"Other Debentures" means all junior subordinated
debentures issued by the Guarantor from time to time and sold to
any other trust, partnership or other entity affiliated with the
Guarantor that is a financing vehicle of the Guarantor (if any),
in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by
the Guarantor with respect to capital securities (if any) similar
to the Preferred Securities issued by any other trust,
partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor (if any), in each case
similar to the Issuer.
"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.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Preferred Securities Guarantee
Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the
Preferred Securities Guarantee Trustee customarily performing
functions similar to those performed by any of the above
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity
with the particular subject.
"Successor Preferred Securities Guarantee Trustee"
means a successor Preferred Securities Guarantee Trustee
possessing the qualifications to act as Preferred Securities
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, or any successor legislation, in each case, as amended.
"Trust Securities" means the Common Securities and the
Preferred Securities, collectively.
ARTICLE II.
TRUST INDENTURE ACT
SECTION A. Trust Indenture Act; Application
1. This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be
part of this Preferred Securities Guarantee and shall, to the
extent applicable, be governed by such provisions; and
2. if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts
with the duties imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION B. Lists of Holders of Securities
1. The Guarantor shall provide the Preferred
Securities Guarantee Trustee (unless the Preferred Securities
Guarantee Trustee is otherwise the registrar of the Preferred
Securities) with a list, in such form as the Preferred Securities
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after May 15 and November 15 of each
year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the
Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Securities
Guarantee Trustee by the Guarantor. The Preferred Securities
Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
2. The Preferred Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and
Section 312(b) of the Trust Indenture Act.
SECTION C. Reports by the Preferred Securities Guarantee
Trustee
Within 60 days after January 15 of each year,
commencing ________________, the Preferred Securities Guarantee
Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture
Act. The Preferred Securities Guarantee Trustee shall also
comply with the other requirements of Section 313 of the Trust
Indenture Act.
SECTION D. Periodic Reports to Preferred Securities Guarantee
Trustee
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the
Trust Indenture Act provided that such compliance certificate
shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports,
information and documents to the Preferred Securities Guarantee
Trustee is for informational purposes only and the Preferred
Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained
therein or determinable from information contained therein,
including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION E. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Preferred Securities
Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION F. Events of Default; Waiver
The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of all Holders,
waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Preferred Securities Guarantee,
but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent
thereon.
SECTION G. Event of Default; Notice
1. The Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to
this Preferred Securities Guarantee, mail by first class postage
prepaid, to all Holders, notices of all defaults actually known
to a Responsible Officer, unless such defaults have been cured
before the giving of such notice, provided, that, except in the
case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
a Responsible Officer in good faith determines that the
withholding of such notice is in the interests of the Holders.
2. The Preferred Securities Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default unless
the Preferred Securities Guarantee Trustee shall have received
written notice from the Guarantor, or a Responsible Officer
charged with the administration of the Trust Agreement shall have
obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Powers and Duties of the Preferred Securities
Guarantee Trustee
1. This Preferred Securities Guarantee shall be held
by the Preferred Securities Guarantee Trustee for the benefit of
the Holders, and the Preferred Securities Guarantee Trustee shall
not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Preferred Securities Guarantee
Trustee on acceptance by such Successor Preferred Securities
Guarantee Trustee of its appointment to act as Successor
Preferred Securities Guarantee Trustee. The right, title and
interest of the Preferred Securities Guarantee Trustee shall
automatically vest in any Successor Preferred Securities
Guarantee Trustee, and such vesting and succession of title shall
be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Preferred Securities Guarantee Trustee.
2. If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Preferred
Securities Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders.
3. The Preferred Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of
all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant
to Section 2.6) and is actually known to a Responsible Officer,
the Preferred Securities Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Preferred Securities
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.
4. No provision of this Preferred Securities
Guarantee shall be construed to relieve the Preferred Securities
Guarantee 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 any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(1) the duties and obligations of the Preferred
Securities Guarantee Trustee shall be determined solely
by the express provisions of this Preferred Securities
Guarantee, and the Preferred Securities Guarantee
Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee; and
(2) in the absence of bad faith on the part of
the Preferred Securities Guarantee Trustee, the
Preferred Securities 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 Preferred
Securities Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions
that by any provision hereof are specifically required
to be furnished to the Preferred Securities Guarantee
Trustee, the Preferred Securities Guarantee Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Preferred Securities Guarantee;
b. the Preferred Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the
Preferred Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
c. the Preferred Securities 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 a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the
Preferred Securities Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Securities
Guarantee Trustee under this Preferred Securities Guarantee;
and
d. no provision of this Preferred Securities
Guarantee shall require the Preferred Securities 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 Preferred Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or
indemnity, reasonably satisfactory to the Preferred
Securities Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION B. Certain Rights of Preferred Securities Guarantee
Trustee
1. Subject to the provisions of Section 3.1:
a. The Preferred Securities 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.
b. Any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee may be
sufficiently evidenced by an Officers' Certificate.
c. Whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
d. The Preferred Securities Guarantee Trustee
shall have no duty to see to any recording, filing or
registration of any instrument (or any rerecording, refiling
or registration thereof).
e. The Preferred Securities 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
Preferred Securities Guarantee Trustee shall have the right
at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from
any court of competent jurisdiction.
f. The Preferred Securities Guarantee Trustee
shall be under no obligation to exercise any of the rights
or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Securities
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Preferred Securities Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Securities
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 Preferred Securities
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred
Securities Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Preferred Securities
Guarantee.
g. The Preferred Securities 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 Preferred
Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or
matters as it may see fit.
h. The Preferred Securities 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 Preferred
Securities 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.
i. Any action taken by the Preferred Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders, and the signature of the Preferred Securities
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
Preferred Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Securities Guarantee
Trustee's or its agent's taking such action.
j. Whenever in the administration of this
Preferred Securities Guarantee the Preferred Securities
Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Preferred
Securities Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
k. The Preferred Securities Guarantee Trustee
shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Preferred Securities Guarantee.
2. No provision of this Preferred Securities
Guarantee shall be deemed to impose any duty or obligation on the
Preferred Securities 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 Preferred Securities 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 Preferred Securities Guarantee Trustee shall be
construed to be a duty.
SECTION C. Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and
the Preferred Securities Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Securities
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV.
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Preferred Securities Guarantee Trustee;
Eligibility
1. There shall at all times be a Preferred Securities
Guarantee Trustee which shall:
a. not be an Affiliate of the Guarantor; and
b. be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least 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 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published.
2. If at any time the Preferred Securities Guarantee
Trustee shall cease to be eligible to so act under Section
4.1(a), the Preferred Securities Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.2(c).
3. If the Preferred Securities Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning
of Section 310(b) of the Trust Indenture Act, the Preferred
Securities Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION B. Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee
1. Subject to Section 4.2(b), the Preferred
Securities Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default. Subject to the provisions of this Section 4.2, the
Preferred Securities Guarantee Trustee may be removed by the
holders of a Majority in Liquidation Amount of the Series A
Capital Securities during an Event of Default.
2. The Preferred Securities Guarantee Trustee shall
not be removed in accordance with Section 4.2(a) until a
Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Securities Guarantee Trustee
and delivered to the Guarantor.
3. The Preferred Securities Guarantee Trustee shall
hold office until a Successor Preferred Securities Guarantee
Trustee shall have been appointed or until its removal or
resignation. The Preferred Securities Guarantee Trustee may
resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred
Securities Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by
such Successor Preferred Securities Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Securities
Guarantee Trustee.
4. If no Successor Preferred Securities Guarantee
Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery of an
instrument of removal or resignation, the Preferred Securities
Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
Preferred Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Securities Guarantee
Trustee.
5. No Preferred Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor
Preferred Securities Guarantee Trustee.
6. Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Securities
Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Preferred Securities Guarantee Trustee all
amounts due to the Preferred Securities Guarantee Trustee accrued
to the date of such termination, removal or resignation.
ARTICLE V.
GUARANTEE
SECTION A. Guarantee
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, 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.
SECTION B. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of
this Preferred Securities 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 C. Obligations Not Affected
The obligations, covenants, agreements and duties of
the Guarantor under this Preferred Securities Guarantee shall in
no way be affected or impaired by reason of the happening from
time to time of any of the following:
1. 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 Preferred Securities to be performed or observed
by the Issuer;
2. the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums payable under
the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than
an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the
Debentures permitted by the Indenture);
3. 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 Preferred Securities, or any action
on the part of the Issuer granting indulgence or extension of any
kind;
4. 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;
5. any invalidity of, or defect or deficiency in, the
Preferred Securities;
6. the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
7. the consummation of the Exchange Offer; or
8. any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee
Payments 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 D. Rights of Holders
1. The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
2. If the Preferred Securities Guarantee Trustee
fails to enforce such Preferred Securities Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor
to enforce the Preferred Securities Guarantee Trustee's rights
under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred
Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION E. Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION F. Subrogation
The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this
Preferred Securities 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 Preferred Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under
this Preferred Securities 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 G. Independent Obligations
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION A. Limitation of Transactions
So long as any Preferred Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's
capital stock (which includes common and preferred stock) or
(ii) make any payment of principal of or premium, if any, or
interest on or repay, repurchase or redeem any debt securities of
the Guarantor (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Debentures
or (iii) make any guarantee payments with respect to any
guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to
the Debentures (other than (a) dividends or distributions in
shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under this
Preferred Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange
or the conversion of one class or series of the Guarantor's
capital stock for another class or series of the Guarantor's
capital stock, (e) 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, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans)
if at such time (i) there shall have occurred any event of which
the Guarantor has actual knowledge that (a) is, or with the
giving of notice or the lapse of time, or both, would be an
Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) if
such Debentures are held by the Property Trustee, the Guarantor
shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or
(iii) the Guarantor shall have given notice of its election of
the exercise of its right to extend the interest payment period
pursuant to Section ______ of the Indenture and any such
extension shall be continuing.
SECTION B. Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to Senior Debt (as
defined in the Indenture), to the same extent and in the same
manner that the Debentures are subordinated to Senior Debt
pursuant to the Indenture (except as indicated below), it being
understood that the terms of Article ___ of the Indenture shall
apply to the obligations of the Guarantor under this Preferred
Securities Guarantee as if (x) such Article ___ were set forth
herein in full and (y) such obligations were substituted for the
term "Securities" appearing in such Article __, except that with
respect to Section ________ of the Indenture only, the term
"Senior Debt" shall mean all liabilities of the Guarantor,
whether or not for money borrowed (other than obligations in
respect of Other Guarantees), (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by
the Guarantor, any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor, and any Other Guarantee, and
(iii) senior to the Guarantor's capital stock.
ARTICLE VII.
TERMINATION
SECTION A. Termination
This Preferred Securities Guarantee shall terminate
(i) upon full payment of the Redemption Price (as defined in the
Trust Agreement) of all Preferred Securities, or (ii) upon
liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the
distribution of the Debentures to the Holders. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue
to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid under
the Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE \EX4-
INDEMNIFICATION
SECTION A. Exculpation
1. 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 Preferred Securities
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 Preferred Securities 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.
2. An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders might properly be paid.
SECTION B. Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities
Guarantee.
ARTICLE IX.
MISCELLANEOUS
SECTION A. Successors and Assigns
All guarantees and agreements contained in this
Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION B. Amendments
Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case
no consent of Holders will be required), this Preferred
Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the
Securities (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). The provisions of the Trust Agreement with respect
to consents to amendments thereof (whether at a meeting or
otherwise) shall apply to the giving of such approval.
SECTION C. Notices
All notices provided for in this Preferred Securities
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:
1. If given to the Issuer, in care of the
Administrative Trustee at the Issuer's mailing address set forth
below (or such other address as the Issuer may give notice of to
the Holders and the Preferred Securities Guarantee Trustee):
Sovereign Capital Trust II
c/o Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
Telecopy: (610) 320-8448
2. If given to the Preferred Securities Guarantee
Trustee, at the Preferred Securities Guarantee Trustee's mailing
address set forth below (or such other address as the Preferred
Securities Guarantee Trustee may give notice of to the Holders
and the Issuer):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
3. 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 and the Preferred
Securities Guarantee Trustee):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Mark R. McCollom
Telecopy: (610) 320-8448
4. If given to any Holder, 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 D. Benefit
This Preferred Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION E. Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
THIS PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
SOVEREIGN BANCORP, INC., as
Guarantor
By:_______________________________
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Securities Guarantee Trustee
By:_______________________________
Name:
Title:
Exhibit 4.20
CERTIFICATE OF TRUST OF
SOVEREIGN CAPITAL TRUST III
THIS Certificate of Trust of Sovereign Capital Trust III
(the "Trust") is being duly executed and filed by The Bank of New
York (Delaware), The Bank of New York, Mark R. McCollom and
Jacquelyn Blue, as trustees, to form a business trust under the
Delaware Business Trust Act (12 Del. C. Section 3801 et seq.)
(the
"Act").
1. Name. The name of the business trust formed hereby is
Sovereign Capital Trust III.
2. Delaware Trustee. The name and business address of the
trustee of the Trust in the State of Delaware is The Bank of New
York (Delaware), White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being all of the
trustees of the Trust, have duly executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
THE BANK OF NEW YORK (DELAWARE),
not in its individual capacity but
solely as Trustee of the Trust
By:/s/Frederick W. Clark
Name: Frederick W. Clark
Title:Authorized Signatory
THE BANK OF NEW YORK, not in its
individual capacity but solely as
Trustee of the Trust
By:/s/Van K. Brown
Name: Van K. Brown
Title:Assistant Vice President
/s/Mark R. McCollom
MARK R. McCOLLOM, not in his
individual capacity but solely as
Trustee of the Trust
/s/Jacquelyn Blue
JACQUELYN BLUE, not in her
individual capacity but solely as
Trustee of the Trust
Exhibit 4.21
DECLARATION OF TRUST
This DECLARATION OF TRUST, dated as of September 8, 1999
(this "Declaration"), among (i) Sovereign Bancorp Inc., a
Pennsylvania corporation (the "Depositor"), (ii) The Bank of New
York (Delaware), a Delaware banking corporation, as trustee,
(iii) The Bank of New York, a New York banking corporation, as
trustee, and (iv) Mark R. McCollom and Jacquelyn Blue, each an
individual, as trustees (each of such trustees in (ii), (iii) and
(iv) a "Trustee" and collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be
known as "Sovereign Capital Trust III" in which name the
Trustees, or the Depositor to the extent provided herein, may
engage in the transactions contemplated hereby, make and execute
contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and
that
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Declaration, satisfactory to each such party
and substantially in the form included as an exhibit to the 1933
Act Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the
issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended
and restated Declaration, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except
as otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor, as the sponsor of the Trust, and
each of the Trustees are hereby authorized (i) to file with the
Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the
Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to
<PAGE 1> the registration under the Securities Act of 1933, as
amended, of the Capital Securities of the Trust and possibly
certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to
the registration of the Capital Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) to file with
the New York Stock Exchange or any other national stock exchange
or The Nasdaq National Market (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as
shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable and (iv) to execute on behalf of the Trust
that certain Underwriting Agreement relating to the Capital
Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as
an exhibit to the 1933 Act Registration Statement. In the event
that any filing referred to in clauses (i), (ii) and (iii) above
is required by the rules and regulations of the Commission, an
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by one or more of the Trustees, each of the
individual Trustees, in his capacity as a Trustee of the Trust,
is hereby authorized and directed to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing.
In connection with the filings referred to above, the Depositor
and Mark R. McCollom and Jacquelyn Blue, each as a Trustee and
not in his individual capacity, hereby constitutes and appoints
Mark R. McCollom and Jacquelyn Blue, and each of them, as their
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such
Trustee or in the Depositor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Commission, the
Exchanges and administrators of state securities or blue sky
laws, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as the Depositor or such
Trustee might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
<PAGE 2>
5. This Declaration may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4)
and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be 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 otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Declaration shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws of principles).
[SIGNATURE PAGE FOLLOWS]
<PAGE 3>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration to be duly executed as of the day and year first
above written.
SOVEREIGN BANCORP INC., as
Depositor
By: /s/ Mark R. McCollom
Name: Mark R. McCollom
Title: Senior Vice President
THE BANK OF NEW YORK (DELAWARE), as
Trustee of the Trust
By: /s/ Frederick W. Clark
Name: Frederick W. Clark
Title: Authorized Signatory
THE BANK OF NEW YORK, as Trustee of
the Trust
By: /s/ Van K. Brown
Name: Van K. Brown
Title: Assistant Vice President
/s/ Mark R. McCollom
MARK R. McCOLLOM, as Trustee of the
Trust
/s/ Jacquelyn Blue
JACQUELYN BLUE, as Trustee of the
Trust
<PAGE 4>
Exhibit 4.22
AMENDED AND RESTATED DECLARATION
OF TRUST
SOVEREIGN CAPITAL TRUST III
Dated as of _______________
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. . . . . . . . . . . . . . . . 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application . . . . . 9
Section 2.2 Lists of Holders of Securities . . . . . . 9
Section 2.3 Reports by the Property Trustee. . . . . . 10
Section 2.4 Periodic Reports to Property Trustee . . . 10
Section 2.5 Evidence of Compliance with Conditions
Precedent. . . . . . . . . . . . . . . . . 10
Section 2.6 Events of Default; Waiver. . . . . . . . . 10
Section 2.7 Event of Default; Notice . . . . . . . . . 12
ARTICLE III
ORGANIZATION
Section 3.1 Name . . . . . . . . . . . . . . . . . . . 13
Section 3.2 Office . . . . . . . . . . . . . . . . . . 13
Section 3.3 Purpose. . . . . . . . . . . . . . . . . . 13
Section 3.4 Authority. . . . . . . . . . . . . . . . . 13
Section 3.5 Title to Property of the Trust . . . . . . 14
Section 3.6 Powers and Duties of the Administrative
Trustees . . . . . . . . . . . . . . . . . 14
Section 3.7 Prohibition of Actions by the Trust and
the Trustees . . . . . . . . . . . . . . . 17
Section 3.8 Powers and Duties of the Property
Trustee. . . . . . . . . . . . . . . . . . 18
Section 3.9 Certain Duties and Responsibilities of
the Property Trustee . . . . . . . . . . . 20
Section 3.10 Certain Rights of Property Trustee . . . . 22
Section 3.11 Delaware Trustee . . . . . . . . . . . . . 25
Section 3.12 Execution of Documents . . . . . . . . . . 25
Section 3.13 Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . . . . 25
Section 3.14 Duration of Trust. . . . . . . . . . . . . 25
Section 3.15 Mergers. . . . . . . . . . . . . . . . . . 26
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities. . 28
Section 4.2 Responsibilities of the Sponsor. . . . . . 28
Section 4.3 Right to Proceed . . . . . . . . . . . . . 28
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-
Trustee. . . . . . . . . . . . . . . . . . 29
Section 5.2 Delaware Trustee . . . . . . . . . . . . . 30
Section 5.3 Property Trustee; Eligibility. . . . . . . 30
Section 5.4 Certain Qualifications of Administrative
Trustees and Delaware Trustee Generally. . 31
Section 5.5 Administrative Trustees. . . . . . . . . . 31
Section 5.6 Delaware Trustee.. . . . . . . . . . . . . 32
Section 5.7 Appointment, Removal and Resignation of
Trustees . . . . . . . . . . . . . . . . . 32
Section 5.8 Vacancies among Trustees . . . . . . . . . 34
Section 5.9 Effect of Vacancies. . . . . . . . . . . . 34
Section 5.10 Meetings . . . . . . . . . . . . . . . . . 34
Section 5.11 Delegation of Power. . . . . . . . . . . . 35
Section 5.12 Merger, Conversion, Consolidation or
Succession to Business . . . . . . . . . . 35
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions. . . . . . . . . . . . . . . 35
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities. . 36
Section 7.2 Execution and Authentication . . . . . . . 36
Section 7.3 Form and Dating. . . . . . . . . . . . . . 37
Section 7.4 Registrar, Paying Agent and Exchange
Agent. . . . . . . . . . . . . . . . . . . 38
Section 7.5 Paying Agent to Hold Money in Trust. . . . 39
Section 7.6 Replacement Securities . . . . . . . . . . 39
Section 7.7 Outstanding Capital Securities . . . . . . 40
Section 7.8 Capital Securities in Treasury . . . . . . 40
Section 7.9 Temporary Securities . . . . . . . . . . . 40
Section 7.10 Cancellation . . . . . . . . . . . . . . . 41
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust . . . . . . . . . . . 42
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities . . . . . . . . . . 43
Section 9.2 Transfer Procedures and Restrictions . . . 44
Section 9.3 Deemed Security Holders. . . . . . . . . . 49
Section 9.4 Book Entry Interests . . . . . . . . . . . 49
Section 9.5 Notices to Clearing Agency . . . . . . . . 50
Section 9.6 Appointment of Successor Clearing
Agency . . . . . . . . . . . . . . . . . . 50
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability. . . . . . . . . . . . . . . . . 50
Section 10.2 Exculpation. . . . . . . . . . . . . . . . 50
Section 10.3 Fiduciary Duty . . . . . . . . . . . . . . 51
Section 10.4 Indemnification. . . . . . . . . . . . . . 52
Section 10.5 Outside Businesses . . . . . . . . . . . . 55
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year. . . . . . . . . . . . . . . . 56
Section 11.2 Certain Accounting Matters . . . . . . . . 56
Section 11.3 Banking. . . . . . . . . . . . . . . . . . 56
Section 11.4 Withholding. . . . . . . . . . . . . . . . 57
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments . . . . . . . . . . . . . . . . 57
Section 12.2 Meetings of the Holders; Action by
Written Consent. . . . . . . . . . . . . . 59
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of
Property Trustee . . . . . . . . . . . . . 61
Section 13.2 Representations and Warranties of
Delaware Trustee . . . . . . . . . . . . . 62
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement. . . . . . . 62
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices. . . . . . . . . . . . . . . . . . 62
Section 15.2 Governing Law. . . . . . . . . . . . . . . 64
Section 15.3 Intention of the Parties . . . . . . . . . 64
Section 15.4 Headings . . . . . . . . . . . . . . . . . 64
Section 15.5 Successors and Assigns.. . . . . . . . . . 64
Section 15.6 Partial Enforceability . . . . . . . . . . 64
Section 15.7 Counterparts . . . . . . . . . . . . . . . 64
ANNEX I TERMS OF SECURITIES. . . . . . . . . . . .I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE . . A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE. . . A2-1
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Trust Agreement
310(a) . . . . . . . . . . . . . . . . . . 5.3
310(b) . . . . . . . . . . . . . . . . . . 5.3(c); 5.3(d)
311(a) . . . . . . . . . . . . . . . . . . 2.2(b)
311(b) . . . . . . . . . . . . . . . . . . 2.2(b)
312(a) . . . . . . . . . . . . . . . . . . 2.2(a)
312(b) . . . . . . . . . . . . . . . . . . 2.2(b)
313. . . . . . . . . . . . . . . . . . . . 2.3
314(a) . . . . . . . . . . . . . . . . . . 2.4; 3.6(j)
314(c) . . . . . . . . . . . . . . . . . . 2.5
315(a) . . . . . . . . . . . . . . . . . . 3.9
315(b) . . . . . . . . . . . . . . . . . . 2.7(a)
315(c) . . . . . . . . . . . . . . . . . . 3.9(a)
315(d) . . . . . . . . . . . . . . . . . . 3.9(b)
316(a) . . . . . . . . . . . . . . . . . . 2.6
316(c) . . . . . . . . . . . . . . . . . . 3.6(e)
317(a) . . . . . . . . . . . . . . . . . . 3.8(e); 3.8(h)
317(b) . . . . . . . . . . . . . . . . . . 3.8(i); 7.5
_______________
* This Cross-Reference Table does not constitute part of the
Trust Agreement and shall not affect the interpretation of
any of its terms or provisions.
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SOVEREIGN CAPITAL TRUST III
_________________, [1999] [2000]
AMENDED AND RESTATED DECLARATION OF TRUST ("Trust
Agreement") dated and effective as of ____________________, by
the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this
Trust Agreement;
WHEREAS, the Trustees and the Sponsor established
Sovereign Capital Trust III (the "Trust"), a trust formed under
the Delaware Business Trust Act pursuant to a Declaration of
Trust dated as of September 8, 1999 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on September 10, 1999, 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
(each as hereinafter defined), and engaging in only those other
activities necessary, advisable or incidental thereto;
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this
Trust Agreement, 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 and that this Trust Agreement constitute
the governing instrument of such 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 Trust Agreement.
<PAGE>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement 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 Trust Agreement
has the same meaning throughout;
(c) all references to "the Trust Agreement" or "this
Trust Agreement" are to this Trust Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles
and Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Trust Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the
same meaning when used in this Trust Agreement unless
otherwise defined in this Trust Agreement or unless the
context otherwise requires; and
(f) a reference to the singular includes the plural
and vice versa.
"Administrative Trustee" has the meaning set forth in
Section 5.1.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act or any successor rule
thereunder.
"Agent" means any Paying Agent, Registrar or Exchange
Agent.
"Authorized Officer" of a Person means any other Person
that is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a
Global Certificate registered in the name of a Clearing Agency or
its nominee, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described
in Section 9.4.
"Business Day" means any day other than a Saturday or a
Sunday or a day on which banking institutions in the City of New
York are authorized or required by law or executive order to
close.
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as it may
be amended from time to time, or any successor legislation.
"Capital Security Beneficial Owner" means, with respect
to a Book Entry Interest, a Person who is the beneficial owner of
such Book Entry Interest, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Capital Securities" means the Series A Capital
Securities.
"Capital Securities Guarantee" means the Series A
Capital Securities Guarantee.
"Clearing Agency" means an organization registered as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as depositary for the Capital Securities and in
whose name or in the name of a nominee of that organization shall
be registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker, dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"Closing Time" means the "Closing Time" under the
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the United States Securities and
Exchange Commission as from time to time constituted, or if at
any time after the execution of this Trust Agreement such
Commission is not existing and performing the duties now assigned
to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Company Indemnified Person" means (a) any
Administrative Trustee; (b) any Affiliate of any Administrative
Trustee; (c) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of
the Trust or its Affiliates.
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
Property Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, 21 West, New York,
New York 10286.
"Covered Person" means: (a) any 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 Sovereign Bancorp, Inc., a
Pennsylvania corporation, or any successor entity resulting from
any consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Debentures under
the Indenture.
"Debenture Trustee" means Harris Trust and Savings
Bank, an Illinois banking corporation, as trustee under the
Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the Series A Debentures.
"Default" means an event, act or condition that with
notice or lapse of time, or both, would constitute an Event of
Default.
"Definitive Capital Securities" shall have the meaning
set forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direct Action" shall have the meaning set forth in
Section 3.8(e).
"Distribution" means a distribution payable to Holders
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the initial
Clearing Agency.
"Event of Default" in respect of the Securities means
an Event of Default (as defined in the Indenture) that has
occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in
Section 7.4.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Fiscal Year" has the meaning set forth in
Section 11.1.
"Global Capital Security" has the meaning set forth in
Section 7.3(a).
"Holder" means a Person in whose name 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
September 1, 1999, among the Debenture Issuer and the Debenture
Trustee, as amended from time to time.
"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.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"List of Holders" has the meaning set forth in
Section 2.2(a).
"Majority in liquidation amount" means, with respect to
the Trust Securities, except as provided in the terms of the
Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"Prospectus" has the meaning set forth in
Section 3.6(b).
"Officers' Certificate" means, with respect to any
Person, a certificate signed by any two of the Chairman, a Vice
Chairman, the Chief Executive Officer, the President, a Vice
President, the Chief Financial Officer, the Treasurer, the
Comptroller, the Secretary, or an Assistant Secretary of such
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Trust Agreement 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.
"Opinion of Counsel" means a written opinion of
counsel, who may be an employee of the Sponsor, and who shall be
acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in
Section 7.4.
"Payment Amount" has the meaning specified in
Section 6.1.
"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.
"PORTAL" has the meaning set forth in
Section 3.6(b)(iii).
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth in
Section 3.8(c).
"QIBs" shall mean qualified institutional buyers as
defined in Rule 144A.
"Quorum" means a majority of the Administrative
Trustees or, if there are only two Administrative Trustees, both
of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Statement" means the Registration
Statement on Form S-3 (333-86961-02) filed with the Commission.
"Related Party" means, with respect to the Sponsor, any
direct or indirect wholly owned subsidiary of the Sponsor or any
other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act, or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as
such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities Act,
as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
"Securities" or "Trust Securities" means the Common
Securities and the outstanding Capital Securities.
"Securities Act" means the Securities Act of 1933, as
amended from time to time, or any successor legislation.
"Securities Guarantee" means the Capital Securities
Guarantee.
"Series A Capital Securities" has the meaning specified
in Section 7.1(a).
"Series A Capital Securities Guarantee" means the
guarantee agreement dated as of ___________________, by the
Sponsor in respect of the Series A Capital Securities.
"Series A Debentures" means the Series A ______% Junior
Subordinated Deferrable Interest Debentures due
_____________________ of the Debenture Issuer issued pursuant to
the Indenture.
"Special Event" has the meaning set forth in Annex I
hereto.
"Sponsor" means Sovereign Bancorp, Inc., a Pennsylvania
corporation, or any successor entity resulting from any merger,
consolidation, amalgamation or other business combination, in its
capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to the
Trust Securities, except as provided in the terms of the Capital
Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"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).
"Trustee" or "Trustees" means each Person who has
signed this Trust Agreement 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 Indenture Act" means the Trust Indenture Act of
1939, as amended from time to time, or any successor legislation.
"Underwriting Agreement" means any underwriting or
placement agreement for the initial offering and sale of Capital
Securities.
"Unrestricted Global Capital Security" has the meaning
set forth in Section 9.2(a).
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Trust Agreement is subject to the provisions
of the Trust Indenture Act that are required to be part of this
Trust Agreement in order for this Trust Agreement to be qualified
under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Trust Agreement limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to this
Trust Agreement shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in
the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative
Trustees on behalf of the Trust shall provide the Property
Trustee, unless the Property Trustee is Registrar for the
Securities (i) within 14 days after each record date for payment
of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders
("List of Holders") as of such record date, provided that neither
the Sponsor nor the Administrative Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act.
Section 2.3 Reports by the Property Trustee.
Within 60 days after January 15 of each year,
commencing January 15, ____, the Property Trustee shall provide
to the Holders of the Capital Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as are required by Section 314
(if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent provided for
in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of
Capital Securities may, by vote or written consent, on behalf of
the Holders of all of the Capital Securities, waive any past
Event of Default in respect of the Capital Securities and its
consequences, provided that, if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of greater than
a majority in aggregate principal amount of the holders of
the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Trust Agreement
may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the
Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with
respect to the Capital Securities 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 an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by
the Holders of the Capital Securities of an Event of Default with
respect to the Capital Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities
for all purposes of this Trust Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of
the Common Securities may, by vote, on behalf of the Holders of
all of the Common Securities, waive any past Event of Default
with respect to the Common Securities and its consequences,
provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture, except
where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Trust Agreement
as provided below in this Section 2.6(b), the Event of
Default under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the
Common Securities are deemed to have waived such Event of
Default under the Trust Agreement as provided below in this
Section 2.6(b), the Event of Default under the Trust
Agreement may only be waived by the vote of the Holders of
at least the proportion in aggregate liquidation amount of
the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding;
provided further, the Holders of Common Securities will be deemed
to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its
consequences if all Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Capital Securities
and only the Holders of the Capital Securities will have the
right to direct the Property Trustee in accordance with the terms
of the Securities. The foregoing provisions of this
Section 2.6(b) shall be in lieu of Section 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Trust Agreement and the
Securities, as permitted by the Trust Indenture Act. Subject to
the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities 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 with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the
Indenture by the Property Trustee, at the direction of the
Holders of the Capital Securities, constitutes a waiver of the
corresponding Event of Default under this Trust Agreement. The
foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, notices of all defaults
with respect to the Securities actually known to a Responsible
Officer, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as
defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice
provided therein); provided that, except for a default in the
payment of principal of (or premium, if any) or interest on any
of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer
in good faith determines that the withholding of such notice is
in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have
knowledge of any default except:
(i) a default under Sections 5.01(a) and 5.01(b)
of the Indenture; or
(ii) any default as to which the Property Trustee
shall have received written notice or of which a Responsible
Officer charged with the administration of the Trust
Agreement shall have actual knowledge.
(c) Within five Business Days after the occurrence of
any Event of Default actually known to the Property Trustee, the
Property Trustee shall transmit notice of such Event of Default
to the Holders of the Capital Securities, the Administrative
Trustees and the Sponsor, unless such Event of Default shall have
been cured or waived. The Sponsor and the Administrative
Trustees shall file annually with the Property Trustee a
certification as to whether or not they are in compliance with
all the conditions and covenants applicable to them under this
Trust Agreement.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "Sovereign Capital Trust III" as
such name may be modified from time to time by the Administrative
Trustees following written notice to the Holders. The Trust's
activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrative Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o
Sovereign Bancorp, Inc., 1130 Berkshire Boulevard, Wyomissing,
Pennsylvania 19610. On ten Business Days written notice to the
Holders of Securities, the Administrative Trustees may designate
another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are
(a) to issue and sell Securities, (b) use the proceeds from the
sale of the Securities to acquire the Debentures, and (c) except
as otherwise limited herein, to engage in only those other
activities necessary, advisable or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived
from investments, mortgage or 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 3.4 Authority.
Subject to the limitations provided in this Trust
Agreement and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action
taken by the Administrative Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust
and an action taken by the Property Trustee on behalf of the
Trust 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 Trust
Agreement.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the
Debentures and the Property Trustee Account or as otherwise
provided in this Trust Agreement, 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 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive
power, duty and authority to cause the Trust to engage in the
following activities:
(a) to issue and sell the Securities in accordance
with this Trust Agreement; provided, however, that (i) the Trust
may issue no more than one series of Capital Securities and no
more than one series of Common Securities, (ii) there shall be no
interests in the Trust other than the Securities, and (iii) the
issuance of Securities shall be limited to a simultaneous
issuance of both the Capital Securities and Common Securities at
the Closing Time;
(b) in connection with the issue and sale of the
Capital Securities, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, a
prospectus and prospectus supplement (the "Prospectus") in
preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Series A Capital
Securities, and to execute and file with the Commission, at
such time as determined by the Sponsor, any Registration
Statement, including any amendments thereto;
(ii) execute and file any documents prepared by
the Sponsor, or take any acts as determined by the Sponsor
to be necessary in order to qualify or register all or part
of the Capital Securities in any State in which the Sponsor
has determined to qualify or register such Capital
Securities for sale;
(iii) execute and file an application, prepared
by the Sponsor, to permit the Capital Securities to trade or
be quoted or listed in or on the New York Stock Exchange or
any other securities exchange, quotation system or the
Nasdaq Stock Market's National Market;
(iv) execute and deliver letters, documents, or
instruments with DTC and other Clearing Agencies relating to
the Capital Securities;
(v) if required, execute and file with the
Commission a registration statement on Form 8-A, including
any amendments thereto, prepared by the Sponsor, relating to
the registration of the Capital Securities under Section 12
of the Exchange Act; and
(vi) execute and enter into the Underwriting
Agreement providing for, among other things, the sale and
registration of the Capital Securities;
(c) to acquire the Series A Debentures with the
proceeds of the sale of the Series A Capital Securities and the
Common Securities; provided, however, that the Administrative
Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the
Holders;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices
to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as may
be required of the Administrative Trustees pursuant to the terms
of the Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant
to Section 3.8(e) the Property Trustee has the exclusive power to
bring such Legal Action;
(h) to employ or otherwise engage employees and agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable
compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by
Section 314(a)(4) of the Trust Indenture Act to the Property
Trustee, which certificate may be executed by any Administrative
Trustee;
(k) to incur expenses that are necessary or incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as,
Registrar and Exchange Agent for the Securities or to appoint a
Paying Agent for the Securities as provided in Section 7.4 except
for such time as such power to appoint a Paying Agent is vested
in the Property Trustee;
(m) to give prompt written notice to the Property
Trustee and to Holders of any notice received from the Debenture
Issuer of its election to defer payments of interest on the
Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or
appropriate 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 or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this
Trust Agreement or with applicable law, that the Administrative
Trustees determine in their discretion to be necessary or
desirable in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(ii) causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Debenture Issuer to
ensure that the Debentures will be treated as indebtedness
of the Debenture Issuer for United States federal income tax
purposes;
(p) to take all action necessary to cause the Capital
Securities to be registered pursuant to an effective registration
statement under the Securities Act;
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
(r) to execute all documents or instruments, perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers
set forth in this Section 3.6 in a manner that is consistent with
the purposes and functions of the Trust set out in Section 3.3,
and the Administrative Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative
Trustees shall have none of the powers or the authority of the
Property Trustee set forth in Section 3.8.
Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Debenture
Issuer.
Section 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees (including
the Property Trustee and the Delaware Trustee) shall not, engage
in any activity other than as required or authorized by this
Trust Agreement. The Trust shall not:
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such
proceeds to Holders pursuant to the terms of this Trust
Agreement 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 in any way whatsoever;
(vi) issue any securities or other evidences of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities;
(vii) other than as provided in this Trust
Agreement or Annex I, (A) direct the time, method and place
of conducting any proceeding with respect to any remedy
available to the Debenture Trustee, or 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, or (C) exercise any right to
rescind or annul any declaration that the principal of all
the Debentures shall be due and payable; or
(viii) 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 a nationally recognized independent
tax counsel experienced in such matters to the effect that
such amendment, modification or termination will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will not be classified
as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned
by and held of record in the name of the Property Trustee in
trust for the benefit of the Holders. The right, title and
interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. 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 Property Trustee shall not transfer its right,
title and interest in the Debentures to the Administrative
Trustees or to the Delaware Trustee (if the Property Trustee does
not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-
interest bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control of
the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments or cause
the Paying Agent to make payments to the Holders from the
Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Trust
Agreement. The Property Trustee Account shall be an account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization", as that term is
defined for purposes of Rule 436(g)(2) under the Securities
Act, is at least investment grade;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption
of the Trust Securities to the extent the Debentures are
redeemed or mature; and
(iii) upon written notice of distribution issued
by the Administrative Trustees 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 upon the occurrence of certain
events.
(d) The Property Trustee shall take all actions and
perform such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Securities.
(e) Subject to Section 3.9(a), the Property Trustee
shall take any Legal Action which arises out of or in connection
with an Event of Default of which a Responsible Officer has
actual knowledge or the Property Trustee's duties and obligations
under this Trust Agreement or the Trust Indenture Act and if such
Property Trustee shall have failed to take such Legal Action, the
Holders of the Capital Securities may take such Legal Action, to
the same extent as if such Holders of Capital Securities held an
aggregate principal amount of Debentures equal to the aggregate
liquidation amount of such Capital Securities, without first
proceeding against the Property Trustee or the Trust; 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 the principal of or premium, if any, or
interest on the Debentures on the date such principal, premium,
if any, or interest is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, 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 Capital Securities
to the extent of any payment made by the Debenture Issuer to such
Holder of Capital Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee
unless either:
(i) the Trust has been completely liquidated and
the proceeds of the liquidation distributed to the Holders
pursuant to the terms of the Securities; or
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance
with Section 5.7 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default
actually known to a Responsible Officer occurs and is continuing,
the Property Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures subject to the rights of
the Holders pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in Section 317(a) of the Trust
Indenture Act.
(i) For such time as the Property Trustee is the
Paying Agent, the Property Trustee may authorize one or more
Persons to act as additional Paying Agents and to pay
Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any such additional Paying Agent may be removed
by the Property Trustee at any time the Property Trustee remains
as Paying Agent and a successor Paying Agent or additional Paying
Agents may be (but are not required to be) appointed at any time
by the Property Trustee while the Property Trustee is so acting
as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee
shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in
Section 3.6.
Notwithstanding anything expressed or implied to the
contrary in this Trust Agreement or any Annex or Exhibit hereto,
(i) the Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and (ii) the
Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in
Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the
Property Trustee.
(a) The Property Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Agreement and
in the Securities and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer has
actual knowledge, the Property Trustee shall exercise such of the
rights and powers vested in it by this Trust Agreement, and use
the same degree of care and skill in their exercise, as a prudent
person would exercise or use under the circumstances in the
conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be
construed to relieve the Property Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such Events
of Default that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Trust Agreement and in the
Securities and the Property Trustee shall not be liable
except for the performance of such duties and
obligations as are specifically set forth in this Trust
Agreement and in the Securities, and no implied
covenants or obligations shall be read into this Trust
Agreement against the Property Trustee; and
(B) in the absence of bad faith on the part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements of
this Trust Agreement; provided, however, that in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Trust Agreement;
(ii) the Property Trustee shall not be liable for
any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Property Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power conferred
upon the Property Trustee under this Trust Agreement;
(iv) no provision of this Trust Agreement shall
require the Property Trustee to expend or risk its own funds
or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable grounds
for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Trust Agreement or indemnity reasonably satisfactory to the
Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with respect
to the custody, safe keeping and physical preservation of
the Debentures and the Property Trustee Account shall be to
deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account,
subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the payment of
any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be liable
for any interest on any money received by it except as it
may otherwise agree in writing with the Sponsor. Money held
by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee
Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the
Administrative Trustees or the Sponsor with their respective
duties under this Trust Agreement, nor shall the Property
Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely
and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be
genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the
Administrative Trustees contemplated by this Trust Agreement
may be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Trust Agreement, the Property Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on
its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel
or other experts of its selection and the advice or opinion
of such counsel and experts with respect to legal matters or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its employees.
The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested in
it by this Trust Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses
and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Trust Agreement;
(vii) the Property Trustee shall not be bound to
make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other
paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any of
the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence on
the part of any agent or attorney appointed with due care by
it hereunder;
(ix) any action taken by the Property Trustee or
its agents hereunder shall bind the Trust and the Holders,
and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as to
the authority of the Property Trustee to so act or as to its
compliance with any of the terms and provisions of this
Trust Agreement, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this Trust
Agreement the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would
be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such
instructions;
(xi) except as otherwise expressly provided by
this Trust Agreement, the Property Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
and
(xii) the Property Trustee shall not be liable
for any action taken, suffered, or omitted to be taken by it
in good faith, without negligence, and reasonably believed
by it to be authorized or within the discretion or rights or
powers conferred upon it by this Trust Agreement.
(b) No provision of this Trust Agreement shall be
deemed to impose any duty or obligation on the Property Trustee
to perform any act or acts or exercise any right, power, duty or
obligation conferred or imposed on it, in any jurisdiction in
which it shall be illegal, or in which the Property Trustee shall
be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right,
power, duty or obligation. No permissive power or authority
available to the Property Trustee shall be construed to be a
duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Trust
Agreement other than Section 5.2, the Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this
Trust Agreement. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust
Act, a majority of the Administrative Trustees or, if there are
only two, any Administrative Trustee or, if there is only one,
such Administrative Trustee is authorized to execute on behalf of
the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.6; provided
that, the Registration Statements contemplated by the
Registration Rights Agreement and referred to in
Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Trust Agreement 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 Trust Agreement or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions
of Article VIII hereof, shall have existence up to _____________.
Section 3.15 Mergers.
(a) The Trust may not merge with or into, consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with
the consent of the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees and without
the consent of the Holders, the Delaware Trustee or the Property
Trustee, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) 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 long as the
Successor Securities rank the same as the Securities
rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of
the Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the
Debentures;
(iii) the 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;
(iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally recognized
statistical rating organization prior to such transaction,
such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities), or if the
Debentures are so rated, the Debentures, to be downgraded by
any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of
the Holders (including the holders of any Successor
Securities) in any material respect (other than with respect
to any dilution of such Holders' interests in the new
entity);
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
the Sponsor has received an opinion of an independent
counsel to the Trust experienced in such matters to the
effect that:
(A) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights, preferences
and privileges of the Holders (including the holders of
any Successor Securities) in any material respect
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity will
be required to register as an Investment Company; and
(viii) the Sponsor or any permitted successor or
assignee owns all of the common securities of such Successor
Entity and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent
provided by the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(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 be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an
entirety to, any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for
United States federal income tax purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of
the Common Securities then issued by the Trust, in an amount at
least equal to approximately, but not less than, 3% of the
capital of the Trust, at the same time as the Series A Capital
Securities are issued and sold.
Section 4.2 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 prepare the Prospectus and to prepare for
filing by the Trust with the Commission any Registration
Statement, including any amendments thereto;
(b) 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;
(c) if deemed necessary or advisable by the Sponsor,
to prepare for filing by the Trust an application to permit the
Capital Securities to trade or be quoted or listed in or on the
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market, or any other securities exchange, quotation
system or the Nasdaq Stock Market's National Market for listing
or quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A, including any
amendments thereto, relating to the registration of the Capital
Securities under Section 12 of the Exchange Act; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities.
Section 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of
Capital Securities, in the event that a failure of the Trust to
pay Distributions on the Capital Securities is attributable to
the failure of the Company to pay interest or principal on the
Debentures, to institute a proceeding directly against the
Debenture Issuer for enforcement of its payment obligations on
the Debentures.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be four (4),
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 Common Securities
voting as a class at a meeting of the Holders of the Common
Securities;
provided, however, that, the number of Trustees shall in no event
be less than two (2); provided further that (1) one Trustee, in
the case of a natural person, shall be a person who is a resident
of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (an "Administrative Trustee"); and (3) one
Trustee shall be the Property Trustee for so long as this Trust
Agreement is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding
the above, unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in liquidation amount
of the Common Securities acting as a class at a meeting of the
Holders of the Common Securities, and the Administrative Trustees
shall have power to appoint one or more Persons either to act as
a co-trustee, jointly with the Property Trustee, of all or any
part of the Trust's property, or to act as separate trustee of
any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such
Person or Persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of
this Trust Agreement. In case an Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to
make any such appointment of a co-trustee.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the State of
Delaware; or
(b) if not a natural person, an entity which has its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no
application.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the
"Property Trustee") which shall act as Property Trustee which
shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America or
any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least 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 5.3(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 Property Trustee shall cease to
be eligible to so act under Section 5.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set
forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of
the Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
(d) The Capital Securities Guarantee shall be deemed
to be specifically described in this Trust Agreement for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Section 5.4 Certain Qualifications of Administrative Trustees
and Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall
be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more Authorized
Officers.
Section 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Mark R. McCollom
Jacquelyn Blue
(a) Except as expressly set forth in this Trust
Agreement and except if a meeting of the Administrative Trustees
is called with respect to any matter over which the
Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent
of, any one such Administrative Trustee.
(b) Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust
Act or applicable law, any Administrative Trustee is authorized
to execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any
amendments thereto, shall be signed by all of the Administrative
Trustees; and
(c) An Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
Section 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Section 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) and to Section 6(b) of
Annex I hereto, Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor;
(ii) unless an Event of Default shall have
occurred and be continuing after the issuance of any
Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities;
and
(iii) if an Event of Default shall have occurred
and be continuing after the issuance of the Securities, with
respect to the Property Trustee or the Delaware Trustee, by
vote of Holders of a Majority in liquidation amount of the
Capital Securities voting as a class at a meeting of Holders
of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.7(a) until a
Successor Property Trustee ("Successor Property Trustee") has
been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and
delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee
shall not be removed in accordance with this Section 5.7(a)
until a successor Trustee possessing the qualifications to
act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office
until his successor shall have been appointed or until his death,
removal or resignation. Any Trustee may resign from office
(without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the
Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee has
been appointed and has accepted such appointment by
instrument executed by such Successor Property Trustee
and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been
completely liquidated and the proceeds thereof
distributed to the Holders; and
(ii) no such resignation of the Trustee that acts
as the Delaware Trustee shall be effective until a Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor and
the resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an
Event of Default shall have occurred and be continuing after the
issuance of the Securities, the Holders of the Capital
Securities, shall use their best efforts to promptly appoint a
Successor Delaware Trustee or Successor Property Trustee, as the
case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this
Section 5.7.
(e) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.7 within 60 days after
delivery of an instrument of resignation or removal, the Property
Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the
case may be.
(f) No Property Trustee or Delaware Trustee shall be
liable for the acts or omissions to act of any Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
Section 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and
the number of Trustees is not reduced pursuant to Section 5.1, or
if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance
with Section 5.7.
Section 5.9 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 Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in
accordance with Section 5.7, the Administrative Trustees in
office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all
the duties imposed upon the Administrative Trustees by this Trust
Agreement.
Section 5.10 Meetings.
If there is more than one Administrative Trustee,
meetings of the Administrative Trustees shall be held from time
to time upon the call of any Administrative Trustee. Regular
meetings of the Administrative Trustees may be held at a time and
place fixed by resolution of the Administrative Trustees. Notice
of any in-person meetings of the Administrative Trustees 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 such meeting. Notice of any telephonic meetings
of the Administrative Trustees 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 an
Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where an Administrative Trustee
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 Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the
Administrative Trustees 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 Administrative Trustees. In the
event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
Section 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purpose of executing any documents contemplated in Section 3.6,
including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to
delegate from time to time to such of their number or to officers
of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to
Business.
Any Person into which the Property Trustee or the
Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, may be merged or converted or
with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property
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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the
Property 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 VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with
the applicable terms of the relevant Holder's Securities. If and
to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the
Indenture) and Additional Sums (as defined in the Indenture)),
premium and/or principal on the Debentures held by the Property
Trustee or any other payments with respect to the Debentures held
by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property 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 VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the
Trust issue one class of capital securities representing
undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Series A Capital
Securities") and one class 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").
(b) 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.
(c) Upon issuance of the Securities as provided in
this Trust Agreement, the Securities so issued shall be deemed to
be validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a Holder
or a Capital Security Beneficial Owner in accordance with the
terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this
Trust Agreement.
Section 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the
Trust by an Administrative Trustee by manual or facsimile
signature. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not
ceased to be such Administrative Trustee; and any Securities may
be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Trust Agreement any such person was
not such a Administrative Trustee.
(b) One Administrative Trustee shall sign the
Securities for the Trust by manual or facsimile signature.
A Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property
Trustee. The signature shall be conclusive evidence that the
Security has been authenticated under this Trust Agreement.
Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate
the Securities for original issue. The aggregate number of
Capital Securities outstanding at any time shall not exceed the
number set forth in the Terms in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating
agent acceptable to the Trust to authenticate Securities. An
authenticating agent may authenticate Securities whenever the
Property Trustee may do so. Each reference in this Trust
Agreement to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the
same rights as the Property Trustee to deal with the Sponsor or
an Affiliate.
Section 7.3 Form and Dating.
The Capital Securities 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 Trust
Agreement. The Property Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibits A-1 and
A-2. Certificates representing the Securities may be printed,
lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof. The Securities may have
letters, CUSIP or other 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
Trust). The Trust at the direction of the Sponsor shall furnish
any such legend not contained in Exhibit A-1 to the Property
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 Trust
Agreement and to the extent applicable, the Property Trustee and
the Sponsor, by their execution and delivery of this Trust
Agreement, expressly agree to such terms and provisions and to be
bound thereby.
(a) Global Securities. Securities may be issued in
the form of one or more, permanent global Securities in
definitive, fully registered form without distribution coupons
with the appropriate global legends (a "Global Capital
Security"), which shall be deposited on behalf of the purchasers
of the Capital Securities represented thereby with the Property
Trustee, at its New York office, as custodian for the Clearing
Agency, and registered in the name of the Clearing Agency or a
nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided.
The number of Capital Securities represented by a Global Capital
Security may from time to time be increased or decreased by
adjustments made on the records of the Property Trustee and the
Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall
apply only to the Global Capital Securities and such other
Capital Securities in global form as may be authorized by the
Trust to be deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee shall,
in accordance with this Section 7.3, authenticate and make
available for delivery initially one or more Global Capital
Securities that (i) shall be registered in the name of Cede & Co.
or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to
such Clearing Agency's written instructions or held by the
Property Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Trust Agreement
with respect to any Global Capital Security held on their behalf
by the Clearing Agency or by the Property Trustee as the
custodian of the Clearing Agency or under such Global Capital
Security, and the Clearing Agency may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for
all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Trust, the Property Trustee or any agent
of the Trust or the Property Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such
Clearing Agency governing the exercise of the rights of a holder
of a beneficial interest in any Global Capital Security.
(c) Definitive Capital Securities. Except as provided
in Section 7.9 or 9.2(e)(i), owners of beneficial interests in a
Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital
Securities").
(d) Authorized Denominations. The Capital Securities
are issuable only in denominations of $______ and any integral
multiple thereof.
Section 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Borough of Manhattan,
The City of New York, (i) an office or agency where Capital
Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities
may be presented for payment ("Paying Agent") and (iii) an office
or agency where Securities may be presented for exchange
("Exchange Agent"). The Registrar shall keep a register of the
Capital Securities and of their transfer. The Trust may appoint
the Registrar, the Paying Agent and the Exchange Agent and may
appoint one or more co-registrars, one or more additional paying
agents and one or more additional exchange agents in such other
locations as it shall determine. The term "Registrar" includes
any additional registrar, "Paying Agent" includes any additional
paying agent and the term "Exchange Agent" includes any
additional exchange agent. The Trust may change any Paying
Agent, Registrar, co-registrar or Exchange Agent without prior
notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees. The Trust shall notify the Property
Trustee of the name and address of any Agent not a party to this
Trust Agreement. If the Trust fails to appoint or maintain
another entity as Registrar, Paying Agent or Exchange Agent, the
Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar, or Exchange Agent.
The Trust shall act as Paying Agent, Registrar, co-registrar, and
Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Exchange Agent for the Capital
Securities.
Section 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than
the Property Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit of Holders or the Property
Trustee all money held by the Paying Agent for the payment of
liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying
Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the
Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or an Affiliate of the Trust
or the Sponsor acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money
held by it as Paying Agent.
Section 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been
lost, destroyed or wrongfully taken or if such Security is
mutilated and is surrendered to the Trust or in the case of the
Capital Securities to the Property Trustee, the Trust shall issue
and the Property Trustee shall, upon written order of the Trust,
authenticate a replacement Security if the Property Trustee's and
the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the
judgment of the Property Trustee, is sufficient to protect the
Trustees, the Sponsor, the Trust or any authenticating agent from
any loss which any of them may suffer if a Security is replaced.
The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional beneficial
interest in the Trust.
Section 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all
the Capital Securities authenticated by the Property Trustee
except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not
outstanding.
If a Capital Security is replaced, paid or purchased
pursuant to Section 7.6 hereof, it ceases to be outstanding
unless the Property Trustee receives proof satisfactory to it
that the replaced, paid or purchased Capital Security is held by
a bona fide purchaser.
If Capital Securities are considered paid in accordance
with the terms of this Trust Agreement, they cease to be
outstanding and Distributions on them shall cease to accumulate.
A Capital Security does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the
Sponsor holds the Security.
Section 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required
amount of Securities have concurred in any direction, waiver or
consent, Capital Securities owned by the Trust, the Sponsor or an
Affiliate of the Sponsor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be
fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee actually
knows are so owned shall be so disregarded.
Section 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for
delivery, the Trust may prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the
form of Definitive Securities but may have variations that the
Trust considers appropriate for temporary Securities. Without
unreasonable delay, the Trust shall prepare and, in the case of
the Capital Securities, the Property Trustee shall authenticate
Definitive Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the
Clearing Agency or with the Property Trustee as custodian for the
Clearing Agency pursuant to Section 7.3 shall be transferred to
the beneficial owners thereof in the form of certificated Capital
Securities only if such transfer complies with Section 9.2 and
(i) the Clearing Agency notifies the Sponsor that it is unwilling
or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and a
clearing agency is not appointed by the Sponsor within 90 days of
such notice, (ii) a Default or an Event of Default has occurred
and is continuing or (iii) the Trust at its sole discretion
elects to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable
to the beneficial owners thereof in the form of certificated
Capital Securities pursuant to this Section 7.9 shall be
surrendered by the Clearing Agency to the Property Trustee
located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without
charge, and the Property Trustee shall authenticate and make
available for delivery, upon such transfer of each portion of
such Global Capital Security, an equal aggregate liquidation
amount of Securities of authorized denominations in the form of
certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered
in such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the
Holder of a Global Capital Security may grant proxies and
otherwise authorize any Person, including Participants and
Persons that may hold interests through Participants, to take any
action which such Holder is entitled to take under this Trust
Agreement or the Securities.
(e) In the event of the occurrence of any of the
events specified in Section 7.9(b), the Trust will promptly make
available to the Property Trustee a reasonable supply of
certificated Capital Securities in fully registered form without
distribution coupons.
Section 7.10 Cancellation.
The Trust at any time may deliver Capital Securities to
the Property Trustee for cancellation. The Registrar, Paying
Agent and Exchange Agent shall forward to the Property Trustee
any Capital Securities surrendered to them for registration of
transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment,
replacement or cancellation and shall dispose of cancelled
Capital Securities as the Trust directs, provided that the
Property Trustee shall not be obligated to destroy Capital
Securities. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any
Holder has exchanged.
Section 4-22 CUSIP Numbers.
The Trust in issuing the Capital Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the
Property Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders of Capital Securities;
provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on
the Capital 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 Capital Securities, and any
such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the
Property Trustee of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect to
the Sponsor; or the revocation of the Sponsor's charter and
the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) following the distribution of a Like Amount
of the Debentures to the Holders, provided that, the
Property Trustee has received written notice from the
Sponsor directing the Property Trustee to terminate the
Trust (which direction is optional, and except as otherwise
expressly provided below, within the discretion of the
Sponsor) and provided, further, that such direction and such
distribution is conditioned on (i) the receipt by the
Sponsor of any required regulatory approval and (ii) the
Administrative Trustees' receipt of an opinion of an
independent tax counsel experienced in such matters, which
opinion may rely on published rulings of the Internal
Revenue Service, to the effect that the Holders will not
recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust and
the distribution of Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent
jurisdiction;
(v) 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;
(vi) upon the repayment of the Debentures or at
such time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.14.
(b) As soon as is practicable after the occurrence of
an event referred to in Section 8.1(a), the Administrative
Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in
this Trust Agreement and in the terms of the Securities. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(b) Subject to this Article IX, Capital Securities may
only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Trust Agreement. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(c) For so long as the Trust Securities remain
outstanding, the Sponsor will covenant (i) to directly or
indirectly maintain 100% direct or indirect ownership of the
Common Securities of the Trust; provided, however, that any
permitted successor of the Sponsor under the Indenture may
succeed to the Sponsor's ownership of such Common Securities,
(ii) not to cause, as sponsor of the Trust, or to permit, as
Holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a
distribution of the Debentures as provided in the Trust Agreement
and in connection with certain mergers, consolidations or
amalgamations permitted by this Trust Agreement and (iii) to use
its reasonable efforts to cause the Trust (a) to remain a
business trust, except in connection with the distribution of
Debentures 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 this Trust Agreement, and (b) to otherwise continue
to be classified as a grantor trust for United States federal
income tax purposes.
(d) The Administrative Trustees shall provide for the
registration of Securities and of the transfer of Securities,
which will be effected without charge but only upon payment (with
such indemnity as the Administrative Trustees 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 Administrative Trustees 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 Administrative
Trustees 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 Property
Trustee (in the case of Capital Securities) or the Trust (in the
case of Common Securities). 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 Trust Agreement.
Section 9.2 Transfer Procedures and Restrictions.
(a) General. No transfer or exchange of a Definitive
Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Trust a
certificate in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1.
(b) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to
the Registrar or co-Registrar
(x) to register the transfer of such Definitive
Capital Securities; or
(y) to exchange such Definitive Capital
Securities which became mutilated, destroyed, defaced,
stolen or lost, for an equal number of Definitive Capital
Securities,
the Registrar or co-registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such
transaction are met; provided, however, that the Definitive
Capital Securities surrendered for 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 or
co-registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
(c) Restrictions on Transfer of a Definitive Capital
Security for a Beneficial Interest in a Global Capital Security.
A Definitive Capital Security may not be exchanged for a
beneficial interest in a Global Capital Security except upon
satisfaction of the requirements set forth below. Upon receipt
by the Property Trustee of a Definitive Capital Security, duly
endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Property Trustee, together with
written instructions directing the Property Trustee to make, or
to direct the Clearing Agency to make, an adjustment on its books
and records with respect to the appropriate Global Capital
Security to reflect an increase in the number of the Capital
Securities represented by such Global Capital Security, then the
Property Trustee shall cancel such Definitive Capital Security
and cause, or direct the Clearing Agency to cause, the aggregate
number of Capital Securities represented by the appropriate
Global Capital Security to be increased accordingly. If no
Global Capital Securities are then outstanding, the Trust shall
issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of
Capital Securities in global form.
(d) Transfer and Exchange of Global Capital
Securities. Subject to Section 9.2(e), the transfer and exchange
of Global Capital Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with
this Trust Agreement (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(e) Transfer of a Beneficial Interest in a Global
Capital Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest in a
Global Capital Security may upon request, but only upon 20
days prior notice to the Property Trustee, and if
accompanied by the information specified below, exchange
such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon
receipt by the Property Trustee from the Clearing Agency or
its nominee on behalf of any Person having a beneficial
interest in a Global Capital Security of written
instructions or such other form of instructions as is
customary for the Clearing Agency or the Person designated
by the Clearing Agency as having such a beneficial interest
in a Capital Security and a certification from the
transferor (in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1), which
may be submitted by facsimile, then the Property Trustee
will cause the aggregate number of Capital Securities
represented by Global Capital Securities to be reduced on
its books and records and, following such reduction, the
Trust will execute and the Property Trustee will
authenticate and make available for delivery to the
transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in
exchange for a beneficial interest in a Global Capital
Security pursuant to this Section 9.2(e) shall be registered
in such names and in such authorized denominations as the
Clearing Agency, pursuant to instructions from its Clearing
Agency Participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall
deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in
accordance with such instructions of the Clearing Agency.
(f) Restrictions on Transfer and Exchange of Global
Capital Securities. Notwithstanding any other provisions of this
Trust Agreement (other than the provisions set forth in
subsection (g) of this Section 9.2), a Global Capital Security
may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the
Clearing Agency or by the Clearing Agency or any such nominee to
a successor Clearing Agency or a nominee of such successor
Clearing Agency.
(g) Authentication of Definitive Capital Securities.
If at any time:
(i) there occurs a Default or an Event of Default
which is continuing, or
(ii) the Trust, in its sole discretion, notifies
the Property Trustee in writing that it elects to cause the
issuance of Definitive Capital Securities under this Trust
Agreement,
then the Trust will execute, and the Property Trustee, upon
receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery
of Definitive Capital Securities to the Persons designated by the
Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of
Capital Securities represented by the Global Capital Securities,
in exchange for such Global Capital Securities.
(h) Cancellation or Adjustment of Global Capital
Security. At such time as all beneficial interests in a Global
Capital Security have either been exchanged for Definitive
Capital Securities to the extent permitted by this Trust
Agreement or redeemed, repurchased or canceled in accordance with
the terms of this Trust Agreement, such Global Capital Security
shall be returned to the Clearing Agency for cancellation or
retained and canceled by the Property Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities,
Capital Securities represented by such Global Capital Security
shall be reduced and an adjustment shall be made on the books and
records of the Clearing Agency and the Registrar, to reflect such
reduction.
(i) Obligations with Respect to Transfers and
Exchanges of Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property Trustee
shall authenticate Definitive Capital Securities and Global
Capital Securities at the Registrar's or co-registrar's
request in accordance with the terms of this Trust
Agreement.
(ii) Registrations of transfers or exchanges will
be effected without charge, but only upon payment (with such
indemnity as the Trust 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 or co-registrar shall not be
required to register the transfer of or exchange of
(a) Capital Securities during a period beginning at the
opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of
business on the day of such mailing; or (b) any Capital
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security being
redeemed in part.
(iv) Prior to the due presentation for
registration of transfer of any Capital Security, the Trust,
the Property Trustee, the Paying Agent, the Registrar or any
co-registrar may deem and treat the Person in whose name a
Capital Security is registered as the absolute owner of such
Capital Security for the purpose of receiving Distributions
on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee, the
Paying Agent, the Registrar or any co-registrar shall be
affected by notice to the contrary.
(v) All Capital Securities issued upon any
transfer or exchange pursuant to the terms of this Trust
Agreement shall evidence the same security and shall be
entitled to the same benefits under this Trust Agreement as
the Capital Securities surrendered upon such transfer or
exchange.
(j) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial owner of a
Global Capital Security, a Clearing Agency Participant in
the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its
nominee or of any Clearing Agency Participant thereof, with
respect to any ownership interest in the Capital Securities
or with respect to the delivery to any Clearing Agency
Participant, beneficial owner or other Person (other than
the Clearing Agency) of any notice (including any notice of
redemption) or the payment of any amount, under or with
respect to such Capital Securities. All notices and
communications to be given to the Holders and all payments
to be made to Holders under the Capital Securities shall be
given or made only to or upon the order of the registered
Holders (which shall be the Clearing Agency or its nominee
in the case of a Global Capital Security). The rights of
beneficial owners in any Global Capital Security shall be
exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency. The
Property Trustee may conclusively rely and shall be fully
protected in relying upon information furnished by the
Clearing Agency or any agent thereof with respect to its
Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar shall
have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed
under this Trust Agreement or under applicable law with
respect to any transfer of any interest in any Capital
Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global
Capital Security) other than to require delivery of such
certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by, the terms of this Trust Agreement, and to
examine the same to determine substantial compliance as to
form with the express requirements hereof.
(k) Minimum Transfers. Series A Capital Securities
may only be transferred in minimum blocks of $___________
aggregate liquidation amount. Any transfer of Series A Capital
Securities in a block having an aggregate liquidation amount of
less than $___________ shall be deemed to be void and of no legal
effect whatsoever. Any such transferee shall be deemed not to be
a Holder of such Series A 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.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Security shall be registered on the books and records of the
Trust as the sole owner of such Security 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 Security on the part of any
Person, whether or not the Trust shall have actual or other
notice thereof.
Section 9.4 Book Entry Interests.
Global Capital Securities shall initially be registered
on the books and records of the Trust in the name of Cede & Co.,
the nominee of the Clearing Agency, and no Capital Security
Beneficial Owner will receive a definitive Capital Security
Certificate representing such Capital Security Beneficial Owner's
interests in such Global Capital Securities, except as provided
in Section 9.2 and Section 7.9. Unless and until definitive,
fully registered Capital Securities certificates have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.2
and Section 7.9:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled to
deal with the Clearing Agency for all purposes of this Trust
Agreement (including the payment of Distributions on the
Global Capital Securities and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities
and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial
Owners;
(c) to the extent that the provisions of this
Section 9.4 conflict with any other provisions of this Trust
Agreement, the provisions of this Section 9.4 shall control;
and
(d) the rights of the Capital Security Beneficial
Owners shall be exercised only through the Clearing Agency
and shall be limited to those established by law and
agreements between such Capital Security Beneficial Owners
and the Clearing Agency and/or the Clearing Agency
Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing
Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital
Security Holders is required under this Trust Agreement, the
Trustees shall give all such notices and communications specified
herein to be given to the Holders of Global Capital Securities to
the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities, the Administrative Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to
such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Trust
Agreement, the Securities Guarantees 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 which shall be made solely from
assets of the Trust; and
(ii) required to pay to the Trust or to any
Holder any deficit upon dissolution of the Trust or
otherwise.
(b) The Debenture Issuer shall be liable for all of
the debts and obligations of the Trust (other than in respect of
the Securities) to the extent not satisfied out of the Trust's
assets.
(c) Pursuant to Section 3803(a) of the Business Trust
Act, the Holders 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 10.2 Exculpation.
(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 Trust
Agreement 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 gross 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 who has been selected 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 might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Trust Agreement
shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust
Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; or
(ii) whenever this Trust Agreement or any other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the Trust or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
the relative interest of each party (including its own interest)
to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or
accepted industry practices, and any applicable generally
accepted accounting practices or principles. In the absence of
bad faith by the Indemnified Person, the resolution, action or
term so made, taken or provided by the Indemnified Person shall
not constitute a breach of this Trust Agreement or any other
agreement contemplated herein or of any duty or obligation of the
Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Trust Agreement 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 Trust Agreement.
Section 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of
the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys'
fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of 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 Company Indemnified Person did not act
in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the
full extent permitted by law, any Company Indemnified Person
who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in
the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to
be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of
all the circumstances of the case, such Person is fairly and
reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company Indemnified
Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(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) actually and reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and
(ii) of this Section 10.4(a) (unless ordered by a
court) shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper
in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Administrative
Trustees by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such action,
suit or proceeding, (2) if such a Quorum is not obtainable,
or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or investigative
action, suit or proceeding referred to in paragraphs (i) and
(ii) of this Section 10.4(a) shall be paid by the Debenture
Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on
behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Debenture Issuer as
authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by
the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrative Trustees so directs,
by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Administrative Trustees, counsel
or the Common Security Holder at the time such determination
is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed
exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer 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 10.4(a) shall be deemed to be provided by a
contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may
purchase and maintain insurance on behalf of any person who
is or was a Company Indemnified Person against any liability
asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or
not the Debenture Issuer would have the power to indemnify
him against such liability under the provisions of this
Section 10.4(a).
(viii) For purposes of this Section 10.4(a),
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 10.4(a) with respect to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this
Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure to
the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify the
(i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee and the Delaware Trustee, and
(iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in
(i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person
harmless against, any and all loss, liability, damage, claim or
expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Trust Agreement.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee
and the Property Trustee may engage in or possess an interest in
other business ventures of any nature or description,
independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders shall have
no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the
Property 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 Property Trustee shall have the
right to take for its own account (individually or as a partner
or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person, the
Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be
the calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust,
the Administrative Trustees shall keep, or cause to be kept, full
books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the 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 Administrative
Trustees.
(b) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders, any 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 Administrative Trustees
shall endeavor to deliver all such information statements within
30 days after the end of each Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an
annual United States federal income tax return, on a Form 1041 or
such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by
the Administrative Trustees on behalf of the Trust with any state
or local taxing authority.
Section 11.3 Banking.
The Trust may maintain one or more bank accounts 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 Property Trustee shall be made directly to the Property
Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Administrative Trustees shall comply
with all withholding requirements under United States federal,
state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect
to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations.
The Administrative Trustees 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 Trust 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 in the amount of
the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld
was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Trust
Agreement or by any applicable terms of the Securities, this
Trust Agreement may only be amended by a written instrument
approved and executed by:
(i) the Administrative Trustees (or if there are
more than two Administrative Trustees a majority of the
Administrative Trustees);
(ii) if the amendment affects the rights, powers,
duties, obligations or immunities of the Property Trustee,
the Property Trustee; and
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed
amendment, the Property Trustee shall have first received an
Officers' Certificate from each of the Trust and the Sponsor
that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the
Securities);
(ii) unless, in the case of any proposed
amendment which affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the
Property 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 Trust
Agreement (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 Trust Agreement (including the terms of the
Securities) and that all conditions precedent, if any,
in this Trust Agreement to the execution and delivery
of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be
required to sign any such amendment; and
(iii) to the extent the result of such amendment
would be to:
(A) cause the Trust to fail to continue 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 Property Trustee in contravention of the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act;
(c) At such time after the Trust has issued any
Securities that remain outstanding, any amendment that would
adversely affect the rights, privileges or preferences of any
Holder may be effected only with such additional requirements as
may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be
amended without the consent of all of the Holders;
(e) Article Four shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the
Common Securities and;
(f) The rights of the holders of the Common Securities
under Article Five 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
Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust
Agreement may be amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any
provision in this Trust Agreement that may be inconsistent
with any other provision of this Trust Agreement or to make
any other provisions with respect to matters or questions
arising under this Trust Agreement which shall not be
inconsistent with the other provisions of the Trust
Agreement; and
(ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to
ensure that the Trust will not be required to register as an
Investment Company under the Investment Company Act.
provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests
of the Holders, and any amendments of this Trust Agreement shall
become effective when notice thereof is given to the Holders.
Section 12.2 Meetings of the Holders; Action by Written
Consent.
(a) Meetings of the Holders of any class of Securities
may be called at any time by the Administrative Trustees (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 Trust Agreement, the
terms of the Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading.
The Administrative Trustees 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 Administrative
Trustees one or more notices in writing stating that the signing
Holders wish to call a meeting and indicating the general or
specific purpose for which the meeting is to be called. Any
Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a
meeting and only those Securities specified shall be counted for
purposes of determining whether the required percentage set forth
in the second sentence of this paragraph has been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to
meetings of Holders:
(i) notice of any such meeting shall be given to
all the Holders having a right to vote thereat at least
seven days and not more than 60 days before the date of such
meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Trust Agreement
or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the
Holders 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 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 entitled to vote who
have not consented in writing. The Administrative Trustees
may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action without
a meeting shall be returned to the Trust within the time
specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act
for it by proxy on all matters in which a Holder 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 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 were stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrative Trustees or by such other
Person that the Administrative Trustees may designate; and
(iv) unless the Business Trust Act, this Trust
Agreement, 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 or trading, otherwise
provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating to
meetings of Holders, including notice of the time, place or
purpose of any meeting at which any matter is to be voted on
by any Holders, waiver of any such notice, action by consent
without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right
to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Trust Agreement, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Property Trustee's acceptance of its appointment
as Property Trustee that:
(a) The Property Trustee is a New York banking
corporation with trust powers and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, this Trust Agreement;
(b) The execution, delivery and performance by the
Property Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Property
Trustee. This Trust Agreement has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property 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 and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of this
Trust Agreement by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property
Trustee; and
(d) No consent, approval or authorization of, or
registration with or notice to, any New York State or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee of this Trust Agreement.
Section 13.2 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 Trust Agreement, 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 Trust Agreement;
(b) The execution, delivery and performance by the
Delaware Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Delaware
Trustee. This Trust Agreement has been duly executed and
delivered by the Delaware Trustee and 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 and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or
registration with or notice to, any federal banking authority is
required for the execution, delivery or performance by the
Delaware Trustee of this Trust Agreement; and
(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.
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement. [Intentionally
Omitted]
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.
All notices provided for in this Trust Agreement 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 Trust, in care of the
Administrative Trustees at the Trust's mailing address set forth
below (or such other address as the Trust may give notice of to
the Holders):
Sovereign Capital Trust III
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
(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):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at the Property
Trustee's mailing address set forth below (or such other address
as the Property Trustee may give notice of to the Holders):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10283
Attention: Corporate Trust
Trustee Administration
(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 to the Trust):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Chief Financial 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.
Section 15.2 Governing Law.
This Trust Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies
shall be governed by such laws without regard to principles of
conflict of laws.
Section 15.3 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 Trust Agreement shall
be interpreted to further this intention of the parties.
Section 15.4 Headings.
Headings contained in this Trust Agreement are inserted
for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
Section 15.5 Successors and Assigns.
Whenever in this Trust Agreement 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 Trust Agreement by the Sponsor and the
Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 15.6 Partial Enforceability.
If any provision of this Trust Agreement, or the
application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, 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 15.7 Counterparts.
This Trust Agreement may contain more than one
counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees
to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers
had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
___________________________________
Mark R. McCollom, as Administrative
Trustee
___________________________________
Jacquelyn Blue, as Administrative
Trustee
THE BANK OF NEW YORK (Delaware) as
Delaware Trustee
By:________________________________
Name:
Title:
THE BANK OF NEW YORK as Property
Trustee
By:________________________________
Name:
Title:
SOVEREIGN BANCORP, INC., as Sponsor
By:________________________________
Name:
Title:
<PAGE>
ANNEX I
TERMS OF
_____% Series A CAPITAL SECURITIES
______% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of ___________________ (as amended
from time to time, the "Trust Agreement"), the designation,
rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized
term used but not defined herein has the meaning set forth in the
Trust Agreement or, if not defined in such Trust Agreement, as
defined in the Prospectus referred to below in Section 2(c) of
this Annex I):
1. Designation and Number.
(a) Capital Securities. ______ Series A Capital
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of ______________________
Dollars ($____________________), and each with a liquidation
amount with respect to the assets of the Trust of $______ per
security, are hereby designated for the purposes of
identification only as "_______% Series A Capital Securities"
(collectively, the "Capital Securities"). The certificates
evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Trust Agreement, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of
any exchange or quotation system on or in which the Capital
Securities are listed, traded or quoted.
of the Trust with an aggregate liquidation amount
with respect to
the assets of the Trust of _________________________ Dollars
($_______________) and a liquidation amount with respect to the
assets of the Trust of $______ per security, are hereby
designated for the purposes of identification only as "_______%
Common Securities" (collectively, the "Common Securities"). The
certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Trust Agreement,
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 fixed at a rate per annum of ______% (the "Coupon Rate") of
the liquidation amount of $______ per Security (the "Liquidation
Amount"), such rate being the rate of interest payable on the
Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional
distributions thereon compounded semi-annually at the Coupon Rate
(to the extent permitted by applicable law). The term
"Distributions", as used herein, includes distributions of any
such interest. A Distribution is payable only to the extent that
payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
on hand legally available therefor.
(b) Distributions on the Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from _______________, and will be payable semi-annually in
arrears on ______________ and __________________ of each year,
commencing on ______________________ (each, a "Distribution
Date"), except as otherwise described below. Distributions will
be computed on the basis of a 360-day year consisting of twelve
30-day months and for any period less than a full calendar month
on the basis of the actual number of days elapsed in such month.
As long as no Event of Default has occurred and is continuing
under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest
payment period at any time and from time to time on the
Debentures for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such
period (each an "Extension Period"), during which Extension
Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall end on a date other than
an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with
additional Distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Maturity Date of the
Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above
requirements.
(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 fifteenth day of the month preceding
the month in which the relevant Distribution Date occurs, which
Distribution Dates correspond to the interest payment dates on
the Debentures. Subject to any applicable laws and regulations
and the provisions of the Trust Agreement, each such payment in
respect of the Capital Securities will be made as described under
the heading "____________________________" in the Prospectus
dated _______________________, of the Debenture Issuer and the
Trust relating to the Securities and the Debentures. The
relevant record dates for the Common Securities shall be the same
as the record dates for the Capital Securities. Distributions
payable on any Securities that are not punctually paid on any
Distribution Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be
payable to the Holder 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 next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made
on such 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.
3. Liquidation Distribution Upon Dissolution.
In the event of any termination of the Trust or the
Sponsor otherwise gives notice of its election to liquidate the
Trust pursuant to Section 8.1(a)(iii) of the Trust Agreement, the
Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be
possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the
Holders a Like Amount (as defined below) of the Debentures,
unless such distribution is determined by the Property Trustee
not to be practicable, in which event such Holders will be
entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction
of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the aggregate of the
liquidation amount of $______ per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of
the Securities, Securities having a Liquidation Amount equal to
the principal amount of Debentures to be paid in accordance with
their terms and (ii) with respect to a distribution of Debentures
upon the liquidation of the Trust, Debentures having a principal
amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro
Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole
or in part, at maturity or upon early redemption (either at the
option of the Debenture Issuer or pursuant to a Special Event, as
described below), the proceeds from such repayment shall be
simultaneously applied by the Property Trustee (subject to the
Property Trustee having received notice no later than 45 days
prior to such repayment) to redeem a Like Amount of the
Securities at a redemption price equal to (i) in the case of the
repayment of the Debentures at maturity, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional
redemption of the Debentures upon the occurrence and continuation
of a Special Event, the Special Event Redemption Price (as
defined below) and (iii) in the case of the optional redemption
of the Debentures on or after ______________________, the
Optional Redemption Price (as defined below). The Maturity
Redemption Price, the Special Event Redemption Price and the
Optional Redemption Price are referred to collectively as the
"Redemption Price". Holders will be given not less than 30 nor
more than 60 days notice of such redemption.
(b) (i) The "Maturity Redemption Price", with
respect to a redemption of Securities, shall mean an amount equal
to the principal of and accrued and unpaid interest on the
Debentures as of the maturity date thereof.
(ii) In the case of an optional redemption,
if fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be determined as described
in Section 4(f)(ii) below. Upon the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction,
the Debentures thereafter will be subject to optional repayment,
in whole, but not in part, on or after _________________ (the
"Initial Optional Redemption Date").
The Debenture Issuer shall have the right (subject to
the conditions in the Indenture) to elect to redeem the
Debentures in whole or in part at any time on or after the
Initial Optional Redemption Date, upon not less than 30 days and
not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of
the Securities to be redeemed by the Trust at the Optional
Redemption Price on a Pro Rata basis. "Optional Redemption
Price" shall mean a price equal to the percentage of the
liquidation amount of Securities to be redeemed plus accumulated
and unpaid Distributions thereon, if any, to the date of such
redemption if redeemed during the 12-month period beginning
______________, of the years indicated below:
Year Percentage
(c) If at any time a Tax Event or a Regulatory
Capital Event (each as defined below, and each a "Special
Event") occurs, the Debenture Issuer shall have the right
(subject to the conditions set forth in the Indenture) at any
time prior to the Initial Optional Redemption Date, upon not less
than 30 nor more than 60 days notice, to redeem the Debentures in
whole, but not in part, within the 90 days following the
occurrence of such Special Event (the "90 Day Period"), and,
simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Special Event
Redemption Price on a Pro Rata basis.
"Tax Event" shall occur upon 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 or
judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after
_________________, 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.
"Regulatory Capital Event" shall mean that the Sponsor
shall have become, or pursuant to law or regulation will become
within 180 days, subject to capital requirements under which, in
the written opinion of independent bank regulatory counsel
experienced in such matters, the Capital Securities would not
constitute Tier 1 Capital applied as if the Sponsor (or its
successor) were a bank holding company (as that concept is used
in the guidelines or regulations issued by the Federal Reserve
Board or its then equivalent); 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 Regulatory Capital Event unless such liquidation
shall have occurred in connection with a Tax Event.
"Special Event Redemption Price" shall mean, with
respect to a redemption of Securities, a price equal to 100% of
the principal of a Like Amount of Debentures to be redeemed plus
accumulated but unpaid Distributions thereon, if any, to the date
of such redemption.
(d) On and from the date fixed by the
Administrative Trustees for any distribution of Debentures and
liquidation of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder
of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates
representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of
Debentures until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.
(e) The Trust may not redeem fewer than all the
outstanding Securities unless all accumulated and unpaid
Distributions have been paid on all Securities for all semi-
annual Distribution periods terminating on or before the date of
redemption.
(f) The procedure with respect to redemptions or
distributions of Securities shall be as follows:
(i) Notice of any redemption of, or notice
of distribution of Debentures in exchange for, the
Securities (a "Redemption/Distribution Notice") will be
given by the Trust by mail to each Holder 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(f)(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. Each Redemption/Distribution
Notice shall be addressed to the Holders at the address of
each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or
in the mailing of either thereof with respect to any Holder
shall affect the validity of the redemption or exchange
proceedings with respect to any other Holder.
(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, it
being understood that, in respect of Capital Securities
registered in the name of and held of record by the Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to the Clearing
Agency and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and
the Trust gives a Redemption/Distribution Notice, (which
notice will be irrevocable), then (A) with respect to
Capital Securities issued in book-entry form, by 12:00 noon,
New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures by 10:00 a.m., New
York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will
deposit irrevocably with the Clearing Agency or its nominee
(or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with
respect to such Capital Securities and will give the
Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the relevant Clearing Agency
Participants, and (B) with respect to Capital Securities
issued in certificated form and Common Securities, provided
that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property
Trustee will pay the relevant Redemption Price to the
Holders by check mailed to the address of the relevant
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, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of
Holders so called for redemption will cease, except the
right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid
Distributions on the Redemption Date of the Securities will
be subject to the rights of Holders on the close of business
on a regular record date in respect of a Distribution Date
occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the
Trust shall be required to register or cause to be
registered the transfer of (i) any Securities beginning on
the opening of business 15 days before the day of mailing of
a notice of redemption or any notice of selection of
Securities for redemption or (ii) any Securities selected
for redemption except the unredeemed portion of any Security
being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such next succeeding Business Day falls in
the next calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the
same force and effect as if made on such date 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 Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to accumulate
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.
(v) Redemption/Distribution Notices shall be
sent by the Property Trustee on behalf of the Trust to
(A) in respect of the Capital Securities, the Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) if the Global Certificates have been issued or,
if Definitive Capital Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable
law (including, without limitation, United States federal
securities laws and banking laws), provided 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 Trust Agreement, the
Holders of the Capital Securities will have no voting rights.
(b) So long as any Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under
Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in
liquidation amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee
without the prior approval of each Holder of the Capital
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital
Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities
of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Capital Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a
"Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to
the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of
Capital Securities in such Direct Action. Except as provided in
the second preceding sentence, the Holders of Capital Securities
will not be able to exercise directly any other remedy available
to the holders of the Debentures.
Any approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of
Capital Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Property Trustees will cause a notice of any
meeting at which Holders of 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 Capital 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 Capital
Securities will be required for the Trust to redeem and cancel
Capital Securities or to distribute the Debentures in accordance
with the Trust Agreement and the terms of the Securities.
Notwithstanding that Holders of 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 be entitled
to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
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 Trust Agreement,
the Holders of the Common Securities will have no voting rights.
(b) Unless an Event of Default shall have
occurred and be continuing, any Trustee may be removed at any
time by the holder of the Common Securities. If an Event of
Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders
of a Majority in liquidation amount of the outstanding Capital
Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested
exclusively in the Sponsor as the holder of the Common
Securities. No resignation or removal of a Trustee and no
appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance
with the provisions of the Trust Agreement.
(c) So long as any Debentures are held by the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under
Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in
liquidation amount of all outstanding Common Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee
without the prior approval of each Holder of the Common
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Common Securities of
any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement
of payment to such Holder of the principal of or premium, if any,
or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities
Holder will be subordinated to the rights of such Holder of
Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Common Securities in such
Direct Action. Except as provided in the second preceding
sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of
the Debentures.
Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of any
meeting at which Holders of 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
record of 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 Trust Agreement and the terms of the Securities.
7. Amendments to Trust Agreement and Indenture.
In addition to the requirements set out in Section 12.1
of the Trust Agreement, the Trust Agreement may be amended from
time to time by the Sponsor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders
(i) to cure any ambiguity, correct or supplement any provisions
in the Trust Agreement that may be inconsistent with any other
provisions, or to make any other provisions with respect to
matters or questions arising under the Trust Agreement which
shall not be inconsistent with the other provisions of the Trust
Agreement, or (ii) to modify, eliminate or add to any provisions
of the Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times that
any Securities are outstanding or to ensure that the Trust will
not be required to register as an "Investment Company" under the
Investment Company Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any
material respect the interests of any Holder, any amendments of
the Trust Agreement shall become effective when notice thereof is
given to the Holders. The Trust Agreement may also be amended by
the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from
status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust
Securities, the Trust Agreement may not be amended to (i) change
the amount or timing of any Distribution on the Trust Securities
or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such
payment on or after such date.
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 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 under the
Trust Agreement 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 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 Common Securities pro rata according to the
aggregate liquidation amount of 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 the Common
Securities and payment thereon shall be made Pro Rata with the
Common Securities, except that, if an Event of Default under the
Trust Agreement occurs and is continuing, no payments in respect
of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made
until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and
other payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common
Securities, by the acceptance thereof, agrees to the provisions
of the Capital Securities Guarantee, including the subordination
provisions therein, and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Trust Agreement.
The Sponsor will provide a copy of the Trust Agreement,
the Capital Securities Guarantee, or the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Sponsor at its principal place of business.
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL SECURITY,
INSERT: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY
WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY.
THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
TRUST AGREEMENT AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER
THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER
NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.]
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT
LESS THAN $_____________ (____ CAPITAL SECURITIES). ANY SUCH
TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $_____________ SHALL BE DEEMED TO BE VOID AND
OF NO LEGAL EFFECT WHATSOEVER. 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 OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR (ii) THE
ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM
ANY SUCH PROHIBITION.
<PAGE>
Certificate Number Aggregate Liquidation Amount
CUSIP NO. __________
Certificate Evidencing Capital Securities
of
Sovereign Capital Trust III
________% Capital Securities
(liquidation amount $_______ per Capital Security)
Sovereign Capital Trust III, a statutory business trust
created under the laws of the State of Delaware (the "Trust"),
hereby certifies that ______________ (the "Holder") is the
registered owner of [$_________ in aggregate liquidation amount
of Capital Securities of the Trust] [the aggregate liquidation
amount of Capital Securities of the Trust specified in Schedule A
hereto] representing undivided beneficial interests in the
assets of the Trust designated the ______% Series A Capital
Securities (liquidation amount $______ per Capital Security) (the
"Capital Securities"). 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 and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust of the Trust dated
as of _________________, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the
terms of the Capital Securities as set forth in Annex I to the
Trust Agreement. Capitalized terms used but not defined herein
shall have the meaning given them in the Trust Agreement. The
Sponsor will provide a copy of the Trust Agreement, the Capital
Securities Guarantee, and the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Trust at its principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder
and to the benefits of the Capital Securities Guarantee to the
extent provided therein.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as
indebtedness and the Capital Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this ______ day of _________________, ______.
SOVEREIGN CAPITAL TRUST III
By:________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in
the within-mentioned Trust Agreement.
Dated: _______________
THE BANK OF NEW YORK,
as Property Trustee
By:________________________________
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be
fixed at a rate per annum of ___% (the "Coupon Rate") of the
liquidation amount of $________ per Capital Security, such rate
being the rate of interest payable on the Debentures to be held
by the Property Trustee. 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 such cash distributions and any such interest unless
otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
on hand legally available therefor.
Distributions on the Capital Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from ________________ and will be payable semi-annually in
arrears, on _______________ and _________________ of each year,
commencing on ________________, except as otherwise described
below. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10
consecutive calendar semi-annual periods, including the first
such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be
deferred. Despite such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate
of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. Payments of accumulated Distributions
will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension
Period and the payment of all amounts then due, the Debenture
Issuer may commence a new Extension Period, subject to the above
requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at the direction of the Sponsor, at any time liquidate the Trust
and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as provided
in the Trust Agreement.
<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
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:
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY
STATE SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW.
NEITHER THIS COMMON 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, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE
HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON
SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION TERMINATION
DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL
ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR
ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY
(A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT
WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT,
(C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE FOR RESALE
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, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S.
PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING
OF REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1),
(2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE
ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT,
SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR
(F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF
THIS COMMON SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE
TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT IT WILL DELIVER TO
EACH PERSON TO WHOM THIS COMMON SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Certificate Evidencing Common Securities
of
Sovereign Capital Trust III
______% Common Securities
(liquidation amount $________ per Common Security)
Sovereign Capital Trust III, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"),
hereby certifies that Sovereign Bancorp, Inc. (the "Holder") is
the registered owner of _____ common securities of the Trust
representing undivided beneficial interests in the assets of the
Trust designated the _______% Common Securities (liquidation
amount $_________ per Common Security) (the "Common Securities").
The Common 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 Common
Securities represented hereby are issued and shall in all
respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of ________________,
as the same may be amended from time to time (the "Trust
Agreement"), including the designation of the terms of the Common
Securities as set forth in Annex I to the Trust Agreement.
Capitalized terms used but not defined herein shall have the
meaning given them in the Declaration. The Sponsor will provide
a copy of the Trust Agreement, the Capital Securities Guarantee
and the Indenture (including any supplemental indenture) to a
Holder without charge upon written request to the Sponsor at its
principal place of business.
Upon receipt of this certificate, the Holder is bound
by the Trust Agreement and is entitled to the benefits thereunder
to the extent provided therein.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as
indebtedness and the Common Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this _____ day of ___________, ______.
Sovereign Capital Trust III
By:________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the
within-mentioned Trust Agreement.
Dated: _____________ THE BANK OF NEW YORK, as Property
Trustee
By:________________________________
Authorized Signatory
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be
fixed at a rate per annum of _______% (the "Coupon Rate") of the
liquidation amount of $_________ per Common Security, such rate
being the rate of interest payable on the Debentures to be held
by the Property Trustee. 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 such cash distributions and any such interest unless
otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
available therefor.
Distributions on the Common Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from ___________________ and will be payable semi-annually
in arrears, on ________________ and ______________ of each year,
commencing on _________________, except as otherwise described
below. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10
consecutive calendar semi-annual periods, including the first
such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be
deferred. Despite such deferral, Distributions will continue to
accumulate with interest thereon (to the extent permitted by
applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any such Extension Period. Prior to the
termination of any such Extension Period, the Debenture Issuer
may further defer payments of interest by further extending such
Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such
Extension Period, may not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such
Extension Period, or end on a date other than an Interest Payment
Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accrued Distributions will be payable to
Holders as they appear on the books and records of the Trust on
the first record date after the end of the Extension Period.
Upon the termination of any Extension Period and the payment of
all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at the direction of the Sponsor, at any time liquidate the Trust
and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
Under certain circumstances, the right of the holders
of the Common Securities shall be subordinate to the rights of
the holders of the Capital Securities (as defined in the Trust
Agreement), as provided in the Declaration.
The Common Securities shall be redeemable as provided
in the Trust Agreement.
<PAGE>
WORD PERFECT SYSTEM
Long Document Name: AMENDED AND RESTATED DECLARATION OF
TRUST OF
SOVEREIGN CAPITAL TRUST III
System Document Name: C:\DMS\RDG\WRK\0126957.WP
Document Location: Reading
Additional Information:
DUPED FROM: O:\DMS\WRK\0126957.WP (RDG)
_________________________________________________________________
_______
YOU WILL HAVE LINE NUMBERS DOWN THE SIDE OF EACH DRAFT DOCUMENT
UNLESS
YOU INDICATE OTHERWISE. 1.5 LINE SPACING WILL BE USED ON ALL
DRAFTS
UNLESS YOU INDICATE OTHERWISE.
RETURN TO: _____________________ LOCATION:
_________________________
RETURN: ____ draft ____ final ____ blacklined ____ stapled
LINE SPACING: ____ same; ____ 1.0; ____ 1.5; ____ 2.0
DUPLICATE: ____ yes ____ no (New Client/Matter No.
_________________)
SAVE FOR BLACKLINING PRIOR TO REVISIONS: ____ yes ____ no
Caret Method ____ Standard Method ____
DELETE PRIOR VERSION(S) SAVED FOR BLACKLINING: ____ yes ____ no
Litigation Dept. Use: PROFILE'S TITLE/SUBJECT AREA:
procedural posture:
______________________________________________
substantive issues:
______________________________________________
_________________________________________________________________
_______
NOTE(S) TO NEXT WORD PROCESSING SPECIALIST:
Origination Date: 09/24/99
Author's Initials: wrk
Last Revised By: laz
Last Revision Date:
Paragraph Numbering:
1 = 4 = 7 =
2 = 5 = 8 =
3 = 6 =
Exhibit 4.23
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Sovereign Bancorp, Inc.
Dated as of _______________
====================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 5
SECTION 2.3 Reports by the Preferred Securities Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent...................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities
Guarantee Trustee.............................. 7
SECTION 3.2 Certain Rights of Preferred Securities Guarantee
Trustee........................................ 9
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee................. 12
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee;
Eligibility.................................... 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee................... 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 14
SECTION 5.2 Waiver of Notice and Demand.................... 14
SECTION 5.3 Obligations Not Affected....................... 14
SECTION 5.4 Rights of Holders.............................. 15
SECTION 5.5 Guarantee of Payment........................... 16
SECTION 5.6 Subrogation.................................... 16
SECTION 5.7 Independent Obligations........................ 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 16
SECTION 6.2 Ranking........................................ 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 18
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 19
SECTION 9.2 Amendments..................................... 19
SECTION 9.3 Notices........................................ 19
SECTION 9.4 Benefit........................................ 20
SECTION 9.5 Governing Law.................................. 20
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _______________, is executed and
delivered by Sovereign Bancorp, Inc., a Pennsylvania corporation
(the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Preferred Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein)
of Sovereign Capital Trust III, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Trust Agreement"), dated as of
_____________, among the trustees of the Issuer, the Guarantor,
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 __________ preferred securities,
having an aggregate liquidation amount of $______________, such
capital securities being designated the Series A ___% Preferred
Securities (collectively the "Preferred Securities").
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Preferred Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the
Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION A. Definitions and Interpretation
In this Preferred Securities Guarantee, unless the
context otherwise requires:
1. Capitalized terms used in this Preferred
Securities Guarantee but not defined in the preamble above
have the respective meanings assigned to them in this
Section 1.1;
<PAGE 1>
2. Terms defined in the Trust Agreement as at
the date of execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred Securities
Guarantee unless otherwise defined in this Preferred
Securities Guarantee;
3. a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
4. all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to
this Preferred Securities Guarantee as modified,
supplemented or amended from time to time;
5. all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and
Sections of this Preferred Securities Guarantee, unless
otherwise specified;
6. a term defined in the Trust Indenture Act has
the same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
7. a reference to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
close.
"Preferred Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor
Preferred Securities Guarantee Trustee.
"Common Securities" means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
Preferred Securities Guarantee Trustee at which the corporate
trust business of the Preferred Securities Guarantee Trustee
shall, at any particular time, be principally administered, which
<PAGE 2> office at the date of execution of this Agreement is
located at 101 Barclay Street, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities.
"Debentures" means the series of subordinated debt
securities of the Guarantor designated the Series A _____% Junior
Subordinated Deferrable Interest Debentures due _____________
held by the Property Trustee (as defined in the Trust Agreement)
of the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Preferred
Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Capital Securities, to the extent not paid or made by the Issuer:
(i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds on hand legally
available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has
funds on hand legally available therefor at such time, with
respect to any Preferred Securities called for redemption by the
Issuer, and (iii) upon a voluntary or involuntary termination and
liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer has funds on
hand legally available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in
liquidation of the Issuer.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities;
provided, however, that, in determining whether the holders of
the requisite percentage of Preferred 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 Preferred Securities
Guarantee Trustee, any Affiliate of the Preferred Securities
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Securities Guarantee
Trustee.
<PAGE 3>
"Indenture" means the Indenture dated as of
September 1, 1999, among the Guarantor (the "Debenture Issuer")
and Harris Trust and Savings Bank, as trustee, pursuant to which
the Debentures are to be issued to the Property Trustee of the
Issuer.
"Indenture Event of Default" shall mean any event
specified in Section ____ of the Indenture.
"Majority in liquidation amount of the Preferred
Securities" means, except as provided by the Trust Indenture Act,
a vote by Holder(s) of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any
person, a certificate signed by the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Comptroller, and the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Preferred Securities Guarantee (other than pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a statement that each such officer has made
such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(c) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
"Other Debentures" means all junior subordinated
debentures issued by the Guarantor from time to time and sold to
any other trust, partnership or other entity affiliated with the
Guarantor that is a financing vehicle of the Guarantor (if any),
in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by
the Guarantor with respect to capital securities (if any) similar
to the Preferred Securities issued by any other trust,
partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor (if any), in each case
similar to the Issuer. <PAGE 4>
"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.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Preferred Securities Guarantee
Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the
Preferred Securities Guarantee Trustee customarily performing
functions similar to those performed by any of the above
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity
with the particular subject.
"Successor Preferred Securities Guarantee Trustee"
means a successor Preferred Securities Guarantee Trustee
possessing the qualifications to act as Preferred Securities
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, or any successor legislation, in each case, as amended.
"Trust Securities" means the Common Securities and the
Preferred Securities, collectively.
ARTICLE II.
TRUST INDENTURE ACT
SECTION A. Trust Indenture Act; Application
1. This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be
part of this Preferred Securities Guarantee and shall, to the
extent applicable, be governed by such provisions; and
2. if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts
with the duties imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION B. Lists of Holders of Securities
1. The Guarantor shall provide the Preferred
Securities Guarantee Trustee (unless the Preferred Securities
Guarantee Trustee is otherwise the registrar of the Preferred
Securities) with a list, in such form as the Preferred Securities
<PAGE 5> Guarantee Trustee may reasonably require, of the names
and addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after May 15 and November 15 of each
year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the
Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Securities
Guarantee Trustee by the Guarantor. The Preferred Securities
Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
2. The Preferred Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and
Section 312(b) of the Trust Indenture Act.
SECTION C. Reports by the Preferred Securities Guarantee
Trustee
Within 60 days after January 15 of each year,
commencing ________________, the Preferred Securities Guarantee
Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture
Act. The Preferred Securities Guarantee Trustee shall also
comply with the other requirements of Section 313 of the Trust
Indenture Act.
SECTION D. Periodic Reports to Preferred Securities Guarantee
Trustee
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the
Trust Indenture Act provided that such compliance certificate
shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports,
information and documents to the Preferred Securities Guarantee
Trustee is for informational purposes only and the Preferred
Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained
therein or determinable from information contained therein,
including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
<PAGE 6>
SECTION E. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Preferred Securities
Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION F. Events of Default; Waiver
The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of all Holders,
waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been
cured, for every purpose of this Preferred Securities Guarantee,
but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent
thereon.
SECTION G. Event of Default; Notice
1. The Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to
this Preferred Securities Guarantee, mail by first class postage
prepaid, to all Holders, notices of all defaults actually known
to a Responsible Officer, unless such defaults have been cured
before the giving of such notice, provided, that, except in the
case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
a Responsible Officer in good faith determines that the
withholding of such notice is in the interests of the Holders.
2. The Preferred Securities Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default unless
the Preferred Securities Guarantee Trustee shall have received
written notice from the Guarantor, or a Responsible Officer
charged with the administration of the Trust Agreement shall have
obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
<PAGE 7>
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Powers and Duties of the Preferred Securities
Guarantee Trustee
1. This Preferred Securities Guarantee shall be held
by the Preferred Securities Guarantee Trustee for the benefit of
the Holders, and the Preferred Securities Guarantee Trustee shall
not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Preferred Securities Guarantee
Trustee on acceptance by such Successor Preferred Securities
Guarantee Trustee of its appointment to act as Successor
Preferred Securities Guarantee Trustee. The right, title and
interest of the Preferred Securities Guarantee Trustee shall
automatically vest in any Successor Preferred Securities
Guarantee Trustee, and such vesting and succession of title shall
be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Preferred Securities Guarantee Trustee.
2. If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Preferred
Securities Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders.
3. The Preferred Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of
all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant
to Section 2.6) and is actually known to a Responsible Officer,
the Preferred Securities Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Preferred Securities
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.
4. No provision of this Preferred Securities
Guarantee shall be construed to relieve the Preferred Securities
Guarantee 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 any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred: <PAGE 8>
(1) the duties and obligations of the Preferred
Securities Guarantee Trustee shall be determined solely
by the express provisions of this Preferred Securities
Guarantee, and the Preferred Securities Guarantee
Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee; and
(2) in the absence of bad faith on the part of
the Preferred Securities Guarantee Trustee, the
Preferred Securities 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 Preferred
Securities Guarantee Trustee and conforming to the
requirements of this Preferred Securities Guarantee;
but in the case of any such certificates or opinions
that by any provision hereof are specifically required
to be furnished to the Preferred Securities Guarantee
Trustee, the Preferred Securities Guarantee Trustee
shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Preferred Securities Guarantee;
b. the Preferred Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the
Preferred Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
c. the Preferred Securities 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 a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the
Preferred Securities Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Securities
Guarantee Trustee under this Preferred Securities Guarantee;
and
d. no provision of this Preferred Securities
Guarantee shall require the Preferred Securities 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 Preferred Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
<PAGE 9> such funds or liability is not reasonably assured
to it under the terms of this Preferred Securities Guarantee
or indemnity, reasonably satisfactory to the Preferred
Securities Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION B. Certain Rights of Preferred Securities Guarantee
Trustee
1. Subject to the provisions of Section 3.1:
a. The Preferred Securities 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.
b. Any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee may be
sufficiently evidenced by an Officers' Certificate.
c. Whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
d. The Preferred Securities Guarantee Trustee
shall have no duty to see to any recording, filing or
registration of any instrument (or any rerecording, refiling
or registration thereof).
e. The Preferred Securities 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
Preferred Securities Guarantee Trustee shall have the right
at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from
any court of competent jurisdiction. <PAGE 10>
f. The Preferred Securities Guarantee Trustee
shall be under no obligation to exercise any of the rights
or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Securities
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Preferred Securities Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Securities
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 Preferred Securities
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred
Securities Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Preferred Securities
Guarantee.
g. The Preferred Securities 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 Preferred
Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or
matters as it may see fit.
h. The Preferred Securities 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 Preferred
Securities 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.
i. Any action taken by the Preferred Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders, and the signature of the Preferred Securities
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
Preferred Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Securities Guarantee
Trustee's or its agent's taking such action.
j. Whenever in the administration of this
Preferred Securities Guarantee the Preferred Securities
<PAGE 11> Guarantee Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy or
right or taking any other action hereunder, the Preferred
Securities Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
k. The Preferred Securities Guarantee Trustee
shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Preferred Securities Guarantee.
2. No provision of this Preferred Securities
Guarantee shall be deemed to impose any duty or obligation on the
Preferred Securities 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 Preferred Securities 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 Preferred Securities Guarantee Trustee shall be
construed to be a duty.
SECTION C. Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and
the Preferred Securities Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Securities
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV.
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Preferred Securities Guarantee Trustee;
Eligibility
1. There shall at all times be a Preferred Securities
Guarantee Trustee which shall:
a. not be an Affiliate of the Guarantor; and
<PAGE 12>
b. be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least 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 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published.
2. If at any time the Preferred Securities Guarantee
Trustee shall cease to be eligible to so act under Section
4.1(a), the Preferred Securities Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.2(c).
3. If the Preferred Securities Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning
of Section 310(b) of the Trust Indenture Act, the Preferred
Securities Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION B. Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee
1. Subject to Section 4.2(b), the Preferred
Securities Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default. Subject to the provisions of this Section 4.2, the
Preferred Securities Guarantee Trustee may be removed by the
holders of a Majority in Liquidation Amount of the Series A
Capital Securities during an Event of Default.
2. The Preferred Securities Guarantee Trustee shall
not be removed in accordance with Section 4.2(a) until a
Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Securities Guarantee Trustee
and delivered to the Guarantor.
3. The Preferred Securities Guarantee Trustee shall
hold office until a Successor Preferred Securities Guarantee
<PAGE 13> Trustee shall have been appointed or until its removal
or resignation. The Preferred Securities Guarantee Trustee may
resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred
Securities Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by
such Successor Preferred Securities Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Securities
Guarantee Trustee.
4. If no Successor Preferred Securities Guarantee
Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery of an
instrument of removal or resignation, the Preferred Securities
Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
Preferred Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Securities Guarantee
Trustee.
5. No Preferred Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor
Preferred Securities Guarantee Trustee.
6. Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Securities
Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Preferred Securities Guarantee Trustee all
amounts due to the Preferred Securities Guarantee Trustee accrued
to the date of such termination, removal or resignation.
ARTICLE V.
GUARANTEE
SECTION A. Guarantee
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, 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.
<PAGE 14>
SECTION B. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of
this Preferred Securities 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 C. Obligations Not Affected
The obligations, covenants, agreements and duties of
the Guarantor under this Preferred Securities Guarantee shall in
no way be affected or impaired by reason of the happening from
time to time of any of the following:
1. 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 Preferred Securities to be performed or observed
by the Issuer;
2. the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums payable under
the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than
an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results
from the extension of any interest payment period on the
Debentures permitted by the Indenture);
3. 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 Preferred Securities, or any action
on the part of the Issuer granting indulgence or extension of any
kind;
4. 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;
5. any invalidity of, or defect or deficiency in, the
Preferred Securities;
<PAGE 15>
6. the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
7. the consummation of the Exchange Offer; or
8. any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee
Payments 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 D. Rights of Holders
1. The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
2. If the Preferred Securities Guarantee Trustee
fails to enforce such Preferred Securities Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor
to enforce the Preferred Securities Guarantee Trustee's rights
under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred
Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION E. Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION F. Subrogation
The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this
Preferred Securities 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
<PAGE 16> payment under this Preferred Securities Guarantee, if,
at the time of any such payment, any amounts are due and unpaid
under this Preferred Securities 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 G. Independent Obligations
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION A. Limitation of Transactions
So long as any Preferred Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's
capital stock (which includes common and preferred stock) or
(ii) make any payment of principal of or premium, if any, or
interest on or repay, repurchase or redeem any debt securities of
the Guarantor (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Debentures
or (iii) make any guarantee payments with respect to any
guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to
the Debentures (other than (a) dividends or distributions in
shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under this
Preferred Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange
or the conversion of one class or series of the Guarantor's
capital stock for another class or series of the Guarantor's
capital stock, (e) 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, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or
<PAGE 17> employees or any of the Guarantor's dividend
reinvestment plans) if at such time (i) there shall have occurred
any event of which the Guarantor has actual knowledge that
(a) is, or with the giving of notice or the lapse of time, or
both, would be an Indenture Event of Default and (b) in respect
of which the Guarantor shall not have taken reasonable steps to
cure, (ii) if such Debentures are held by the Property Trustee,
the Guarantor shall be in default with respect to its payment of
any obligations under this Preferred Securities Guarantee or
(iii) the Guarantor shall have given notice of its election of
the exercise of its right to extend the interest payment period
pursuant to Section ______ of the Indenture and any such
extension shall be continuing.
SECTION B. Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to Senior Debt (as
defined in the Indenture), to the same extent and in the same
manner that the Debentures are subordinated to Senior Debt
pursuant to the Indenture (except as indicated below), it being
understood that the terms of Article ___ of the Indenture shall
apply to the obligations of the Guarantor under this Preferred
Securities Guarantee as if (x) such Article ___ were set forth
herein in full and (y) such obligations were substituted for the
term "Securities" appearing in such Article __, except that with
respect to Section ________ of the Indenture only, the term
"Senior Debt" shall mean all liabilities of the Guarantor,
whether or not for money borrowed (other than obligations in
respect of Other Guarantees), (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by
the Guarantor, any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor, and any Other Guarantee, and
(iii) senior to the Guarantor's capital stock.
ARTICLE VII.
TERMINATION
SECTION A. Termination
This Preferred Securities Guarantee shall terminate
(i) upon full payment of the Redemption Price (as defined in the
Trust Agreement) of all Preferred Securities, or (ii) upon
liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the
distribution of the Debentures to the Holders. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue
to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid under
<PAGE 18> the Preferred Securities or under this Preferred
Securities Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION A. Exculpation
1. 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 Preferred Securities
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 Preferred Securities 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.
2. An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders might properly be paid.
SECTION B. Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Preferred Securities
Guarantee.
<PAGE 19>
ARTICLE IX.
MISCELLANEOUS
SECTION A. Successors and Assigns
All guarantees and agreements contained in this
Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION B. Amendments
Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case
no consent of Holders will be required), this Preferred
Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the
Securities (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). The provisions of the Trust Agreement with respect
to consents to amendments thereof (whether at a meeting or
otherwise) shall apply to the giving of such approval.
SECTION C. Notices
All notices provided for in this Preferred Securities
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:
1. If given to the Issuer, in care of the
Administrative Trustee at the Issuer's mailing address set forth
below (or such other address as the Issuer may give notice of to
the Holders and the Preferred Securities Guarantee Trustee):
Sovereign Capital Trust III
c/o Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
Telecopy: (610) 320-8448
2. If given to the Preferred Securities Guarantee
Trustee, at the Preferred Securities Guarantee Trustee's mailing
address set forth below (or such other address as the Preferred
Securities Guarantee Trustee may give notice of to the Holders
and the Issuer):
<PAGE 20>
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
3. 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 and the Preferred
Securities Guarantee Trustee):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Mark R. McCollom
Telecopy: (610) 320-8448
4. If given to any Holder, 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 D. Benefit
This Preferred Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION E. Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
THIS PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
SOVEREIGN BANCORP, INC., as
Guarantor
By:_______________________________
Name: <PAGE 21>
Title:
THE BANK OF NEW YORK, as Preferred
Securities Guarantee Trustee
By:_______________________________
Name:
Title:
<PAGE 22>
Exhibit 4.24
CERTIFICATE OF TRUST OF
SOVEREIGN CAPITAL TRUST IV
THIS Certificate of Trust of Sovereign Capital Trust IV
(the
"Trust") is being duly executed and filed by The Bank of New York
(Delaware), The Bank of New York, Mark R. McCollom and Jacquelyn
Blue, as trustees, to form a business trust under the Delaware
Business Trust Act (12 Del. C. Section 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed hereby
is
Sovereign Capital Trust IV.
2. Delaware Trustee. The name and business address of
the
trustee of the Trust in the State of Delaware is The Bank of New
York (Delaware), White Clay Center, Newark, Delaware 19711.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State.
IN WITNESS WHEREOF, the undersigned, being all of the
trustees of the Trust, have duly executed this Certificate of
Trust in accordance with Section 3811(a) of the Act.
THE BANK OF NEW YORK
(DELAWARE),
not in its individual
capacity but
solely as Trustee of the
Trust
By:/s/Frederick W. Clark
Name: Frederick W.
Clark
Title: Authorized
Signatory
THE BANK OF NEW YORK, not in
its
individual capacity but
solely as
Trustee of the Trust
By:/s/Van K. Brown
Name: Van K. Brown
Title:
/s/Mark R. McCollom
MARK R. McCOLLOM, not in his
individual capacity but
solely as
Trustee of the Trust
/s/Jacquelyn Blue
JACQUELYN BLUE, not in her
individual capacity but
solely as
Trustee of the Trust
Exhibit 4.25
DECLARATION OF TRUST
This DECLARATION OF TRUST, dated as of September 8, 1999
(this "Declaration"), among (i) Sovereign Bancorp Inc., a
Pennsylvania corporation (the "Depositor"), (ii) The Bank of New
York (Delaware), a Delaware banking corporation, as trustee,
(iii) The Bank of New York, a New York banking corporation, as
trustee, and (iv) Mark R. McCollom and Jacquelyn Blue, each an
individual, as trustees (each of such trustees in (ii), (iii) and
(iv) a "Trustee" and collectively, the "Trustees"). The
Depositor and the Trustees hereby agree as follows:
1. The trust created hereby (the "Trust") shall be
known as "Sovereign Capital Trust IV" in which name the Trustees,
or the Depositor to the extent provided herein, may engage in the
transactions contemplated hereby, make and execute contracts, and
sue and be sued.
2. The Depositor hereby assigns, transfers conveys
and sets over to the Trustees the sum of $10. The Trustees
hereby acknowledge receipt of such amount in trust from the
Depositor, which amount shall constitute the initial trust
estate. The Trustees hereby declare that they will hold the
trust estate in trust for the Depositor. It is the intention of
the parties hereto that the Trust created hereby constitute a
business trust under Chapter 38 of Title 12 of the Delaware Code,
12 Del. C. Section 3801, et seq. (the "Business Trust Act"), and
that
this document constitutes the governing instrument of the Trust.
The Trustees are hereby authorized and directed to execute and
file a certificate of trust with the Delaware Secretary of State
in accordance with the provisions of the Business Trust Act.
3. The Depositor and the Trustees will enter into an
amended and restated Declaration, satisfactory to each such party
and substantially in the form included as an exhibit to the 1933
Act Registration Statement (as defined below), to provide for the
contemplated operation of the Trust created hereby and the
issuance of the Capital Securities and Common Securities referred
to therein. Prior to the execution and delivery of such amended
and restated Declaration, the Trustees shall not have any duty or
obligation hereunder or with respect to the trust estate, except
as otherwise required by applicable law or as may be necessary to
obtain prior to such execution and delivery of any licenses,
consents or approvals required by applicable law or otherwise.
4. The Depositor, as the sponsor of the Trust, and
each of the Trustees are hereby authorized (i) to file with the
Securities and Exchange Commission (the "Commission") and
execute, in each case on behalf of the Trust, (a) the
Registration Statement on Form S-3 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective
amendments to the 1933 Act Registration Statement, relating to
<PAGE 1> the registration under the Securities Act of 1933, as
amended, of the Capital Securities of the Trust and possibly
certain other securities and (b) a Registration Statement on
Form 8-A (the "1934 Act Registration Statement") (including all
pre-effective and post-effective amendments thereto) relating to
the registration of the Capital Securities of the Trust under the
Securities Exchange Act of 1934, as amended; (ii) to file with
the New York Stock Exchange or any other national stock exchange
or The Nasdaq National Market (each, an "Exchange") and execute
on behalf of the Trust one or more listing applications and all
other applications, statements, certificates, agreements and
other instruments as shall be necessary or desirable to cause the
Capital Securities to be listed on any of the Exchanges; (iii) to
file and execute on behalf of the Trust such applications,
reports, surety bonds, irrevocable consents, appointments of
attorney for service of process and other papers and documents as
shall be necessary or desirable to register the Capital
Securities under the securities or blue sky laws of such
jurisdictions as the Depositor, on behalf of the Trust, may deem
necessary or desirable and (iv) to execute on behalf of the Trust
that certain Underwriting Agreement relating to the Capital
Securities, among the Trust, the Depositor and the several
Underwriters named therein, substantially in the form included as
an exhibit to the 1933 Act Registration Statement. In the event
that any filing referred to in clauses (i), (ii) and (iii) above
is required by the rules and regulations of the Commission, an
Exchange or state securities or blue sky laws, to be executed on
behalf of the Trust by one or more of the Trustees, each of the
individual Trustees, in his capacity as a Trustee of the Trust,
is hereby authorized and directed to join in any such filing and
to execute on behalf of the Trust any and all of the foregoing.
In connection with the filings referred to above, the Depositor
and Mark R. McCollom and Jacquelyn Blue, each as a Trustee and
not in his individual capacity, hereby constitutes and appoints
Mark R. McCollom and Jacquelyn Blue, and each of them, as their
true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or such
Trustee or in the Depositor's or such Trustee's name, place and
stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act
Registration Statement and the 1934 Act Registration Statement
and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Commission, the
Exchanges and administrators of state securities or blue sky
laws, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as
fully to all intents and purposes as the Depositor or such
Trustee might or could to in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of
them, or their respective substitute or substitutes, shall do or
cause to be done by virtue hereof.
<PAGE 2>
5. This Declaration may be executed in one or more
counterparts.
6. The number of Trustees initially shall be four (4)
and thereafter the number of Trustees shall be such number as
shall be fixed from time to time by a written instrument signed
by the Depositor which may increase or decrease the number of
Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be 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 otherwise meets the requirements of
applicable Delaware law. Subject to the foregoing, the Depositor
is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior
notice to the Depositor.
7. This Declaration shall be governed by, and
construed in accordance with, the laws of the State of Delaware
(without regard to conflict of laws of principles).
[SIGNATURE PAGE FOLLOWS] <PAGE 3>
IN WITNESS WHEREOF, the parties hereto have caused this
Declaration to be duly executed as of the day and year first
above written.
SOVEREIGN BANCORP INC., as
Depositor
By: /s/ Mark R. McCollom
Name: Mark R. McCollom
Title: Senior Vice President
THE BANK OF NEW YORK (DELAWARE), as
Trustee of the Trust
By: /s/ Frederick W. Clark
Name: Frederick W. Clark
Title: Authorized Signatory
THE BANK OF NEW YORK, as Trustee of
the Trust
By: /s/ Van K. Brown
Name: Van K. Brown
Title: Assistant Vice President
/s/ Mark R. McCollom
MARK R. McCOLLOM, as Trustee of the
Trust
/s/ Jacquelyn Blue
JACQUELYN BLUE, as Trustee of the
Trust
<PAGE 4>
Exhibit 4.26
AMENDED AND RESTATED DECLARATION
OF TRUST
SOVEREIGN CAPITAL TRUST IV
Dated as of _______________
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1
Definitions.................................... 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act;
Application............... 9
Section 2.2 Lists of Holders of
Securities................. 9
Section 2.3 Reports by the Property
Trustee................ 10
Section 2.4 Periodic Reports to Property
Trustee........................................ 10
Section 2.5 Evidence of Compliance with Conditions
Precedent...................................... 10
Section 2.6 Events of Default;
Waiver...................... 10
Section 2.7 Event of Default;
Notice....................... 12
ARTICLE III
ORGANIZATION
Section 3.1
Name........................................... 13
Section 3.2
Office......................................... 13
Section 3.3
Purpose........................................ 13
Section 3.4
Authority...................................... 13
Section 3.5 Title to Property of the
Trust................. 14
Section 3.6 Powers and Duties of the Administrative
Trustees....................................... 14
Section 3.7 Prohibition of Actions by the Trust and the
Trustees....................................... 17
Section 3.8 Powers and Duties of the Property
Trustee........................................ 18
Section 3.9 Certain Duties and Responsibilities of the
Property
Trustee............................... 20
Section 3.10 Certain Rights of Property
Trustee............. 22
Section 3.11 Delaware
Trustee............................... 25
Section 3.12 Execution of
Documents......................... 25
Section 3.13 Not Responsible for Recitals or Issuance of
Securities..................................... 25
Section 3.14 Duration of
Trust.............................. 25
Section 3.15
Mergers........................................ 26
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common
Securities........ 28
Section 4.2 Responsibilities of the
Sponsor................ 28
Section 4.3 Right to
Proceed............................... 28
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-
Trustee........................................ 29
Section 5.2 Delaware
Trustee............................... 30
Section 5.3 Property Trustee;
Eligibility.................. 30
Section 5.4 Certain Qualifications of Administrative
Trustees
and Delaware Trustee
Generally................. 31
Section 5.5 Administrative
Trustees........................ 31
Section 5.6 Delaware
Trustee............................... 32
Section 5.7 Appointment, Removal and Resignation of
Trustees....................................... 32
Section 5.8 Vacancies among
Trustees....................... 34
Section 5.9 Effect of
Vacancies............................ 34
Section 5.10
Meetings....................................... 34
Section 5.11 Delegation of
Power............................ 35
Section 5.12 Merger, Conversion, Consolidation or
Succession to
Business....................................... 35
ARTICLE VI
DISTRIBUTIONS
Section 6.1
Distributions.................................. 35
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding
Securities.................................................... 36
Section 7.2 Execution and
Authentication................... 36
Section 7.3 Form and
Dating................................ 37
Section 7.4 Registrar, Paying Agent and Exchange
Agent.......................................... 38
Section 7.5 Paying Agent to Hold Money in
Trust............ 39
Section 7.6 Replacement
Securities......................... 39
Section 7.7 Outstanding Capital
Securities................. 40
Section 7.8 Capital Securities in
Treasury................. 40
Section 7.9 Temporary
Securities........................... 40
Section 7.10
Cancellation................................... 41
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust..........................
42
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of
Securities......................... 43
Section 9.2 Transfer Procedures and
Restrictions........... 44
Section 9.3 Deemed Security
Holders........................ 49
Section 9.4 Book Entry
Interests........................... 49
Section 9.5 Notices to Clearing
Agency..................... 50
Section 9.6 Appointment of Successor Clearing
Agency......................................... 50
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1
Liability...................................... 50
Section 10.2
Exculpation.................................... 50
Section 10.3 Fiduciary
Duty................................. 51
Section 10.4
Indemnification................................ 52
Section 10.5 Outside
Businesses............................. 55
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal
Year.................................... 56
Section 11.2 Certain Accounting
Matters..................... 56
Section 11.3
Banking........................................ 56
Section 11.4
Withholding.................................... 57
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1
Amendments..................................... 57
Section 12.2 Meetings of the Holders; Action by Written
Consent........................................ 59
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee........................................ 61
Section 13.2 Representations and Warranties of Delaware
Trustee........................................ 62
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights
Agreement.................. 62
ARTICLE XV
MISCELLANEOUS
Section 15.1
Notices........................................ 62
Section 15.2 Governing
Law.................................. 64
Section 15.3 Intention of the
Parties....................... 64
Section 15.4
Headings....................................... 64
Section 15.5 Successors and
Assigns......................... 64
Section 15.6 Partial
Enforceability......................... 64
Section 15.7
Counterparts................................... 64
ANNEX I TERMS OF
SECURITIES.......................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY
CERTIFICATE.....A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY
CERTIFICATE......A2-1
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Trust Agreement
310(a)........................................... 5.3
310(b)........................................... 5.3(c); 5.3(d)
311(a)........................................... 2.2(b)
311(b)........................................... 2.2(b)
312(a)........................................... 2.2(a)
312(b)........................................... 2.2(b)
313.............................................. 2.3
314(a)........................................... 2.4; 3.6(j)
314(c)........................................... 2.5
315(a)........................................... 3.9
315(b)........................................... 2.7(a)
315(c)........................................... 3.9(a)
315(d)........................................... 3.9(b)
316(a)........................................... 2.6
316(c)........................................... 3.6(e)
317(a)........................................... 3.8(e); 3.8(h)
317(b)........................................... 3.8(i); 7.5
_______________
* This Cross-Reference Table does not constitute part of the
Trust Agreement and shall not affect the interpretation of
any of its terms or provisions.
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
SOVEREIGN CAPITAL TRUST IV
_________________, [1999] [2000]
AMENDED AND RESTATED DECLARATION OF TRUST ("Trust
Agreement") dated and effective as of ____________________, by
the Trustees (as defined herein), the Sponsor (as defined
herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this
Trust Agreement;
WHEREAS, the Trustees and the Sponsor established
Sovereign Capital Trust IV (the "Trust"), a trust formed under
the Delaware Business Trust Act pursuant to a Declaration of
Trust dated as of September 8, 1999 (the "Original Declaration"),
and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on September 10, 1999, 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
(each as hereinafter defined), and engaging in only those other
activities necessary, advisable or incidental thereto;
WHEREAS, as of the date hereof, no interests in the
Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by
this
Trust Agreement, 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 and that this Trust Agreement constitute
the governing instrument of such 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 Trust Agreement. <PAGE 1>
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement
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 Trust
Agreement
has the same meaning throughout;
(c) all references to "the Trust Agreement" or
"this
Trust Agreement" are to this Trust Agreement as modified,
supplemented or amended from time to time;
(d) all references in this Trust Agreement to
Articles
and Sections and Annexes and Exhibits are to Articles and
Sections of and Annexes and Exhibits to this Trust
Agreement
unless otherwise specified;
(e) a term defined in the Trust Indenture Act has
the
same meaning when used in this Trust Agreement unless
otherwise defined in this Trust Agreement or unless the
context otherwise requires; and
(f) a reference to the singular includes the
plural
and vice versa.
"Administrative Trustee" has the meaning set forth
in
Section 5.1.
"Affiliate" has the same meaning as given to that
term
in Rule 405 under the Securities Act or any successor rule
thereunder.
"Agent" means any Paying Agent, Registrar or
Exchange
Agent.
"Authorized Officer" of a Person means any other
Person
that is authorized to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in
a
Global Certificate registered in the name of a Clearing Agency or
its nominee, ownership and transfers of which shall be maintained
and made through book entries by a Clearing Agency as described
in Section 9.4.
"Business Day" means any day other than a Saturday
or a
Sunday or a day on which banking institutions in the City of New
York are authorized or required by law or executive order to
close. <PAGE 2>
"Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. Code Section 3801 et seq., as it may
be amended from time to time, or any successor legislation.
"Capital Security Beneficial Owner" means, with
respect
to a Book Entry Interest, a Person who is the beneficial owner of
such Book Entry Interest, as reflected on the books of the
Clearing Agency, or on the books of a Person maintaining an
account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in
accordance with the rules of such Clearing Agency).
"Capital Securities" means the Series A Capital
Securities.
"Capital Securities Guarantee" means the Series A
Capital Securities Guarantee.
"Clearing Agency" means an organization registered
as a
"Clearing Agency" pursuant to Section 17A of the Exchange Act
that is acting as depositary for the Capital Securities and in
whose name or in the name of a nominee of that organization shall
be registered a Global Certificate and which shall undertake to
effect book entry transfers and pledges of the Capital
Securities.
"Clearing Agency Participant" means a broker,
dealer,
bank, other financial institution or other Person for whom from
time to time the Clearing Agency effects book entry transfers and
pledges of securities deposited with the Clearing Agency.
"Closing Time" means the "Closing Time" under the
Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as
amended from time to time, or any successor legislation.
"Commission" means the United States Securities and
Exchange Commission as from time to time constituted, or if at
any time after the execution of this Trust Agreement such
Commission is not existing and performing the duties now assigned
to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in
Section 7.1(a).
"Company Indemnified Person" means (a) any
Administrative Trustee; (b) any Affiliate of any Administrative
Trustee; (c) any officers, directors, shareholders, members,
partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of
the Trust or its Affiliates.
<PAGE 3>
"Corporate Trust Office" means the office of the
Property Trustee at which the corporate trust business of the
Property Trustee shall, at any particular time, be principally
administered, which office at the date of execution of this
Agreement is located at 101 Barclay Street, 21 West, New York,
New York 10286.
"Covered Person" means: (a) any 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 Sovereign Bancorp, Inc., a
Pennsylvania corporation, or any successor entity resulting from
any consolidation, amalgamation, merger or other business
combination, in its capacity as issuer of the Debentures under
the Indenture.
"Debenture Trustee" means Harris Trust and Savings
Bank, an Illinois banking corporation, as trustee under the
Indenture until a successor is appointed thereunder, and
thereafter means such successor trustee.
"Debentures" means the Series A Debentures.
"Default" means an event, act or condition that with
notice or lapse of time, or both, would constitute an Event of
Default.
"Definitive Capital Securities" shall have the
meaning
set forth in Section 7.3(c).
"Delaware Trustee" has the meaning set forth in
Section 5.2.
"Direct Action" shall have the meaning set forth in
Section 3.8(e).
"Distribution" means a distribution payable to
Holders
in accordance with Section 6.1.
"DTC" means The Depository Trust Company, the
initial
Clearing Agency.
"Event of Default" in respect of the Securities
means
an Event of Default (as defined in the Indenture) that has
occurred and is continuing in respect of the Debentures.
"Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in
Section 7.4.
<PAGE 4>
"Federal Reserve Board" means the Board of Governors
of
the Federal Reserve System.
"Fiduciary Indemnified Person" has the meaning set
forth in Section 10.4(b).
"Fiscal Year" has the meaning set forth in
Section 11.1.
"Global Capital Security" has the meaning set forth
in
Section 7.3(a).
"Holder" means a Person in whose name 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
September 1, 1999, among the Debenture Issuer and the Debenture
Trustee, as amended from time to time.
"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.
"Legal Action" has the meaning set forth in
Section 3.6(g).
"List of Holders" has the meaning set forth in
Section 2.2(a).
"Majority in liquidation amount" means, with respect
to
the Trust Securities, except as provided in the terms of the
Capital Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"Prospectus" has the meaning set forth in
Section 3.6(b).
"Officers' Certificate" means, with respect to any
Person, a certificate signed by any two of the Chairman, a Vice
<PAGE 5> Chairman, the Chief Executive Officer, the President, a
Vice President, the Chief Financial Officer, the Treasurer, the
Comptroller, the Secretary, or an Assistant Secretary of such
Person. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Trust Agreement 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.
"Opinion of Counsel" means a written opinion of
counsel, who may be an employee of the Sponsor, and who shall be
acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in
Section 7.4.
"Payment Amount" has the meaning specified in
Section 6.1.
"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.
"PORTAL" has the meaning set forth in
Section 3.6(b)(iii).
"Property Trustee" has the meaning set forth in
Section 5.3(a).
"Property Trustee Account" has the meaning set forth
in
Section 3.8(c).
"QIBs" shall mean qualified institutional buyers as
defined in Rule 144A.
<PAGE 6>
"Quorum" means a majority of the Administrative
Trustees or, if there are only two Administrative Trustees, both
of them.
"Registrar" has the meaning set forth in Section
7.4.
"Registration Statement" means the Registration
Statement on Form S-3 (333-86961-03) filed with the Commission.
"Related Party" means, with respect to the Sponsor,
any
direct or indirect wholly owned subsidiary of the Sponsor or any
other Person that owns, directly or indirectly, 100% of the
outstanding voting securities of the Sponsor.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Property Trustee, including any
vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer or other
officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by
any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom
such matter is referred because of that officer's knowledge of
and familiarity with the particular subject.
"Rule 3a-5" means Rule 3a-5 under the Investment
Company Act, or any successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act,
as
such rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission.
"Rule 144A" means Rule 144A under the Securities
Act,
as such rule may be amended from time to time, or any similar
rule or regulation hereafter adopted by the Commission.
"Securities" or "Trust Securities" means the Common
Securities and the outstanding Capital Securities.
"Securities Act" means the Securities Act of 1933,
as
amended from time to time, or any successor legislation.
"Securities Guarantee" means the Capital Securities
Guarantee.
"Series A Capital Securities" has the meaning
specified
in Section 7.1(a).
"Series A Capital Securities Guarantee" means the
guarantee agreement dated as of ___________________, by the
Sponsor in respect of the Series A Capital Securities.
"Series A Debentures" means the Series A ______%
Junior
Subordinated Deferrable Interest Debentures due <PAGE 7>
_____________________ of the Debenture Issuer issued pursuant to
the Indenture.
"Special Event" has the meaning set forth in Annex I
hereto.
"Sponsor" means Sovereign Bancorp, Inc., a
Pennsylvania
corporation, or any successor entity resulting from any merger,
consolidation, amalgamation or other business combination, in its
capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in
Section 3.15(b)(i).
"Super Majority" has the meaning set forth in
Section 2.6(a)(ii).
"10% in liquidation amount" means, with respect to
the
Trust Securities, except as provided in the terms of the Capital
Securities or by the Trust Indenture Act, Holder(s) of
outstanding Trust 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.
"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).
"Trustee" or "Trustees" means each Person who has
signed this Trust Agreement 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 Indenture Act" means the Trust Indenture Act
of
1939, as amended from time to time, or any successor legislation.
"Underwriting Agreement" means any underwriting or
placement agreement for the initial offering and sale of Capital
Securities.
"Unrestricted Global Capital Security" has the
meaning
set forth in Section 9.2(a). <PAGE 8>
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Trust Agreement is subject to the
provisions
of the Trust Indenture Act that are required to be part of this
Trust Agreement in order for this Trust Agreement to be qualified
under the Trust Indenture Act and shall, to the extent
applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee
which is a Trustee for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of
this
Trust Agreement limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act, such imposed duties shall control.
(d) The application of the Trust Indenture Act to
this
Trust Agreement shall not affect the nature of the Securities as
equity securities representing undivided beneficial interests in
the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative
Trustees on behalf of the Trust shall provide the Property
Trustee, unless the Property Trustee is Registrar for the
Securities (i) within 14 days after each record date for payment
of Distributions, a list, in such form as the Property Trustee
may reasonably require, of the names and addresses of the Holders
("List of Holders") as of such record date, provided that neither
the Sponsor nor the Administrative Trustees on behalf of the
Trust shall be obligated to provide such List of Holders at any
time the List of Holders does not differ from the most recent
List of Holders given to the Property Trustee by the Sponsor and
the Administrative Trustees on behalf of the Trust, and (ii) at
any other time, within 30 days of receipt by the Trust of a
written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Property
Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in
Lists of Holders given to it or which it receives in the capacity
as Paying Agent (if acting in such capacity), provided that the
Property Trustee may destroy any List of Holders previously given
to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its
obligations under Sections 311(a), 311(b) and 312(b) of the Trust
Indenture Act.
<PAGE 9>
Section 2.3 Reports by the Property Trustee.
Within 60 days after January 15 of each year,
commencing January 15, ____, the Property Trustee shall provide
to the Holders of the Capital Securities such reports as are
required by Section 313 of the Trust Indenture Act, if any, in
the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Property Trustee shall also comply with the
requirements of Section 313(d) of the Trust Indenture Act.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees
on
behalf of the Trust shall provide to the Property Trustee such
documents, reports and information as are required by Section 314
(if any) and the compliance certificate required by Section 314
of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
Section 2.5 Evidence of Compliance with Conditions
Precedent.
Each of the Sponsor and the Administrative Trustees
on
behalf of the Trust shall provide to the Property Trustee such
evidence of compliance with any conditions precedent provided for
in this Trust Agreement that relate to any of the matters set
forth in Section 314(c) of the Trust Indenture Act. Any
certificate or opinion required to be given by an officer
pursuant to Section 314(c)(1) of the Trust Indenture Act may be
given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation
amount of
Capital Securities may, by vote or written consent, on behalf of
the Holders of all of the Capital Securities, waive any past
Event of Default in respect of the Capital Securities and its
consequences, provided that, if the underlying Event of Default
under the Indenture:
(i) is not waivable under the Indenture, the
Event of Default under the Trust Agreement shall also not
be
waivable; or
(ii) requires the consent or vote of greater
than
a majority in aggregate principal amount of the holders of
the Debentures (a "Super Majority") to be waived under the
Indenture, the Event of Default under the Trust Agreement
may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the
Capital Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding.
<PAGE 10>
The foregoing provisions of this Section 2.6(a) shall be in lieu
of Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act. Upon such waiver, any
such default shall cease to exist, and any Event of Default with
respect to the Capital Securities 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 an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by
the Holders of the Capital Securities of an Event of Default with
respect to the Capital Securities shall also be deemed to
constitute a waiver by the Holders of the Common Securities of
any such Event of Default with respect to the Common Securities
for all purposes of this Trust Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation
amount of
the Common Securities may, by vote, on behalf of the Holders of
all of the Common Securities, waive any past Event of Default
with respect to the Common Securities and its consequences,
provided that, if the underlying Event of Default under the
Indenture:
(i) is not waivable under the Indenture,
except
where the Holders of the Common Securities are deemed to
have waived such Event of Default under the Trust Agreement
as provided below in this Section 2.6(b), the Event of
Default under the Trust Agreement shall also not be
waivable; or
(ii) requires the consent or vote of a Super
Majority to be waived, except where the Holders of the
Common Securities are deemed to have waived such Event of
Default under the Trust Agreement as provided below in this
Section 2.6(b), the Event of Default under the Trust
Agreement may only be waived by the vote of the Holders of
at least the proportion in aggregate liquidation amount of
the Common Securities that the relevant Super Majority
represents of the aggregate principal amount of the
Debentures outstanding;
provided further, the Holders of Common Securities will be deemed
to have waived any such Event of Default and all Events of
Default with respect to the Common Securities and its
consequences if all Events of Default with respect to the Capital
Securities have been cured, waived or otherwise eliminated, and
until such Events of Default have been so cured, waived or
otherwise eliminated, the Property Trustee will be deemed to be
acting solely on behalf of the Holders of the Capital Securities
and only the Holders of the Capital Securities will have the
right to direct the Property Trustee in accordance with the terms
of the Securities. The foregoing provisions of this <PAGE 11>
Section 2.6(b) shall be in lieu of Section 316(a)(1)(A) and
316(a)(1)(B) of the Trust Indenture Act and such Sections
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are
hereby expressly excluded from this Trust Agreement and the
Securities, as permitted by the Trust Indenture Act. Subject to
the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of
Default with respect to the Common Securities 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 with respect to
the Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the
Indenture by the Property Trustee, at the direction of the
Holders of the Capital Securities, constitutes a waiver of the
corresponding Event of Default under this Trust Agreement. The
foregoing provisions of this Section 2.6(c) shall be in lieu of
Section 316(a)(1)(B) of the Trust Indenture Act and such
Section 316(a)(1)(B) of the Trust Indenture Act is hereby
expressly excluded from this Trust Agreement and the Securities,
as permitted by the Trust Indenture Act.
Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days
after
the occurrence of an Event of Default, transmit by mail, first
class postage prepaid, to the Holders, notices of all defaults
with respect to the Securities actually known to a Responsible
Officer, unless such defaults have been cured before the giving
of such notice (the term "defaults" for the purposes of this
Section 2.7(a) being hereby defined to be an Event of Default as
defined in the Indenture, not including any periods of grace
provided for therein and irrespective of the giving of any notice
provided therein); provided that, except for a default in the
payment of principal of (or premium, if any) or interest on any
of the Debentures, the Property Trustee shall be protected in
withholding such notice if and so long as a Responsible Officer
in good faith determines that the withholding of such notice is
in the interests of the Holders.
(b) The Property Trustee shall not be deemed to
have
knowledge of any default except:
(i) a default under Sections 5.01(a) and
5.01(b)
of the Indenture; or
(ii) any default as to which the Property
Trustee
shall have received written notice or of which a
Responsible
Officer charged with the administration of the Trust
Agreement shall have actual knowledge.
(c) Within five Business Days after the occurrence
of
any Event of Default actually known to the Property Trustee, the
<PAGE 12> Property Trustee shall transmit notice of such Event of
Default to the Holders of the Capital Securities, the
Administrative Trustees and the Sponsor, unless such Event of
Default shall have been cured or waived. The Sponsor and the
Administrative Trustees shall file annually with the Property
Trustee a certification as to whether or not they are in
compliance with all the conditions and covenants applicable to
them under this Trust Agreement.
ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "Sovereign Capital Trust IV" as
such
name may be modified from time to time by the Administrative
Trustees following written notice to the Holders. The Trust's
activities may be conducted under the name of the Trust or any
other name deemed advisable by the Administrative Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is
c/o
Sovereign Bancorp, Inc., 1130 Berkshire Boulevard, Wyomissing,
Pennsylvania 19610. On ten Business Days written notice to the
Holders of Securities, the Administrative Trustees may designate
another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust
are
(a) to issue and sell Securities, (b) use the proceeds from the
sale of the Securities to acquire the Debentures, and (c) except
as otherwise limited herein, to engage in only those other
activities necessary, advisable or incidental thereto. The Trust
shall not borrow money, issue debt or reinvest proceeds derived
from investments, mortgage or 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 3.4 Authority.
Subject to the limitations provided in this Trust
Agreement and to the specific duties of the Property Trustee, the
Administrative Trustees shall have exclusive and complete
authority to carry out the purposes of the Trust. An action
taken by the Administrative Trustees in accordance with their
powers shall constitute the act of and serve to bind the Trust
and an action taken by the Property Trustee on behalf of the
Trust 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
<PAGE 13> dealing with the Trust are entitled to rely
conclusively on the power and authority of the Trustees as set
forth in this Trust Agreement.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to
the
Debentures and the Property Trustee Account or as otherwise
provided in this Trust Agreement, 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 3.6 Powers and Duties of the Administrative
Trustees.
The Administrative Trustees shall have the exclusive
power, duty and authority to cause the Trust to engage in the
following activities:
(a) to issue and sell the Securities in accordance
with this Trust Agreement; provided, however, that (i) the Trust
may issue no more than one series of Capital Securities and no
more than one series of Common Securities, (ii) there shall be no
interests in the Trust other than the Securities, and (iii) the
issuance of Securities shall be limited to a simultaneous
issuance of both the Capital Securities and Common Securities at
the Closing Time;
(b) in connection with the issue and sale of the
Capital Securities, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, a
prospectus and prospectus supplement (the "Prospectus") in
preliminary and final form prepared by the Sponsor, in
relation to the offering and sale of Series A Capital
Securities, and to execute and file with the Commission, at
such time as determined by the Sponsor, any Registration
Statement, including any amendments thereto;
(ii) execute and file any documents prepared
by
the Sponsor, or take any acts as determined by the Sponsor
to be necessary in order to qualify or register all or part
of the Capital Securities in any State in which the Sponsor
has determined to qualify or register such Capital
Securities for sale;
(iii) execute and file an application,
prepared
by the Sponsor, to permit the Capital Securities to trade
or
be quoted or listed in or on the New York Stock Exchange or
any other securities exchange, quotation system or the
Nasdaq Stock Market's National Market;
<PAGE 14>
(iv) execute and deliver letters, documents,
or
instruments with DTC and other Clearing Agencies relating
to
the Capital Securities;
(v) if required, execute and file with the
Commission a registration statement on Form 8-A, including
any amendments thereto, prepared by the Sponsor, relating
to
the registration of the Capital Securities under Section 12
of the Exchange Act; and
(vi) execute and enter into the Underwriting
Agreement providing for, among other things, the sale and
registration of the Capital Securities;
(c) to acquire the Series A Debentures with the
proceeds of the sale of the Series A Capital Securities and the
Common Securities; provided, however, that the Administrative
Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the
Holders;
(d) to give the Sponsor and the Property Trustee
prompt written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including and with respect to, for the purposes of
Section 316(c) of the Trust Indenture Act, Distributions, voting
rights, redemptions and exchanges, and to issue relevant notices
to the Holders of Capital Securities and Holders of Common
Securities as to such actions and applicable record dates;
(f) to take all actions and perform such duties as
may
be required of the Administrative Trustees pursuant to the terms
of the Securities;
(g) to bring or defend, pay, collect, compromise,
arbitrate, resort to legal action, or otherwise adjust claims or
demands of or against the Trust ("Legal Action"), unless pursuant
to Section 3.8(e) the Property Trustee has the exclusive power to
bring such Legal Action;
(h) to employ or otherwise engage employees and
agents
(who may be designated as officers with titles) and managers,
contractors, advisors, and consultants and pay reasonable
compensation for such services;
(i) to cause the Trust to comply with the Trust's
obligations under the Trust Indenture Act;
(j) to give the certificate required by
Section 314(a)(4) of the Trust Indenture Act to the Property
Trustee, which certificate may be executed by any Administrative
Trustee; <PAGE 15>
(k) to incur expenses that are necessary or
incidental
to carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act
as,
Registrar and Exchange Agent for the Securities or to appoint a
Paying Agent for the Securities as provided in Section 7.4 except
for such time as such power to appoint a Paying Agent is vested
in the Property Trustee;
(m) to give prompt written notice to the Property
Trustee and to Holders of any notice received from the Debenture
Issuer of its election to defer payments of interest on the
Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or
appropriate 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 or to
enable the Trust to effect the purposes for which the Trust was
created;
(o) to take any action, not inconsistent with this
Trust Agreement or with applicable law, that the Administrative
Trustees determine in their discretion to be necessary or
desirable in carrying out the activities of the Trust as set out
in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be
an
Investment Company required to be registered under the
Investment Company Act;
DDIE causing the Trust to be classified for
United States federal income tax purposes as a grantor
trust; and
(iii) cooperating with the Debenture Issuer
to
ensure that the Debentures will be treated as indebtedness
of the Debenture Issuer for United States federal income
tax
purposes;
(p) to take all action necessary to cause the
Capital
Securities to be registered pursuant to an effective registration
statement under the Securities Act;
(q) to take all action necessary to cause all
applicable tax returns and tax information reports that are
required to be filed with respect to the Trust to be duly
prepared and filed by the Administrative Trustees, on behalf of
the Trust; and
<PAGE 16>
(r) to execute all documents or instruments,
perform
all duties and powers, and do all things for and on behalf of the
Trust in all matters necessary or incidental to the foregoing.
The Administrative Trustees must exercise the powers
set forth in this Section 3.6 in a manner that is consistent with
the purposes and functions of the Trust set out in Section 3.3,
and the Administrative Trustees shall not take any action that is
inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative
Trustees shall have none of the powers or the authority of the
Property Trustee set forth in Section 3.8.
Any expenses incurred by the Administrative Trustees
pursuant to this Section 3.6 shall be reimbursed by the Debenture
Issuer.
Section 3.7 Prohibition of Actions by the Trust and the
Trustees.
(a) The Trust shall not, and the Trustees
(including
the Property Trustee and the Delaware Trustee) shall not, engage
in any activity other than as required or authorized by this
Trust Agreement. The Trust shall not:
(i) invest any proceeds received by the Trust
from holding the Debentures, but shall distribute all such
proceeds to Holders pursuant to the terms of this Trust
Agreement 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 in any way whatsoever;
(vi) issue any securities or other evidences
of
beneficial ownership of, or beneficial interest in, the
Trust other than the Securities;
(vii) other than as provided in this Trust
Agreement or Annex I, (A) direct the time, method and place
of conducting any proceeding with respect to any remedy
available to the Debenture Trustee, or exercising any trust
or power conferred upon the Debenture Trustee with respect
<PAGE 17> to the Debentures, (B) waive any past default
that
is waivable under the Indenture, or (C) exercise any right
to rescind or annul any declaration that the principal of
all the Debentures shall be due and payable; or
(viii) 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 a nationally recognized independent
tax counsel experienced in such matters to the effect that
such amendment, modification or termination will not cause
more than an insubstantial risk that for United States
federal income tax purposes the Trust will not be
classified
as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be
owned
by and held of record in the name of the Property Trustee in
trust for the benefit of the Holders. The right, title and
interest of the Property Trustee to the Debentures shall vest
automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. 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 Property Trustee shall not transfer its
right,
title and interest in the Debentures to the Administrative
Trustees or to the Delaware Trustee (if the Property Trustee does
not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated non-
interest bearing trust account (the "Property Trustee
Account") in the name of and under the exclusive control of
the Property Trustee on behalf of the Holders and, upon the
receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds
into the Property Trustee Account and make payments or
cause
the Paying Agent to make payments to the Holders from the
Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held
uninvested until disbursed in accordance with this Trust
Agreement. The Property Trustee Account shall be an
account
that is maintained with a banking institution the rating on
whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization", as that term
is
defined for purposes of Rule 436(g)(2) under the Securities
Act, is at least investment grade;
(ii) engage in such ministerial activities as
shall be necessary or appropriate to effect the redemption
<PAGE 18> of the Trust Securities to the extent the
Debentures are redeemed or mature; and
(iii) upon written notice of distribution
issued
by the Administrative Trustees 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 upon the occurrence of certain
events.
(d) The Property Trustee shall take all actions
and
perform such duties as may be specifically required of the
Property Trustee pursuant to the terms of the Securities.
(e) Subject to Section 3.9(a), the Property
Trustee
shall take any Legal Action which arises out of or in connection
with an Event of Default of which a Responsible Officer has
actual knowledge or the Property Trustee's duties and obligations
under this Trust Agreement or the Trust Indenture Act and if such
Property Trustee shall have failed to take such Legal Action, the
Holders of the Capital Securities may take such Legal Action, to
the same extent as if such Holders of Capital Securities held an
aggregate principal amount of Debentures equal to the aggregate
liquidation amount of such Capital Securities, without first
proceeding against the Property Trustee or the Trust; 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 the principal of or premium, if any, or
interest on the Debentures on the date such principal, premium,
if any, or interest is otherwise payable (or in the case of
redemption, on the redemption date), then a Holder of Capital
Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, 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 Capital Securities
to the extent of any payment made by the Debenture Issuer to such
Holder of Capital Securities in such Direct Action. Except as
provided in the preceding sentences, the Holders of Capital
Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a
Trustee
unless either:
(i) the Trust has been completely liquidated
and
the proceeds of the liquidation distributed to the Holders
pursuant to the terms of the Securities; or
<PAGE 19>
(ii) a successor Property Trustee has been
appointed and has accepted that appointment in accordance
with Section 5.7 (a "Successor Property Trustee").
(g) The Property Trustee shall have the legal
power to
exercise all of the rights, powers and privileges of a holder of
Debentures under the Indenture and, if an Event of Default
actually known to a Responsible Officer occurs and is continuing,
the Property Trustee shall, for the benefit of Holders, enforce
its rights as holder of the Debentures subject to the rights of
the Holders pursuant to the terms of such Securities.
(h) The Property Trustee shall be authorized to
undertake any actions set forth in Section 317(a) of the Trust
Indenture Act.
(i) For such time as the Property Trustee is the
Paying Agent, the Property Trustee may authorize one or more
Persons to act as additional Paying Agents and to pay
Distributions, redemption payments or liquidation payments on
behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with Section 317(b) of the Trust
Indenture Act. Any such additional Paying Agent may be removed
by the Property Trustee at any time the Property Trustee remains
as Paying Agent and a successor Paying Agent or additional Paying
Agents may be (but are not required to be) appointed at any time
by the Property Trustee while the Property Trustee is so acting
as Paying Agent.
(j) Subject to this Section 3.8, the Property
Trustee
shall have none of the duties, liabilities, powers or the
authority of the Administrative Trustees set forth in
Section 3.6.
Notwithstanding anything expressed or implied to the
contrary in this Trust Agreement or any Annex or Exhibit hereto,
(i) the Property Trustee must exercise the powers set forth in
this Section 3.8 in a manner that is consistent with the purposes
and functions of the Trust set out in Section 3.3, and (ii) the
Property Trustee shall not take any action that is inconsistent
with the purposes and functions of the Trust set out in
Section 3.3.
Section 3 Property Trustee.
(a) The Property Trustee, before the occurrence of
any
Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform only such
duties as are specifically set forth in this Trust Agreement and
in the Securities and no implied covenants shall be read into
this Trust Agreement against the Property Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) of which a Responsible Officer has
<PAGE 20> actual knowledge, the Property Trustee shall exercise
such of the rights and powers vested in it by this Trust
Agreement, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(b) No provision of this Trust Agreement shall be
construed to relieve the Property Trustee from liability for its
own negligent action, its own negligent failure to act, or its
own willful misconduct, except that:
(i) prior to the occurrence of an Event of
Default and after the curing or waiving of all such Events
of Default that may have occurred:
(A) the duties and obligations of the
Property Trustee shall be determined solely by the
express provisions of this Trust Agreement and in
the
Securities and the Property Trustee shall not be
liable
except for the performance of such duties and
obligations as are specifically set forth in this
Trust
Agreement and in the Securities, and no implied
covenants or obligations shall be read into this
Trust
Agreement against the Property Trustee; and
(B) in the absence of bad faith on the
part
of the Property Trustee, the Property Trustee may
conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed
therein,
upon any certificates or opinions furnished to the
Property Trustee and conforming to the requirements
of
this Trust Agreement; provided, however, that in the
case of any such certificates or opinions that by
any
provision hereof are specifically required to be
furnished to the Property Trustee, the Property
Trustee
shall be under a duty to examine the same to
determine
whether or not they conform to the requirements of
this
Trust Agreement;
(ii) the Property Trustee shall not be liable
for
any error of judgment made in good faith by a Responsible
Officer, unless it shall be proved that the Property
Trustee
was negligent in ascertaining the pertinent facts;
(iii) the Property Trustee shall not be
liable
with respect to any action taken or omitted to be taken by
it in good faith in accordance with the direction of the
Holders of not less than a Majority in liquidation amount
of
the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the
Property Trustee, or exercising any trust or power
conferred
upon the Property Trustee under this Trust Agreement;
<PAGE 21>
(iv) no provision of this Trust Agreement
shall
require the Property Trustee to expend or risk its own
funds
or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if it shall have reasonable
grounds
for believing that the repayment of such funds or liability
is not reasonably assured to it under the terms of this
Trust Agreement or indemnity reasonably satisfactory to the
Property Trustee against such risk or liability is not
reasonably assured to it;
(v) the Property Trustee's sole duty with
respect
to the custody, safe keeping and physical preservation of
the Debentures and the Property Trustee Account shall be to
deal with such property in a similar manner as the Property
Trustee deals with similar property for its own account,
subject to the protections and limitations on liability
afforded to the Property Trustee under this Trust Agreement
and the Trust Indenture Act;
(vi) the Property Trustee shall have no duty
or
liability for or with respect to the value, genuineness,
existence or sufficiency of the Debentures or the payment
of
any taxes or assessments levied thereon or in connection
therewith;
(vii) the Property Trustee shall not be
liable
for any interest on any money received by it except as it
may otherwise agree in writing with the Sponsor. Money
held
by the Property Trustee need not be segregated from other
funds held by it except in relation to the Property Trustee
Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise
required by law; and
(viii) the Property Trustee shall not be
responsible for monitoring the compliance by the
Administrative Trustees or the Sponsor with their
respective
duties under this Trust Agreement, nor shall the Property
Trustee be liable for any default or misconduct of the
Administrative Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
PPS the Property Trustee may conclusively
rely
and shall be fully protected in acting or refraining from
acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to
be
genuine and to have been signed, sent or presented by the
proper party or parties; <PAGE 22>
(ii) any direction or act of the Sponsor or
the
Administrative Trustees contemplated by this Trust
Agreement
may be sufficiently evidenced by an Officers' Certificate;
(iii) whenever in the administration of this
Trust Agreement, the Property Trustee shall deem it
desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith
on
its part, request and conclusively rely upon an Officers'
Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative
Trustees;
(iv) the Property Trustee shall have no duty
to
see to any recording, filing or registration of any
instrument (including any financing or continuation
statement or any filing under tax or securities laws) or
any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with
counsel
or other experts of its selection and the advice or opinion
of such counsel and experts with respect to legal matters
or
advice within the scope of such experts' area of expertise
shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it
hereunder in good faith and in accordance with such advice
or opinion, such counsel may be counsel to the Sponsor or
any of its Affiliates, and may include any of its
employees.
The Property Trustee shall have the right at any time to
seek instructions concerning the administration of this
Trust Agreement from any court of competent jurisdiction;
(vi) the Property Trustee shall be under no
obligation to exercise any of the rights or powers vested
in
it by this Trust Agreement at the request or direction of
any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably
satisfactory to the Property Trustee, against the costs,
expenses (including reasonable attorneys' fees and expenses
and the expenses of the Property Trustee's agents, nominees
or custodians) and liabilities that might be incurred by it
in complying with such request or direction, including such
reasonable advances as may be requested by the Property
Trustee provided, that, nothing contained in this
Section 3.10(a)(vi) shall be taken to relieve the Property
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it
by
this Trust Agreement;
(vii) the Property Trustee shall not be bound
to
make any investigation into the facts or matters stated in
any resolution, certificate, statement, instrument,
opinion,
<PAGE 23> report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness
or other paper or document, but the Property Trustee, in
its
discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit;
(viii) the Property Trustee may execute any
of
the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents,
custodians, nominees or attorneys and the Property Trustee
shall not be responsible for any misconduct or negligence
on
the part of any agent or attorney appointed with due care
by
it hereunder;
(ix) any action taken by the Property Trustee
or
its agents hereunder shall bind the Trust and the Holders,
and the signature of the Property Trustee or its agents
alone shall be sufficient and effective to perform any such
action and no third party shall be required to inquire as
to
the authority of the Property Trustee to so act or as to
its
compliance with any of the terms and provisions of this
Trust Agreement, both of which shall be conclusively
evidenced by the Property Trustee's or its agent's taking
such action;
(x) whenever in the administration of this
Trust
Agreement the Property Trustee shall deem it desirable to
receive instructions with respect to enforcing any remedy
or
right or taking any other action hereunder, the Property
Trustee (i) may request instructions from the Holders which
instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would
be entitled to direct the Property Trustee under the terms
of the Securities in respect of such remedy, right or
action, (ii) may refrain from enforcing such remedy or
right
or taking such other action until such instructions are
received, and (iii) shall be protected in conclusively
relying on or acting in or accordance with such
instructions;
(xi) except as otherwise expressly provided
by
this Trust Agreement, the Property Trustee shall not be
under any obligation to take any action that is
discretionary under the provisions of this Trust Agreement;
and
(xii) the Property Trustee shall not be
liable
for any action taken, suffered, or omitted to be taken by
it
in good faith, without negligence, and reasonably believed
by it to be authorized or within the discretion or rights
or
powers conferred upon it by this Trust Agreement.
(b) No provision of this Trust Agreement shall be
deemed to impose any duty or obligation on the Property Trustee
<PAGE 24> 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
Property Trustee shall be unqualified or incompetent in
accordance with applicable law, to perform any such act or acts,
or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee
shall be construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Trust
Agreement other than Section 5.2, the Delaware Trustee shall not
be entitled to exercise any powers, nor shall the Delaware
Trustee have any of the duties and responsibilities of the
Administrative Trustees or the Property Trustee described in this
Trust Agreement. Except as set forth in Section 5.2, the
Delaware Trustee shall be a Trustee for the sole and limited
purpose of fulfilling the requirements of Section 3807 of the
Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Administrative
Trustees, and except as otherwise required by the Business Trust
Act, a majority of the Administrative Trustees or, if there are
only two, any Administrative Trustee or, if there is only one,
such Administrative Trustee is authorized to execute on behalf of
the Trust any documents that the Administrative Trustees have the
power and authority to execute pursuant to Section 3.6; provided
that, the Registration Statements contemplated by the
Registration Rights Agreement and referred to in
Section 3.6(b)(i), including any amendments thereto, shall be
signed by all of the Administrative Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of
Securities.
The recitals contained in this Trust Agreement 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 Trust Agreement or the Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the
provisions
of Article VIII hereof, shall have existence up to _____________.
<PAGE 25>
Section 3.15 Mergers.
(a) The Trust may not merge with or into,
consolidate,
amalgamate, or be replaced by, or convey, transfer or lease its
properties and assets substantially as an entirety to any Person,
except as described in Section 3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor,
with
the consent of the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees and without
the consent of the Holders, the Delaware Trustee or the Property
Trustee, merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust
organized as such under the laws of any State; provided that:
(i) 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 long as
the
Successor Securities rank the same as the Securities
rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee
of
the Successor Entity that possesses the same powers and
duties as the Property Trustee as the holder of the
Debentures;
(iii) the 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;
(iv) if the Capital Securities (including any
Successor Securities) are rated by any nationally
recognized
statistical rating organization prior to such transaction,
such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities), or if the
Debentures are so rated, the Debentures, to be downgraded
by
any nationally recognized statistical rating organization;
(v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of
the Holders (including the holders of any Successor
Securities) in any material respect (other than with
respect
<PAGE 26> to any dilution of such Holders' interests in the
new entity);
(vi) such Successor Entity has a purpose
identical to that of the Trust;
(vii) prior to such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
the Sponsor has received an opinion of an independent
counsel to the Trust experienced in such matters to the
effect that:
(A) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or
lease does not adversely affect the rights,
preferences
and privileges of the Holders (including the holders
of
any Successor Securities) in any material respect
(other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger,
consolidation,
amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor the Successor Entity
will
be required to register as an Investment Company;
and
(viii) the Sponsor or any permitted successor
or
assignee owns all of the common securities of such
Successor
Entity and guarantees the obligations of such Successor
Entity under the Successor Securities at least to the
extent
provided by the Capital Securities Guarantee.
(c) Notwithstanding Section 3.15(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 be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an
entirety to, any other Person or permit any other Person to
consolidate, amalgamate, merge with or into, or replace it if
such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the
Successor Entity not to be classified as a grantor trust for
United States federal income tax purposes.
<PAGE 27>
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all
of
the Common Securities then issued by the Trust, in an amount at
least equal to approximately, but not less than, 3% of the
capital of the Trust, at the same time as the Series A Capital
Securities are issued and sold.
Section 4.2 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 prepare the Prospectus and to prepare for
filing by the Trust with the Commission any Registration
Statement, including any amendments thereto;
(b) 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;
(c) if deemed necessary or advisable by the
Sponsor,
to prepare for filing by the Trust an application to permit the
Capital Securities to trade or be quoted or listed in or on the
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") market, or any other securities exchange, quotation
system or the Nasdaq Stock Market's National Market for listing
or quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the
Commission a registration statement on Form 8-A, including any
amendments thereto, relating to the registration of the Capital
Securities under Section 12 of the Exchange Act; and
(e) to negotiate the terms of the Underwriting
Agreement providing for the sale of the Capital Securities.
Section 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders
of
Capital Securities, in the event that a failure of the Trust to
pay Distributions on the Capital Securities is attributable to
the failure of the Company to pay interest or principal on the
Debentures, to institute a proceeding directly against the
<PAGE 28> Debenture Issuer for enforcement of its payment
obligations on the Debentures.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be four (4),
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 Common Securities
voting as a class at a meeting of the Holders of the Common
Securities;
provided, however, that, the number of Trustees shall in no event
be less than two (2); provided further that (1) one Trustee, in
the case of a natural person, shall be a person who is a resident
of the State of Delaware or that, if not a natural person, is an
entity which has its principal place of business in the State of
Delaware (the "Delaware Trustee"); (2) there shall be at least
one Trustee who is an employee or officer of, or is affiliated
with the Sponsor (an "Administrative Trustee"); and (3) one
Trustee shall be the Property Trustee for so long as this Trust
Agreement is required to qualify as an indenture under the Trust
Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding
the above, unless an Event of Default shall have occurred and be
continuing, at any time or times, for the purpose of meeting the
legal requirements of the Trust Indenture Act or of any
jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in liquidation amount
of the Common Securities acting as a class at a meeting of the
Holders of the Common Securities, and the Administrative Trustees
shall have power to appoint one or more Persons either to act as
a co-trustee, jointly with the Property Trustee, of all or any
part of the Trust's property, or to act as separate trustee of
any such property, in either case with such powers as may be
provided in the instrument of appointment, and to vest in such
Person or Persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of
this Trust Agreement. In case an Event of Default has occurred
and is continuing, the Property Trustee alone shall have power to
make any such appointment of a co-trustee.
<PAGE 29>
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee
(the
"Delaware Trustee") shall be:
(a) a natural person who is a resident of the
State of
Delaware; or
(b) if not a natural person, an entity which has
its
principal place of business in the State of Delaware, and
otherwise meets the requirements of applicable law,
provided that, if the Property Trustee has its principal place of
business in the State of Delaware and otherwise meets the
requirements of applicable law, then the Property Trustee shall
also be the Delaware Trustee and Section 3.11 shall have no
application.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the
"Property Trustee") which shall act as Property Trustee which
shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing
business under the laws of the United States of America or
any State or Territory thereof or of the District of
Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the
Trust Indenture Act, authorized under such laws to exercise
corporate trust powers, having a combined capital and
surplus of at least 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 5.3(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 Property Trustee shall
cease to
be eligible to so act under Section 5.3(a), the Property Trustee
shall immediately resign in the manner and with the effect set
forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire
any
"conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Property Trustee and the Holder of
the Common Securities (as if it were the obligor referred to in
Section 310(b) of the Trust Indenture Act) shall in all respects
<PAGE 30> comply with the provisions of Section 310(b) of the
Trust Indenture Act.
(d) The Capital Securities Guarantee shall be
deemed
to be specifically described in this Trust Agreement for purposes
of clause (i) of the first provision contained in Section 310(b)
of the Trust Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Section 5.4 Certain Qualifications of Administrative
Trustees
and Delaware Trustee Generally.
Each Administrative Trustee and the Delaware Trustee
(unless the Property Trustee also acts as Delaware Trustee) shall
be either a natural person who is at least 21 years of age or a
legal entity that shall act through one or more Authorized
Officers.
Section 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Mark R. McCollom
Jacquelyn Blue
(a) Except as expressly set forth in this Trust
Agreement and except if a meeting of the Administrative Trustees
is called with respect to any matter over which the
Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent
of, any one such Administrative Trustee.
(b) Unless otherwise determined by the
Administrative
Trustees, and except as otherwise required by the Business Trust
Act or applicable law, any Administrative Trustee is authorized
to execute on behalf of the Trust any documents which the
Administrative Trustees have the power and authority to cause the
Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any
amendments thereto, shall be signed by all of the Administrative
Trustees; and
(c) An Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purposes of signing any documents which the Administrative
<PAGE 31> Trustees have power and authority to cause the Trust to
execute pursuant to Section 3.6.
Section 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Section 5.7 Appointment, Removal and Resignation of
Trustees.
(a) Subject to Section 5.7(b) and to Section 6(b)
of
Annex I hereto, Trustees may be appointed or removed without
cause at any time:
(i) until the issuance of any Securities, by
written instrument executed by the Sponsor;
(ii) unless an Event of Default shall have
occurred and be continuing after the issuance of any
Securities, by vote of the Holders of a Majority in
liquidation amount of the Common Securities voting as a
class at a meeting of the Holders of the Common Securities;
and
(iii) if an Event of Default shall have
occurred
and be continuing after the issuance of the Securities,
with
respect to the Property Trustee or the Delaware Trustee, by
vote of Holders of a Majority in liquidation amount of the
Capital Securities voting as a class at a meeting of
Holders
of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee
shall not be removed in accordance with Section 5.7(a) until a
Successor Property Trustee ("Successor Property Trustee") has
been appointed and has accepted such appointment by written
instrument executed by such Successor Property Trustee and
delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware
Trustee
shall not be removed in accordance with this Section 5.7(a)
until a successor Trustee possessing the qualifications to
act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has
accepted such appointment by written instrument executed by
such Successor Delaware Trustee and delivered to the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold
office
until his successor shall have been appointed or until his death,
removal or resignation. Any Trustee may resign from office
<PAGE 32> (without need for prior or subsequent accounting) by an
instrument in writing signed by the Trustee and delivered to the
Sponsor and the Trust, which resignation shall take effect upon
such delivery or upon such later date as is specified therein;
provided, however, that:
(i) No such resignation of the Trustee that
acts
as the Property Trustee shall be effective:
(A) until a Successor Property Trustee
has
been appointed and has accepted such appointment by
instrument executed by such Successor Property
Trustee
and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have
been
completely liquidated and the proceeds thereof
distributed to the Holders; and
(ii) no such resignation of the Trustee that
acts
as the Delaware Trustee shall be effective until a
Successor
Delaware Trustee has been appointed and has accepted such
appointment by instrument executed by such Successor
Delaware Trustee and delivered to the Trust, the Sponsor
and
the resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an
Event of Default shall have occurred and be continuing after the
issuance of the Securities, the Holders of the Capital
Securities, shall use their best efforts to promptly appoint a
Successor Delaware Trustee or Successor Property Trustee, as the
case may be, if the Property Trustee or the Delaware Trustee
delivers an instrument of resignation in accordance with this
Section 5.7.
(e) If no Successor Property Trustee or Successor
Delaware Trustee shall have been appointed and accepted
appointment as provided in this Section 5.7 within 60 days after
delivery of an instrument of resignation or removal, the Property
Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for
appointment of a Successor Property Trustee or Successor Delaware
Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the
case may be.
(f) No Property Trustee or Delaware Trustee shall
be
liable for the acts or omissions to act of any Successor Property
Trustee or Successor Delaware Trustee, as the case may be.
<PAGE 33>
Section 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason
and
the number of Trustees is not reduced pursuant to Section 5.1, or
if the number of Trustees is increased pursuant to Section 5.1, a
vacancy shall occur. A resolution certifying the existence of
such vacancy by the Administrative Trustees or, if there are more
than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance
with Section 5.7.
Section 5.9 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 Administrative Trustees shall occur, until such vacancy is
filled by the appointment of an Administrative Trustee in
accordance with Section 5.7, the Administrative Trustees in
office, regardless of their number, shall have all the powers
granted to the Administrative Trustees and shall discharge all
the duties imposed upon the Administrative Trustees by this Trust
Agreement.
Section 5.10 Meetings.
If there is more than one Administrative Trustee,
meetings of the Administrative Trustees shall be held from time
to time upon the call of any Administrative Trustee. Regular
meetings of the Administrative Trustees may be held at a time and
place fixed by resolution of the Administrative Trustees. Notice
of any in-person meetings of the Administrative Trustees 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 such meeting. Notice of any telephonic meetings
of the Administrative Trustees 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 an
Administrative Trustee at a meeting shall constitute a waiver of
notice of such meeting except where an Administrative Trustee
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 Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the
Administrative Trustees 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 Administrative Trustees. In the
<PAGE 34> event there is only one Administrative Trustee, any and
all action of such Administrative Trustee shall be evidenced by a
written consent of such Administrative Trustee.
Section 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of
attorney consistent with applicable law, delegate to any other
natural person over the age of 21 his or her power for the
purpose of executing any documents contemplated in Section 3.6,
including any registration statement or amendment thereto filed
with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power
to
delegate from time to time to such of their number or to officers
of the Trust the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the
Administrative Trustees or otherwise as the Administrative
Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the
Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or
Succession to
Business.
Any Person into which the Property Trustee or the
Delaware Trustee or any Administrative Trustee that is not a
natural person, as the case may be, may be merged or converted or
with which it may be consolidated, or any Person resulting from
any merger, conversion or consolidation to which the Property
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 Property Trustee or the Delaware
Trustee, as the case may be, shall be the successor of the
Property 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 VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance
with
the applicable terms of the relevant Holder's Securities. If and
to the extent that the Debenture Issuer makes a payment of
interest (including Compounded Interest (as defined in the
Indenture) and Additional Sums (as defined in the Indenture)),
premium and/or principal on the Debentures held by the Property
Trustee or any other payments with respect to the Debentures held
by the Property Trustee (the amount of any such payment being a
"Payment Amount"), the Property Trustee shall and is directed, to
<PAGE 35> the extent funds are available for that purpose, to
make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of
the
Trust issue one class of capital securities representing
undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Series A Capital
Securities") and one class 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").
(b) 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.
(c) Upon issuance of the Securities as provided in
this Trust Agreement, the Securities so issued shall be deemed to
be validly issued, fully paid and non-assessable.
(d) Every Person, by virtue of having become a
Holder
or a Capital Security Beneficial Owner in accordance with the
terms of this Trust Agreement, shall be deemed to have expressly
assented and agreed to the terms of, and shall be bound by, this
Trust Agreement.
Section 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of
the
Trust by an Administrative Trustee by manual or facsimile
signature. In case any Administrative Trustee of the Trust who
shall have signed any of the Securities shall cease to be such
Administrative Trustee before the Securities so signed shall be
delivered by the Trust, such Securities nevertheless may be
delivered as though the person who signed such Securities had not
ceased to be such Administrative Trustee; and any Securities may
be signed on behalf of the Trust by such persons who, at the
actual date of execution of such Security, shall be the
Administrative Trustees of the Trust, although at the date of the
execution and delivery of the Trust Agreement any such person was
not such a Administrative Trustee.
(b) One Administrative Trustee shall sign the
Securities for the Trust by manual or facsimile signature.
A Security shall not be valid until authenticated by
the manual signature of an authorized signatory of the Property
<PAGE 36> Trustee. The signature shall be conclusive evidence
that the Security has been authenticated under this Trust
Agreement.
Upon a written order of the Trust signed by one
Administrative Trustee, the Property Trustee shall authenticate
the Securities for original issue. The aggregate number of
Capital Securities outstanding at any time shall not exceed the
number set forth in the Terms in Annex I hereto except as
provided in Section 7.6.
The Property Trustee may appoint an authenticating
agent acceptable to the Trust to authenticate Securities. An
authenticating agent may authenticate Securities whenever the
Property Trustee may do so. Each reference in this Trust
Agreement to authentication by the Property Trustee includes
authentication by such agent. An authenticating agent has the
same rights as the Property Trustee to deal with the Sponsor or
an Affiliate.
Section 7.3 Form and Dating.
The Capital Securities 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 Trust
Agreement. The Property Trustee's certificate of authentication
shall be substantially in the form set forth in Exhibits A-1 and
A-2. Certificates representing the Securities may be printed,
lithographed or engraved or may be produced in any other manner
as is reasonably acceptable to the Administrative Trustees, as
evidenced by their execution thereof. The Securities may have
letters, CUSIP or other 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
Trust). The Trust at the direction of the Sponsor shall furnish
any such legend not contained in Exhibit A-1 to the Property
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 Trust
Agreement and to the extent applicable, the Property Trustee and
the Sponsor, by their execution and delivery of this Trust
Agreement, expressly agree to such terms and provisions and to be
bound thereby.
(a) Global Securities. Securities may be issued
in
the form of one or more, permanent global Securities in
definitive, fully registered form without distribution coupons
with the appropriate global legends (a "Global Capital
Security"), which shall be deposited on behalf of the purchasers
of the Capital Securities represented thereby with the Property
<PAGE 37> Trustee, at its New York office, as custodian for the
Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the
Trust and authenticated by the Property Trustee as hereinafter
provided. The number of Capital Securities represented by a
Global Capital Security may from time to time be increased or
decreased by adjustments made on the records of the Property
Trustee and the Clearing Agency or its nominee as hereinafter
provided.
(b) Book-Entry Provisions. This Section 7.3(b)
shall
apply only to the Global Capital Securities and such other
Capital Securities in global form as may be authorized by the
Trust to be deposited with or on behalf of the Clearing Agency.
The Trust shall execute and the Property Trustee
shall,
in accordance with this Section 7.3, authenticate and make
available for delivery initially one or more Global Capital
Securities that (i) shall be registered in the name of Cede & Co.
or other nominee of such Clearing Agency and (ii) shall be
delivered by the Trustee to such Clearing Agency or pursuant to
such Clearing Agency's written instructions or held by the
Property Trustee as custodian for the Clearing Agency.
Members of, or participants in, the Clearing Agency
("Participants") shall have no rights under this Trust Agreement
with respect to any Global Capital Security held on their behalf
by the Clearing Agency or by the Property Trustee as the
custodian of the Clearing Agency or under such Global Capital
Security, and the Clearing Agency may be treated by the Trust,
the Property Trustee and any agent of the Trust or the Property
Trustee as the absolute owner of such Global Capital Security for
all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall prevent the Trust, the Property Trustee or any agent
of the Trust or the Property Trustee from giving effect to any
written certification, proxy or other authorization furnished by
the Clearing Agency or impair, as between the Clearing Agency and
its Participants, the operation of customary practices of such
Clearing Agency governing the exercise of the rights of a holder
of a beneficial interest in any Global Capital Security.
(c) Definitive Capital Securities. Except as
provided
in Section 7.9 or 9.2(e)(i), owners of beneficial interests in a
Global Capital Security will not be entitled to receive physical
delivery of certificated Capital Securities ("Definitive Capital
Securities").
(d) Authorized Denominations. The Capital
Securities
are issuable only in denominations of $______ and any integral
multiple thereof.
<PAGE 38>
Section 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Borough of
Manhattan,
The City of New York, (i) an office or agency where Capital
Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities
may be presented for payment ("Paying Agent") and (iii) an office
or agency where Securities may be presented for exchange
("Exchange Agent"). The Registrar shall keep a register of the
Capital Securities and of their transfer. The Trust may appoint
the Registrar, the Paying Agent and the Exchange Agent and may
appoint one or more co-registrars, one or more additional paying
agents and one or more additional exchange agents in such other
locations as it shall determine. The term "Registrar" includes
any additional registrar, "Paying Agent" includes any additional
paying agent and the term "Exchange Agent" includes any
additional exchange agent. The Trust may change any Paying
Agent, Registrar, co-registrar or Exchange Agent without prior
notice to any Holder. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees. The Trust shall notify the Property
Trustee of the name and address of any Agent not a party to this
Trust Agreement. If the Trust fails to appoint or maintain
another entity as Registrar, Paying Agent or Exchange Agent, the
Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar, or Exchange Agent.
The Trust shall act as Paying Agent, Registrar, co-registrar, and
Exchange Agent for the Common Securities.
The Trust initially appoints the Property Trustee as
Registrar, Paying Agent, and Exchange Agent for the Capital
Securities.
Section 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than
the Property Trustee to agree in writing that the Paying Agent
will hold in trust for the benefit of Holders or the Property
Trustee all money held by the Paying Agent for the payment of
liquidation amounts or Distributions, and will notify the
Property Trustee if there are insufficient funds for such
purpose. While any such insufficiency continues, the Property
Trustee may require a Paying Agent to pay all money held by it to
the Property Trustee. The Trust at any time may require a Paying
Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the
Property Trustee, the Paying Agent (if other than the Trust or an
Affiliate of the Trust) shall have no further liability for the
money. If the Trust or the Sponsor or an Affiliate of the Trust
or the Sponsor acts as Paying Agent, it shall segregate and hold
in a separate trust fund for the benefit of the Holders all money
held by it as Paying Agent.
<PAGE 39>
Section 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has
been
lost, destroyed or wrongfully taken or if such Security is
mutilated and is surrendered to the Trust or in the case of the
Capital Securities to the Property Trustee, the Trust shall issue
and the Property Trustee shall, upon written order of the Trust,
authenticate a replacement Security if the Property Trustee's and
the Trust's requirements, as the case may be, are met. An
indemnity bond must be provided by the Holder which, in the
judgment of the Property Trustee, is sufficient to protect the
Trustees, the Sponsor, the Trust or any authenticating agent from
any loss which any of them may suffer if a Security is replaced.
The Trust may charge such Holder for its expenses in replacing a
Security.
Every replacement Security is an additional
beneficial
interest in the Trust.
Section 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are
all
the Capital Securities authenticated by the Property Trustee
except for those cancelled by it, those delivered to it for
cancellation, and those described in this Section as not
outstanding.
If a Capital Security is replaced, paid or purchased
pursuant to Section 7.6 hereof, it ceases to be outstanding
unless the Property Trustee receives proof satisfactory to it
that the replaced, paid or purchased Capital Security is held by
a bona fide purchaser.
If Capital Securities are considered paid in
accordance
with the terms of this Trust Agreement, they cease to be
outstanding and Distributions on them shall cease to accumulate.
A Capital Security does not cease to be outstanding
because one of the Trust, the Sponsor or an Affiliate of the
Sponsor holds the Security.
Section 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required
amount of Securities have concurred in any direction, waiver or
consent, Capital Securities owned by the Trust, the Sponsor or an
Affiliate of the Sponsor, as the case may be, shall be
disregarded and deemed not to be outstanding, except that for the
purposes of determining whether the Property Trustee shall be
fully protected in relying on any such direction, waiver or
consent, only Securities which the Property Trustee actually
knows are so owned shall be so disregarded.
<PAGE 40>
Section 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for
delivery, the Trust may prepare and, in the case of the Capital
Securities, the Property Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the
form of Definitive Securities but may have variations that the
Trust considers appropriate for temporary Securities. Without
unreasonable delay, the Trust shall prepare and, in the case of
the Capital Securities, the Property Trustee shall authenticate
Definitive Securities in exchange for temporary Securities.
(b) A Global Capital Security deposited with the
Clearing Agency or with the Property Trustee as custodian for the
Clearing Agency pursuant to Section 7.3 shall be transferred to
the beneficial owners thereof in the form of certificated Capital
Securities only if such transfer complies with Section 9.2 and
(i) the Clearing Agency notifies the Sponsor that it is unwilling
or unable to continue as Clearing Agency for such Global Capital
Security or if at any time such Clearing Agency ceases to be a
"clearing agency" registered under the Exchange Act and a
clearing agency is not appointed by the Sponsor within 90 days of
such notice, (ii) a Default or an Event of Default has occurred
and is continuing or (iii) the Trust at its sole discretion
elects to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is
transferable
to the beneficial owners thereof in the form of certificated
Capital Securities pursuant to this Section 7.9 shall be
surrendered by the Clearing Agency to the Property Trustee
located in the Borough of Manhattan, The City of New York, to be
so transferred, in whole or from time to time in part, without
charge, and the Property Trustee shall authenticate and make
available for delivery, upon such transfer of each portion of
such Global Capital Security, an equal aggregate liquidation
amount of Securities of authorized denominations in the form of
certificated Capital Securities. Any portion of a Global Capital
Security transferred pursuant to this Section shall be registered
in such names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c),
the
Holder of a Global Capital Security may grant proxies and
otherwise authorize any Person, including Participants and
Persons that may hold interests through Participants, to take any
action which such Holder is entitled to take under this Trust
Agreement or the Securities.
(e) In the event of the occurrence of any of the
events specified in Section 7.9(b), the Trust will promptly make
available to the Property Trustee a reasonable supply of
certificated Capital Securities in fully registered form without
distribution coupons.
<PAGE 41>
Section 7.10 Cancellation.
The Trust at any time may deliver Capital Securities
to
the Property Trustee for cancellation. The Registrar, Paying
Agent and Exchange Agent shall forward to the Property Trustee
any Capital Securities surrendered to them for registration of
transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Capital Securities, surrendered for
registration of transfer, redemption, exchange, payment,
replacement or cancellation and shall dispose of cancelled
Capital Securities as the Trust directs, provided that the
Property Trustee shall not be obligated to destroy Capital
Securities. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid or that have been
delivered to the Property Trustee for cancellation or that any
Holder has exchanged.
Section 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the
Property Trustee shall use "CUSIP" numbers in notices of
redemption as a convenience to Holders of Capital Securities;
provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on
the Capital 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 Capital Securities, and any
such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the
Property Trustee of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of
dissolution or liquidation or its equivalent with respect
to
the Sponsor; or the revocation of the Sponsor's charter and
the expiration of 90 days after the date of revocation
without a reinstatement thereof;
(iii) following the distribution of a Like
Amount
of the Debentures to the Holders, provided that, the
Property Trustee has received written notice from the
Sponsor directing the Property Trustee to terminate the
Trust (which direction is optional, and except as otherwise
expressly provided below, within the discretion of the
Sponsor) and provided, further, that such direction and
such
<PAGE 42> distribution is conditioned on (i) the receipt by
the Sponsor of any required regulatory approval and (ii)
the
Administrative Trustees' receipt of an opinion of an
independent tax counsel experienced in such matters, which
opinion may rely on published rulings of the Internal
Revenue Service, to the effect that the Holders will not
recognize any gain or loss for United States federal income
tax purposes as a result of the dissolution of the Trust
and
the distribution of Debentures;
(iv) upon the entry of a decree of judicial
dissolution of the Trust by a court of competent
jurisdiction;
(v) 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;
(vi) upon the repayment of the Debentures or
at
such time as no Debentures are outstanding; or
(vii) the expiration of the term of the Trust
provided in Section 3.14.
(b) As soon as is practicable after the occurrence
of
an event referred to in Section 8.1(a), the Administrative
Trustees shall file a certificate of cancellation with the
Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X
shall
survive the termination of the Trust.
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole
or in
part, in accordance with the terms and conditions set forth in
this Trust Agreement and in the terms of the Securities. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(b) Subject to this Article IX, Capital Securities
may
only be transferred, in whole or in part, in accordance with the
terms and conditions set forth in this Trust Agreement. Any
transfer or purported transfer of any Security not made in
accordance with this Trust Agreement shall be null and void.
(c) For so long as the Trust Securities remain
outstanding, the Sponsor will covenant (i) to directly or
indirectly maintain 100% direct or indirect ownership of the
Common Securities of the Trust; provided, however, that any
<PAGE 43> permitted successor of the Sponsor under the Indenture
may succeed to the Sponsor's ownership of such Common Securities,
(ii) not to cause, as sponsor of the Trust, or to permit, as
Holder of the Common Securities, the dissolution, winding-up or
termination of the Trust, except in connection with a
distribution of the Debentures as provided in the Trust Agreement
and in connection with certain mergers, consolidations or
amalgamations permitted by this Trust Agreement and (iii) to use
its reasonable efforts to cause the Trust (a) to remain a
business trust, except in connection with the distribution of
Debentures 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 this Trust Agreement, and (b) to otherwise continue
to be classified as a grantor trust for United States federal
income tax purposes.
(d) The Administrative Trustees shall provide for
the
registration of Securities and of the transfer of Securities,
which will be effected without charge but only upon payment (with
such indemnity as the Administrative Trustees 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 Administrative Trustees 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 Administrative
Trustees 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 Property
Trustee (in the case of Capital Securities) or the Trust (in the
case of Common Securities). 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 Trust Agreement.
Section 9.2 Transfer Procedures and Restrictions.
(a) General. No transfer or exchange of a
Definitive
Capital Security or of an interest in the Global Capital Security
shall be effective unless the transferor delivers to the Trust a
certificate in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1.
(b) Transfer and Exchange of Definitive Capital
Securities. When Definitive Capital Securities are presented to
the Registrar or co-Registrar
(x) to register the transfer of such
Definitive
Capital Securities; or
<PAGE 44>
(y) to exchange such Definitive Capital
Securities which became mutilated, destroyed, defaced,
stolen or lost, for an equal number of Definitive Capital
Securities,
the Registrar or co-registrar shall register the transfer or make
the exchange as requested if its reasonable requirements for such
transaction are met; provided, however, that the Definitive
Capital Securities surrendered for 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 or
co-registrar, duly executed by the Holder thereof or his attorney
duly authorized in writing.
(c) Restrictions on Transfer of a Definitive
Capital
Security for a Beneficial Interest in a Global Capital Security.
A Definitive Capital Security may not be exchanged for a
beneficial interest in a Global Capital Security except upon
satisfaction of the requirements set forth below. Upon receipt
by the Property Trustee of a Definitive Capital Security, duly
endorsed or accompanied by appropriate instruments of transfer,
in form satisfactory to the Property Trustee, together with
written instructions directing the Property Trustee to make, or
to direct the Clearing Agency to make, an adjustment on its books
and records with respect to the appropriate Global Capital
Security to reflect an increase in the number of the Capital
Securities represented by such Global Capital Security, then the
Property Trustee shall cancel such Definitive Capital Security
and cause, or direct the Clearing Agency to cause, the aggregate
number of Capital Securities represented by the appropriate
Global Capital Security to be increased accordingly. If no
Global Capital Securities are then outstanding, the Trust shall
issue and the Property Trustee shall authenticate, upon written
order of any Administrative Trustee, an appropriate number of
Capital Securities in global form.
APP Transfer and Exchange of Global Capital
Securities. Subject to Section 9.2(e), the transfer and exchange
of Global Capital Securities or beneficial interests therein
shall be effected through the Clearing Agency, in accordance with
this Trust Agreement (including applicable restrictions on
transfer set forth herein, if any) and the procedures of the
Clearing Agency therefor.
(e) Transfer of a Beneficial Interest in a Global
Capital Security for a Definitive Capital Security.
(i) Any Person having a beneficial interest
in a
Global Capital Security may upon request, but only upon 20
days prior notice to the Property Trustee, and if
accompanied by the information specified below, exchange
such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon
receipt by the Property Trustee from the Clearing Agency or
<PAGE 45> its nominee on behalf of any Person having a
beneficial interest in a Global Capital Security of written
instructions or such other form of instructions as is
customary for the Clearing Agency or the Person designated
by the Clearing Agency as having such a beneficial interest
in a Capital Security and a certification from the
transferor (in a form substantially similar to that
attached
hereto as the form of "Assignment" in Exhibit A-1), which
may be submitted by facsimile, then the Property Trustee
will cause the aggregate number of Capital Securities
represented by Global Capital Securities to be reduced on
its books and records and, following such reduction, the
Trust will execute and the Property Trustee will
authenticate and make available for delivery to the
transferee a Definitive Capital Security.
(ii) Definitive Capital Securities issued in
exchange for a beneficial interest in a Global Capital
Security pursuant to this Section 9.2(e) shall be
registered
in such names and in such authorized denominations as the
Clearing Agency, pursuant to instructions from its Clearing
Agency Participants or otherwise, shall instruct the
Property Trustee in writing. The Property Trustee shall
deliver such Capital Securities to the Persons in whose
names such Capital Securities are so registered in
accordance with such instructions of the Clearing Agency.
(f) Restrictions on Transfer and Exchange of
Global
Capital Securities. Notwithstanding any other provisions of this
Trust Agreement (other than the provisions set forth in
subsection (g) of this Section 9.2), a Global Capital Security
may not be transferred as a whole except by the Clearing Agency
to a nominee of the Clearing Agency or another nominee of the
Clearing Agency or by the Clearing Agency or any such nominee to
a successor Clearing Agency or a nominee of such successor
Clearing Agency.
(g) Authentication of Definitive Capital
Securities.
If at any time:
(i) there occurs a Default or an Event of
Default
which is continuing, or
(ii) the Trust, in its sole discretion,
notifies
the Property Trustee in writing that it elects to cause the
issuance of Definitive Capital Securities under this Trust
Agreement,
then the Trust will execute, and the Property Trustee, upon
receipt of a written order of the Trust signed by one
Administrative Trustee requesting the authentication and delivery
of Definitive Capital Securities to the Persons designated by the
Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of
<PAGE 46> Capital Securities represented by the Global Capital
Securities, in exchange for such Global Capital Securities.
(h) Cancellation or Adjustment of Global Capital
Security. At such time as all beneficial interests in a Global
Capital Security have either been exchanged for Definitive
Capital Securities to the extent permitted by this Trust
Agreement or redeemed, repurchased or canceled in accordance with
the terms of this Trust Agreement, such Global Capital Security
shall be returned to the Clearing Agency for cancellation or
retained and canceled by the Property Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global
Capital Security is exchanged for Definitive Capital Securities,
Capital Securities represented by such Global Capital Security
shall be reduced and an adjustment shall be made on the books and
records of the Clearing Agency and the Registrar, to reflect such
reduction.
(i) Obligations with Respect to Transfers and
Exchanges of Capital Securities.
(i) To permit registrations of transfers and
exchanges, the Trust shall execute and the Property Trustee
shall authenticate Definitive Capital Securities and Global
Capital Securities at the Registrar's or co-registrar's
request in accordance with the terms of this Trust
Agreement.
(ii) Registrations of transfers or exchanges
will
be effected without charge, but only upon payment (with
such
indemnity as the Trust 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 or co-registrar shall not
be
required to register the transfer of or exchange of
(a) Capital Securities during a period beginning at the
opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Capital
Securities for redemption and ending at the close of
business on the day of such mailing; or (b) any Capital
Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security being
redeemed in part.
(iv) Prior to the due presentation for
registration of transfer of any Capital Security, the
Trust,
the Property Trustee, the Paying Agent, the Registrar or
any
co-registrar may deem and treat the Person in whose name a
Capital Security is registered as the absolute owner of
such
Capital Security for the purpose of receiving Distributions
on such Capital Security and for all other purposes
whatsoever, and none of the Trust, the Property Trustee,
the
<PAGE 47> Paying Agent, the Registrar or any co-registrar
shall be affected by notice to the contrary.
(v) All Capital Securities issued upon any
transfer or exchange pursuant to the terms of this Trust
Agreement shall evidence the same security and shall be
entitled to the same benefits under this Trust Agreement as
the Capital Securities surrendered upon such transfer or
exchange.
(j) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no
responsibility or obligation to any beneficial owner of a
Global Capital Security, a Clearing Agency Participant in
the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its
nominee or of any Clearing Agency Participant thereof, with
respect to any ownership interest in the Capital Securities
or with respect to the delivery to any Clearing Agency
Participant, beneficial owner or other Person (other than
the Clearing Agency) of any notice (including any notice of
redemption) or the payment of any amount, under or with
respect to such Capital Securities. All notices and
communications to be given to the Holders and all payments
to be made to Holders under the Capital Securities shall be
given or made only to or upon the order of the registered
Holders (which shall be the Clearing Agency or its nominee
in the case of a Global Capital Security). The rights of
beneficial owners in any Global Capital Security shall be
exercised only through the Clearing Agency subject to the
applicable rules and procedures of the Clearing Agency.
The
Property Trustee may conclusively rely and shall be fully
protected in relying upon information furnished by the
Clearing Agency or any agent thereof with respect to its
Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar
shall
have no obligation or duty to monitor, determine or inquire
as to compliance with any restrictions on transfer imposed
under this Trust Agreement or under applicable law with
respect to any transfer of any interest in any Capital
Security (including any transfers between or among Clearing
Agency Participants or beneficial owners in any Global
Capital Security) other than to require delivery of such
certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly
required by, the terms of this Trust Agreement, and to
examine the same to determine substantial compliance as to
form with the express requirements hereof.
(k) Minimum Transfers. Series A Capital
Securities
may only be transferred in minimum blocks of $___________
aggregate liquidation amount. Any transfer of Series A Capital
<PAGE 48> Securities in a block having an aggregate liquidation
amount of less than $___________ shall be deemed to be void and
of no legal effect whatsoever. Any such transferee shall be
deemed not to be a Holder of such Series A 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.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any
Security shall be registered on the books and records of the
Trust as the sole owner of such Security 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 Security on the part of any
Person, whether or not the Trust shall have actual or other
notice thereof.
Section 9.4 Book Entry Interests.
Global Capital Securities shall initially be
registered
on the books and records of the Trust in the name of Cede & Co.,
the nominee of the Clearing Agency, and no Capital Security
Beneficial Owner will receive a definitive Capital Security
Certificate representing such Capital Security Beneficial Owner's
interests in such Global Capital Securities, except as provided
in Section 9.2 and Section 7.9. Unless and until definitive,
fully registered Capital Securities certificates have been issued
to the Capital Security Beneficial Owners pursuant to Section 9.2
and Section 7.9:
(a) the provisions of this Section 9.4 shall be in
full force and effect;
(b) the Trust and the Trustees shall be entitled
to
deal with the Clearing Agency for all purposes of this
Trust
Agreement (including the payment of Distributions on the
Global Capital Securities and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities
and the sole holder of the Global Certificates and shall
have no obligation to the Capital Security Beneficial
Owners;
(c) to the extent that the provisions of this
Section 9.4 conflict with any other provisions of this
Trust
Agreement, the provisions of this Section 9.4 shall
control;
and
(d) the rights of the Capital Security Beneficial
Owners shall be exercised only through the Clearing Agency
and shall be limited to those established by law and
agreements between such Capital Security Beneficial Owners
<PAGE 49> and the Clearing Agency and/or the Clearing
Agency
Participants and receive and transmit payments of
Distributions on the Global Certificates to such Clearing
Agency Participants. DTC will make book entry transfers
among the Clearing Agency Participants.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the
Capital
Security Holders is required under this Trust Agreement, the
Trustees shall give all such notices and communications specified
herein to be given to the Holders of Global Capital Securities to
the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its
services as securities depositary with respect to the Capital
Securities, the Administrative Trustees may, in their sole
discretion, appoint a successor Clearing Agency with respect to
such Capital Securities.
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Trust
Agreement, the Securities Guarantees 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 which shall be made solely from
assets of the Trust; and
(ii) required to pay to the Trust or to any
Holder any deficit upon dissolution of the Trust or
otherwise.
(b) The Debenture Issuer shall be liable for all
of
the debts and obligations of the Trust (other than in respect of
the Securities) to the extent not satisfied out of the Trust's
assets.
(c) Pursuant to Section 3803(a) of the Business
Trust
Act, the Holders 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.
<PAGE 50>
Section 10.2 Exculpation.
(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 Trust
Agreement 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 gross 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 who has been selected 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 might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an
Indemnified Person has duties (including fiduciary duties) and
liabilities relating thereto to the Trust or to any other Covered
Person, an Indemnified Person acting under this Trust Agreement
shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust
Agreement. The provisions of this Trust Agreement, to the extent
that they restrict the duties and liabilities of an Indemnified
Person otherwise existing at law or in equity (other than the
duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or
arises between any Covered Persons; or
(ii) whenever this Trust Agreement or any
other
agreement contemplated herein or therein provides that an
Indemnified Person shall act in a manner that is, or
provides terms that are, fair and reasonable to the Trust
or
any Holder of Securities,
the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case
<PAGE 51> the relative interest of each party (including its own
interest) to such conflict, agreement, transaction or situation
and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the
absence of bad faith by the Indemnified Person, the resolution,
action or term so made, taken or provided by the Indemnified
Person shall not constitute a breach of this Trust Agreement or
any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or
otherwise.
(c) Whenever in this Trust Agreement 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 Trust Agreement.
Section 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to
the
full extent permitted by law, any Company Indemnified
Person
who was or is a party or is threatened to be made a party
to
any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of
the Trust) by reason of the fact that he is or was a
Company
Indemnified Person against expenses (including attorneys'
fees and expenses), judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be
in or not opposed to the best interests of 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 Company Indemnified Person did not act
in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
<PAGE 52>
(ii) The Debenture Issuer shall indemnify, to
the
full extent permitted by law, any Company Indemnified
Person
who was or is a party or is threatened to be made a party
to
any threatened, pending or completed action or suit by or
in
the right of the Trust to procure a judgment in its favor
by
reason of the fact that he is or was a Company Indemnified
Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in
connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he
reasonably
believed to be in or not opposed to the best interests of
the Trust and except that no such indemnification shall be
made in respect of any claim, issue or matter as to which
such Company Indemnified Person shall have been adjudged to
be liable to the Trust unless and only to the extent that
the Court of Chancery of Delaware or the court in which
such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in view of
all the circumstances of the case, such Person is fairly
and
reasonably entitled to indemnity for such expenses which
such Court of Chancery or such other court shall deem
proper.
(iii) To the extent that a Company
Indemnified
Person shall be successful on the merits or otherwise
(including dismissal of an action without prejudice or the
settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(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) actually and
reasonably
incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i)
and
(ii) of this Section 10.4(a) (unless ordered by a
court) shall be made by the Debenture Issuer only as
authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper
in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii).
Such determination shall be made (1) by the Administrative
Trustees by a majority vote of a Quorum consisting of such
Administrative Trustees who were not parties to such
action,
suit or proceeding, (2) if such a Quorum is not obtainable,
or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security
Holder of the Trust.
(v) Expenses (including attorneys' fees and
expenses) incurred by a Company Indemnified Person in
defending a civil, criminal, administrative or
investigative
action, suit or proceeding referred to in paragraphs (i)
and
<PAGE 53> (ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition of
such
action, suit or proceeding upon receipt of an undertaking
by
or on behalf of such Company Indemnified Person to repay
such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as
authorized in this Section 10.4(a). Notwithstanding the
foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by
the Administrative Trustees by a majority vote of a quorum
of disinterested Administrative Trustees, (ii) if such a
quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrative Trustees so directs,
by independent legal counsel in a written opinion or
(iii) the Common Security Holder of the Trust, that, based
upon the facts known to the Administrative Trustees,
counsel
or the Common Security Holder at the time such
determination
is made, such Company Indemnified Person acted in bad faith
or in a manner that such person did not believe to be in or
not opposed to the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company
Indemnified Person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any
advance be made in instances where the Administrative
Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately
breached his duty to the Trust or its Common or Capital
Security Holders.
(vi) The indemnification and advancement of
expenses provided by, or granted pursuant to, the other
paragraphs of this Section 10.4(a) shall not be deemed
exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled
under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer 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 10.4(a) shall be deemed to be provided by a
contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time
while this Section 10.4(a) is in effect. Any repeal or
modification of this Section 10.4(a) shall not affect any
rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may
purchase and maintain insurance on behalf of any person who
is or was a Company Indemnified Person against any
liability
asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or
not the Debenture Issuer would have the power to indemnify
him against such liability under the provisions of this
Section 10.4(a). <PAGE 54>
(viii) For purposes of this Section 10.4(a),
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 10.4(a) with respect
to
the resulting or surviving entity as he would have with
respect to such constituent entity if its separate
existence
had continued.
(ix) The indemnification and advancement of
expenses provided by, or granted pursuant to, this
Section 10.4(a) shall, unless otherwise provided when
authorized or ratified, continue as to a person who has
ceased to be a Company Indemnified Person and shall inure
to
the benefit of the heirs, executors and administrators of
such a person.
(b) The Debenture Issuer agrees to indemnify the
(i) Property Trustee, (ii) the Delaware Trustee, (iii) any
Affiliate of the Property Trustee and the Delaware Trustee, and
(iv) any officers, directors, shareholders, members, partners,
employees, representatives, custodians, nominees or agents of the
Property Trustee and the Delaware Trustee (each of the Persons in
(i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person
harmless against, any and all loss, liability, damage, claim or
expense including taxes (other than taxes based on the income of
such Fiduciary Indemnified Person) incurred without negligence or
bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust or trusts hereunder,
including the costs and expenses (including reasonable legal fees
and expenses) of defending itself against or investigating any
claim or liability in connection with the exercise or performance
of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Trust Agreement.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware
Trustee
and the Property Trustee may engage in or possess an interest in
other business ventures of any nature or description,
independently or with others, similar or dissimilar to the
business of the Trust, and the Trust and the Holders shall have
no rights by virtue of this Trust Agreement in and to such
independent ventures or the income or profits derived therefrom,
and the pursuit of any such venture, even if competitive with the
business of the Trust, shall not be deemed wrongful or improper.
No Covered Person, the Sponsor, the Delaware Trustee, or the
<PAGE 55> Property 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 Property Trustee shall have
the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such
particular investment or other opportunity. Any Covered Person,
the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary for,
trustee or agent for, or act on any committee or body of holders
of, securities or other obligations of the Sponsor or its
Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall
be
the calendar year, or such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
(a) At all times during the existence of the
Trust,
the Administrative Trustees shall keep, or cause to be kept, full
books of account, records and supporting documents, which shall
reflect in reasonable detail, each transaction of the 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 Administrative
Trustees.
(b) The Administrative Trustees shall cause to be
duly
prepared and delivered to each of the Holders, any 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 Administrative Trustees
shall endeavor to deliver all such information statements within
30 days after the end of each Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be
duly
prepared and filed with the appropriate taxing authority, an
annual United States federal income tax return, on a Form 1041 or
such other form required by United States federal income tax law,
and any other annual income tax returns required to be filed by
the Administrative Trustees on behalf of the Trust with any state
or local taxing authority. <PAGE 56>
Section 11.3 Banking.
The Trust may maintain one or more bank accounts 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 Property Trustee shall be made directly to the Property
Trustee Account and no other funds of the Trust shall be
deposited in the Property Trustee Account. The sole signatories
for such accounts shall be designated by the Administrative
Trustees; provided, however, that the Property Trustee shall
designate the signatories for the Property Trustee Account.
Section 11.4 Withholding.
The Trust and the Administrative Trustees shall
comply
with all withholding requirements under United States federal,
state and local law. The Trust shall request, and the Holders
shall provide to the Trust, such forms or certificates as are
necessary to establish an exemption from withholding with respect
to each Holder, and any representations and forms as shall
reasonably be requested by the Trust to assist it in determining
the extent of, and in fulfilling, its withholding obligations.
The Administrative Trustees 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 Trust 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 in the amount of
the withholding to the Holder. In the event of any claimed over
withholding, Holders shall be limited to an action against the
applicable jurisdiction. If the amount required to be withheld
was not withheld from actual Distributions made, the Trust may
reduce subsequent Distributions by the amount of such
withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Trust
Agreement or by any applicable terms of the Securities, this
Trust Agreement may only be amended by a written instrument
approved and executed by:
(i) the Administrative Trustees (or if there
are
more than two Administrative Trustees a majority of the
Administrative Trustees);
(ii) if the amendment affects the rights,
powers,
duties, obligations or immunities of the Property Trustee,
the Property Trustee; and <PAGE 57>
(iii) if the amendment affects the rights,
powers, duties, obligations or immunities of the Delaware
Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such
purported
amendment shall be void and ineffective:
(i) unless, in the case of any proposed
amendment, the Property Trustee shall have first received
an
Officers' Certificate from each of the Trust and the
Sponsor
that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the
Securities);
(ii) unless, in the case of any proposed
amendment which affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the
Property 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
Trust
Agreement (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 Trust Agreement (including the terms of the
Securities) and that all conditions precedent, if
any,
in this Trust Agreement to the execution and
delivery
of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be
required to sign any such amendment; and
(iii) to the extent the result of such
amendment
would be to:
(A) cause the Trust to fail to continue
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 Property Trustee in contravention of
the
Trust Indenture Act; or
(C) cause the Trust to be deemed to be
an
Investment Company required to be registered under
the
Investment Company Act;
(c) At such time after the Trust has issued any
Securities that remain outstanding, any amendment that would
adversely affect the rights, privileges or preferences of any
<PAGE 58> Holder may be effected only with such additional
requirements as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not
be
amended without the consent of all of the Holders;
(e) Article Four shall not be amended without the
consent of the Holders of a Majority in liquidation amount of the
Common Securities and;
(f) The rights of the holders of the Common
Securities
under Article Five 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
Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust
Agreement may be amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement
any
provision in this Trust Agreement that may be inconsistent
with any other provision of this Trust Agreement or to make
any other provisions with respect to matters or questions
arising under this Trust Agreement which shall not be
inconsistent with the other provisions of the Trust
Agreement; and
(ii) to modify, eliminate or add to any
provisions of the Trust Agreement to such extent as shall
be
necessary to ensure that the Trust will be classified for
United States federal income tax purposes as a grantor
trust
at all times that any Securities are outstanding or to
ensure that the Trust will not be required to register as
an
Investment Company under the Investment Company Act.
provided, however, that in the case of clause (i), such action
shall not adversely affect in any material respect the interests
of the Holders, and any amendments of this Trust Agreement shall
become effective when notice thereof is given to the Holders.
Section 12.2 Meetings of the Holders; Action by Written
Consent.
(a) Meetings of the Holders of any class of
Securities
may be called at any time by the Administrative Trustees (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 Trust Agreement, the
terms of the Securities or the rules of any stock exchange on
which the Capital Securities are listed or admitted for trading.
The Administrative Trustees 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 Administrative
<PAGE 59> Trustees one or more notices in writing stating that
the signing Holders wish to call a meeting and indicating the
general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing
the Security Certificates held by the Holders exercising the
right to call a meeting and only those Securities specified shall
be counted for purposes of determining whether the required
percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the
terms of the Securities, the following provisions shall apply to
meetings of Holders:
(i) notice of any such meeting shall be given
to
all the Holders having a right to vote thereat at least
seven days and not more than 60 days before the date of
such
meeting. Whenever a vote, consent or approval of the
Holders is permitted or required under this Trust Agreement
or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading, such vote,
consent or approval may be given at a meeting of the
Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent in
writing setting forth the action so taken is signed by the
Holders 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 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 entitled to vote who
have not consented in writing. The Administrative Trustees
may specify that any written ballot submitted to the
Security Holder for the purpose of taking any action
without
a meeting shall be returned to the Trust within the time
specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to
act
for it by proxy on all matters in which a Holder 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 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 were stockholders of a Delaware corporation;
(iii) each meeting of the Holders shall be
conducted by the Administrative Trustees or by such other
Person that the Administrative Trustees may designate; and
<PAGE 60>
(iv) unless the Business Trust Act, this
Trust
Agreement, 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 or trading, otherwise
provides, the Administrative Trustees, in their sole
discretion, shall establish all other provisions relating
to
meetings of Holders, including notice of the time, place or
purpose of any meeting at which any matter is to be voted
on
by any Holders, waiver of any such notice, action by
consent
without a meeting, the establishment of a record date,
quorum requirements, voting in person or by proxy or any
other matter with respect to the exercise of any such right
to vote.
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property
Trustee.
The Trustee that acts as initial Property Trustee
represents and warrants to the Trust and to the Sponsor at the
date of this Trust Agreement, and each Successor Property Trustee
represents and warrants to the Trust and the Sponsor at the time
of the Successor Property Trustee's acceptance of its appointment
as Property Trustee that:
(a) The Property Trustee is a New York banking
corporation with trust powers and authority to execute and
deliver, and to carry out and perform its obligations under the
terms of, this Trust Agreement;
(b) The execution, delivery and performance by the
Property Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Property
Trustee. This Trust Agreement has been duly executed and
delivered by the Property Trustee and constitutes a legal, valid
and binding obligation of the Property 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 and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) The execution, delivery and performance of
this
Trust Agreement by the Property Trustee does not conflict with or
constitute a breach of the charter or by-laws of the Property
Trustee; and
<PAGE 61>
(d) No consent, approval or authorization of, or
registration with or notice to, any New York State or federal
banking authority is required for the execution, delivery or
performance by the Property Trustee of this Trust Agreement.
Section 13.2 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 Trust Agreement, 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 Trust Agreement;
(b) The execution, delivery and performance by the
Delaware Trustee of this Trust Agreement has been duly authorized
by all necessary corporate action on the part of the Delaware
Trustee. This Trust Agreement has been duly executed and
delivered by the Delaware Trustee and 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 and the discretion of the court (regardless
of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or
registration with or notice to, any federal banking authority is
required for the execution, delivery or performance by the
Delaware Trustee of this Trust Agreement; and
(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.
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement. [Intentionally
Omitted]
<PAGE 62>
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.
All notices provided for in this Trust Agreement
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 Trust, in care of the
Administrative Trustees at the Trust's mailing address set forth
below (or such other address as the Trust may give notice of to
the Holders):
Sovereign Capital Trust IV
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
(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):
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at the
Property
Trustee's mailing address set forth below (or such other address
as the Property Trustee may give notice of to the Holders):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10283
Attention: Corporate Trust
Trustee Administration
(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 to the Trust):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Chief Financial Officer
<PAGE 63>
(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.
Section 15.2 Governing Law.
This Trust Agreement and the rights of the parties
hereunder shall be governed by and interpreted in accordance with
the laws of the State of Delaware and all rights and remedies
shall be governed by such laws without regard to principles of
conflict of laws.
Section 15.3 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 Trust Agreement shall
be interpreted to further this intention of the parties.
Section 15.4 Headings.
Headings contained in this Trust Agreement are
inserted
for convenience of reference only and do not affect the
interpretation of this Trust Agreement or any provision hereof.
Section 15.5 Successors and Assigns.
Whenever in this Trust Agreement 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 Trust Agreement by the Sponsor and the
Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
Section 15.6 Partial Enforceability.
If any provision of this Trust Agreement, or the
application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Trust Agreement, or
the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be
affected thereby.
<PAGE 64>
Section 15.7 Counterparts.
This Trust Agreement may contain more than one
counterpart of the signature page and this Trust Agreement may be
executed by the affixing of the signature of each of the Trustees
to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they
shall have the same force and effect as though all of the signers
had signed a single signature page.
IN WITNESS WHEREOF, the undersigned has caused these
presents to be executed as of the day and year first above
written.
___________________________________
Mark R. McCollom, as
Administrative
Trustee
___________________________________
Jacquelyn Blue, as
Administrative
Trustee
THE BANK OF NEW YORK
(Delaware) as
Delaware Trustee
By:________________________________
Name:
Title:
THE BANK OF NEW YORK as
Property
Trustee
By:________________________________
Name:
Title:
SOVEREIGN BANCORP, INC., as
Sponsor
By:________________________________
Name:
Title:
<PAGE 65>
ANNEX I
TERMS OF
_____% Series A CAPITAL SECURITIES
______% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of ___________________ (as amended
from time to time, the "Trust Agreement"), the designation,
rights, privileges, restrictions, preferences and other terms and
provisions of the Securities are set out below (each capitalized
term used but not defined herein has the meaning set forth in the
Trust Agreement or, if not defined in such Trust Agreement, as
defined in the Prospectus referred to below in Section 2(c) of
this Annex I):
1. Designation and Number.
(a) Capital Securities. ______ Series A
Capital
Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of ______________________
Dollars ($____________________), and each with a liquidation
amount with respect to the assets of the Trust of $______ per
security, are hereby designated for the purposes of
identification only as "_______% Series A Capital Securities"
(collectively, the "Capital Securities"). The certificates
evidencing the Capital Securities shall be substantially in the
form of Exhibit A-1 to the Trust Agreement, with such changes and
additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of
any exchange or quotation system on or in which the Capital
Securities are listed, traded or quoted.
(b) Common Securities. ______ Common
Securities
of the Trust with an aggregate liquidation amount with respect to
the assets of the Trust of _________________________ Dollars
($_______________) and a liquidation amount with respect to the
assets of the Trust of $______ per security, are hereby
designated for the purposes of identification only as "_______%
Common Securities" (collectively, the "Common Securities"). The
certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Trust Agreement,
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 fixed at a rate per annum of ______% (the "Coupon Rate") of
the liquidation amount of $______ per Security (the "Liquidation
Amount"), such rate being the rate of interest payable on the
<PAGE I-1> Debentures to be held by the Property Trustee.
Distributions in arrears for more than one semi-annual period
will bear additional distributions thereon compounded semi-
annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein,
includes distributions of any such interest. A Distribution is
payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the
Property Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from _______________, and will be payable semi-annually in
arrears on ______________ and __________________ of each year,
commencing on ______________________ (each, a "Distribution
Date"), except as otherwise described below. Distributions will
be computed on the basis of a 360-day year consisting of twelve
30-day months and for any period less than a full calendar month
on the basis of the actual number of days elapsed in such month.
As long as no Event of Default has occurred and is continuing
under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest
payment period at any time and from time to time on the
Debentures for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such
period (each an "Extension Period"), during which Extension
Period no interest shall be due and payable on the Debentures,
provided that no Extension Period shall end on a date other than
an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with
additional Distributions thereon (to the extent permitted by
applicable law but not at a rate greater than the rate at which
interest is then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, or extend beyond the Maturity Date of the
Debentures. Upon the termination of any Extension Period and the
payment of all amounts then due, the Debenture Issuer may
commence a new Extension Period, subject to the above
requirements.
(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 fifteenth day of the month preceding
the month in which the relevant Distribution Date occurs, which
Distribution Dates correspond to the interest payment dates on
<PAGE I-2> the Debentures. Subject to any applicable laws and
regulations and the provisions of the Trust Agreement, each such
payment in respect of the Capital Securities will be made as
described under the heading "____________________________" in the
Prospectus dated _______________________, of the Debenture Issuer
and the Trust relating to the Securities and the Debentures. The
relevant record dates for the Common Securities shall be the same
as the record dates for the Capital Securities. Distributions
payable on any Securities that are not punctually paid on any
Distribution Date, as a result of the Debenture Issuer having
failed to make a payment under the Debentures, will cease to be
payable to the Holder 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 next succeeding Business Day is in the next succeeding
calendar year, such payment shall be made on the immediately
preceding Business Day with the same force and effect as if made
on such 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.
3. Liquidation Distribution Upon Dissolution.
In the event of any termination of the Trust or the
Sponsor otherwise gives notice of its election to liquidate the
Trust pursuant to Section 8.1(a)(iii) of the Trust Agreement, the
Trust shall be liquidated by the Administrative Trustees as
expeditiously as the Administrative Trustees determine to be
possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the
Holders a Like Amount (as defined below) of the Debentures,
unless such distribution is determined by the Property Trustee
not to be practicable, in which event such Holders will be
entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction
of liabilities to creditors of the Trust as provided by
applicable law, an amount equal to the aggregate of the
liquidation amount of $______ per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption
of
the Securities, Securities having a Liquidation Amount equal to
the principal amount of Debentures to be paid in accordance with
their terms and (ii) with respect to a distribution of Debentures
<PAGE I-3> upon the liquidation of the Trust, Debentures having a
principal amount equal to the Liquidation Amount of the
Securities of the Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation
Distribution can be paid only in part because the Trust has
insufficient assets on hand legally available to pay in full the
aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro
Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in
whole
or in part, at maturity or upon early redemption (either at the
option of the Debenture Issuer or pursuant to a Special Event, as
described below), the proceeds from such repayment shall be
simultaneously applied by the Property Trustee (subject to the
Property Trustee having received notice no later than 45 days
prior to such repayment) to redeem a Like Amount of the
Securities at a redemption price equal to (i) in the case of the
repayment of the Debentures at maturity, the Maturity Redemption
Price (as defined below), (ii) in the case of the optional
redemption of the Debentures upon the occurrence and continuation
of a Special Event, the Special Event Redemption Price (as
defined below) and (iii) in the case of the optional redemption
of the Debentures on or after ______________________, the
Optional Redemption Price (as defined below). The Maturity
Redemption Price, the Special Event Redemption Price and the
Optional Redemption Price are referred to collectively as the
"Redemption Price". Holders will be given not less than 30 nor
more than 60 days notice of such redemption.
(b) (i) The "Maturity Redemption Price",
with
respect to a redemption of Securities, shall mean an amount equal
to the principal of and accrued and unpaid interest on the
Debentures as of the maturity date thereof.
(ii) In the case of an optional
redemption,
if fewer than all the outstanding Securities are to be so
redeemed, the Securities will be redeemed Pro Rata and the
Capital Securities to be redeemed will be determined as described
in Section 4(f)(ii) below. Upon the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction,
the Debentures thereafter will be subject to optional repayment,
in whole, but not in part, on or after _________________ (the
"Initial Optional Redemption Date").
The Debenture Issuer shall have the right (subject
to
the conditions in the Indenture) to elect to redeem the
Debentures in whole or in part at any time on or after the
Initial Optional Redemption Date, upon not less than 30 days and
not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of
<PAGE I-4> the Securities to be redeemed by the Trust at the
Optional Redemption Price on a Pro Rata basis. "Optional
Redemption Price" shall mean a price equal to the percentage of
the liquidation amount of Securities to be redeemed plus
accumulated and unpaid Distributions thereon, if any, to the date
of such redemption if redeemed during the 12-month period
beginning ______________, of the years indicated below:
Year Percentage
(c) If at any time a Tax Event or a
Regulatory
Capital Event (each as defined below, and each a "Special
Event") occurs, the Debenture Issuer shall have the right
(subject to the conditions set forth in the Indenture) at any
time prior to the Initial Optional Redemption Date, upon not less
than 30 nor more than 60 days notice, to redeem the Debentures in
whole, but not in part, within the 90 days following the
occurrence of such Special Event (the "90 Day Period"), and,
simultaneous with such redemption, to cause a Like Amount of the
Securities to be redeemed by the Trust at the Special Event
Redemption Price on a Pro Rata basis.
"Tax Event" shall occur upon 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 or
judicial decision interpreting or applying such laws or
regulations, which amendment or change is effective or which
pronouncement or decision is announced on or after
_________________, 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.
"Regulatory Capital Event" shall mean that the
Sponsor
shall have become, or pursuant to law or regulation will become
within 180 days, subject to capital requirements under which, in
the written opinion of independent bank regulatory counsel
experienced in such matters, the Capital Securities would not
constitute Tier 1 Capital applied as if the Sponsor (or its
successor) were a bank holding company (as that concept is used
<PAGE I-5> in the guidelines or regulations issued by the Federal
Reserve Board or its then equivalent); 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 Regulatory Capital Event unless such
liquidation shall have occurred in connection with a Tax Event.
"Special Event Redemption Price" shall mean, with
respect to a redemption of Securities, a price equal to 100% of
the principal of a Like Amount of Debentures to be redeemed plus
accumulated but unpaid Distributions thereon, if any, to the date
of such redemption.
(d) On and from the date fixed by the
Administrative Trustees for any distribution of Debentures and
liquidation of the Trust: (i) the Securities will no longer be
deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder
of the Capital Securities, will receive a registered global
certificate or certificates representing the Debentures to be
delivered upon such distribution and any certificates
representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be
deemed to represent beneficial interests in a Like Amount of
Debentures until such certificates are presented to the Debenture
Issuer or its agent for transfer or reissue.
(e) The Trust may not redeem fewer than all
the
outstanding Securities unless all accumulated and unpaid
Distributions have been paid on all Securities for all semi-
annual Distribution periods terminating on or before the date of
redemption.
(f) The procedure with respect to
redemptions or
distributions of Securities shall be as follows:
(i) Notice of any redemption of, or
notice
of distribution of Debentures in exchange for, the
Securities (a "Redemption/Distribution Notice") will be
given by the Trust by mail to each Holder 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(f)(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. Each Redemption/Distribution
Notice shall be addressed to the Holders at the address of
each such Holder appearing in the books and records of the
Trust. No defect in the Redemption/Distribution Notice or
in the mailing of either thereof with respect to any Holder
<PAGE I-6> 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, it
being understood that, in respect of Capital Securities
registered in the name of and held of record by the
Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) or any nominee, the distribution of the
proceeds of such redemption will be made to the Clearing
Agency and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed
and
the Trust gives a Redemption/Distribution Notice, (which
notice will be irrevocable), then (A) with respect to
Capital Securities issued in book-entry form, by 12:00
noon,
New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures by 10:00 a.m., New
York City time, on the maturity date or the date of
redemption, as the case requires, the Property Trustee will
deposit irrevocably with the Clearing Agency or its nominee
(or successor Clearing Agency or its nominee) funds
sufficient to pay the applicable Redemption Price with
respect to such Capital Securities and will give the
Clearing Agency irrevocable instructions and authority to
pay the Redemption Price to the relevant Clearing Agency
Participants, and (B) with respect to Capital Securities
issued in certificated form and Common Securities, provided
that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related
redemption or maturity of the Debentures, the Property
Trustee will pay the relevant Redemption Price to the
Holders by check mailed to the address of the relevant
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, if
applicable, then immediately prior to the close of business
on the date of such deposit, or on the redemption date, as
applicable, Distributions will cease to accumulate on the
Securities so called for redemption and all rights of
Holders so called for redemption will cease, except the
right of the Holders of such Securities to receive the
Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
(iv) Payment of accumulated and unpaid
Distributions on the Redemption Date of the Securities will
be subject to the rights of Holders on the close of
business
on a regular record date in respect of a Distribution Date
occurring on or prior to such Redemption Date. <PAGE I-7>
Neither the Administrative Trustees nor
the
Trust shall be required to register or cause to be
registered the transfer of (i) any Securities beginning on
the opening of business 15 days before the day of mailing
of
a notice of redemption or any notice of selection of
Securities for redemption or (ii) any Securities selected
for redemption except the unredeemed portion of any
Security
being redeemed. If any date fixed for redemption of
Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the
next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay)
except that, if such next succeeding Business Day falls in
the next calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the
same force and effect as if made on such date 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 Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee,
Distributions on such Securities will continue to
accumulate
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.
(v) Redemption/Distribution Notices
shall be
sent by the Property Trustee on behalf of the Trust to
(A) in respect of the Capital Securities, the Clearing
Agency or its nominee (or any successor Clearing Agency or
its nominee) if the Global Certificates have been issued
or,
if Definitive Capital Security Certificates have been
issued, to the Holder thereof, and (B) in respect of the
Common Securities to the Holder thereof.
(vi) Subject to the foregoing and
applicable
law (including, without limitation, United States federal
securities laws and banking laws), provided 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 Trust Agreement, the
Holders of the Capital Securities will have no voting rights.
(b) So long as any Debentures are held by
the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
<PAGE I-8> power conferred on such Debenture Trustee with respect
to the Debentures, (ii) waive any past default that is waivable
under Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in
liquidation amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
thereby, no such consent shall be given by the Property Trustee
without the prior approval of each Holder of the Capital
Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the Holders of the Capital
Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities
of any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Capital Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Capital Securities may directly institute a proceeding for
enforcement of payment to such Holder of the principal of or
premium, if any, or interest on a Like Amount of Debentures (a
"Direct Action") on or after the respective due date specified in
the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to
the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of
Capital Securities in such Direct Action. Except as provided in
the second preceding sentence, the Holders of Capital Securities
will not be able to exercise directly any other remedy available
to the holders of the Debentures.
Any approval or direction of Holders of Capital
Securities may be given at a separate meeting of Holders of
Capital Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Property Trustees will cause a notice of any
meeting at which Holders of 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 Capital Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date
<PAGE I-9> 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 Trust Agreement and the terms of the Securities.
Notwithstanding that Holders of 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 be entitled
to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
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 Trust Agreement,
the Holders of the Common Securities will have no voting rights.
(b) Unless an Event of Default shall have
occurred and be continuing, any Trustee may be removed at any
time by the holder of the Common Securities. If an Event of
Default has occurred and is continuing, the Property Trustee and
the Delaware Trustee may be removed at such time by the holders
of a Majority in liquidation amount of the outstanding Capital
Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace
the Administrative Trustees, which voting rights are vested
exclusively in the Sponsor as the holder of the Common
Securities. No resignation or removal of a Trustee and no
appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance
with the provisions of the Trust Agreement.
(c) So long as any Debentures are held by
the
Property Trustee, the Trustees shall not (i) direct the time,
method and place of conducting any proceeding for any remedy
available to the Debenture Trustee, or executing any trust or
power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under
Section 5.07 of the Indenture, (iii) exercise any right to
rescind or annul a declaration of acceleration of the maturity of
the principal of the Debentures or (iv) consent to any amendment,
modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a Majority in
liquidation amount of all outstanding Common Securities;
provided, however, that where a consent under the Indenture would
require the consent of each holder of Debentures affected
<PAGE I-10> thereby, no such consent shall be given by the
Property Trustee without the prior approval of each Holder of the
Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the
Common Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Common Securities of
any notice of default with respect to the Debentures. In
addition to obtaining the foregoing approvals of such Holders of
the Common Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has
occurred and is continuing and such event is attributable to the
failure of the Debenture Issuer to pay principal of or premium,
if any, or interest on the Debentures on the due date (or in the
case of redemption, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement
of payment to such Holder of the principal of or premium, if any,
or interest on a Like Amount of Debentures on or after the
respective due date specified in the Debentures. In connection
with such Direct Action, the rights of the Common Securities
Holder will be subordinated to the rights of such Holder of
Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Common Securities in such
Direct Action. Except as provided in the second preceding
sentence, the Holders of Common Securities will not be able to
exercise directly any other remedy available to the holders of
the Debentures.
Any approval or direction of Holders of Common
Securities may be given at a separate meeting of Holders of
Common Securities convened for such purpose, at a meeting of all
of the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of any
meeting at which Holders of 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
record of 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 Trust Agreement and the terms of the Securities.
<PAGE I-11>
7. Amendments to Trust Agreement and Indenture.
In addition to the requirements set out in Section
12.1
of the Trust Agreement, the Trust Agreement may be amended from
time to time by the Sponsor, the Property Trustee and the
Administrative Trustees, without the consent of the Holders
(i) to cure any ambiguity, correct or supplement any provisions
in the Trust Agreement that may be inconsistent with any other
provisions, or to make any other provisions with respect to
matters or questions arising under the Trust Agreement which
shall not be inconsistent with the other provisions of the Trust
Agreement, or (ii) to modify, eliminate or add to any provisions
of the Trust Agreement to such extent as shall be necessary to
ensure that the Trust will be classified for United States
federal income tax purposes as a grantor trust at all times that
any Securities are outstanding or to ensure that the Trust will
not be required to register as an "Investment Company" under the
Investment Company Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any
material respect the interests of any Holder, any amendments of
the Trust Agreement shall become effective when notice thereof is
given to the Holders. The Trust Agreement may also be amended by
the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in liquidation amount of all outstanding
Securities, and (ii) receipt by the Trustees of an Opinion of
Counsel to the effect that such amendment or the exercise of any
power granted to the Trustees in accordance with such amendment
will not affect the Trust's status as a grantor trust for United
States federal income tax purposes or the Trust's exemption from
status as an Investment Company under the Investment Company Act,
provided that, without the consent of each Holder of Trust
Securities, the Trust Agreement may not be amended to (i) change
the amount or timing of any Distribution on the Trust Securities
or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust
Securities to institute suit for the enforcement of any such
payment on or after such date.
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 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 under the
Trust Agreement 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 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
<PAGE I-12> each Holder of Common Securities pro rata according
to the aggregate liquidation amount of 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 the
Common
Securities and payment thereon shall be made Pro Rata with the
Common Securities, except that, if an Event of Default under the
Trust Agreement occurs and is continuing, no payments in respect
of Distributions on, or payments upon liquidation, redemption or
otherwise with respect to, the Common Securities shall be made
until the Holders of the Capital Securities shall be paid in full
the Distributions, Redemption Price, Liquidation Distribution and
other payments to which they are entitled at such time.
10. Acceptance of Securities Guarantee and
Indenture.
Each Holder of Capital Securities and Common
Securities, by the acceptance thereof, agrees to the provisions
of the Capital Securities Guarantee, including the subordination
provisions therein, and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders shall have no preemptive rights to
subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Trust
Agreement.
The Sponsor will provide a copy of the Trust
Agreement,
the Capital Securities Guarantee, or the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Sponsor at its principal place of business.
<PAGE I-13>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
[IF THIS GLOBAL SECURITY IS A GLOBAL CAPITAL
SECURITY,
INSERT: THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY
WITHIN THE MEANING OF THE TRUST AGREEMENT HEREINAFTER REFERRED TO
AND IS REGISTERED IN THE NAME OF THE DEPOSITORY TRUST COMPANY
(THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING AGENCY.
THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY
OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
TRUST AGREEMENT AND NO TRANSFER OF THIS CAPITAL SECURITY (OTHER
THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A
NOMINEE OF THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER
NOMINEE OF THE CLEARING AGENCY) MAY BE REGISTERED EXCEPT IN
LIMITED CIRCUMSTANCES.]
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE
TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT
LESS THAN $_____________ (____ CAPITAL SECURITIES). ANY SUCH
TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT OF LESS THAN $_____________ SHALL BE DEEMED TO BE VOID AND
OF NO LEGAL EFFECT WHATSOEVER. 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 OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE
SHALL BE DEEMED TO HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL
SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS
ACCEPTANCE
HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT EITHER (i) IT IS
NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR (ii) THE
ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY IT IS NOT
PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM
ANY SUCH PROHIBITION.
<PAGE 1>
Certificate Number Aggregate Liquidation
Amount
CUSIP NO. _____
Certificate Evidencing Capital Securities
of
Sovereign Capital Trust IV
________% Capital Securities
(liquidation amount $_______ per Capital
Security)
Sovereign Capital Trust IV, a statutory business
trust
created under the laws of the State of Delaware (the "Trust"),
hereby certifies that ______________ (the "Holder") is the
registered owner of [$_________ in aggregate liquidation amount
of Capital Securities of the Trust](1) [the aggregate liquidation
amount of Capital Securities of the Trust specified in Schedule A
hereto](2) representing undivided beneficial interests in the
assets of the Trust designated the ______% Series A Capital
Securities (liquidation amount $______ per Capital Security) (the
"Capital Securities"). 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 and shall in all respects be subject to the provisions of
the Amended and Restated Declaration of Trust of the Trust dated
as of _________________, as the same may be amended from time to
time (the "Trust Agreement"), including the designation of the
terms of the Capital Securities as set forth in Annex I to the
Trust Agreement. Capitalized terms used but not defined herein
shall have the meaning given them in the Trust Agreement. The
Sponsor will provide a copy of the Trust Agreement, the Capital
Securities Guarantee, and the Indenture (including any
supplemental indenture) to a Holder without charge upon written
request to the Trust at its principal place of business.
______________
(1) Insert in Definitive Capital Securities only.
(2) Insert in Global Capital Securities only.
<PAGE 2>
Upon receipt of this certificate, the Holder is
bound
by the Trust Agreement and is entitled to the benefits thereunder
and to the benefits of the Capital Securities Guarantee to the
extent provided therein.
By acceptance, the Holder agrees to treat, for
United
States federal income tax purposes, the Debentures as
indebtedness and the Capital Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this ______ day of _________________, ______.
SOVEREIGN CAPITAL TRUST IV
By:________________________________
Name:
Administrative
Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in
the within-mentioned Trust Agreement.
Dated: _______________
THE BANK OF NEW YORK,
as Property Trustee
By:________________________________
Authorized
Signatory
<PAGE 3>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will
be
fixed at a rate per annum of ___% (the "Coupon Rate") of the
liquidation amount of $________ per Capital Security, such rate
being the rate of interest payable on the Debentures to be held
by the Property Trustee. 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 such cash distributions and any such interest unless
otherwise stated. A Distribution is payable only to the extent
that payments are made in respect of the Debentures held by the
Property Trustee and to the extent the Property Trustee has funds
on hand legally available therefor.
Distributions on the Capital Securities will be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from ________________ and will be payable semi-annually in
arrears, on _______________ and _________________ of each year,
commencing on ________________, except as otherwise described
below. Distributions will be computed on the basis of a 360-day
year consisting of twelve 30-day months and, for any period less
than a full calendar month, the number of days elapsed in such
month. As long as no Event of Default has occurred and is
continuing under the Indenture, the Debenture Issuer has the
right under the Indenture to defer payments of interest by
extending the interest payment period at any time and from time
to time on the Debentures for a period not exceeding 10
consecutive calendar semi-annual periods, including the first
such semi-annual period during such extension period (each an
"Extension Period"), provided that no Extension Period shall end
on a date other than an Interest Payment Date for the Debentures
or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be
deferred. Despite such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate
of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension
Period, together with all such previous and further extensions
within such Extension Period, may not exceed 10 consecutive semi-
annual periods, including the first semi-annual period during
such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity
Date of the Debentures. Payments of accumulated Distributions
will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of
the Extension Period. Upon the termination of any Extension
<PAGE 4> Period and the payment of all amounts then due, the
Debenture Issuer may commence a new Extension Period, subject to
the above requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at the direction of the Sponsor, at any time liquidate the Trust
and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities to be redeemed by the Trust.
The Capital Securities shall be redeemable as
provided
in the Trust Agreement.
<PAGE 5>
_____________________
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
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*:
____________
* Signature must be guaranteed by an "eligible guarantor
institution" that
is a bank, stockbroker, savings and loan association or
credit union
meeting the requirements of the Registrar, which
requirements include
membership or participation in the Securities Transfer
Agents Medallion
Program ("STAMP") or such other "signature guarantee
program" as may be
determined by the Registrar in addition to, or in
substitution for,
STAMP, all in accordance with the Securities and Exchange
Act of 1934,
as amended.
<PAGE 6>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES
ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR
ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
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, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE
HEREOF AGREES
TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR
TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS
AFTER THE LATER
OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH
THE COMPANY OR
ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE COMPANY,
(B) PURSUANT TO
A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE
SECURITIES ACT, (C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE
FOR RESALE
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, (D) PURSUANT TO OFFERS AND
SALES TO NON-
U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE
MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL
"ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR
(7) OF RULE
501 UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS COMMON
SECURITY FOR ITS
OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL
ACCREDITED INVESTOR,
FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR
SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES
ACT, OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF
THE TRUST AND
THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)
PURSUANT TO CLAUSE
(D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF
THEM, AND
(ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE
FORM APPEARING ON THE REVERSE OF THIS COMMON SECURITY IS
COMPLETED AND
DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER
AGREES THAT IT
WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON SECURITY IS
TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
<PAGE 7>
Certificate Evidencing Common Securities
of
Sovereign Capital Trust IV
______% Common Securities
(liquidation amount $________ per Common
Security)
Sovereign Capital Trust IV, a statutory business
trust formed
under the laws of the State of Delaware (the "Trust"), hereby
certifies that
Sovereign Bancorp, Inc. (the "Holder") is the registered owner of
_____ common
securities of the Trust representing undivided beneficial
interests in the
assets of the Trust designated the _______% Common Securities
(liquidation
amount $_________ per Common Security) (the "Common Securities").
The Common
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
Common Securities represented hereby are issued and shall in all
respects be
subject to the provisions of the Amended and Restated Declaration
of Trust of
the Trust dated as of ________________, as the same may be
amended from time
to time (the "Trust Agreement"), including the designation of the
terms of the
Common Securities as set forth in Annex I to the Trust Agreement.
Capitalized
terms used but not defined herein shall have the meaning given
them in the
Declaration. The Sponsor will provide a copy of the Trust
Agreement, the
Capital Securities Guarantee and the Indenture (including any
supplemental
indenture) to a Holder without charge upon written request to the
Sponsor at
its principal place of business.
Upon receipt of this certificate, the Holder is
bound by the Trust
Agreement and is entitled to the benefits thereunder to the
extent provided
therein.
By acceptance, the Holder agrees to treat, for
United States
federal income tax purposes, the Debentures as indebtedness and
the Common
Securities as evidence of indirect beneficial ownership in the
Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this
_____ day of ___________, ______.
Sovereign Capital
Trust IV
By:________________________________
Name:
Administrative
Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in
the within-
mentioned Trust Agreement.
Dated: _____________ THE BANK OF NEW YORK, as Property
Trustee
By:________________________________
Authorized
Signatory <PAGE 8>
<PAGE 9>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will
be fixed at a
rate per annum of _______% (the "Coupon Rate") of the liquidation
amount of
$_________ per Common Security, such rate being the rate of
interest payable
on the Debentures to be held by the Property Trustee.
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 such cash
distributions and any such interest unless otherwise stated. A
Distribution
is payable only to the extent that payments are made in respect
of the
Debentures held by the Property Trustee and to the extent the
Property Trustee
has funds available therefor.
Distributions on the Common Securities will be
cumulative, will
accumulate from the most recent date to which Distributions have
been paid or,
if no Distributions have been paid, from ___________________ and
will be
payable semi-annually in arrears, on ________________ and
______________ of
each year, commencing on _________________, except as otherwise
described
below. Distributions will be computed on the basis of a 360-day
year
consisting of twelve 30-day months and, for any period less than
a full
calendar month, the number of days elapsed in such month. As
long as no Event
of Default has occurred and is continuing under the Indenture,
the Debenture
Issuer has the right under the Indenture to defer payments of
interest by
extending the interest payment period at any time and from time
to time on the
Debentures for a period not exceeding 10 consecutive calendar
semi-annual
periods, including the first such semi-annual period during such
extension
period (each an "Extension Period"), provided that no Extension
Period shall
end on a date other than an Interest Payment Date for the
Debentures or extend
beyond the Maturity Date of the Debentures. As a consequence of
such
deferral, Distributions will also be deferred. Despite such
deferral,
Distributions will continue to accumulate with interest thereon
(to the extent
permitted by applicable law, but not at a rate exceeding the rate
of interest
then accruing on the Debentures) at the Coupon Rate compounded
semi-annually
during any such Extension Period. Prior to the termination of
any such
Extension Period, the Debenture Issuer may further defer payments
of interest
by further extending such Extension Period; provided that such
Extension
Period, together with all such previous and further extensions
within such
Extension Period, may not exceed 10 consecutive semi-annual
periods, including
the first semi-annual period during such Extension Period, or end
on a date
other than an Interest Payment Date for the Debentures or extend
beyond the
Maturity Date of the Debentures. Payments of accrued
Distributions will be
payable to Holders as they appear on the books and records of the
Trust on the
first record date after the end of the Extension Period. Upon
the termination
of any Extension Period and the payment of all amounts then due,
the Debenture
Issuer may commence a new Extension Period, subject to the above
requirements.
Subject to receipt by the Sponsor of any required
regulatory
approval and to certain other conditions set forth in the Trust
Agreement and
the Indenture, the Property Trustee may, at the direction of the
Sponsor, at
any time liquidate the Trust and cause the Debentures to be
distributed to the
holders of the Securities in liquidation of the Trust or,
simultaneous with
any redemption of the Debentures, cause a Like Amount of the
Securities to be
redeemed by the Trust.
Under certain circumstances, the right of the
holders of the
Common Securities shall be subordinate to the rights of the
holders of the
Capital Securities (as defined in the Trust Agreement), as
provided in the
Declaration.
<PAGE 10>
The Common Securities shall be redeemable as
provided in the Trust
Agreement.
<PAGE 11>
Exhibit 4.27
====================================
PREFERRED SECURITIES GUARANTEE AGREEMENT
Sovereign Bancorp, Inc.
Dated as of _______________
====================================
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation................. 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application............... 5
SECTION 2.2 Lists of Holders of Securities................. 5
SECTION 2.3 Reports by the Preferred Securities Guarantee
Trustee........................................ 6
SECTION 2.4 Periodic Reports to Preferred Securities Guarantee
Trustee........................................ 6
SECTION 2.5 Evidence of Compliance with Conditions Prece-
dent........................................... 6
SECTION 2.6 Events of Default; Waiver...................... 7
SECTION 2.7 Event of Default; Notice....................... 7
SECTION 2.8 Conflicting Interests.......................... 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Preferred Securities
Guarantee Trustee............................. 7
SECTION 3.2 Certain Rights of Preferred Securities Guarantee
Trustee....................................... 9
SECTION 3.3 Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee................ 12
ARTICLE IV
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Preferred Securities Guarantee Trustee;
Eligibility.................................... 12
SECTION 4.2 Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee................... 13
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 14
SECTION 5.2 Waiver of Notice and Demand.................... 14
SECTION 5.3 Obligations Not Affected....................... 14
SECTION 5.4 Rights of Holders.............................. 15
SECTION 5.5 Guarantee of Payment........................... 16
SECTION 5.6 Subrogation.................................... 16
SECTION 5.7 Independent Obligations........................ 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions..................... 16
SECTION 6.2 Ranking........................................ 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.................................... 18
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.................................... 18
SECTION 8.2 Indemnification................................ 19
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns......................... 19
SECTION 9.2 Amendments..................................... 19
SECTION 9.3 Notices........................................ 19
SECTION 9.4 Benefit........................................ 20
SECTION 9.5 Governing Law.................................. 20
PREFERRED SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Preferred Securities
Guarantee"), dated as of _______________, is executed and
delivered by Sovereign Bancorp, Inc., a Pennsylvania corporation
(the "Guarantor"), and The Bank of New York, a New York banking
corporation, as trustee (the "Preferred Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Preferred Securities (as defined herein)
of Sovereign Capital Trust IV, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Trust Agreement"), dated as of
_____________, among the trustees of the Issuer, the Guarantor,
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 __________ preferred securities,
having an aggregate liquidation amount of $______________, such
capital securities being designated the Series A ___% Preferred
Securities (collectively the "Preferred Securities").
WHEREAS, as incentive for the Holders to purchase the
Preferred Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Preferred Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth
herein.
NOW, THEREFORE, in consideration of the purchase by
each Holder, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers
this Preferred Securities Guarantee for the benefit of the
Holders.
ARTICLE I.
DEFINITIONS AND INTERPRETATION
SECTION A. Definitions and Interpretation
In this Preferred Securities Guarantee, unless the
context otherwise requires:
1. Capitalized terms used in this Preferred
Securities Guarantee but not defined in the preamble above
have the respective meanings assigned to them in this
Section 1.1;
2. Terms defined in the Trust Agreement as at
the date of execution of this Preferred Securities Guarantee
have the same meaning when used in this Preferred Securities
<PAGE 1> Guarantee unless otherwise defined in this
Preferred Securities Guarantee;
3. a term defined anywhere in this Preferred
Securities Guarantee has the same meaning throughout;
4. all references to "the Preferred Securities
Guarantee" or "this Preferred Securities Guarantee" are to
this Preferred Securities Guarantee as modified,
supplemented or amended from time to time;
5. all references in this Preferred Securities
Guarantee to Articles and Sections are to Articles and
Sections of this Preferred Securities Guarantee, unless
otherwise specified;
6. a term defined in the Trust Indenture Act has
the same meaning when used in this Preferred Securities
Guarantee, unless otherwise defined in this Preferred
Securities Guarantee or unless the context otherwise
requires; and
7. a reference to the singular includes the
plural and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
close.
"Preferred Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Preferred
Securities Guarantee and thereafter means each such Successor
Preferred Securities Guarantee Trustee.
"Common Securities" means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
Preferred Securities Guarantee Trustee at which the corporate
trust business of the Preferred Securities Guarantee Trustee
shall, at any particular time, be principally administered, which
office at the date of execution of this Agreement is located at
101 Barclay Street, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Preferred Securities. <PAGE 2>
"Debentures" means the series of subordinated debt
securities of the Guarantor designated the Series A _____% Junior
Subordinated Deferrable Interest Debentures due _____________
held by the Property Trustee (as defined in the Trust Agreement)
of the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Preferred
Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Preferred
Capital Securities, to the extent not paid or made by the Issuer:
(i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Preferred
Securities to the extent the Issuer has funds on hand legally
available therefor at such time, (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of
redemption (the "Redemption Price") to the extent the Issuer has
funds on hand legally available therefor at such time, with
respect to any Preferred Securities called for redemption by the
Issuer, and (iii) upon a voluntary or involuntary termination and
liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for
Preferred Securities as provided in the Trust Agreement), the
lesser of (a) the aggregate of the liquidation amount and all
accumulated and unpaid Distributions on the Preferred Securities
to the date of payment, to the extent the Issuer has funds on
hand legally available therefor, and (b) the amount of assets of
the Issuer remaining available for distribution to Holders in
liquidation of the Issuer.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Preferred Securities;
provided, however, that, in determining whether the holders of
the requisite percentage of Preferred 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 Preferred Securities
Guarantee Trustee, any Affiliate of the Preferred Securities
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Preferred Securities Guarantee
Trustee.
"Indenture" means the Indenture dated as of
September 1, 1999, among the Guarantor (the "Debenture Issuer")
and Harris Trust and Savings Bank, as trustee, pursuant to which
the Debentures are to be issued to the Property Trustee of the
Issuer.
"Indenture Event of Default" shall mean any event
specified in Section ____ of the Indenture. <PAGE 3>
"Majority in liquidation amount of the Preferred
Securities" means, except as provided by the Trust Indenture Act,
a vote by Holder(s) of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are
determined) of all Preferred Securities.
"Officers' Certificate" means, with respect to any
person, a certificate signed by the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Comptroller, and the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Preferred Securities Guarantee (other than pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a statement that each such officer has made
such examination or investigation as, in such officer's
opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or
condition has been complied with; and
(c) a statement as to whether, in the opinion of
each such officer, such condition or covenant has been
complied with.
"Other Debentures" means all junior subordinated
debentures issued by the Guarantor from time to time and sold to
any other trust, partnership or other entity affiliated with the
Guarantor that is a financing vehicle of the Guarantor (if any),
in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by
the Guarantor with respect to capital securities (if any) similar
to the Preferred Securities issued by any other trust,
partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor (if any), in each case
similar to the Issuer.
"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.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Preferred Securities Guarantee
Trustee, including any vice president, any assistant vice
<PAGE 4> president, any assistant secretary, the treasurer, any
assistant treasurer or other officer of the Corporate Trust
Office of the Preferred Securities Guarantee Trustee customarily
performing functions similar to those performed by any of the
above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such
matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Successor Preferred Securities Guarantee Trustee"
means a successor Preferred Securities Guarantee Trustee
possessing the qualifications to act as Preferred Securities
Guarantee Trustee under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, or any successor legislation, in each case, as amended.
"Trust Securities" means the Common Securities and the
Preferred Securities, collectively.
ARTICLE II.
TRUST INDENTURE ACT
SECTION A. Trust Indenture Act; Application
1. This Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be
part of this Preferred Securities Guarantee and shall, to the
extent applicable, be governed by such provisions; and
2. if and to the extent that any provision of this
Preferred Securities Guarantee limits, qualifies or conflicts
with the duties imposed by Section 310 to 317, inclusive, of the
Trust Indenture Act, such imposed duties shall control.
SECTION B. Lists of Holders of Securities
1. The Guarantor shall provide the Preferred
Securities Guarantee Trustee (unless the Preferred Securities
Guarantee Trustee is otherwise the registrar of the Preferred
Securities) with a list, in such form as the Preferred Securities
Guarantee Trustee may reasonably require, of the names and
addresses of the Holders ("List of Holders") as of such date,
(i) within one Business Day after May 15 and November 15 of each
year, and (ii) at any other time within 30 days of receipt by the
Guarantor of a written request for a List of Holders as of a date
no more than 14 days before such List of Holders is given to the
Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders
at any time the List of Holders does not differ from the most
recent List of Holders given to the Preferred Securities
Guarantee Trustee by the Guarantor. The Preferred Securities
<PAGE 5> Guarantee Trustee may destroy any List of Holders
previously given to it on receipt of a new List of Holders.
2. The Preferred Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and
Section 312(b) of the Trust Indenture Act.
SECTION C. Reports by the Preferred Securities Guarantee
Trustee
Within 60 days after January 15 of each year,
commencing ________________, the Preferred Securities Guarantee
Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture
Act. The Preferred Securities Guarantee Trustee shall also
comply with the other requirements of Section 313 of the Trust
Indenture Act.
SECTION D. Periodic Reports to Preferred Securities Guarantee
Trustee
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the
Trust Indenture Act provided that such compliance certificate
shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports,
information and documents to the Preferred Securities Guarantee
Trustee is for informational purposes only and the Preferred
Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained
therein or determinable from information contained therein,
including the Guarantor's compliance with any of its covenants
hereunder (as to which the Preferred Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION E. Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Preferred Securities
Guarantee Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Preferred Securities
Guarantee that relate to any of the matters set forth in
Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to
Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION F. Events of Default; Waiver
The Holders of a Majority in liquidation amount of
Preferred Securities may, by vote, on behalf of all Holders,
<PAGE 6> waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Preferred Securities
Guarantee, but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent
thereon.
SECTION G. Event of Default; Notice
1. The Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to
this Preferred Securities Guarantee, mail by first class postage
prepaid, to all Holders, notices of all defaults actually known
to a Responsible Officer, unless such defaults have been cured
before the giving of such notice, provided, that, except in the
case of default in the payment of any Guarantee Payment, the
Preferred Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
a Responsible Officer in good faith determines that the
withholding of such notice is in the interests of the Holders.
2. The Preferred Securities Guarantee Trustee shall
not be deemed to have knowledge of any Event of Default unless
the Preferred Securities Guarantee Trustee shall have received
written notice from the Guarantor, or a Responsible Officer
charged with the administration of the Trust Agreement shall have
obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Preferred Securities Guarantee for the purposes
of clause (i) of the first proviso contained in Section 310(b) of
the Trust Indenture Act.
ARTICLE III.
POWERS, DUTIES AND RIGHTS OF
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Powers and Duties of the Preferred Securities
Guarantee Trustee
1. This Preferred Securities Guarantee shall be held
by the Preferred Securities Guarantee Trustee for the benefit of
the Holders, and the Preferred Securities Guarantee Trustee shall
not transfer this Preferred Securities Guarantee to any Person
except a Holder exercising his or her rights pursuant to
Section 5.4(b) or to a Successor Preferred Securities Guarantee
Trustee on acceptance by such Successor Preferred Securities
Guarantee Trustee of its appointment to act as Successor
Preferred Securities Guarantee Trustee. The right, title and
<PAGE 7> interest of the Preferred Securities Guarantee Trustee
shall automatically vest in any Successor Preferred Securities
Guarantee Trustee, and such vesting and succession of title shall
be effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Preferred Securities Guarantee Trustee.
\A If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Preferred
Securities Guarantee Trustee shall enforce this Preferred
Securities Guarantee for the benefit of the Holders.
3. The Preferred Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of
all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Preferred Securities Guarantee, and no implied covenants shall be
read into this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant
to Section 2.6) and is actually known to a Responsible Officer,
the Preferred Securities Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Preferred Securities
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.
4. No provision of this Preferred Securities
Guarantee shall be construed to relieve the Preferred Securities
Guarantee 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 any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(1) the duties and obligations of the Preferred
Securities Guarantee Trustee shall be determined solely
by the express provisions of this Preferred Securities
Guarantee, and the Preferred Securities Guarantee
Trustee shall not be liable except for the performance
of such duties and obligations as are specifically set
forth in this Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into
this Preferred Securities Guarantee against the
Preferred Securities Guarantee Trustee; and
(2) in the absence of bad faith on the part of
the Preferred Securities Guarantee Trustee, the
Preferred Securities 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 Preferred
<PAGE 8> Securities Guarantee Trustee and conforming to
the requirements of this Preferred Securities
Guarantee; but in the case of any such certificates or
opinions that by any provision hereof are specifically
required to be furnished to the Preferred Securities
Guarantee Trustee, the Preferred Securities Guarantee
Trustee shall be under a duty to examine the same to
determine whether or not they conform to the
requirements of this Preferred Securities Guarantee;
b. the Preferred Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith
by a Responsible Officer, unless it shall be proved that the
Preferred Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
c. the Preferred Securities 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 a Majority in liquidation amount of the
Preferred Securities relating to the time, method and place
of conducting any proceeding for any remedy available to the
Preferred Securities Guarantee Trustee, or exercising any
trust or power conferred upon the Preferred Securities
Guarantee Trustee under this Preferred Securities Guarantee;
and
d. no provision of this Preferred Securities
Guarantee shall require the Preferred Securities 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 Preferred Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Preferred Securities Guarantee or
indemnity, reasonably satisfactory to the Preferred
Securities Guarantee Trustee, against such risk or liability
is not reasonably assured to it.
SECTION B. Certain Rights of Preferred Securities Guarantee
Trustee
1. Subject to the provisions of Section 3.1:
a. The Preferred Securities 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. <PAGE 9>
b. Any direction or act of the Guarantor
contemplated by this Preferred Securities Guarantee may be
sufficiently evidenced by an Officers' Certificate.
c. Whenever, in the administration of this
Preferred Securities Guarantee, the Preferred Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Preferred Securities Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
d. The Preferred Securities Guarantee Trustee
shall have no duty to see to any recording, filing or
registration of any instrument (or any rerecording, refiling
or registration thereof).
e. The Preferred Securities 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
Preferred Securities Guarantee Trustee shall have the right
at any time to seek instructions concerning the
administration of this Preferred Securities Guarantee from
any court of competent jurisdiction.
f. The Preferred Securities Guarantee Trustee
shall be under no obligation to exercise any of the rights
or powers vested in it by this Preferred Securities
Guarantee at the request or direction of any Holder, unless
such Holder shall have provided to the Preferred Securities
Guarantee Trustee such security and indemnity, reasonably
satisfactory to the Preferred Securities Guarantee Trustee,
against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Preferred Securities
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 Preferred Securities
Guarantee Trustee; provided that, nothing contained in this
Section 3.2(a)(vi) shall be taken to relieve the Preferred
Securities Guarantee Trustee, upon the occurrence of an
Event of Default, of its obligation to exercise the rights
and powers vested in it by this Preferred Securities
Guarantee.
<PAGE 10>
g. The Preferred Securities 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 Preferred
Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or
matters as it may see fit.
h. The Preferred Securities 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 Preferred
Securities 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.
i. Any action taken by the Preferred Securities
Guarantee Trustee or its agents hereunder shall bind the
Holders, and the signature of the Preferred Securities
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
Preferred Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this
Preferred Securities Guarantee, both of which shall be
conclusively evidenced by the Preferred Securities Guarantee
Trustee's or its agent's taking such action.
j. Whenever in the administration of this
Preferred Securities Guarantee the Preferred Securities
Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right
or taking any other action hereunder, the Preferred
Securities Guarantee Trustee (i) may request instructions
from the Holders of a Majority in liquidation amount of the
Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such
instructions are received, and (iii) shall be protected in
conclusively relying on or acting in accordance with such
instructions.
k. The Preferred Securities Guarantee Trustee
shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this
Preferred Securities Guarantee.
2. No provision of this Preferred Securities
Guarantee shall be deemed to impose any duty or obligation on the
Preferred Securities Guarantee Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or
<PAGE 11> imposed on it in any jurisdiction in which it shall be
illegal, or in which the Preferred Securities 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 Preferred Securities Guarantee Trustee
shall be construed to be a duty.
SECTION C. Not Responsible for Recitals or Issuance of
Preferred Securities Guarantee
The recitals contained in this Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and
the Preferred Securities Guarantee Trustee does not assume any
responsibility for their correctness. The Preferred Securities
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Preferred Securities Guarantee.
ARTICLE IV.
PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION A. Preferred Securities Guarantee Trustee;
Eligibility
1. There shall at all times be a Preferred Securities
Guarantee Trustee which shall:
a. not be an Affiliate of the Guarantor; and
b. be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and
Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least 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 4.1(a)(ii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition
so published.
2. If at any time the Preferred Securities Guarantee
Trustee shall cease to be eligible to so act under Section
4.1(a), the Preferred Securities Guarantee Trustee shall
immediately resign in the manner and with the effect set out in
Section 4.2(c). <PAGE 12>
3. If the Preferred Securities Guarantee Trustee has
or shall acquire any "conflicting interest" within the meaning
of Section 310(b) of the Trust Indenture Act, the Preferred
Securities Guarantee Trustee and Guarantor shall in all respects
comply with the provisions of Section 310(b) of the Trust
Indenture Act.
SECTION B. Appointment, Removal and Resignation of Preferred
Securities Guarantee Trustee
1. Subject to Section 4.2(b), the Preferred
Securities Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor except during an Event of
Default. Subject to the provisions of this Section 4.2, the
Preferred Securities Guarantee Trustee may be removed by the
holders of a Majority in Liquidation Amount of the Series A
Capital Securities during an Event of Default.
2. The Preferred Securities Guarantee Trustee shall
not be removed in accordance with Section 4.2(a) until a
Successor Preferred Securities Guarantee Trustee has been
appointed and has accepted such appointment by written instrument
executed by such Successor Preferred Securities Guarantee Trustee
and delivered to the Guarantor.
3. The Preferred Securities Guarantee Trustee shall
hold office until a Successor Preferred Securities Guarantee
Trustee shall have been appointed or until its removal or
resignation. The Preferred Securities Guarantee Trustee may
resign from office (without need for prior or subsequent
accounting) by an instrument in writing executed by the Preferred
Securities Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor
Preferred Securities Guarantee Trustee has been appointed and has
accepted such appointment by instrument in writing executed by
such Successor Preferred Securities Guarantee Trustee and
delivered to the Guarantor and the resigning Preferred Securities
Guarantee Trustee.
4. If no Successor Preferred Securities Guarantee
Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery of an
instrument of removal or resignation, the Preferred Securities
Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
Preferred Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Preferred Securities Guarantee
Trustee.
5. No Preferred Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor
Preferred Securities Guarantee Trustee.
<PAGE 13>
6. Upon termination of this Preferred Securities
Guarantee or removal or resignation of the Preferred Securities
Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Preferred Securities Guarantee Trustee all
amounts due to the Preferred Securities Guarantee Trustee accrued
to the date of such termination, removal or resignation.
ARTICLE V.
GUARANTEE
SECTION A. Guarantee
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, 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.
SECTION B. Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of
this Preferred Securities 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 C. Obligations Not Affected
The obligations, covenants, agreements and duties of
the Guarantor under this Preferred Securities Guarantee shall in
no way be affected or impaired by reason of the happening from
time to time of any of the following:
1. 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 Preferred Securities to be performed or observed
by the Issuer;
2. the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption
Price, Liquidation Distribution or any other sums payable under
the terms of the Preferred Securities or the extension of time
for the performance of any other obligation under, arising out
of, or in connection with, the Preferred Securities (other than
an extension of time for payment of Distributions, Redemption
Price, Liquidation Distribution or other sum payable that results
<PAGE 14> from the extension of any interest payment period on
the Debentures permitted by the Indenture);
3. 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 Preferred Securities, or any action
on the part of the Issuer granting indulgence or extension of any
kind;
4. 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;
5. any invalidity of, or defect or deficiency in, the
Preferred Securities;
6. the settlement or compromise of any obligation
guaranteed hereby or hereby incurred;
7. the consummation of the Exchange Offer; or
8. any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee
Payments 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 D. Rights of Holders
1. The Holders of a Majority in liquidation amount of
the Preferred Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy
available to the Preferred Securities Guarantee Trustee in
respect of this Preferred Securities Guarantee or exercising any
trust or power conferred upon the Preferred Securities Guarantee
Trustee under this Preferred Securities Guarantee.
2. If the Preferred Securities Guarantee Trustee
fails to enforce such Preferred Securities Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor
to enforce the Preferred Securities Guarantee Trustee's rights
under this Preferred Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Preferred
Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
<PAGE 15> be brought first against the Issuer or any other person
or entity before proceeding directly against the Guarantor.
SECTION E. Guarantee of Payment
This Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION F. Subrogation
The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this
Preferred Securities 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 Preferred Securities Guarantee, if, at the
time of any such payment, any amounts are due and unpaid under
this Preferred Securities 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 G. Independent Obligations
The Guarantor acknowledges that its obligations
hereunder are independent of the obligations of the Issuer with
respect to the Preferred Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Preferred Securities
Guarantee notwithstanding the occurrence of any event referred to
in subsections (a) through (h), inclusive, of Section 5.3 hereof.
ARTICLE VI.
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION A. Limitation of Transactions
So long as any Preferred Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Guarantor's
capital stock (which includes common and preferred stock) or
(ii) make any payment of principal of or premium, if any, or
interest on or repay, repurchase or redeem any debt securities of
the Guarantor (including any Other Debentures) that rank
pari passu with or junior in right of payment to the Debentures
or (iii) make any guarantee payments with respect to any
guarantee by the Guarantor of the debt securities of any
subsidiary of the Guarantor (including Other Guarantees) if such
guarantee ranks pari passu with or junior in right of payment to
the Debentures (other than (a) dividends or distributions in
<PAGE 16> shares of, or options, warrants, rights to subscribe
for or purchase shares of, common stock of the Guarantor, (b) any
declaration of a dividend in connection with the implementation
of a stockholders' rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under this
Preferred Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange
or the conversion of one class or series of the Guarantor's
capital stock for another class or series of the Guarantor's
capital stock, (e) 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, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or
employees or any of the Guarantor's dividend reinvestment plans)
if at such time (i) there shall have occurred any event of which
the Guarantor has actual knowledge that (a) is, or with the
giving of notice or the lapse of time, or both, would be an
Indenture Event of Default and (b) in respect of which the
Guarantor shall not have taken reasonable steps to cure, (ii) if
such Debentures are held by the Property Trustee, the Guarantor
shall be in default with respect to its payment of any
obligations under this Preferred Securities Guarantee or
(iii) the Guarantor shall have given notice of its election of
the exercise of its right to extend the interest payment period
pursuant to Section ______ of the Indenture and any such
extension shall be continuing.
SECTION B. Ranking
This Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to Senior Debt (as
defined in the Indenture), to the same extent and in the same
manner that the Debentures are subordinated to Senior Debt
pursuant to the Indenture (except as indicated below), it being
understood that the terms of Article ___ of the Indenture shall
apply to the obligations of the Guarantor under this Preferred
Securities Guarantee as if (x) such Article ___ were set forth
herein in full and (y) such obligations were substituted for the
term "Securities" appearing in such Article __, except that with
respect to Section ________ of the Indenture only, the term
"Senior Debt" shall mean all liabilities of the Guarantor,
whether or not for money borrowed (other than obligations in
respect of Other Guarantees), (ii) pari passu with the most
senior preferred or preference stock now or hereafter issued by
the Guarantor, any guarantee now or hereafter entered into by the
Guarantor in respect of any preferred or preference stock of any
Affiliate of the Guarantor, and any Other Guarantee, and
(iii) senior to the Guarantor's capital stock.
<PAGE 17>
ARTICLE VII.
TERMINATION
SECTION A. Termination
This Preferred Securities Guarantee shall terminate
(i) upon full payment of the Redemption Price (as defined in the
Trust Agreement) of all Preferred Securities, or (ii) upon
liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the
distribution of the Debentures to the Holders. Notwithstanding
the foregoing, this Preferred Securities Guarantee will continue
to be effective or will be reinstated, as the case may be, if at
any time any Holder must restore payment of any sums paid under
the Preferred Securities or under this Preferred Securities
Guarantee.
ARTICLE VIII.
INDEMNIFICATION
SECTION A. Exculpation
1. 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 Preferred Securities
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 Preferred Securities 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.
2. An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which
Distributions to Holders might properly be paid.
SECTION B. Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
<PAGE 18> trusts hereunder, including the costs and expenses
(including reasonable legal fees and expenses) of defending
itself against, or investigating, any claim or liability in
connection with the exercise or performance of any of its powers
or duties hereunder. The obligation to indemnify as set forth in
this Section 8.2 shall survive the termination of this Preferred
Securities Guarantee.
ARTICLE IX.
MISCELLANEOUS
SECTION A. Successors and Assigns
All guarantees and agreements contained in this
Preferred Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION B. Amendments
Except with respect to any changes that do not
materially adversely affect the rights of Holders (in which case
no consent of Holders will be required), this Preferred
Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the
Securities (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). The provisions of the Trust Agreement with respect
to consents to amendments thereof (whether at a meeting or
otherwise) shall apply to the giving of such approval.
SECTION C. Notices
All notices provided for in this Preferred Securities
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:
1. If given to the Issuer, in care of the
Administrative Trustee at the Issuer's mailing address set forth
below (or such other address as the Issuer may give notice of to
the Holders and the Preferred Securities Guarantee Trustee):
Sovereign Capital Trust IV
c/o Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Administrative Trustee
Telecopy: (610) 320-8448
2. If given to the Preferred Securities Guarantee
Trustee, at the Preferred Securities Guarantee Trustee's mailing
address set forth below (or such other address as the Preferred
<PAGE 19> Securities Guarantee Trustee may give notice of to the
Holders and the Issuer):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
3. 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 and the Preferred
Securities Guarantee Trustee):
Sovereign Bancorp, Inc.
1130 Berkshire Boulevard
Wyomissing, PA 19610
Attention: Mark R. McCollom
Telecopy: (610) 320-8448
4. If given to any Holder, 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 D. Benefit
This Preferred Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not
separately transferable from the Preferred Securities.
SECTION E. Governing Law
THIS PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES THEREOF.
THIS PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
SOVEREIGN BANCORP, INC., as
Guarantor
By:_______________________________
<PAGE 20>
Name:
Title:
THE BANK OF NEW YORK, as Preferred
Securities Guarantee Trustee
By:_______________________________
Name:
Title:
<PAGE 21>
Exhibit 5.1
September 24, 1999
Board of Directors
Sovereign Bancorp, Inc.
2000 Market Street
Philadelphia, Pennsylvania 19103
Re: Registration Statement on Form S-3
(No. 333-86961)
Ladies and Gentlemen:
In connection with the registration of Common Stock, Debt
Securities, Preferred Stock, Securities Warrants, Depositary
Shares, Stock Purchase Contracts, and Stock Purchase Units with
an aggregate initial public offering price of up to
$2,000,000,000, by Sovereign Bancorp, Inc. (the "Company"),
covered by the Company's Registration Statement on Form S-3 (No.
333-86961) (together with any pre-effective amendments thereto,
the "Registration Statement"), we, as counsel to the Company,
have reviewed:
(1) the Articles of Incorporation of the Company;
(2) the Bylaws of the Company;
(3) the minute books of the Company;
(4) a subsistence certificate with respect to the Company
issued by the Pennsylvania Department of State on
September 16, 1999;
(5) resolutions adopted by the Company's Board of Directors
on February 13, 1994 and August 18, 1999;
(6) the Registration Statement;
(7) the Subordinated Indenture and the Senior Indenture
both dated as of February 1, 1994 between the Company
and Harris Trust and Savings Bank;
(8) the Junior Subordinated Indenture dated September 1,
1999 between the Company and Harris Trust and Savings
Bank; and
(9) forms of the Debt Securities, the Securities Warrants,
the Stock Purchase Contracts, and the Depository
Agreement.
The documents listed above are hereinafter collectively
referred to as the Documents. All capitalized terms used herein
but not defined herein shall have the meaning given to them in
the Registration Statement.
_______________________
Based upon our review of the Documents, and subject to the
limitations, qualifications, exceptions and assumptions stated
hereafter, it is our opinion that:
(1) The Company has been duly incorporated under the laws
of the Commonwealth of Pennsylvania and is validly
existing and in good standing under the laws of such
Commonwealth.
(2) The Subordinated Indenture and the Senior Indenture,
both dated as of February 1, 1994 and the Junior
Subordinated Indenture dated as of September 2, 1999
(individually as "Indenture" and collectively the
"Indentures") between the Company and Harris Trust and
Savings Bank, as trustee (the "Trustee"), have been
duly authorized, executed, and delivered by the Company
and the Trustee, and constitute valid and legally
binding obligations of the Company, enforceable in
accordance with their respective terms.
(3) The Debt Securities covered by the Registration
Statement have been duly authorized for registration
under the Securities Act of 1933, as amended (the
"Act"), and when (a) the Board of Directors has
authorized the issuance thereof and established the
terms thereof, (b) Officers' Certificates have been
duly executed and delivered in accordance with the
applicable Indenture, (c) the Debt Securities have been
executed and authenticated in the manner set forth in
the applicable Indenture, (d) the pertinent provisions
of such state securities and "blue sky" laws as are
applicable have been complied with, and (e) the Debt
Securities have been issued, sold, and delivered in
accordance with the Registration Statement, the
Prospectus and any Prospectus Supplement relating
thereto against payment therefor as contemplated by the
Underwriting Agreement, the Debt Securities will be
validly executed, authenticated, issued, and delivered,
and will constitute valid and legally binding
obligations of the Company enforceable in accordance
with their respective terms and the terms of the
applicable Indenture.
(4) The Common Stock covered by the Registration Statement
has been duly authorized for registration under the
Act, and when (a) the Board of Directors has authorized
the issuance thereof, (b) the pertinent provisions of
such state securities and "blue sky" laws as are
applicable have been complied with, and (c) such shares
are duly issued, sold and delivered against payment
therefor as contemplated by the Underwriting Agreement,
pursuant to and in accordance with the terms described
in the Registration Statement, the Prospectus, and any
Prospectus Supplement relating thereto, such Common
Stock will be validly issued by the Company and fully
paid and nonassessable.
(5) The Preferred Stock covered by the Registration
Statement has been duly authorized for registration
under the Act, and when (a) the Board of Directors has
authorized the issuance thereof and established the
terms thereof, (b) a Certificate of Designation has
been duly filed with the Secretary of State of the
Commonwealth of Pennsylvania, (c) the pertinent
provisions of such state securities and "blue sky" laws
as are applicable have been complied with, and (d) such
shares have been duly issued, sold and delivered
against payment therefor as contemplated by the
Underwriting Agreement pursuant to and in accordance
with the terms described in the Registration Statement,
the Prospectus and any Prospectus Supplement relating
thereto, such Preferred Stock will be validly issued by
the Company and fully paid and nonassessable.
(6) The Securities Warrants covered by the Registration
Statement have been duly authorized for registration
under the Act, and when (a) the Board of Directors has
authorized the issuance thereof and established the
terms thereof, (b) the Securities Warrant Agreement has
been duly executed and delivered by the Company to the
Securities Warrant Agent, (c) the Securities Warrants
have been executed and authenticated in the manner set
forth in the Securities Warrant Agreement, (d) the
pertinent provisions of such state securities and "blue
sky" laws as are applicable have been complied with,
and (e) the Securities Warrants have been issued, sold
and delivered against payment therefor as contemplated
by the Underwriting Agreement, pursuant to and in
accordance with the Registration Statement, the
Prospectus and any Prospectus Supplement relating
thereto, such Securities Warrants will be validly
executed, authenticated, issued, and delivered and will
constitute valid and legally binding obligations of the
Company enforceable in accordance with their respective
terms and the terms of the Warrant Agreement.
(7) The Stock Purchase Contracts covered by the
Registration Statement have been duly authorized for
registration under the Act, and when (a) the Board of
Directors has authorized the issuance thereof and
established the terms thereof, (b) the Stock Purchase
Contracts have been duly executed and delivered by the
Company, (c) the pertinent provisions of such state
securities and "blue sky" laws as are applicable have
been complied with, and (d) the Stock Purchase
Contracts have been issued, sold and delivered against
payment therefor as contemplated by the Underwriting
Agreement, pursuant to and in accordance with the
Registration Statement, the Prospectus and any
Prospectus Supplement relating thereto, such Stock
Purchase Contracts will be validly executed, issued,
and delivered and will constitute valid and legally
binding obligations of the Company enforceable in
accordance with their respective terms.
(8) The Depositary Shares covered by the Registration
Statement have been duly authorized for registration
under the Act, and when (a) the Board of Directors has
authorized the issuance of such Depositary Shares and
the underlying Preferred Stock and established the
terms of such Depositary Shares and underlying
Preferred Stock, (b) a Statement with Respect to Shares
with respect to the underlying Preferred Stock has been
duly filed with the Secretary of State of the
Commonwealth of Pennsylvania, (c) the Depositary
Agreement has been duly executed and delivered by the
Company to the preferred stock depositary, (d) the
Depositary Shares have been executed by the preferred
stock depositary in the manner set forth in the
Depositary Agreement, (e) the pertinent provisions of
such state securities and "blue sky" laws as are
applicable have been complied with, and (f) the
Depositary Shares have been issued, sold, and delivered
against payment therefor as contemplated by the
Underwriting Agreement, pursuant to and in accordance
with the terms of the Registration Statement, the
Prospectus, and any applicable Prospectus Supplement
relating thereto, such Depositary Shares will be
validly issued and delivered and will be fully paid and
nonassessable.
(9) Assuming (a) appropriate corporate action is taken in
the future to authorize the issuance of Debt
Securities, Preferred Stock or Common Stock upon
exercise of any Securities Warrants and to establish
the terms thereof, (b) a sufficient number of shares of
Common Stock or Preferred Stock is authorized under the
Company's articles of incorporation on the date of
exercise of any Securities Warrants, (c) the Securities
Warrants have been duly executed, delivered,
authenticated, issued and exercised in accordance with
their terms and the terms of the Warrant Agreement and
in the manner described in the Registration Statement,
the Prospectus and any Prospectus Supplement relating
thereto, and (d) no change occurs in any applicable law
or pertinent facts, when (i) the pertinent provisions
of all securities laws, including state securities and
"blue sky" laws, as may be applicable have been
complied with, (ii) the Securities Warrants are
exercised in accordance with their terms and the terms
of the Warrant Agreement, and (iii) the Debt
Securities, Preferred Stock or Common Stock, as the
case may be, have been duly executed, authenticated and
delivered, the Debt Securities issuable upon the
exercise of any Securities Warrants will constitute
legal and valid obligations of the Company, enforceable
in accordance with their respective terms and entitled
to the benefit of the applicable Indenture, and the
Preferred Stock or Common Stock, as the case may be,
issuable upon the exercise of any Securities Warrants
will be duly authorized, validly issued and fully paid
and nonassessable.
(10) Assuming (a) a sufficient number of shares of Common
Stock or Preferred Stock is authorized under the
Company's articles of incorporation on the date of
conversion of any convertible Preferred Stock,
(b) appropriate corporate action is taken in the future
to authorize the issuance of any shares of Common Stock
or Preferred Stock upon conversion of any convertible
Preferred Stock and to establish the terms thereof,
(c) the Preferred Stock have been duly issued and
converted in accordance with their terms and in the
manner described in the Registration Statement, the
Prospectus and any Prospectus Supplement relating
thereto, (d) no change occurs in any applicable law or
pertinent facts, when (i) the pertinent provisions of
all securities laws, including state securities and
"blue sky" laws, as may be applicable have been
complied with, and (ii) the Preferred Stock are
converted in accordance with their terms, such shares
of Common Stock or Preferred Stock, as the case may be,
issuable upon such conversion will be duly authorized,
legally issued, fully paid and nonassessable.
(11) Assuming (a) a sufficient number of shares of Common
Stock or Preferred Stock is authorized under the
Company's articles of incorporation on the date of
conversion or exchange of any Debt Securities,
(b) appropriate corporate action is taken in the future
to authorize the issuance of any shares of Common Stock
or Preferred Stock upon conversion or exchange of any
Debt Securities and to establish the terms thereof,
(c) the Debt Securities have been duly issued and
converted or exchanged, as the case may be, in
accordance with their terms and the terms of the
applicable Indenture and in the manner described in the
Registration Statement, the Prospectus and any
Prospectus Supplement relating thereto, and (d) no
change occurs in any applicable law or fact, when
(i) the pertinent provisions of all securities laws,
including state securities and "blue sky" laws, as may
be applicable have been complied with, and (ii) the
Debt Securities are converted or exchanged in
accordance with their terms and the terms of the
applicable Indenture, such shares of Common Stock or
Preferred Stock, as the case may be, issuable upon such
conversion or exchange will be duly authorized, legally
issued and fully paid and nonassessable.
(12) Assuming (a) appropriate corporate action is taken in
the future to authorize the issuance of Preferred Stock
or Common Stock upon exercise of any Stock Purchase
Contracts and to establish the terms thereof, (b) a
sufficient number of shares of Common Stock or
Preferred Stock is authorized under the Company's
articles of incorporation on the date of exercise of
any Stock Purchase Contract, (c) the Stock Purchase
Contracts have been duly executed, delivered, issued
and exercised in accordance with their terms and in the
manner described in the Registration Statement, the
Prospectus and any Prospectus Supplement relating
thereto, and (d) no change occurs in any applicable law
or pertinent facts, when (i) the pertinent provisions
of all securities laws, including state securities and
"blue sky" laws, as may be applicable have been
complied with, and (ii) the Stock Purchase Contracts
are exercised in accordance with their terms, the
Preferred Stock or Common Stock, as the case may be,
issuable upon the exercise of any Stock Purchase
Contracts will be duly authorized, validly issued and
fully paid and nonassessable.
The opinions expressed in Paragraph 2 relating to the
Indentures constituting valid and legally binding obligations of
the Company and in Paragraphs 3, 5, 6, 7, and 9 above, relating
to whether the securities described therein will constitute valid
and legal obligations of the Company that will be enforceable in
accordance with their terms, are subject to the exception that
the validity, enforceability, and binding nature of such
securities and Indentures are subject to (a) applicable
bankruptcy, insolvency, reorganization, liquidation,
receivership, conservatorship, readjustment of debt, arrangement,
moratorium or other laws relating to or affecting the rights of
creditors generally, (b) any laws, regulations, or judicial
decisions affecting the rights of creditors of a savings and loan
holding company and any power granted to the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation (the
"FDIC"), or any successor thereto in the event of bankruptcy or
insolvency of any subsidiary of the Company whose deposits are
insured by the FDIC or in the event the FDIC or any other person
is appointed conservator or receiver for any such subsidiary, and
(c) general principles of equity, including without limitation,
concepts of materiality, reasonableness, good faith and fair
dealing, and the possible unavailability of specific performance,
injunctive relief or other equitable remedies, regardless of
whether such enforceability is considered in a proceeding in
equity or at law.
We call to your attention that we have only reviewed
proposed forms of the Debt Securities, Securities Warrants, Stock
Purchase Contracts, and Depository Agreement. To the extent that
the actual securities issued and sold under the Registration
Statement differ from such proposed forms of securities, the
opinions expressed herein may not remain applicable.
We assume no obligation to update or supplement our opinions
set forth herein to reflect any facts or circumstances that may
hereafter come to our attention or any changes in laws that may
hereafter occur.
We consent to the filing of this opinion as an exhibit to
the Registration Statement, and to the references to us under the
heading "Legal Matters" in the related Prospectus. In giving
this consent, we do not thereby admit that we come within the
category of persons whose consent is required under Section 7 of
the Securities Act of 1933, as amended, or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
Very truly yours,
STEVENS & LEE
/s/ Stevens & Lee
Exhibit 25.3
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
Sovereign Capital Trust II
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
______________________
Preferred Securities
(Title of the indenture securities)
=================================================================
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 20th day of September, 1999.
THE BANK OF NEW YORK
By /s/MICHELE L. RUSSO
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE 3>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
<PAGE 4>
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.4
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
__________________
Sovereign Capital Trust III
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
__________________
Preferred Securities
(Title of the indenture securities)
=================================================================
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to
Form T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 20th day of September, 1999.
THE BANK OF NEW YORK
By /s/MICHELE L. RUSSO
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE 3>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
<PAGE 4>
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.5
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
__________________
Sovereign Capital Trust IV
(Exact name of obligor as specified in its charter)
Delaware To Be Applied For
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
__________________
Preferred Securities
(Title of the indenture securities)
=================================================================
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe
each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with
Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1
filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee
published pursuant to law or to the requirements of
its
supervising or examining authority.
<PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 20th day of September, 1999.
THE BANK OF NEW YORK
By /s/ MICHELE L. RUSSO
Name: MICHELE L.
RUSSO
Title: ASSISTANT
TREASURER
<PAGE 3>
<PAGE>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
Interest-bearing 20,498,943
<PAGE 4>
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.6
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
Sovereign Bancorp, Inc.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2453088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Preferred Securities of Sovereign Capital Trust II
(Title of the indenture securities)
=================================================================
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of September, 1999.
THE BANK OF NEW YORK
By/s/MICHELE L. RUSSO
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE 3>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
<PAGE 4>
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.7
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
__________________
Sovereign Bancorp, Inc.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2453088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
__________________
Guarantee of Preferred Securities of Sovereign Capital Trust III
(Title of the indenture securities)
=================================================================
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of September, 1999.
THE BANK OF NEW YORK
By/s/MICHELE L. RUSSO
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE 3>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
<PAGE 4>
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.8
=================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
__________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
__________________
Sovereign Bancorp, Inc.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2453088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2000 Market Street, Philadelphia, Pennsylvania 19103
(Address of principal executive offices) (Zip code)
__________________
Guarantee of Preferred Securities of Sovereign Capital Trust IV
(Title of the indenture securities)
=================================================================
<PAGE 1>
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza, New York,
New York N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
<PAGE 1>
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority. <PAGE 2>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of September, 1999.
THE BANK OF NEW YORK
By:/s/MICHELE L. RUSSO
Name: MICHELE L. RUSSO
Title: ASSISTANT TREASURER
<PAGE 3>
EXHIBIT 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1999, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
In Thousands
ASSETS
Cash and balances due from depository
institutions:
Noninterest-bearing balances and
currency and coin $ 5,597,807
Interest-bearing balances 4,075,775
Securities:
Held-to-maturity securities 785,167
Available-for-sale securities 4,159,891
Federal funds sold and Securities purchased under
agreements to resell 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned income 38,028,772
LESS: Allowance for loan and lease losses 568,617
LESS: Allocated transfer risk reserve 16,352
Loans and leases, net of unearned income,
allowance, and reserve 37,443,803
Trading Assets 1,563,671
Premises and fixed assets (including capitalized
leases) 683,587
Other real estate owned 10,995
Investments in unconsolidated subsidiaries and
associated companies 184,661
Customers' liability to this bank on acceptances
outstanding 812,015
Intangible assets 1,135,572
Other assets 5,607,019
Total assets $64,536,926
LIABILITIES
Deposits:
In domestic offices $26,488,980
Noninterest-bearing 10,626,811
Interest-bearing 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs 20,655,414
Noninterest-bearing 156,471
<PAGE 4>
Interest-bearing 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase 3,729,439
Demand notes issued to the U.S.Treasury 257,860
Trading liabilities 1,987,450
Other borrowed money:
With remaining maturity of one year or less 496,235
With remaining maturity of more than one year
through three years 465
With remaining maturity of more than three years 31,080
Bank's liability on acceptances executed and
outstanding 822,455
Subordinated notes and debentures 1,308,000
Other liabilities 2,846,649
Total liabilities 58,624,027
EQUITY CAPITAL
Common stock 1,135,284
Surplus 815,314
Undivided profits and capital reserves 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities (7,956)
Cumulative foreign currency translation
adjustments (31,510)
Total equity capital 5,912,899
Total liabilities and equity capital $64,536,926
I, Thomas J. Mastro, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Thomas A. Reyni
Alan R. Griffith
Gerald L. Hassell
Directors
<PAGE 5>
Exhibit 25.9
SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549
FORM T-1
Statement of Eligibility
Under the Trust Indenture Act
of 1939
of a Corporation Designated to Act
as Trustee
Check if an Application to Determine
Eligibility
of a Trustee Pursuant to Section
305(b)(2) ______
HARRIS TRUST AND SAVINGS
BANK
(Name of Trustee)
Illinois
36-1194448
(State of Incorporation) (I.R.S. Employer
Identification
No.)
111 West Monroe Street, Chicago,
Illinois 60603
(Address of principal executive
offices)
Daniel G. Donovan, Harris Trust and
Savings Bank,
311 West Monroe Street, Chicago,
Illinois, 60606
(312) 461-2908 phone (312)
461-3525 facsimile
(Name, address and telephone number for agent for
service)
SOVEREIGN BANCORP, INC.
(Obligor)
Pennsylvania
23-2453088
(State of Incorporation) (I.R.S. Employer
Identification
No.)
1130 Berkshire Boulevard
Wyomissing, PA 19610
(Address of principal executive
offices)
Junior Subordinated Debt
Securities
(Title of indenture
securities)
1. GENERAL INFORMATION. Furnish the following information
as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Commissioner of Banks and Trust Companies, State
of
Illinois, Springfield, Illinois; Chicago Clearing
House
Association, 164 West Jackson Boulevard, Chicago,
Illinois; Federal Deposit Insurance Corporation,
Washington, D.C.; The Board of Governors of the
Federal
Reserve System, Washington, D.C.
(b) Whether it is authorized to exercise corporate
trust
powers.
Harris Trust and Savings Bank is authorized to
exercise
corporate trust powers.
2. AFFILIATIONS WITH OBLIGOR. If the Obligor is an
affiliate
of the Trustee, describe each such
affiliation.
The Obligor is not an affiliate of the Trustee.
3. through 15.
NO RESPONSE NECESSARY
16. LIST OF EXHIBITS.
1. A copy of the articles of association of the
Trustee as
now in effect which includes the authority of the
trustee to commence business and to exercise
corporate
trust powers.
A copy of the Certificate of Merger dated April
1, 1972
between Harris Trust and Savings Bank, HTS Bank
and
Harris Bankcorp, Inc. which constitutes the
articles of
association of the Trustee as now in effect and
includes the authority of the Trustee to commence
business and to exercise corporate trust powers
was
filed in connection with the Registration
Statement of
Louisville Gas and Electric Company, File No.
2-44295,
and is incorporated herein by reference.
2. A copy of the existing by-laws of the Trustee.
A copy of the existing by-laws of the Trustee was
filed
in connection with the Registration Statement of
Commercial Federal Corporation, File No.
333-20711, and
is incorporated herein by reference.
3. The consents of the Trustee required by Section
321(b)
of the Act.
(included as Exhibit A on page 2 of this
statement)
4. A copy of the latest report of condition of the
Trustee
published pursuant to law or the requirements of
its
supervising or examining authority.
(included as Exhibit B on page 3 of this
statement)
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the Trustee, HARRIS TRUST AND SAVINGS BANK, a corporation
organized and existing under the laws of the State of Illinois,
has duly caused this statement of eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the
City of Chicago, and State of Illinois, on the 9th day of
September, 1999.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. Donovan
D. G. Donovan
Assistant Vice President
<PAGE>
EXHIBIT A
The consents of the trustee required by Section 321(b) of the
Act.
Harris Trust and Savings Bank, as the Trustee herein named,
hereby consents that reports of examinations of said trustee by
Federal and State authorities may be furnished by such
authorities to the Securities and Exchange Commission upon
request therefor.
HARRIS TRUST AND SAVINGS BANK
By: /s/ D. G. Donovan
D. G. Donovan
Assistant Vice President
EXHIBIT B
Attached is a true and correct copy of the statement of condition
of Harris Trust and Savings Bank as of March 31, 1999, as
published in accordance with a call made by the State Banking
Authority and by the Federal Reserve Bank of the Seventh Reserve
District.
Harris Trust and Savings
Bank
111 West Monroe Street
Chicago, Illinois 60603
of Chicago, Illinois, And Foreign and Domestic Subsidiaries, at
the close of business on March 31, 1999, a state banking
institution organized and operating under the banking laws of
this State and a member of the Federal Reserve System. Published
in accordance with a call made by the Commissioner of Banks and
Trust Companies of the State of Illinois and by the Federal
Reserve Bank of this District.
Bank's Transit Number
71000288
<TABLE>
<CAPTION>
ASSETS
THOUSANDS
OF DOLLARS
<S>
<C> <C>
Cash and balances due from depository institutions:
Non-interest bearing balances and currency and
coin..................................
$ 1,237,336
Interest bearing
balances.........................................................
... $ 137,061
Securities:......................................................
......................
a. Held-to-maturity securities
$ 0
b. Available-for-sale securities
$ 5,455,837
Federal funds sold and securities purchased under agreements to
resell $ 87,250
Loans and lease financing receivables:
Loans and leases, net of unearned
income.............................................
$9,500,293
LESS: Allowance for loan and lease
losses......................................... $
109,979
Loans and leases, net of unearned income, allowance, and
reserve
(item 4.a minus
4.b).............................................................
$ 9,390,314
Assets held in trading
accounts........................................................
$ 161,168
Premises and fixed assets (including capitalized
leases)...............................
$ 255,438
Other real estate
owned............................................................
.... $ 243
Investments in unconsolidated subsidiaries and associated
companies.................... $
75
Customer's liability to this bank on acceptances
outstanding...........................
$ 40,869
Intangible
assets...........................................................
........... $ 254,549
Other
assets...........................................................
................ $ 1,183,465
TOTAL ASSETS
$18,203,605
===========
LIABILITIES
Deposits:
In domestic
offices..........................................................
........ $ 9,099,851
Non-interest
bearing..........................................................
....... $2,743,074
Interest
bearing..........................................................
........... $6,356,777
In foreign offices, Edge and Agreement subsidiaries, and
IBF's....................... $
1,822,400
Non-interest
bearing..........................................................
..... $ 26,371
Interest
bearing..........................................................
..... $1,796,029
Federal funds purchased and securities sold under agreements to
repurchase in
domestic offices of the bank and of its Edge and Agreement
subsidiaries,
and in IBF's:
Federal funds purchased & securities sold under agreements to
repurchase............... $ 3,534,582
Trading Liabilities
96,517
Other borrowed
money:...........................................................
.......
a. With remaining maturity of one year or less
0
b. With remaining maturity of more than one year
$ 1,681,346
Bank's liability on acceptances executed and outstanding
$ 40,869
Subordinated notes and
debentures.......................................................
$ 225,000
Other
liabilities......................................................
................. $ 390,234
TOTAL LIABILITIES
$16,890,799
===========
EQUITY CAPITAL
Common
stock............................................................
................ $ 100,000
Surplus..........................................................
....................... $ 608,510
a. Undivided profits and capital
reserves..............................................
$ 616,084
b. Net unrealized holding gains (losses) on available-for-sale
securities $ (11,788)
TOTAL EQUITY CAPITAL
$ 1,312,806
===========
Total liabilities, limited-life preferred stock, and equity
capital.....................
$18,203,605
===========
</TABLE>
I, Pamela Piarowski, Vice President of the above-named
bank,
do hereby declare that this Report of Condition has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true to the best
of my knowledge and belief.
PAMELA PIAROWSKI
4/30/99
We, the undersigned directors, attest to the correctness
of
this Report of Condition and declare that it has been examined by
us and, to the best of our knowledge and belief, has been
prepared in conformance with the instructions issued by the Board
of Governors of the Federal Reserve System and the Commissioner
of Banks and Trust Companies of the State of Illinois and is true
and correct.
EDWARD W. LYMAN,
ALAN G. McNALLY,
JAMES J. GLASSER
Directors
