EXHIBIT 4.1
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AMENDED AND RESTATED DECLARATION
OF TRUST
by and among
STATE STREET BANK AND TRUST COMPANY
OF CONNECTICUT, NATIONAL ASSOCIATION,
as Institutional Trustee,
MCB FINANCIAL CORPORATION,
as Sponsor,
CHARLES O. HALL and PATRICK E. PHELAN,
as Administrators
Dated as of September 7, 2000
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TABLE OF CONTENTS
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ARTICLE I INTERPRETATION AND DEFINITIONS..........................................................................1
Section 1.1. Definitions............................................................................1
ARTICLE II ORGANIZATION...........................................................................................7
Section 2.1. Name...................................................................................7
Section 2.2. Office.................................................................................7
Section 2.3. Purpose................................................................................7
Section 2.4. Authority..............................................................................8
Section 2.5. Title to Property of the Trust.........................................................8
Section 2.6. Powers and Duties of the Trustees and the Administrators...............................8
Section 2.7. Prohibition of Actions by the Trust and the Trustees..................................11
Section 2.8. Powers and Duties of the Institutional Trustee........................................12
Section 2.9. Certain Duties and Responsibilities of the Trustees and Administrators................13
Section 2.10. Certain Rights of Institutional Trustee...............................................14
Section 2.11. Execution of Documents................................................................16
Section 2.12. Not Responsible for Recitals or Issuance of Securities................................17
Section 2.13. Duration of Trust.....................................................................17
Section 2.14. Mergers...............................................................................17
ARTICLE III SPONSOR..............................................................................................18
Section 3.1. Sponsor's Purchase of Common Securities...............................................18
Section 3.2. Responsibilities of the Sponsor.......................................................18
Section 3.3. Expenses..............................................................................19
Section 3.4. Right to Proceed......................................................................19
ARTICLE IV TRUSTEES AND ADMINISTRATORS...........................................................................19
Section 4.1. Number of Trustees....................................................................19
Section 4.2. Institutional Trustee; Eligibility....................................................20
Section 4.3. Administrators........................................................................20
Section 4.4. Appointment, Removal and Resignation of Trustees and Administrators...................20
Section 4.5. Vacancies Among Trustees..............................................................21
Section 4.6. Effect of Vacancies...................................................................22
Section 4.7. Meetings of the Trustees and the Administrators.......................................22
Section 4.8. Delegation of Power...................................................................22
Section 4.9. Conversion, Consolidation or Succession to Business...................................22
ARTICLE V DISTRIBUTIONS..........................................................................................23
Section 5.1. Distributions.........................................................................23
ARTICLE VI ISSUANCE OF SECURITIES................................................................................23
Section 6.1. General Provisions Regarding Securities...............................................23
Section 6.2. Paying Agent, Transfer Agent and Registrar............................................24
Section 6.3. Form and Dating.......................................................................24
Section 6.4. Mutilated, Destroyed, Lost or Stolen Certificates.....................................24
Section 6.5. Temporary Securities..................................................................25
Section 6.6. Cancellation..........................................................................25
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Section 6.7. Rights of Holders; Waivers of Past Defaults...........................................25
ARTICLE VII DISSOLUTION AND TERMINATION OF TRUST.................................................................27
Section 7.1. Dissolution and Termination of Trust..................................................27
ARTICLE VIII TRANSFER OF INTERESTS...............................................................................28
Section 8.1. General...............................................................................28
Section 8.2. Transfer Procedures and Restrictions..................................................28
Section 8.3. Deemed Security Holders...............................................................30
ARTICLE IX LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS..................................30
Section 9.1. Liability.............................................................................30
Section 9.2. Exculpation...........................................................................30
Section 9.3. Fiduciary Duty........................................................................31
Section 9.4. Indemnification.......................................................................31
Section 9.5. Outside Businesses....................................................................33
Section 9.6. Compensation; Fee.....................................................................33
ARTICLE X ACCOUNTING.............................................................................................34
Section 10.1. Fiscal Year...........................................................................34
Section 10.2. Certain Accounting Matters............................................................34
Section 10.3. Banking...............................................................................34
Section 10.4. Withholding...........................................................................35
ARTICLE XI AMENDMENTS AND MEETINGS...............................................................................35
Section 11.1. Amendments............................................................................35
Section 11.2. Meetings of the Holders of Securities; Action by Written Consent......................36
ARTICLE XII REPRESENTATIONS OF INSTITUTIONAL TRUSTEE.............................................................38
Section 12.1. Representations and Warranties of Institutional Trustee...............................38
ARTICLE XIII MISCELLANEOUS.......................................................................................38
Section 13.1. Notices...............................................................................38
Section 13.2. Governing Law.........................................................................39
Section 13.3. Intention of the Parties..............................................................40
Section 13.4. Headings..............................................................................40
Section 13.5. Successors and Assigns................................................................40
Section 13.6. Partial Enforceability................................................................40
Section 13.7. Counterparts..........................................................................40
Annex I....................Terms of Securities
Exhibit A-I................Form of Capital Security Certificate
Exhibit A-2................Form of Common Security Certificate
Exhibit B..................Specimen of Initial Debenture
Exhibit C..................Placement Agreement
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AMENDED AND RESTATED
DECLARATION OF TRUST
OF
MCB STATUTORY TRUST I
September 7, 2000
AMENDED AND RESTATED DECLARATION OF TRUST ("Declaration") dated and
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effective as of September 7, 2000, by the Trustees (as defined herein), the
Administrators (as defined herein), the Sponsor (as defined herein) and by the
holders, from time to time, of undivided beneficial interests in the Trust (as
defined herein) to be issued pursuant to this Declaration;
WHEREAS, the Trustees, the Administrators and the Sponsor established
MCB Statutory Trust I (the "Trust"), a statutory trust under the Connecticut
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Statutory Trust Act pursuant to a Declaration of Trust dated as of August 28,
2000 (the "Original Declaration"), and a Certificate of Trust filed with the
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Secretary of State of the State of Connecticut on August 29, 2000, for the sole
purpose of issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust and investing the proceeds
thereof in certain debentures of the Debenture Issuer (as defined herein);
WHEREAS, as of the date hereof, no interests in the Trust have been
issued; and
WHEREAS, all of the Trustees, the Administrators and the Sponsor, by
this Declaration, amend and restate each and every term and provision of the
Original Declaration;
NOW, THEREFORE, it being the intention of the parties hereto to
continue the Trust as a statutory trust under the Statutory Trust Act (as
defined herein) and that this Declaration constitutes the governing instrument
of such statutory trust, the Trustees declare that all assets contributed to the
Trust will be held in trust for the benefit of the holders, from time to time,
of the securities representing undivided beneficial interests in the assets of
the Trust issued hereunder, subject to the provisions of this Declaration. The
parties hereto hereby agree as follows:
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions. Unless the context otherwise requires:
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(a) Capitalized terms used in this Declaration but not defined in
the preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration as modified, supplemented or amended from time to time;
(d) all references in this Declaration to Articles and Sections
and Annexes and Exhibits are to Articles and Sections of and Annexes and
Exhibits to this Declaration unless otherwise specified; and
(e) a reference to the singular includes the plural and vice versa.
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"Additional Interest" has the meaning set forth in the Indenture.
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"Administrators" means each of Charles O. Hall and Patrick E. Phelan,
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solely in such Person's capacity as Administrator of the Trust created and
continued hereunder and not in such Person's individual capacity, or such
Administrator's successor in interest in such capacity, or any successor
appointed as herein provided.
"Affiliate" has the same meaning as given to that term in Rule 405 of
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the Securities Act or any successor rule thereunder.
"Authorized Officer" of a Person means any Person that is authorized to
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bind such Person.
"Bankruptcy Event" means, with respect to any Person:
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(a) a court having jurisdiction in the premises shall enter a
decree or order for relief in respect of such Person in an involuntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its property, or ordering the winding-up or liquidation of
its affairs and such decree or order shall remain unstayed and in effect for a
period of 90 consecutive days; or
(b) such Person shall commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, shall consent to the entry of an order for relief in an involuntary case
under any such law, or shall consent to the appointment of or taking possession
by a receiver, liquidator, assignee, trustee, custodian, sequestrator (or other
similar official) of such Person of any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due.
"Business Day" means any day other than Saturday, Sunday or any other
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day on which banking institutions in New York City or Hartford, Connecticut are
permitted or required by any applicable law to close.
"Capital Securities" has the meaning set forth in Section 6.1(a).
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"Capital Security Certificate" means a definitive Certificate in fully
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registered form representing a Capital Security substantially in the form of
Exhibit A-1.
"Capital Treatment Event" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Certificate" means any certificate evidencing Securities.
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"Closing Date" has the meaning set forth in the Placement Agreement.
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"Code" means the Internal Revenue Code of 1986, as amended from time to
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time, or any successor legislation.
"Commission" means the Securities and Exchange Commission.
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"Common Securities" has the meaning set forth in Section 6.1(a).
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"Common Security Certificate" means a definitive Certificate in fully
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registered form representing a Common Security substantially in the form of
Exhibit A-2.
"Company Indemnified Person" means (a) any Administrator; (b) any
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Affiliate of any Administrator; (c) any officers, directors, shareholders,
members, partners, employees, representatives or agents of any Administrator; or
(d) any officer, employee or agent of the Trust or its Affiliates.
"Comparable Treasury Issue" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Comparable Treasury Price" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Corporate Trust Office" means the office of the Institutional Trustee
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at which the corporate trust business of the Institutional Trustee shall, at any
particular time, be principally administered, which office at the date of
execution of this Declaration is located at 225 Asylum Street, Goodwin Square,
Hartford, Connecticut.
"Coupon Rate" has the meaning set forth in paragraph 2(a) of Annex I.
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"Covered Person" means: (a) any Administrator, officer, director,
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shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) any of the Trust's Affiliates; and (b) any Holder of Securities.
"Creditor" has the meaning set forth in Section 3.3.
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"Debenture Issuer" means MCB Financial Corporation, a California
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corporation, in its capacity as issuer of the Debentures under the Indenture.
"Debenture Trustee" means State Street Bank and Trust Company of
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Connecticut, National Association, as trustee under the Indenture until a
successor is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means the 10.60% Junior Subordinated Deferrable Interest
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Debentures due 2030 to be issued by the Debenture Issuer under the Indenture.
"Defaulted Interest" has the meaning set forth in the Indenture.
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"Direct Action" has the meaning set forth in Section 2.8(d).
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"Distribution" means a distribution payable to Holders of Securities in
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accordance with Section 5.1.
"Distribution Payment Date" has the meaning set forth in paragraph 2(b)
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of Annex I.
"Event of Default" means any one of the following events (whatever the
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reason for such event and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body):
(a) the occurrence of an Indenture Event of Default; or
(b) default by the Trust in the payment of any Redemption Price of
any Security when it becomes due and payable; or
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(c) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this Declaration (other
than those specified in clause (a) or (b) above) and continuation of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail to the Trustees and to the Sponsor by the Holders
of at least 25% in aggregate liquidation amount of the outstanding Capital
Securities a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" hereunder;
or
(d) the occurrence of a Bankruptcy Event with respect to the
Institutional Trustee if a successor Institutional Trustee has not been
appointed within 90 days thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
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from time to time, or any successor legislation.
"Extension Period" has the meaning set forth in paragraph 2(b) of Annex
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I.
"Federal Reserve" has the meaning set forth in paragraph 3 of Annex I.
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"Fiduciary Indemnified Person" shall mean the Institutional Trustee,
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any Affiliate of the Institutional Trustee and any officers, directors,
shareholders, members, partners, employees, representatives, custodians,
nominees or agents of the Institutional Trustee.
"Fiscal Year" has the meaning set forth in Section 10.1.
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"Guarantee" means the guarantee agreement to be dated as of the Closing
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Date, of the Sponsor in respect of the Capital Securities.
"Holder" means a Person in whose name a Certificate representing a
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Security is registered, such Person being a beneficial owner within the meaning
of the Statutory Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
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Indemnified Person.
"Indenture" means the Indenture dated as of the Closing Date, between
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the Debenture Issuer and the Debenture Trustee, and any indenture supplemental
thereto pursuant to which the Debentures are to be issued, as such Indenture and
any supplemental indenture may be amended, supplemented or otherwise modified
from time to time.
"Indenture Event of Default" means an "Event of Default" as defined in
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the Indenture.
"Institutional Trustee" means the Trustee meeting the eligibility
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requirements set forth in Section 4.2.
"Interest" means any interest due on the Debentures including any
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Additional Interest and Defaulted Interest.
"Investment Company" means an investment company as defined in the
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Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
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amended from time to time, or any successor legislation.
"Investment Company Event" has the meaning set forth in paragraph 4(a)
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of Annex I.
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"Legal Action" has the meaning set forth in Section 2.8(d).
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"Liquidation" has the meaning set forth in paragraph 3 of Annex I.
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"Liquidation Distribution" has the meaning set forth in paragraph 3 of
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Annex I.
"Majority in liquidation amount of the Securities" means Holder(s) of
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outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of
more than 50% of the aggregate liquidation amount (including the stated amount
that would be paid on redemption, liquidation or otherwise, plus accrued and
unpaid Distributions to the date upon which the voting percentages are
determined) of all outstanding Securities of the relevant class.
"Officers' Certificates" means, with respect to any Person, a
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certificate signed by two Authorized Officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
providing for it in this Declaration shall include:
(a) a statement that each officer signing the Certificate has
read the covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination
or investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination
or investigation as, in such officer's opinion, is necessary to enable such
officer to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Paying Agent" has the meaning specified in Section 6.2.
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"Payment Amount" has the meaning set forth in Section 5.1.
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"Person" means a legal person, including any individual, corporation,
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estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Placement Agreement" means the Placement Agreement relating to the
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offering and sale of Capital Securities in the form of Exhibit C.
"Primary Treasury Dealer" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Property Account" has the meaning set forth in Section 2.8(c).
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"Pro Rata" has the meaning set forth in paragraph 8 of Annex I.
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"Quorum" means a majority of the Administrators or, if there are only
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two Administrators, both of them.
"Quotation Agent" has the meaning set forth in paragraph 4(a) of Annex
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I.
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"Redemption/Distribution Notice" has the meaning set forth in paragraph
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4(e) of Annex I.
"Redemption Price" has the meaning set forth in paragraph 4(a) of Annex
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I.
"Registrar" has the meaning set forth in Section 6.2.
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"Reference Treasury Dealer" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Reference Treasury Dealer Quotations" has the meaning set forth in
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paragraph 4(a) of Annex I.
"Relevant Trustee" has the meaning set forth in Section 4.4(a).
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"Remaining Life" has the meaning set forth in paragraph 4(a) of Annex
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I.
"Responsible Officer" means, with respect to the Institutional Trustee,
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any officer within the Corporate Trust Office of the Institutional Trustee,
including any vice-president, any assistant vice-president, any assistant
secretary, the treasurer, any assistant treasurer, any trust officer or other
officer of the Corporate Trust Office of the Institutional Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Restricted Securities Legend" has the meaning set forth in Section
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8.2(b).
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act.
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"Rule 3a-7" means Rule 3a-7 under the Investment Company Act.
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"Securities" means the Common Securities and the Capital Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time
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to time or any successor legislation.
"Special Event" has the meaning set forth in paragraph 4(a) of Annex I.
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"Special Redemption Date" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Special Redemption Price" has the meaning set forth in paragraph 4(a)
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of Annex I.
"Sponsor" means MCB Financial Corporation, a California corporation, or
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any successor entity in a merger, consolidation or amalgamation, in its capacity
as sponsor of the Trust.
"Statutory Trust Act" means Chapter 615 of Title 34 of the Connecticut
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General Statutes, Sections 500, et seq. as may be amended from time to time.
"Successor Entity" has the meaning set forth in Section 2.14(b).
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"Successor Institutional Trustee" has the meaning set forth in Section
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4.4(a).
"Successor Securities" has the meaning set forth in Section 2.14(b).
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"Super Majority" has the meaning set forth in paragraph 5(b) of Annex
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I.
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"Tax Event" has the meaning set forth in paragraph 4(a) of Annex I.
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"10% in liquidation amount of the Securities" means Holder(s) of
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outstanding Securities voting together as a single class or, as the context may
require, Holders of outstanding Capital Securities or Holders of outstanding
Common Securities voting separately as a class, who are the record owners of 10%
or more of the aggregate liquidation amount (including the stated amount that
would be paid on redemption, liquidation or otherwise, plus accrued and unpaid
Distributions to the date upon which the voting percentages are determined) of
all outstanding Securities of the relevant class.
"Transfer Agent" has the meaning set forth in Section 6.2.
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"Treasury Rate" has the meaning set forth in paragraph 4(a) of Annex I.
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"Treasury Regulations" means the income tax regulations, including
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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
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Declaration as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as Trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Property" means (a) the Debentures, (b) any cash on deposit in,
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or owing to, the Property Account and (c) all proceeds and rights in respect of
the foregoing and any other property and assets for the time being held or
deemed to be held by the Institutional Trustee pursuant to the trusts of this
Declaration.
"U.S. Person" means a United States Person as defined in Section
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7701(a)(30) of the Code.
ARTICLE II
ORGANIZATION
Section 2.1 Name. The Trust is named "MCB Statutory Trust I," as
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such name may be modified from time to time by the Administrators following
written notice to the Holders of the Securities. The Trust's activities may be
conducted under the name of the Trust or any other name deemed advisable by the
Administrators.
Section 2.2 Office. The address of the principal office of the Trust
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is c/o State Street Bank and Trust Company of Connecticut, National Association,
225 Asylum Street, Goodwin Square, Hartford, Connecticut 06103. On at least 10
Business Days written notice to the Holders of the Securities, the
Administrators may designate another principal office, which shall be in a state
of the United States or in the District of Columbia.
Section 2.3 Purpose. The exclusive purposes and functions of the
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Trust are (a) to issue and sell the Securities representing undivided beneficial
interests in the assets of the Trust, (b) to invest the gross proceeds from such
sale to acquire the Debentures, (c) to facilitate direct investment in the
assets of the Trust through issuance of the Common Securities and the Capital
Securities and (d) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, pledge any of
its
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assets, or otherwise undertake (or permit to be undertaken) any activity that
would cause the Trust not to be classified for United States federal income tax
purposes as a grantor trust.
Section 2.4 Authority. Except as specifically provided in this
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Declaration, the Institutional Trustee shall have exclusive and complete
authority to carry out the purposes of the Trust. An action taken by a Trustee
in accordance with its powers shall constitute the act of and serve to bind the
Trust. In dealing with the Trustees acting on behalf of the Trust, no Person
shall be required to inquire into the authority of the Trustees to bind the
Trust. Persons dealing with the Trust are entitled to rely conclusively on the
power and authority of the Trustees as set forth in this Declaration. The
Administrators shall have only those ministerial duties set forth herein with
respect to accomplishing the purposes of the Trust and are not intended to be
trustees or fiduciaries with respect to the Trust or the Holders. The
Institutional Trustee shall have the right, but shall not be obligated except as
provided in Section 2.6, to perform those duties assigned to the Administrators.
Section 2.5 Title to Property of the Trust. Except as provided in
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Section 2.8 with respect to the Debentures and the Property Account or as
otherwise provided in this Declaration, legal title to all assets of the Trust
shall be vested in the Trust. The Holders shall not have legal title to any part
of the assets of the Trust, but shall have an undivided beneficial interest in
the assets of the Trust.
Section 2.6 Powers and Duties of the Trustees and the Administrators.
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(a) The Trustees and the Administrators shall conduct the affairs of
the Trust in accordance with the terms of this Declaration. Subject to the
limitations set forth in paragraph (b) of this Section, and in accordance with
the following provisions (i) and (ii), the Trustees and the Administrators shall
have the authority to enter into all transactions and agreements determined by
the Trustees to be appropriate in exercising the authority, express or implied,
otherwise granted to the Trustees or the Administrators, as the case may be,
under this Declaration, and to perform all acts in furtherance thereof,
including without limitation, the following:
(i) Each Administrator shall have the power and authority to
act on behalf of the Trust with respect to the following matters:
(A) the issuance and sale of the Securities;
(B) to cause the Trust to enter into, and to execute
and deliver on behalf of the Trust, such agreements as may be
necessary or desirable in connection with the purposes and func-
tion of the Trust, including agreements with the Paying Agent;
(C) ensuring compliance with the Securities Act, appli-
cable state securities or blue sky laws;
(D) the sending of notices (other than notices of
default), and other information regarding the Securities and the
Debentures to the Holders in accordance with this Declaration;
(E) the consent to the appointment of a Paying Agent,
Transfer Agent and Registrar in accordance with this Declaration,
which consent shall not be unreasonably withheld or delayed;
(F) execution and delivery of the Securities in accord-
ance with this Declaration;
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(G) execution and delivery of closing certificates,
pursuant to the Placement Agreement and the application for a
taxpayer identification number;
(H) unless otherwise determined by the Holders of a
Majority in liquidation amount of the Securities or as otherwise
required by the Statutory Trust Act, to execute on behalf of the
Trust (either acting alone or together with any or all of the
Administrators) any documents that the Administrators have the
power to execute pursuant to this Declaration;
(I) the taking of any action incidental to the fore-
going as the Institutional Trustee may from time to time
determine is necessary or advisable to give effect to the terms
of this Declaration for the benefit of the Holders (without
consideration of the effect of any such action on any particular
Holder);
(J) to establish a record date with respect to all
actions to be taken hereunder that require a record date be
established, including Distributions, voting rights, redemptions
and exchanges, and to issue relevant notices to the Holders of
Capital Securities and Holders of Common Securities as to such
actions and applicable record dates; and
(K) to duly prepare and file all applicable tax
returns and tax information reports that are required to be filed
with respect to the Trust on behalf of the Trust.
(ii) As among the Trustees and the Administrators, the Insti-
tutional Trustee shall have the power, duty and authority to act on behalf of
the Trust with respect to the following matters:
(A) the establishment of the Property Account;
(B) the receipt of the Debentures;
(C) the collection of interest, principal and any other
payments made in respect of the Debentures in the Property
Account;
(D) the distribution through the Paying Agent of
amounts owed to the Holders in respect of the Securities;
(E) the exercise of all of the rights, powers and pri-
vileges of a holder of the Debentures;
(F) the sending of notices of default and other
information regarding the Securities and the Debentures to the
Holders in accordance with this Declaration;
(G) the distribution of the Trust Property in accor-
dance with the terms of this Declaration;
(H) to the extent provided in this Declaration, the
winding up of the affairs of and liquidation of the Trust
and the preparation, execution and filing of the certificate
of cancellation with the Secretary of State of the State of
Connecticut;
(I) after any Event of Default (provided that
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such Event of Default is not by or with respect to the
Institutional Trustee) the taking of any action incidental to the
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foregoing as the Institutional Trustee may from time to time
determine is necessary or advisable to give effect to the terms
of this Declaration and protect and conserve the Trust Property
for the benefit of the Holders (without consideration of the
effect of any such action on any particular Holder); and
(J) to take all action that may be necessary for the
preservation and the continuation of the Trust's valid existence,
rights, franchises and privileges as a statutory trust under the
laws of the State of Connecticut and of each other jurisdiction
in which such existence is necessary to protect the limited
liability of the Holders of the Capital Securities or to enable
the Trust to effect the purposes for which the Trust was created.
(iii) The Institutional Trustee shall have the power and autho-
rity to act on behalf of the Trust with respect to any of the duties,
liabilities, powers or the authority of the Administrators set forth in Section
2.6(a)(i)(D), (E) and (F) herein but shall not have a duty to do any such act
unless specifically requested to do so in writing by the Sponsor, and shall then
be fully protected in acting pursuant to such written request; and in the event
of a conflict between the action of the Administrators and the action of the
Institutional Trustee, the action of the Institutional Trustee shall prevail.
(b) So long as this Declaration remains in effect, the Trust (or the
Trustees or Administrators acting on behalf of the Trust) shall not undertake
any business, activities or transaction except as expressly provided herein or
contemplated hereby. In particular, neither the Trustees nor the Administrators
may cause the Trust to (i) acquire any investments or engage in any activities
not authorized by this Declaration, (ii) sell, assign, transfer, exchange,
mortgage, pledge, set-off or otherwise dispose of any of the Trust Property or
interests therein, including to Holders, except as expressly provided herein,
(iii) take any action that would reasonably be expected (x) to cause the Trust
to fail or cease to qualify as a "grantor trust" for United States federal
income tax purposes or (y) to require the Trust to register as an Investment
Company under the Investment Company Act, (iv) incur any indebtedness for
borrowed money or issue any other debt or (v) take or consent to any action that
would result in the placement of a lien on any of the Trust Property. The
Institutional Trustee shall, at the sole cost and expense of the Trust, defend
all claims and demands of all Persons at any time claiming any lien on any of
the Trust Property adverse to the interest of the Trust or the Holders in their
capacity as Holders.
(c) In connection with the issuance and sale of the Capital Securi-
ties, the Sponsor shall have the right and responsibility to assist the Trust
with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Sponsor in furtherance of the following prior to the date
of this Declaration are hereby ratified and confirmed in all respects):
(i) the taking of any action necessary to obtain an exemption
from the Securities Act;
(ii) the determination of the States in which to take appro-
priate action to qualify or register for sale all or part of the Capital
Securities and the determination of any and all such acts, other than actions
which must be taken by or on behalf of the Trust, and the advice to the Trustees
of actions they must take on behalf of the Trust, and the preparation for
execution and filing of any documents to be executed and filed by the Trust or
on behalf of the Trust, as the Sponsor deems necessary or advisable in order to
comply with the applicable laws of any such States in connection with the sale
of the Capital Securities;
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(iii) the negotiation of the terms of, and the execution and
delivery of, the Placement Agreement providing for the sale of the Capital
Securities; and
(iv) the taking of any other actions necessary or desirable to
carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, the Administra-
tors and the Holders of a Majority in liquidation amount of the Common
Securities are authorized and directed to conduct the affairs of the Trust and
to operate the Trust so that the Trust will not (i) be deemed to be an
Investment Company required to be registered under the Investment Company Act,
and (ii) fail to be classified as a grantor trust for United States federal
income tax purposes. The Administrators and the Holders of a Majority in
liquidation amount of the Common Securities shall not take any action
inconsistent with the treatment of the Debentures as indebtedness of the
Debenture Issuer for United States federal income tax purposes. In this
connection, the Administrators and the Holders of a Majority in liquidation
amount of the Common Securities are authorized to take any action, not
inconsistent with applicable laws, the Certificate of Trust or this Declaration,
as amended from time to time, that each of the Administrators and the Holders of
a Majority in liquidation amount of the Common Securities determines in their
discretion to be necessary or desirable for such purposes.
(e) All expenses incurred by the Administrators or the Trustees pur-
suant to this Section 2.6 shall be reimbursed by the Sponsor, and the Trustees
shall have no obligations with respect to such expenses.
(f) The assets of the Trust shall consist of the Trust Property.
(g) Legal title to all Trust Property shall be vested at all
times in the Institutional Trustee (in its capacity as such) and shall be held
and administered by the Institutional Trustee for the benefit of the Trust in
accordance with this Declaration.
Section 2.7 Prohibition of Actions by the Trust and the Trustees.
----------------------------------------------------
(a) The Trust shall not, and the Institutional Trustee shall cause
the Trust not to, engage in any activity other than as required or authorized by
this Declaration. In particular, the Trust shall not and the Institutional
Trustee shall cause the Trust not to:
(i) invest any proceeds received by the Trust from holding
the Debentures, but shall distribute all such proceeds to Holders of the
Securities pursuant to the terms of this Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
(iii) possess Trust Property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way whatsoever other
than as expressly provided herein;
(vi) issue any securities or other evidences of beneficial
ownership of, or beneficial interest in, the Trust other than the Securities;
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(vii) carry on any "trade or business" as that phrase is used
in the Code; or
(viii) other than as provided in this Declaration (including
Annex I), (A) direct the time, method and place of exercising any trust or power
conferred upon the Debenture Trustee with respect to the Debentures, (B) waive
any past default that is waivable under the Indenture, (C) exercise any right to
rescind or annul any declaration that the principal of all the Debentures shall
be due and payable, or (D) consent to any amendment, modification or termination
of the Indenture or the Debentures where such consent shall be required unless
the Trust shall have received an opinion of counsel to the effect that such
modification will not cause the Trust to cease to be classified as a grantor
trust for United States federal income tax purposes.
Section 2.8 Powers and Duties of the Institutional Trustee.
----------------------------------------------
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Institutional Trustee in trust for the benefit of the
Trust and the Holders of the Securities. The right, title and interest of the
Institutional Trustee to the Debentures shall vest automatically in each Person
who may hereafter be appointed as Institutional Trustee in accordance with
Section 4.4. Such vesting and cessation of title shall be effective whether or
not conveyancing documents with regard to the Debentures have been executed and
delivered.
(b) The Institutional Trustee shall not transfer its right, title and
interest in the Debentures to the Administrators.
(c) The Institutional Trustee shall:
(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Account") in the name of and under the exclusive
-----------------
control of the Institutional Trustee, and maintained in the Institutional
Trustee's trust department, on behalf of the Holders of the Securities and, upon
the receipt of payments of funds made in respect of the Debentures held by the
Institutional Trustee, deposit such funds into the Property Account and make
payments, or cause the Paying Agent to make payments, to the Holders of the
Capital Securities and Holders of the Common Securities from the Property
Account in accordance with Section 5.1. Funds in the Property Account shall be
held uninvested until disbursed in accordance with this Declaration;
(ii) engage in such ministerial activities as shall be
necessary or appropriate to effect the redemption of the Capital Securities and
the Common Securities to the extent the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the
Administrators in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders of Securities upon the occurrence of
certain circumstances pursuant to the terms of the Securities.
(d) The Institutional Trustee may bring or defend, pay, collect,
compromise, arbitrate, resort to legal action with respect to, or otherwise
adjust claims or demands of or against, the Trust ("Legal Action") which arises
------------
out of or in connection with an Event of Default of which a Responsible Officer
of the Institutional Trustee has actual knowledge or arises out of the
Institutional Trustee's duties and obligations under this Declaration; provided,
--------
however, that if an Event of Default has occurred and is continuing and such
-------
event is attributable to the failure of the Debenture Issuer to pay interest or
principal on the Debentures on the date such interest or principal is otherwise
payable (or in the case of redemption, on the redemption date), then a Holder of
the Capital Securities may directly institute a proceeding for
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enforcement of payment to such Holder of the principal of or interest on the
Debentures having a principal amount equal to the aggregate liquidation amount
of the Capital Securities of such Holder (a "Direct Action") on or after the
respective due date specified in the Debentures. In connection with such Direct
Action, the rights of the Holders of the Common Securities will be subrogated to
the rights of such Holder of the Capital Securities to the extent of any payment
made by the Debenture Issuer to such Holder of the Capital Securities in such
Direct Action; provided, however, that no Holder of the Common Securities may
exercise such right of subrogation so long as an Event of Default with respect
to the Capital Securities has occurred and is continuing.
(e) The Institutional Trustee shall continue to serve as a Trustee
until either:
(i) the Trust has been completely liquidated and the proceeds
of the liquidation distributed to the Holders of the Securities pursuant to the
terms of the Securities and this Declaration; or
(ii) a Successor Institutional Trustee has been appointed and
has accepted that appointment in accordance with Section 4.4.
(f) The Institutional Trustee shall have the legal power to exercise
all of the rights, powers and privileges of a Holder of the Debentures under the
Indenture and, if an Event of Default occurs and is continuing, the
Institutional Trustee may, for the benefit of Holders of the Securities, enforce
its rights as holder of the Debentures subject to the rights of the Holders
pursuant to this Declaration (including Annex I) and the terms of the
Securities.
The Institutional Trustee must exercise the powers set forth in this
Section 2.8 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 2.3, and the Institutional Trustee shall not take
any action that is inconsistent with the purposes and functions of the Trust set
out in Section 2.3.
Section 2.9 Certain Duties and Responsibilities of the Trustees
---------------------------------------------------------
and Administrators.
------------------
(a) The Institutional Trustee, before the occurrence of any Event of
Default and after the curing or waiving of all such Events of Default that may
have occurred, shall undertake to perform only such duties as are specifically
set forth in this Declaration and no implied covenants shall be read into this
Declaration against the Institutional Trustee. In case an Event of Default has
occurred (that has not been cured or waived pursuant to Section 6.7), the
Institutional Trustee shall exercise such of the rights and powers vested in it
by this Declaration, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his or her own affairs.
(b) The duties and responsibilities of the Trustees and the Adminis-
trators shall be as provided by this Declaration. Notwithstanding the foregoing,
no provision of this Declaration shall require the Trustees or Administrators to
expend or risk their own funds or otherwise incur any financial liability in the
performance of any of their duties hereunder, or in the exercise of any of their
rights or powers if it shall have reasonable grounds to believe that repayment
of such funds or adequate protection against such risk of liability is not
reasonably assured to it. Whether or not therein expressly so provided, every
provision of this Declaration relating to the conduct or affecting the liability
of or affording protection to the Trustees or Administrators shall be subject to
the provisions of this Article. Nothing in this Declaration shall be construed
to relieve an Administrator or Trustee from liability for its own negligent
failure to act, or its own willful misconduct. To the extent that, at law or in
equity, a Trustee or an Administrator has duties and liabilities relating to the
Trust or to the Holders, such Trustee or
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Administrator shall not be liable to the Trust or to any Holder for such
Trustee's or Administrator's good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of the Administrators or the Trustees
otherwise existing at law or in equity, are agreed by the Sponsor and the
Holders to replace such other duties and liabilities of the Administrators or
the Trustees.
(c) All payments made by the Institutional Trustee or a Paying Agent
in respect of the Securities shall be made only from the revenue and proceeds
from the Trust Property and only to the extent that there shall be sufficient
revenue or proceeds from the Trust Property to enable the Institutional Trustee
or a Paying Agent to make payments in accordance with the terms hereof. Each
Holder, by its acceptance of a Security, agrees that it will look solely to the
revenue and proceeds from the Trust Property to the extent legally available for
distribution to it as herein provided and that the Trustees and the
Administrators are not personally liable to it for any amount distributable in
respect of any Security or for any other liability in respect of any Security.
This Section 2.9(c) does not limit the liability of the Trustees expressly set
forth elsewhere in this Declaration.
(d) The Institutional Trustee shall not be liable for its own acts
or omissions hereunder except as a result of its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(i) the Institutional Trustee shall not be liable for any
error of judgment made in good faith by an Authorized Officer of the
Institutional Trustee, unless it shall be proved that the Institutional Trustee
was negligent in ascertaining the pertinent facts;
(ii) the Institutional Trustee shall not be liable with
respect to any action taken or omitted to be taken by it in good faith in
accordance with the direction of the Holders of not less than a Majority in
liquidation amount of the Capital Securities or the Common Securities, as
applicable, relating to the time, method and place of conducting any proceeding
for any remedy available to the Institutional Trustee, or exercising any trust
or power conferred upon the Institutional Trustee under this Declaration;
(iii) the Institutional Trustee's sole duty with respect to
the custody, safekeeping and physical preservation of the Debentures and the
Property Account shall be to deal with such property in a similar manner as the
Institutional Trustee deals with similar property for its fiduciary accounts
generally, subject to the protections and limitations on liability afforded to
the Institutional Trustee under this Declaration;
(iv) the Institutional Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree in writing
with the Sponsor; and money held by the Institutional Trustee need not be
segregated from other funds held by it except in relation to the Property
Account maintained by the Institutional Trustee pursuant to Section 2.8(c)(i)
and except to the extent otherwise required by law; and
(v) the Institutional Trustee shall not be responsible for
monitoring the compliance by the Administrators or the Sponsor with their
respective duties under this Declaration, nor shall the Institutional Trustee be
liable for any default or misconduct of the Administrators or the Sponsor.
Section 2.10 Certain Rights of Institutional Trustee. Subject to
-------------------------------------------
the provisions of Section 2.9:
14
<PAGE>
(a) the Institutional Trustee may conclusively rely and shall fully
be protected in acting or refraining from acting in good faith upon any
resolution, opinion of counsel, certificate, written representation of a Holder
or transferee, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order,
appraisal, bond, debenture, note, other evidence of indebtedness or other paper
or document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties;
(b) if (i) in performing its duties under this Declaration, the
Institutional Trustee is required to decide between alternative courses of
action, (ii) in construing any of the provisions of this Declaration, the
Institutional Trustee finds the same ambiguous or inconsistent with any other
provisions contained herein, or (iii) the Institutional Trustee is unsure of the
application of any provision of this Declaration, then, except as to any matter
as to which the Holders of Capital Securities are entitled to vote under the
terms of this Declaration, the Institutional Trustee may deliver a notice to the
Sponsor requesting the Sponsor's written instructions as to the course of action
to be taken and the Institutional Trustee shall take such action, or refrain
from taking such action, as the Institutional Trustee shall be instructed in
writing, in which event the Institutional Trustee shall have no liability except
for its own negligence or willful misconduct;
(c) any direction or act of the Sponsor or the Administrators contem-
plated by this Declaration shall be sufficiently evidenced by an Officers'
Certificate;
(d) whenever in the administration of this Declaration, the
Institutional Trustee shall deem it desirable that a matter be proved or
established before undertaking, suffering or omitting any action hereunder, the
Institutional Trustee (unless other evidence is herein specifically prescribed)
may request and conclusively rely upon an Officers' Certificate as to factual
matters which, upon receipt of such request, shall be promptly delivered by the
Sponsor or the Administrators;
(e) the Institutional Trustee shall have no duty to see to any
recording, filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or reregistration thereof;
(f) the Institutional rustee may consult with counsel of its selec-
tion (which counsel may be counsel to the Sponsor or any of its Affiliates) and
the advice of such counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon and in accordance with such advice; the
Institutional Trustee shall have the right at any time to seek instructions
concerning the administration of this Declaration from any court of competent
jurisdiction;
(g) the Institutional Trustee shall be under no obligation to exer-
cise any of the rights or powers vested in it by this Declaration at the request
or direction of any of the Holders pursuant to this Declaration, unless such
Holders shall have offered to the Institutional Trustee security or indemnity
reasonably satisfactory to it against the costs, expenses and liabilities which
might be incurred by it in compliance with such request or direction; provided,
that nothing contained in this Section 2.10(g) shall be taken to relieve the
Institutional Trustee, subject to Section 2.9(b), upon the occurrence of an
Event of Default, to exercise such of the rights and powers vested in it by this
Declaration, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs;
(h) the Institutional Trustee shall not be bound to make any investi-
gation into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
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<PAGE>
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to do so by
one or more Holders, but the Institutional Trustee may make such further inquiry
or investigation into such facts or matters as it may see fit;
(i) the Institutional Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through its
agents or attorneys and the Institutional Trustee shall not be responsible
for any misconduct or negligence on the part of or for the supervision of,
any such agent or attorney appointed with due care by it hereunder;
(j) whenever in the administration of this Declaration the Institu-
tional Trustee shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder the
Institutional Trustee (i) may request instructions from the Holders of the
Capital Securities which instructions may only be given by the Holders of the
same proportion in liquidation amount of the Capital Securities as would be
entitled to direct the Institutional Trustee under the terms of the Capital
Securities in respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting in
accordance with such instructions;
(k) except as otherwise expressly provided in this Declara-
tion, the Institutional Trustee shall not be under any obligation to take any
action that is discretionary under the provisions of this Declaration;
(l) when the Institutional Trustee incurs expenses or renders
services in connection with a Bankruptcy Event, such expenses (including the
fees and expenses of its counsel) and the compensation for such services are
intended to constitute expenses of administration under any bankruptcy law or
law relating to creditors rights generally;
(m) the Institutional Trustee shall not be charged with knowledge of
an Event of Default unless a Responsible Officer of the Institutional Trustee
obtains actual knowledge of such event or the Institutional Trustee receives
written notice of such event from any Holder, the Sponsor or the Debenture
Trustee;
(n) any action taken by the Institutional Trustee or its agents here-
under shall bind the Trust and the Holders of the Securities, and the signature
of the Institutional Trustee or its agents alone shall be sufficient and
effective to perform any such action and no third party shall be required to
inquire as to the authority of the Institutional Trustee to so act or as to its
compliance with any of the terms and provisions of this Declaration, both of
which shall be conclusively evidenced by the Institutional Trustee's or its
agent's taking such action; and
(o) no provision of this Declaration shall be deemed to impose
any duty or obligation on the Institutional Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Institutional
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Institutional
Trustee shall be construed to be a duty.
Section 2.11 Execution of Documents. Unless otherwise determined in
----------------------
writing by the Institutional Trustee, and except as otherwise required by the
Statutory Trust Act, the Institutional Trustee, or any one or more of the
Administrators, as the case may be, is authorized to execute on behalf
16
<PAGE>
of the Trust any documents that the Trustees or the Administrators, as the case
may be, have the power and authority to execute pursuant to Section 2.6.
Section 2.12 Not Responsible for Recitals or Issuance of Securities.
--------------------------------------------------------
The recitals contained in this Declaration and the Securities shall be taken as
the statements of the Sponsor, and the Trustees do not assume any responsibility
for their correctness. The Trustees make no representations as to the value or
condition of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration, the
Debentures or the Securities.
Section 2.13 Duration of Trust. The Trust, unless earlier dis-
-------------------
solved pursuant to the provisions of Article VII hereof, shall be in existence
for 35 years from the Closing Date.
Section 2.14 Mergers.
-------
(a) The Trust may not consolidate, amalgamate, merge with or
into, or be replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other body, except as
described in this Section 2.14(b) and (c).
(b) The Trust may, with the consent of the Institutional Trustee and
without the consent of the Holders of the Capital Securities, consolidate,
amalgamate, merge with or into, or be replaced by a trust organized as such
under the laws of any state; provided that:
(i) if the Trust is not the surviving entity, 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 "Suc-
cessor Securities") so that the Successor Securities rank the
same as the Securities rank with respect to Distributions and
payments upon Liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Institutional Trustee as
the Holder of the Debentures;
(iii) such merger, consolidation, amalgamation or replacement
does not adversely affect the rights, preferences and privileges of the Holders
of the Securities (including any Successor Securities) in any material respect
(other than with respect to any dilution of such Holders' interests in the
Successor Entity as a result of such merger, consolidation, amalgamation or
replacement);
(iv) the Institutional Trustee receives written confirmation
from Moody's Investor Services, Inc. or any other nationally recognized
statistical rating organization that rates securities issued by the initial
purchase of the Capital Securities that it will not reduce or withdraw the
rating of any such securities because of such merger, conversion, consolidation,
amalgamation or replacement;
(v) such Successor Entity has a purpose substantially identi-
cal to that of the Trust;
17
<PAGE>
(vi) prior to such merger, consolidation, amalgamation or
replacement, the Trust has received an opinion of a nationally recognized
independent counsel to the Trust experienced in such matters to the effect that:
(A) such merger, consolidation, amalgamation or
replacement does not adversely affect the rights, preferences and
privileges of the Holders of the Securities (including any
Successor Securities) in any material respect (other than with
respect to any dilution of the Holders' interest in the Successor
Entity);
(B) following such merger, consolidation, amalga-
mation or replacement, neither the Trust nor the Successor Entity
will be required to register as an Investment Company; and
(C) following such merger, consolidation, amalga-
mation or replacement, the Trust (or the Successor Entity) will
continue to be classified as a grantor trust for United States
federal income tax purposes;
(vii) the Sponsor guarantees the obligations of such Successor
Entity under the Successor Securities at least to the extent provided by the
Guarantee;
(viii) the Sponsor owns 100% of the common securities of any
Successor Entity; and
(ix) prior to such merger, consolidation, amalgamation or
replacement, the Institutional Trustee shall have received an Officers'
Certificate of the Administrators and an opinion of counsel, each to the effect
that all conditions precedent under this Section 2.14(b) to such transaction
have been satisfied.
(c) Notwithstanding Section 2.14(b), the Trust shall not, except
with the consent of Holders of 100% in aggregate liquidation amount of the
Securities, consolidate, amalgamate, merge with or into, or be replaced by any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger or
replacement would cause the Trust or Successor Entity to be classified as other
than a grantor trust for United States federal income tax purposes.
ARTICLE III
SPONSOR
Section 3.1 Sponsor's Purchase of Common Securities. On the Closing
----------------------------------------
Date, the Sponsor will purchase all of the Common Securities issued by the Trust
in an amount at least equal to 3% of the capital of the Trust, at the same time
as the Capital Securities are sold.
Section 3.2 Responsibilities of the Sponsor. In connection with the
-------------------------------
issue and sale of the Capital Securities, the Sponsor shall have the exclusive
right and responsibility to engage in, or direct the Administrators to engage
in, the following activities:
(a) to determine the States in which to take appropriate action to
qualify or register for sale all or part of the Capital Securities and to do any
and all such acts, other than actions which must be taken by the Trust, and
advise the Trust of actions it must take, and prepare for execution and filing
any documents to be executed and filed by the Trust, as the Sponsor deems
necessary or advisable in order to comply with the applicable laws of any such
States; and
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<PAGE>
(b) to negotiate the terms of and/or execute on behalf of the
Trust, the Placement Agreement, and other related agreements providing for the
sale of the Capital Securities.
Section 3.3 Expenses. In connection with the offering, sale and
--------
issuance of the Debentures to the Institutional Trustee and in connection with
the sale of the Securities by the Trust, the Sponsor, in its capacity as
Debenture Issuer, shall:
(a) pay all costs and expenses relating to the offering, sale and
issuance of the Debentures, including compensation of the Debenture Trustee
under the Indenture in accordance with the provisions of the Indenture;
(b) be responsible for and shall pay all debts and obligations (other
than with respect to the Securities) and all costs and expenses of the Trust
(including, but not limited to, costs and expenses relating to the organization,
maintenance and dissolution of the Trust), the offering, sale and issuance of
the Securities (including fees to the placement agents in connection therewith),
the fees and expenses (including reasonable counsel fees and expenses) of the
Institutional Trustee and the Administrators, the costs and expenses relating to
the operation of the Trust, including, without limitation, costs and expenses of
accountants, attorneys, statistical or bookkeeping services, expenses for
printing and engraving and computing or accounting equipment, Paying Agents,
Registrars, Transfer Agents, duplicating, travel and telephone and other
telecommunications expenses and costs and expenses incurred in connection with
the acquisition, financing, and disposition of Trust assets and the enforcement
by the Institutional Trustee of the rights of the Holders; and
(c) to pay any and all taxes (other than United States with-
holding taxes attributable to the Trust or its assets) and all liabilities,
costs and expenses with respect to such taxes of the Trust.
The Sponsor's obligations under this Section 3.3 shall be for the
benefit of, and shall be enforceable by, any Person to whom such debts,
obligations, costs, expenses and taxes are owed (a "Creditor") whether or not
--------
such Creditor has received notice hereof. Any such Creditor may enforce the
Sponsor's obligations under this Section 3.3 directly against the Sponsor and
the Sponsor irrevocably waives any right or remedy to require that any such
Creditor take any action against the Trust or any other Person before proceeding
against the Sponsor. The Sponsor agrees to execute such additional agreements as
may be necessary or desirable in order to give full effect to the provisions of
this Section 3.3.
Section 3.4 Right to Proceed. The Sponsor acknowledges the rights
of Holders to institute a Direct Action as set forth in Section 2.8(d)hereto.
ARTICLE IV
TRUSTEES AND ADMINISTRATORS
Section 4.1 Number of Trustees. The number of Trustees initially
------------------
shall be one (1), and:
(a) at any time before the issuance of any Securities, the Sponsor
may, by written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees
may be increased or decreased by vote of the Holders of a Majority in
liquidation amount of the Capital Securities voting as a class at a meeting of
the Holders of the Capital Securities; provided, however, that there shall
-------- -------
always be one Trustee who shall be the Institutional Trustee.
19
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Section 4.2 Institutional Trustee; Eligibility.
----------------------------------
(a) There shall at all times be one Trustee which shall act as Insti-
tutional Trustee which shall:
(i) not be an Affiliate of the Sponsor;
(ii) not offer or provide credit or credit enhancement to the
Trust; and
(iii) be a banking corporation or trust company organized and
doing business under the laws of the United States of America or 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 50
million U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, state, or District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the requirements
of the supervising or examining authority referred to above, then for the
purposes of this Section 4.2(a)(iii), the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published.
(b) If at any time the Institutional Trustee shall cease to be
eligible to so act under Section 4.2(a), the Institutional Trustee shall
immediately resign in the manner and with the effect set forth in Section
4.4(a).
(c) The initial Institutional Trustee shall be State Street Bank and
Trust Company of Connecticut, National Association.
Section 4.3 Administrators. Each Administrator shall be a U.S. Person,
--------------
21 years of age or older and authorized to bind the Sponsor. The initial
Administrators shall be Charles O. Hall and Patrick E. Phelan. There shall at
all times be at least one Administrator. Except where a requirement for action
by a specific number of Administrators is expressly set forth in this
Declaration and except with respect to any action the taking of which is the
subject of a meeting of the Administrators, any action required or permitted to
be taken by the Administrators may be taken by, and any power of the
Administrators may be exercised by, or with the consent of, any one such
Administrator.
Section 4.4 Appointment, Removal and Resignation of Trustees and
----------------------------------------------------
Administrators.
--------------
(a) Notwithstanding anything to the contrary in this Declaration, no
resignation or removal of any Trustee (the "Relevant Trustee") and no
------------------
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of this Section 4.4.
Subject to the immediately preceding paragraph, a Relevant Trustee may
resign at any time by giving written notice thereof to the Holders of the
Securities and by appointing a successor Relevant Trustee. Upon the resignation
of the Institutional Trustee, the Institutional Trustee shall appoint a
successor by requesting from at least three Persons meeting the eligibility
requirements, its expenses and charges to serve as the successor Institutional
Trustee on a form provided by the Administrators, and selecting the Person who
agrees to the lowest expense and charges (the "Successor Institutional
Trustee"). If the instrument of acceptance by the successor Relevant Trustee
required by this Section 4.4 shall not have been delivered to the Relevant
Trustee within 60 days after the giving of such notice of resignation or
delivery of the instrument of removal, the Relevant Trustee may petition, at the
expense of the Trust, any Federal, state or District of Columbia court of
competent jurisdiction for the appointment of a
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successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a Relevant Trustee. The
Institutional Trustee shall have no liability for the selection of such
successor pursuant to this Section 4.4.
The Institutional Trustee may be removed by the act of the Holders of a
Majority in liquidation amount of the Capital Securities, delivered to the
Relevant Trustee (in its individual capacity and on behalf of the Trust) if an
Event of Default shall have occurred and be continuing. If any Trustee shall be
so removed, the Holders of Capital Securities, by act of the Holders of a
Majority in liquidation amount of the Capital Securities then outstanding
delivered to the Relevant Trustee, shall promptly appoint a successor Relevant
Trustee or Trustees, and such successor Trustee shall comply with the applicable
requirements of this Section 4.4. If no successor Relevant Trustee shall have
been so appointed by the Holders of a Majority in liquidation amount of the
Capital Securities and accepted appointment in the manner required by this
Section 4.4, within 30 days after delivery of an instrument of removal, any
Holder who has been a Holder of the Securities for at least 6 months may, on
behalf of himself and all others similarly situated, petition any Federal, state
or District of Columbia court of competent jurisdiction for the appointment of a
successor Relevant Trustee. Such court may thereupon, after prescribing such
notice, if any, as it may deem proper, appoint a successor Relevant Trustee or
Trustees.
The Institutional Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Holders in the manner provided in Section 13.1(d) and shall give notice to the
Sponsor. Each notice shall include the name of the successor Relevant Trustee
and the address of its Corporate Trust Office if it is the Institutional
Trustee.
(b) In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such appointment and which
(i) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Securities and the Trust and (ii) shall add to or change any of the provisions
of this Declaration as shall be necessary to provide for or facilitate the
administration of the Trust by more than one Relevant Trustee, it being
understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees and upon the execution and delivery of such
amendment the resignation or removal of the retiring Relevant Trustee shall
become effective to the extent provided therein and each such successor Relevant
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Relevant Trustee; but,
on request of the Trust of any successor Relevant Trustee such retiring Relevant
Trustee shall duly assign, transfer and deliver to such successor Relevant
Trustee all Trust Property, all proceeds thereof and money held by such retiring
Relevant Trustee hereunder with respect to the Securities and the Trust.
(c) No Institutional Trustee shall be liable for the acts or omissions
to act of any Successor Institutional Trustee.
(d) The Holders of the Capital Securities will have no right to vote
to appoint, remove or replace the Administrators, which voting rights are vested
exclusively in the Holder of the Common Securities.
Section 4.5 Vacancies Among Trustees. If a Trustee ceases to hold
-------------------------
office for any reason and the number of Trustees is not reduced pursuant to
Section 4.1, or if the number of Trustees is increased pursuant to Section 4.1,
a vacancy shall occur. A resolution certifying the existence of such
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vacancy by the Trustees or, if there are more than two, a majority of the
Trustees shall be conclusive evidence of the existence of such vacancy. The
vacancy shall be filled with a Trustee appointed in accordance with Section 4.4.
Section 4.6 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 or terminate this Declaration. Whenever a vacancy in the number
of Trustees shall occur, until such vacancy is filled by the appointment of a
Trustee in accordance with Section 4.4, the Institutional Trustee shall have all
the powers granted to the Trustees and shall discharge all the duties imposed
upon the Trustees by this Declaration.
Section 4.7 Meetings of the Trustees and the Administrators. Meetings
-----------------------------------------------
of the Trustees or the Administrators shall be held from time to time upon the
call of any Trustee or Administrator, as applicable. Regular meetings of the
Trustees and the Administrators, respectively, may be held in person in the
United States or by telephone, at a place (if applicable) and time fixed by
resolution of the Trustees or the Administrators, as applicable. Notice of any
in-person meetings of the Trustees or the Administrators shall be hand delivered
or otherwise delivered in writing (including by facsimile, with a hard copy by
overnight courier) not less than 48 hours before such meeting. Notice of any
telephonic meetings of the Trustees or the Administrators or any committee
thereof shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of a Trustee or an Administrator, as the case may be, at a meeting
shall constitute a waiver of notice of such meeting except where a Trustee or an
Administrator, as the case may be, attends a meeting for the express purpose of
objecting to the transaction of any activity on the grounds that the meeting has
not been lawfully called or convened. Unless provided otherwise in this
Declaration, any action of the Trustees or the Administrators, as the case may
be, may be taken at a meeting by vote of a majority of the Trustees or the
Administrators present (whether in person or by telephone) and eligible to vote
with respect to such matter, provided that a Quorum is present, or without a
meeting by the unanimous written consent of the Trustees or the Administrators.
Meetings of the Trustees and the Administrators together shall be held from time
to time upon the call of any Trustee or Administrator.
Section 4.8 Delegation of Power.
-------------------
(a) Any Administrator may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 that is
a U.S. Person his or her power for the purpose of executing any documents
contemplated in Section 2.6; and
(b) the Administrators shall have power to delegate from time to time
to such of their number the doing of such things and the execution of such
instruments either in the name of the Trust or the names of the Administrators
or otherwise as the Administrators may deem expedient, to the extent such
delegation is not prohibited by applicable law or contrary to the provisions of
the Trust, as set forth herein.
Section 4.9 Conversion, Consolidation or Succession to Business.
-------------------------------------------------------
Any Person into which the Institutional Trustee 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 Institutional Trustee shall be a party,
or any Person succeeding to all or substantially all the corporate trust
business of the Institutional Trustee shall be the successor of the
Institutional Trustee hereunder, provided such Person shall be otherwise
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qualified and eligible under this Article, without the execution or filing of
any paper or any further act on the part of any of the parties hereto.
ARTICLE V
DISTRIBUTIONS
Section 5.1 Distributions. Holders shall receive Distributions
-------------
in accordance with the applicable terms of the relevant Holder's Securities.
Distributions shall be made on the Capital Securities and the Common Securities
in accordance with the preferences set forth in their respective terms. If and
to the extent that the Debenture Issuer makes a payment of Interest (or any
principal on the Debentures held by the Institutional Trustee) (the amount of
any such payment being a "Payment Amount"), the Institutional Trustee shall and
is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VI
ISSUANCE OF SECURITIES
Section 6.1 General Provisions Regarding Securities.
---------------------------------------
(a) The Administrators shall, on behalf of the Trust, issue one
series of capital securities substantially in the form of Exhibit A-1
representing undivided beneficial interests in the assets of the Trust having
such terms as are set forth in Annex I (the "Capital Securities") and one series
of common securities representing undivided beneficial interests in the assets
of the Trust having such terms as are set forth in Annex I (the "Common
Securities"). The Trust shall issue no securities or other interests in the
assets of the Trust other than the Capital Securities and the Common Securities.
The Capital Securities rank pari passu to, and payment thereon shall be made Pro
Rata with, the Common Securities except that, where an Event of Default has
occurred and is continuing, the rights of Holders of the Common Securities to
payment in respect of Distributions and payments upon liquidation, redemption
and otherwise are subordinated to the rights to payment of the Holders of the
Capital Securities as set forth in Annex I.
(b) The Certificates shall be signed on behalf of the Trust by
one or more Administrators. Such signature shall be the facsimile or manual
signature of any Administrator. In case any Administrator of the Trust who shall
have signed any of the Securities shall cease to be such Administrator before
the Certificates so signed shall be delivered by the Trust, such Certificates
nevertheless may be delivered as though the person who signed such Certificates
had not ceased to be such Administrator, and any Certificate may be signed on
behalf of the Trust by such persons who, at the actual date of execution of such
Security, shall be an Administrator of the Trust, although at the date of the
execution and delivery of the Declaration any such person was not such an
Administrator. A Capital Security shall not be valid until authenticated by the
manual signature of an Authorized Officer of the Institutional Trustee. Such
signature shall be conclusive evidence that the Capital Security has been
authenticated under this Declaration. Upon written order of the Trust signed by
one Administrator, the Institutional Trustee shall authenticate the Capital
Securities for original issue. The Institutional Trustee may appoint an
authenticating agent that is a U.S. Person acceptable to the Trust to
authenticate the Capital Securities. A Common Security need not be so
authenticated.
(c) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
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(d) Upon issuance of the Securities as provided in this Declaration,
the Securities so issued shall be deemed to be validly issued, fully paid
and non-assessable.
(e) Every Person, by virtue of having become a Holder in accordance
with the terms of this Declaration, shall be deemed to have expressly assented
and agreed to the terms of, and shall be bound by, this Declaration and the
Guarantee.
Section 6.2 Paying Agent, Transfer Agent and Registrar. The Trust
-------------------------------------------
shall maintain in Hartford, Connecticut, an office or agency where the Capital
Securities may be presented for payment ("Paying Agent"), and an office or
-------------
agency where Securities may be presented for registration of transfer (the
"Transfer Agent"). The Trust shall keep or cause to be kept at such office or
---------------
agency a register for the purpose of registering Securities, transfers and
exchanges of Securities, such register to be held by a registrar (the
"Registrar"). The Administrators may appoint the Paying Agent, the Registrar,
---------
the Transfer Agent and may appoint one or more additional Paying Agents or one
or more co-Registrars, or one or more co-Transfer Agents in such other locations
as it shall determine. The term "Paying Agent" includes any additional paying
------------
agent, the term "Registrar" includes any additional registrar or co-Registrar
---------
and the term "Transfer Agent" includes any additional transfer agent. The
---------------
Administrators may change any Paying Agent without prior notice to any Holder.
The Administrators shall notify the Institutional Trustee of the name and
address of any Paying Agent, Transfer Agent and Registrar not a party to this
Declaration. The Administrators hereby appoint the Institutional Trustee to act
as Paying Agent, Transfer Agent and Registrar for the Capital Securities and the
Common Securities. The Institutional Trustee or any of its Affiliates in the
United States may act as Paying Agent, Transfer Agent or Registrar.
Section 6.3 Form and Dating. The Capital Securities and the Institu-
---------------
tional Trustee's certificate of authentication thereon shall be substantially in
the form of Exhibit A-1, and the Common Securities shall be substantially in the
form of Exhibit A-2, each of which is hereby incorporated in and expressly made
a part of this Declaration. Certificates may be typed, printed, lithographed or
engraved or may be produced in any other manner as is reasonably acceptable to
the Administrators, as conclusively evidenced by their execution thereof. The
Securities may have letters, numbers, notations or other marks of identification
or designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the
Sponsor). The Trust at the direction of the Sponsor shall furnish any such
legend not contained in Exhibit A-1 to the Institutional Trustee in writing.
Each Capital Security shall be dated the date of its authentication. The terms
and provisions of the Securities set forth in Annex I and the forms of
Securities set forth in Exhibits A-1 and A-2 are part of the terms of this
Declaration and to the extent applicable, the Institutional Trustee, the
Administrators and the Sponsor, by their execution and delivery of this
Declaration, expressly agree to such terms and provisions and to be bound
thereby. Capital Securities will be issued only in blocks having a stated
liquidation amount of not less than $500,000 and any multiple of $1,000 in
excess thereof.
The Capital Securities are being offered and sold by the Trust pursuant
to the Placement Agreement in definitive, registered form without coupons with
the Restricted Securities Legend.
Section 6.4 Mutilated, Destroyed, Lost or Stolen Certificates.
-------------------------------------------------
If:
(a) any mutilated Certificates should be surrendered to the
Registrar, or if the Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate; and
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(b) there shall be delivered to the Registrar, the Administrators
and the Institutional Trustee such security or indemnity as may be required by
them to keep each of them harmless;
then, in the absence of notice that such Certificate shall have been acquired by
a protected purchaser, an Administrator on behalf of the Trust shall execute
(and in the case of a Capital Security Certificate, the Institutional Trustee
shall authenticate) and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Certificate, a new Certificate of like
denomination. In connection with the issuance of any new Certificate under this
Section 6.4, the Registrar or the Administrators may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection therewith. Any duplicate Certificate issued pursuant to this
Section shall constitute conclusive evidence of an ownership interest in the
relevant Securities, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.
Section 6.5 Temporary Securities. Until definitive Securities are
---------------------
ready for delivery, the Administrators may prepare and, in the case of the
Capital Securities, the Institutional Trustee shall authenticate temporary
Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Administrators consider
appropriate for temporary Securities. Without unreasonable delay, the
Administrators shall prepare and, in the case of the Capital Securities, the
Institutional Trustee shall authenticate definitive Securities in exchange for
temporary Securities.
Section 6.6 Cancellation. The Administrators at any time may deliver
------------
Securities to the Institutional Trustee for cancellation. The Registrar shall
forward to the Institutional Trustee any Securities surrendered to it for
registration of transfer, redemption or payment. The Institutional Trustee shall
promptly cancel all Securities surrendered for registration of transfer, payment
replacement or cancellation and shall dispose of such canceled Securities as the
Administrators direct. The Administrators may not issue new Securities to
replace Securities that have been paid or that have been delivered to the
Institutional Trustee for cancellation.
Section 6.7 Rights of Holders; Waivers of Past Defaults.
-------------------------------------------
(a) The legal title to the Trust Property is vested exclusively
in the Institutional Trustee (in its capacity as such) in accordance with
Section 2.5, and the Holders shall not have any right or title therein other
than the undivided beneficial interest in the assets of the Trust conferred by
their Securities and they shall have no right to call for any partition or
division of property, profits or rights of the Trust except as described below.
The Securities shall be personal property giving only the rights specifically
set forth therein and in this Declaration. The Securities shall have no
preemptive or similar rights.
(b) For so long as any Capital Securities remain outstanding,
if upon an Indenture Event of Default, the Debenture Trustee fails or the
holders of not less than 25% in principal amount of the outstanding Debentures
fail to declare the principal of all of the Debentures to be immediately due and
payable, the Holders of a Majority in liquidation amount of the Capital
Securities then outstanding shall have the right to make such declaration by a
notice in writing to the Institutional Trustee, the Sponsor and the Debenture
Trustee.
At any time after a declaration of acceleration with respect to the
Debentures has been made and before a judgment or decree for payment of the
money due has been obtained by the Debenture Trustee as provided in the
Indenture, if the Institutional Trustee fails to annul any such declaration and
waive such default, the Holders of a Majority in liquidation amount of the
Capital Securities, by written notice to the Institutional Trustee, the Sponsor
and the Debenture Trustee, may rescind and annul such declaration and its
consequences if:
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(i) the Debenture Issuer has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest on all of the
Debentures,
(B) any accrued Additional Interest on all of the Debentures,
(C) the principal of (and premium, if any, on) any Debentures
that have become due otherwise than by such declaration of
acceleration and interest and Additional Interest thereon at the rate
borne by the Debentures, and
(D) all sums paid or advanced by the Debenture Trustee under
the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Debenture Trustee and the
Institutional Trustee, their agents and counsel; and
(ii) all Events of Default with respect to the Debentures, other
than the non-payment of the principal of the Debentures that has become due
solely by such acceleration, have been cured or waived as provided in Section
5.7 of the Indenture.
The Holders of at least a majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default or Event of Default under the Indenture, except a default or
Event of Default in the payment of principal or interest (unless such default or
Event of Default has been cured and a sum sufficient to pay all matured
installments of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee) or a default or Event of Default in
respect of a covenant or provision that under the Indenture cannot be modified
or amended without the consent of the holder of each outstanding Debenture. No
such rescission shall affect any subsequent default or impair any right
consequent thereon.
Upon receipt by the Institutional Trustee of written notice declaring
such an acceleration, or rescission and annulment thereof, by Holders of any
part of the Capital Securities, a record date shall be established for
determining Holders of outstanding Capital Securities entitled to join in such
notice, which record date shall be at the close of business on the day the
Institutional Trustee receives such notice. The Holders on such record date, or
their duly designated proxies, and only such Persons, shall be entitled to join
in such notice, whether or not such Holders remain Holders after such record
date; provided, that unless such declaration of acceleration, or rescission and
annulment, as the case may be, shall have become effective by virtue of the
requisite percentage having joined in such notice prior to the day that is 90
days after such record date, such notice of declaration of acceleration, or
rescission and annulment, as the case may be, shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new written notice of declaration of
acceleration, or rescission and annulment thereof, as the case may be, that is
identical to a written notice that has been canceled pursuant to the proviso to
the preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.7.
(c) Except as otherwise provided in paragraphs (a) and (b) of this Section 6.7,
the Holders of at least a majority in liquidation amount of the Capital
Securities may, on behalf of the Holders of all the Capital Securities, waive
any past default or Event of Default and its consequences. Upon such waiver, any
such default or Event of Default shall cease to exist, and any default or Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Trust Agreement, but no
26
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such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
ARTICLE VII
DISSOLUTION AND TERMINATION OF TRUST
Section 7.1 Dissolution and Termination of Trust.
------------------------------------
(a) The Trust shall dissolve on the first to occur of:
(i) unless earlier dissolved, on September 7, 2035, the expi-
ration of the term of the Trust;
(ii) upon a Bankruptcy Event with respect to the Sponsor, the
Trust or the Debenture Issuer;
(iii) (other than in connection with a merger, consolidation
or similar transaction not prohibited by the Indenture, this Declaration or the
Guarantee, as the case may be) upon the filing of a certificate of dissolution
or its equivalent with respect to the Sponsor, upon the consent of Holders of a
Majority in liquidation amount of the Securities voting together as a single
class to file a certificate of cancellation with respect to the Trust or upon
the revocation of the charter of the Sponsor and the expiration of 90 days after
the date of revocation without a reinstatement thereof;
(iv) upon the distribution of the Debentures to the Holders of
the Securities;
(v) upon exercise of the right of the Holder of all of the
outstanding Common Securities to dissolve the Trust as provided in Annex I
hereto;
(vi) upon the entry of a decree of judicial dissolution of the
Holder of the Common Securities, the Sponsor, the Trust or the Debenture Issuer;
(vii) when all of the Securities shall have been called for
redemption and the amounts necessary for redemption thereof shall have been paid
to the Holders in accordance with the terms of the Securities; or
(viii) before the issuance of any Securities, with the consent
of all of the Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event
referred to in Section 7.1(a), and after satisfaction of liabilities to
creditors of the Trust as required by applicable law, including of the Statutory
Trust Act, and subject to the terms set forth in Annex I, the Institutional
Trustee shall terminate the Trust by filing a certificate of cancellation with
the Secretary of State of the State of Connecticut.
(c) The provisions of Section 2.9 and Article IX shall survive the
termination of the Trust.
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ARTICLE VIII
TRANSFER OF INTERESTS
Section 8.1 General.
-------
(a) Subject to Section 8.1(c), where Capital Securities are presented
to the Registrar or a co-registrar with a request to register a transfer or to
exchange them for an equal number of Capital Securities represented by different
certificates, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met. To permit registrations of
transfer and exchanges, the Trust shall issue and the Institutional Trustee
shall authenticate Capital Securities at the Registrar's request.
(b) Upon issuance of the Common Securities, the Sponsor shall acquire
and retain beneficial and record ownership of the Common Securities and for so
long as the Securities remain outstanding, the Sponsor shall maintain 100%
ownership of the Common Securities; provided, however, that any permitted
successor of the Sponsor, in its capacity as Debenture Issuer, under the
Indenture that is a U.S. Person may succeed to the Sponsor's ownership of the
Common Securities.
(c) Capital Securities may only be transferred, in whole or in
part, in accordance with the terms and conditions set forth in this Declaration
and in the terms of the Securities. To the fullest extent permitted by
applicable law, any transfer or purported transfer of any Security not made in
accordance with this Declaration shall be null and void and will be deemed to be
of no legal effect whatsoever and any such transferee shall be deemed not to be
the holder of such Capital Securities for any purpose, including but not limited
to the receipt of Distributions on such Capital Securities, and such transferee
shall be deemed to have no interest whatsoever in such Capital Securities.
(d) The Registrar shall provide for the registration of Securities
and of transfers of Securities, which will be effected without charge but only
upon payment (with such indemnity as the Registrar may require) in respect of
any tax or other governmental charges that may be imposed in relation to it.
Upon surrender for registration of transfer of any Securities, the Registrar
shall cause one or more new Securities of the same tenor to be issued in the
name of the designated transferee or transferees. Every Security surrendered for
registration of transfer shall be accompanied by a written instrument of
transfer in form satisfactory to the Registrar duly executed by the Holder or
such Holder's attorney duly authorized in writing. Each Security surrendered for
registration of transfer shall be canceled by the Institutional Trustee pursuant
to Section 6.6. A transferee of a Security shall be entitled to the rights and
subject to the obligations of a Holder hereunder upon the receipt by such
transferee of a Security. By acceptance of a Security, each transferee shall be
deemed to have agreed to be bound by this Declaration.
(e) The Trust shall not be required (i) to issue, register the trans-
fer of, or exchange any Securities during a period beginning at the opening of
business 15 days before the day of any selection of Securities for redemption
and ending at the close of business on the earliest date on which the relevant
notice of redemption is deemed to have been given to all Holders of the
Securities to be redeemed, or (ii) to register the transfer or exchange of any
Security so selected for redemption in whole or in part, except the unredeemed
portion of any Security being redeemed in part.
Section 8.2 Transfer Procedures and Restrictions.
------------------------------------
(a) The Capital Securities shall bear the Restricted Securities
Legend, which shall not be removed unless there is delivered to the Trust such
satisfactory evidence, which may include an opinion
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of counsel licensed to practice law in the State of Connecticut, as may be
reasonably required by the Trust, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof
comply with the provisions of the Securities Act. Upon provision of such
satisfactory evidence, the Institutional Trustee, at the written direction of
the Trust, shall authenticate and deliver Capital Securities that do not bear
the legend.
(b) Except as permitted by Section 8.2(a), each Capital Security
shall bear a legend (the "Restricted Securities Legend") in substantially the
------------------------------
following form and a Capital Security shall not be transferred except in
compliance with such legend, unless otherwise determined by the Sponsor, upon
the advice of counsel expert in securities law, in accordance with applicable
law:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS
OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY
INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED,
TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM,
OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER,
SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY (A) TO THE SPONSOR OR THE
TRUST, (B) TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS
OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE PURSUANT
TO RULE 144A IN ACCORDANCE WITH RULE 144A, (C) TO A NON-U.S. PERSON IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS
APPLICABLE) OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS
ACQUIRING THIS CAPITAL 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 (E) PURSUANT TO ANY
OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO
ANY SUCH OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION
OF COUNSEL, CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM IN ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH
MAY BE OBTAINED FROM THE SPONSOR OR THE TRUST. THE HOLDER OF THIS
SECURITY AGREES THAT IT WILL COMPLY WITH THE FOREGOING RESTRICTIONS.
(c) To permit registrations of transfers and exchanges, the Trust
shall execute and the Institutional Trustee shall authenticate Capital Secu-
rities at the Registrar's request.
(d) Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Registrar or the
Sponsor may require) in respect of any tax or other governmental charge that may
be imposed in relation to it.
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(e) All Capital Securities issued upon any registration of transfer
or exchange pursuant to the terms of this Declaration shall evidence the same
security and shall be entitled to the same benefits under this Declaration as
the Capital Securities surrendered upon such registration of transfer or
exchange.
Section 8.3 Deemed Security Holders. The Trust, the Administrators,
------------------------
the Trustees, the Paying Agent, the Transfer Agent or the Registrar may treat
the Person in whose name any Certificate shall be registered on the books and
records of the Trust as the sole holder of such Certificate and of the
Securities represented by such Certificate for purposes of receiving
Distributions and for all other purposes whatsoever and, accordingly, shall not
be bound to recognize any equitable or other claim to or interest in such
Certificate or in the Securities represented by such Certificate on the part of
any Person, whether or not the Trust, the Administrators, the Trustees, the
Paying Agent, the Transfer Agent or the Registrar shall have actual or other
notice thereof
ARTICLE IX
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 9.1 Liability.
---------
(a) Except as expressly set forth in this Declaration, the Guarantee
and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of
the capital contributions (or any return thereon) of the Holders of the
Securities which shall be made solely from assets of the Trust; or
(ii) required to pay to the Trust or to any Holder of the
Securities any deficit upon dissolution of the Trust or otherwise.
(b) The Holder of the Common Securities shall be liable for all of
the debts and obligations of the Trust (other than with respect to the
Securities) to the extent not satisfied out of the Trust's assets.
(c) Pursuant to the Statutory Trust Act, the Holders of the Capital
Securities shall be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit organized under
the General Corporation Law of the State of Connecticut.
Section 9.2 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 Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's negligence or willful misconduct
with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's
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professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care by or on
behalf of the Trust, including information, opinions, reports or statements as
to the value and amount of the assets, liabilities, profits, losses, or any
other facts pertinent to the existence and amount of assets from which
Distributions to Holders of Securities might properly be paid.
Section 9.3 Fiduciary Duty.
--------------
(a) To the extent that, at law or in equity, an Indemnified Person
has duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any other Covered Person for
its good faith reliance on the provisions of this Declaration. The provisions of
this Declaration, to the extent that they restrict the duties and liabilities of
an Indemnified Person otherwise existing at law or in equity, are agreed by the
parties hereto to replace such other duties and liabilities of the Indemnified
Person.
(b) Whenever in this Declaration an Indemnified Person is permitted
or required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Indemnified Person shall be entitled to consider such interests
and factors as it desires, including its own interests, and shall have no duty
or obligation to give any consideration to any interest of or factors affecting
the Trust or any other Person; or
(ii) in its "good faith" or under another express standard,
the Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
Section 9.4 Indemnification.
---------------
(a) The Sponsor shall indemnify, to the full extent permitted by
law, any Indemnified Person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Trust) by reason of the fact that he is or was an
Indemnified Person against expenses (including reasonable attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the Indemnified Person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the Trust, and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(b) The Sponsor shall indemnify, to the full extent permitted by
law, any Indemnified Person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or suit by or in the right
of the Trust to procure a judgment in its favor by reason of the fact that he is
or was an Indemnified Person against expenses (including reasonable attorneys'
fees and expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best
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interests of the Trust; provided, however, that no such indemnification shall be
made in respect of any claim, issue or matter as to which such Indemnified
Person shall have been adjudged to be liable to the Trust unless and only to the
extent that the court 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 shall deem proper.
(c) To the extent that an Indemnified Person shall be successful on
the merits or otherwise (including dismissal of an action without prejudice or
the settlement of an action without admission of liability) in defense of any
action, suit or proceeding referred to in paragraphs (a) and (b) of this Section
9.4, or in defense of any claim, issue or matter therein, he shall be
indemnified, to the full extent permitted by law, against expenses (including
attorneys' fees and expenses) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification of an Administrator under paragraphs (a) and
(b) of this Section 9.4 (unless ordered by a court) shall be made by the Sponsor
only as authorized in the specific case upon a determination that
indemnification of the Indemnified Person is proper in the circumstances because
he has met the applicable standard of conduct set forth in paragraphs (a) and
(b). Such determination shall be made (i) by the Administrators by a majority
vote of a Quorum consisting of such Administrators who were not parties to such
action, suit or proceeding, (ii) if such a Quorum is not obtainable, or, even if
obtainable, if a Quorum of disinterested Administrators so directs, by
independent legal counsel in a written opinion, or (iii) by the Common Security
Holder of the Trust.
(e) To the fullest extent permitted by law, expenses (including
reasonable attorneys' fees and expenses) incurred by an Indemnified Person in
defending a civil, criminal, administrative or investigative action, suit or
proceeding referred to in paragraphs (a) and (b) of this Section 9.4 shall be
paid by the Sponsor in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such Indemnified
Person to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Sponsor as authorized in this Section 9.4.
Notwithstanding the foregoing, no advance shall be made by the Sponsor if a
determination is reasonably and promptly made (i) by the Administrators by a
majority vote of a Quorum of disinterested Administrators, (ii) if such a Quorum
is not obtainable, or, even if obtainable, if a quorum of disinterested
Administrators so directs, by independent legal counsel in a written opinion or
(iii) by the Common Security Holder of the Trust, that, based upon the facts
known to the Administrators, counsel or the Common Security Holder at the time
such determination is made, such Indemnified Person acted in bad faith or in a
manner that such Person did not believe to be in or not opposed to the best
interests of the Trust, or, with respect to any criminal proceeding, that such
Indemnified Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Administrators, independent legal counsel or the Common Security Holder
reasonably determine that such Indemnified Person deliberately breached his duty
to the Trust or its Common or Capital Security Holders.
(f) Each Trustee, at the sole cost and expense of the Sponsor,retains
the right to representation by counsel of its own choosing in any action, suit
or any other proceeding for which it is indemnified under paragraphs (a) and (b)
of this Section 9.4, without affecting its right to indemnification hereunder or
waiving any rights afforded to it under this Declaration or applicable law.
(g) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 9.4 shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
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stockholders or disinterested directors of the Sponsor or Capital Security
Holders of the Trust or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office. All rights to
indemnification under this Section 9.4 shall be deemed to be provided by a
contract between the Sponsor and each Indemnified Person who serves in such
capacity at any time while this Section 9.4 is in effect. Any repeal or
modification of this Section 9.4 shall not affect any rights or obligations then
existing.
(h) The Sponsor or the Trust may purchase and maintain insurance on
behalf of any Person who is or was an Indemnified Person against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Sponsor would have the power to indemnify
him against such liability under the provisions of this Section 9.4.
(i) For purposes of this Section 9.4, references to "the Trust" shall
include, in addition to the resulting or surviving entity, any constituent
entity (including any constituent of a constituent) absorbed in a consolidation
or merger, so that any Person who is or was a director, trustee, officer or
employee of such constituent entity, or is or was serving at the request of such
constituent entity as a director, trustee, officer, employee or agent of another
entity, shall stand in the same position under the provisions of this Section
9.4 with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had continued.
(j) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 9.4 shall, unless otherwise provided when
authorized or ratified, (i) continue as to a Person who has ceased to be an
Indemnified Person and shall inure to the benefit of the heirs, executors and
administrators of such a Person; and (ii) survive the termination or expiration
of this Declaration or the earlier removal or resignation of an Indemnified
Person.
Section 9.5 Outside Businesses. Any Covered Person, the Sponsor and
-------------------
the Institutional 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 of
Securities shall have no rights by virtue of this Declaration in and to such
independent ventures or the income or profits derived therefrom, and the pursuit
of any such venture, even if competitive with the business of the Trust, shall
not be deemed wrongful or improper. None of any Covered Person, the Sponsor or
the Institutional Trustee shall be obligated to present any particular
investment or other opportunity to the Trust even if such opportunity is of a
character that, if presented to the Trust, could be taken by the Trust, and any
Covered Person, the Sponsor and the Institutional Trustee shall have the right
to take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person and the Institutional Trustee may engage or be interested in any
financial or other transaction with the Sponsor or any Affiliate of the Sponsor,
or may act as depositary for, trustee or agent for, or act on any committee or
body of holders of, securities or other obligations of the Sponsor or its
Affiliates.
Section 9.6 Compensation; Fee. The Sponsor agrees:
-----------------
(a) to pay to the Trustees from time to time such compensation for
all services rendered by them hereunder as the parties shall agree from time to
time (which compensation shall not be limited by any provision of law in regard
to the compensation of a trustee of an express trust); and
(b) except as otherwise expressly provided herein, to reimburse
the Trustees upon request for all reasonable expenses, disbursements and
advances incurred or made by the Trustees in accordance with any provision of
this Declaration (including the reasonable compensation and the expenses and
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disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence, bad faith or
willful misconduct.
The provisions of this Section 9.6 shall survive the dissolution of the
Trust and the termination of this Declaration and the removal or resignation of
any Trustee.
No Trustee may claim any lien or charge on any property of the Trust
as a result of any amount due pursuant to this Section 9.6.
ARTICLE X
ACCOUNTING
Section 10.1 Fiscal Year. The fiscal year ("Fiscal Year") of the
------------
Trust shall be the calendar year, or such other year as is required by the Code.
Section 10.2 Certain Accounting Matters.
--------------------------
(a) At all times during the existence of the Trust, the Administra-
tors shall keep, or cause to be kept at the principal office of the Trust in the
United States, as defined for purposes of Treasury regulations section
301.7701-7, full books of account, records and supporting documents, which shall
reflect in reasonable detail each transaction of the Trust. The books of account
shall be maintained, at the Sponsor's expense, in accordance with generally
accepted accounting principles, consistently applied. The books of account and
the records of the Trust shall be examined by and reported upon as of the end of
each Fiscal Year of the Trust by a firm of independent certified public
accountants selected by the Administrators.
(b) The Administrators, at the Sponsor's expense, shall cause to be
prepared at the principal office of the Trust in the United States, as defined
for purposes of Treasury regulations section 301.7701-7, and delivered to each
of the Holders of Securities, within 90 days after the end of each Fiscal Year
of the Trust, annual financial statements of the Trust, including a balance
sheet of the Trust as of the end of such Fiscal Year, and the related statements
of income or loss which shall be examined by and reported upon by a firm of
independent certified public accountants selected by the Administrators.
(c) The Administrators shall cause to be duly prepared and delivered
to each of the Holders of Securities Form 1099 or such other annual United
States federal income tax information statement required by the Code, containing
such information with regard to the Securities held by each Holder as is
required by the Code and the Treasury Regulations. Notwithstanding any right
under the Code to deliver any such statement at a later date, the Administrators
shall endeavor to deliver all such statements within 30 days after the end of
each Fiscal Year of the Trust.
(d) The Administrators, at the Sponsor's expense, shall cause
to be duly prepared at the principal office of the Trust in the United States,
as defined for purposes of Treasury regulations section 301.7701-7, and filed an
annual United States federal income tax return on a Form 1041 or such other form
required by United States federal income tax law, and any other annual income
tax returns required to be filed by the Administrators on behalf of the Trust
with any state or local taxing authority.
Section 10.3 Banking. The Trust shall maintain in the United States,
as defined for purposes of Treasury regulations section 301.7701-7, 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
-------
Institutional Trustee shall be made directly to the Property Account and no
other funds of the Trust
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shall be deposited in the Property Account. The sole signatories for such
accounts (including the Property Account) shall be designated by the
Institutional Trustee.
Section 10.4 Withholding. The Institutional Trustee or any Paying
-----------
Agent and the Administrators shall comply with all withholding requirements
under United States federal, state and local law. The Institutional Trustee or
any Paying Agent shall request, and each Holder shall provide to the
Institutional Trustee or any Paying Agent, such forms or certificates as are
necessary to establish an exemption from withholding with respect to the Holder,
and any representations and forms as shall reasonably be requested by the
Institutional Trustee or any Paying Agent to assist it in determining the extent
of, and in fulfilling, its withholding obligations. The Administrators shall
file required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Institutional Trustee or any Paying Agent is required to withhold and pay over
any amounts to any authority with respect to distributions or allocations to any
Holder, the amount withheld shall be deemed to be a Distribution in the amount
of the withholding to the Holder. In the event of any claimed overwithholding,
Holders shall be limited to an action against the applicable jurisdiction. If
the amount required to be withheld was not withheld from actual Distributions
made, the Institutional Trustee or any Paying Agent may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XI
AMENDMENTS AND MEETINGS
Section 11.1 Amendments.
----------
(a) Except as otherwise provided in this Declaration or by any appli-
cable terms of the Securities, this Declaration may only be amended by a written
instrument approved and executed by the Institutional Trustee.
(b) Notwithstanding any other provision of this Article XI, no amend-
ment shall be made, and any such purported amendment shall be void and
ineffective:
(i) unless the Institutional Trustee shall have first
received
(A) an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the
terms of the Securities); and
(B) an opinion of counsel (who may be counsel to the
Sponsor or the Trust) that such amendment is permitted by, and
conforms to, the terms of this Declaration (including the terms
of the Securities); and
(ii) if the result of such amendment would be to
(A) cause the Trust to cease to be classified for pur-
poses of United States federal income taxation as a grantor
trust; or
(B) cause the Trust to be deemed to be an Investment
Company required to be registered under the Investment Company
Act.
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(c) Except as provided in Section 11.1(d), (e) or (h), no amendment
shall be made, and any such purported amendment shall be void and ineffective
unless the Holders of a Majority in liquidation amount of the Capital Securities
shall have consented to such amendment.
(d) In addition to and notwithstanding any other provision in this
Declaration, without the consent of each affected Holder, this Declaration may
not be amended to (i) change the amount or timing of any Distribution on the
Securities or otherwise adversely affect the amount of any Distribution required
to be made in respect of the Securities as of a specified date or change any
conversion or exchange provisions or (ii) restrict the right of a Holder to
institute suit for the enforcement of any such payment on or after such date.
(e) Section 8.1 (b) and 8.1(c) and this Section 11.1 shall not be
amended without the consent of all of the Holders of the Securities.
(f) Article III shall not be amended without the consent of the
Holders of a Majority in liquidation amount of the Common Securities.
(g) The rights of the Holders of the Capital Securities under
Article IV to increase or decrease the number of, and appoint and remove,
Trustees shall not be amended without the consent of the Holders of a Majority
in liquidation amount of the Capital Securities.
(h) This Declaration may be amended by the Institutional Trustee and
the Holders of a Majority in the liquidation amount of the Common Securities
without the consent of the Holders of the Capital Securities to:
(i) cure any ambiguity;
(ii) correct or supplement any provision in this Declaration
that may be defective or inconsistent with any other provision of this
Declaration;
(iii) add to the covenants, restrictions or obligations of the
Sponsor; or
(iv) modify, eliminate or add to any provision of this Decla-
ration to such extent as may be necessary to ensure that the Trust will be
classified for United States federal income tax purposes at all times as a
grantor trust and will not be required to register as an "investment company"
under the Investment Company Act (including without limitation to conform to any
change in Rule 3a-5, Rule 3a-7 or any other applicable rule under the Investment
Company Act or written change in interpretation or application thereof by any
legislative body, court, government agency or regulatory authority) which
amendment does not have a material adverse effect on the rights, preferences or
privileges of the Holders of Securities;
provided, however, that no such modification, elimination or addition
referred to in clauses (i), (ii) or (iii) shall adversely affect in any material
respect the powers, preferences or special rights of Holders of Capital
Securities.
Section 11.2 Meetings of the Holders of Securities; Action by Written
--------------------------------------------------------
Consent.
-------
(a) Meetings of the Holders of any class of Securities may be called
at any time by the Administrators (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Declaration or the terms
of the Securities. The Administrators shall call a meeting of the Holders of
such class if directed to do so by
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the Holders of at least 10% in liquidation amount of such class of Securities.
Such direction shall be given by delivering to the Administrators one or more
calls in a writing stating that the signing Holders of the Securities wish to
call a meeting and indicating the general or specific purpose for which the
meeting is to be called. Any Holders of the Securities calling a meeting shall
specify in writing the Certificates held by the Holders of the Securities
exercising the right to call a meeting and only those Securities represented by
such Certificates shall be counted for purposes of determining whether the
required percentage set forth in the second sentence of this paragraph has been
met.
(b) Except to the extent otherwise provided in the terms of the Secu-
rities, the following provisions shall apply to meetings of Holders of the
Securities:
(i) notice of any such meeting shall be given to all the
Holders of the Securities having a right to vote thereat at least 7 days and not
more than 60 days before the date of such meeting. Whenever a vote, consent or
approval of the Holders of the Securities is permitted or required under this
Declaration, such vote, consent or approval may be given at a meeting of the
Holders of the Securities. Any action that may be taken at a meeting of the
Holders of the Securities may be taken without a meeting if a consent in writing
setting forth the action so taken is signed by the Holders of the Securities
owning not less than the minimum amount of Securities in liquidation amount that
would be necessary to authorize or take such action at a meeting at which all
Holders of the Securities having a right to vote thereon were present and
voting. Prompt notice of the taking of action without a meeting shall be given
to the Holders of the Securities entitled to vote who have not consented in
writing. The Administrators may specify that any written ballot submitted to the
Holders of the Securities for the purpose of taking any action without a meeting
shall be returned to the Trust within the time specified by the Administrators;
(ii) each Holder of a Security may authorize any Person to
act for it by proxy on all matters in which a Holder of Securities is entitled
to participate, including waiving notice of any meeting, or voting or
participating at a meeting. No proxy shall be valid after the expiration of 11
months from the date thereof unless otherwise provided in the proxy. Every proxy
shall be revocable at the pleasure of the Holder of the Securities executing it.
Except as otherwise provided herein, all matters relating to the giving, voting
or validity of proxies shall be governed by the General Corporation Law of the
State of Connecticut relating to proxies, and judicial interpretations
thereunder, as if the Trust were a Connecticut corporation and the Holders of
the Securities were stockholders of a Connecticut corporation; each meeting of
the Holders of the Securities shall be conducted by the Administrators or by
such other Person that the Administrators may designate; and
(iii) unless the Statutory Trust Act, this Declaration, or the
terms of the Securities otherwise provides, the Administrators, in their sole
discretion, shall establish all other provisions relating to meetings of Holders
of Securities, including notice of the time, place or purpose of any meeting at
which any matter is to be voted on by any Holders of the Securities, waiver of
any such notice, action by consent without a meeting, the establishment of a
record date, quorum requirements, voting in person or by proxy or any other
matter with respect to the exercise of any such right to vote; provided,
however, that each meeting shall be conducted in the United States (as that term
is defined in Treasury regulations section 301.7701-7).
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ARTICLE XII
REPRESENTATIONS OF INSTITUTIONAL TRUSTEE
Section 12.1 Representations and Warranties of Institutional Trustee.
--------------------------------------------------------
The Trustee that acts as initial Institutional Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Declaration, and each
Successor Institutional Trustee represents and warrants to the Trust and the
Sponsor at the time of the Successor Institutional Trustee's acceptance of its
appointment as Institutional Trustee, that:
(a) the Institutional Trustee is a national banking association
with trust powers, duly organized and validly existing under the laws of the
United States of America with trust power and authority to execute and deliver,
and to carry out and perform its obligations under the terms of, this
Declaration;
(b) the execution, delivery and performance by the Institutional
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Institutional Trustee. This Declaration has been duly
executed and delivered by the Institutional Trustee, and it constitutes a legal,
valid and binding obligation of the Institutional Trustee, enforceable against
it in accordance with its terms, subject to applicable bankruptcy,
reorganization, moratorium, insolvency, and other similar laws affecting
creditors' rights generally and to general principles of equity (regardless of
whether considered in a proceeding in equity or at law);
(c) the execution, delivery and performance of this Declaration
by the Institutional Trustee does not conflict with or constitute a breach of
the charter or by-laws of the Institutional Trustee; and
(d) no consent, approval or authorization of, or registration with or
notice to, any state or federal banking authority is required for the execution,
delivery or performance by the Institutional Trustee of this Declaration.
ARTICLE XIII
MISCELLANEOUS
Section 13.1 Notices. All notices provided for in this Declaration
shall be in writing, duly signed by the party giving such notice, and shall be
delivered, telecopied (which telecopy shall be followed by notice delivered or
mailed by first class mail) or mailed by first class mail, as follows:
(a) if given to the Trust in care of the Administrators at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders of the Securities):
MCB Financial Corporation
1248 Fifth Avenue
San Rafael, California 94901
Attention: Pat Phelan
Telecopy: (415) 721-4808
(b) if given to the Institutional Trustee, at the Institutional
Trustee's mailing address set forth below (or such other address as the
Institutional Trustee may give notice of to the Holders of the Securities):
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State Street Bank and Trust Company of Connecticut,National Association
225 Asylum Street, Goodwin Square
Hartford, Connecticut 06103
Attention: Vice President, Corporate Trust Department
Telecopy: 860-244-1889
With a copy to:
State Street Bank and Trust Company
P.O. Box 778
Boston, Massachusetts 02102-0778
Attention: Paul D. Allen, Corporate Trust Department
Telecopy: (617) 662-1462
(c) if given to the Holder of the Common Securities, at the mailing
address of the Sponsor set forth below (or such other address as the Holder of
the Common Securities may give notice of to the Trust):
MCB Financial Corporation
1248 Fifth Avenue
San Rafael, California 94901
Attention: Pat Phelan
Telecopy: (415) 721-4808
(d) 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 13.2 Governing Law. This Declaration and the rights of
-------------
the parties hereunder shall be governed by and interpreted in accordance with
the law of the State of Connecticut and all rights and remedies shall be
governed by such laws without regard to the principles of conflict of laws of
the State of Connecticut or any other jurisdiction that would call for the
application of the law of any jurisdiction other than the State of Connecticut;
provided, however, that there shall not be applicable to the Trust, the Trustees
or this Declaration any provision of the laws (statutory or common) of the State
of Connecticut pertaining to trusts that relate to or regulate, in a manner
inconsistent with the terms hereof (a) the filing with any court or governmental
body or agency of trustee accounts or schedules of trustee fees and charges, (b)
affirmative requirements to post bonds for trustees, officers, agents or
employees of a trust, (c) the necessity for obtaining court or other
governmental approval concerning the acquisition, holding or disposition of real
or personal property, (d) fees or other sums payable to trustees, officers,
agents or employees of a trust, (e) the allocation of receipts and expenditures
to income or principal, or (f) restrictions or limitations on the permissible
nature, amount or concentration of trust investments or requirements relating to
the titling, storage or other manner of holding or investing trust assets.
39
<PAGE>
Section 13.3 Intention of the Parties. It is the intention of the
-------------------------
parties hereto that the Trust be classified for United States federal income tax
purposes as a grantor trust. The provisions of this Declaration shall be
interpreted to further this intention of the parties.
Section 13.4 Headings. Headings contained in this Declaration are
--------
inserted for convenience of reference only and do not affect the interpretation
of this Declaration or any provision hereof.
Section 13.5 Successors and Assigns. Whenever in this Declaration
-----------------------
any of the parties hereto is named or referred to, the successors and assigns of
such party shall be deemed to be included, and all covenants and agreements in
this Declaration by the Sponsor and the Trustees shall bind and inure to the
benefit of their respective successors and assigns, whether or not so expressed.
Section 13.6 Partial Enforceability. If any provision of this
-----------------------
Declaration, or the application of such provision to any Person or circumstance,
shall be held invalid, the remainder of this Declaration, or the application of
such provision to persons or circumstances other than those to which it is held
invalid, shall not be affected thereby.
Section 13.7 Counterparts. This Declaration may contain more than
------------
one counterpart of the signature page and this Declaration may be executed by
the affixing of the signature of each of the Trustees and Administrators to any
of such counterpart signature pages. All of such counterpart signature pages
shall be read as though one, and they shall have the same force and effect as
though all of the signers had signed a single signature page.
40
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused these presents to be
executed as of the day and year first above written.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as Institutional Trustee
By:
--------------------------------------------------
Name:
Title:
MCB FINANCIAL CORPORATION, as Sponsor
By:
--------------------------------------------------
Name:
Title:
MCB STATUTORY TRUST I
By:
--------------------------------------------------
Name: CHARLES O. HALL
Title: Administrator
By:
--------------------------------------------------
Name: PATRICK E. PHELAN
Title: Administrator
41
<PAGE>
ANNEX I
TERMS OF SECURITIES
Pursuant to Section 6.1 of the Amended and Restated
Declaration of Trust, dated as of September 7, 2000 (as amended from time to
time, the "Declaration"), the designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities and the
Common Securities are set out below (each capitalized term used but not defined
herein has the meaning set forth in the Declaration):
1. Designation and Number.
----------------------
(a) 3,000 Capital Securities of MCB Statutory Trust I (the
"Trust"), with an aggregate stated liquidation amount with respect to the assets
of the Trust of Three Million Dollars ($3,000,000) and a stated liquidation
amount with respect to the assets of the Trust of $1,000 per Capital Security,
are hereby designated for the purposes of identification only as the "Capital
-------
Securities". The Capital Security Certificates evidencing the Capital Securities
----------
shall be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
(b) 93 Common Securities of the Trust (the "Common
------
Securities") will be evidenced by Common Security Certificates substantially in
----------
the form of Exhibit A-2 to the Declaration, with such changes and additions
thereto or deletions therefrom as may be required by ordinary usage, custom or
practice.
2. Distributions.
-------------
(a) Distributions payable on each Security will be payable
at an annual rate equal to 10.60% (the "Coupon Rate") of the stated liquidation
-----------
amount of $1,000 per Security, such rate being the rate of interest payable on
the Debentures to be held by the Institutional Trustee. 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 law). A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Institutional Trustee and to the extent the
Institutional Trustee has funds available therefor. The amount of Distributions
payable for any period will be computed for any full semi-annual period on the
basis of a 360-day year of twelve 30-day months.
(b) Distributions on the Securities will be cumulative,
will accrue from the date of original issuance, and will be payable, subject to
extension of distribution payment periods as described herein, semi-annually in
arrears on March 7 and September 7 of each year, commencing on September 7, 2001
(each a "Distribution Payment Date") when, as and if available for payment. The
--------------------------
Debenture Issuer has the right under the Indenture to defer payments of interest
on the Debentures, so long as no Indenture Event of Default has occurred and is
continuing, by deferring the payment of interest on the Debentures for up to 10
consecutive semi-annual periods (each an "Extension Period") at any time and
-----------------
from time to time, subject to the conditions described below, although such
interest would continue to accrue on the Debentures at the Coupon Rate
compounded semi-annually (to the extent permitted by law) during any Extension
Period. No Extension Period may end on a date other than a Distribution Payment
Date. At the end of any such Extension Period the Debenture Issuer shall pay all
interest then accrued and unpaid on the Debentures (together with Additional
Interest thereon); provided, however, that no Extension Period may extend beyond
-------- -------
the Maturity Date and provided further, however, during any such Extension
-------- ------- -------
Period, the Debenture Issuer and its Affiliates shall not (i) declare or pay any
dividends or distributions
I-1
<PAGE>
on, or redeem, purchase, acquire, or make a liquidation payment with respect to,
any of the Debenture Issuer's or its Affiliates' capital stock (other than
payments of dividends or distributions to the Debenture Issuer) or make any
guarantee payments with respect to the foregoing, or (ii) make any payment of
principal of or interest or premium, if any, on or repay, repurchase or redeem
any debt securities of the Debenture Issuer or any Affiliate that rank pari
passu in all respects with or junior in interest to the Debentures (other than,
with respect to clauses (i) and (ii) above, (a) repurchases, redemptions or
other acquisitions of shares of capital stock of the Debenture Issuer in
connection with any employment contract, benefit plan or other similar
arrangement with or for the benefit of one or more employees, officers,
directors or consultants, in connection with a dividend reinvestment or
stockholder stock purchase plan or in connection with the issuance of capital
stock of the Debenture Issuer (or securities convertible into or exercisable for
such capital stock) as consideration in an acquisition transaction entered into
prior to the applicable Extension Period, (b) as a result of any exchange or
conversion of any class or series of the Debenture Issuer's capital stock (or
any capital stock of a subsidiary of the Debenture Issuer) for any class or
series of the Debenture Issuer's capital stock or of any class or series of the
Debenture Issuer's indebtedness for any class or series of the Debenture
Issuer's capital stock, (c) the purchase of fractional interests in shares of
the Debenture Issuer's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
(d) any declaration of a dividend in connection with any stockholder's rights
plan, or the issuance of rights, stock or other property under any stockholder's
rights plan, or the redemption or repurchase of rights pursuant thereto, (e) any
dividend in the form of stock, warrants, options or other rights where the
dividend stock or the stock issuable upon exercise of such warrants, options or
other rights is the same stock as that on which the dividend is being paid or
ranks pari passu with or junior to such stock and any cash payments in lieu of
fractional shares issued in connection therewith, or (f) payments under the
Capital Securities Guarantee). Prior to the termination of any Extension Period,
the Debenture Issuer may further extend such period, provided that such period
together with all such previous and further consecutive extensions thereof shall
not exceed 10 consecutive semi-annual periods, or extend beyond the Maturity
Date. Upon the termination of any Extension Period and upon the payment of all
accrued and unpaid interest and Additional Interest, the Debenture Issuer may
commence a new Extension Period, subject to the foregoing requirements. No
interest or Additional Interest shall be due and payable during an Extension
Period, except at the end thereof, but each installment of interest that would
otherwise have been due and payable during such Extension Period shall bear
Additional Interest. If Distributions are deferred, the Distributions due shall
be paid on the date that the related Extension Period terminates, to Holders of
the Securities as they appear on the books and records of the Trust on the
record date immediately preceding such date. Distributions on the Securities
must be paid on the dates payable (after giving effect to any Extension Period)
to the extent that the Trust has funds available for the payment of such
distributions in the Property Account of the Trust. The Trust's funds available
for Distribution to the Holders of the Securities will be limited to payments
received from the Debenture Issuer. The payment of Distributions out of moneys
held by the Trust is guaranteed by the Guarantor pursuant to the Guarantee.
(c) Distributions on the Securities will be payable to the Holders
thereof as they appear on the books and records of the Trust on the relevant
record dates. The relevant record dates shall be 15 days before the relevant
Distribution Payment Date. Distributions payable on any Securities that are not
punctually paid on any Distribution Payment Date, as a result of the Debenture
Issuer having failed to make a payment under the Debentures, as the case may be,
when due (taking into account any Extension Period), will cease to be payable to
the Person in whose name such Securities are registered on the relevant record
date, and such defaulted Distribution will instead be payable to the Person in
whose name such Securities are registered on the special record date or other
specified date determined in accordance with the Indenture. If any date on which
Distributions are payable on the Securities is not a Business Day, then payment
of the Distribution payable on such date will be made on the next succeeding day
that is a Business Day (and without any interest or other payment in respect of
any such delay) except that, if
I-2
<PAGE>
such Business Day is in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such payment date.
(d) In the event that there is any money or other property held by
or for the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders of the Securities.
3. Liquidation Distribution Upon Dissolution. In the event of the
------------------------------------------
voluntary or involuntary liquidation, dissolution, winding-up or termination of
the Trust (each a "Liquidation") other than in connection with a redemption of
-----------
the Debentures, the Holders of the Securities will be entitled to receive out of
the assets of the Trust available for distribution to Holders of the Securities,
after satisfaction of liabilities to creditors of the Trust (to the extent not
satisfied by the Debenture Issuer), distributions equal to the lesser of (i) the
aggregate of the stated liquidation amount of $ 1,000 per Security plus accrued
and unpaid Distributions thereon to the date of payment, to the extent the Trust
shall have funds available therefor, and (ii) the amount of assets of the Trust
remaining available for distribution to Holders in liquidation of the Trust
(such amount being, in either case, the "Liquidation Distribution"), unless in
-------------------------
connection with such Liquidation, the Debentures in aggregate stated principal
amount equal to the aggregate stated liquidation amount of such Securities, with
an interest rate equal to the Coupon Rate of, and bearing accrued and unpaid
interest in an amount equal to the accrued and unpaid Distributions on, and
having the same record date as, such Securities, after paying or making
reasonable provision to pay all claims and obligations of the Trust in
accordance with the Statutory Trust Act, shall be distributed on a Pro Rata
basis to the Holders of the Securities in exchange for such Securities.
The Sponsor, as the Holder of all of the Common Securities, has the
right at any time to dissolve the Trust (including, without limitation, upon the
occurrence of a Special Event), subject to the receipt by the Debenture Issuer
of prior approval from the Board of Governors of the Federal Reserve System (the
"Federal Reserve"), if then required under applicable capital guidelines or
----------------
policies of the Federal Reserve and, after satisfaction of liabilities to
creditors of the Trust, cause the Debentures to be distributed to the Holders of
the Securities on a Pro Rata basis in accordance with the aggregate stated
liquidation amount thereof.
If a Liquidation of the Trust occurs as described in clause (i), (ii),
(iii) or (v) in Section 7.1(a) of the Declaration, the Trust shall be liquidated
by the Trustees of the Trust as expeditiously as such Trustees determine to be
possible by distributing, after satisfaction of liabilities to creditors of the
Trust, to the Holders of the Securities, the Debentures on a Pro Rata basis to
the extent not satisfied by the Debenture Issuer, unless such distribution is
determined by the Institutional Trustee not to be practical, in which event such
Holders will be entitled to receive out of the assets of the Trust available for
distribution to the Holders, after satisfaction of liabilities of creditors of
the Trust to the extent not satisfied by the Debenture Issuer, an amount equal
to the Liquidation Distribution. An early Liquidation of the Trust pursuant to
clause (iv) of Section 7.1(a) of the Declaration shall occur if the,
Institutional Trustee determines that such Liquidation is possible by
distributing, after satisfaction of liabilities to creditors of Trust, to the
Holders of the Securities on a Pro Rata basis, the Debentures, and such
distribution occurs.
If, upon any such Liquidation the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets available to pay in full
the aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on such Capital Securities shall be paid to the Holders of the Trust
Securities on a Pro Rata basis, except that if an Event of Default has occurred
and is continuing, the Capital Securities shall have a preference over the
Common Securities with regard to such distributions.
I-3
<PAGE>
After the date for any distribution of the Debentures upon dissolution
of the Trust (i) the Securities of the Trust will be deemed to be no longer
outstanding, (ii) the Holders of the Capital Securities will receive
certificates representing the Debentures to be delivered upon such distribution,
and (iii) any certificates representing the Capital Securities still outstanding
will be deemed to represent undivided beneficial interests in such of the
Debentures as have an aggregate principal amount equal to the aggregate stated
liquidation amount with an interest rate identical to the distribution rate of,
and bearing accrued and unpaid interest equal to accrued and unpaid
distributions on, the Securities until such certificates are presented to the
Debenture Issuer or its agent for transfer or reissuance.
4. Redemption and Distribution.
---------------------------
(a) The Debentures will mature on September 7, 2030. The Deben-
tures may be redeemed by the Debenture Issuer, in whole or in part at any time
and from time to time on or after September 7, 2010, at the Redemption Price. In
addition, the Debentures may be redeemed by the Debenture Issuer at the Special
Redemption Price, in whole but not in part, at any time, upon the occurrence and
continuation of a Special Event within 90 days following the occurrence of such
Special Event at the Special Redemption Price, upon not less than 30 nor more
than 60 days' notice to holders of such Debentures so long as such Special Event
is continuing. In each case, the right of the Debenture Issuer to redeem the
Debentures is subject to the Debenture Issuer having received prior approval
from the Federal Reserve, if then required under applicable capital guidelines
or policies of the Federal Reserve. The Sponsor shall appoint a Quotation Agent,
which initially shall be State Street Bank and Trust Company, for the purpose of
performing the services contemplated in, or by reference in, the definition of
Special Redemption Price. Any error in the calculation of the Special Redemption
Price by the Quotation Agent or the Debenture Trustee may be corrected at any
time by notice delivered to the Sponsor and the holders of the Capital
Securities. Subject to the corrective rights set forth above, all certificates,
communications, opinions, determinations, calculations, quotations and decisions
given, expressed, made or obtained for the purposes of the provisions relating
to the payment and calculation of the Special Redemption Price on the Debt
Securities or the Capital Securities by the Debenture Trustee, the Quotation
Agent or the Institutional Trustee, as the case may be, shall (in the absence of
willful default, bad faith or manifest error) be final, conclusive and binding
on the holders of the Debt Securities and the Capital Securities, the Trust and
the Sponsor, and no liability shall attach (except as provided above) to the
Debenture Trustee, the Quotation Agent or the Institutional Trustee in
connection with the exercise or non-exercise by any of them of their respective
powers, duties and discretion.
"Tax Event" means the receipt by the Debenture Issuer and the Trust of
---------
an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to or change (including any announced prospective
change) in the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement (including any private letter ruling,
technical advice memorandum, field service advice, regulatory procedure, notice
or announcement including any notice or announcement of intent to adopt such
procedures or regulations (an "Administrative Action")) or judicial decision
interpreting or applying such laws or regulations, regardless of whether such
Administrative Action or judicial decision is issued to or in connection with a
proceeding involving the Debenture Issuer or the Trust and whether or not
subject to review or appeal, which amendment, clarification, change,
Administrative Action or decision is enacted, promulgated or announced, in each
case on or after the date of issuance of the Debentures, there is more than an
insubstantial risk that: (i) the Trust is, or will be within 90 days of the date
of such opinion, subject to United States federal income tax with respect to
income received or accrued on the Debentures; (ii) interest payable by the
Debenture Issuer on the Debentures is not, or within 90 days of the date of such
opinion, will not be, deductible by the Debenture Issuer, in whole or in part,
for United
I-4
<PAGE>
States federal income tax purposes; or (iii) the Trust is, or will be within 90
days of the date of such opinion, subject to more than a de minimis amount of
other taxes, duties or other governmental charges.
"Investment Company Event" means the receipt by the Debenture Issuer
--------------------------
and the Trust of an opinion of counsel experienced in such matters to the effect
that, as a result of the occurrence of a change in law or regulation or written
change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
agency or regulatory authority, there is more than an insubstantial risk that
the Trust is or will be considered an "Investment Company" that is required to
be registered under the Investment Company Act of 1940, as amended which change
or prospective change becomes effective or would become effective, as the case
may be, on or after the date of the issuance of the Debentures.
"Capital Treatment Event" means the receipt by the Debenture Issuer and
-----------------------
the Trust of an opinion of counsel that, as a result of the occurrence of any
amendment to, or change (including any announced prospective change) in, the
laws of the United States or any political subdivision thereof or therein, or as
the result of any official or administrative pronouncement or action or decision
interpreting or applying such laws, rules or regulations, which amendment or
change is effective or which pronouncement, action or decision is announced on
or after the date of issuance of the Debentures, there is more than an
insubstantial risk that the Sponsor will not be entitled to treat an amount
equal to the aggregate liquidation amount of the Debentures as "Tier 1 Capital"
(or the then equivalent thereof) for purposes of the capital adequacy guidelines
of the Federal Reserve, as then in effect and applicable to the Sponsor;
provided, however, that the inability of the Sponsor to treat all or any portion
of the liquidation amount of the Debentures as Tier l Capital shall not
constitute the basis for a Capital Treatment Event, if such inability results
from the Sponsor having cumulative preferred stock, minority interests in
consolidated subsidiaries, or any other class of security or interest which the
Federal Reserve may now or hereinafter accord Tier 1 Capital treatment in excess
of the amount which may qualify for treatment as Tier 1 Capital under applicable
capital adequacy guidelines for the Federal Reserve; provided further, however,
that the distribution of Debentures in connection with the Liquidation of the
Trust shall not in and of itself constitute a Capital Treatment Event unless
such Liquidation shall have occurred in connection with a Tax Event or an
Investment Company Event.
"Special Event" means a Tax Event, an Investment Company Event or a
--------------
Capital Treatment Event.
"Redemption Price" means the price set forth in the following table for
----------------
any Redemption Date that occurs within the twelve-month period beginning in the
relevant year indicated below, expressed as the percentage of the principal
amount of the Debentures being redeemed:
Year Beginning on Percentage
----------------- ----------
September 7, 2010 105.300%
September 7, 2011 104.770%
September 7, 2012 104.240%
September 7, 2013 103.710%
September 7, 2014 103.180%
September 7, 2015 102.650%
September 7, 2016 102.120%
September 7, 2017 101.590%
I-5
<PAGE>
September 7, 2018 101.060%
September 7, 2019 100.530%
September 7, 2020 and after 100.000%
plus accrued and unpaid interest on such Debentures to the Redemption Date.
"Special Redemption Date" means a Redemption Date on which a Special
-------------------------
Event redemption occurs.
"Special Redemption Price" means (a) if the Special Redemption Date is
-------------------------
before September 7, 2010, the greater of (i) 100% of the principal amount of the
Debentures, plus accrued and unpaid interest on the Debentures to such Special
Redemption Date, or (ii) as determined by a Quotation Agent, the sum of (A) the
present value of the principal amount of the Debentures set forth in the above
Redemption Price table for the September 7, 2010 Redemption Date and the present
value of interest payable on the Debentures from such Special Redemption Date to
September 7, 2010 (the "Remaining Life"), each discounted to the Special
Redemption Date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months at the Treasury Rate), plus (B) accrued and unpaid interest
on the Debentures to such Special Redemption Date, or (b) if the Special
Redemption Date is on or after September 7, 2010, the price for the Debentures
set forth in the above Redemption Price table for such Special Redemption Date.
"Comparable Treasury Issue" means with respect to any Special
-----------------------------
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity which is within a period from 3 months before to 3 months after
September 7, 2010, the two most closely corresponding United States Treasury
securities as selected by the Quotation Agent shall be used as the Comparable
Treasury Issue, and the Treasury Rate shall be interpolated or extrapolated on a
straight-line basis, rounding to the nearest month using such securities.
"Comparable Treasury Price" means (a) the average of 5 Reference
---------------------------
Treasury Dealer Quotations for such Special Redemption Date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (b) if the
Quotation Agent obtains fewer than 5 such Reference Treasury Dealer Quotations,
the average of all such Quotations.
"Primary Treasury Dealer" shall mean either a primary United States
-------------------------
Government securities dealer or an entity of nationally recognized stock in
matters pertaining to the quotation of treasury securities that is reasonably
acceptable to the Sponsor and the Institutional Trustee.
"Quotation Agent" means State Street Bank and Trust Company, or its
----------------
designee, and its successors; provided, however, that if the foregoing shall
cease to be a Primary Treasury Dealer, the Sponsor shall substitute therefor
another Primary Treasury Dealer.
"Redemption Date" shall mean the date fixed for the redemption of
----------------
Capital Securities, which shall be March 7 or September 7 commencing September
7, 2010.
"Reference Treasury Dealer" means (i) the Quotation Agent and (ii) any
--------------------------
other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Debenture Issuer.
I-6
<PAGE>
"Reference Treasury Dealer Quotations" means, with respect to each
---------------------------------------
Reference Treasury Dealer and any Special Redemption Date, the average, as
determined by the Quotation Agent, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day
preceding such Redemption Date.
"Treasury Rate" means (i) the yield, under the heading which represents
-------------
the average for the week immediately prior to the date of calculation, appearing
in the most recently published statistical release designated H.15(519) or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities", for the
maturity corresponding to the Remaining Life (if no maturity is within 3 months
before or after the Remaining Life, yields for the 2 published maturities most
closely corresponding to the Remaining Life shall be determined and the Treasury
Rate shall be interpolated or extrapolated from such yields on a straight-line
basis, rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Special Redemption Date.
The Treasury Rate shall be calculated by the Quotation Agent on the third
Business Day preceding the Special Redemption Date.
(b) Upon the repayment in full at maturity or redemption in whole or
in part of the Debentures (other than following the distribution of the
Debentures to the Holders of the Securities), the proceeds from such repayment
or payment shall concurrently be applied to redeem Pro Rata at the applicable
Redemption Price or Special Redemption Price, as applicable, Securities having
an aggregate liquidation amount equal to the aggregate principal amount of the
Debentures so repaid or redeemed; provided, however, that holders of such
Securities shall be given not less than 30 nor more than 60 days' notice of such
redemption (other than at the scheduled maturity of the Debentures).
(c) If fewer than all the outstanding Securities are to be so
redeemed, the Common Securities and the Capital Securities will be redeemed Pro
Rata and the Capital Securities to be redeemed will be redeemed Pro Rata from
each Holder of Capital Securities.
(d) The Trust may not redeem fewer than all the outstanding Capital
Securities unless all accrued and unpaid Distributions have been paid on all
Capital Securities for all semi-annual Distribution periods terminating on or
before the date of redemption.
(e) Redemption or Distribution Procedures.
-------------------------------------
(i) Notice of any redemption of or notice of distri-
bution of the Debentures in exchange for, the Securities (a
"Redemption/Distribution Notice") will be given by the Trust by mail to each
-------------------------------
Holder of Securities to be redeemed or exchanged not fewer than 30 nor more than
60 days before the date fixed for redemption or exchange thereof which, in the
case of a redemption, will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of redemption or exchange and the
dates on which notices are given pursuant to this paragraph 4(e)(i), a
Redemption/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders of such
Securities. Each Redemption/Distribution Notice shall be addressed to the
Holders of such Securities at the address of each such Holder appearing on the
books and records of the Trust. No defect in the Redemption/Distribution Notice
or in the mailing thereof with respect to any Holder
I-7
<PAGE>
shall affect the validity of the redemption or exchange proceedings with respect
to any other Holder.
(ii) If the Securities are to be redeemed and the Trust gives
a Redemption/ Distribution Notice, which notice may only be issued if the
Debentures are redeemed as set out in this paragraph 4 (which notice will be
irrevocable), then, provided that the Institutional Trustee has a sufficient
--------
amount of cash in connection with the related redemption or maturity of the
Debentures, the Institutional Trustee will pay the relevant Redemption Price or
Special Redemption Price, as applicable, to the Holders of such Securities by
check mailed to the address of each such Holder appearing on the books and
records of the Trust on the redemption date. If a Redemption/Distribution Notice
shall have been given and funds deposited as required then immediately prior to
the close of business on the date of such deposit Distributions will cease to
accrue on the Securities so called for redemption and all rights of Holders of
such Securities so called for redemption will cease, except the right of the
Holders of such Securities to receive the applicable Redemption Price or Special
Redemption Price specified in paragraph 4(a), but without interest on such
Redemption Price or Special Redemption Price. If any date fixed for redemption
of Securities is not a Business Day, then payment of any such Redemption Price
or Special Redemption Price payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that, if such Business Day falls in the
next calendar year, such payment will be made on the immediately preceding
Business Day, in each case with the same force and effect as if made on such
date fixed for redemption. If payment of the Redemption Price or Special
Redemption Price in respect of any Securities is improperly withheld or refused
and not paid either by the Trust or by the Debenture Issuer as guarantor
pursuant to the Guarantee, Distributions on such Securities will continue to
accrue at the Coupon Rate from the original redemption date to the actual date
of payment, in which case the actual payment date will be considered the date
fixed for redemption for purposes of calculating the Redemption Price or Special
Redemption Price. In the event of any redemption of the Capital Securities
issued by the Trust in part, the Trust shall not be required to (i) issue,
register the transfer of or exchange any Security during a period beginning at
the opening of business 15 days before any selection for redemption of the
Capital Securities and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to all
Holders of the Capital Securities to be so redeemed or (ii) register the
transfer of or exchange any Capital Securities so selected for redemption, in
whole or in part except for the unredeemed portion of any Capital Securities
being redeemed in part.
(iii) Redemption/Distribution Notices shall be sent by the Administra-
tors on behalf of the Trust to (A) in respect of the Capital Securities, the
Holders thereof and (B) in respect of the Common Securities, the Holder thereof.
5. Voting Rights - Capital Securities.
----------------------------------
(a) Except as provided under paragraphs 5(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Capital
Securities will have no voting rights. The Administrators are required to call a
meeting of the Holders of the Capital Securities if directed to do so by Holders
of at least 10% in liquidation amount of the Capital Securities.
(b) Subject to the requirements of obtaining a tax opinion by
the Institutional Trustee in certain circumstances set forth in the last
sentence of this paragraph, the Holders of a Majority in liquidation amount of
the Capital Securities, voting separately as a class, have the right to direct
the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or
I-8
<PAGE>
exercising any trust or power conferred upon the Institutional Trustee under the
Declaration, including the right to direct the Institutional Trustee, as holder
of the Debentures, to (i) exercise the remedies available under the Indenture as
the holder of the Debentures, (ii) waive any past default that is waivable under
the Indenture, (iii) exercise any right to rescind or annul a declaration that
the principal of all the Debentures shall be due and payable or (iv) consent on
behalf of all the Holders of the Capital Securities to any amendment,
modification or termination of the Indenture or the Debentures where such
consent shall be required; provided, however, that, where a consent or action
-------- -------
under the Indenture would require the consent or act of the holders of greater
than a simple majority in aggregate principal amount of Debentures (a "Super
-----
Majority") affected thereby, the Institutional Trustee may only give such
--------
consent or take such action at the written direction of the Holders of at least
the proportion in liquidation amount of the Capital Securities outstanding which
the relevant Super Majority represents of the aggregate principal amount of the
Debentures outstanding. If the Institutional Trustee fails to enforce its rights
under the Debentures after the Holders of a Majority in liquidation amount of
such Capital Securities have so directed the Institutional Trustee, to the
fullest extent permitted by law, a Holder of the Capital Securities may
institute a legal proceeding directly against the Debenture Issuer to enforce
the Institutional Trustee's rights under the Debentures without first
instituting any legal proceeding against the Institutional Trustee or any other
person or entity. Notwithstanding the foregoing, if an Event of Default has
occurred and is continuing and such event is attributable to the failure of the
Debenture Issuer to pay interest or principal on the Debentures on the date the
interest or principal is payable (or in the case of redemption, the redemption
date), then a Holder of record of the Capital Securities may directly institute
a proceeding for enforcement of payment on or after the respective due dates
specified in the Debentures, to such Holder directly of the principal of or
interest on the Debentures having an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Securities of such Holder. The
Institutional Trustee shall notify all Holders of the Capital Securities of any
default actually known to the Institutional Trustee with respect to the
Debentures unless (x) such default has been cured prior to the giving of such
notice or (y) the Institutional Trustee determines in good faith that the
withholding of such notice is in the interest of the Holders of such Capital
Securities, except where the default relates to the payment of principal of or
interest on any of the Debentures. Such notice shall state that such Indenture
Event of Default also constitutes an Event of Default hereunder. Except with
respect to directing the time, method and place of conducting a proceeding for a
remedy, the Institutional Trustee shall not take any of the actions described in
clauses (i), (ii) or (iii) above unless the Institutional Trustee has obtained
an opinion of tax counsel to the effect that, as a result of such action, the
Trust will not be classified as other than a grantor trust for United States
federal income tax purposes.
In the event the consent of the Institutional Trustee, as the holder of
the Debentures is required under the Indenture with respect to any amendment,
modification or termination of the Indenture, the Institutional Trustee shall
request the direction of the Holders of the Securities with respect to such
amendment modification or termination and shall vote with respect to such
amendment, modification or termination as directed by a Majority in liquidation
amount of the Securities voting together as a single class; provided, however,
-------- -------
that where a consent under the Indenture would require the consent of a
Super-Majority, the Institutional Trustee may only give such consent at the
direction of the Holders of at least the proportion in liquidation amount of
such Trust Securities outstanding which the relevant Super-Majority represents
of the aggregate principal amount of the Debentures outstanding. The
Institutional Trustee shall not take any such action in accordance with the
directions of the Holders of the Securities unless the Institutional Trustee has
obtained an opinion of tax counsel to the effect that, as a result of such
action, the Trust will not be classified as other than a grantor trust for
United States federal income tax purposes.
A waiver of an Indenture Event of Default will constitute a waiver of
the corresponding Event of Default hereunder. Any required approval or direction
of Holders of the Capital Securities may be given
I-9
<PAGE>
at a separate meeting of Holders of the Capital Securities convened for such
purpose, at a meeting of all of the Holders of the Securities in the Trust or
pursuant to written consent. The Institutional Trustee will cause a notice of
any meeting at which Holders of the Capital Securities are entitled to vote, or
of any matter upon which action by written consent of such Holders is to be
taken, to be mailed to each Holder of record of the Capital Securities. Each
such notice will include a statement setting forth the following information (i)
the date of such meeting or the date by which such action is to be taken, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote or of such matter upon which written consent
is sought and (iii) instructions for the delivery of proxies or consents. No
vote or consent of the Holders of the Capital Securities will be required for
the Trust to redeem and cancel Capital Securities or to distribute the
Debentures in accordance with the Declaration and the terms of the Securities.
Notwithstanding that Holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Sponsor or any Affiliate of the Sponsor
shall not entitle the Holder thereof to vote or consent and shall, for purposes
of such vote or consent, be treated as if such Capital Securities were not
outstanding.
In no event will Holders of the Capital Securities have the right to
vote to appoint, remove or replace the Administrators, which voting rights are
vested exclusively in the Sponsor as the Holder of all of the Common Securities
of the Trust. Under certain circumstances as more fully described in the
Declaration, Holders of Capital Securities have the right to vote to appoint,
remove or replace the Institutional Trustee.
6. Voting Rights - Common Securities.
---------------------------------
(a) Except as provided under paragraphs 6(b), 6(c) and 7
and as otherwise required by law and the Declaration, the Common Securities
will have no voting rights.
(b) The Holders of the Common Securities are entitled,
in accordance with Article IV of the Declaration, to vote to appoint,
remove or replace any Administrators.
(c) Subject to Section 6.7 of the Declaration and only
after each Event of Default (if any) with respect to the Capital Securities has
been cured, waived, or otherwise eliminated and subject to the requirements of
the second to last sentence of this paragraph, the Holders of a Majority in
liquidation amount of the Common Securities, voting separately as a class, may
direct the time, method, and place of conducting any proceeding for any remedy
available to the Institutional Trustee, or exercising any trust or power
conferred upon the Institutional Trustee under the Declaration, including (i)
directing the time, method, place of conducting any proceeding for any remedy
available to the Debenture Trustee, or exercising any trust or power conferred
on the Debenture Trustee with respect to the Debentures, (ii) waive any past
default and its consequences that is waivable under the Indenture, or (iii)
exercise any right to rescind or annul a declaration that the principal of all
the Debentures shall be due and payable; provided, however, that, where a
-------- -------
consent or action under the Indenture would require a Super Majority, the
Institutional Trustee may only give such consent or take such action at the
written direction of the Holders of at least the proportion in liquidation
amount of the Common Securities which the relevant Super Majority represents of
the aggregate principal amount of the Debentures outstanding. Notwithstanding
this paragraph 6(c), the Institutional Trustee shall not revoke any action
previously authorized or approved by a vote or consent of the Holders of the
Capital Securities. Other than with respect to directing the time, method and
place of conducting any proceeding for any remedy available to the Institutional
Trustee or the Debenture Trustee as set forth above, the Institutional Trustee
shall not take any action described in (i), (ii) or (iii) above, unless the
Institutional Trustee has obtained an opinion
I-10
<PAGE>
of tax counsel to the effect that for the purposes of United States federal
income tax the Trust will not be classified as other than a grantor trust on
account of such action. If the Institutional Trustee fails to enforce its rights
under the Declaration to the fullest extent permitted by law, any Holder of the
Common Securities may institute a legal proceeding directly against any Person
to enforce the Institutional Trustee's rights under the Declaration, without
first instituting a legal proceeding against the Institutional Trustee or any
other Person.
Any approval or direction of Holders of the Common Securities may be
given at a separate meeting of Holders of the Common Securities convened for
such purpose, at a meeting of all of the Holders of the Securities in the Trust
or pursuant to written consent. The Administrators will cause a notice of any
meeting at which Holders of the Common Securities are entitled to vote, or of
any matter upon which action by written consent of such Holders is to be taken,
to be mailed to each Holder of the Common Securities. Each such notice will
include a statement setting forth (i) the date of such meeting or the date by
which such action is to be taken, (ii) a description of any resolution proposed
for adoption at such meeting on which such Holders are entitled to vote or of
such matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Common Securities will be
required for the Trust to redeem and cancel Common Securities or to distribute
the Debentures in accordance with the Declaration and the terms of the
Securities.
7. Amendments to Declaration and Indenture.
---------------------------------------
(a) In addition to any requirements under Section 11.1 of
the Declaration, if any proposed amendment to the Declaration provides for, or
the Trustees, Sponsor or Administrators otherwise propose to effect, (i) any
action that would adversely affect the powers, preferences or special rights of
the Securities, whether by way of amendment to the Declaration or otherwise, or
(ii) the Liquidation of the Trust, other than as described in Section 7.1 of the
Declaration, then the Holders of outstanding Securities, voting together as a
single class, will be entitled to vote on such amendment or proposal and such
amendment or proposal shall not be effective except with the approval of the
Holders of at least a Majority in liquidation amount of the Securities, affected
thereby; provided, however, if any amendment or proposal referred to in clause
-------- -------
(i) above would adversely affect only the Capital Securities or only the Common
Securities, then only the affected class will be entitled to vote on such
amendment or proposal and such amendment or proposal shall not be effective
except with the approval of a Majority in liquidation amount of such class of
Securities.
(b) In the event the consent of the Institutional Trustee
as the holder of the Debentures is required under the Indenture with respect to
any amendment, modification or termination of the Indenture or the Debentures,
the Institutional Trustee shall request the written direction of the Holders of
the Securities with respect to such amendment, modification or termination and
shall vote with respect to such amendment, modification, or termination as
directed by a Majority in liquidation amount of the Securities voting together
as a single class; provided, however, that where a consent under the Indenture
would require a Super Majority, the Institutional Trustee may only give such
consent at the direction of the Holders of at least the proportion in
liquidation amount of the Securities which the relevant Super Majority
represents of the aggregate principal amount of the Debentures outstanding.
(c) Notwithstanding the foregoing, no amendment or modifi-
cation may be made to the Declaration if such amendment or modification would
(i) cause the Trust to be classified for purposes of United States federal
income taxation as other than a grantor trust, (ii) reduce or otherwise
adversely
I-11
<PAGE>
affect the powers of the Institutional Trustee or (iii) cause the Trust to be
deemed an Investment Company which is required to be registered under the
Investment Company Act.
(d) Notwithstanding any provision of the Declaration, the
right of any Holder of the Capital Securities to receive payment of
distributions and other payments upon redemption or otherwise, on or after their
respective due dates, or to institute a suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder. For the protection and enforcement of the
foregoing provision, each and every Holder of the Capital Securities shall be
entitled to such relief as can be given either at law or equity.
8. Pro Rata. A reference in these terms of the Securities to
--------
any payment, distribution or treatment as being "Pro Rata" shall mean pro rata
to each Holder of the Securities according to the aggregate liquidation amount
of the Securities held by the relevant Holder in relation to the aggregate
liquidation amount of all Securities then outstanding unless, in relation to a
payment, an Event of Default has occurred and is continuing, in which case any
funds available to make such payment shall be paid first to each Holder of the
Capital Securities Pro Rata according to the aggregate liquidation amount of the
Capital Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Capital Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Capital Securities, to
each Holder of the Common Securities Pro Rata according to the aggregate
liquidation amount of the Common Securities held by the relevant Holder relative
to the aggregate liquidation amount of all Common Securities outstanding.
9. Ranking. The Capital Securities rank pari passu with and pay-
-------
ment thereon shall be made Pro Rata with the Common Securities except that,
where an Event of Default has occurred and is continuing, the rights of Holders
of the Common Securities to receive payment of Distributions and payments upon
liquidation, redemption and otherwise are subordinated to the rights of the
Holders of the Capital Securities with the result that no payment of any
Distribution on, or Redemption Price of, any Common Security, and no other
payment on account of redemption, liquidation or other acquisition of Common
Securities, shall be made unless payment in full in cash of all accumulated and
unpaid Distributions on all outstanding Capital Securities for all distribution
periods terminating on or prior thereto, or in the case of payment of the
Redemption Price the full amount of such Redemption Price on all outstanding
Capital Securities then called for redemption, shall have been made or provided
for, and all funds immediately available to the Institutional Trustee shall
first be applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.
10. Acceptance of Guarantee and Indenture. Each Holder of the Capital
-------------------------------------
Securities and the Common Securities, by the acceptance ofsuch Securities,
agrees to the provisions of the Guarantee, including the subordination
provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights. The Holders of the Securities shall
----------------------
have no preemptive or similar rights to subscribe for any additional securities.
12. Miscellaneous. These terms constitute a part of the Declara-
-------------
tion. The Sponsor will provide a copy of the Declaration, the Guarantee, and
the Indenture to a Holder without charge on written request to the Sponsor at
its principal place of business.
I-12
<PAGE>
EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
[FORM OF FACE OF SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE "SECURITIES ACT"), ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY ONLY
(A) TO THE SPONSOR OR THE TRUST, (B) TO A PERSON WHOM THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A SO LONG AS THIS SECURITY IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A IN ACCORDANCE WITH RULE 144A, (C) TO A NON-U.S. PERSON IN
AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE 904 (AS APPLICABLE)
OF REGULATION S UNDER THE SECURITIES ACT, (D) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL 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 (E) PURSUANT TO
ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE SPONSOR'S AND THE TRUST'S RIGHT PRIOR TO ANY SUCH
OFFER, SALE OR TRANSFER TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE DECLARATION OF TRUST, A COPY OF WHICH MAY BE OBTAINED FROM
THE SPONSOR OR THE TRUST. THE HOLDER OF THIS SECURITY AGREES THAT IT WILL COMPLY
WITH THE FOREGOING RESTRICTIONS.
IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE
REGISTRAR AND TRANSFER AGENT SUCH CERTIFICATE AND OTHER INFORMATION AS MAY BE
REQUIRED BY THE DECLARATION TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE
FOREGOING RESTRICTIONS.
A-1-1
<PAGE>
Certificate Number Number of Capital Securities
Certificate Evidencing Capital Securities of
of
MCB Statutory Trust I
(liquidation amount $ 1,000 per Capital Security)
MCB Statutory Trust I, a statutory trust created under the laws of the
State of Connecticut (the "Trust"), hereby certifies that Preferred Term
Securities, Ltd. (the "Holder") is the registered owner of securities of the
Trust representing undivided beneficial interests in the assets of the Trust,
(liquidation amount $1,000 per capital security) (the "Capital Securities").
Subject to the Declaration (as defined below), the Capital Securities are
transferable on the books and records of the Trust in person or by a duly
authorized attorney, upon surrender of this Certificate duly endorsed and in
proper form for transfer. The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of September 7, 2000, among Charles O. Hall and Patrick E. Phelan, as
Administrators, State Street Bank and Trust Company of Connecticut, National
Association, as Institutional Trustee, MCB Financial Corporation, as Sponsor,
and the holders from time to time of undivided beneficial interests in the
assets of the Trust, including the designation of the terms of the Capital
Securities as set forth in Annex I thereto as the same may be amended from time
to time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee, and the Indenture to the
Holder without charge upon written request to the Trust at its principal place
of business.
Upon receipt of this Security, the Holder is bound by the Declaration
and is entitled to the benefits thereunder.
By acceptance of this Security, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as indebtedness and the
Capital Securities as evidence of beneficial ownership in the Debentures.
This Capital Security is governed by, and construed in accordance with,
the laws of the State of Connecticut, without regard to principles of conflict
of laws.
IN WITNESS WHEREOF, the Trust has duly executed this certificate.
MCB STATUTORY TRUST I
By:
-----------------------------------------------------------
Name:
Title: Administrator
Dated: September 7, 2000
A-1-2
<PAGE>
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Capital Securities referred to in the
within-mentioned Declaration.
STATE STREET BANK AND TRUST COMPANY OF
CONNECTICUT, NATIONAL ASSOCIATION,
as the Institutional Trustee
By:
---------------------------------------------------
Authorized Officer
A-1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Capital Security will be payable at an
annual rate of 10.60% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than a 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 interest payments (including
Additional Interest and principal on the Debentures held by the Institutional
Trustee) and any such compounded interest payable on the Debentures unless
otherwise stated. A Distribution is payable only to the extent that payments are
made in respect of the Debentures held by the Institutional Trustee and to the
extent the Institutional Trustee has funds available therefor. The amount of
Distributions payable for any period will be computed for any full semi-annual
Distribution period on the basis of a 360-day year of twelve 30-day months.
Except as otherwise described below, Distributions on the Capital
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semi-annually in arrears on March 7 and September 7 of each
year, commencing on March 7, 2001. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures by extending the
interest payment period for up to 10 consecutive semi-annual periods (each an
"Extension Period") on the Debentures, subject to the conditions described
below, although such interest would continue to accrue on the Debentures at an
annual rate equal to the Coupon Rate compounded semi-annually to the extent
permitted by law during any Extension Period. No Extension Period may end on a
date other than an interest Payment Date. At the end of any such Extension
Period the Sponsor shall pay all interest then accrued and unpaid on the Debt
Securities (together with Additional Interest thereon); provided, however, that
no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Sponsor may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 10 consecutive semi-annual
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Sponsor may commence a new Extension Period, subject to
the foregoing requirements. No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.
The Capital Securities shall be redeemable as provided in the
Declaration.
A-1-4
<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:(1)
__________________
(1) 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 Security 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 Security
registrar in addition to, or in substitution for, STAMP, all in accordance with
the Securities Exchange Act of 1934, as amended.
A-1-5
<PAGE>
EXHIBIT A-2
FORM OF COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EXEMPTION FROM REGISTRATION.
THIS CERTIFICATE IS NOT TRANSFERABLE EXCEPT IN COMPLIANCE WITH SECTION
8.1 OF THE DECLARATION.
Certificate Number Number of Common Securities
Certificate Evidencing Common Securities
of
MCB Statutory Trust I
MCB Statutory Trust I, a statutory trust created under the laws of the
State of Connecticut (the "Trust"), hereby certifies that MCB Financial
Corporation (the "Holder") is the registered owner of common securities of the
Trust representing undivided beneficial interests in the assets of the Trust
(the "Common Securities"). The designation, rights, privileges, restrictions,
preferences and other terms and provisions of the Common Securities represented
hereby are issued pursuant to, and shall in all respects be subject to, the
provisions of the Amended and Restated Declaration of Trust of the Trust dated
as of September 7, 2000, among Charles O. Hall and Patrick E. Phelan, as
Administrators, State Street Bank and Trust Company of Connecticut, National
Association, as Institutional Trustee, MCB Financial Corporation, as Sponsor and
the holders from time to time of undivided beneficial interest in the assets of
the Trust including the designation of the terms of the Common Securities as set
forth in Annex I to the Declaration, as the same may be amended from time to
time (the "Declaration"). Capitalized terms used herein but not defined shall
have the meaning given them in the Declaration. The Holder is entitled to the
benefits of the Guarantee to the extent provided therein. The Sponsor will
provide a copy of the Declaration, the Guarantee and the Indenture to the Holder
without charge upon written request to the Sponsor at its principal place of
business.
As set forth in the Declaration, where an Event of Default has occurred
and continuing, the rights of Holders of Common Securities to payment in respect
of Distributions and payments upon Liquidation, redemption or otherwise are
subordinated to the rights of payment of Holders of the Capital Securities.
Upon receipt of this Certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder.
By acceptance of this Certificate, the Holder agrees to treat, for
United States federal income tax purposes, the Debentures as indebtedness and
the Common Securities as evidence of undivided beneficial ownership in the
Debentures.
This Common Security is governed by, and construed in accordance with,
the laws of the State of Connecticut, without regard to principles of conflict
of laws.
A-2-1
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 7th
day of September, 2000.
MCB STATUTORY TRUST I
By:
------------------------------------------------
Name:
Title: Administrator
A-2-2
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be identical in
amount to the Distributions payable on each Capital Security, which is at an
annual rate of 10.60% (the "Coupon Rate") of the stated liquidation amount of
$1,000 per Capital Security, such rate being the rate of interest payable on the
Debentures to be held by the Institutional Trustee. Distributions in arrears for
more than one period will bear interest thereon compounded at the Coupon Rate
(to the extent permitted by applicable law). The term "Distributions" as used
herein includes interest payments (including Additional Interest and principal
on the Debentures held by the Institutional Trustee) and any such compounded
interest payable on the Debentures unless otherwise stated. A Distribution is
payable only to the extent that payments are made in respect of the Debentures
held by the Institutional Trustee and to the extent the Institutional Trustee
has funds available therefor. The amount of Distributions payable for any period
will be computed for any full semi-annual Distribution period on 360-day year of
twelve 30-day months.
Except as otherwise described below, Distributions on the Common
Securities will be cumulative, will accrue from the date of original issuance
and will be payable semi-annually in arrears on March 7 and September 7 of each
year, commencing on March 7, 2001. The Debenture Issuer has the right under the
Indenture to defer payments of interest on the Debentures by extending the
interest payment period for up to 10 consecutive semi-annual periods (each an
"Extension Period") on the Debentures, subject to the conditions described
below, although such interest would continue to accrue on the Debentures at an
annual rate equal to the Coupon Rate compounded semi-annually to the extent
permitted by law during any Extension Period. No Extension Period may end on a
date other than an Interest Payment Date. At the end of any such Extension
Period the Sponsor shall pay all interest then accrued and unpaid on the Debt
Securities (together with Additional Interest thereon); provided, however, that
no Extension Period may extend beyond the Maturity Date. Prior to the
termination of any Extension Period, the Sponsor may further extend such period,
provided that such period together with all such previous and further
consecutive extensions thereof shall not exceed 10 consecutive semi-annual
periods, or extend beyond the Maturity Date. Upon the termination of any
Extension Period and upon the payment of all accrued and unpaid interest and
Additional Interest, the Sponsor may commence a new Extension Period, subject to
the foregoing requirements. No interest or Additional Interest shall be due and
payable during an Extension Period, except at the end thereof, but each
installment of interest that would otherwise have been due and payable during
such Extension Period shall bear Additional Interest. If Distributions are
deferred, the Distributions due shall be paid on the date that the related
Extension Period terminates, to Holders of the Securities as they appear on the
books and records of the Trust on the record date immediately preceding such
date. Distributions on the Securities must be paid on the dates payable (after
giving effect to any Extension Period) to the extent that the Trust has funds
available for the payment of such distributions in the Property Account of the
Trust. The Trust's funds available for Distribution to the Holders of the
Securities will be limited to payments received from the Debenture Issuer. The
payment of Distributions out of moneys held by the Trust is guaranteed by the
Guarantor pursuant to the Guarantee.
The Common Securities shall be redeemable as provided in the
Declaration.
A-2-3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common
Security Certificate to:
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(Insert assignee's social security or tax identification number)
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(Insert address and zip code of assignee) and irrevocably appoints
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agent
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to transfer this Common Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:
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Signature:
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(Sign exactly as your name appears on the other side of this Common
Security Certificate)
Signature:
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(Sign exactly as your name appears on the other side of this common
Security Certificate)
Signature Guarantee(2)
__________________
(2) 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 Security 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 Security registrar in addition to, or in substitution for, STAMP, all in
accordance with the Securities Exchange Act of 1934, as amended.
A-2-4
<PAGE>
EXHIBIT B
SPECIMEN OF INITIAL DEBENTURE
B-1
<PAGE>
EXHIBIT C
PLACEMENT AGREEMENT
C-1
