AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
NOVEMBER __, 1997
REGISTRATION NO. 333-37783
333-37783-01
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1933
PATRIOT BANK CORP. PATRIOT CAPITAL TRUST I
(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its trust
agreement)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction
incorporation or organization) of incorporation or
organization)
6712 6719
(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
23-2820537 23-7897586
(I.R.S. Employer Identification (I.R.S. Employer
No.) Identification No.)
HIGH AND HANOVER STREETS
POTTSTOWN, PENNSYLVANIA 19464
(610) 323-1500
(Address, including zip code, and telephone number,
including
area code, of Registrants' principal executive
offices)
RICHARD A. ELKO
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER
PATRIOT BANK CORP.
HIGH AND HANOVER STREETS
POTTSTOWN, PENNSYLVANIA 19464
(610) 323-1500
(Name, address, including zip code, and telephone
number,
including area code, of agents for service)
COPIES TO:
JEFFREY P. WALDRON
STEVENS & LEE
1275 DRUMMERS LANE
ONE GLENHARDIE CORPORATE CENTER, SUITE 202
WAYNE, PENNSYLVANIA 19087-0236
Approximate Date of Commencement of Proposed Sale to the
Public:
As soon as practicable after this Registration Statement becomes
effective.
If any of the securities being registered on this Form are to be
offered in connection with the formation of a holding company and
there is compliance with General Instruction G, check the
following box. [ ]
<PAGE>
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON
SUCH DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE
DATE UNTIL THE REGISTRANTS SHALL FILE A FURTHER AMENDMENT WHICH
SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT SHALL
THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED NOVEMBER __,
1997
PATRIOT CAPITAL TRUST I
OFFER TO EXCHANGE ITS
10.30% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL
SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933
FOR ANY AND ALL OF ITS OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL
SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, AS DESCRIBED
HEREIN, BY
PATRIOT BANK CORP., INC.
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE
AT
5:00 P.M., NEW YORK CITY TIME, ON , 1997, UNLESS EXTENDED
PATRIOT CAPITAL TRUST I, A TRUST FORMED UNDER THE LAWS OF
THE STATE OF DELAWARE (THE "TRUST"), HEREBY OFFERS, UPON THE
TERMS AND SUBJECT TO THE CONDITIONS SET FORTH IN THIS PROSPECTUS
(AS THE SAME MAY BE AMENDED OR SUPPLEMENTED FROM TIME TO TIME,
THE "PROSPECTUS") AND IN THE ACCOMPANYING LETTER OF TRANSMITTAL
(WHICH TOGETHER CONSTITUTE THE "EXCHANGE OFFER"), TO EXCHANGE UP
TO $19,000,000 AGGREGATE LIQUIDATION AMOUNT OF ITS 10.30%
EXCHANGE CAPITAL SECURITIES (THE "EXCHANGE CAPITAL SECURITIES")
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), PURSUANT TO A REGISTRATION
STATEMENT (AS DEFINED HEREIN) OF WHICH THIS PROSPECTUS
CONSTITUTES A PART, FOR A LIKE LIQUIDATION AMOUNT OF ITS
OUTSTANDING 10.30% CAPITAL SECURITIES (THE "ORIGINAL CAPITAL
SECURITIES"), OF WHICH $19,000,000 AGGREGATE LIQUIDATION AMOUNT
IS OUTSTANDING. PURSUANT TO THE EXCHANGE OFFER, PATRIOT BANK
CORP., A DELAWARE CORPORATION (THE "CORPORATION" OR "PATRIOT"),
IS ALSO OFFERING TO EXCHANGE (I) ITS GUARANTEE OF PAYMENTS OF
CASH DISTRIBUTIONS AND PAYMENTS ON LIQUIDATION OF THE TRUST OR
REDEMPTION OF THE ORIGINAL CAPITAL SECURITIES (THE "ORIGINAL
GUARANTEE") FOR A LIKE GUARANTEE IN RESPECT OF THE EXCHANGE
CAPITAL SECURITIES (THE "EXCHANGE GUARANTEE") AND
(II) $19,000,000 AGGREGATE PRINCIPAL AMOUNT OF ITS 10.30% JUNIOR
SUBORDINATED DEFERRABLE INTEREST DEBENTURES DUE JUNE 1, 2027 (THE
"ORIGINAL JUNIOR SUBORDINATED DEBENTURES") FOR A LIKE AGGREGATE
PRINCIPAL AMOUNT OF ITS 10.30% EXCHANGE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURES DUE JUNE 1, 2027 (THE "EXCHANGE
JUNIOR SUBORDINATED DEBENTURES"), WHICH EXCHANGE GUARANTEE AND
EXCHANGE JUNIOR SUBORDINATED DEBENTURES ALSO HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT. THE ORIGINAL CAPITAL SECURITIES, THE
ORIGINAL GUARANTEE AND THE ORIGINAL JUNIOR SUBORDINATED
DEBENTURES ARE COLLECTIVELY REFERRED TO HEREIN AS THE "ORIGINAL
SECURITIES" AND THE EXCHANGE CAPITAL SECURITIES, THE EXCHANGE
GUARANTEE AND THE EXCHANGE JUNIOR SUBORDINATED DEBENTURES ARE
COLLECTIVELY REFERRED TO HEREIN AS THE "EXCHANGE SECURITIES."
THE TERMS OF THE EXCHANGE SECURITIES ARE IDENTICAL IN ALL
MATERIAL RESPECTS TO THE RESPECTIVE TERMS OF THE ORIGINAL
SECURITIES, EXCEPT THAT (1) THE EXCHANGE SECURITIES HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT AND THEREFORE WILL NOT BE
SUBJECT TO CERTAIN RESTRICTIONS ON TRANSFER APPLICABLE TO THE
ORIGINAL SECURITIES, (2) THE EXCHANGE CAPITAL SECURITIES WILL NOT
PROVIDE FOR ANY INCREASE IN THE DISTRIBUTION RATE THEREON AND
(3) THE EXCHANGE JUNIOR SUBORDINATED DEBENTURES WILL NOT PROVIDE
FOR ANY LIQUIDATED DAMAGES THEREON. SEE "DESCRIPTION OF EXCHANGE
SECURITIES" AND "DESCRIPTION OF ORIGINAL SECURITIES." THE
EXCHANGE CAPITAL SECURITIES ARE BEING OFFERED FOR EXCHANGE IN
ORDER TO SATISFY CERTAIN OBLIGATIONS OF THE CORPORATION AND THE
TRUST UNDER THE REGISTRATION RIGHTS AGREEMENT DATED AS OF JUNE 5,
1997 (THE "REGISTRATION AGREEMENT") AMONG THE CORPORATION, THE
TRUST AND THE INITIAL PURCHASERS (AS DEFINED HEREIN). IN THE
EVENT THAT THE EXCHANGE OFFER IS CONSUMMATED, ANY ORIGINAL
CAPITAL SECURITIES WHICH REMAIN OUTSTANDING AFTER CONSUMMATION OF
THE EXCHANGE OFFER AND THE EXCHANGE CAPITAL SECURITIES ISSUED IN
THE EXCHANGE OFFER WILL VOTE TOGETHER AS A SINGLE CLASS FOR
PURPOSES OF DETERMINING WHETHER HOLDERS OF THE REQUISITE
PERCENTAGE IN OUTSTANDING LIQUIDATION AMOUNT THEREOF HAVE TAKEN
CERTAIN ACTIONS OR EXERCISED CERTAIN RIGHTS UNDER THE
DECLARATION. (CONTINUED ON THE FOLLOWING PAGE)
THIS PROSPECTUS AND THE LETTER OF TRANSMITTAL ARE FIRST
BEING MAILED TO ALL HOLDERS OF ORIGINAL CAPITAL SECURITIES ON
NOVEMBER __, 1997.
SEE "RISK FACTORS" COMMENCING ON PAGE __ FOR CERTAIN
INFORMATION THAT SHOULD BE CONSIDERED BY HOLDERS IN DECIDING
WHETHER TO TENDER ORIGINAL CAPITAL SECURITIES IN THE EXCHANGE
OFFER.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is November __,
1997. <PAGE>
(Continued from the previous page)
The Exchange Capital Securities and the Original Capital
Securities (collectively, the "Capital Securities") represent
beneficial interests in the assets of the Trust. The Corporation
is the owner of all of the beneficial interests represented by
common securities of the Trust (the "Common Securities," and
together with the Capital Securities, the "Trust Securities").
The Bank of New York is the Property Trustee of the Trust. The
Trust exists for the sole purpose of issuing the Trust Securities
and investing the proceeds thereof in the Junior Subordinated
Debentures (as defined herein). The Junior Subordinated
Debentures mature on June 1, 2027 (the "Stated Maturity"). The
Capital Securities will have a preference over the Common
Securities under certain circumstances with respect to cash
distributions and amounts payable on liquidation, redemption or
otherwise. See "Description of Exchange Securities--Description
of Exchange Capital Securities--Subordination of Common
Securities."
As used herein, (i) the "Indenture" means the Indenture,
dated as of June 1, 1997, as amended and supplemented, between
the Corporation and The Bank of New York, as Debenture Trustee
(the "Debenture Trustee"), and (ii) the "Declaration" means the
Amended and Restated Declaration of Trust relating to the Trust
among the Corporation, as Sponsor, The Bank of New York as
Property Trustee (the "Property Trustee"), The Bank of New York
(Delaware) as Delaware Trustee (the "Delaware Trustee"), and the
Administrative Trustees named therein (collectively, with the
Property Trustee and Delaware Trustee, the "Issuer Trustees").
In addition, as the context may require, (i) the term "Junior
Subordinated Debentures" includes the Original Junior
Subordinated Debentures and the Exchange Junior Subordinated
Debentures and (ii) the term "Guarantee" includes the Original
Guarantee and the Exchange Guarantee.
Holders of the Trust Securities will be entitled to receive
cumulative cash distributions arising from the payment of
interest on the Junior Subordinated Debentures accruing from
June 5, 1997 and payable semi-annually in arrears on the 1st day
of June and December of each year, commencing December 1, 1997,
at the annual rate of 10.30% of the Liquidation Amount of $1,000
per Exchange Capital Security and at the annual rate of 10.30% of
the Liquidation Amount of $1,000 per Common Security
("Distributions"). Subject to certain exceptions, the
Corporation has the right to defer payments of interest on the
Junior Subordinated Debentures at any time or from time to time
for a period not exceeding 10 consecutive semi-annual periods
with respect to each deferral period (each, an "Extension
Period"); provided, however, that no Extension Period may extend
beyond the Stated Maturity of the Junior Subordinated Debentures.
Upon the termination of any Extension Period and the payment of
all interest then accrued and unpaid (together with interest
thereon at the rate of 10.30%, compounded semi-annually, to the
extent permitted by applicable law), the Corporation may elect to
begin a new Extension Period, subject to the requirements set
forth herein. If interest payments on the Junior Subordinated
Debentures are so deferred, during any Extension Period,
Distributions on the Trust Securities will also be deferred and
the Corporation will not be permitted, subject to certain
exceptions described herein, to declare or pay any cash
distributions with respect to the Corporation's capital stock
(which includes common and preferred stock) or to make any
payment with respect to debt securities of the Corporation that
rank pari passu in all respects with or junior to the Junior
Subordinated Debentures. During an Extension Period, interest on
the Junior Subordinated Debentures will continue to accrue (and
the amount of Distributions to which holders of the Trust
Securities are entitled will accumulate) at the rate of 10.30%
per annum, compounded semi-annually, and holders of Trust
Securities will be required to accrue interest income for United
States federal income tax purposes. See "Description of Exchange
Securities--Description of Exchange Junior Subordinated
Debentures--Option to Extend Interest Payment Date" and "Certain
United States Federal Income Tax Consequences--Interest Income
and Original Issue Discount."
<PAGE>
The Corporation has, through the Guarantee, the
Declaration,
the Junior Subordinated Debentures and the Indenture (each as
defined herein), taken together, fully, irrevocably and
unconditionally guaranteed, as described herein, all of the
Trust's obligations under the Capital Securities. See
"Relationship Among the Exchange Capital Securities, the Exchange
Junior Subordinated Debentures and the Exchange Guarantee--Full
and Unconditional Guarantee." Pursuant to the Exchange Guarantee,
the Corporation will guarantee the payment of Distributions and
payments on liquidation or redemption of the Exchange Capital
Securities, but only in each case to the extent of funds held by
the Trust, as described herein. See "Description of Exchange
Securities--Description of Exchange Guarantee." If the
Corporation does not make interest payments on the Junior
Subordinated Debentures held by the Trust, the Trust will have
insufficient funds to pay Distributions on the Capital
Securities. The Guarantee does not cover the payment of
Distributions when the Trust does not have sufficient funds to
pay such Distributions. In such event, a holder of Capital
Securities may institute a legal proceeding directly against the
Corporation for enforcement of payment to such holder of the
principal of or interest on Junior Subordinated Debentures having
a principal amount equal to the aggregate Liquidation Amount of
the Capital Securities held by such holder (a "Direct Action").
See "Description of Exchange Securities--Description of Exchange
Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of Exchange Capital Securities." The obligations of the
Corporation under the Guarantee and the Junior Subordinated
Debentures are subordinate and junior in right of payment to all
Senior Indebtedness (as defined in "Description of Exchange
Securities--Description of Exchange Junior Subordinated
Debentures--Subordination") of the Corporation. In addition,
because the Corporation is a holding company, the Junior
Subordinated Debentures and the Guarantee are effectively
subordinated to all existing and future liabilities of the
Corporation's subsidiaries, including deposits.
The Trust Securities will be subject to mandatory
redemption
(i) in whole, but not in part, at the Stated Maturity of the
Junior Subordinated Debentures upon the redemption thereof at a
redemption price equal to the principal amount of, plus accrued
interest on, the Junior Subordinated Debentures (the "Maturity
Redemption Price"), (ii) in whole, but not in part, at any time
prior to June 1, 2007, contemporaneously with the optional
redemption of the Junior Subordinated Debentures, upon the
occurrence and continuation of a Special Event (as defined
herein) at a redemption price equal to the Special Event
Prepayment Price (as defined herein) (the "Special Event
Redemption Price"), and (iii) in whole or in part on or after
June 1, 2007 contemporaneously with any optional redemption by
the Corporation of Junior Subordinated Debentures at a redemption
price (the "Optional Redemption Price") equal to the Optional
Prepayment Price (as defined below). Any of the Maturity
Redemption Price, the Special Event Redemption Price or the
Optional Redemption Price may be referred to herein as the
"Redemption Price." See "Description of Exchange Securities--
Description of Exchange Capital Securities--Mandatory
Redemption." Subject to the Corporation having received any
required regulatory approval to do so, the Junior Subordinated
Debentures are redeemable prior to the Stated Maturity (i) at the
option of the Corporation on or after June 1, 2007, in whole or
in part at any time at a redemption price (the "Optional
Prepayment Price") equal to 105.150% of the principal amount
thereof on June 1, 2007 declining ratably on each June 1
thereafter to 100% on or after June 1, 2017, plus accrued and
unpaid interest thereon to the date of redemption or (ii) at any
time prior to June 1, 2007, in whole but not in part, upon the
occurrence and continuation of a Special Event, at a redemption
price (the "Special Event Prepayment Price" equal to the greater
of (a) 100% of the principal amount thereof or (b) the sum, as
determined by a Quotation Agent (as defined herein), of the
present values of the principal amount and premium payable as
part of the prepayment price with respect to an optional
redemption of such Junior Subordinated Debentures on June 1,
2007, together with scheduled payments of interest accruing from
the redemption date to June 1, 2007, in each case, discounted to
the redemption date on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury
Rate (as defined herein), plus accrued but unpaid interest
thereon to the date of redemption. See "Description of Exchange
Securities--Description of Exchange Junior Subordinated
Debentures--Optional Redemption" and "--Special Event
Prepayment."
The Corporation, as the holder of the outstanding Common
Securities, has the right at any time (including, without
limitation, upon the occurrence of a Tax Event (as defined
herein)) to terminate the Trust and cause a Like Amount (as
defined herein) of the Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities upon
liquidation of the Trust, subject to (i) the Corporation having
received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Capital
Securities and (ii) any required regulatory approval. In the
event of such termination of the Trust, after satisfaction of
liabilities to creditors of the Trust as required by applicable
law, the holders of the Capital Securities generally will be
entitled to receive a Liquidation Amount of $1,000 per Capital
Security plus accumulated and unpaid Distributions thereon to the
date of payment, which shall be in the form of a distribution of
a Like Amount of Junior Subordinated Debentures, subject to
certain exceptions. See "Description of Exchange Securities--
Description of Exchange Capital Securities--Liquidation of the
Trust and Distribution of Junior Subordinated Debentures."
The Capital Securities, including the Exchange Capital
Securities when issued, may be transferred only in blocks having
a Liquidation Value of not less than $100,000 (100 Capital
Securities)
The Trust is making the Exchange Offer of the Exchange
Capital Securities in reliance on the position of the staff of
the Division of Corporation Finance of the Securities and
Exchange Commission (the "Commission") as set forth in certain
interpretive letters addressed to third parties in other
transactions. However, neither the Corporation nor the Trust has
sought its own interpretive letter and there can be no assurance
that the staff of the Division of Corporation Finance of the
Commission would make a similar determination with respect to the
Exchange Offer as it has in such interpretive letters to third
parties. Based on these interpretations by the staff of the
Division of Corporation Finance of the Commission, and subject to
the two immediately following sentences, the Corporation and the
Trust believe that Exchange Capital Securities issued pursuant to
this Exchange Offer in exchange for Original Capital Securities
may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer)
without further compliance with the registration and prospectus
delivery requirements of the Securities Act, provided that such
Exchange Capital Securities are acquired in the ordinary course
of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any
person to participate, in a distribution (within the meaning of
the Securities Act) of such Exchange Capital Securities.
However, any holder of Original Capital Securities who is an
"affiliate" of the Corporation or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing
Exchange Capital Securities, or any broker-dealer who purchased
Original Capital Securities from the Trust to resell pursuant to
Rule 144A under the Securities Act ("Rule 144A") or any other
available exemption under the Securities Act, (a) will not be
able to rely on the interpretations of the staff of the Division
of Corporation Finance of the Commission set forth in the above-
mentioned interpretive letters, (b) will not be permitted or
entitled to tender such Original Capital Securities in the
Exchange Offer and (c) must comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Original
Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described
below, if any broker-dealer holds Original Capital Securities
acquired for its own account as a result of market-making or
other trading activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then such broker-
dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such Exchange
Capital Securities.
<PAGE>
Each holder of Original Capital Securities who wishes to
exchange Original Capital Securities for Exchange Capital
Securities in the Exchange Offer will be required to represent
that (i) it is not an "affiliate" of the Corporation or the
Trust, (ii) any Exchange Capital Securities to be received by it
are being acquired in the ordinary course of its business,
(iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged
in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such Exchange Capital
Securities. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility
to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the
meaning of Rule 13d-3 under the Securities Exchange Act of 1934,
as amended) on behalf of whom such holder holds the Capital
Securities to be exchanged in the Exchange Offer. Each broker-
dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it
acquired the Original Capital Securities for its own account as
the result of market-making activities or other trading
activities and must agree that it will deliver a prospectus
meeting the requirements of the Securities Act in connection with
any resale of such Exchange Capital Securities. The Letter of
Transmittal states that by so acknowledging and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it
is an "underwriter" within the meaning of the Securities Act.
Based on the position taken by the staff of the Division of
Corporation Finance of the Commission in the interpretive letters
referred to above, the Corporation and the Trust believe that
broker-dealers who acquired Original Capital Securities for their
own accounts, as a result of market-making activities or other
trading activities ("Participating Broker-Dealers"), may fulfill
their prospectus delivery requirements with respect to the
Exchange Capital Securities received upon exchange of such
Original Capital Securities (other than Original Capital
Securities which represent an unsold allotment from the initial
sale of the Original Capital Securities) with a prospectus
meeting the requirements of the Securities Act, which may be the
prospectus prepared for an exchange offer so long as it contains
a description of the plan of distribution with respect to the
resale of such Exchange Capital Securities. Each broker-dealer
that receives Exchange Capital Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with any resale of such
Exchange Capital Securities. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an
underwriter within the meaning of the Securities Act. This
Prospectus, as it may be amended or supplemented from time to
time, may be used by a broker-dealer in connection with resales
of Exchange Capital Securities received in exchange for Original
Capital Securities acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Trust
and the Corporation have agreed that, ending on the close of
business on the 180th day following the Expiration Date (as
described herein), it will make this Prospectus available to any
broker-dealer for use in connection with any such resale. See
"Plan of Distribution." However, a Participating Broker-Dealer
who intends to use this Prospectus in connection with the resale
of Exchange Capital Securities received in exchange for Original
Capital Securities pursuant to the Exchange Offer must notify the
Corporation or the Trust, or cause the Corporation or the Trust
to be notified, on or prior to the Expiration Date, that it is a
Participating Broker-Dealer. Such notice may be given in the
space provided for that purpose in the Letter of Transmittal or
may be delivered to the Exchange Agent at one of the addresses
set forth herein under "The Exchange Offer-- Exchange Agent."
Any Participating Broker-Dealer who is an "affiliate" of the
Corporation or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with
any resale transaction. See "The Exchange Offer--Resales of
Exchange Capital Securities."
In that regard, each Participating Broker-Dealer who
surrenders Original Capital Securities pursuant to the Exchange
Offer will be deemed to have agreed, by execution of the Letter
of Transmittal, that upon receipt of notice from the Corporation
or the Trust of the occurrence of any event or the discovery of
any fact which makes any statement contained or incorporated by
reference in this Prospectus untrue in any material respect or
which causes this Prospectus to omit to state a material fact
necessary in order to make the statements contained or
incorporated by reference herein, in light of the circumstances
under which they were made, not misleading or of the occurrence
of certain other events specified in the Registration Agreement,
such Participating Broker-Dealer will suspend the sale of
Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) pursuant
to this Prospectus until the Corporation or the Trust has amended
or supplemented this Prospectus to correct such misstatement or
omission and has furnished copies of the amended or supplemented
Prospectus to such Participating Broker-Dealer, or the
Corporation or the Trust has given notice that the sale of the
Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be. If the Corporation or the Trust
gives such notice to suspend the sale of the Exchange Capital
Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable), it shall extend the
180-day period referred to above during which Participating
Broker-Dealers are entitled to use this Prospectus in connection
with the resale of Exchange Capital Securities by the number of
days during the period from and including the date of the giving
of such notice to and including the date when Participating
Broker-Dealers shall have received copies of the amended or
supplemented Prospectus necessary to permit resales of the
Exchange Capital Securities or to and including the date on which
the Corporation or the Trust has given notice that the sale of
Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
Prior to the Exchange Offer, there has been only a limited
secondary market and no public market for the Original Capital
Securities. The Exchange Capital Securities will be a new issue
of securities for which there currently is no market. Although
the Initial Purchasers have informed the Corporation and the
Trust that they each currently intend to make a market in the
Exchange Capital Securities, they are not obligated to do so, and
any such market making may be discontinued at any time without
notice. Accordingly, there can be no assurance as to the
development or liquidity of any market for the Exchange Capital
Securities. The Corporation and the Trust currently do not
intend to apply for listing of the Exchange Capital Securities on
any securities exchange or for quotation through the National
Association of Securities Dealers Automated Quotation System.
Any Original Capital Securities not tendered and accepted
in
the Exchange Offer will remain outstanding and will be entitled
to all the same rights and will be subject to the same
limitations applicable thereto under the Declaration (except for
those rights which terminate upon consummation of the Exchange
Offer). Following consummation of the Exchange Offer, the
holders of Original Capital Securities will continue to be
subject to all of the existing restrictions upon transfer
thereof, and neither the Corporation nor the Trust will have any
further obligation to such holders (other than under certain
limited circumstances) to provide for registration under the
Securities Act of the Original Capital Securities held by them.
To the extent that Original Capital Securities are tendered and
accepted in the Exchange Offer, a holder's ability to sell
untendered Original Capital Securities could be adversely
affected. See "Risk Factors--Consequences of a Failure to
Exchange Original Capital Securities."
THIS PROSPECTUS AND THE RELATED LETTER OF TRANSMITTAL
CONTAIN IMPORTANT INFORMATION. HOLDERS OF ORIGINAL CAPITAL
SECURITIES ARE URGED TO READ THIS PROSPECTUS AND THE RELATED
LETTER OF TRANSMITTAL CAREFULLY BEFORE DECIDING WHETHER TO TENDER
THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
Original Capital Securities may be tendered for exchange on
or prior to 5:00 p.m., New York City time, on ______________,
1997 (such time on such date being hereinafter called the
"Expiration Date"), unless the Exchange Offer is extended by the
Corporation or the Trust (in which case the term "Expiration
Date" shall mean the latest date and time to which the Exchange
Offer is extended). Tenders of Original Capital Securities may
be withdrawn at any time on or prior to the Expiration Date. The
Exchange Offer is not conditioned upon any minimum Liquidation
Amount of Original Capital Securities being tendered for
exchange. However, the Exchange Offer is subject to certain
events and conditions which may be waived by the Corporation or
the Trust and to the terms and provisions of the Registration
Agreement. Original Capital Securities may be tendered in whole
or in part having an aggregate Liquidation Amount of not less
than $100,000 (100 Capital Securities) or any integral multiple
of $1,000 Liquidation Amount (one Capital Security) in excess
thereof. The Corporation, as Issuer of the Junior Subordinated
Debentures, has agreed to pay all expenses of the Exchange Offer.
See "The Exchange Offer--Fees and Expenses." Holders of the
Original Capital Securities whose Original Capital Securities are
accepted for exchange will not receive Distributions on such
Original Capital Securities and will be deemed to have waived the
right to receive any Distributions on such Original Capital
Securities accumulated from and after December 1, 1997. See "The
Exchange Offer--Distributions on Exchange Capital Securities."
Neither the Corporation nor the Trust will receive any cash
proceeds from the issuance of the Exchange Capital Securities
offered hereby. No dealer-manager is being used in connection
with this Exchange Offer. See "Use of Proceeds" and "Plan of
Distribution."
<PAGE>
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THIS EXCHANGE OFFER AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE
TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER OR A SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
TABLE OF CONTENTS
Page
Available Information 14
Incorporation of Certain Documents by Reference 16
Summary 18
Risk Factors 29
Ratios of Earnings to Fixed Charges 37
Patriot Capital Trust I 38
Patriot Bank Corp. 40
Selected Financial Data 43
Capitalization 46
Accounting Treatment 47
The Exchange Offer 48
Description of Exchange Securities 62
Description of Original Securities 96
Relationship Among the Exchange Capital Securities, the
Exchange Junior Subordinated Debentures and the
Exchange Guarantee 96
Certain United States Federal Income Tax Consequences 98
ERISA Considerations 103
Plan of Distribution 105
Validity of Exchange Securities 106
Experts 106
AVAILABLE INFORMATION
The Corporation is subject to the informational
requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith, files reports, proxy
statements and other information with the Commission. Such
reports, proxy statements and other information can be inspected
and copied at the public reference facilities of the Commission
at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549 and
at the regional offices of the Commission located at 7 World
Trade Center, 13th Floor, Suite 1300, New York, New York 10048
and Suite 1400, Citicorp Center, 14th Floor, 500 West Madison
Street, Chicago, Illinois 60661. Copies of such material can
also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Such information may also be accessed
electronically by means of the Commission's home page on the
Internet (http://www.sec.gov.). The Corporation's common stock
is traded on the NASDAQ National Market. Such reports, proxy
statements and other information concerning the Corporation can
be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street N.W., Washington, D.C.
20006.
No separate financial statements of the Trust have been
included herein. The Corporation and the Trust do not consider
that such financial statements would be material to holders of
the Capital Securities because the Trust is a newly formed
special purpose entity, has no operating history or independent
operations and is not engaged in and does not propose to engage
in any activity other than holding as trust assets the Junior
Subordinated Debentures and issuing the Trust Securities. See
"Patriot Capital Trust I" and "Description of Exchange
Securities." In addition, the Corporation does not expect that
the Trust will file reports under the Exchange Act with the
Commission.
This Prospectus constitutes a part of a registration
statement on Form S-4 (the "Registration Statement") filed by the
Corporation and the Trust with the Commission under the
Securities Act. This Prospectus does not contain all the
information set forth in the Registration Statement, certain
parts of which are omitted in accordance with the rules and
regulations of the Commission, and reference is hereby made to
the Registration Statement and to the exhibits relating thereto
for further information with respect to the Corporation, the
Trust and the Exchange Securities. Any statements contained
herein concerning the provisions of any document are not
necessarily complete, and, in each instance, reference is made to
the copy of such document filed as an exhibit to the Registration
Statement or otherwise filed with the Commission. Each such
statement is qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Corporation with the
Commission are incorporated into this Prospectus by reference:
1. The Corporation's Annual Report on Form 10-K
for
the year ended December 31, 1996;
2. The Corporation's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997 (as amended on May 30,
1997);
3. The Corporation's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997 (as amended on
September 9, 1997); and
4. The Corporation's Current Report on Form 8-K
dated
May 29, 1997.
Each document or report subsequently filed by the
Corporation pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date hereof and prior to the termination
of the offering of the Exchange Securities offered hereby shall
be deemed to be incorporated by reference into this Prospectus
and to be a part of this Prospectus from the date of filing of
such document. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in
any other subsequently filed document which also is or is deemed
to be incorporated by reference herein modifies or supersedes
such statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.
As used herein, the terms "Prospectus" and "herein" mean
this Prospectus including the documents incorporated or deemed to
be incorporated herein by reference, as the same may be amended,
supplemented or otherwise modified from time to time. Statements
contained in this Prospectus as to the contents of any contract
or other document referred to herein do not purport to be
complete, and where reference is made to the particular
provisions of such contract or other document, such provisions
are qualified in all respects by reference to all of the
provisions of such contract or other document. The Corporation
will provide without charge to any person to whom this Prospectus
is delivered, on the written or oral request of such person, a
copy of any or all of the foregoing documents incorporated by
reference herein (other than exhibits not specifically
incorporated by reference into the texts of such documents).
Requests for such documents should be directed to: Patriot Bank
Corp., High and Hanover Streets, Pottstown, Pennsylvania 19464,
Attention: Diane M. Davidheiser. Telephone requests may be
directed to Ms. Davidheiser at (610) 323-1500.
<PAGE>
SUMMARY
The following is a summary of certain information contained
elsewhere in this Prospectus. Reference is made to, and this
summary is qualified in its entirety by, the more detailed
information and financial statements, including the notes
thereto, contained elsewhere in this Prospectus and in documents
incorporated by reference hereto.
PATRIOT CAPITAL TRUST I
The Trust is a statutory business trust formed under
Delaware law pursuant to (i) the Declaration and (ii) the filing
of a certificate of trust with the Delaware Secretary of State on
May 29, 1997. The Trust's business and affairs are conducted by
the Issuer Trustees: The Bank of New York, as Property Trustee,
The Bank of New York (Delaware), as Delaware Trustee, and three
individual Administrative Trustees who are employees or officers
of or affiliated with the Corporation. The Trust exists for the
exclusive purposes of (i) issuing and selling the Trust
Securities, (ii) using the proceeds from the sale of the Trust
Securities to acquire the Junior Subordinated Debentures issued
by the Corporation and (iii) engaging in only those other
activities necessary, advisable or incidental thereto (such as
registering the transfer of the Capital Securities). The Junior
Subordinated Debentures will be the sole assets of the Trust, and
payments under the Junior Subordinated Debentures will be the
sole revenues of the Trust. All of the Common Securities will be
owned directly or indirectly by the Corporation.
PATRIOT BANK CORP.
General
The Corporation is a Delaware corporation and bank holding
company which was organized in August 1995 to acquire all of the
capital stock of Patriot Bank (the "Bank") issued in connection
with the Bank's conversion from mutual to stock form of ownership
in December 1995. The Corporation is headquartered in Pottstown,
Pennsylvania and is the holding company for the Bank and Patriot
Investment Company ("PIC"). The Corporation reported net income
of $1,647,000 or $.41 per share for the six-month period ended
June 30, 1997 and net income of $2,811,000 or $.66 per share for
the year ended December 31, 1996 (excluding a special after-tax
charge of $836,000 representing the special deposit insurance
assessment levied by the FDIC on all SAIF member institutions).
At June 30, 1997, the Corporation had total assets of
$699.0 million and total stockholders' equity of $49.5 million.
The Bank is a Pennsylvania state chartered commercial bank
which conducts business from its executive offices in Pottstown,
Pennsylvania and its 13 community banking offices located in
Montgomery, Berks, Lehigh, Northampton and Chester Counties,
Pennsylvania. The Bank is a community-oriented financial
services provider whose business primarily consists of attracting
retail deposits from the general public and small businesses and
originating mortgage, consumer and commercial loans in the Bank's
market area. The Bank also invests in investment and
mortgage-backed securities and uses advances from the Federal
Home Loan Bank of Pittsburgh and repurchase agreements as sources
of funds. At June 30, 1997, the Bank had total assets of
$665.6 million and total stockholder's equity of $34.7 million.
Prior to May 23, 1997, the Bank was a federally-chartered
savings bank. The Bank converted to a Pennsylvania-chartered
commercial bank in order to provide expanded commercial products
and services.
PIC is a Delaware investment corporation whose primary
business consists of maintaining an investment portfolio. At
June 30, 1997, PIC had total assets of $35.7 million and total
stockholder's equity of $25.1 million.
Recent Developments
On August 25, 1997, Patriot announced a 20% stock dividend
that was paid on September 22, 1997 to stockholders of record on
September 8, 1997. The earnings per share and other per share
data stated in this Prospectus have not been adjusted to reflect
such stock split.
On August 21, 1997, Patriot announced that it had entered
into a letter of intent to acquire First Nations Capital Corp., a
privately-owned small-ticket commercial leasing company
headquartered in Reading, Pennsylvania. The acquisition is
expected to be completed in the fourth quarter of 1997. Upon
completion of the acquisition, First Nations Capital Corp. will
be renamed Patriot Commercial Leasing Company.
On July 28, 1997, the Corporation completed the repurchase
of 449,537 shares of its common stock pursuant to a "Modified
Dutch Auction" self-tender offer. The shares were repurchased at
a price of $18.00 per share.
Patriot announced on August 8, 1997 that it had entered
into
a nonbinding letter of intent to sell certain of the deposits and
the physical facility of the Bank's Topton, Pennsylvania branch
to National Penn Bank. The sale is subject to regulatory
approval and is expected to be completed during the fourth
quarter of 1997.
The Corporation is a legal entity separate and distinct
from
its subsidiaries. The ability of holders of debt and equity
securities of the Corporation to benefit from the distribution of
assets of any subsidiary upon the liquidation or reorganization
of such subsidiary is subordinate to prior claims of creditors of
the subsidiary (including depositors in the case of banking
subsidiaries) except to the extent that a claim of the
Corporation as a creditor may be recognized.
In addition, there are regulatory limitations on the
payment
of dividends directly or indirectly to the Corporation from its
existing banking subsidiaries. Under applicable banking
statutes, at June 30, 1997, the Corporation's banking subsidiary
could have declared additional dividends of approximately
$7.5 million. However, Federal and state regulatory agencies
also have the authority to limit further the Corporation's
banking subsidiaries' payment of dividends based on other
factors, such as the maintenance of adequate capital for such
subsidiary bank, which could reduce the amount of dividends
otherwise payable.
THE EXCHANGE OFFER
The Exchange Offer Up to $19,000,000 aggregate
Liquidation
Amount of Exchange Capital
Securities
are being offered in exchange for a
like
aggregate Liquidation Amount of
Original
Capital Securities. Original
Capital
Securities may be tendered for
exchange
in whole or in part in a
Liquidation
Amount of $100,000 (100 Capital
Securities) or any integral
multiple of
$1,000 (one Capital Security) in
excess
thereof. The Corporation and the
Trust
are making the Exchange Offer in
order
to satisfy their obligations under
the
Registration Agreement relating to
the
Original Capital Securities. For a
description of the procedures for
tendering Original Capital
Securities,
see "The Exchange Offer--Procedures
for
Tendering Original Capital
Securities."
Expiration Date 5:00 p.m., New York City time, on
_________, 1997, unless the
Exchange
Offer is extended by the
Corporation or
the Trust (in which case the
Expiration
Date will be the latest date and
time to
which the Exchange Offer is
extended).
See "The Exchange Offer--Terms of
the
Exchange Offer."
Conditions to the
Exchange Offer The Exchange Offer is subject to
certain
conditions, which may be waived by
the
Corporation and the Trust in their
sole
discretion. The Exchange Offer is
not
conditioned upon any minimum
Liquidation
Amount of Original Capital
Securities
being tendered. See "The Exchange
Offer--Conditions to the Exchange
Offer."
Terms of the Exchange
Offer The Corporation and the Trust
reserve
the right in their sole and
absolute
discretion, subject to applicable
law,
at any time and from time to time,
(i) to delay the acceptance of the
Original Capital Securities for
exchange, (ii) to terminate the
Exchange
Offer if certain specified
conditions
have not been satisfied, (iii) to
extend
the Expiration Date of the Exchange
Offer and retain all Original
Capital
Securities tendered pursuant to the
Exchange Offer, subject, however,
to the
right of holders of Original
Capital
Securities to withdraw their
tendered
Original Capital Securities, or
(iv) to
waive any condition or otherwise
amend
the terms of the Exchange Offer in
any
respect. See "The Exchange
Offer--Terms
of the Exchange Offer."
Withdrawal Rights Tenders of Original Capital
Securities
may be withdrawn at any time on or
prior
to the Expiration Date by
delivering a
written notice of such withdrawal
to the
Exchange Agent in conformity with
certain procedures set forth below
under
"The Exchange Offer--Withdrawal
Rights."
Procedures for Tendering
Original Capital
Securities Tendering holders of Original
Capital
Securities must complete and sign a
Letter of Transmittal in accordance
with
the instructions contained therein
and
forward the same by mail, facsimile
or
hand delivery, together with any
other
required documents, to the Exchange
Agent, either with the Original
Capital
Securities to be tendered or in
compliance with the specified
procedures
for guaranteed delivery of Original
Capital Securities. Certain
brokers,
dealers, commercial banks, trust
companies and other nominees may
also
effect tenders by book-entry
transfer.
Holders of Original Capital
Securities
registered in the name of a broker,
dealer, commercial bank, trust
company
or other nominee are urged to
contact
such person promptly if they wish
to
tender Original Capital Securities
pursuant to the Exchange Offer.
See
"The Exchange Offer-- Procedures
for
Tendering Original Capital
Securities."
Letters of Transmittal and
certificates
representing Original Capital
Securities
should not be sent to the
Corporation or
the Trust. Such documents should
only
be sent to the Exchange Agent.
Resales of Exchange
Capital Securities The Corporation and the Trust are
making
the Exchange Offer in reliance on
the
position of the staff of the
Division of
Corporation Finance of the
Commission as
set forth in certain interpretive
letters addressed to third parties
in
other transactions. However,
neither
the Corporation nor the Trust has
sought
its own interpretive letter and
there
can be no assurance that the staff
of
the Division of Corporation Finance
of
the Commission would make a similar
determination with respect to the
Exchange Offer as it has in such
interpretive letters to third
parties.
Based on these interpretations by
the
staff of the Division of
Corporation
Finance of the Commission, and
subject
to the two immediately following
sentences, the Corporation and the
Trust
believe that Exchange Capital
Securities
issued pursuant to this Exchange
Offer
in exchange for Original Capital
Securities may be offered for
resale,
resold and otherwise transferred by
a
holder thereof (other than a holder
who
is a broker-dealer) without further
compliance with the registration
and
prospectus delivery requirements of
the
Securities Act, provided that such
Exchange Capital Securities are
acquired
in the ordinary course of such
holder's
business and that such holder is
not
participating, and has no
arrangement or
understanding with any person to
participate, in a distribution
(within
the meaning of the Securities Act)
of
such Exchange Capital Securities.
However, any holder of Original
Capital
Securities who is an "affiliate" of
the
Corporation or the Trust or who
intends
to participate in the Exchange
Offer for
the purpose of distributing the
Exchange
Capital Securities, or any
broker-dealer
who purchased the Original Capital
Securities from the Trust to resell
pursuant to Rule 144A or any other
available exemption under the
Securities
Act, (a) will not be able to rely
on the
interpretations of the staff of the
Division of Corporation Finance of
the
Commission set forth in the
above-mentioned interpretive
letters,
(b) will not be permitted or
entitled to
tender such Original Capital
Securities
in the Exchange Offer and (c) must
comply with the registration and
prospectus delivery requirements of
the
Securities Act in connection with
any
sale or other transfer of such
Original
Capital Securities unless such sale
is
made pursuant to an exemption from
such
requirements. In addition, as
described
below, if any broker-dealer holds
Original Capital Securities
acquired for
its own account as a result of
market-making or other trading
activities and exchanges such
Original
Capital Securities for Exchange
Capital
Securities, then such broker-dealer
must
deliver a prospectus meeting the
requirements of the Securities Act
in
connection with any resales of such
Exchange Capital Securities.
Each holder of Original Capital
Securities who wishes to exchange
Original Capital Securities for
Exchange
Capital Securities in the Exchange
Offer
will be required to represent that
(i)
it is not an "affiliate" of the
Corporation or the Trust, (ii) any
Exchange Capital Securities to be
received by it are being acquired
in the
ordinary course of its business,
(iii)
it has no arrangement or
understanding
with any person to participate in a
distribution (within the meaning of
the
Securities Act) of such Exchange
Capital
Securities, and (iv) if such holder
is
not a broker-dealer, such holder is
not
engaged in, and does not intend to
engage in, a distribution (within
the
meaning of the Securities Act) of
such
Exchange Capital Securities. Each
broker-dealer that receives
Exchange
Capital Securities for its own
account
in exchange for Original Capital
Securities, where such Original
Capital
Securities were acquired by such
broker-dealer as a result of
market-making activities or other
trading activities, must
acknowledge
that it will deliver a prospectus
meeting the requirements of the
Securities Act in connection with
any
resale of such Exchange Capital
Securities. The Letter of
Transmittal
states that, by so acknowledging
and by
delivering such a prospectus, a
broker-dealer will not be deemed to
admit that it is an "underwriter"
within
the meaning of the Securities Act.
Based on the position taken by the
staff
of the Division of Corporation
Finance
of the Commission in the
interpretive
letters referred to above, the
Corporation and the Trust believe
that
Participating Broker-Dealers who
acquired Original Capital
Securities for
their own accounts as a result of
market-making activities or other
trading activities may fulfill
their
prospectus delivery requirements
with
respect to the Exchange Capital
Securities received upon exchange
of
such Original Capital Securities
(other
than Original Capital Securities
which
represent an unsold allotment from
the
initial sale of the Original
Capital
Securities) with a prospectus
meeting
the requirements of the Securities
Act,
which may be the prospectus
prepared for
an exchange offer so long as it
contains
a description of the plan of
distribution with respect to the
resale
of such Exchange Capital
Securities.
Accordingly, this Prospectus, as it
may
be amended or supplemented from
time to
time, may be used by a
Participating
Broker-Dealer in connection with
resales
of Exchange Capital Securities
received
in exchange for Original Capital
Securities where such Original
Capital
Securities were acquired by such
Participating Broker-Dealer for its
own
account as a result of
market-making or
other trading activities. Subject
to
certain provisions set forth in the
Registration Agreement and to the
limitations described below under
"The
Exchange Offer--Resales of Exchange
Capital Securities," the
Corporation and
the Trust have agreed that this
Prospectus, as it may be amended or
supplemented from time to time, may
be
used by a Participating
Broker-Dealer in
connection with resales of such
Exchange
Capital Securities for a period
ending
180 days after the Expiration Date
(subject to extension under certain
limited circumstances) or, if
earlier,
when all such Exchange Capital
Securities have been disposed of by
such
Participating Broker-Dealer. See
"Plan
of Distribution." Any Participating
Broker-Dealer who is an "affiliate"
of
the Corporation or the Trust may
not
rely on such interpretive letters
and
must comply with the registration
and
prospectus delivery requirements of
the
Securities Act in connection with
any
resale transaction. See "The
Exchange
Offer--Resales of Exchange Capital
Securities."
Exchange Agent The exchange agent with respect to
the
Exchange Offer is The Bank of New
York
(the "Exchange Agent"). The
addresses,
and telephone and facsimile
numbers, of
the Exchange Agent are set forth in
"The
Exchange Offer--Exchange Agent" and
in
the Letter of Transmittal.
Use of Proceeds Neither the Corporation nor the
Trust
will receive any cash proceeds from
the
issuance of the Exchange Capital
Securities offered hereby.
Certain United States
Federal Income Tax
Consequences; ERISA
Considerations Holders of Original Capital
Securities
should review the information set
forth
under "Certain United States
Federal
Income Tax Consequences" and "ERISA
Considerations" prior to tendering
Original Capital Securities in the
Exchange Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered Up to $19,000,000 aggregate
Liquidation
Amount of the Trust's Exchange
Capital
Securities have been registered
under
the Securities Act (Liquidation
Amount
$1,000 per Exchange Capital
Security).
The Exchange Capital Securities
will be
issued and the Original Capital
Securities were issued under the
Declaration. The Exchange Capital
Securities and any Original Capital
Securities which remain outstanding
after consummation of the Exchange
Offer
will vote together as a single
class for
purposes of determining whether
holders
of the requisite percentage in
outstanding Liquidation Amount
thereof
have taken certain actions or
exercised
certain rights under the
Declaration.
See "Description of Exchange
Securities--Description of Exchange
Capital Securities--Voting Rights;
Amendment of the Declaration." The
terms
of the Exchange Capital Securities
are
identical in all material respects
to
the terms of the Original Capital
Securities, except that the
Exchange
Capital Securities have been
registered
under the Securities Act, will not
be
subject to certain restrictions on
transfer applicable to the Original
Capital Securities and will not
provide
for any increase in the
Distribution
rate thereon. See "The Exchange
Offer--Purpose of the Exchange
Offer,"
"Description of Exchange
Securities" and
"Description of Original
Securities."
Distribution Dates June 1 and December 1 of each year,
commencing June 1, 1998.
Extension Periods Distributions on the Exchange
Capital
Securities will be deferred for the
duration of any Extension Period
elected
by the Corporation with respect to
the
payment of interest on the Exchange
Junior Subordinated Debentures. No
Extension Period will exceed
10 consecutive semi-annual periods
or
extend beyond the Stated Maturity
of the
Junior Subordinated Debentures.
See
"Description of Exchange
Securities--Description of Exchange
Junior Subordinated
Debentures--Option
to Extend Interest Payment Date"
and
"Certain United States Federal
Income
Tax Consequences--Interest Income
and
Original Issue Discount."
Ranking The Exchange Capital Securities
will
rank pari passu, and payments
thereon
will be made pro rata, with the
Original
Capital Securities and the Common
Securities except as described
under
"Description of Exchange
Securities--Description of Exchange
Capital Securities--Subordination
of
Common Securities." The Exchange
Junior
Subordinated Debentures will rank
pari
passu with the Original Junior
Subordinated Debentures and all
other
junior subordinated debt securities
to
be issued by the Corporation
pursuant to
the Indenture with substantially
similar
subordination terms ("Other
Debentures"), and which will be
issued
and sold to other trusts to be
established by the Corporation in
each
case similar to the Trust ("Other
Trusts"), and will be unsecured and
subordinate and junior in right of
payment to the extent and in the
manner
set forth in the Indenture to all
Senior
Debt of the Corporation. See
"Description of Exchange
Securities--Description of Exchange
Junior Subordinated Debentures."
The
Exchange Guarantee will rank pari
passu
with the Original Guarantee and all
other guarantees to be issued by
the
Corporation with respect to capital
securities to be issued by Other
Trusts
("Other Guarantees"), and will
constitute an unsecured obligation
of
the Corporation and will rank
subordinate and junior in right of
payment to the extent and in the
manner
set forth in the Guarantee to all
Senior
Debt. See "Description of Exchange
Securities--Description of Exchange
Guarantee." In addition, because
the
Corporation is a holding company,
the
Junior Subordinated Debentures and
the
Guarantee are effectively
subordinated
to all existing and future
liabilities
of the Corporation's subsidiaries,
including deposits.
Redemption The Trust Securities are subject to
mandatory redemption (i) in whole,
but
not in part, at the Stated Maturity
of
the Junior Subordinated Debentures
upon
the redemption thereof, (ii) in
whole,
but not in part, at any time prior
to
June 1, 2007, contemporaneously
with the
optional redemption of the Junior
Subordinated Debentures upon the
occurrence and continuation of a
Special
Event (as defined herein), and
(iii) in
whole or in part at any time on or
after
June 1, 2007 contemporaneously with
any
optional redemption by the
Corporation
of Junior Subordinated Debentures,
in
each case at the applicable
Redemption
Price. See "Description of
Exchange
Securities--Description of Exchange
Capital Securities--Mandatory
Redemption."
Transfer Restrictions The Exchange Capital Securities
will be
issued, and may be transferred,
only in
blocks having a Liquidation Amount
of
not less than $100,000 (100 Capital
Securities).
ERISA Considerations Prospective purchasers must
carefully
consider the restrictions on
purchase
set forth under "ERISA
Considerations."
Absence of Market for
the Exchange Capital
Securities The Exchange Capital Securities
will be
a new issue of securities for which
there currently is no market.
Accordingly, there can be no
assurance
as to the development or liquidity
of
any market for the Exchange Capital
Securities. The Trust and the
Corporation do not intend to apply
for
listing of the Exchange Capital
Securities on any securities
exchange or
for quotation through the National
Association of Securities Dealers
Automated Quotation System
("NASDAQ").
See "Plan of Distribution."
Risk Factors Prospective investors should
carefully
consider the matters set forth
under
"Risk Factors."
<PAGE>
RISK FACTORS
Prospective investors should consider carefully, in
addition
to the other information contained in this Prospectus, the
following factors in connection with the Exchange Offer and the
Exchange Capital Securities offered hereby. This Prospectus
contains certain forward-looking statements and information
relating to the Corporation that are based on the beliefs of
management as well as assumptions made by and information
currently available to management. The words "anticipate,"
"believe," "estimate," "expect," "intends" and similar
expressions, as they relate to the Corporation or the
Corporation's management, are intended to identify
forward-looking statements. Such statements reflect the current
views of the Corporation with respect to future events and are
subject to certain risks,uncertainties and assumptions, including
the risk factors described in this Prospectus. Should one or
more of these risks or uncertainties materialize, or should
underlying assumptions prove incorrect, actual results may vary
materially from those described herein as anticipated, believed,
estimated or expected. The Corporation does not intend to update
these forward-looking statements.
Ranking of Obligations Under the Guarantee and the Junior
Subordinated Debentures
The obligations of the Corporation under the Guarantee
issued by the Corporation for the benefit of the holders of
Capital Securities and under the Junior Subordinated Debentures
are unsecured and rank subordinate and junior in right of payment
to all Senior Debt of the Corporation. At June 30, 1997, the
Corporation had no outstanding Senior Debt. Because the
Corporation is a bank holding company, the right of the
Corporation to participate in any distribution of assets of any
subsidiary, including the Bank, upon such subsidiary's
liquidation or reorganization or otherwise (and thus the ability
of holders of the Capital Securities to benefit indirectly from
such distribution), is subject to the prior claims of creditors
of such subsidiary, except to the extent that the Corporation may
itself be recognized as a creditor of such subsidiary.
Accordingly, the Junior Subordinated Debentures will be
effectively subordinated to all existing and future liabilities
of the Corporation's subsidiaries, and holders of Junior
Subordinated Debentures should look only to the assets of the
Corporation for payments on the Junior Subordinated Debentures.
Because the Corporation is a holding company with limited assets
and liabilities, a substantial portion of the consolidated
liabilities of the Corporation are liabilities of its
subsidiaries. The Guarantee will constitute an unsecured
obligation of the Corporation and will rank subordinate and
junior in right of payment to all Senior Debt in the same manner
as the Junior Subordinated Debentures. See "Patriot." None of
the Indenture, the Guarantee or the Declaration places any
limitation on the amount of secured or unsecured debt, including
Senior Debt, that may be incurred by the Corporation or any
subsidiary. See "Description of Exchange Securities--Description
of Exchange Junior Subordinated Debentures--Subordination" and
"--Description of Exchange Guarantee--Status of the Guarantee."
The ability of the Trust to pay amounts due on the Capital
Securities is solely dependent upon the Corporation making
payments on the Junior Subordinated Debentures as and when
required.
In addition, there are regulatory limitations on the
payment
of dividends directly or indirectly to the Corporation from the
Bank. Under applicable banking statutes at June 30, 1997, the
Bank could have declared additional dividends of $7.5 million.
Option to Extend Interest Payment Date; Tax Consequences; Market
Price Consequences
So long as no Debenture Event of Default (as defined
herein)
has occurred and is continuing, the Corporation has the right
under the Indenture to defer the payment of interest on the
Junior Subordinated Debentures at any time or from time to time
for a period not exceeding 10 consecutive semi-annual periods
with respect to each Extension Period; provided, however, that no
Extension Period shall end on a date other than an Interest
Payment Date or extend beyond the Stated Maturity of the Junior
Subordinated Debentures. As a consequence of any such deferral,
semi-annual Distributions on the Trust Securities by the Trust
will also be deferred (and the amount of Distributions to which
holders of the Trust Securities are entitled will accumulate
additional Distributions thereon at the rate of 10.30% per annum,
compounded semi-annually, but not exceeding the interest rate
then accruing on the Junior Subordinated Debentures) from the
relevant payment date for such Distributions during any such
Extension Period.
Prior to the termination of any Extension Period, the
Corporation may further extend such Extension Period; provided,
however, that such extension does not cause such Extension Period
to exceed 10 consecutive semi-annual periods or to extend beyond
the Stated Maturity. Upon the termination of any Extension
Period and the payment of all interest then accrued and unpaid on
the Junior Subordinated Debentures (together with interest
thereon at the annual rate of 10.30%, compounded semi-annually,
to the extent permitted by applicable law), the Corporation may
elect to begin a new Extension Period, subject to the above
requirements. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period. See
"Description of Exchange Securities--Description of Exchange
Capital Securities--Distributions" and "--Description of Exchange
Junior Subordinated Debentures--Option to Extend Interest Payment
Date."
During any Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of the Corporation's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or
premium, if any, on, or repay, repurchase or redeem any debt
securities of the Corporation (including Other Debentures) that
rank pari passu with or junior in right of payment to, the Junior
Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including Other
Guarantees) if such guarantee ranks pari passu with or junior in
right of payment to the Junior Subordinated Debentures (other
than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future,
or the redemption or repurchase of any such rights pursuant
thereto, (c) payments under the Guarantee, (d) purchases of
shares of the Corporation's common stock related to the issuance
of common stock or rights under any of the Corporation's benefit
plans for its directors, officers or employees or any of the
Corporation's dividend reinvestment plans, (e) as a result of a
reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional
interests in shares of the Corporation's capital stock pursuant
to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged).
Because the Corporation believes that the likelihood of its
exercising its option to defer payments of interest is remote,
the Junior Subordinated Debentures will be treated under Treasury
regulations as issued without original issue discount ("OID") for
United States federal income tax purposes. As a result, holders
of Capital Securities generally will include their allocable
share of the interest on the Junior Subordinated Debentures in
taxable income under their own methods of tax accounting (i.e.,
cash or accrual). Under the Treasury regulations, however, if
the Corporation exercises its right to defer payments of
interest, the Junior Subordinated Debentures will become OID
instruments. Consequently, holders of Capital Securities will be
required to include their pro rata share of OID in gross income
as it accrues for United States federal income tax purposes in
advance of the receipt of cash attributable to such interest
income and such holders will not receive the cash related to such
income if they dispose of the Capital Securities prior to the
record date for payment of distributions thereafter. See
"Certain United States Federal Income Tax Consequences--Interest
Income and Original Issue Discount" and "--Sales of Capital
Securities."
Should the Corporation elect to exercise its right to defer
payments of interest on the Junior Subordinated Debentures in the
future, the market price of the Capital Securities is likely to
be affected. A holder that disposes of its Capital Securities
during an Extension Period, therefore, might not receive the same
return on its investment as a holder that continues to hold its
Capital Securities. In addition, merely as a result of the
existence of the Corporation's right to defer interest payments
on the Junior Subordinated Debentures, the market price of the
Capital Securities (which represent an undivided beneficial
ownership interest in the Junior Subordinated Debentures) may be
more volatile than the market prices of other securities that are
not subject to such deferrals.
Special Event Redemption; Possible Tax Law Changes Affecting the
Capital Securities
Upon the occurrence and continuation of a Special Event
prior to June 1, 2007, the Corporation may, at its option and
subject to receipt of any required regulatory approval, prepay
the Junior Subordinated Debentures in whole, but not in part, at
the Special Event Prepayment Price (as defined herein) within
90 days following the occurrence of such Special Event. In such
event, the Trust will redeem the Trust Securities on a pro rata
basis to the same extent as the Junior Subordinated Debentures
are prepaid by the Corporation. See "Description of Exchange
Securities--Description of Exchange Junior Subordinated
Debentures--Special Event Prepayment", "--Description of Exchange
Capital Securities--Mandatory Redemption" and "--Description of
Exchange Capital Securities--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures."
A "Special Event" means a Tax Event or a Regulatory Capital
Event, as the case may be.
A "Tax Event" means the receipt by the Corporation and the
Trust of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a
result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or
decision is announced on or after June 2, 1997 (the "Issue
Date"), 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 Junior Subordinated Debentures,
(ii) interest payable by the Corporation on the Junior
Subordinated Debentures is not, or within 90 days of the date of
such opinion will not be, deductible by the Corporation, in whole
or in part, for United States federal income tax purposes, or
(iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes,
duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation
shall have become, or pursuant to law or regulation will become
within 180 days, subject to capital requirements under which, in
the written opinion of independent bank regulatory counsel
experienced in such matters, the Capital Securities would not
constitute Tier 1 capital applied as if the Corporation (or its
successor) were a bank holding company (as that concept is used
in the guidelines or regulations issued by the Board of Governors
of the Federal Reserve System as of June 2, 1997) or its then
equivalent ("Tier I Capital").
<PAGE>
Liquidation Distribution of Junior Subordinated Debentures
The Corporation has the right at any time to distribute the
Junior Subordinated Debentures to holders of the Trust
Securities. Under current United States federal income tax law,
a distribution of Junior Subordinated Debentures upon the
dissolution of the Trust would not be a taxable event to holders
of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of dissolution
of the Trust, the distribution of the Junior Subordinated
Debentures may constitute a taxable event to holders of Capital
Securities. Moreover, upon occurrence of a Special Event, a
dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders.
See "Certain United States Federal Income Taxation
Consequences--Distribution of Junior Subordinated Debentures or
Cash Upon Liquidation of the Trust."
There can be no assurance as to the market prices for
Capital Securities or Junior Subordinated Debentures that may be
distributed in exchange for Capital Securities if a liquidation
of the Trust occurs. Accordingly, the Capital Securities or the
Junior Subordinated Debentures may trade at a discount to the
price that the investor paid to purchase the Capital Securities
offered hereby. Because holders of Capital Securities may
receive Junior Subordinated Debentures on termination of the
Trust and because Distributions are otherwise limited to payments
on the Junior Subordinated Debentures, prospective purchasers of
Exchange Capital Securities are also making an investment
decision with regard to the Exchange Junior Subordinated
Debentures and should carefully review all the information
regarding the Exchange Junior Subordinated Debentures contained
herein. See "Description of Exchange Securities--Description of
Exchange Capital Securities--Description of Liquidation of the
Trust and Distribution of Junior Subordinated Debentures" and
"--Description of Exchange Junior Subordinated
Debentures--General."
Rights Under the Guarantee
The Guarantee guarantees to the holders of the Capital
Securities the following payments, to the extent not paid by or
on behalf of the Trust: (i) any accumulated and unpaid
Distributions required to be paid on the Capital Securities, to
the extent that the Trust has funds on hand available therefor at
such time, (ii) the applicable Redemption Price with respect to
any Capital Securities called for redemption, to the extent that
the Trust has funds on hand available therefor at such time, and
(iii) upon a voluntary or involuntary termination and liquidation
of the Trust (unless the Junior Subordinated Debentures are
distributed to holders of the Capital Securities), the lesser of
(a) the aggregate of the Liquidation Amount and all accumulated
and unpaid Distributions to the date of payment, to the extent
that the Trust has funds on hand available therefor at such time,
and (b) the amount of assets of the Trust remaining available for
distribution to holders of the Capital Securities upon a
termination and liquidation of the Trust.
The holders of a majority in aggregate Liquidation Amount
of
the Capital Securities have the right to direct the time, method
and place of conducting any proceeding for any remedy available
to the Guarantee Trustee (as defined herein) in respect of the
Guarantee or to direct the exercise of any trust power conferred
upon the Guarantee Trustee under the Guarantee. Any holder of
the Capital Securities may institute a legal proceeding directly
against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust,
the Guarantee Trustee or any other person or entity. If the
Corporation defaults on its obligation to pay amounts payable
under the Junior Subordinated Debentures, the Trust will not have
funds for the payment of Distributions or amounts payable on
redemption of the Capital Securities or otherwise, and, in such
event, holders of the Capital Securities would not be able to
rely upon the Guarantee for payment of such amounts. Instead, in
the event a Debenture Event of Default shall have occurred and be
continuing and such event is attributable to the failure of the
Corporation to pay principal of (or premium, if any) or interest
on the Junior Subordinated Debentures on the applicable payment
date, then a holder of Capital Securities may institute a Direct
Action. Notwithstanding any payments made to a holder of Capital
Securities by the Corporation in connection with a Direct Action,
the Corporation shall remain obligated to pay the principal of
(and premium, if any) and interest on the Junior Subordinated
Debentures, and the Corporation shall be subrogated to the rights
of the holder of such Capital Securities with respect to payments
on the Capital Securities to the extent of any payments made by
the Corporation to such holder in any Direct Action. Except as
described herein, holders of Capital Securities will not be able
to exercise directly any other remedy available to the holders of
the Junior Subordinated Debentures or assert directly any other
rights in respect of the Junior Subordinated Debentures. See
"Description of Exchange Securities--Description of Exchange
Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of Exchange Capital Securities," "--Description of
Exchange Junior Subordinated Debentures--Debenture Events of
Default" and "--Description of Exchange Guarantee." The
Declaration provides that each holder of Capital Securities by
acceptance thereof agrees to the provisions of the Guarantee and
the Indenture. The Bank of New York will act as Guarantee
Trustee under the Exchange Guarantee and will hold the Guarantee
for the benefit of the holders of the Capital Securities. The
Bank of New York will also act as Property Trustee under the
Declaration and as Debenture Trustee under the Indenture.
Limited Voting Rights
Holders of Capital Securities will generally have limited
voting rights relating only to the modification of the Capital
Securities, the termination or liquidation of the Trust, and the
exercise of the Trust's rights as holder of Junior Subordinated
Debentures. Holders of Capital Securities will not be entitled
to vote to appoint, remove or replace the Property Trustee or the
Delaware Trustee, and such voting rights are vested exclusively
in the holder of the Common Securities except upon the occurrence
of certain events described herein. The Property Trustee, the
Administrative Trustees and the Corporation may amend the
Declaration without the consent of holders of Capital Securities
to ensure that the Trust will be classified for United States
Federal income tax purposes as a grantor trust, even if such
action adversely affects the interests of such holders. See
"Description of Exchange Securities--Description of Exchange
Capital Securities--Removal of Issuer Trustees" and "--Voting
Rights; Amendment of the Declaration."
Consequences of a Failure to Exchange Original Capital Securities
The Original Capital Securities have not been registered
under the Securities Act or any state securities laws and
therefore may not be offered, sold or otherwise transferred
except in compliance with the registration requirements of the
Securities Act and any other applicable securities laws, or
pursuant to an exemption therefrom or in a transaction not
subject thereto, and in each case in compliance with certain
other conditions and restrictions. Original Capital Securities
which remain outstanding after consummation of the Exchange Offer
will continue to bear a legend reflecting such restrictions on
transfer. In addition, upon consummation of the Exchange Offer,
holders of Original Capital Securities which remain outstanding
will not be entitled to any rights to have such Original Capital
Securities registered under the Securities Act or to any similar
rights under the Registration Agreement (subject to certain
limited exceptions). The Corporation and the Trust do not intend
to register under the Securities Act any Original Capital
Securities which remain outstanding after consummation of the
Exchange Offer (subject to such limited exceptions, if
applicable). To the extent that Original Capital Securities are
tendered and accepted in the Exchange Offer, a holder's ability
to sell untendered Original Capital Securities could be adversely
affected.
The Exchange Capital Securities and any Original Capital
Securities which remain outstanding after consummation of the
Exchange Offer will vote together as a single class for purposes
of determining whether holders of the requisite percentage in
outstanding Liquidation Amount thereof have taken certain actions
or exercised certain rights under the Declaration. See
"Description of Exchange Securities--Description of Exchange
Capital Securities--Voting Rights; Amendment of the Declaration."
The Original Capital Securities provide, among other
things,
that, if a registration statement relating to the Exchange Offer
has not been filed by October 30, 1997 or has not been declared
effective by November 29, 1997, then the Distribution rate borne
by the Original Capital Securities, commencing on the day after
the registration statement was required to be filed or become
effective as the case may be, will increase by 0.25% per annum
until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Original Capital Securities will
not be entitled to any increase in the Distribution rate thereon
or any further registration rights under the Registration
Agreement, except under limited circumstances. See "Description
of Original Securities."
Absence of Public Market
The Original Capital Securities were issued to, and the
Corporation believes such securities are currently owned by, a
relatively small number of beneficial owners. The Original
Capital Securities have not been registered under the Securities
Act and will be subject to restrictions on transferability if
they are not exchanged for the Exchange Capital Securities.
Although the Exchange Capital Securities may be resold or
otherwise transferred by the holders (who are not affiliates of
the Corporation or the Trust) without compliance with the
registration requirements under the Securities Act, they will
constitute a new issue of securities with no established trading
market. Capital Securities may be transferred by the holders
thereof only in blocks having a Liquidation Amount of not less
than $100,000 (100 Capital Securities).
No assurance can be given that an active public or other
market will develop for the Exchange Capital Securities or the
Original Capital Securities, or as to the liquidity of or the
trading market for the Exchange Capital Securities or the
Original Capital Securities. If an active public market does not
develop, the market price and liquidity of the Exchange Capital
Securities may be adversely affected.
If a public trading market develops for the Exchange
Capital
Securities, future trading prices will depend on many factors,
including, among other things, prevailing interest rates, the
financial condition of the Corporation and the market for similar
securities. Depending on these and other factors, the Exchange
Capital Securities may trade at a discount to the purchase price
paid by the holder.
Notwithstanding the registration of the Exchange Capital
Securities in the Exchange Offer, holders who are "affiliates"
(as defined under Rule 405 of the Securities Act) of the
Corporation or the Trust may publicly offer for sale or resell
the Exchange Capital Securities only in compliance with the
provisions of Rule 144 under the Securities Act.
Each broker-dealer that receives Exchange Capital
Securities
for its own account in exchange for Original Capital Securities,
where such Original Capital Securities were acquired by such
broker-dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital
Securities. See "Plan of Distribution."
Exchange Offer Procedures
Except with respect to holders tendering Original Capital
Securities through the Automated Tender Offer Program of DTC
("ATOP"), issuance of the Exchange Capital Securities in exchange
for Original Capital Securities pursuant to the Exchange Offer
will be made only after a timely receipt by the Trust of such
Original Capital Securities, a properly completed and duly
executed Letter of Transmittal and all other required documents.
Therefore, holders of the Original Capital Securities desiring to
tender such Original Capital Securities in exchange for Exchange
Capital Securities should allow sufficient time to ensure timely
delivery. Neither the Corporation nor the Trust is under any
duty to give notification of defects or irregularities with
respect to the tenders of Original Capital Securities for
exchange.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed
charges of the Corporation for the respective periods indicated.
<TABLE>
<CAPTION>
Six Months
Ended June 30,
Years Ended December 31,
1997 1996 1996
1995 1994 1993 1992
<S> <C> <C>
<C> <C> <C> <C>
Ratios of Earnings
to Fixed Charges:
Excluding interest
on deposits 2.09x 1.83x
2.72x 20.17x 27.62x 60.11x 79.85x
Including interest
on deposits 1.17x 1.32x
1.18x 1.20x 1.23x 1.39x 1.21x
</TABLE>
For purposes of computing the ratios of earnings to
combined
fixed charges, earnings represent net income (loss) before
extraordinary items and cumulative effect of changes in
accounting principles plus applicable income taxes and fixed
charges. Fixed charges, excluding interest on deposits, include
gross interest expense (other than on deposits) and the
proportion deemed representative of the interest factor of rent
expense, net of income from subleases. Fixed charges, including
gross interest on deposits, include all interest expense and the
proportion deemed representative of the interest factor of rent
expense, net of income from subleases.
<PAGE>
PATRIOT CAPITAL TRUST I
The Trust is a statutory business trust formed under
Delaware law pursuant to (i) the original declaration of trust
executed by the Corporation, as Sponsor, The Bank of New York
(Delaware), as Delaware Trustee, and the Administrative Trustees
named therein, which original declaration of trust was amended
and restated and executed by the Corporation, as Sponsor, The
Bank of New York, as Property Trustee, The Bank of New York
(Delaware), as Delaware Trustee, and the Administrative Trustees
named therein (the "Declaration"), and (ii) the filing of a
certificate of trust with the Delaware Secretary of State on
May 29, 1997. The Trust exists for the exclusive purposes of
(i) issuing and selling the Trust Securities, (ii) using the
proceeds from the sale of the Trust Securities to acquire the
Junior Subordinated Debentures and (iii) engaging in only those
other activities necessary, advisable or incidental thereto (such
as registering the transfer of the Capital Securities).
Accordingly, the Junior Subordinated Debentures are the sole
assets of the Trust, and payments under the Junior Subordinated
Debentures are the sole revenues of the Trust. All of the Common
Securities are owned directly or indirectly by the Corporation.
The Common Securities will rank pari passu, and payments are and
will be made thereon pro rata, with the Capital Securities,
except that upon the occurrence and continuance of an Event of
Default under the Declaration resulting from a Debenture Event of
Default, the rights of the Corporation as holder of the Common
Securities to payment in respect of Distributions and payments
upon liquidation, redemption or otherwise will be subordinated to
the rights of the holders of the Capital Securities. See
"Description of Exchange Securities--Description of Exchange
Capital Securities--Subordination of Common Securities." The
Corporation has acquired Common Securities in an aggregate
Liquidation Amount equal to 3% of the total capital of the Trust.
The Trust has a term of 31 years, but may terminate earlier as
provided in the Declaration. The Trust's business and affairs
are conducted by its trustees, each appointed by the Corporation
as holder of the Common Securities. The trustees for the Trust
will be The Bank of New York, as the Property Trustee, The Bank
of New York (Delaware), as the Delaware Trustee, and three
individual trustees as Administrative Trustees who are employees
or officers of or affiliated with the Corporation (collectively,
the "Issuer Trustees"). The Bank of New York, as Property
Trustee, currently acts as sole indenture trustee under the
Declaration. The Bank of New York also acts as trustee under the
Exchange Guarantee and the Indenture. See "--Description of
Exchange Junior Subordinated Debentures" and "--Description of
Exchange Guarantee." The holder of the Common Securities of the
Trust, or the holders of a majority in Liquidation Amount of the
Capital Securities if an Event of Default under the Declaration
resulting from a Debenture Event of Default has occurred and is
continuing, is entitled to appoint, remove or replace the
Property Trustee and/or Delaware Trustee. In no event do the
holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such
voting rights are vested exclusively in the holder of the Common
Securities. The duties and obligations of each Issuer Trustee
are governed by the Declaration. Pursuant to the expense
provisions under the Indenture, the Corporation, as Issuer of the
Junior Subordinated Debentures, has and will continue to pay all
fees and expenses related to the Trust and the offering of the
Capital Securities and has and will continue to pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the
Trust. See "--Description of Exchange Capital
Securities--Expenses and Taxes." The principal executive office
of the Trust is Patriot Bank Corp., High and Hanover Streets,
Pottstown, Pennsylvania 19464. Telephone inquiries may be
directed to Diane M. Davidheiser at (610) 323-1500.
<PAGE>
PATRIOT BANK CORP.
General
The Corporation is a Delaware corporation and bank holding
company which was organized in August 1995 to acquire all of the
capital stock of the Bank issued in connection with the Bank's
conversion from mutual to stock form of ownership in December
1995. The Corporation is headquartered in Pottstown, Pennsylvania
and is the holding company for the Bank and PIC. The Corporation
reported net income of $1,647,000 or $.41 per share for the six-
month period ended June 30, 1997 and net income of $2.8 million
or $.66 per share for the year ended December 31, 1996 (excluding
a special after-tax charge of $836,000 representing the special
deposit insurance assessment levied by the FDIC on all SAIF
member institutions). At June 30, 1997, the Corporation had
total assets of $699.0 million and total stockholders' equity of
$49.5 million.
The Bank is a Pennsylvania state chartered commercial bank
which conducts business from its executive offices in Pottstown,
Pennsylvania and its 13 community banking offices located in
Montgomery, Berks, Lehigh, Northampton and Chester Counties,
Pennsylvania. The Bank is a community-oriented financial
services provider whose business primarily consists of attracting
retail deposits from the general public and small businesses and
originating mortgage, consumer and commercial loans in the Bank's
market area. The Bank also invests in investment and mortgage-
backed securities and uses advances from the Federal Home Loan
Bank of Pittsburgh and repurchase agreements as sources of funds.
At June 30, 1997, the Bank had total assets of $665.6 million and
total stockholder's equity of $34.7 million.
The Bank endeavors to promote a sales culture in which
highly motivated and trained team members attract and retain
profitable customer relationships. The Bank's primary operating
strategy is to maintain a reputation as a community bank where
consumers and small business customers can obtain a wide range of
financial products and services usually associated with larger
financial institutions while providing personal attention,
service and responsiveness.
For consumers, the Bank provides deposit products which
include checking, savings and money market accounts as well as
certificates of deposit. The Bank offers numerous lending
products to consumers including residential mortgage loans, home
equity lines of credit, home equity loans, personal lines of
credit, credit cards and other consumer loans. The Bank also
offers other consumer products and services such as check cards,
safe deposit boxes, telephone banking and automated teller
services. The Bank intends to introduce annuities, mutual funds,
brokerage service as well as in-home banking via personal
computer by the end of 1997.
For small businesses, the Bank offers various deposit and
transaction services including business checking and savings
accounts, electronic banking and cash management services. The
Bank offers a full array of short-term and adjustable lending
products including loans secured by real estate and other assets,
working capital lines and other commercial loans. The Bank
generally concentrates on loans with balances of $500,000 and
less to small businesses within its local market area.
Prior to May 23, 1997, the Bank was a federally-chartered
savings bank. The Bank converted to a Pennsylvania-chartered
commercial bank in order to compete more effectively as a
community-oriented commercial bank with expanded commercial
products and services.
PIC is a Delaware investment corporation whose primary
business consists of maintaining an investment portfolio. PIC's
investment portfolio consists primarily of mortgage-backed
securities, corporate bonds and equity securities. PIC uses
repurchase agreements as a source of funds. At June 30, 1997, PIC
had total assets of $35.7 million and total stockholder's equity
of $25.1 million.
On August 25, 1997, Patriot announced a 20% stock dividend
that was paid on September 22, 1997 to stockholders of record on
September 8, 1997. The earnings per share and other per share
data stated in this Prospectus have not been adjusted to reflect
such stock split.
On August 21, 1997, Patriot announced that it had entered
into a letter of intent to acquire First Nations Capital Corp., a
privately-owned small-ticket commercial leasing company
headquartered in Reading, Pennsylvania. The acquisition is
expected to be completed in the fourth quarter of 1997. Upon
completion of the acquisition, First Nations Capital Corp. will
be renamed Patriot Commercial Leasing Company.
On July 28, 1997, the Corporation completed the repurchase
of 449,537 shares of its common stock pursuant to a "Modified
Dutch Auction" self-tender offer. The shares were repurchased at
a price of $18.00 per share.
Patriot announced on August 8, 1997 that it had entered
into
a nonbinding letter of intent to sell certain of the deposits and
the physical facility of the Bank's Topton, Pennsylvania branch
to National Penn Bank. The sale is subject to regulatory
approval and is expected to be completed during the fourth
quarter of 1997.
The Corporation as a bank holding company is subject to
regulation and examination by the Federal Reserve. The Bank is
subject to regulation and examination by the state of
Pennsylvania and the FDIC. The Bank's deposits are insured by the
FDIC to the maximum extent permitted by law through the Savings
Association Insurance Fund.
The principal executive offices of the Corporation are
located at High and Hanover Streets, Pottstown, Pennsylvania
19464 and its telephone number is (610) 323-1500.
<PAGE>
Patriot is a legal entity separate and distinct from its
subsidiaries. The ability of holders of debt and equity
securities of Patriot to benefit from the distribution of assets
of any subsidiary upon the liquidation or reorganization of such
subsidiary is subordinate to prior claims of creditors of the
subsidiary (including depositors in the case of banking
subsidiaries) except to the extent that a claim of Patriot as a
creditor may be recognized.
There are various statutory and regulatory limitations on
the extent to which present and future banking subsidiaries of
Patriot can finance or otherwise transfer funds to Patriot or its
nonbanking subsidiaries, whether in the form of loans, extensions
of credit, investments or asset purchases.
In addition, there are regulatory limitations on the
payment
of dividends directly or indirectly to Patriot from its existing
banking subsidiaries. Under applicable banking statutes, at
June 30, 1997, the Bank could have declared additional dividends
of approximately $7.5 million. However, Federal and state
regulatory agencies also have the authority to further limit
payment of dividends by the Bank based on other factors, such as
the maintenance of adequate capital by the Bank, which could
reduce the amount of dividends otherwise payable.
<PAGE>
SELECTED FINANCIAL DATA
The selected consolidated financial data should be read in
conjunction with the historical Consolidated Financial Statements
of the Corporation included in the Corporation's 1996 Annual
Report on Form 10-K and the Corporation's Quarterly Report on
Form 10-Q for the quarter ended June 30, 1997. Interim unaudited
data for the three months ended June 30, 1997 and 1996 reflect,
in the opinion of management of the Corporation, all adjustments
(consisting only of normal recurring adjustments) necessary for a
fair presentation of such data. Results for the six months ended
June 30, 1997 are not necessarily indicative of results that may
be expected for any other interim period or for the year as a
whole.
<TABLE>
<CAPTION>
At June 30,
At December 31,
1997 1996
1995 1994 1993 1992
<S> <C> <C>
<C> <C> <C> <C>
Selected Financial Condition Data:
(in thousands)
Total assets $699,015 $529,165
$268,869 $221,035 $221,895 $244,171
Investments and mortgage-backed
securities available for sale(1) 259,056 159,148
47,646 33,025 - -
Investments and mortgage-backed
securities held to maturity(1) 69,134 72,710
3,917 8,669 34,436 38,148
Loans receivable 345,286 280,184
194,250 168,974 161,529 195,837
Allowance for possible loan losses (2,041) (1,830)
(1,702) (1,720) (1,665) (1,450)
Deposits 283,331 239,514
201,618 189,938 198,876 207,944
Borrowings 342,416 231,595
10,000 10,000 2,000 16,100
Stockholders' equity 49,501 53,117
54,110 17,868 17,517 15,200
<CAPTION>
Six Months Ended
June 30,
Years Ended December 31,
1997 1996 1996
1995 1994 1993 1992
<S> <C> <C> <C>
<C> <C> <C> <C>
Selected Operating Data:
(in thousands except
per share data)
Interest income $21,644 $12,068 $29,594
$17,168 $15,498 $17,361 $20,298
Interest expense 14,527 6,454 17,502
9,549 8,125 9,628 12,141
Net interest income before
provision for possible
loan losses 7,117 5,614 12,092
7,619 7,373 7,733 8,157
Provision for possible loan
losses 225 115 305
60 56 1 1,115
Net interest income after
provision for possible
loan losses 6,892 5,499 11,787
7,559 7,317 7,732 7,042
Non-interest income 481 252 637
518 674 1,496 641
Non-interest expense 4,894 3,672 9,198
6,151 6,090 5,541 5,132
Income before income taxes
and cumulative effect
of change in method of
accounting for income
taxes 2,479 2,079 3,226
1,926 1,901 3,777 2,551
Income taxes 832 819 1,251
734 717 1,460 593
Income before cumulative
effect of change in
method of accounting
for income taxes 1,647 1,260 1,975
1,192 1,184 2,317 1,958
Cumulative effect of change
in method of accounting
for income taxes - - -
- - - - 586
Net income 1,647 1,260 1,975
1,192 1,184 2,317 2,544
Earnings per share(2) $.41 $.30 $0.46
N/A N/A N/A N/A
Net income before special
charge(3) N/A N/A $2,811
N/A N/A N/A N/A
Earnings per share before
special charge(2)(3) N/A N/A $0.66
N/A N/A N/A N/A
<CAPTION>
Six Months Ended
Performance Ratios(4): June 30,
Years Ended December 31,
1997 1996 1996
1995 1994 1993 1992
<S> <C> <C> <C>
<C> <C> <C> <C>
Return on average assets .55% .12% 0.48%
0.50% 0.54% 0.99% 0.81%
Return on average assets before
special charge(3) - - 0.68
- - - -
Return on average equity 6.77 4.68 3.71
5.40 6.59 13.61 13.90
Return on average equity before
special charge(3) - - 5.28
- - - -
Average interest rate spread(5) 2.36 3.40 2.95
3.29 3.33 3.31 3.38
Net interest margin(6) 2.39 3.45 3.01
3.39 3.45 3.43 3.50
Average interest-earning assets
to average interest-bearing
liabilities 106.67 118.36 113.69
109.20 107.16 106.90 105.84
Total non-interest expense to
average assets(7) 1.62 2.22 1.93
2.65 2.75 2.34 2.13
Dividend payout ratio(2) 41.36 22.22 45.91
- - - -
<CAPTION>
At June 30,
At December 31,
Regulatory Capital Ratios: 1997
1996 1995 1994 1993 1992
<S> <C> <C>
<C> <C> <C> <C>
Tangible capital to tangible assets 9.59%
9.97% 20.14% 8.46% 7.89% 6.23%
Leverage (core) capital to tangible
assets 9.59
9.97 20.14 8.46 7.89 6.23
Leverage (core) capital to risk-
adjusted assets 16.56
20.28 34.27 13.98 13.61 10.61
Risk-based capital to risk-adjusted
assets 17.81
20.98 35.35 15.33 14.90 11.62
<CAPTION>
At June 30,
At December 31,
Asset Quality Ratios(8): 1997
1996 1995 1994 1993 1992
<S> <C> <C>
<C> <C> <C> <C>
Non-performing assets as a percent of
total assets .13%
0.12% 0.29% 0.45% 0.64% 0.86%
Non-performing loans as a percent of
loans receivable .21
0.20 0.30 0.43 0.53 0.72
Allowance for possible loan losses as a
percent of loans receivable .59
0.65 0.88 1.01 1.02 0.73
Allowance for possible loan losses as
a percent of non-performing loans 223.38
321.94 292.94 235.94 190.94 102.04
</TABLE>
___________________________
(1) Patriot has classified its investment and mortgage-backed
securities as "held to maturity" or "available for sale"
since fiscal 1994 when it adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for
Certain
Investments in Debt and Equity Securities."
(2) Patriot completed its initial public offering on December
1,
1995. Therefore, earnings per share and dividend payout
ratio are not applicable for years prior to 1996.
(3) Special charge representing the special deposit insurance
assessment levied against all SAIF member financial
institutions by the FDIC to recapitalize its SAIF fund.
(4) All ratios are based on average monthly balances during the
indicated periods. Return on average assets and return on
average equity are calculated before the cumulative effect
of change in method of accounting for income taxes.
(5) The average interest rate spread represents the difference
between the weighted average yield on interest-earning
assets and the weighted average cost of interest-bearing
liabilities and equity.
(6) The net interest margin represents net interest income as a
percent of average interest-earning assets.
(7) Calculated prior to special charge.
(8) Non-performing assets consist of non-performing loans and
real estate owned (REO). Non-performing loans consist of
non-accrual and accruing loans 90 days or more overdue,
while REO consists of real estate acquired through
foreclosure and real estate acquired by acceptance of a
deed
in lieu of foreclosure.
(9) Per share data do not reflect the 20% stock dividend paid
to the Corporation's shareholders on September 22, 1997.
<PAGE>
CAPITALIZATION
The following table sets forth the historical consolidated
capitalization of the Corporation as of June 30, 1997. The
issuance of the Exchange Capital Securities will have no effect
on the capitalization of Patriot. The following data should be
read in conjunction with the financial information included in
documents incorporated herein by reference. See "Incorporation of
Certain Documents by Reference."
<TABLE>
<CAPTION>
June
30, 1997
(In thousands)
<S> <C>
Long-term debt
$101,000
Corporation-obligated mandatorily redeemable
capital securities of subsidiary trust
holding solely junior subordinated
debentures of the Corporation(1)
18,525
Stockholders' equity:
Preferred Stock, $0.01 par value,
2,000,000 shares authorized, none
issued and outstanding
-
Common stock, $0.01 par; 10,000,000 shares
authorized; 4,683,594 shares issued
47
Additional Paid-in Capital
49,014
Common stock acquired by ESOP,
271,377 shares, at cost
(2,571)
Common stock acquired by MRP
160,644 shares, at amortized cost
(1,364)
Retained earnings
11,263
Treasury stock, 607,092 shares at cost
(7,979)
Net unrealized holding loss on securities,
net of taxes
1,091
Total Stockholders' equity
49,501
Total capitalization
$169,026
</TABLE>
_________________________
(1) Reflects the Capital Securities. The Trust is a subsidiary
of the Corporation and holds the Junior Subordinated
Debentures as its sole asset.<PAGE>
ACCOUNTING TREATMENT
The financial statements of the Trust are consolidated into
the Corporation's consolidated financial statements, with the
Capital Securities treated as minority interest and shown in the
Corporation's consolidated balance sheet as "Corporation-
Obligated Mandatorily Redeemable Securities of Subsidiary Trust
Holding Solely Junior Subordinated Debentures of the
Corporation." The financial statement footnotes in the Quarterly
Report of the Corporation for the quarter ended June 30, 1997
reflect that the sole asset of the Trust is approximately $19.6
million principal amount of the Junior Subordinated Debentures,
bearing interest at 10.30% and maturing on June 1, 2027. All
future reports filed by the Corporation under the Exchange Act
will present information regarding the Trust and other similar
trusts in the manner described above.
<PAGE>
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the Original Capital
Securities, the Corporation and the Trust entered into the
Registration Agreement with the Initial Purchasers, pursuant to
which the Corporation and the Trust agreed to file and to use
their reasonable efforts to cause to become effective with the
Commission a registration statement with respect to the exchange
of the Original Capital Securities for capital securities with
terms identical in all material respects to the terms of the
Original Capital Securities. A copy of the Registration
Agreement has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual
obligations of the Corporation and the Trust under the
Registration Agreement. The form and terms of the Exchange
Capital Securities are the same as the form and terms of the
Original Capital Securities except that the Exchange Capital
Securities have been registered under the Securities Act and will
not be subject to certain restrictions on transfer applicable to
the Original Capital Securities, and will not provide for any
increase in the Distribution rate thereon. In that regard, the
Original Capital Securities provide, among other things, that, if
a registration statement relating to the Exchange Offer has not
been filed by October 30, 1997 or has not been declared effective
by November 29, 1997, then the Distribution rate borne by the
Original Capital Securities, commencing on the day after the
registration statement was required to be filed or become
effective as the case may be, will increase by 0.25% per annum
until the Exchange Offer is consummated. Upon consummation of
the Exchange Offer, holders of Original Capital Securities will
not be entitled to any increase in the Distribution rate thereon
or any further registration rights under the Registration
Agreement, except under limited circumstances. See "Risk
Factors--Consequences of a Failure to Exchange Original Capital
Securities" and "Description of Original Securities."
The Exchange Offer is not being made to, nor will the Trust
accept tenders for exchange from, holders of Original Capital
Securities in any jurisdiction in which the Exchange Offer or the
acceptance thereof would not be in compliance with the securities
or blue sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder"
with respect to the Exchange Offer means any person in whose name
the Original Capital Securities are registered on the books of
the Trust or any other person who has obtained a properly
completed bond power from the registered holder, or any person
whose Original Capital Securities are held of record by The
Depository Trust Company ("DTC") who desires to deliver such
Original Capital Securities by book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Corporation will
exchange as soon as practicable after the date hereof the
Original Guarantee for the Exchange Guarantee and the Original
Junior Subordinated Debentures, in an amount corresponding to the
Original Capital Securities accepted for exchange, for a like
aggregate principal amount of the Exchange Junior Subordinated
Debentures. The Exchange Guarantee and Exchange Junior
Subordinated Debentures have been registered under the Securities
Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the
conditions set forth in this Prospectus and in the accompanying
Letter of Transmittal, to exchange up to $19,000,000 aggregate
Liquidation Amount of Exchange Capital Securities for a like
aggregate Liquidation Amount of Original Capital Securities
properly tendered on or prior to the Expiration Date and not
properly withdrawn in accordance with the procedures described
below. The Trust will issue, promptly after the Expiration Date,
an aggregate Liquidation Amount of up to $19,000,000 of Exchange
Capital Securities in exchange for a like principal amount of
outstanding Original Capital Securities tendered and accepted in
connection with the Exchange Offer. Holders may tender their
Original Capital Securities in whole or in part in a Liquidation
Amount of not less than $100,000 (100 Capital Securities) or any
integral multiple of $1,000 Liquidation Amount (one Capital
Security) in excess thereof.
The Exchange Offer is not conditioned upon any minimum
Liquidation Amount of Original Capital Securities being tendered.
As of the date of this Prospectus, $19,000,000 aggregate
Liquidation Amount of the Original Capital Securities is
outstanding.
Holders of Original Capital Securities do not have any
appraisal or dissenters' rights in connection with the Exchange
Offer. Original Capital Securities which are not tendered for or
are tendered but not accepted in connection with the Exchange
Offer will remain outstanding and be entitled to the benefits of
the Declaration, but will not be entitled to any further
registration rights under the Registration Agreement, except
under limited circumstances. See "Risk Factors--Consequences of
a Failure to Exchange Original Capital Securities" and
"Description of Original Securities."
If any tendered Original Capital Securities are not
accepted
for exchange because of an invalid tender, the occurrence of
certain other events set forth herein or otherwise, certificates
for any such unaccepted Original Capital Securities will be
returned, without expense, to the tendering holder thereof
promptly after the Expiration Date.
Holders who tender Original Capital Securities in
connection
with the Exchange Offer will not be required to pay brokerage
commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of
Original Capital Securities in connection with the Exchange
Offer. The Corporation will pay all charges and expenses, other
than certain applicable taxes described below, in connection with
the Exchange Offer. See "--Fees and Expenses."
NEITHER THE CORPORATION, THE BOARD OF DIRECTORS OF THE
CORPORATION NOR ANY ISSUER TRUSTEE OF THE TRUST MAKES ANY
RECOMMENDATION TO HOLDERS OF ORIGINAL CAPITAL SECURITIES AS TO
WHETHER TO TENDER OR REFRAIN FROM TENDERING ALL OR ANY PORTION OF
THEIR ORIGINAL CAPITAL SECURITIES PURSUANT TO THE EXCHANGE OFFER.
IN ADDITION, NO ONE HAS BEEN AUTHORIZED TO MAKE ANY SUCH
RECOMMENDATION. HOLDERS OF ORIGINAL CAPITAL SECURITIES MUST MAKE
THEIR OWN DECISIONS WHETHER TO TENDER PURSUANT TO THE EXCHANGE
OFFER AND, IF SO, THE AGGREGATE AMOUNT OF ORIGINAL CAPITAL
SECURITIES TO TENDER BASED ON SUCH HOLDERS' OWN FINANCIAL
POSITIONS AND REQUIREMENTS.
Expiration Date; Extensions; Amendments.
The term "Expiration Date" means 5:00 p.m., New York City
time, on _____________, 1997 unless the Exchange Offer is
extended by the Corporation or the Trust (in which case the term
"Expiration Date" shall mean the latest date and time to which
the Exchange Offer is extended).
The Corporation and the Trust expressly reserve the right
in
their sole and absolute discretion, subject to applicable law, at
any time and from time to time, (i) to delay the acceptance of
the Original Capital Securities for exchange, (ii) to terminate
the Exchange Offer (whether or not any Original Capital
Securities have theretofore been accepted for exchange) if the
Trust determines, in its sole and absolute discretion, that any
of the events or conditions referred to under "--Conditions to
the Exchange Offer" have occurred or exist or have not been
satisfied, (iii) to extend the Expiration Date of the Exchange
Offer and retain all Original Capital Securities tendered
pursuant to the Exchange Offer, subject, however, to the right of
holders of Original Capital Securities to withdraw their tendered
Original Capital Securities as described under "--Withdrawal
Rights," and (iv) to waive any condition or otherwise amend the
terms of the Exchange Offer in any respect. If the Exchange
Offer is amended in a manner determined by the Corporation and
the Trust to constitute a material change, or if the Corporation
and the Trust waive a material condition of the Exchange Offer,
the Corporation and the Trust will promptly disclose such
amendment by means of a prospectus supplement that will be
distributed to the holders of the Original Capital Securities,
and the Corporation and the Trust will extend the Exchange Offer
to the extent required by Rule 14e-1 under the Exchange Act.
Any such delay in acceptance, extension, termination or
amendment will be followed promptly by oral or written notice
thereof to the Exchange Agent and by making a public announcement
thereof, and such announcement in the case of an extension will
be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date.
Without limiting the manner in which the Corporation and the
Trust may choose to make any public announcement and subject to
applicable law, the Corporation and the Trust shall have no
obligation to publish, advertise or otherwise communicate any
such public announcement other than by issuing a release to an
appropriate news agency.
Acceptance for Exchange and Issuance of Exchange Capital
Securities
Upon the terms and subject to the conditions of the
Exchange
Offer, the Trust will exchange, and will issue to the Exchange
Agent, promptly after the Expiration Date, Exchange Capital
Securities for Original Capital Securities validly tendered and
not withdrawn.
In all cases, delivery of Exchange Capital Securities in
exchange for Original Capital Securities tendered and accepted
for exchange pursuant to the Exchange Offer will be made only
after timely receipt by the Exchange Agent of (i) the book-entry
confirmation described below under "-- Procedures for Tendering
Original Capital Securities -- Book-Entry Transfer" or
(ii) certificates representing such Original Capital Securities,
the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature
guarantees, and any other documents required by the Letter of
Transmittal.
Subject to the terms and conditions of the Exchange Offer,
the Trust will be deemed to have accepted for exchange, and
thereby exchanged, Original Capital Securities validly tendered
and not withdrawn as, if and when the Trust gives oral or written
notice to the Exchange Agent of the Trust's acceptance of such
Original Capital Securities for exchange pursuant to the Exchange
Offer. The Exchange Agent will act as agent for the Trust for
the purpose of receiving tenders of book-entry confirmations or
certificates representing Original Capital Securities, Letters of
Transmittal and related documents, and as agent for tendering
holders for the purpose of receiving book-entry confirmations or
certificates representing Original Capital Securities, Letters of
Transmittal and related documents and transmitting Exchange
Capital Securities to validly tendering holders. Such exchange
will be made promptly after the Expiration Date. If for any
reason whatsoever, acceptance for exchange or the exchange of any
Original Capital Securities tendered pursuant to the Exchange
Offer is delayed (whether before or after the Trust's acceptance
for exchange of Original Capital Securities) or the Trust extends
the Exchange Offer or is unable to accept for exchange or
exchange Original Capital Securities tendered pursuant to the
Exchange Offer, then, without prejudice to the Trust's rights set
forth herein, the Exchange Agent may, nevertheless, on behalf of
the Trust and subject to Rule 14e-1(c) under the Exchange Act,
retain tendered Original Capital Securities and such Original
Capital Securities may not be withdrawn except to the extent
tendering holders are entitled to withdrawal rights as described
under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Original
Capital Securities will warrant and agree in the Letter of
Transmittal that it has full power and authority to tender,
exchange, sell, assign and transfer Original Capital Securities,
that the Trust will acquire good, marketable and unencumbered
title to the tendered Original Capital Securities, free and clear
of all liens, restrictions, charges and encumbrances, and the
Original Capital Securities tendered for exchange are not subject
to any adverse claims or proxies. The holder also will warrant
and agree that it will, upon request, execute and deliver any
additional documents deemed by the Trust or the Exchange Agent to
be necessary or desirable to complete the exchange, sale,
assignment, and transfer of the Original Capital Securities
tendered pursuant to the Exchange Offer. Tendering holders of
Original Capital Securities that use ATOP will, by so doing,
acknowledge that they are bound by the terms of the Letter of
Transmittal.
Procedures for Tendering Original Capital Securities
Book-Entry Transfer. For purposes of the Exchange Offer,
the Exchange Agent will establish an account with respect to the
Original Capital Securities at DTC within two business days after
the date of this Prospectus. Any tendering financial institution
that is a participant in DTC's book-entry transfer facility
system may make a book-entry delivery of the Original Capital
Securities by causing DTC to transfer such Original Capital
Securities into the Exchange Agent's account at DTC in accordance
with DTC's ATOP procedures for transfers. Such holder of
Original Capital Securities using ATOP should transmit its
acceptance to DTC on or prior to the Expiration Date (or comply
with the guaranteed delivery procedures set forth below). DTC
will verify such acceptance, execute a book-entry transfer of the
tendered Original Capital Securities into the Exchange Agent's
account at DTC and then send to the Exchange Agent confirmation
of such book-entry transfer, including an agent's message
confirming that DTC has received an express acknowledgement from
such holder that such holder has received and agrees to be bound
by the Letter of Transmittal and that the Trust and the
Corporation may enforce the Letter of Transmittal against such
holder (a "book-entry confirmation").
A beneficial owner of Original Capital Securities that are
held by or registered in the name of a broker, dealer, commercial
bank, trust company or other nominee or custodian is urged to
contact such entity promptly if such beneficial owner wishes to
participate in the Exchange Offer.
Certificates. If the tender is not made through ATOP,
certificates representing Original Capital Securities, as well as
the Letter of Transmittal (or facsimile thereof), properly
completed and duly executed, with any required signature
guarantees, and any other documents required by the Letter of
Transmittal, must be received by the Exchange Agent at its
address set forth under "-- Exchange Agent" on or prior to the
Expiration Date in order for such tender to be effective (or the
guaranteed delivery procedures set forth below must be complied
with).
If less than all of the Original Capital Securities are
tendered, a tendering holder should fill in the amount of
Original Capital Securities being tendered in the appropriate box
on the Letter of Transmittal. The entire amount of Original
Capital Securities delivered to the Exchange Agent will be deemed
to have been tendered unless otherwise indicated.
Signature Guarantees. Certificates for the Original
Capital
Securities need not be endorsed and signature guarantees on the
Letter of Transmittal are unnecessary unless (a) a certificate
for the Original Capital Securities is registered in a name other
than that of the person surrendering the certificate or (b) such
holder completes the box entitled "Special Issuance Instructions"
or "Special Delivery Instructions" in the Letter of Transmittal.
In the case of (a) or (b) above, such certificates for Original
Capital Securities must be duly endorsed or accompanied by a
properly executed bond power, with the endorsement or signature
on the bond power and on the Letter of Transmittal guaranteed by
a firm or other entity identified in Rule 17Ad-15 under the
Exchange Act as an "eligible guarantor institution," including
(as such terms are defined therein): (i) a bank; (ii) a broker,
dealer, municipal securities broker or dealer or government
securities broker or dealer; (iii) a credit union; (iv) a
national securities exchange, registered securities association
or clearing agency; or (v) a savings association that is a
participant in a Securities Transfer Association (an "Eligible
Institution"), unless surrendered on behalf of such Eligible
Institution. See Instruction 1 to the Letter of Transmittal.
Delivery. The method of delivery of the book-entry
confirmation or certificates representing tendered Original
Capital Securities, the Letter of Transmittal, and all other
required documents is at the option and sole risk of the
tendering holder, and delivery will be deemed made only when
actually received by the Exchange Agent. If delivery is by mail,
registered mail, return receipt requested, properly insured, or
an overnight delivery service is recommended. In all cases,
sufficient time should be allowed to ensure timely delivery.
Notwithstanding any other provision hereof, the delivery of
Exchange Capital Securities in exchange for Original Capital
Securities tendered and accepted for exchange pursuant to the
Exchange Offer will in all cases be made only after timely
receipt by the Exchange Agent of (i) a book-entry confirmation
with respect to such Original Capital Securities or
(ii) certificates representing Original Capital Securities and a
properly completed and duly executed Letter of Transmittal (or
facsimile thereof), together with any required signature
guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of Exchange Capital
Securities might not be made to all tendering holders at the same
time, and will depend upon when book-entry confirmations with
respect to Original Capital Securities or certificates
representing Original Capital Securities and other required
documents are received by the Exchange Agent.
Guaranteed Delivery. If a holder desires to tender
Original
Capital Securities pursuant to the Exchange Offer and the
certificates for such Original Capital Securities are not
immediately available or time will not permit all required
documents to reach the Exchange Agent on or prior to the
Expiration Date, or the procedure for book-entry transfer cannot
be completed on a timely basis, such Original Capital Securities
may nevertheless be tendered, provided that all of the following
guaranteed delivery procedures are complied with:
(1) such tenders are made by or through an Eligible
Institution;
(2) a properly completed and duly executed notice to the
Exchange Agent guaranteeing delivery to the Exchange Agent of
either certificates representing the Original Capital Securities
or a book-entry confirmation in compliance with the requirements
set forth herein (the "Notice of Guaranteed Delivery")
substantially in the form accompanying the Letter of Transmittal,
is received by the Exchange Agent, as provided below, on or prior
to the Expiration Date;
(3) (a) a book-entry confirmation or (b) the certificates
representing all tendered Original Capital Securities, in proper
form for transfer, together with a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), with any
required signature guarantees and any other documents required by
the Letter of Transmittal, are, in any case, received by the
Exchange Agent within three New York Stock Exchange trading days
after the date of execution of such Notice of Guaranteed
Delivery.
The Notice of Guaranteed Delivery may be delivered by hand,
or transmitted by facsimile or mail to the Exchange Agent and
must include a guarantee by an Eligible Institution in the form
set forth in such notice.
The Trust's acceptance for exchange of Original Capital
Securities tendered pursuant to any of the procedures described
above will constitute a binding agreement between the tendering
holder and the Trust upon the terms and subject to the conditions
of the Exchange Offer.
Determination of Validity. All questions as to the form of
documents, validity, eligibility (including time of receipt) and
acceptance for exchange of any tendered Original Capital
Securities will be determined by the Corporation and the Trust,
in their sole discretion, whose determination shall be final and
binding on all parties. The Corporation and the Trust reserve
the absolute right, in their sole and absolute discretion, to
reject any and all tenders determined by them not to be in proper
form or the acceptance of which, or exchange for, may, in the
opinion of counsel to the Corporation and the Trust, be unlawful.
The Corporation and the Trust also reserve the absolute right,
subject to applicable law, to waive any of the conditions of the
Exchange Offer as set forth under "--Conditions to the Exchange
Offer" or any condition or irregularity in any tender of Original
Capital Securities of any particular holder whether or not
similar conditions or irregularities are waived in the case of
other holders.
The interpretation by the Corporation and the Trust of the
terms and conditions of the Exchange Offer (including the Letter
of Transmittal and the instructions thereto) will be final and
binding. No tender of Original Capital Securities will be deemed
to have been validly made until all irregularities with respect
to such tender have been cured or waived. Neither the
Corporation, the Trust, any affiliates or assigns of the
Corporation or the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to
give any such notification.
If any Letter of Transmittal, endorsement, bond power,
power
of attorney, or any other document required by the Letter of
Transmittal is signed by a trustee, executor, administrator,
guardian, attorney-in-fact, officer of a corporation or other
person acting in a fiduciary or representative capacity, such
person should so indicate when signing, and unless waived by the
Corporation and the Trust, proper evidence satisfactory to the
Corporation and the Trust, in their sole discretion, of such
person's authority to so act must be submitted.
Resales of Exchange Capital Securities
The Trust is making the Exchange Offer for the Exchange
Capital Securities in reliance on the position of the staff of
the Division of Corporation Finance of the Commission as set
forth in certain interpretive letters addressed to third parties
in other transactions. However, neither the Corporation nor the
Trust sought its own interpretive letter and there can be no
assurance that the staff of the Division of Corporation Finance
of the Commission would make a similar determination with respect
to the Exchange Offer as it has in such interpretive letters to
third parties. Based on these interpretations by the staff of
the Division of Corporation Finance of the Commission, and
subject to the two immediately following sentences, the
Corporation and the Trust believe that Exchange Capital
Securities issued pursuant to this Exchange Offer in exchange for
Original Capital Securities may be offered for resale, resold and
otherwise transferred by a holder thereof (other than a holder
who is a broker-dealer) without further compliance with the
registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities
are acquired in the ordinary course of such holder's business and
that such holder is not participating, and has no arrangement or
understanding with any person to participate, in a distribution
(within the meaning of the Securities Act) of such Exchange
Capital Securities. However, any holder of Original Capital
Securities who is an "affiliate" of the Corporation or the Trust
or who intends to participate in the Exchange Offer for the
purpose of distributing Exchange Capital Securities, or any
broker-dealer who purchased Original Capital Securities from the
Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be able to rely
on the interpretations of the staff of the Division of
Corporation Finance of the Commission set forth in the
above-mentioned interpretive letters, (b) will not be permitted
or entitled to tender such Original Capital Securities in the
Exchange Offer and (c) must comply with the registration and
prospectus delivery requirements of the Securities Act in
connection with any sale or other transfer of such Original
Capital Securities unless such sale is made pursuant to an
exemption from such requirements. In addition, as described
below, if any broker-dealer holds Original Capital Securities
acquired for its own account as a result of market-making or
other trading activities and exchanges such Original Capital
Securities for Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements
of the Securities Act in connection with any resales of such
Exchange Capital Securities.
Each holder of Original Capital Securities who wishes to
exchange Original Capital Securities for Exchange Capital
Securities in the Exchange Offer will be required to represent
that (i) it is not an "affiliate" of the Corporation or the
Trust, (ii) any Exchange Capital Securities to be received by it
are being acquired in the ordinary course of its business,
(iii) it has no arrangement or understanding with any person to
participate in a distribution (within the meaning of the
Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged
in, and does not intend to engage in, a distribution (within the
meaning of the Securities Act) of such Exchange Capital
Securities. In addition, the Corporation and the Trust may
require such holder, as a condition to such holder's eligibility
to participate in the Exchange Offer, to furnish to the
Corporation and the Trust (or an agent thereof) in writing
information as to the number of "beneficial owners" (within the
meaning of Rule 13d-3 under the Exchange Act) on behalf of whom
such holder holds the Capital Securities to be exchanged in the
Exchange Offer. Each broker-dealer that receives Exchange
Capital Securities for its own account pursuant to the Exchange
Offer must acknowledge that it acquired the Original Capital
Securities for its own account as the result of market-making
activities or other trading activities and must agree that it
will deliver a prospectus meeting the requirements of the
Securities Act in connection with any resale of such Exchange
Capital Securities. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer
will not be deemed to admit that it is an "underwriter" within
the meaning of the Securities Act. Based on the position taken
by the staff of the Division of Corporation Finance of the
Commission in the interpretive letters referred to above, the
Corporation and the Trust believe that Participating
Broker-Dealers who acquired Original Capital Securities for their
own accounts as a result of market-making activities or other
trading activities may fulfill their prospectus delivery
requirements with respect to the Exchange Capital Securities
received upon exchange of such Original Capital Securities (other
than Original Capital Securities which represent an unsold
allotment from the initial sale of the Original Capital
Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an
exchange offer so long as it contains a description of the plan
of distribution with respect to the resale of such Exchange
Capital Securities. Accordingly, this Prospectus, as it may be
amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below
in connection with resales of Exchange Capital Securities
received in exchange for Original Capital Securities where such
Original Capital Securities were acquired by such Participating
Broker-Dealer for its own account as a result of market-making or
other trading activities. Subject to certain provisions set
forth in the Registration Agreement, the Corporation and the
Trust have agreed that this Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such Exchange Capital
Securities for a period ending 180 days after the Expiration Date
(subject to extension under certain limited circumstances
described below) or, if earlier, when all such Exchange Capital
Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution." However, a
Participating Broker-Dealer who intends to use this Prospectus in
connection with the resale of Exchange Capital Securities
received in exchange for Original Capital Securities pursuant to
the Exchange Offer must notify the Corporation or the Trust, or
cause the Corporation or the Trust to be notified, on or prior to
the Expiration Date, that it is a Participating Broker-Dealer.
Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange
Agent at one of the addresses set forth herein under "--Exchange
Agent." Any Participating Broker-Dealer who is an "affiliate" of
the Corporation or the Trust may not rely on such interpretive
letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with
any resale transaction.
In that regard, each Participating Broker-Dealer who
surrenders Original Capital Securities pursuant to the Exchange
Offer will be deemed to have agreed, by execution of the Letter
of Transmittal, that upon receipt of notice from the Corporation
or the Trust of the occurrence of any event or the discovery of
(i) any fact which makes any statement contained or incorporated
by reference in this Prospectus untrue in any material respect or
(ii) any fact which causes this Prospectus to omit to state a
material fact necessary in order to make the statements contained
or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading, or
(iii) of the occurrence of certain other events specified in the
Registration Agreement, such Participating Broker-Dealer will
suspend the sale of Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) pursuant to this Prospectus until the Corporation or
the Trust has amended or supplemented this Prospectus to correct
such misstatement or omission and has furnished copies of the
amended or supplemented Prospectus to such Participating
Broker-Dealer, or the Corporation or the Trust has given notice
that the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as
applicable) may be resumed, as the case may be. If the
Corporation or the Trust gives such notice to suspend the sale of
the Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable), it shall
extend the 180-day period referred to above during which
Participating Broker-Dealers are entitled to use this Prospectus
in connection with the resale of Exchange Capital Securities by
the number of days during the period from and including the date
of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the
amended or supplemented Prospectus necessary to permit resales of
the Exchange Capital Securities or to and including the date on
which the Corporation or the Trust has given notice that the sale
of Exchange Capital Securities (or the Exchange Guarantee or the
Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Original
Capital Securities may be withdrawn at any time on or prior to
the Expiration Date.
In order for a withdrawal to be effective, a written,
telegraphic, telex or facsimile transmission of such notice of
withdrawal must be timely received by the Exchange Agent at one
of its addresses set forth under "--Exchange Agent" on or prior
to the Expiration Date. Any such notice of withdrawal must
specify the name of the person who tendered the Original Capital
Securities to be withdrawn, the aggregate principal amount of
Original Capital Securities to be withdrawn, and (if certificates
for such Original Capital Securities have been tendered) the name
of the registered holder of the Original Capital Securities as
set forth on the Original Capital Securities, if different from
that of the person who tendered such Original Capital Securities.
If certificates representing Original Capital Securities have
been delivered or otherwise identified to the Exchange Agent,
then prior to the physical release of such certificates, the
tendering holder must submit the serial numbers shown on the
particular Original Capital Securities to be withdrawn and the
signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Original Capital
Securities tendered for the account of an Eligible Institution.
If Original Capital Securities have been tendered pursuant to the
procedures for book-entry transfer set forth in "--Procedures for
Tendering Original Capital Securities -- Book-Entry Transfer,"
the notice of withdrawal must specify the name and number of the
account at DTC to be credited with the withdrawal of Original
Capital Securities. Withdrawals of tenders of Original Capital
Securities may not be rescinded. Original Capital Securities
properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any
subsequent time on or prior to the Expiration Date by following
any of the procedures described above under "--Procedures for
Tendering Original Capital Securities."
All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be
determined by the Trust, in its sole discretion, whose
determination shall be final and binding on all parties. Neither
the Corporation, the Trust, any affiliates or assigns of the
Corporation or the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification. Any Original Capital
Securities which have been tendered but which are withdrawn will
be returned to the holder thereof promptly after withdrawal.
Distributions on Exchange Capital Securities
Holders of Original Capital Securities whose Original
Capital Securities are accepted for exchange will not receive
Distributions on such Original Capital Securities and will be
deemed to have waived the right to receive any Distributions on
such Original Capital Securities accumulated from and after
December 1, 1997. Accordingly, holders of Exchange Capital
Securities as of the record date for the payment of Distributions
on June 1, 1998 will be entitled to receive Distributions
accumulated from and after December 1, 1997.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer,
or any extension of the Exchange Offer, the Corporation and the
Trust will not be required to accept for exchange, or to
exchange, any Original Capital Securities for any Exchange
Capital Securities, and, as described below, may terminate the
Exchange Offer (whether or not any Original Capital Securities
have theretofore been accepted for exchange) or may waive any
conditions to or amend the Exchange Offer, if any of the
following conditions have occurred or exists or have not been
satisfied:
(a) there shall occur a change in the current
interpretation by the staff of the Commission which permits the
Exchange Capital Securities issued pursuant to the Exchange Offer
in exchange for Original Capital Securities to be offered for
resale, resold and otherwise transferred by holders thereof
(other than broker-dealers and any such holder which is an
"affiliate" of the Corporation or the Trust within the meaning of
Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities
Act, provided that such Exchange Capital Securities are acquired
in the ordinary course of such holders' business and such holders
have no arrangement or understanding with any person to
participate in the distribution of such Exchange Capital
Securities; or
(b) any law, statute, rule or regulation shall have been
adopted or enacted which, in the judgment of the Corporation or
the Trust, would reasonably be expected to impair its ability to
proceed with the Exchange Offer; or
(c) a stop order shall have been issued by the Commission
or any state securities authority suspending the effectiveness of
the Registration Statement, or proceedings shall have been
initiated or, to the knowledge of the Corporation or the Trust,
threatened for that purpose, or any governmental approval has not
been obtained, which approval the Corporation or the Trust shall,
in its sole discretion, deem necessary for the consummation of
the Exchange Offer as contemplated hereby, or
(d) the Corporation determines in good faith (i) that
there
is a reasonable likelihood that, or a material uncertainty exists
as to whether, consummation of the Exchange Offer would result in
an adverse tax consequence to the Trust or the Corporation and
(ii) that such condition exists on January 31, 1998.
If the Corporation or the Trust determines in its sole and
absolute discretion that any of the foregoing events or
conditions has occurred or exists or has not been satisfied, it
may, subject to applicable law, terminate the Exchange Offer
(whether or not any Original Capital Securities have theretofore
been accepted for exchange) or may waive any such condition or
otherwise amend the terms of the Exchange Offer in any respect.
If such waiver or amendment constitutes a material change to the
Exchange Offer, the Corporation or the Trust will promptly
disclose such waiver or amendment by means of a prospectus
supplement that will be distributed to the registered holders of
the Original Capital Securities and will extend the Exchange
Offer to the extent required by Rule 14e-1 under the Exchange
Act.
Exchange Agent
The Bank of New York has been appointed as Exchange Agent
for the Exchange Offer. Delivery of the Letters of Transmittal
and any other required documents, questions, requests for
assistance, and requests for additional copies of this Prospectus
or of the Letter of Transmittal should be directed to the
Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL:
The Bank of New York
Floor 7E, 101 Barclay Street
New York, New York 10286
Attention: Enrique Lopez, Reorganization Section
Confirm By Telephone:
(212) 815-2742
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(212) 815-6639
BY HAND OR OVERNIGHT DELIVERY:
The Bank of New York
101 Barclay Street
Corporate Trust Services Window
Ground Level
New York, New York 10286
Attention: Enrique Lopez, Reorganization Section
Confirm by Telephone:
(212) 815-2742
Delivery to other than the above addresses or facsimile
number will not constitute a valid delivery.
Fees and Expenses
The Corporation has agreed to pay the Exchange Agent
reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection
therewith. The Corporation will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable
out-of-pocket expenses incurred by them in forwarding copies of
this Prospectus and related documents to the beneficial owners of
Original Capital Securities, and in handling or tendering for
their customers.
Holders who tender their Original Capital Securities for
exchange will not be obligated to pay any transfer taxes in
connection therewith. If, however, Exchange Capital Securities
are to be delivered to, or are to be issued in the name of, any
person other than the registered holder of the Original Capital
Securities tendered, or if a transfer tax is imposed for any
reason other than the exchange of Original Capital Securities in
connection with the Exchange Offer, then the amount of any such
transfer taxes (whether imposed on the registered holder or any
other persons) will be payable by the tendering holder. If
satisfactory evidence of payment of such taxes or exemption
therefrom is not submitted with the Letter of Transmittal, the
amount of such transfer taxes will be billed directly to such
tendering holder.
Neither the Corporation nor the Trust will make any payment
to brokers, dealers or other nominees soliciting acceptances of
the Exchange Offer.
<PAGE>
DESCRIPTION OF EXCHANGE SECURITIES
Description of Exchange Capital Securities
Pursuant to the terms of the Declaration, the Issuer
Trustees on behalf of the Trust will issue the Exchange Capital
Securities. The Exchange Capital Securities will represent
beneficial ownership interests in the Trust and the holders
thereof will be entitled to a preference in certain circumstances
with respect to Distributions and amounts payable on redemption
of the Trust Securities or liquidation of the Trust over the
Common Securities, as well as other benefits as described in the
Declaration. See "--Subordination of Common Securities." The
Declaration has been qualified under the Trust Indenture Act of
1939, as amended (the "Trust Indenture Act"). This summary of
certain provisions of the Exchange Capital Securities, the Common
Securities and the Declaration does not purport to be complete
and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Declaration, including the
definitions therein of certain terms. The form of the
Declaration is available upon request from the Issuer Trustees
and has been filed as an exhibit to the Registration Statement,
of which this Prospectus is a part.
General. The Exchange Capital Securities will be limited to $100
million aggregate Liquidation Amount at any one time outstanding.
The Capital Securities will rank pari passu, and payments will be
made thereon pro rata, with the Common Securities except as
described under "--Subordination of Common Securities." Legal
title to the Junior Subordinated Debentures will be held by the
Property Trustee on behalf of the Trust in trust for the benefit
of the holders of the Trust Securities. The Exchange Guarantee
executed by the Corporation for the benefit of the holders of the
Exchange Capital Securities (the "Exchange Guarantee") will not
guarantee payment of Distributions or amounts payable on
redemption of the Exchange Capital Securities or on liquidation
of the Trust when the Trust does not have funds on hand available
to make such payments. See "--Description of Exchange
Guarantee."
Distributions. The Exchange Capital Securities represent
beneficial ownership interests in the Trust, and Distributions on
each Capital Security will be payable at the annual rate of
10.30% of the stated Liquidation Amount of $1,000, and will be
payable semi-annually in arrears on June 1 and December 1 of each
year to the holders of the Exchange Capital Securities at the
close of business on the May 15 or November 15 (each, a "Record
Date"), as the case may be, next preceding the relevant
Distribution Date (as defined herein). Distributions on the
Exchange Capital Securities will be cumulative. Distributions
will accumulate from December 1, 1997. The first Distribution
Date for the Exchange Capital Securities will be June 1, 1998.
The amount of Distributions payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
In the event that any date on which Distributions are payable on
the Exchange Capital Securities is not a Business Day (as defined
herein), payment of the Distributions payable on such date will
be made on the next succeeding day that is a Business Day (and
without any additional Distributions or other payments in respect
to any such delay), except that if such next succeeding Business
Day falls in the next succeeding calendar year, such payment
shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on the date such
payment was originally payable (each date on which Distributions
are payable in accordance with the foregoing, a "Distribution
Date"). A "Business Day" shall mean any day other than a
Saturday or a Sunday, or a day on which banking institutions in
The City of New York are authorized or required by law or
executive order to remain closed.
So long as no Debenture Event of Default has occurred and
is
continuing, the Corporation has the right under the Indenture to
defer the payment of interest on the Exchange Junior Subordinated
Debentures at any time or from time to time for a period not
exceeding 10 consecutive semi-annual periods with respect to each
Extension Period, provided that no Extension Period shall end on
a date other than an Interest Payment Date or extend beyond the
Stated Maturity of the Junior Subordinated Debentures. As a
consequence of any such election, semi-annual Distributions on
the Trust Securities by the Trust will be deferred during any
such Extension Period. Distributions to which holders of the
Trust Securities are entitled during any such Extension Period
will accumulate additional Distributions thereon at the rate per
annum of 10.30% thereof, compounded semi-annually from the
relevant Distribution Date, but not exceeding the interest rate
then accruing on the Junior Subordinated Debentures. The term
"Distributions" as used herein shall include any such additional
Distributions.
Prior to the termination of any such Extension Period, the
Corporation may further extend such Extension Period, provided
that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods, end on a date other
than an Interest Payment Date, or to extend beyond the Stated
Maturity of the Junior Subordinated Debentures. Upon the
termination of any such Extension Period and the payment of all
amounts then due, and subject to the foregoing limitations, the
Corporation may elect to begin a new Extension Period. The
Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any
such Extension Period (or an extension thereof) at least five
Business Days prior to the earlier of (i) the date the
Distributions on the Capital Securities would have been payable
except for the election to begin such Extension Period or
(ii) the date the Administrative Trustees are required to give
notice to any securities exchange or to holders of such Exchange
Capital Securities of the Record Date for the date such
Distributions are payable, but in any event not less than five
Business Days prior to such Record Date. There is no limitation
on the number of times that the Corporation may elect to begin an
Extension Period. See "--Description of Exchange Junior
Subordinated Debentures--Option to Extend Interest Payment Date"
and "Certain United States Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
During any such Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of the Corporation's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt
securities of, the Corporation (including Other Debentures) that
rank pari passu with or junior in right of payment to the Junior
Subordinated Debentures, or (iii) make any guarantee payments
with respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including Other
Guarantees) if such guarantee ranks pari passu with or junior in
right of payment to the Junior Subordinated Debentures (other
than (a) dividends or distributions in shares of, or options,
warrants or rights to subscribe for or purchase shares of, common
stock of the Corporation, (b) any declaration of a dividend in
connection with the implementation of a stockholders' rights
plan, or the issuance of stock under any such plan in the future,
or the redemption or repurchase of any such rights pursuant
thereto, (c) payments under the Guarantee, (d) purchases of
shares of the Corporation's common stock related to the issuance
of common stock or rights under any of the Corporation's benefit
plans for its directors, officers, or employees or any of the
Corporation's dividend reinvestment plans, (e) as a result of a
reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the
Corporation's capital stock or, (f) the purchase of fractional
interests in shares of the Corporation's capital stock pursuant
to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged).
The Corporation has no current intention of exercising its
right to defer payments of interest on the Exchange Junior
Subordinated Debentures.
The revenue of the Trust available for distribution to
holders of the Trust Securities will be limited to payments under
the Exchange Junior Subordinated Debentures. See "--Description
of Exchange Junior Subordinated Debentures--General." If the
Corporation does not make interest payments on the Exchange
Junior Subordinated Debentures, the Property Trustee will not
have funds available to pay Distributions on the Trust
Securities. The payment of Distributions (if and to the extent
the Trust has funds legally available for the payment of such
Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on a limited basis as set forth
herein under "--Description of Exchange Guarantee."
Mandatory Redemption. Upon the repayment on the Stated Maturity
Date or prepayment prior to the Stated Maturity Date of the
Junior Subordinated Debentures (other than following the
distribution of the Junior Subordinated Debentures to the holders
of the Trust Securities), the proceeds from such repayment or
redemption shall be applied by the Property Trustee to redeem a
Like Amount of Trust Securities, upon not less than 30 nor more
than 60 days' notice of a date of redemption (the "Redemption
Date"), at the applicable Redemption Price, which shall be equal
to (i) in the case of the repayment of the Exchange Junior
Subordinated Debentures at the Stated Maturity, the Maturity
Redemption Price (equal to the principal of, and accrued but
unpaid interest on, the Junior Subordinated Debentures), (ii) in
the case of the redemption of the Junior Subordinated Debentures
prior to June 1, 2007 in connection with the occurrence of a
Special Event, the Special Event Redemption Price (equal to the
Special Event Prepayment Price (as defined under "--Description
of the Exchange Junior Subordinated Debentures--Special Event
Prepayment")), and (iii) in the case of the optional redemption
of the Junior Subordinated Debentures on or after June 1, 2007,
the Optional Redemption Price (equal to the Optional Prepayment
Price (as defined under "--Description of Exchange Junior
Subordinated Debentures--Optional Prepayment")).
"Like Amount" means (i) with respect to a redemption of the
Trust Securities, Trust Securities having a Liquidation Amount
equal to the principal amount of Junior Subordinated Debentures
to be paid in accordance with their terms and (ii) with respect
to a distribution of Junior Subordinated Debentures upon the
liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust
Securities of the holder to whom such Junior Subordinated
Debentures are distributed.
The Corporation will have the option to prepay the Junior
Subordinated Debentures, (i) in whole or in part, on or after
June 1, 2007, at the applicable Optional Prepayment Price and
(ii) in whole but not in part, at any time prior to June 1, 2007,
upon the occurrence of a Special Event, at the Special Event
Prepayment Price, in each case subject to receipt of any required
regulatory approval. See "Description of Exchange Junior
Subordinated Debentures--Optional Prepayment" and "--Special
Event Prepayment." If less than all of the Junior Subordinated
Debentures are to be repaid or redeemed on a Redemption Date,
then the proceeds from such repayment or redemption shall be
allocated to the redemption pro rata of the Trust Securities.
Redemption of the Junior Subordinated Debentures prior to
Stated Maturity may be subject to receipt of prior regulatory
approval if then required under applicable capital guidelines or
policies.
If the Trust is required to pay any additional taxes,
duties
or other governmental charges as a result of a Tax Event, the
Corporation will pay as additional amounts on the Junior
Subordinated Debentures the Additional Sums.
"Additional Sums" means the additional amounts as may be
necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Trust Securities shall
not be reduced as a result of any additional taxes, duties and
other governmental charges to which the Trust has become subject
as a result of a Tax Event.
Redemption Procedures. Trust Securities shall be redeemed, if at
all, at the applicable Redemption Price with the proceeds from
the contemporaneous repayment or redemption of the Exchange
Junior Subordinated Debentures. Redemptions of the Trust
Securities shall be made and the applicable Redemption Price
shall be payable on each Redemption Date only to the extent that
the Trust has funds on hand available for the payment of such
applicable Redemption Price. See also "--Subordination of Common
Securities."
If the Trust gives a notice of redemption in respect of the
Exchange Capital Securities, then, by 12:00 noon, New York City
time, on the Redemption Date, to the extent funds are available,
with respect to the Exchange Capital Securities held in global
form, the Property Trustee will deposit irrevocably with DTC
funds sufficient to pay the applicable Redemption Price and will
give DTC irrevocable instructions and authority to pay the
applicable Redemption Price to the holders of the Capital
Securities. See "--Form, Denomination, Book-Entry Procedures and
Transfer." With respect to the Exchange Capital Securities held
in certificated form, the Property Trustee, to the extent funds
are available, will irrevocably deposit with the paying agent for
the Exchange Capital Securities funds sufficient to pay the
applicable Redemption Price and will give such paying agent
irrevocable instructions and authority to pay the applicable
Redemption Price to the holders thereof upon surrender of their
certificates evidencing the Exchange Capital Securities. See
"--Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be
payable to the holders of the Exchange Capital Securities on the
relevant Record Dates for the related Distribution Dates. If
notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the
holders of the Exchange Capital Securities will cease, except the
right of the holders of the Exchange Capital Securities to
receive the applicable Redemption Price, but without interest on
such Redemption Price, and the Exchange Capital Securities will
cease to be outstanding. In the event that any date fixed for
redemption of Capital Securities is not a Business Day, then
payment of the applicable Redemption Price payable on such date
will be made on the next succeeding day which is a Business Day
(and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next
calendar year, such payment will be made on the immediately
preceding Business Day. In the event that payment of the
applicable Redemption Price is improperly withheld or refused and
not paid either by the Trust or by the Corporation pursuant to
the Exchange Guarantee as described under "--Description of
Exchange Guarantee," Distributions on Exchange Capital Securities
will continue to accrue at the then applicable rate, from the
Redemption Date originally established by the Trust to the date
such applicable Redemption Price is actually paid, in which case
the actual payment date will be the date fixed for redemption for
purposes of calculating the applicable Redemption Price.
In the event that fewer than all of the outstanding Capital
Securities are to be redeemed, the Capital Securities will be
redeemed in accordance with the customary procedures of DTC.
Subject to applicable law (including, without limitation,
United States federal securities law), the Corporation or its
subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or
by private agreement.
Notice of any redemption will be mailed at least 30 days
but
not more than 60 days before the Redemption Date to each holder
of Trust Securities at its registered address. Unless the
Corporation defaults in payment of the applicable Prepayment
Price on, or in the repayment of, the Junior Subordinated
Debentures, on and after the Redemption Date Distributions will
cease to accrue on the Trust Securities called for redemption.
Liquidation of the Trust and Distribution of Junior Subordinated
Debentures. The Corporation will have the right at any time to
terminate the Trust and cause the Junior Subordinated Debentures
to be distributed to the holders of the Trust Securities in
liquidation of the Trust. Such right is subject to (i) the
Corporation having received an opinion of counsel to the effect
that such distribution will not be a taxable event to holders of
Capital Securities and (ii) any required regulatory approval.
Upon liquidation of the Trust and certain other events, the
Junior Subordinated Debentures may be distributed to holders of
the Trust Securities. Under current United States federal income
tax law, a distribution of Junior Subordinated Debentures upon
the dissolution of the Trust would not be a taxable event to
holders of the Capital Securities. If, however, the Trust is
characterized for United States federal income tax purposes as an
association taxable as a corporation at the time of dissolution
of the Trust, the distribution of the Junior Subordinated
Debentures would constitute a taxable event to holders of Capital
Securities. Moreover, upon the occurrence of a Tax Event, a
dissolution of the Trust in which holders of the Capital
Securities receive cash would be a taxable event to such holders.
See "Certain United States Federal Income Tax
Consequences--Distribution of Junior Subordinated Debentures or
Cash Upon Liquidation of the Trust."
The Trust shall automatically terminate upon the first to
occur of: (i) certain events of bankruptcy, dissolution or
liquidation of the Corporation; (ii) the distribution of a Like
Amount of the Junior Subordinated Debentures to the holders of
the Trust Securities if the Corporation, as Sponsor, has given
written direction to the Property Trustee to terminate the Trust
(which direction is optional and, except as described above,
wholly within the discretion of the Corporation, as Sponsor);
(iii) redemption of all of the Trust Securities as described
under "--Mandatory Redemption" above; (iv) expiration of the term
of the Trust; and (v) the entry of an order for the dissolution
of the Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii),
(iv) or (v) above, the Trust shall be liquidated by the Issuer
Trustees as expeditiously as the Issuer Trustees determine to be
possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Junior
Subordinated Debentures, unless such distribution is determined
by the Property Trustee not to be practicable, in which event
such holders will be entitled to receive out of the assets of the
Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided
by applicable law, an amount equal to the aggregate of the
Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the
"Liquidation Distribution"). If such Liquidation Distribution
can be paid only in part because the Trust has insufficient
assets on hand legally available to pay in full the aggregate
Liquidation Distribution or if a Debenture Event of Default has
occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities. See "--Subordination of
Common Securities."
If the Corporation elects not to prepay the Junior
Subordinated Debentures prior to maturity in accordance with
their terms and either elects not to or is unable to liquidate
the Trust and distribute the Junior Subordinated Debentures to
holders of the Trust Securities, the Trust Securities will remain
outstanding until the repayment of the Junior Subordinated
Debentures at the Stated Maturity.
After the liquidation date is fixed for any distribution of
Junior Subordinated Debentures to holders of the Trust Securities
(i) the Trust Securities will no longer be deemed to be
outstanding, (ii) DTC or its nominee will receive in respect of
each global certificate, if any, representing Trust Securities
and held by it, a registered global certificate or certificates
representing the Junior Subordinated Debentures to be delivered
upon such distribution, and (iii) any certificates representing
Trust Securities not held by DTC or its nominee will be deemed to
represent Junior Subordinated Debentures having a principal
amount equal to the Liquidation Amount of such Trust Securities,
and bearing accrued and unpaid interest in an amount equal to the
accumulated and unpaid Distributions on such Trust Securities
until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the
Corporation will issue to such holder, and the Debenture Trustee
will authenticate, a certificate representing such Junior
Subordinated Debentures.
There can be no assurance as to the market prices for the
Capital Securities or the Junior Subordinated Debentures that may
be distributed in exchange for the Trust Securities if a
dissolution and liquidation of the Trust were to occur.
Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor
may receive on dissolution and liquidation of the Trust, may
trade at a discount to the price that the investor paid to
purchase the Capital Securities offered hereby.
Subordination of Common Securities. Payment of Distributions on,
and the Redemption Price of, the Trust Securities, as applicable,
shall be made pro rata to the holders of Trust Securities based
on the Liquidation Amount of the Trust Securities; provided,
however, that if on any Distribution Date or Redemption Date a
Debenture Event of Default shall have occurred and be continuing,
no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account
of the redemption, liquidation or other acquisition of the Common
Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding
Capital Securities for all Distribution periods terminating on or
prior thereto, or in the case of payment of the applicable
Redemption Price the full amount of such Redemption Price, shall
have been made or provided for, and all funds available to the
Property 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.
In the case of any Event of Default, the Corporation as
holder of the Common Securities will be deemed to have waived any
right to act with respect to any such Event of Default until the
effect of all such Events of Default have been cured, waived or
otherwise eliminated. Until any such Event of Default has been
so cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the holders of the Capital
Securities and not on behalf of the Corporation as holder of the
Common Securities, and only the holders of the Capital Securities
will have the right to direct the Property Trustee to act on
their behalf.
Events of Default; Notice. The occurrence of a Debenture Event
of Default (see "Description of Exchange Junior Subordinated
Debentures - Debenture Events of Default") constitutes an "Event
of Default" under the Declaration.
Within five Business Days after the occurrence of any Event
of Default actually known to the Property Trustee, the Property
Trustee shall transmit notice of such Event of Default to the
holders of the Capital Securities, the Administrative Trustees
and the Corporation, as Sponsor, unless such Event of Default
shall have been cured or waived. The Corporation, as Sponsor,
and the Administrative Trustees are required to file annually
with the Property Trustee a certificate as to whether or not they
are in compliance with all the conditions and covenants
applicable to them under the Declaration.
If a Debenture Event of Default or an Event of Default
under
the Declaration has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as
described above. See "--Liquidation of the Trust and
Distribution of Junior Subordinated Debentures" and
"--Subordination of Common Securities."
Removal of Issuer Trustees. Unless a Debenture Event of Default
shall have occurred and be continuing, any Issuer Trustee may be
removed at any time by the holder of the Common Securities. If a
Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such
time by the holders of a majority in Liquidation Amount of the
outstanding Capital Securities. In no event will the holders of
the Capital Securities have the right to vote to appoint, remove
or replace the Administrative Trustees, which voting rights are
vested exclusively in the Corporation as the holder of the Common
Securities. No resignation or removal of an Issuer Trustee and
no appointment of a successor trustee shall be effective until
the acceptance of appointment by the successor trustee in
accordance with the provisions of the Declaration.
Co-Trustees and Separate Property Trustee. Unless an Event of
Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of
the Trust's property may at the time be located, the Corporation,
as the holder of the Common Securities, and the Administrative
Trustees shall have power to appoint one or more persons either
to act as a co-trustee, jointly with the Property Trustee, of all
or any part of such Trust's property, or to act as separate
trustee of any such property, in either case with such powers as
may be provided in the instrument of appointment, and to vest in
such person or persons in such capacity any property, title,
right or power deemed necessary or desirable, subject to the
provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee
alone shall have power to make such appointment.
Merger or Consolidation of Issuer Trustees. Any Person into
which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged
or converted or with which it may be consolidated or any Person
resulting from any merger, conversion or consolidation to which
such Issuer Trustee shall be a party, or any Person succeeding to
all or substantially all the corporate trust business of such
Issuer Trustee, shall be the successor of such Issuer Trustee
under the Declaration, provided such Person shall be otherwise
qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the
Trust. The Trust may not merge with or into, consolidate,
amalgamate or be replaced by, or convey, transfer or lease its
properties and assets as an entirety or substantially as an
entirety to any corporation or other Person, except as described
below or as otherwise set forth in the Declaration. The Trust
may, at the request of the Corporation, as Sponsor, with the
consent of the Administrative Trustees but without the consent of
the holders of the Capital Securities, the Property Trustee or
the Delaware Trustee, merge with or into, consolidate, amalgamate
or be replaced by, or convey, transfer or lease its properties
and assets as an entirety or substantially as an entirety to, a
trust organized as such under the laws of any State; provided,
that (i) such successor entity either (a) expressly assumes all
of the obligations of the Trust with respect to the Capital
Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor
Securities rank the same as the Capital Securities rank in
priority with respect to distributions and payments upon
liquidation, redemption and otherwise, (ii) the Corporation
expressly appoints a trustee of such successor entity possessing
the same powers and duties as the Property Trustee as the holder
of the Junior Subordinated Debentures, (iii) the Successor
Securities are listed or traded, or any Successor Securities will
be listed or traded upon notification of issuance, on any
national securities exchange or other organization on which the
Capital Securities are then listed or traded, if any, (iv) if the
Capital Securities (including any Successor Securities) are rated
by any nationally recognized statistical rating organization
prior to such transaction, such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
cause the Capital Securities (including any Successor Securities)
to be downgraded by any such nationally recognized statistical
rating organization, (v) such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor
Securities) in any material respect, (vi) such successor entity
has a purpose identical to that of the Trust, (vii) prior to such
merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease, the Corporation has received an opinion from
independent counsel to the Trust experienced in such matters to
the effect that (a) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the holders of
the Capital Securities (including any Successor Securities) in
any material respect, and (b) following such merger,
consolidation, amalgamation, replacement, conveyance, transfer or
lease, neither the Trust nor such successor entity will be
required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment
Company Act"), and (viii) the Corporation or any permitted
successor or assignee owns all of the common securities of such
successor entity and guarantees the obligations of such successor
entity under the Successor Securities at least to the extent
provided by the Guarantee. Notwithstanding the foregoing, the
Trust shall not, except with the consent of holders of 100% in
Liquidation Amount of the Trust Securities, consolidate,
amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other entity or permit any
other entity to consolidate, amalgamate, merge with or into, or
replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust
or the successor entity to be classified as other than a grantor
trust for United States federal income tax purposes.
Voting Rights; Amendment of the Declaration. Except as provided
below and under "--Mergers, Consolidations, Amalgamations or
Replacements of the Trust" and "Description of Exchange
Guarantee--Amendments and Assignment" and as otherwise required
by law and the Declaration, the holders of the Capital Securities
will have no voting rights.
The Declaration may be amended from time to time by the
Corporation, the Property Trustee and the Administrative
Trustees, without the consent of the holders of the Trust
Securities, (i) to cure any ambiguity, correct or supplement any
provision in the Declaration that may be inconsistent with any
other provision, or to make any other provisions with respect to
matters or questions arising under the Declaration, which shall
not be inconsistent with the other provisions of the Declaration,
or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that
the Trust will be classified for United States federal income tax
purposes as a grantor trust at all times that any Trust
Securities are outstanding or to ensure that the Trust will not
be required to register as an "investment company" under the
Investment Company Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any
material respect the interests of the holders of the Trust
Securities, and any amendments of the Declaration shall become
effective when notice thereof is given to the holders of the
Trust Securities. The Declaration may be amended by the Issuer
Trustees and the Corporation with (i) the consent of holders
representing a majority (based upon Liquidation Amount) of the
outstanding Trust Securities, and (ii) upon receipt by the Issuer
Trustees of an opinion of counsel to the effect that such
amendment or the exercise of any power granted to the Issuer
Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal
income tax purposes or the Trust's exemption from status as an
"investment company" under the Investment Company Act. In
addition, without the consent of each holder of Trust Securities,
the Declaration may not be amended to (i) change the amount or
timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be
made in respect of the Trust Securities as of a specified date or
(ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or
after such date. The Exchange Capital Securities and any
Original Capital Securities which remain outstanding after
consummation of the Exchange Offer will vote together as a single
class for purposes of determining whether holders of the
requisite percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain rights under the
Declaration.
So long as any Junior Subordinated Debentures are held by
the Property Trustee, the Issuer Trustees shall not (i) direct
the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee, or executing any trust
or power conferred on the Property Trustee with respect to the
Junior Subordinated Debentures, (ii) waive certain past defaults
under the Indenture, (iii) exercise any right to rescind or annul
a declaration of acceleration of the maturity of the principal of
the Junior Subordinated Debentures or (iv) consent to any
amendment, modification or termination of the Indenture or the
Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of
the holders of a majority in aggregate Liquidation Amount of all
outstanding Capital Securities; provided, however, that where a
consent under the Indenture would require the consent of each
holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the
prior approval of each holder of the Capital Securities. The
Issuer Trustees shall not revoke any action previously authorized
or approved by a vote of the holders of the Capital Securities
except by subsequent vote of such holders. The Property Trustee
shall notify each holder of Capital Securities of any notice of
default with respect to the Junior Subordinated Debentures. In
addition to obtaining the foregoing approvals of such holders of
the Capital Securities, prior to taking any of the foregoing
actions, the Issuer Trustees shall obtain an opinion of counsel
experienced in such matters to the effect that the Trust will not
be classified as an association taxable as a corporation for
United States federal income tax purposes on account of such
action.
Any required approval of holders of Capital Securities may
be given at a meeting of such holders convened for such purpose
or pursuant to written consent. The Property Trustee will cause
a notice of any meeting at which holders of Capital Securities
are entitled to vote, or of any matter upon which action by
written consent of such holders is to be taken, to be given to
each holder of record of Capital Securities in the manner set
forth in the Declaration.
No vote or consent of the holders of Capital Securities
will
be required for the Trust to redeem and cancel the Capital
Securities in accordance with the Declaration.
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 Corporation, the Issuer Trustees or any affiliate of the
Corporation or any Issuer Trustees, shall, for purposes of such
vote or consent, be treated as if they were not outstanding.
Expenses and Taxes. In the Indenture, the Corporation, as issuer
of the Junior Subordinated Debentures, has agreed to pay all
debts and other obligations (other than with respect to payments
of Distributions, amounts payable upon redemption and the
Liquidation Amount of the Trust Securities) and all costs and
expenses of the Trust (including costs and expenses relating to
the organization of the Trust, the fees and expenses of the
Issuer Trustees and the costs and expenses relating to the
operation of the Trust) and the offering of the Capital
Securities, and to pay any and all taxes and all costs and
expenses with respect to the foregoing (other than United States
withholding taxes) to which the Trust might become subject.
Form, Denomination, Book-Entry Procedures and Transfer. The
Exchange Capital Securities initially will be represented by one
or more Capital Securities in registered, global form
(collectively, the "Global Capital Securities"). The Global
Capital Securities will be deposited upon issuance with the
Property Trustee as custodian for DTC, in New York, New York, and
registered in the name of DTC or its nominee, in each case for
credit to an account of a direct or indirect participant in DTC
as described below.
Except as set forth below, the Global Capital Securities
may
be transferred, in whole and not in part, only to another nominee
of DTC or to a successor of DTC or its nominee. Beneficial
interests in the Global Capital Securities may not be exchanged
for Capital Securities in certificated form except in the limited
circumstances described below. See "--Exchange of Book-Entry
Capital Securities for Certificated Capital Securities."
Depositary Procedures. DTC has advised the Trust and the
Corporation as follows: DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of
the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities for its
participating organizations (collectively, the "Participants")
and to facilitate the clearance and settlement of transactions in
those securities between Participants through electronic
book-entry changes to accounts of its Participants, thereby
eliminating the need for physical movement of certificates.
Participants include securities brokers and dealers (including
the Initial Purchasers), banks, trust companies, clearing
corporations and certain other organizations. Indirect access to
DTC's system is also available to other entities such as banks,
brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either
directly or indirectly (collectively, the "Indirect
Participants"). Persons who are not Participants may
beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each
actual purchaser of each security held by or on behalf of DTC are
recorded on the records of the Participants and Indirect
Participants.
DTC has also advised the Trust and the Corporation that,
pursuant to procedures established by it, (i) upon deposit of the
Global Capital Securities, DTC will credit the accounts of
Participants designated by the Initial Purchasers with portions
of the Liquidation Amount of the Global Capital Securities and
(ii) ownership of such interests in the Global Capital Securities
will be shown on, and the transfer of ownership thereof will be
effected only through, records maintained by DTC (with respect to
the Participants) or by the Participants and the Indirect
Participants (with respect to other owners of beneficial
interests in the Global Capital Securities).
Investors in the Global Capital Securities may hold their
interests therein directly through DTC, if they are Participants
in such system, or indirectly through organizations which are
Participants in such system. All interests in a Global Capital
Security will be subject to the procedures and requirements of
DTC. The laws of some states require that certain persons take
physical delivery in certificated form of securities that they
own. Consequently, the ability to transfer beneficial interests
in a Global Capital Security to such persons will be limited to
that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain
banks, the ability of a person having beneficial interests in a
Global Capital Security to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise
take actions in respect of such interests, may be affected by the
lack of a physical certificate evidencing such interests. For
certain other restrictions on the transferability of the Capital
Securities, see "--Exchange of Book-Entry Capital Securities for
Certificated Capital Securities" and "--Exchange of Certificated
Capital Securities for Book-Entry Capital Securities."
EXCEPT AS DESCRIBED BELOW, OWNERS OF BENEFICIAL INTERESTS
IN
THE GLOBAL CAPITAL SECURITIES WILL NOT BE ENTITLED TO HAVE
CAPITAL SECURITIES REGISTERED IN THEIR NAMES, WILL NOT RECEIVE OR
BE ENTITLED TO RECEIVE PHYSICAL DELIVERY OF CAPITAL SECURITIES IN
CERTIFICATED FORM AND WILL NOT BE CONSIDERED THE REGISTERED
OWNERS OR HOLDERS THEREOF UNDER THE DECLARATION FOR ANY PURPOSE.
Payments in respect of the Global Capital Security
registered in the name of DTC or its nominee will be payable by
the Property Trustee to DTC in its capacity as the registered
holder under the Declaration. Under the terms of the
Declaration, the Property Trustee will treat the persons in whose
names the Capital Securities, including the Global Capital
Securities, are registered as the owners thereof for the purpose
of receiving such payments and for any and all other purposes
whatsoever. Consequently, neither the Property Trustee nor any
agent thereof has or will have any responsibility or liability
for (i) any aspect of DTC's records or any Participant's or
Indirect Participant's records relating to, or payments made on
account of, beneficial ownership interests in the Global Capital
Securities, or for maintaining, supervising or reviewing any of
DTC's records or any Participant's or Indirect Participant's
records relating to the beneficial ownership interests in the
Global Capital Securities, or (ii) any other matter relating to
the actions and practices of DTC or any of its Participants or
Indirect Participants.
DTC has advised the Trust and the Corporation that its
current practice, upon receipt of any payment in respect of
securities such as the Capital Securities, is to credit the
accounts of the relevant Participants with the payment on the
payment date, in amounts proportionate to their respective
holdings in Liquidation Amount of beneficial interests in the
Global Capital Security, as shown on the records of DTC, unless
DTC has reason to believe it will not receive payment on such
payment date. Payments by the Participants and the Indirect
Participants to the beneficial owners of Capital Securities
represented by Global Capital Securities held through such
Participants will be governed by standing instructions and
customary practices and will be the responsibility of the
Participants or the Indirect Participants and will not be the
responsibility of DTC, the Property Trustee, the Trust, or the
Corporation. Neither the Trust or the Corporation nor the
Property Trustee will be liable for any delay by DTC or any of
its Participants in identifying the beneficial owners of the
Capital Securities, and the Trust or the Corporation and the
Property Trustee may conclusively rely on and will be protected
in relying on instructions from DTC or its nominee for all
purposes.
Interests in the Global Capital Securities will trade in
DTC's Same-Day Funds Settlement System and secondary market
trading activity in such interests will therefore settle in
immediately available funds, subject in all cases to the rules
and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's
procedures, and will settle in same-day funds.
DTC has advised the Trust and the Corporation that it will
take any action permitted to be taken by a holder of Exchange
Capital Securities (including, without limitation, the
presentation of Capital Securities for exchange as described
below) only at the direction of one or more Participants to whose
account with DTC interests in the Global Capital Securities are
credited and only in respect of such portion of the aggregate
Liquidation Amount of the Capital Securities as to which such
Participant or Participants has or have given such direction.
However, if there is an Event of Default under the Declaration,
DTC reserves the right to exchange the Global Capital Securities
for legended Exchange Capital Securities in certificated form and
to distribute such Exchange Capital Securities to its
Participants.
So long as DTC or its nominee is the registered owner of
the
Global Capital Securities, DTC or such nominee, as the case may
be, will be considered the sole owner or holder of the Capital
Securities represented by the Global Capital Security for all
purposes under the Declaration. The information in this section
concerning DTC and its book-entry system has been obtained from
sources that the Trust and the Corporation believe to be
reliable, but neither the Trust nor the Corporation takes
responsibility for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to
facilitate transfers of interest in the Global Capital Securities
among Participants in DTC, it is under no obligation to perform
or to continue to perform such procedures, and such procedures
may be discontinued at any time. Neither the Trust or the
Corporation nor the Property Trustee will have any responsibility
for the performance by DTC or its Participants or Indirect
Participants of their respective obligations under the rules and
procedures governing their operations.
Exchange of Book-Entry Capital Securities for Certificated
Capital Securities. A Global Capital Security is exchangeable
for Exchange Capital Securities in registered certificated form
if (i) DTC (x) notifies the Trust that it is no longer willing or
able to continue as Depositary for the Global Capital Security
and the Trust fails to appoint a successor Depositary within
90 days, or (y) has ceased to be a "clearing agency" registered
under the Exchange Act; (ii) the Corporation at its option elects
to cause the issuance of Capital Securities in certificated form;
or (iii) there shall have occurred and be continuing a Debenture
Event of Default or any event which, after notice or lapse of
time or both, would be an Event of Default under the Declaration.
In addition, beneficial interests in a Global Capital Security
may be exchanged for certificated Exchange Capital Securities
upon request, but only upon at least 20 days prior written notice
given to the Property Trustee by or on behalf of DTC in
accordance with DTC's customary procedures. In all cases,
certificated Capital Securities delivered in exchange for any
Global Capital Security or beneficial interests therein will be
registered in the names, and issued in any approved
denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures).
Exchange of Certificated Capital Securities for Book-Entry
Capital Securities. Capital Securities issued in certificated
form may not be exchanged for beneficial interests in any Global
Capital Security unless such exchange occurs in connection with a
transfer of such Capital Securities and the transferor first
delivers to the Property Trustee a written certificate (in the
form provided in the Declaration) to the effect that such
transfer will comply with the appropriate transfer restrictions
applicable to such Capital Securities.
Payment and Paying Agency. Payments in respect of the Exchange
Capital Securities held in global form shall be made to the
Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of
the Capital Securities that are not held by the Depositary, such
payments shall be made by check mailed to the address of the
holder entitled thereto as such address shall appear on the
register. The paying agent (the "Paying Agent") shall initially
be the Property Trustee and any co-paying agent chosen by the
Property Trustee and acceptable to the Administrative Trustees
and the Corporation. The Paying Agent shall be permitted to
resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees. In the event that the Property Trustee
shall no longer be the Paying Agent, the Administrative Trustees
shall appoint a successor (which shall be a bank or trust company
acceptable to the Administrative Trustees and the Corporation) to
act as Paying Agent.
The Bank of New York has informed the Trust that so long as
it serves as paying agent for the Capital Securities, it
anticipates that information regarding Distributions on the
Capital Securities, including payment date, Record Date and
redemption information, will be made available through The Bank
of New York at 1-800-524-4458.
Restrictions on Transfer. The Exchange Capital Securities will
be issued, and may be transferred, only in blocks having a
Liquidation Amount of not less than $100,000 (100 Capital
Securities). Any such transfer of Exchange Capital Securities in
a block having a Liquidation Amount of less than $100,000 shall
be deemed to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Exchange
Capital Securities for any purpose, including but not limited to
the receipt of Distributions on such Exchange Capital Securities,
and such transferee shall be deemed to have no interest
whatsoever in such Exchange Capital Securities.
Registrar and Transfer Agent. The Property Trustee will act as
registrar and transfer agent for the Exchange Capital Securities.
Registration of transfers of the Exchange Capital Securities will
be effected without charge by or on behalf of the Trust, but upon
payment of any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. The Trust
will not be required to register or cause to be registered the
transfer of the Exchange Capital Securities after they have been
called for redemption.
Information Concerning the Property Trustee. The Property
Trustee, other than during the occurrence and continuance of an
Event of Default, undertakes to perform only such duties as are
specifically set forth in the Declaration and, during the
existence of an Event of Default, must exercise the same degree
of care and skill as a prudent person would exercise or use in
the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to
exercise any of the powers vested in it by the Declaration at the
request of any holder of Trust Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities
that might be incurred thereby. If no Event of Default has
occurred and is continuing and the Property Trustee is required
to decide between alternative causes of action, construe
ambiguous provisions in the Declaration or is unsure of the
application of any provision of the Declaration, and the matter
is not one on which holders of the Capital Securities or the
Common Securities are entitled under the Declaration to vote,
then the Property Trustee shall take such action as is directed
by the Corporation and, if not so directed, shall take such
action as it deems advisable and in the best interests of the
holders of the Trust Securities and will have no liability except
for its own bad faith, negligence or willful misconduct.
Miscellaneous. The Administrative Trustees are authorized and
directed to conduct the affairs of and to operate the Trust in
such a way that the Trust will not be deemed to be an "investment
company" required to be registered under the Investment Company
Act or classified as an association taxable as a corporation for
United States federal income tax purposes, and so that the Junior
Subordinated Debentures will be treated as indebtedness of the
Corporation for United States federal income tax purposes. In
this connection, the Corporation and the Administrative Trustees
are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Trust or the
Declaration, that the Corporation and the Administrative Trustees
determine in their discretion to be necessary or desirable for
such purposes, as long as such action does not materially
adversely affect the interests of the holders of the Trust
Securities.
Holders of the Trust Securities have no preemptive or
similar rights.
The Trust may not borrow money, issue debt, execute
mortgages or pledge any of its assets.
Description of Exchange Junior Subordinated Debentures
The Junior Subordinated Debentures were issued as a
separate
series under an Indenture, as supplemented from time to time (as
so supplemented, the "Indenture"), between the Corporation and
The Bank of New York, as trustee (the "Debenture Trustee"). The
Indenture has been qualified under the Trust Indenture Act. This
summary of certain terms and provisions of the Junior
Subordinated Debentures and the Indenture does not purport to be
complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of
certain terms, some of which are not otherwise defined herein,
are qualified in their entirety by reference to all of the
provisions of the Indenture and those terms made a part of the
Indenture by the Trust Indenture Act.
General. Concurrently with the issuance of the Trust
Securities, the Trust invested the proceeds thereof in the
Original Junior Subordinated Debentures issued by the
Corporation. The Exchange Junior Subordinated Debentures,
similarly to the Original Junior Subordinated Debentures, will
bear interest from June 5, 1997 at the annual rate of 10.30% of
the principal amount thereof, payable semi-annually in arrears on
June 1 and December 1 of each year (each, an "Interest Payment
Date"), commencing June 1, 1998, to the person in whose name each
Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the 15th day of the month
preceding the month in which the relevant Interest Payment Date
falls. It is anticipated that, until the liquidation, if any, of
the Trust, each Exchange Junior Subordinated Debenture will be
held in the name of the Property Trustee in trust for the benefit
of the holders of the Trust Securities. The amount of interest
payable for any period will be computed on the basis of a 360-day
year of twelve 30-day months. In the event that any date on
which interest is payable on the Exchange Junior Subordinated
Debentures is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that
is a Business Day (and without any interest or other payment in
respect of any such delay), except that if such next succeeding
Business Day falls in the next succeeding calendar year, then
such payment will be made on the immediately preceding Business
Day, in each case with the same force and effect as if made on
the date such payment was originally payable. Accrued interest
that is not paid on the applicable Interest Payment Date will
bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 10.30% thereof,
compounded semi-annually from the relevant Interest Payment Date.
The term "interest" as used herein shall include semi-annual
interest payments, interest on semi-annual interest payments not
paid on the applicable Interest Payment Date and Additional Sums
(as defined herein), as applicable.
The Exchange Junior Subordinated Debentures will be issued
pursuant to the Indenture and will be issued in denominations of
$1,000 and integral multiples thereof. Unless previously
redeemed or repurchased, the Junior Subordinated Debentures will
mature on June 1, 2027.
The Exchange Junior Subordinated Debentures will rank pari
passu with the Original Junior Subordinated Debentures and all
Other Debentures issued under the Indenture and will be unsecured
and subordinate and junior in right of payment to the extent and
in the manner set forth in the Indenture to all Senior
Indebtedness of the Corporation. See "--Subordination."
The Corporation is a non-operating holding company and
almost all of the operating assets of the Corporation are owned
by the Corporation's subsidiaries. The Corporation relies
primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its
outstanding debt obligations and corporate expenses. The
Corporation is a legal entity separate and distinct from its
banking and non-banking affiliates. The principal sources of the
Corporation's income are dividends, interest, and fees from its
banking and nonbanking affiliates. The Bank is subject to
certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or
other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the
Bank unless the loans are secured by various types of collateral.
Further, such secured loans, other transactions and investments
by the Bank are generally limited in amount as to the Corporation
and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Corporation and all of such
other affiliates to an aggregate of 20% of such Bank's capital
and surplus. In addition, payment of dividends to the
Corporation by the subsidiary banks is subject to ongoing review
by banking regulators and is subject to various statutory
limitations and in certain circumstances requires approval by
banking regulatory authorities. Under applicable banking
statutes, at June 30, 1997, the Bank could have declared
additional dividends of approximately $7.5 million. However,
federal and state regulatory agencies also have the authority to
limit further the Bank's payment of dividends based on other
factors, such as the maintenance of adequate capital for the
Bank, which could reduce the amount of dividends otherwise
payable.
Because the Corporation is a holding company, the right of
the Corporation to participate in any distribution of assets of
any subsidiary, upon such subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of
creditors of the subsidiary (including depositors, in the case of
the Bank), except to the extent that the Corporation may itself
be recognized as a creditor of that subsidiary. At June 30,
1997, the subsidiaries of the Corporation had total liabilities
(excluding liabilities owed to the Corporation) of approximately
$625.7 million. Accordingly, the Exchange Junior Subordinated
Debentures will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders
of Exchange Junior Subordinated Debentures should look only to
the assets of the Corporation for payments on the Exchange Junior
Subordinated Debentures. The Indenture does not limit the
incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Indebtedness.
Denominations, Registration and Transfer. The Exchange Junior
Subordinated Debentures will be represented by one or more global
certificates registered in the name of Cede & Co. as the nominee
of DTC if, and only if, distributed to the holders of the Trust
Securities. Until such time, the Exchange Junior Subordinated
Debentures will be registered in the name of the Trust and held
by the Property Trustee. Should the Exchange Junior Subordinated
Debentures be distributed to holders of the Trust Securities,
beneficial interests in the Exchange Junior Subordinated
Debentures will be shown on, and transfers thereof will be
effected only through, records maintained by Participants in DTC.
A global security shall be exchangeable for Exchange Junior
Subordinated Debentures registered in the names of persons other
than Cede & Co. only if (i) DTC notifies the Corporation that it
is unwilling or unable to continue as a depositary for such
global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency"
registered under the Exchange Act, at a time when DTC is required
to be so registered to act as such depositary, (ii) the
Corporation in its sole discretion determines that such global
security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. Any
global security that is exchangeable pursuant to the preceding
sentence shall be exchangeable for certificates registered in
such names as DTC shall direct. It is expected that such
instructions will be based upon directions received by DTC from
its Participants with respect to ownership of beneficial
interests in such global security. In the event that Exchange
Junior Subordinated Debentures are issued in certificated form,
such Exchange Junior Subordinated Debentures will be in minimum
denominations of $100,000 and integral multiples of $1,000 in
excess thereof and may be transferred or exchanged only in such
minimum denominations and in the manner and at the offices
described below.
Payments on Exchange Junior Subordinated Debentures
represented by a global security will be made to DTC, as the
depositary for the Exchange Junior Subordinated Debentures. In
the event Exchange Junior Subordinated Debentures are issued in
certificated form, principal and interest will be payable, the
transfer of the Exchange Junior Subordinated Debentures will be
registrable, and Exchange Junior Subordinated Debentures will be
exchangeable for Exchange Junior Subordinated Debentures of other
denominations of a like aggregate principal amount, at the
corporate office of the Debenture Trustee in New York, New York,
or at the offices of any paying agent or transfer agent appointed
by the Corporation, provided that payment of interest may be made
at the option of the Corporation by check mailed to the address
of the persons entitled thereto or by wire transfer. In
addition, if the Exchange Junior Subordinated Debentures are
issued in certificated form, the record dates for payment of
interest will be the fifteenth day of the month preceding each
Payment Date.
For a description of DTC and the terms of the depositary
arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Description
of Exchange Securities--Description of Exchange Capital
Securities--Form, Denomination, Book-Entry Procedures and
Transfer." If the Exchange Junior Subordinated Debentures are
distributed to the holders of the Trust Securities upon the
termination of the Trust, the form, denomination, book-entry and
transfer procedures with respect to the Capital Securities as
described under "Description of Exchange Securities--Description
of Exchange Capital Securities--Form, Denomination, Book-Entry
Procedures and Transfer," shall apply to the Exchange Junior
Subordinated Debentures.
Payment and Paying Agents. Payment of principal of (and premium,
if any) and any interest on Exchange Junior Subordinated
Debentures will be made at the office of the Debenture Trustee in
the City of New York or at the office of such Paying Agent or
Paying Agents as the Corporation may designate from time to time,
except that at the option of the Corporation payment of any
interest may be made (except in the case of Exchange Junior
Subordinated Debentures in global form), (i) by check mailed to
the address of the Person entitled thereto as such address shall
appear in the register for Exchange Junior Subordinated
Debentures or (ii) by transfer to an account maintained by the
person entitled thereto as specified in such register, provided
that proper transfer instructions have been received by the
relevant Record Date. Payment of any interest on any Exchange
Junior Subordinated Debenture will be made to the person in whose
name such Exchange Junior Subordinated Debenture is registered at
the close of business on the Record Date for such interest,
except in the case of defaulted interest. The Corporation may at
any time designate additional Paying Agents or rescind the
designation of any Paying Agent; however the Corporation will at
all times be required to maintain a Paying Agent in each Place of
Payment for the Exchange Junior Subordinated Debentures.
Any moneys deposited with the Debenture Trustee or any
Paying Agent, or then held by the Corporation in trust, for the
payment of the principal of (and premium, if any) or interest on
any Exchange Junior Subordinated Debenture and remaining
unclaimed for two years after such principal (and premium, if
any) or interest has become due and payable shall, at the request
of the Corporation, be repaid to the Corporation and the holder
of such Exchange Junior Subordinated Debenture shall thereafter
look, as a general unsecured creditor, only to the Corporation
for payment thereof.
Option to Extend Interest Payment Date. So long as no Debenture
Event of Default has occurred and is continuing, the Corporation
has the right under the Indenture at any time or from to time
during the term of the Exchange Junior Subordinated Debentures to
defer the payment of interest for a period not exceeding
10 consecutive semi-annual periods with respect to each Extension
Period; provided, however, that no Extension Period shall end on
a date other than an Interest Payment Date or extend beyond the
Stated Maturity Date. At the end of an Extension Period, the
Corporation must pay all interest then accrued and unpaid
(together with interest thereon at the annual rate of 10.30%,
compounded semi-annually from the relevant Interest Payment Date,
to the extent permitted by applicable law). During an Extension
Period, interest will continue to accrue and holders of Exchange
Junior Subordinated Debentures (and holders of the Exchange
Capital Securities while Exchange Capital Securities are
outstanding) will be required to accrue such deferred interest
income for United States federal income tax purposes prior to
receipt of the cash attributable to such income. See "Certain
United States Federal Income Tax Consequences--Interest Income
and Original Issue Discount."
During any Extension Period, the Corporation may not
(i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to,
any of the Corporation's capital stock (which includes common and
preferred stock), (ii) make any payment of principal, interest or
premium, if any, on or repay, repurchase or redeem any debt
securities of the Corporation (including any Other Debentures)
that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures or (iii) make any
guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation (including any Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures (other than (a) dividends
or distributions in shares of, or options, warrants, or rights to
subscribe for or purchase shares of, common stock of the
Corporation, (b) any declaration of a dividend in connection with
the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Guarantee, (d) purchases of common stock
related to the issuance of common stock or rights under any of
the Corporation's benefit plans for its directors, officers or
employees or any of the Corporation's dividend reinvestment
plans, (e) as a result of a reclassification of the Corporation's
capital stock or the exchange or conversion of one class or
series of the Corporation's capital stock for another class or
series of the Corporation's capital stock, and (f) the purchase
of fractional interests in shares of the Corporation's capital
stock pursuant to the conversion or exchange provisions of such
capital stock or the security being converted or exchanged).
Prior to the termination of any Extension Period, the
Corporation may further extend such Extension Period, provided
that such extension does not cause such Extension Period to
exceed 10 consecutive semi-annual periods, end on a date other
than an Interest Payment Date or extend beyond the Stated
Maturity Date. Upon the termination of any Extension Period and
the payment of all amounts then due on any Interest Payment Date,
the Corporation may elect to begin a new Extension Period,
subject to the above requirements. No interest shall be due and
payable during an Extension Period, except at the end thereof.
The Corporation must give the Property Trustee, the
Administrative Trustees and the Debenture Trustee notice of its
election of any Extension Period (or an extension thereof) at
least five Business Days prior to the earlier of (i) the date the
Distributions on the Trust Securities would have been payable
except for the election to begin or extend such Extension Period
or (ii) the date the Administrative Trustees are required to give
notice to any securities exchange or to holders of Exchange
Capital Securities of the Record Date for the date such
Distributions are payable, but in any event not less than five
Business Days prior to such Record Date. The Debenture Trustee
shall give notice of the Corporation's election to begin or
extend a new Extension Period to the holders of the Capital
Securities. There is no limitation on the number of times that
the Corporation may elect to begin an Extension Period.
Optional Prepayment. The Exchange Junior Subordinated Debentures
will be prepayable, in whole or in part, at the option of the
Corporation on or after June 1, 2007, subject to the Corporation
having received any required regulatory approval, at a prepayment
price (the "Optional Prepayment Price") equal to the percentage
of the outstanding principal amount of the Exchange Junior
Subordinated Debentures specified below, plus, in each case,
accrued interest thereon to but excluding the date fixed for
prepayment if redeemed during the 12-month period beginning
June 1 of the years listed below:
Year Percentage
2007 105.150%
2008 104.635%
2009 104.120%
2010 103.605%
2011 103.090%
2012 102.575%
2013 102.060%
2014 101.545%
2015 101.030%
2016 100.515%
2017 100.0000%
Special Event Prepayment. If, prior to June 1, 2007, a Special
Event shall occur and be continuing, the Corporation may, at its
option and subject to receipt of any required regulatory
approval, prepay the Exchange Junior Subordinated Debentures in
whole (but not in part) at any time within 90 days after the
occurrence of such Special Event, at a prepayment price (the
"Special Event Prepayment Price") equal to the greater of
(i) 100% of the principal amount of such Exchange Junior
Subordinated Debentures or (ii) the sum, as determined by a
Quotation Agent, of the present values of the principal amount
and premium payable with respect to an optional redemption of
such Exchange Junior Subordinated Debentures on June 1, 2007,
together with scheduled payments of interest on the Exchange
Junior Subordinated Debentures from the prepayment date to and
including June 1, 2007, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate, plus, in each case,
accrued but unpaid interest thereon to the date of prepayment.
See "--Description of Exchange Capital Securities--Liquidation of
the Trust and Distribution of Junior Subordinated Debentures."
"Special Event" means a Tax Event or a Regulatory Capital
Event (as defined below), as the case may be.
"Tax Event" means the receipt by the Corporation and the
Trust of an opinion of counsel experienced in such matters to the
effect that, as a result of any amendment to, or change
(including any announced prospective change) in, the laws or any
regulations thereunder of the United States or any political
subdivision or taxing authority thereof or therein, or as a
result of any official administrative pronouncement or judicial
decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronouncement or
decision is announced on or after June 2, 1997, 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 Exchange Junior Subordinated Debentures,
(ii) interest payable by the Corporation on the Exchange Junior
Subordinated Debentures is not, or within 90 days of the date of
such opinion, will not be, deductible by the Corporation, in
whole or in part, for United States federal income tax purposes,
or (iii) the Trust is, or will be within 90 days of the date of
such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
A "Regulatory Capital Event" means that the Corporation
shall have become, or pursuant to law or regulation will become
within 180 days, subject to capital requirements under which, in
the written opinion of independent bank regulatory counsel
experienced in such matters, the Capital Securities would not
constitute Tier 1 Capital applied as if the Corporation (or its
successor) were a bank holding company (as that concept is used
in the guidelines or regulations issued by the Board of Governors
of the Federal Reserve System as of June 2, 1997) or its then
equivalent ("Tier 1 Capital").
"Adjusted Treasury Rate" means, with respect to any
prepayment date, the rate per annum equal to the semi-annual
equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable
Treasury Price for such prepayment date, plus (i) 3.30% if such
prepayment date occurs on or prior to June 1, 1998 and (ii) 2.75%
in all other cases.
"Comparable Treasury Issue" means the United States
Treasury
security selected by the Quotation Agent as having a maturity
comparable to the remaining term of the Exchange Junior
Subordinated Debt Debentures to be prepaid 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 term of
the Exchange Junior Subordinated Debentures.
"Quotation Agent" means the Reference Treasury Dealer
appointed by the Corporation. "Reference Treasury Dealer" means:
a nationally recognized U.S. Government Securities Dealer in New
York City selected by the Corporation.
"Comparable Treasury Price" means, with respect to any
prepayment date, (i) the average of the bid and asked prices for
the Comparable Treasury Issue (expressed in each case as a
percentage of its principal amount) on the third Business Day
preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the
Federal Reserve Bank of New York and designated "Composite
3:30 p.m. Quotations for U.S. Government Securities" or (ii) if
such release (or any successor release) is not published or does
not contain such prices on such Business Day, (A) the average of
Reference Treasury Dealer Quotations for such prepayment date,
after excluding the highest and lowest of such Reference Treasury
Dealer Quotations, or (B) if the Debenture Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average
of all such quotations.
"Reference Treasury Dealer Quotations" means, with respect
to each Reference Treasury Dealer and any prepayment date, the
average, as determined by the Debenture Trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing
to the Debenture Trustee by such Reference Treasury Dealer at
5:00 p.m., New York City time, on the third Business Day
preceding such prepayment date.
"Additional Sums" means the additional amounts as may be
necessary in order that the amount of Distributions then due and
payable by the Trust on the outstanding Capital Securities and
Common Securities shall not be reduced as a result of any such
additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event.
Notice of any prepayment will be mailed at least 30 days
but
not more than 60 days before the redemption date to each holder
of Exchange Junior Subordinated Debentures to be prepaid at its
registered address. Unless the Corporation defaults in payment
of the prepayment price, on and after the prepayment date
interest ceases to accrue on such Exchange Junior Subordinated
Debentures called for prepayment.
If the Trust is required to pay any additional taxes,
duties
or other governmental charges as a result of a Tax Event, the
Corporation will pay as additional amounts on the Exchange Junior
Subordinated Debentures the Additional Sums.
Restrictions on Certain Payments. The Corporation will also
covenant that it will not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire or make a
liquidation payment with respect to, any of the Corporation's
capital stock (which includes common and preferred stock),
(ii) make any payment of principal, interest or premium, if any,
on or repay or repurchase or redeem any debt securities of the
Corporation (including Other Debentures) that rank pari passu
with or junior in right of payment to the Exchange Junior
Subordinated Debentures or (iii) make any guarantee payments with
respect to any guarantee by the Corporation of the debt
securities of any subsidiary of the Corporation (including under
Other Guarantees) if such guarantee ranks pari passu with or
junior in right of payment to the Exchange Junior Subordinated
Debentures (other than (a) dividends or distributions in shares
of, or options, warrants, or rights to subscribe for or purchase
shares of, common stock of the Corporation, (b) any declaration
of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any
such plan in the future, or the redemption or repurchase of any
such rights pursuant thereto, (c) payments under the Guarantee,
(d) purchases of common stock related to the issuance of common
stock or rights under any of the Corporation's benefit plans for
its directors, officers, or employees or any of the Corporation's
dividend reinvestment plans, (e) as a result of a
reclassification of the Corporation's capital stock or the
exchange or conversion of one class or series of the
Corporation's capital stock for another class or series of the
Corporation's capital stock or (f) the purchase of fractional
interests in shares of the Corporation's capital stock pursuant
to the conversion or exchange provisions of such capital stock or
the security being converted or exchanged), if at such time
(1) there shall have occurred any event of which the Corporation
has actual knowledge that (a) is, or with the giving of notice or
lapse of time, or both, would be a Debenture Event of Default,
and (b) in respect of which the Corporation shall not have taken
reasonable steps to cure, (2) if such Exchange Junior
Subordinated Debentures are held by the Trust, the Corporation
shall be in default with respect to its payment of any
obligations under the Exchange Guarantee, or (3) the Corporation
shall have given notice of its election of an Extension Period as
provided in the Indenture and shall not have rescinded such
notice, and such Extension Period, or any extension thereof,
shall be continuing.
For so long as the Trust Securities remain outstanding, the
Corporation will covenant (i) to directly or indirectly maintain
100% direct or indirect ownership of the Common Securities of the
Trust; provided, however, that any permitted successor of the
Corporation under the Indenture may succeed to the Corporation's
ownership of such Common Securities, (ii) not to cause, as
Sponsor of the Trust, or to permit, as holder of the Common
Securities, the dissolution, winding-up or termination of the
Trust, except in connection with a distribution of the Exchange
Junior Subordinated Debentures as provided in the Declaration and
in connection with certain mergers, consolidations or
amalgamations and (iii) to use its reasonable efforts to cause
the Trust (a) to remain a business trust, except in connection
with the distribution of Exchange Junior Subordinated Debentures
to the holders of Trust Securities in liquidation of the Trust,
the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as
permitted by the Declaration, and (b) to otherwise continue to be
classified as a grantor trust for United States federal income
tax purposes.
Modification of Indenture. From time to time the Corporation and
the Debenture Trustee may, without the consent of the holders of
Exchange Junior Subordinated Debentures, amend, waive or
supplement the Indenture for specified purposes, including, among
other things, curing ambiguities, defects or inconsistencies
(provided that any such action does not materially adversely
affect the interest of the holders of Exchange Junior
Subordinated Debentures) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and
the Debenture Trustee, with the consent of the holders of a
majority in principal amount of Exchange Junior Subordinated
Debentures, to modify the Indenture in a manner affecting the
rights of the holders of Exchange Junior Subordinated Debentures;
provided, that no such modification may, without the consent of
the holder of each outstanding Exchange Junior Subordinated
Debenture so affected, (i) change the Stated Maturity, or reduce
the principal amount of the Exchange Junior Subordinated
Debentures, or reduce the rate or extend the time of payment of
interest thereon except pursuant to the Corporation's right under
the Indenture to defer the payment of interest as provided
therein (see "--Option to Extend Interest Payment Date") or
(ii) reduce the percentage of principal amount of Exchange Junior
Subordinated Debentures, the holders of which are required to
consent to any such modification of the Indenture.
In addition, the Corporation and the Debenture Trustee may
execute, without the consent of any holder of Exchange Junior
Subordinated Debentures, any supplemental Indenture for the
purpose of creating any Other Debentures.
Debenture Events of Default. The Indenture provides that any one
or more of the following described events with respect to the
Exchange Junior Subordinated Debentures that has occurred and is
continuing constitutes a "Debenture Event of Default" (whatever
the reason for such Debenture Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of
law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or
governmental body):
(i) failure for 30 days to pay any interest on the
Exchange Junior Subordinated Debentures or any Other
Debentures when due (subject to the deferral of any due
date
in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if
any,
on the Exchange Junior Subordinated Debentures or any Other
Debentures when due, whether at maturity, upon redemption,
by declaration of acceleration of maturity or otherwise; or
(iii) failure to observe or perform in any material
respect certain other covenants contained in the Indenture
for 90 days after written notice to the Corporation from
the
Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Exchange
Junior Subordinated Debentures; or
(iv) certain events in bankruptcy, insolvency or
reorganization of the Corporation.
The holders of a majority in aggregate outstanding
principal
amount of the Exchange Junior Subordinated Debentures have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee.
The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Exchange Junior
Subordinated Debentures may declare the principal due and payable
immediately upon a Debenture Event of Default. The holders of a
majority in aggregate outstanding principal amount of the
Exchange Junior Subordinated Debentures may annul such
declaration and waive the default if the default (other than the
non-payment of the principal of the Exchange Junior Subordinated
Debentures which has become due solely by such acceleration) has
been cured and a sum sufficient to pay all matured installments
of interest and principal due otherwise than by acceleration has
been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding
principal
amount of the Exchange Junior Subordinated Debentures affected
thereby may, on behalf of the holders of all the Exchange Junior
Subordinated Debentures, waive any past default, except a default
in the payment of principal of (or premium, if any) or interest
(unless such default has been cured and a sum sufficient to pay
all matured installments of interest (and premium, if any) and
principal due otherwise than by acceleration has been deposited
with the Debenture Trustee) or a default in respect of a covenant
or provision which under the Indenture cannot be modified or
amended without the consent of the holder of each outstanding
Exchange Junior Subordinated Debenture. The Corporation is
required to file annually with the Debenture Trustee a
certificate as to whether or not the Corporation is in compliance
with all the conditions and covenants applicable to it under the
Indenture.
Enforcement of Certain Rights by Holders of Exchange Capital
Securities. If a Debenture Event of Default has occurred and is
continuing and such event is attributable to the failure of the
Corporation to pay interest (or premium, if any) on or principal
of the Exchange Junior Subordinated Debentures on the due date, a
holder of Exchange Capital Securities may institute a Direct
Action. The Corporation may not amend the Indenture to remove
the foregoing right to bring a Direct Action without the prior
written consent of the holders of all of the Exchange Capital
Securities. Notwithstanding any payments made to a holder of
Exchange Capital Securities by the Corporation in connection with
a Direct Action, the Corporation shall remain obligated to pay
the principal of (or premium, if any) or interest on the Exchange
Junior Subordinated Debentures, and the Corporation shall be
subrogated to the rights of the holder of such Capital Securities
with respect to payments on the Exchange Capital Securities to
the extent of any payments made by the Corporation to such holder
in any Direct Action.
The holders of the Exchange Capital Securities will not be
able to exercise directly any remedies, other than those set
forth in the preceding paragraph, available to the holders of the
Exchange Junior Subordinated Debentures unless there shall have
been an Event of Default under the Declaration. See
"--Description of Exchange Capital Securities--Events of Default;
Notice."
Consolidation, Merger, Sale of Assets and Other Transactions.
The Indenture provides that the Corporation shall not consolidate
with or merge into any other Person or convey, transfer or lease
its properties and assets as an entirety or substantially as an
entirety to any Person, and no Person shall consolidate with or
merge into the Corporation or convey, transfer or lease its
properties and assets as an entirety or substantially as an
entirety to the Corporation, unless (i) in case the Corporation
consolidates with or merges into another Person or conveys or
transfers its properties and assets substantially as an entirety
to any Person, the successor Person is organized under the laws
of the United States or any state or the District of Columbia,
and such successor Person expressly assumes the Corporation's
obligations on the Exchange Junior Subordinated Debentures;
(ii) immediately after giving effect thereto, no Debenture Event
of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have
occurred and be continuing; and (iii) certain other conditions as
prescribed in the Indenture are met.
The general provisions of the Indenture do not afford
holders of the Exchange Junior Subordinated Debentures protection
in the event of a highly leveraged or other transaction involving
the Corporation that may adversely affect holders of the Exchange
Junior Subordinated Debentures.
Satisfaction and Discharge. The Indenture provides that when,
among other things, all Exchange Junior Subordinated Debentures
not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become
due and payable at maturity within one year, and the Corporation
deposits or causes to be deposited with the Debenture Trustee
funds, in trust, for the purpose and in an amount sufficient to
pay and discharge the entire indebtedness on the Exchange Junior
Subordinated Debentures not previously delivered to the Debenture
Trustee for cancellation, for the principal (and premium, if any)
and interest to the date of the deposit or to the Stated Maturity
Date, as the case may be, then the Indenture will cease to be of
further effect (except as to the Corporation's obligations to pay
all other sums due pursuant to the Indenture and to provide the
officers' certificates and opinions of counsel described
therein), and the Corporation will be deemed to have satisfied
and discharged the Indenture.
Subordination. In the Indenture, the Corporation has covenanted
and agreed that any Exchange Junior Subordinated Debentures
issued thereunder shall be subordinate and junior in right of
payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to
creditors upon any liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors,
marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any
insolvency or bankruptcy proceeding of the Corporation, all
Senior Indebtedness must be paid in full before the holders of
Exchange Junior Subordinated Debentures will be entitled to
receive or retain any payment or distribution in respect thereof.
In the event of the acceleration of the maturity of the
Exchange Junior Subordinated Debentures, the holders of all
Senior Indebtedness outstanding at the time of such acceleration
will first be entitled to receive payment in full of all such
Senior Indebtedness before the holders of the Exchange Junior
Subordinated Debentures will be entitled to receive or retain any
payment in respect of the Exchange Junior Subordinated
Debentures.
No payments on account of principal (or premium, if any) or
interest, if any, in respect of the Exchange Junior Subordinated
Debentures may be made if there shall have occurred and be
continuing a default in any payment with respect to Senior
Indebtedness, or an event of default with respect to any Senior
Indebtedness resulting in the acceleration of the maturity
thereof, or if any judicial proceeding shall be pending with
respect to any such default.
"Senior Indebtedness" shall mean all Indebtedness for Money
Borrowed, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, except
Indebtedness Ranking on a Parity with the Exchange Junior
Subordinated Debentures or Indebtedness Ranking Junior to the
Exchange Junior Subordinated Debentures, and any deferrals,
renewals or extensions of such Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean any obligation
of, or any obligation guaranteed by, the Corporation for the
repayment of borrowed money, whether or not evidenced by bonds,
debentures, notes or other written instruments.
"Indebtedness Ranking on a Parity with the Exchange Junior
Subordinated Debentures" shall mean (i) Indebtedness for Money
Borrowed, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks equally with and not prior to the
Exchange Junior Subordinated Debentures in the right of payment
upon the happening of the dissolution or winding-up or
liquidation or reorganization of the Corporation and (ii) all
other debt securities, and guarantees in respect of those debt
securities, issued to any other trust, partnership or other
entity affiliated with the Corporation that is a financing
vehicle of the Corporation (a "financing entity") in connection
with the issuance by such financing entity of equity securities
or other securities guaranteed by the Corporation pursuant to an
instrument that ranks pari passu with our junior in right of
payment to the Guarantee.
"Indebtedness Ranking Junior to the Exchange Junior
Subordinated Debentures" shall mean any Indebtedness for Money
Borrowed, whether outstanding on the date of execution of the
Indenture or thereafter created, assumed or incurred, which
specifically by its terms ranks junior to and not equally with or
prior to the Exchange Junior Subordinated Debentures (and any
other Indebtedness Ranking on a Parity with the Exchange Junior
Subordinated Debentures) in right of payment upon the happening
of the dissolution or winding-up or liquidation or reorganization
of the Corporation. The securing of any Indebtedness for Money
Borrowed, otherwise constituting Indebtedness Ranking on a Parity
with the Exchange Junior Subordinated Debentures or Indebtedness
Ranking Junior to the Exchange Junior Subordinated Debentures, as
the case may be, shall not be deemed to prevent such Indebtedness
for Money Borrowed from constituting Indebtedness Ranking on a
Parity with the Exchange Junior Subordinated Debentures or
Indebtedness Ranking Junior to the Exchange Junior Subordinated
Debentures, as the case may be.
The Corporation is a non-operating holding company and
almost all of the operating assets of the Corporation are owned
by the Corporation's subsidiaries. The Corporation relies
primarily on dividends from such subsidiaries to meet its
obligations for payment of principal and interest on its
outstanding debt obligations and corporate expenses. The
Corporation is a legal entity separate and distinct from its
banking and non-banking affiliates. The principal sources of the
Corporation's income are dividends, interest and fees from its
banking and non-banking affiliates. The Bank is subject to
certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, the Corporation
and certain other affiliates, and on investments in stock or
other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the
Bank unless the loans are secured by various types of collateral.
Further, such secured loans, other transactions and investments
by the Bank are generally limited in amount as to the Corporation
and as to each of such other affiliates to 10% of such Bank's
capital and surplus and as to the Corporation and all of such
other affiliates to an aggregate of 20% of such Bank's capital
and surplus. In addition, payment of dividends to the
Corporation by the subsidiary banks is subject to ongoing review
by banking regulators and is subject to various statutory
limitations and in certain circumstances requires approval by
banking regulatory authorities. Accordingly, the Exchange Junior
Subordinated Dentures will be effectively subordinated to all
existing and future liabilities of the Corporation's
subsidiaries. Holders of Exchange Junior Subordinated Debentures
should look only to the assets of the Corporation for payments of
interest and principal and premium, if any.
The Indenture places no limitation on the amount of Senior
Indebtedness that may be incurred by the Corporation. The
Corporation expects from time to time to incur additional
indebtedness constituting Senior Indebtedness. At June 30, 1997,
the Corporation had no outstanding Senior Indebtedness.
Restrictions on Transfer. The Exchange Junior Subordinated
Debentures will be issued, and may be transferred only, in blocks
having an aggregate principal amount of not less than $100,000
(100 Exchange Junior Subordinated Debentures). Any such transfer
of Exchange Junior Subordinated Debentures in a block having an
aggregate principal amount of less than $100,000 shall be deemed
to be void and of no legal effect whatsoever. Any such
transferee shall be deemed not to be the holder of such Exchange
Junior Subordinated Debentures for any purpose, including but not
limited to the receipt of payments on such Exchange Junior
Subordinated Debentures, and such transferee shall be deemed to
have no interest whatsoever in such Exchange Junior Subordinated
Debentures.
Governing Law. The Indenture and the Exchange Junior
Subordinated Debentures will be governed by and construed in
accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee. Following the
Exchange Offer and the qualification of the Indenture under the
Trust Indenture Act, the Debenture Trustee shall have and be
subject to all the duties and responsibilities specified with
respect to an indenture trustee under the Trust Indenture Act.
Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Exchange Junior
Subordinated Debentures, unless offered reasonable indemnity by
such holder against the costs, expenses and liabilities which
might be incurred thereby. The Debenture Trustee is not required
to expend or risk its own funds or otherwise incur personal
financial liability in the performance of its duties if the
Debenture Trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
Description of Exchange Guarantee
The Exchange Guarantee will be executed and delivered by
the
Corporation concurrently with the issuance by the Trust of the
Exchange Capital Securities for the benefit of the holders from
time to time of such Exchange Capital Securities. The Bank of
New York will act as trustee (the "Guarantee Trustee") under the
Exchange Guarantee. The Exchange Guarantee has been qualified
under the Trust Indenture Act. This summary of certain
provisions of the Exchange Guarantee does not purport to be
complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the Exchange Guarantee,
including the definitions therein of certain terms, and the Trust
Indenture Act. The Guarantee Trustee will hold the Exchange
Guarantee for the benefit of the holders of the Exchange Capital
Securities.
General. The Corporation will irrevocably agree to pay in full
on a subordinated basis, to the extent set forth herein, the
Guarantee Payments (as defined herein) to the holders of the
Exchange Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Trust may have
or assert other than the defense of payment. The following
payments with respect to the Exchange Capital Securities, to the
extent not paid by or on behalf of the Trust (the "Guarantee
Payments"), will be subject to the Exchange Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the
Exchange Capital Securities, to the extent that the Trust has
funds on hand legally available therefor at such time, (ii) the
applicable Redemption Price with respect to Exchange Capital
Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time, and
(iii) upon a voluntary or involuntary termination and liquidation
of the Trust (other than in connection with the distribution of
Exchange Junior Subordinated Debentures to the holders of the
Exchange Capital Securities or the redemption of all of the
Exchange Capital Securities) the lesser of (a) the Liquidation
Distribution and (b) the amount of assets of the Trust remaining
available for distribution to holders of the Exchange Capital
Securities. The Corporation's obligation to make a Guarantee
Payment may be satisfied by direct payment of the required
amounts by the Corporation to the holders of the Exchange Capital
Securities or by causing the Trust to pay such amounts to such
holders.
The Exchange Guarantee will rank subordinate and junior in
right of payment to all Senior Indebtedness to the extent
provided therein. See "--Status of the Exchange Guarantee."
Because the Corporation is a holding company, the right of the
Corporation to participate in any distribution of assets of any
subsidiary upon such subsidiary's liquidation or reorganization
or otherwise, is subject to the prior claims of creditors of such
subsidiary, except to the extent the Corporation may itself be
recognized as a creditor of that subsidiary. Accordingly, the
Corporation's obligations under the Exchange Guarantee will be
effectively subordinated to all existing and future liabilities
of the Corporation's subsidiaries, including deposits, and
claimants should look only to the assets of the Corporation for
payments thereunder. See "Description of the Exchange Junior
Subordinated Debentures - General." The Guarantee does not limit
the incurrence or issuance of other secured or unsecured debt of
the Corporation, including Senior Indebtedness, whether under the
Indenture or any other indenture that the Corporation may enter
into in the future or otherwise.
The Corporation has, through the Exchange Guarantee, the
Declaration, the Exchange Junior Subordinated Debentures and the
Indenture, taken together, fully, irrevocably and unconditionally
guaranteed all of the Trust's obligations under the Exchange
Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other
documents constitutes such guarantee. It is only the combined
operation of these documents that has the effect of providing a
full, irrevocable and unconditional guarantee of the Trust's
obligations under the Exchange Capital Securities. See
"Relationship Among the Exchange Capital Securities, the Exchange
Junior Subordinated Debentures and the Exchange Guarantee."
Status of the Exchange Guarantee. The Exchange Guarantee will
constitute an unsecured obligation of the Corporation and will
rank subordinate and junior in right of payment to all Senior
Indebtedness in the same manner as Exchange Junior Subordinated
Debentures, except in the case of a bankruptcy or insolvency
proceeding in respect of the Corporation, in which case the
Exchange Guarantee will rank subordinate and junior in right of
payment to all liabilities (other than Other Guarantees) of the
Corporation.
The Exchange Guarantee will rank pari passu with all Other
Guarantees issued by the Corporation. The Exchange Guarantee
will constitute a guarantee of payment and not of collection
(i.e., the guaranteed party may institute a legal proceeding
directly against the Corporation to enforce its rights under the
Exchange Guarantee without first instituting a legal proceeding
against any other person or entity). The Exchange Guarantee will
be held for the benefit of the holders of the Exchange Capital
Securities. The Exchange Guarantee will not be discharged except
by payment of the Guarantee Payments in full to the extent not
paid by the Trust or upon distribution to the holders of the
Exchange Capital Securities of the Exchange Junior Subordinated
Debentures. The Guarantee does not place a limitation on the
amount of additional Senior Indebtedness that may be incurred by
the Corporation. The Corporation expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.
Amendments and Assignment. Except with respect to any changes
which do not materially adversely affect the rights of holders of
the Exchange Capital Securities (in which case no vote will be
required), the Exchange Guarantee may not be amended without the
prior approval of the holders of a majority of the aggregate
Liquidation Amount of such outstanding Exchange Capital
Securities. The manner of obtaining any such approval will be as
set forth under "--Description of Exchange Capital
Securities--Voting Rights; Amendment of the Declaration." All
guarantees and agreements contained in the Exchange Guarantee
shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit
of the holders of the Exchange Capital Securities then
outstanding.
Events of Default. An event of default under the Exchange
Guarantee will occur upon the failure of the Corporation to
perform any of its payment or other obligations thereunder. The
holders of a majority in aggregate Liquidation Amount of the
Exchange Capital Securities will have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Guarantee Trustee in respect of the
Exchange Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Exchange
Guarantee.
Any holder of the Exchange Capital Securities may institute
a legal proceeding directly against the Corporation to enforce
its rights under the Exchange Guarantee without first instituting
a legal proceeding against the Trust, the Guarantee Trustee or
any other person or entity.
The Corporation, as guarantor, is required to file annually
with the Guarantee Trustee a certificate as to whether or not the
Corporation is in compliance with all the conditions and
covenants applicable to it under the Exchange Guarantee.
Information Concerning the Guarantee Trustee. The Guarantee
Trustee, other than during the occurrence and continuance of a
default by the Corporation in performance of the Guarantee, will
undertake to perform only such duties as are specifically set
forth in the Guarantee and, after default with respect to the
Guarantee, must exercise the same degree of care and skill as a
prudent person would exercise or use in the conduct of his or her
own affairs. Subject to this provision, the Guarantee Trustee
will be under no obligation to exercise any of the powers vested
in it by the Guarantee at the request of any holder of the
Capital Securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be
incurred thereby.
Termination of the Exchange Guarantee. The Exchange Guarantee
will terminate and be of no further force and effect upon full
payment of the applicable Redemption Price of the Exchange
Capital Securities, upon full payment of the Liquidation Amount
payable upon liquidation of the Trust or upon distribution of
Exchange Junior Subordinated Debentures to the holders of the
Exchange Capital Securities. The Exchange Guarantee will
continue to be effective or will be reinstated, as the case may
be, if at any time any holder of the Exchange Capital Securities
must restore payment of any sums paid under the Exchange Capital
Securities or the Exchange Guarantee.
Governing Law. The Exchange Guarantee will be governed by and
construed in accordance with the laws of the State of New York.
DESCRIPTION OF ORIGINAL SECURITIES
The terms of the Original Securities are identical in all
materials respects to the Exchange Securities, except that
(i) the Original Securities have not been registered under the
Securities Act, are subject to certain restrictions on transfer
and are entitled to certain rights under the applicable
Registration Agreement (which rights will terminate upon
consummation of the Exchange Offer, except under limited
circumstances), (ii) the Exchange Capital Securities will not
provide for any increase in the Distribution rate thereon and
(iii) the Exchange Junior Subordinated Debentures will not
provide for any liquidated damages thereon. The Original
Securities provide that, in the event that a registration
statement relating to the Exchange Offer has not been filed by
October 30, 1997 and been declared effective by November 29,
1997, or, in certain limited circumstances, in the event a shelf
registration statement (the "Shelf Registration Statement") with
respect to the resale of the Original Capital Securities is not
declared effective by October 30, 1997, then liquidated damages
will accrue at the rate of 0.25% per annum on the principal
amount of the Original Junior Subordinated Debentures and
Distributions will accrue at the rate of 0.25% per annum on the
Liquidation Amount of the Original Capital Securities, for the
period from the occurrence of such event until such time as such
required Exchange Offer is consummated or any required Shelf
Registration Statement is effective. The Exchange Securities are
not, and upon consummation of the Exchange Offer the Original
Securities will not be, entitled to any such additional interest
or Distributions. Accordingly, holders of Original Capital
Securities should review the information set forth under "Risk
Factors--Consequences of a Failure to Exchange Original Capital
Securities" and "Description of Exchange Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES,
THE EXCHANGE JUNIOR
SUBORDINATED DEBENTURES AND THE EXCHANGE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the
Exchange Capital Securities (to the extent the Trust has funds on
hand legally available for the payment of such Distributions) are
irrevocably guaranteed by the Corporation as and to the extent
set forth under "--Description of Exchange Guarantee." Taken
together, the Corporation's obligations under the Exchange Junior
Subordinated Debentures, the Indenture, the Declaration and the
Exchange Guarantee provide, in the aggregate, a full, irrevocable
and unconditional guarantee of payments of Distributions and
other amounts due on the Exchange Capital Securities. No single
document standing alone or operating in conjunction with fewer
than all of the other documents constitutes such guarantee. It
is only the combined operation of these documents that has the
effect of a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Exchange Capital Securities. If
and to the extent that the Corporation does not make payments on
the Exchange Junior Subordinated Debentures, the Trust will not
have sufficient funds to make the related payments, including
Distributions, on the Exchange Capital Securities. The Guarantee
does not cover any such payment when the Trust does not have
sufficient funds on hand legally available therefor. In such
event, the remedy of a holder of Exchange Capital Securities is
to institute a Direct Action. The obligations of the Corporation
under the Exchange Guarantee are subordinate and junior in right
of payment to all Senior Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made
when due on the Exchange Junior Subordinated Debentures, such
payments will be sufficient to cover Distributions and other
payments due on the Exchange Capital Securities, primarily
because (i) the aggregate principal amount or Prepayment Price of
the Exchange Junior Subordinated Debentures will be equal to the
sum of the aggregate Liquidation Amount or Redemption Price, as
applicable, of the Trust Securities; (ii) the interest rate and
interest and other payment dates on the Exchange Junior
Subordinated Debentures will match the Distribution rate and
Distribution and other payment dates for the Trust Securities;
(iii) the Corporation, as Sponsor, shall pay for all costs,
expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust
Securities; and (iv) the Declaration further provides that the
Trust is not authorized to engage in any activity that is not
consistent with the limited purposes thereof.
Enforcement Rights of Holders of Exchange Capital Securities
A holder of any Exchange Capital Security may institute a
legal proceeding directly against the Corporation to enforce its
rights under the Exchange Guarantee without first instituting a
legal proceeding against the Guarantee Trustee, the Trust or any
other person or entity.
A default or event of default under any Senior Indebtedness
would not constitute a default or Event of Default under the
Declaration. However, in the event of payment defaults under, or
acceleration of, Senior Indebtedness, the subordination
provisions of the Indenture provide that no payments may be made
in respect of the Exchange Junior Subordinated Debentures until
such Senior Indebtedness has been paid in full or any payment
default thereunder has been cured or waived. Failure to make
required payments on Exchange Junior Subordinated Debentures
would constitute an Event of Default under the Declaration.
Limited Purpose of the Trust
The Capital Securities evidence a beneficial interest in
the
Trust, and the Trust exists for the sole purpose of issuing and
selling the Trust Securities, using the proceeds from the sale of
the Trust Securities to acquire the Junior Subordinated
Debentures, and engaging in only those other activities
necessary, advisable or incidental thereto. A principal
difference between the rights of a holder of an Exchange Capital
Security and a holder of an Exchange Junior Subordinated
Debenture is that a holder of an Exchange Junior Subordinated
Debenture will be entitled to receive from the Corporation the
principal amount (and premium, if any) and interest on Exchange
Junior Subordinated Debentures held, while a holder of Exchange
Capital Securities is entitled to receive Distributions from the
Trust (or, in certain circumstances from the Corporation under
the Guarantee) if and to the extent the Trust has funds on hand
legally available for the payment of such Distributions.
Rights Upon Termination
Unless the Exchange Junior Subordinated Debentures are
distributed to holders of the Trust Securities, upon any
voluntary or involuntary termination and liquidation of the
Trust, after satisfaction of the liabilities of creditors of the
Trust as required by applicable law, the holders of the Trust
Securities will be entitled to receive, out of assets held by the
Trust, the Liquidation Distribution in cash. See "Description of
Exchange Securities--Description of Exchange Capital
Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures." Upon any voluntary or involuntary
liquidation or bankruptcy of the Corporation, the Property
Trustee, as holder of the Exchange Junior Subordinated
Debentures, would be a subordinated creditor of the Corporation,
subordinated in right of payment to all Senior Indebtedness as
set forth in the Indenture, but entitled to receive payment in
full of principal (and premium, if any) and interest, before any
stockholders of the Corporation receive payments or
distributions. Since the Corporation is the guarantor under the
Exchange Guarantee and has agreed to pay for all costs, expenses
and liabilities of the Trust (other than the Trust's obligations
to the holders of its Trust Securities), the positions of a
holder of Exchange Capital Securities and a holder of Exchange
Junior Subordinated Debentures relative to other creditors and to
stockholders of the Corporation in the event of liquidation or
bankruptcy of the Corporation are expected to be substantially
the same.
CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES
General
The following is a summary of certain of the material
United
States federal income tax consequences of the purchase, ownership
and disposition of Capital Securities held as capital assets
(generally, assets held for investment) by a holder who purchases
such Capital Securities upon original issuance. The tax
treatment of a holder of Capital Securities may vary depending
upon his particular situation. This summary does not address all
of the tax consequences that may be relevant to holders who may
be subject to special tax treatment such as, for example, banks,
thrifts, real estate investment trusts, regulated investment
companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, or, except to the extent
described below, foreign taxpayers. This summary is based on the
Internal Revenue Code of 1986, as amended (the "Code"), Treasury
regulations thereunder and the administrative and judicial
interpretations thereof, as of the date hereof, all of which are
subject to change, possibly on a retroactive basis. Each
investor is urged to consult his tax advisor as to the particular
tax consequences of purchasing, owning and disposing of Capital
Securities, including the application and effect of United States
federal, state, local, foreign, and other tax laws.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO
THE TAX CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND
DISPOSITION OF THE CAPITAL SECURITIES, INCLUDING THE TAX
CONSEQUENCES UNDER UNITED STATES FEDERAL, STATE, LOCAL, FOREIGN,
AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED
STATES FEDERAL OR OTHER TAX LAWS. FOR A DISCUSSION OF THE
POSSIBLE REDEMPTION OF THE CAPITAL SECURITIES UPON THE OCCURRENCE
OF CERTAIN TAX EVENTS SEE "DESCRIPTION OF EXCHANGE
SECURITIES--DESCRIPTION OF EXCHANGE CAPITAL
SECURITIES--LIQUIDATION OF THE TRUST AND DISTRIBUTION OF JUNIOR
SUBORDINATED DEBENTURES."
Exchange of Capital Securities
The exchange of Original Securities for Exchange Securities
should not be a taxable event to holders for United States
federal income tax purposes. The exchange of Original Securities
for Exchange Securities pursuant to the Exchange Offer should not
be treated as an "exchange" for United States federal income tax
purposes because the Exchange Securities should not be considered
to differ materially in kind or extent from the Original
Securities and because the exchange will occur by operation of
the terms of the Original Securities. Accordingly, the Exchange
Capital Securities should have the same issue price as the
Original Capital Securities, and a holder should have the same
adjusted tax basis and holding period in the Exchange Capital
Securities as the holder had in the Original Capital Securities
immediately before the exchange. Moreover, a holder which had
acquired Original Capital Securities with either market discount
or bond premium will be treated as holding Exchange Capital
Securities with the same amount of market discount or bond
premium and will be required to include such market discount in
or deduct such bond premium from their income in the same manner
as on the Original Capital Securities. Holders are urged to
consult their tax advisors regarding the applicability of the
market discount and bond premium rules.
Classification of the Junior Subordinated Debentures
The Corporation intends to take the position that the
Exchange Junior Subordinated Debentures will be classified for
United States federal income tax purposes as indebtedness of the
Corporation under current law and, by acceptance of Capital
Securities, each holder covenants to treat the Exchange Junior
Subordinated Debentures as indebtedness and the Capital
Securities as evidence of an indirect beneficial ownership
interest in the Exchange Junior Subordinated Debentures. No
assurance can be given, however, that the IRS will not challenge
such position or, if challenged, that such a challenge will not
be successful. The remainder of this discussion assumes that the
Exchange Junior Subordinated Debentures will be treated as
indebtedness of the Corporation for United States federal income
tax purposes.
Classification of the Trust
In connection with the issuance of the Capital Securities,
Stevens & Lee, P.C., special tax counsel to the Corporation and
the Trust ("Tax Counsel") is of the opinion that, under current
law and assuming full compliance with the terms of the
Declaration, the Indenture, and other documents, and based upon
certain facts and assumptions contained in such opinion, the
Trust will be classified as a grantor trust for United States
federal income tax purposes and not as an association taxable as
a corporation. Accordingly, for United States federal income tax
purposes, each holder of Capital Securities will generally be
treated as the owner of an undivided interest in the Junior
Subordinated Debentures and, as further discussed below, each
holder will be required to include in ordinary income his
allocable share of interest (or original issue discount ("OID"))
paid or accrued on the Junior Subordinated Debentures.
Interest Income and Original Issue Discount
Under recently issued Treasury regulations (the
"Regulations"), a debt instrument will be deemed to be issued
with OID if there is more than a "remote" contingency that
periodic stated interest payments due on the instrument will not
be timely paid. Because the exercise by the Corporation of its
option to defer the payment of stated interest on the Exchange
Junior Subordinated Debentures would prevent the Corporation from
declaring dividends on any class of equity, the Corporation
believes that the likelihood of its exercising the option is
"remote" within the meaning of such regulations. As a result,
the Corporation intends to take the position, based on the advice
of Tax Counsel, that the Junior Subordinated Debentures will not
be deemed to be issued with OID. Accordingly, based upon this
position, and except as set forth below, stated interest payments
on the Junior Subordinated Debentures generally will be
includible in the ordinary income of a holder of Capital
Securities at the time that such payments are paid or accrued in
accordance with such holder's regular method of accounting.
Because the Regulations have not yet been addressed in any
published rulings or other published interpretations issued by
the Internal Revenue Service, it is possible that the Internal
Revenue Service could take a position contrary to the position
taken by the Corporation.
Exercise of Deferral Option. If the Corporation were to
exercise its option to defer the payment of stated interest on
the Junior Subordinated Debentures, the Junior Subordinated
Debentures would be treated, solely for purposes of the OID
rules, as being "re-issued" at such time with OID. Under these
rules, a holder of the Junior Subordinated Debentures would be
required to include OID in ordinary income, on a current basis,
over the period that the instrument is held even though the
Corporation would not be making any actual cash payments during
the extended interest payment period. The amount of interest
income includible in the taxable income of a holder of the Junior
Subordinated Debentures would be determined on the basis of a
constant yield method over the remaining term of the instrument
and the actual receipt of future payments of stated interest on
the Junior Subordinated Debentures would no longer be separately
reported as taxable income. The amount of OID that would accrue,
in the aggregate, during the extended interest payment period
would be approximately equal to the amount of the cash payment
due at the end of such period. Any OID included in income would
increase the holder's adjusted tax basis in the Junior
Subordinated Debentures and the holder's actual receipt of
interest payments would reduce such basis.
Because income on the Capital Securities will constitute
interest for United States federal income tax purposes, corporate
holders of Capital Securities will not be entitled to a
dividends-received deduction in respect of such income.
Receipt of Junior Subordinated Debentures or Cash Upon
Liquidation of the Trust
If the Corporation exercises its right to liquidate the
Trust and cause the Exchange Junior Subordinated Debentures to be
distributed to the holders of the Trust Securities, such
distribution would be treated as a nontaxable event to the
holders of Capital Securities. In such event, each holder of
Capital Securities would have an adjusted tax basis in the
Exchange Junior Subordinated Debentures, received in the
liquidation, equal to such holder's adjusted tax basis in his
Capital Securities surrendered therefor, and the holding period
of the Exchange Junior Subordinated Debentures would include the
period during which the holder had held the Capital Securities.
If, however, the Trust is characterized, for United States
federal income tax purposes, as an association taxable as a
corporation at the time of such liquidation, the distribution of
the Exchange Junior Subordinated Debentures would constitute a
taxable event to holders of Capital Securities.
If the Exchange Junior Subordinated Debentures are redeemed
for cash and the proceeds of such redemption are distributed to
holders in redemption of their Capital Securities, the redemption
would for United States federal income tax purposes be treated as
a sale of the Capital Securities, in which gain or loss would be
recognized, as described immediately below. See "--Sales of
Capital Securities."
Sales of Capital Securities
Upon the sale of Capital Securities (including a redemption
of Capital Securities) a holder will recognize gain or loss in an
amount equal to the difference between the amount realized by the
holder on the sale of the Capital Securities (except to the
extent that such amount realized is characterized as a payment in
respect of accrued but unpaid interest on such holder's allocable
share of the Junior Subordinated Debentures that the holder had
not included in gross income previously) and the holder's
adjusted tax basis in the Capital Securities sold or redeemed. A
holder's adjusted tax basis in the Capital Securities will
generally be its initial purchase price increased by OID (if any)
previously includible in such holder's gross income to the date
of disposition and decreased by payments (if any) received on the
Capital Securities in respect of OID. Such gain or loss
generally will be a capital gain or loss, and generally will be a
long-term capital gain or loss if the Capital Securities have
been held for more than one year. Under the Taxpayer Relief Act
of 1997, for noncorporate taxpayers, such gain is taxed at
different rates, which vary with the taxpayer's holding period
for the capital asset. Generally, for capital assets held for
more than one year but not more than eighteen months, the maximum
rate is twenty-eight percent. For capital assets held for more
than eighteen months, the maximum rate is twenty percent.
Subject to certain limited exceptions, capital losses cannot be
applied to offset ordinary income for United States federal
income tax purposes.
The Capital Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest (or
OID if the Junior Subordinated Debentures are treated as having
been issued, or reissued with OID) with respect to the underlying
Junior Subordinated Debentures. A holder who uses the accrual
method of accounting for tax purposes (and a cash method holder,
if the Junior Subordinated Debentures are deemed to have been
issued with OID) who disposes of his Capital Securities will be
required to include in ordinary income (i) any portion of the
amount realized that is attributable to such accrued but unpaid
interest to the extent not previously included in income or
(ii) any OID, in either case that has accrued on his pro rata
share of the underlying Junior Subordinated Debentures during the
taxable year of sale through the date of disposition. Any such
income inclusion will increase the holder's adjusted tax basis in
his Capital Securities disposed of. To the extent the amount
realized in the sale is less than the holder's adjusted tax basis
a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset
ordinary income for United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien
Holder" is any corporation, individual, partnership, estate or
trust that is not a U.S. Holder for United States federal income
tax purposes.
A "U.S. Holder" is a holder of Capital Securities who or
which is (i) a citizen or individual resident (or is treated as a
citizen or individual resident) of the United States for federal
income tax purposes, (ii) a corporation or partnership created or
organized (or treated as created or organized for federal income
tax purposes) in or under the laws of the United States or any
political subdivision thereof, (iii) an estate the income of
which is includible in its gross income for federal income tax
purposes without regard to its source, or (iv) a trust if a court
within the United States is able to exercise primary supervision
over the administration of the trust and one or more United
States persons have the authority to control all substantial
decisions of the trust.
Under present United States federal income tax laws:
(i) payments by the Trust or any of its paying agents to any
holder of a Capital Security who or which is a United States
Alien Holder will not be subject to United States federal
withholding tax; provided that, (a) the beneficial owner of the
Capital Security does not actually or constructively own 10
percent or more of the total combined voting power of all classes
of stock of the Corporation entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign
corporation that is related to the Corporation through stock
ownership, and (c) either (A) the beneficial owner of the Capital
Security certifies to the Trust or its agent, under penalties of
perjury, that it is not a United States holder and provides its
name and address or (B) a securities clearing organization, bank
or other financial institution that holds customers' securities
in the ordinary course of its trade or business (a "Financial
Institution"), and holds the Capital Security in such capacity,
certifies to the Trust or its agent, under penalties of perjury,
that such statement has been received from the beneficial owner
by it or by a Financial Institution between it and the beneficial
owner and furnishes the Trust or its agent with a copy thereof;
and (ii) a United States Alien Holder of a Capital Security will
not be subject to United States federal withholding tax on any
gain realized upon the sale or other disposition of a Capital
Security.
Information Reporting to Holders
Generally, income on the Capital Securities will be
reported
to holders on Forms 1099, which forms should be mailed to holders
of Capital Securities by January 31 following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the
Capital
Securities may be subject to a "backup" withholding tax of 31
percent unless the holder complies with certain identification
requirements. Any withheld amounts will be allowed as a credit
against the holder's United States federal income tax, provided
the required information is provided to the IRS.
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH
ABOVE IS INCLUDED FOR GENERAL INFORMATION ONLY AND MAY NOT BE
APPLICABLE DEPENDING UPON A HOLDER'S PARTICULAR SITUATION.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE CAPITAL SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER
STATE, LOCAL, FOREIGN AND OTHER TAX LAWS AND THE POSSIBLE EFFECTS
OF CHANGE IN UNITED STATES FEDERAL OR OTHER TAX LAWS.
ERISA CONSIDERATIONS
The Corporation, the obligor with respect to the Junior
Subordinated Debentures held by the Trust, and its affiliates and
the Property Trustee may be considered a "party in interest"
(within the meaning of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA")) or a "disqualified person"
(within the meaning of Section 4975 of the Code) with respect to
many employee benefit plans ("Plans") that are subject to ERISA.
Any purchaser proposing to acquire Capital Securities with assets
of any Plan should consult with its counsel. The purchase and/or
holding of Capital Securities by a Plan that is subject to the
fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Code (including
individual retirement arrangements and other plans described in
Section 4975(e)(1) of the Code) and with respect to which the
Corporation, the Property Trustee or any affiliate is a service
provider (or otherwise is a party in interest or a disqualified
person) may constitute or result in a prohibited transaction
under ERISA or Section 4975 of the Code, unless such Capital
Securities are acquired pursuant to and in accordance with an
applicable exemption, such as Prohibited Transaction Class
Exemption ("PTCE") 84-14 (an exemption for certain transactions
determined by an independent qualified professional asset
manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company
pooled separate accounts), PTCE 95-60 (an exemption for certain
transactions involving certain insurance company general
accounts) or PTCE 96-23 (an exemption for certain transactions
determined by an in-house asset manager). In addition, a Plan
fiduciary considering the purchase of Capital Securities should
be aware that the assets of the Trust may be considered "plan
assets" for ERISA purposes. Therefore, to avoid certain
prohibited transactions under ERISA and the Code that could
thereby result, each investing Plan, by purchasing the Capital
Securities, will be deemed to have directed the Trust to invest
in the Junior Subordinated Debentures and to have appointed the
Property Trustee.
<PAGE>
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital
Securities
for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with
any resale of such Exchange Capital Securities. This Prospectus,
as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange
Capital Securities received in exchange for Capital Securities
where such Capital Securities were acquired by such broker-dealer
as a result of market-making activities or other trading
activities. The Trust and the Corporation have agreed that,
starting on the Expiration Date and ending on the close of
business on the 180th day following the Expiration Date, it will
make this Prospectus, as amended or supplemented, available to
any broker-dealer for use in connection with any such resale. In
addition, until ________, 1997, all dealers effecting
transactions in the Exchange Securities may be required to
deliver a prospectus.
The Trust and the Corporation will not receive any proceeds
from any sale of Exchange Capital Securities by broker-dealers.
Exchange Capital Securities received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time
to time in one or more transactions, in the over-the-counter
market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of
such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or
at negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any
such broker-dealer and/or the purchasers of any such Exchange
Capital Securities. Any broker-dealer that resells Exchange
Capital Securities that were received by it for its own account
pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Capital
Securities may be deemed to be an "underwriter" within the
meaning of the Securities Act and any profit of any such resale
of Exchange Capital Securities and any commissions or concessions
received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal
states that by acknowledging that it will deliver and by
delivering a prospectus, a broker-dealer will not be deemed to
admit that it is an "underwriter" within the meaning of the
Securities Act.
For a period of 180 days after the Expiration Date, the
Trust and the Corporation will promptly send additional copies of
this Prospectus and any amendment or supplement to this
Prospectus to any broker-dealer that requests such documents in
the Letter of Transmittal. The Trust and the Corporation have
agreed to pay all expenses incident to the Exchange Offer
(including the expenses of one counsel for the holders of the
Capital Securities) other than commissions or concessions of any
brokers or dealers and will indemnify the holders of the Capital
Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF EXCHANGE SECURITIES
The validity of the Exchange Guarantee and the Exchange
Junior Subordinated Debentures will be passed upon for the
Corporation by Stevens & Lee, P.C., Reading, Pennsylvania.
Certain matters relating to United States federal income tax
consequences will be passed upon for the Corporation by Stevens &
Lee, P.C., Reading, Pennsylvania.
Certain matters of Delaware law relating to the validity of
the Exchange Capital Securities will be passed upon on behalf of
the Trust by Richards, Layton & Finger, special Delaware counsel
to the Trust.
EXPERTS
The consolidated financial statements of Patriot, as of
December 31, 1996 and 1995 and for each of the three years in the
period ended December 31, 1996, appearing in the 1996 Annual
Report of the Corporation to its shareholders and included in the
Annual Report on Form 10-K for the year ended December 31, 1996,
are incorporated by reference in this Prospectus and in the
Registration Statement of which this Prospectus forms a part,
have been audited by Grant Thornton LLP, independent certified
public accountants, whose reports thereon appear herein, and in
reliance upon such reports of Grant Thornton LLP, given upon the
authority of such firm as experts in accounting and auditing.
<PAGE>
NO DEALER, SALESMAN OR ANY OTHER INDIVIDUAL HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THIS EXCHANGE OFFER AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR THE TRUST.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION OR THE
TRUST SINCE THE DATE HEREOF. THIS PROSPECTUS DOES NOT CONSTITUTE
AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE
PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO
SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
<PAGE>
TABLE OF CONTENTS
PAGE
Available Information .............
Incorporation of Certain Documents
by Reference ....................
Summary ...........................
Risk Factors ......................
Ratios of Earnings to Fixed
Charges .........................
Patriot Capital Trust I ...........
Patriot Bank Corp..................
Selected Financial Data............
Capitalization ....................
Accounting Treatment ..............
The Exchange Offer ................
Description of Exchange
Securities ......................
Description of Original
Securities ......................
Relationship Among the Exchange
Capital Securities, the
Exchange Junior Subordinated
Debentures and the Exchange
Guarantee .......................
Certain United States Federal
Income Tax Consequences .........
ERISA Considerations ..............
Plan of Distribution ..............
Validity of Exchange Securities ...
Experts ...........................
<PAGE>
$19,000,000
PATRIOT CAPITAL TRUST I
OFFER TO EXCHANGE ITS
10.30% EXCHANGE CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000
PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933
FOR ANY AND
ALL OF ITS OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000
PER ORIGINAL CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED,
AS DESCRIBED HEREIN, BY
PATRIOT BANK CORP.
_______________________________
PROSPECTUS
_______________________________
NOVEMBER __, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As authorized by Section 145 of the General Corporation Law
of the State of Delaware, each director and officer of the
Corporation may be indemnified by the Corporation against
expenses (including attorney's fees, judgments, fines and amounts
paid in settlement) actually and reasonably incurred in
connection with the defense or settlement of any threatened,
pending or completed legal proceedings in which he is involved by
reason of the fact that he is or was a director or officer of the
Company if he acted in good faith and in a manner that he
reasonably believed to be in or not opposed to the best interests
of the Corporation and, with respect to any criminal action or
proceeding, if he had no reasonable cause to believe that his
conduct was unlawful. If the legal proceeding, however, is by or
in the right of the Corporation, the director or officer may not
be indemnified in respect of any claim, issue or matter as to
which he shall have been adjudged to be liable for negligence or
misconduct in the performance of his duty to the Corporation
unless a court determines otherwise.
In addition, the Corporation maintains a directors' and
officers' liability policy.
Article Eleventh of the Certificate of Incorporation of the
Corporation provides that, to the fullest extent permitted by
law, directors of the Corporation will not be liable for monetary
damages to the Corporation or its stockholders for breaches of
their fiduciary duties.
<PAGE>
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
EXHIBIT NO.
4.1 Indenture of Patriot Bank Corp. relating to the Junior
Subordinated Debentures*
4.2 Form of Certificate of Exchange Junior Subordinated
Debentures
4.3 Certificate of Trust of Patriot Capital Trust I*
4.4 Declaration of Trust of Patriot Capital Trust I*
4.5 Amended and Restated Declaration of Trust for Patriot
Capital Trust I*
4.6 Form of Exchange Capital Security Certificate for Patriot
Capital Trust I
4.7 Form of Exchange Guarantee Agreement of Patriot Bank Corp.
relating to the Exchange Capital Securities
4.8 Registration Rights Agreement*
5.1 Opinion and consent of Stevens & Lee, P.C. to Patriot Bank
Corp. as to legality of the Exchange Junior Subordinated
Debentures and the Exchange Guarantee to be issued by
Patriot Bank Corp.
5.2 Opinion of Richards, Layton & Finger special Delaware
counsel, as to legality of the Exchange Capital Securities
to be issued by Patriot Capital Trust I
8 Opinion of Stevens & Lee, P.C., special tax counsel, as to
certain federal income tax matters
12.1 Computation of ratios of earnings to fixed charges
23.1 Consent of Grant Thornton LLP*
23.2 Consent of Stevens & Lee, P.C. (included in Exhibit 5.1)
23.3 Consent of Richards, Layton & Finger (included in
Exhibit 5.2)
24 Power of Attorney of certain officers and directors of
Patriot Bank Corp.*
25.1 Form T-1 Statement of Eligibility of The Bank of New York
to
act as trustee under the Amended and Restated Declaration
of
Trust of Patriot Capital Trust I
25.2 Form T-1 Statement of Eligibility of The Bank of New York
to
act as trustee under the Indenture
25.3 Form T-1 Statement of Eligibility of The Bank of New York
to
act as trustee under the Exchange Guarantee for the benefit
of the holders of Exchange Capital Securities of Patriot
Capital Trust I
99.1 Form of Letter of Transmittal
99.2 Form of Notice of Guaranteed Delivery
99.3 Form of Exchange Agent Agreement
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust
Companies and Other Nominees
99.5 Form of Letter to Clients
* Previously filed.
<PAGE>
ITEM 22. UNDERTAKINGS
Each of the undersigned Registrants hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, as amended, each filing of a Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this Registration Statement shall be
deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under
the
Securities Act of 1933 may be permitted to directors, officers
and controlling persons of each undersigned Registrant pursuant
to the foregoing provisions, or otherwise, each Registrant has
been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by each undersigned Registrant of
expenses incurred or paid by a director, officer of controlling
person of each Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer
or controlling person in connection with the securities being
registered, each Registrant will, unless in the opinion of its
counsel the matter has been settled by the controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
The undersigned Registrants hereby undertake to respond to
requests for information that is incorporated by reference into
the Prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form,
within one business day of receipt of such request, and to send
the incorporated documents by first class mail or other equally
prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration
statement through the date of responding to the request.
The undersigned Registrants hereby undertake to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired or involved therein,
that was not the subject of and included in the registration
statement when it became effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, Patriot Bank Corp., Inc. certifies that it has reasonable
grounds to believe that it meets all of the requirements for
filing on Form S-4 and has duly caused this Amendment No. 1 to
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pottstown,
in the Commonwealth of Pennsylvania, on the 29th day of October,
1997.
PATRIOT BANK CORP.
By /s/ Joseph W. Major*
Joseph W. Major
President and Chief
Operating Officer
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/ John H. Diehl* Director October 29, 1997
John H. Diehl
/s/ James B. Elliott* Director October 29, 1997
James B. Elliott
/s/ Gary N. Gieringer* Chairman of Board, October 29, 1997
Gary N. Gieringer Chief Executive
Officer and
Director
/s/ Leonard A. Huff* Director October 29, 1997
Leonard A. Huff
/s/Samuel N. Landis* Director October 29, 1997
Samuel N. Landis
/s/ Joseph W. Major* Director, October 29, 1997
Joseph W. Major President and
Chief Operating
Officer (Principal
Executive Officer)
/s/ Larry V. Thren* Director October 29, 1997
Larry V. Thren
/s/ Richard A. Elko Chief Financial October 29, 1997
Richard A. Elko Officer
* /s/ Richard A. Elko
Richard A. Elko,
Attorney-In-Fact<PAGE>
Pursuant to the requirements of the Securities Act of
1933, Patriot Capital Trust I certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form S-4 and has duly caused this Amendment No. 1 to
registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Pottstown,
and Commonwealth of Pennsylvania, on October 29, 1997.
PATRIOT CAPITAL TRUST I
By:/s/ Richard A. Elko
Richard A. Elko
as Administrative Trustee
By:/s/ Joseph W. Major
Joseph W. Major
as Administrative Trustee
By:/s/Gary N. Gieringer
Gary N. Gieringer
as Administrative Trustee
(FORM OF FACE OF SECURITY)
[IF THE SECURITY IS A GLOBAL SECURITY, INSERT: - THIS
SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS
EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON
OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY
THE DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF
THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE
DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK
CORPORATION ("DTC") TO THE ISSUER OR ITS AGENT FOR REGISTRATION
OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER,
PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.]
<PAGE>
No. R-1 CUSIP No. ______
PATRIOT BANK CORP.
Series B 10.30% EXCHANGE JUNIOR SUBORDINATED
DEFERRABLE INTEREST DEBENTURE
DUE June 1, 2027
Patriot Bank Corp., a Delaware corporation (the
"Company", which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby
promises to pay to _____________ or registered assigns, the
principal sum of _______________ Dollars on June 1, 2027 (the
"Maturity Date"), unless previously redeemed, and to pay interest
on the outstanding principal amount hereof from December 1, or
from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly
provided for, semi-annually (subject to deferral as set forth
herein) in arrears on June 1 and December 1 of each year, com-
mencing June 1, 1998, at the rate of 10.30% per annum until the
principal hereof shall have become due and payable, and on any
overdue principal and premium, if any, and (without duplication
and to the extent that payment of such interest is enforceable
under applicable law) on any overdue installment of interest at
the same rate per annum compounded semi-annually. The amount of
interest payable on any Interest Payment Date shall be computed
on the basis of a 360-day year of twelve 30-day months and, for
any period less than a full calendar month, the number of days
elapsed in such month. In the event that any date on which the
principal of (or premium, if any) or interest on this Security is
payable is not a Business Day, then the payment payable on such
date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any
such delay) except that if such next succeeding Business Day
falls in the next succeeding calendar year, then such payment
shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
Pursuant to the Indenture, in certain circumstances the Company
will be required to pay Additional Sums and Compound Interest
(each as defined in the Indenture) with respect to this Security.
The interest installment so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as
provided in the Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities, as defined
in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be
the 15th day of the month preceding the month in which the rele-
vant interest payment date falls. Any such interest installment
not punctually paid or duly provided for shall forthwith cease to
be payable to the holders on such regular record date and may be
paid to the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of business on
a special record date to be fixed by the Trustee for the payment
of such defaulted interest, notice whereof shall be given to the
holders of Securities not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities
exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, all as more fully
provided in the Indenture.
The principal of (and premium, if any) and interest
(including Additional Sums and Compounded Interest, if any) on
this Security shall be payable at the office or agency of the
Trustee maintained for that purpose in any coin or currency of
the United States of America that at the time of payment is legal
tender for payment of public and private debts; provided,
however, that, payment of interest may be made at the option of
the Company by (i) check mailed to the holder at such address as
shall appear in the Security Register or (ii) by transfer to an
account maintained by the Person entitled thereto, provided that
proper written transfer instructions have been received by the
relevant record date. Notwithstanding the foregoing, so long as
the Holder of this Security is the Property Trustee, the payment
of the principal of (and premium, if any) and interest (including
Additional Sums and Compounded Interest, if any) on this Security
will be made at such place and to such account as may be
designated by the Property Trustee.
The indebtedness evidenced by this Security is, to the
extent provided in the Indenture, subordinate and junior in right
of payment to the prior payment in full of all Senior Indebted-
ness, and this Security is issued subject to the provisions of
the Indenture with respect thereto. Each holder of this Securi-
ty, by accepting the same, (a) agrees to and shall be bound by
such provisions, (b) authorizes and directs the Trustee on his or
her behalf to take such action as may be necessary or appropriate
to acknowledge or effectuate the subordination so provided and
(c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance
hereof, hereby waives all notice of the acceptance of the
subordination provisions contained herein and in the Indenture by
each holder of Senior Indebtedness, whether now outstanding or
hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Security shall not be entitled to any benefit
under the Indenture hereinafter referred to, be valid or become
obligatory for any purpose until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
By acceptance of this Security, the holder agrees to
treat, for United States federal income tax purposes, this
Security as indebtedness.
The provisions of this Security are continued on the
reverse side hereof and such provisions shall for all purposes
have the same effect as though fully set forth at this place.
IN WITNESS WHEREOF, the Company has executed this
certificate this _____ day of _____________________, _______.
PATRIOT BANK CORP.
By________________________________
Name:
Title:
Attest:___________________________
Name:
Title:
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
Dated: __________, _______
THE BANK OF NEW YORK, as Trustee
By________________________________
Authorized Signatory
<PAGE>
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company
(herein sometimes referred to as the "Securities"), specified in
the Indenture, all issued or to be issued under and pursuant to
an Indenture, dated as of June 1, 1997 (the "Indenture"), duly
executed and delivered between the Company and The Bank of New
York, as Trustee (the "Trustee"), to which Indenture reference is
hereby made for a description of the rights, limitations of
rights, obligations, duties and immunities thereunder of the
Trustee, the Company and the holders of the Securities.
Upon the occurrence and continuation of a Special Event
prior to June 1, 2007 (the "Initial Optional Redemption Date"),
the Company shall have the right, at any time within 90 days
following the occurrence of such Special Event, to redeem this
Security in whole (but not in part) at the Special Event Redemp-
tion Price. "Special Event Redemption Price" shall mean, with
respect to any redemption of the Securities following a Special
Event, an amount in cash equal to the greater of (i) 100% of the
principal amount to be redeemed or (ii) the sum, as determined by
a Quotation Agent, of the present values of the principal amount
and premium payable with respect to an Optional Redemption (as
defined below) of this Security on the Initial Optional Redemp-
tion Date, together with scheduled payments of interest on this
Security from the prepayment date to and including the Initial
Optional Redemption Date, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve
30-day months) at the Adjusted Treasury Rate, plus, in the case
of each of clauses (i) and (ii), any accrued but unpaid interest
thereon (including Compounded Interest and Additional Sums, if
any) to the date of such redemption.
In addition, the Company shall have the right to redeem
this Security, in whole or in part, at any time on or after the
Initial Optional Redemption Date (an "Optional Redemption"), at
the redemption prices set forth below (expressed as percentages
of principal to be redeemed) plus, in each case, accrued and
unpaid interest thereon (including Additional Sums and Compounded
Interest, if any) to the applicable date of redemption (the
"Optional Redemption Price") if redeemed during the 12-month
period beginning June 1 of the years indicated below.
Year Percentage
2007 105.150%
2008 104.635%
2009 104.120%
2010 103.605%
2011 103.090%
2012 102.575%
2013 102.060%
2014 101.545%
2015 101.030%
2016 100.515%
2017 and thereafter 100.000%
The optional Redemption Price or the Special Event
Redemption Price, as the case requires, shall be paid prior to
12:00 noon, New York time, on the date of such redemption or at
such earlier time as the Company determines, provided, that the
Company shall deposit with the Trustee an amount sufficient to
pay the applicable Redemption Price by 10:00 a.m., New York City
time, on the date such Redemption Price is to be paid. Any re-
demption pursuant to this paragraph will be made upon not less
than 30 days nor more than 60 days notice. If the Securities are
only partially redeemed by the Company pursuant to an Optional
Redemption, the Securities will be redeemed pro rata or by lot or
by any other method utilized by the Trustee; provided that if, at
the time of redemption, the Securities are registered as a Global
Security, the Depositary shall determine the particular
Securities to be redeemed in accordance with its procedures.
In the event of redemption of this Security in part
only, a new Security or Securities for the unredeemed portion
hereof will be issued in the name of the holder hereof upon the
cancellation hereof.
Notwithstanding the foregoing, any redemption of
Securities by the Company shall be subject to the Company having
received any required regulatory approval.
In case an Event of Default, as defined in the Inden-
ture, shall have occurred and be continuing, the principal of all
of the Securities may be declared, and upon such declaration
shall become, due and payable, in the manner, with the effect and
subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the
Company and the Trustee, with the consent of the holders of a
majority in aggregate principal amount of the Securities at the
time outstanding, as defined in the Indenture, to execute supple-
mental indentures for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
the Indenture or of modifying in any manner the rights of the
holders of the Securities; provided, however, that no such
supplemental indenture shall, without the consent of each holder
of Securities then outstanding and affected thereby, (i) change
the Maturity Date of any Securities, or reduce the principal
amount thereof, or reduce any amount payable on redemption
thereof, or reduce the rate or extend the time of payment of
interest thereon (subject to Article XVI of the Indenture), or
make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or
impair or affect the right of any holder of Securities to insti-
tute suit for the payment thereof, or (ii) reduce the aforesaid
percentage of Securities, the holders of which are required to
consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in
aggregate principal amount of the Securities at the time out-
standing affected thereby, on behalf of all of the holders of the
Securities, to waive any past default in the performance of any
of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default
in the payment of the principal of or premium, if any, or inter-
est on any of the Securities or a default in respect of any
covenant or provision under which the Indenture cannot be modi-
fied or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of
this Security (unless revoked as provided in the Indenture) shall
be conclusive and binding upon such Holder and upon all future
holders and owners of this Security and of any Security issued in
exchange herefor or in place hereof (whether by registration of
transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision
of this Security or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and premium, if any, and interest (in-
cluding Compounded Interest and Additional Sums, if any) on this
Security at the time and place and at the rate and in the money
herein prescribed.
So long as no Event of Default shall have occurred and
be continuing, the Company shall have the right, at any time and
from time to time during the term of the Securities, to defer
payments of interest by extending the interest payment period of
such Securities for a period not exceeding 10 consecutive semi-
annual periods, including the first such semi-annual period
during such extension period, and not extending beyond the
Maturity Date of the Securities (an "Extended Interest Payment
Period") or ending on a date other than an Interest Payment Date,
at the end of which period the Company shall pay all interest
then accrued and unpaid (together with interest thereon at the
rate specified for the Securities to the extent that payment of
such interest is enforceable under applicable law). Before the
termination of any such Extended Interest Payment Period, the
Company may further defer payments of interest by further extend-
ing such Extended Interest Payment Period, provided that such
Extended Interest Payment Period, together with all such previous
and further extensions within such Extended Interest Payment
Period, (i) shall not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extended
Interest Payment Period, (ii) shall not end on any date other
than an Interest Payment Date, and (iii) shall not extend beyond
the Maturity Date of the Securities. Upon the termination of any
such Extended Interest Payment Period and the payment of all
accrued and unpaid interest and any additional amounts then due,
the Company may commence a new Extended Interest Payment Period,
subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or
pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment with respect to, any of
the Company's capital stock (which includes common and preferred
stock) or (ii) make any payment of principal, interest or premi-
um, if any, on or repay or repurchase or redeem any debt securi-
ties of the Company that rank pari passu with or junior in right
of payment to the Securities or (iii) make any guarantee payments
with respect to any guarantee by the Company of the debt securi-
ties of any Subsidiary of the Company (including any Other
Guarantees) if such guarantee ranks pari passu or junior in right
of payment to the Securities (other than (a) dividends or distri-
butions in shares of, or options, warrants or rights to subscribe
for or purchase shares of, Common Stock of the Company, (b) any
declaration of a dividend in connection with the implementation
of a stockholder's rights plan, or the issuance of stock under
any such plan in the future, or the redemption or repurchase of
any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee, (d) as a result of a reclassification of
the Company's capital stock or the exchange or the conversion of
one class or series of the Company's capital stock, for another
class or series of the Company's capital stock, (e) the purchase
of fractional interests in shares of the Company's capital stock
pursuant to the exchange or conversion of such capital stock or
the security being exchanged or converted, and (f) purchases of
Common Stock related to the issuance of Common Stock or rights
under any of the Company's benefit plans for its directors,
officers or employees or any of the Company's dividend reinvest-
ment plans) if at such time (i) there shall have occurred any
event of which the Company has actual knowledge that (a) is or,
with the giving of notice or the lapse of time, or both, would
be, an Event of Default and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (ii) if the
Securities are held by Patriot Capital Trust, the Company shall
be in default with respect to its payment obligations under the
Capital Securities Guarantee or (iii) the Company shall have
given notice of its election of the exercise of its right to
extend the interest payment period and any such extension shall
be continuing.
Subject to (i) the receipt by the Company of any
required regulatory approval and (ii) the receipt by the Company
of an opinion of counsel to the effect that such distribution
will not be a taxable event to holders of Capital Securities, the
Company will have the right at any time to liquidate the Patriot
Capital Trust and cause the Securities to be distributed to the
holders of the Trust Securities in liquidation of the Trust.
The Securities are issuable only in registered form
without coupons in denominations of $1,000.00 and any integral
multiple thereof. As provided in the Indenture and subject to
certain limitations as may be contained herein and therein from
time to time, this Security is transferable by the holder hereof
on the Security Register of the Company, upon surrender of this
Security for registration of transfer at the office or agency of
the Company in the City and State of New York accompanied by a
written instrument or instruments of transfer in form
satisfactory to the Company or the Trustee duly executed by the
holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of authorized denominations
and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service
charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer
of this Security, the Company, the Trustee, any authenticating
agent, any paying agent, any transfer agent and the registrar may
deem and treat the holder hereof as the absolute owner hereof
(whether or not this Security shall be overdue and notwithstand-
ing any notice of ownership or writing hereon made by anyone
other than the Security Registrar) for the purpose of receiving
payment of or on account of the principal hereof and premium, if
any, and (subject to the Indenture) interest due hereon and for
all other purposes, and neither the Company nor the Trustee nor
any authenticating agent nor any paying agent nor any transfer
agent nor any registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the princi-
pal of or premium, if any, or interest on this Security, or for
any claim based hereon, or otherwise in respect hereof, or based
on or in respect of the Indenture, against any incorporator,
stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person,
whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part of the
consideration for the issuance hereof, expressly waived and
released.
All terms used in this Security that are defined in the
Indenture shall have the meanings assigned to them in the Inden-
ture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO CONFLICT OF LAW PROVISIONS THEREOF.
FORM OF EXCHANGE CAPITAL SECURITY CERTIFICATE
[IF THIS EXCHANGE CAPITAL SECURITY IS A GLOBAL CAPITAL
SECURITY, INSERT: THIS EXCHANGE CAPITAL SECURITY IS A GLOBAL
CAPITAL SECURITY WITHIN THE MEANING OF THE TRUST AGREEMENT
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF
THE CLEARING AGENCY. THIS EXCHANGE CAPITAL SECURITY IS
EXCHANGEABLE FOR EXCHANGE CAPITAL SECURITIES REGISTERED IN THE
NAME
OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO
TRANSFER OF THIS EXCHANGE CAPITAL SECURITY (OTHER THAN A TRANSFER
OF THIS EXCHANGE CAPITAL SECURITY AS A WHOLE BY THE CLEARING
AGENCY
TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING
AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.]
[IF THIS EXCHANGE CAPITAL SECURITY IS A GLOBAL
SECURITY,
INSERT: UNLESS THIS EXCHANGE CAPITAL SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55
WATER
STREET, NEW YORK, NEW YORK) TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY EXCHANGE
CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO.
OR
SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY A PERSON IS WRONGFUL SINCE THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
THE EXCHANGE CAPITAL SECURITIES ARE ISSUED, AND MAY BE
TRANSFERRED, ONLY IN BLOCKS HAVING A LIQUIDATION AMOUNT OF NOT
LESS
THAN $100,000 (100 CAPITAL SECURITIES). ANY SUCH TRANSFER OF
EXCHANGE CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION
AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL
EFFECT WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE
THE HOLDER OF SUCH EXCHANGE CAPITAL SECURITIES FOR ANY PURPOSE,
INCLUDING BUT NOT LIMITED TO THE RECEIPT OF DISTRIBUTIONS ON SUCH
EXCHANGE CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED
TO
HAVE NO INTEREST WHATSOEVER IN SUCH EXCHANGE CAPITAL SECURITIES.
THE HOLDER OF THIS EXCHANGE CAPITAL SECURITY BY ITS
ACCEPTANCE HEREOF ALSO AGREES, REPRESENTS AND WARRANTS THAT
EITHER
(i) IT IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO THE EMPLOYEE
RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA") OR
(ii) THE ACQUISITION AND HOLDING OF THIS EXCHANGE CAPITAL
SECURITY
BY IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION
4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR
EXEMPT FROM ANY SUCH PROHIBITION.
<PAGE>
Certificate Number Aggregate Liquidation Amount
CUSIP NO. ______
Exchange Capital Securities
of
Patriot Capital Trust I
10.30% Exchange Capital Securities
(liquidation amount $1,000 per Exchange Capital Security)
Patriot Capital Trust I, a statutory business trust
created under the laws of the State of Delaware (the "Trust"),
hereby certifies that Cede & Co. (the "Holder") is the registered
owner of [____________________ (__) in aggregate liquidation
amount
of Exchange Capital Securities of the Trust](1) [the aggregate
liquidation amount of Exchange Capital Securities of the Trust
specified in Schedule A hereto] (2) representing undivided
beneficial interests in the assets of the Trust designated the
10.30% Series B Capital Securities (liquidation amount $1,000 per
Exchange Capital Security) (the "Exchange Capital Securities").
The Exchange 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 Exchange
Capital
Securities represented hereby are issued and shall in all
respects
be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated as of June 5, 1997, as
the
same may be amended from time to time (the "Trust Agreement"),
including the designation of the terms of the Exchange Capital
Securities as set forth in Annex I to the Trust Agreement.
Capitalized terms used but not defined herein shall have the
meaning given them in the Trust Agreement. The Sponsor will
provide a copy of the Trust Agreement, the Exchange Capital
Securities Guarantee, the Common Securities Guarantee (as may be
appropriate), and the Indenture (including any supplemental
indenture) to a Holder without charge upon written request to the
Trust at its principal place of business.
______________
(1) Insert in Definitive Exchange Capital Securities only.
(2) Insert in Global Exchange Capital Securities only.
<PAGE>
Upon receipt of this certificate, the Holder is bound
by
the Trust Agreement and is entitled to the benefits thereunder
and
to the benefits of the Exchange Capital Securities Guarantee to
the
extent provided therein.
By acceptance, the Holder agrees to treat, for United
States federal income tax purposes, the Debentures as
indebtedness
and the Exchange Capital Securities as evidence of indirect
beneficial ownership in the Debentures.
IN WITNESS WHEREOF, the Trust has executed this
certificate this ________ day of _________________, ____.
PATRIOT CAPITAL TRUST I
By________________________________
Name:
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Exchange Capital Securities referred
to in the within-mentioned Trust Agreement.
Dated: _________________, ____
THE BANK OF NEW YORK, as Property
Trustee
By________________________________
Authorized Signatory
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Exchange Capital Security
will be fixed at a rate per annum of 10.30% (the "Coupon Rate")
of
the liquidation amount of $1,000 per Exchange Capital Security,
such rate being the rate of interest payable on the Debentures to
be held by the Property Trustee. Distributions in arrears for
more
than one semi-annual period will bear interest thereon compounded
semi-annually at the Coupon Rate (to the extent permitted by
applicable law). The term "Distributions", as used herein,
includes such cash distributions and any such interest payable
unless otherwise stated. A Distribution is payable only to the
extent that payments are made in respect of the Debentures held
by
the Property Trustee and to the extent the Property Trustee has
funds on hand legally available therefor.
Distributions on the Exchange Capital Securities will
be
cumulative, will accumulate from the most recent date to which
Distributions have been paid or, if no Distributions have been
paid, from December 1, 1997 and will be payable semi-annually in
arrears, on June 1 and December 1 of each year, commencing on
June
1, 1998, except as otherwise described below. Distributions will
be computed on the basis of a 360-day year consisting of twelve
30-day months and, for any period less than a full calendar
month,
the number of days elapsed in such month. As long as no Event of
Default has occurred and is continuing under the Indenture, the
Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at
any time and from time to time on the Debentures for a period not
exceeding 10 consecutive calendar semi-annual periods, including
the first such semi-annual period during such extension period
(each an "Extension Period"), provided that no Extension Period
shall end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures.
As a consequence of such deferral, Distributions will also be
deferred. Despite such deferral, semi-annual Distributions will
continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate
of interest then accruing on the Debentures) at the Coupon Rate
compounded semi-annually during any such Extension Period. Prior
to the termination of any such Extension Period, the Debenture
Issuer may further defer payments of interest by further
extending
such Extension Period; provided that such Extension Period,
together with all such previous and further extensions within
such
Extension Period, may not exceed 10 consecutive semi-annual
periods, including the first semi-annual period during such
Extension Period, end on a date other than an Interest Payment
Date
for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be
payable
to Holders as they appear on the books and records of the Trust
on
the first record date after the end of the Extension Period.
Upon
the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new
Extension
Period, subject to the above requirements.
Subject to receipt by the Sponsor of any required
regulatory approval and to certain other conditions set forth in
the Trust Agreement and the Indenture, the Property Trustee may,
at
the direction of the Sponsor, at any time liquidate the Trust and
cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any
redemption of the Debentures, cause a Like Amount of the
Securities
to be redeemed by the Trust.
The Exchange Capital Securities shall be redeemable as
provided in the Trust Agreement.
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Exchange 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 Exchange 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
Exchange Capital Security Certificate)
Signature Guarantee***: _______________________________________
_____________
*** Signature must be guaranteed by an "eligible guarantor
institution" that is a bank, stockbroker, savings and loan
association or credit union meeting the requirements of the
Registrar, which requirements include membership or
participation in the Securities Transfer Agents medallion
Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition
to, or in substitution for, STAMP, all in accordance with
the Securities and Exchange Act of 1934, as amended.
====================================
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
Patriot Bank Corp.
Dated as of _________, 1997
====================================<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation............... 5
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.............. 9
SECTION 2.2 Lists of Holders of Securities................ 9
SECTION 2.3 Reports by the Capital Securities Guarantee
Trustee....................................... 10
SECTION 2.4 Periodic Reports to Capital Securities Guarantee
Trustee....................................... 10
SECTION 2.5 Evidence of Compliance with Conditions Precedent10
SECTION 2.6 Events of Default; Waiver...................... 10
SECTION 2.7 Event of Default; Notice....................... 11
SECTION 2.8 Conflicting Interests.......................... 11
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee.............................. 11
SECTION 3.2 Certain Rights of Capital Securities Guarantee
Trustee........................................ 13
SECTION 3.3. Not Responsible for Recitals or Issuance of Ser-
ies B Capital Securities Guarantee............. 16
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee;
Eligibility.....................................16
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee................... 17
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee...................................... 18
SECTION 5.2 Waiver of Notice and Demand.................... 18
SECTION 5.3 Obligations Not Affected....................... 18
SECTION 5.4 Rights of Holders.............................. 19
SECTION 5.5 Guarantee of Payment........................... 19
SECTION 5.6 Subrogation.................................... 20
SECTION 5.7 Independent Obligations........................ 20
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions.................... 20
SECTION 6.2 Ranking....................................... 21
ARTICLE VII
TERMINATION
SECTION 7.1 Termination................................... 22
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation................................... 22
SECTION 8.2 Indemnification............................... 22
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns........................ 23
SECTION 9.2 Amendments.................................... 23
SECTION 9.3 Notices....................................... 23
SECTION 9.4 Benefit....................................... 24
SECTION 9.5 Governing Law................................. 24
<PAGE>
SERIES B CAPITAL SECURITIES GUARANTEE AGREEMENT
This GUARANTEE AGREEMENT (the "Series B Capital
Securities Guarantee"), dated as of _______, 1997, is executed
and delivered by PATRIOT BANK CORP., a Delaware corporation (the
"Guarantor"), and THE BANK OF NEW YORK, a New York banking
corporation, as trustee (the "Capital Securities Guarantee
Trustee"), for the benefit of the Holders (as defined herein)
from time to time of the Series B Capital Securities (as defined
herein) of Patriot Capital Trust I, a Delaware statutory business
trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated
Declaration of Trust (the "Trust Agreement"), dated as of June 5,
1997, among the trustees of the Issuer, the Guarantor, as
sponsor, and the holders from time to time of undivided
beneficial interests in the assets of the Issuer, the Issuer is
issuing on the date hereof 19,000 capital securities, having an
aggregate liquidation amount of $19,000,000, such capital
securities being designated the Series B 10.30% Capital
Securities (collectively the "Series B Capital Securities").
WHEREAS, as incentive for the Holders to exchange the
Series A Capital Securities (as defined herein) for the Series B
Capital Securities, the Guarantor desires irrevocably and
unconditionally to agree, to the extent set forth in this
Series B Capital Securities Guarantee, to pay to the Holders the
Guarantee Payments (as defined below). The Guarantor agrees to
make certain other payments on the terms and conditions set forth
herein.
WHEREAS, the Guarantor executed and delivered a
guarantee agreement dated June 5, 1997 (the "Common Securities
Guarantee"), with substantially identical terms to this Series B
Capital Securities Guarantee, for the benefit of the holders of
the Common Securities (as defined herein), except that if an
Event of Default (as defined in the Trust Agreement) has occurred
and is continuing, the rights of holders of the Common Securities
to receive Guarantee Payments under the Common Securities
Guarantee are subordinated, to the extent and in the manner set
forth in the Common Securities Guarantee, to the rights of
holders of Series A Capital Securities and the Series B Capital
Securities to receive Guarantee Payments under this Series B
Capital Securities Guarantee and the Series A Capital Securities
Guarantee, as the case may be.
NOW, THEREFORE, in consideration of the exchange by
each Holder of Series A Capital Securities for Series B Capital
Securities, which exchange the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers
this Series B Capital Securities Guarantee for the benefit of the
Holders.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Series B Capital Securities Guarantee, unless
the context otherwise requires:
(a) Capitalized terms used in this Series B Capital
Securities Guarantee but not defined in the
preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Terms defined in the Trust Agreement as at the
date of execution of this Series B Capital
Securities Guarantee have the same meaning when
used in this Series B Capital Securities Guarantee
unless otherwise defined in this Series B Capital
Securities Guarantee;
(c) A term defined anywhere in this Series B Capital
Securities Guarantee has the same meaning
throughout;
(d) All references to "the Series B Capital Securities
Guarantee" or "this Series B Capital Securities
Guarantee" are to this Series B Capital Securities
Guarantee as modified, supplemented or amended
from time to time;
(e) All references in this Series B Capital Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Series B Capital Securities
Guarantee, unless otherwise specified;
(f) A term defined in the Trust Indenture Act has the
same meaning when used in this Series B Capital
Securities Guarantee, unless otherwise defined in
this Series B Capital Securities Guarantee or
unless the context otherwise requires; and
(g) A reference to the singular includes the plural
and vice versa.
"Affiliate" has the same meaning as given to that term
in Rule 405 under the Securities Act of 1933, as amended, or any
successor rule thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New
York are authorized or required by law or executive order to
close.
"Capital Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor
Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment pursuant to the terms of this Series B
Capital Securities Guarantee and thereafter means each such
Successor Capital Securities Guarantee Trustee.
"Common Securities" means the securities representing
common undivided beneficial interests in the assets of the
Issuer.
"Corporate Trust Office" means the office of the
Capital Securities Guarantee Trustee at which the corporate trust
business of the Capital Securities Guarantee Trustee shall, at
any particular time, be principally administered, which office at
the date of execution of this Agreement is located at 101 Barclay
Street, 21 West, New York, New York 10286.
"Covered Person" means any Holder or beneficial owner
of Series B Capital Securities.
"Debentures" means the series of subordinated debt
securities of the Guarantor designated the Series B 10.30% Junior
Subordinated Deferrable Interest Debentures due June 1, 2027 held
by the Property Trustee (as defined in the Trust Agreement) of
the Issuer.
"Event of Default" means a default by the Guarantor on
any of its payment or other obligations under this Series B
Capital Securities Guarantee.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Series B
Capital Securities, to the extent not paid or made by the Issuer:
(i) any accumulated and unpaid Distributions (as defined in the
Trust Agreement) that are required to be paid on such Series B
Capital Securities to the extent the Issuer has funds on hand
legally available therefor at such time, (ii) the redemption
price, including all accumulated and unpaid Distributions to the
date of redemption (the "Redemption Price") to the extent the
Issuer has funds on hand legally available therefor at such time,
with respect to any Series B Capital Securities called for
redemption by the Issuer, and (iii) upon a voluntary or involun-
tary termination and liquidation of the Issuer (other than in
connection with the distribution of Debentures to the Holders in
exchange for Series B Capital Securities as provided in the Trust
Agreement), the lesser of (a) the aggregate of the liquidation
amount and all accumulated and unpaid Distributions on the
Series B Capital Securities to the date of payment, to the extent
the Issuer has funds on hand legally available therefor, and
(b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer. If an
Event of Default has occurred and is continuing, no Guarantee
Payments under the Common Securities Guarantee with respect to
the Common Securities or any guarantee payment under any Other
Common Securities Guarantees shall be made until the Holders
shall be paid in full the Guarantee Payments to which they are
entitled under this Series B Capital Securities Guarantee.
"Holder" shall mean any holder, as registered on the
books and records of the Issuer, of any Series B Capital
Securities; provided, however, that, in determining whether the
holders of the requisite percentage of Series B Capital
Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any
Affiliate of the Guarantor.
"Indemnified Person" means the Capital Securities
Guarantee Trustee, any Affiliate of the Capital Securities
Guarantee Trustee, or any officers, directors, shareholders,
members, partners, employees, representatives, nominees,
custodians or agents of the Capital Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of June 1,
1997, among the Guarantor (the "Debenture Issuer") and The Bank
of New York, as trustee, pursuant to which the Debentures are to
be issued to the Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event
specified in Section 5.01 of the Indenture.
"Majority in liquidation amount of the Series B Capital
Securities" means, except as provided by the Trust Indenture Act,
a vote by Holder(s) of more than 50% of the aggregate liquidation
amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accumulated and unpaid
Distributions to the date upon which the voting percentages are
determined) of all Series B Capital Securities.
"Officers' Certificate" means, with respect to any
person, a certificate signed by the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the
Comptroller, the Secretary or an Assistant Secretary of the
Guarantor. Any Officers' Certificate delivered with respect to
compliance with a condition or covenant provided for in this
Series B Capital Securities Guarantee (other than pursuant to
Section 314(a)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the
Officers' Certificate has read the covenant or condition and
the definitions relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion,
is necessary to enable such officer to express an informed
opinion as to whether or not such covenant or condition has
been complied with; and
(c) a statement as to whether, in the opinion of each
such officer, such condition or covenant has been complied
with.
"Other Common Securities Guarantees" shall have the
same meaning as "Other Guarantees" as defined in the Common
Securities Guarantee.
"Other Debentures" means all junior subordinated
debentures issued by the Guarantor from time to time and sold to
any other trust, partnership or other entity affiliated with the
Guarantor that is a financing vehicle of the Guarantor (if any),
in each case similar to the Issuer.
"Other Guarantees" means all guarantees to be issued by
the Guarantor with respect to capital securities (if any) similar
to the Series B Capital Securities issued by any other trust,
partnership or other entity affiliated with the Guarantor that is
a financing vehicle of the Guarantor (if any), in each case
similar to the Issuer.
"Person" means a legal person, including any individu-
al, corporation, estate, partnership, joint venture, association,
joint stock company, limited liability company, trust,
unincorporated association, or government or any agency or
political subdivision thereof, or any other entity of whatever
nature.
"Registration Rights Agreement" means the Registration
Rights Agreement, dated as of June 5, 1997, by and among the
Guarantor, the Issuer and the Initial Purchasers named therein as
such agreement may be amended, modified or supplemented from time
to time.
"Responsible Officer" means any officer within the
Corporate Trust Office of the Capital Securities Guarantee
Trustee, including any vice president, any assistant vice
president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the
Capital Securities Guarantee Trustee customarily performing
functions similar to those performed by any of the above
designated officers and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity
with the particular subject.
"Series A Capital Securities" means the Series A 10.30%
Capital Securities, having an aggregate liquidation amount of
$19,000,000, of the Issuer issued under the Trust Agreement.
"Successor Capital Securities Guarantee Trustee" means
a successor Capital Securities Guarantee Trustee possessing the
qualifications to act as Capital Securities Guarantee Trustee
under Section 4.1.
"Trust Indenture Act" means the Trust Indenture Act of
1939, as amended.
"Trust Securities" means the Common Securities and the
Series A Capital Securities and Series B Capital Securities,
collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Series B Capital Securities Guarantee is
subject to the provisions of the Trust Indenture Act that are
required to be part of this Series B Capital Securities Guarantee
and shall, to the extent applicable, be governed by such
provisions; and
(b) if and to the extent that any provision of this
Series B Capital Securities Guarantee limits, qualifies or
conflicts with the duties imposed by Section 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall
control.
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Capital Securities
Guarantee Trustee (unless the Capital Securities Guarantee
Trustee is otherwise the registrar of the Capital Securities)
with a list, in such form as the Capital Securities Guarantee
Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of such date, (i) within one
Business Day after May 15 and November 15 of each year, and (ii)
at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than
14 days before such List of Holders is given to the Capital
Securities Guarantee Trustee, provided, that the Guarantor shall
not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of
Holders given to the Capital Securities Guarantee Trustee by the
Guarantor. The Capital Securities Guarantee Trustee may destroy
any List of Holders previously given to it on receipt of a new
List of Holders.
(b) The Capital Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and
Section 312(b) of the Trust Indenture Act.
SECTION 2.3 Reports by the Capital Securities Guarantee
Trustee
Within 60 days after December 15 of each year,
commencing December 15, 1997, the Capital Securities Guarantee
Trustee shall provide to the Holders such reports as are required
by Section 313 of the Trust Indenture Act, if any, in the form
and in the manner provided by Section 313 of the Trust Indenture
Act. The Capital Securities Guarantee Trustee shall also comply
with the other requirements of Section 313 of the Trust Indenture
Act.
SECTION 2.4 Periodic Reports to Capital Securities Guarantee
Trustee
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such documents, reports and information as
required by Section 314 (if any) and the compliance certificate
required by Section 314 of the Trust Indenture Act in the form,
in the manner and at the times required by Section 314 of the
Trust Indenture Act provided that such compliance certificate
shall be delivered on or before 120 days after the end of each
fiscal year of the Guarantor. Delivery of such reports,
information and documents to the Capital Securities Guarantee
Trustee is for informational purposes only and the Capital
Securities Guarantee Trustee's receipt of such shall not
constitute constructive notice of any information contained
therein or determinable from information contained therein,
including the Guarantor's compliance with any of its covenants
hereunder (as to which the Capital Securities Guarantee Trustee
is entitled to rely exclusively on Officers' Certificates).
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Capital Securities
Guarantee Trustee such evidence of compliance with any conditions
precedent, if any, provided for in this Series B Capital
Securities Guarantee that relate to any of the matters set forth
in Section 314(c) of the Trust Indenture Act. Any certificate or
opinion required to be given by an officer pursuant to Section
314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in liquidation amount of
Series B Capital Securities may, by vote, on behalf of all
Holders, waive any past Event of Default and its consequences.
Upon such waiver, any such Event of Default shall cease to exist,
and any Event of Default arising therefrom shall be deemed to
have been cured, for every purpose of this Series B Capital
Securities Guarantee, but no such waiver shall extend to any
subsequent or other default or Event of Default or impair any
right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Capital Securities Guarantee Trustee shall,
within 90 days after the occurrence of a default with respect to
this Capital Securities Guarantee, mail by first class postage
prepaid, to all Holders, notices of all defaults actually known
to a Responsible Officer, unless such defaults have been cured
before the giving of such notice, provided, that, except in the
case of default in the payment of any Guarantee Payment, the
Capital Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors,
the executive committee, or a trust committee of directors and/or
a Responsible Officer in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Capital Securities Guarantee Trustee shall not
be deemed to have knowledge of any Event of Default unless the
Capital Securities Guarantee Trustee shall have received written
notice from the Guarantor, or a Responsible Officer charged with
the administration of the Trust Agreement shall have obtained
actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Trust Agreement shall be deemed to be specifically
described in this Series B Capital Securities Guarantee for the
purposes of clause (i) of the first proviso contained in Section
310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Capital Securities
Guarantee Trustee
(a) This Series B Capital Securities Guarantee shall
be held by the Capital Securities Guarantee Trustee for the
benefit of the Holders, and the Capital Securities Guarantee
Trustee shall not transfer this Series B Capital Securities
Guarantee to any Person except a Holder exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Capital
Securities Guarantee Trustee on acceptance by such Successor
Capital Securities Guarantee Trustee of its appointment to act as
Successor Capital Securities Guarantee Trustee. The right, title
and interest of the Capital Securities Guarantee Trustee shall
automatically vest in any Successor Capital Securities Guarantee
Trustee, and such vesting and succession of title shall be
effective whether or not conveyancing documents have been
executed and delivered pursuant to the appointment of such
Successor Capital Securities Guarantee Trustee.
(b) If an Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Capital
Securities Guarantee Trustee shall enforce this Series B Capital
Securities Guarantee for the benefit of the Holders.
(c) The Capital Securities Guarantee Trustee, before
the occurrence of any Event of Default and after the curing of
all Events of Default that may have occurred, shall undertake to
perform only such duties as are specifically set forth in this
Series B Capital Securities Guarantee, and no implied covenants
shall be read into this Series B Capital Securities Guarantee
against the Capital Securities Guarantee Trustee. In case an
Event of Default has occurred (that has not been cured or waived
pursuant to Section 2.6) and is actually known to a Responsible
Officer, the Capital Securities Guarantee Trustee shall exercise
such of the rights and powers vested in it by this Series B
Capital Securities Guarantee, and use the same degree of care and
skill in its exercise thereof, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own
affairs.
(d) No provision of this Series B Capital Securities
Guarantee shall be construed to relieve the Capital Securities
Guarantee Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct,
except that:
(i) prior to the occurrence of any Event of Default
and after the curing or waiving of all such Events of
Default that may have occurred:
(A) the duties and obligations of the Capital
Securities Guarantee Trustee shall be determined solely
by the express provisions of this Series B Capital
Securities Guarantee, and the Capital Securities
Guarantee Trustee shall not be liable except for the
performance of such duties and obligations as are
specifically set forth in this Series B Capital
Securities Guarantee, and no implied covenants or
obligations shall be read into this Series B Capital
Securities Guarantee against the Capital Securities
Guarantee Trustee; and
(B) in the absence of bad faith on the part of
the Capital Securities Guarantee Trustee, the Capital
Securities Guarantee Trustee may conclusively rely, as
to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates
or opinions furnished to the Capital Securities
Guarantee Trustee and conforming to the requirements of
this Series B Capital Securities Guarantee; but in the
case of any such certificates or opinions that by any
provision hereof are specifically required to be
furnished to the Capital Securities Guarantee Trustee,
the Capital Securities Guarantee Trustee shall be under
a duty to examine the same to determine whether or not
they conform to the requirements of this Series B
Capital Securities Guarantee;
(ii) the Capital Securities Guarantee Trustee shall not
be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the
Capital Securities Guarantee Trustee was negligent in
ascertaining the pertinent facts upon which such judgment
was made;
(iii) the Capital Securities Guarantee Trustee shall
not be liable with respect to any action taken or omitted to
be taken by it in good faith in accordance with the
direction of the Holders of a Majority in liquidation amount
of the Series B Capital Securities relating to the time,
method and place of conducting any proceeding for any remedy
available to the Capital Securities Guarantee Trustee, or
exercising any trust or power conferred upon the Capital
Securities Guarantee Trustee under this Series B Capital
Securities Guarantee; and
(iv) no provision of this Series B Capital Securities
Guarantee shall require the Capital Securities Guarantee
Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or
powers, if the Capital Securities Guarantee Trustee shall
have reasonable grounds for believing that the repayment of
such funds or liability is not reasonably assured to it
under the terms of this Series B Capital Securities
Guarantee or indemnity, reasonably satisfactory to the
Capital Securities Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Capital Securities Guarantee
Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Capital Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or
refraining from acting, upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor
contemplated by this Series B Capital Securities Guarantee
may be sufficiently evidenced by an Officers' Certificate.
(iii) Whenever, in the administration of this Series B
Capital Securities Guarantee, the Capital Securities
Guarantee Trustee shall deem it desirable that a matter be
proved or established before taking, suffering or omitting
any action hereunder, the Capital Securities Guarantee
Trustee (unless other evidence is herein specifically
prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate
which, upon receipt of such request, shall be promptly
delivered by the Guarantor.
(iv) The Capital Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration
of any instrument (or any rerecording, refiling or
registration thereof).
(v) The Capital Securities Guarantee Trustee may
consult with counsel of its selection, and the advice or
opinion of such counsel with respect to legal matters shall
be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in
good faith and in accordance with such advice or opinion.
Such counsel may be counsel to the Guarantor or any of its
Affiliates and may include any of its employees. The Capi-
tal Securities Guarantee Trustee shall have the right at any
time to seek instructions concerning the administration of
this Series B Capital Securities Guarantee from any court of
competent jurisdiction.
(vi) The Capital Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers
vested in it by this Series B Capital Securities Guarantee
at the request or direction of any Holder, unless such
Holder shall have provided to the Capital Securities Guaran-
tee Trustee such security and indemnity, reasonably satis-
factory to the Capital Securities Guarantee Trustee, against
the costs, expenses (including attorneys' fees and expenses
and the expenses of the Capital Securities Guarantee
Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request
or direction, including such reasonable advances as may be
requested by the Capital Securities Guarantee Trustee; pro-
vided that, nothing contained in this Section 3.2(a)(vi)
shall be taken to relieve the Capital Securities Guarantee
Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by
this Series B Capital Securities Guarantee.
(vii) The Capital Securities Guarantee Trustee shall
not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Capital
Securities Guarantee Trustee, in its discretion, may make
such further inquiry or investigation into such facts or
matters as it may see fit.
(viii) The Capital Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or by or through agents,
nominees, custodians or attorneys, and the Capital Securiti-
es Guarantee Trustee shall not be responsible for any mis-
conduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
(ix) Any action taken by the Capital Securities Guar-
antee Trustee or its agents hereunder shall bind the Hold-
ers, and the signature of the Capital Securities Guarantee
Trustee or its agents alone shall be sufficient and effec-
tive to perform any such action. No third party shall be
required to inquire as to the authority of the Capital
Securities Guarantee Trustee to so act or as to its compli-
ance with any of the terms and provisions of this Series B
Capital Securities Guarantee, both of which shall be conclu-
sively evidenced by the Capital Securities Guarantee Truste-
e's or its agent's taking such action.
(x) Whenever in the administration of this Series B
Capital Securities Guarantee the Capital Securities Guaran-
tee Trustee shall deem it desirable to receive instructions
with respect to enforcing any remedy or right or taking any
other action hereunder, the Capital Securities Guarantee
Trustee (i) may request instructions from the Holders of a
Majority in liquidation amount of the Series B Capital
Securities, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions
are received, and (iii) shall be protected in conclusively
relying on or acting in accordance with such instructions.
(xi) The Capital Securities Guarantee Trustee shall
not be liable for any action taken, suffered, or omitted to
be taken by it in good faith, without negligence, and rea-
sonably believed by it to be authorized or within the dis-
cretion or rights or powers conferred upon it by this Seri-
es B Capital Securities Guarantee.
(b) No provision of this Series B Capital Securities
Guarantee shall be deemed to impose any duty or obligation on the
Capital Securities Guarantee Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal,
or in which the Capital Securities Guarantee Trustee shall be
unqualified or incompetent in accordance with applicable law, to
perform any such act or acts or to exercise any such right,
power, duty or obligation. No permissive power or authority
available to the Capital Securities Guarantee Trustee shall be
construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Ser-
ies B Capital Securities Guarantee
The recitals contained in this Series B Capital Securi-
ties Guarantee shall be taken as the statements of the Guarantor,
and the Capital Securities Guarantee Trustee does not assume any
responsibility for their correctness. The Capital Securities
Guarantee Trustee makes no representation as to the validity or
sufficiency of this Series B Capital Securities Guarantee.
ARTICLE IV
CAPITAL SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Capital Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Capital Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business
under the laws of the United States of America or any State
or Territory thereof or of the District of Columbia, or a
corporation or Person permitted by the Securities and Ex-
change Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital
and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authori-
ty. If such corporation publishes reports of condition at
least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above,
then, for the purposes of this Section 4.1(a)(ii), the com-
bined 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) Trustee shall cease to be eligible to so act under
Section
4.1(a), the Capital Securities Guarantee Trustee shall imme-
diately resign in the manner and with the effect set out in
Section 4.2(c).
(c) If the Capital Securities Guarantee Trustee has or
shall acquire any "conflicting interest" within the meaning of
Section 310(b) of the Trust Indenture Act, the Capital Securities
Guarantee Trustee and Guarantor shall in all respects comply with
the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.2 Appointment, Removal and Resignation of Capital
Securities Guarantee Trustee
(a) Subject to Section 4.2(b), the Capital Securities
Guarantee Trustee may be appointed or removed without cause at
any time by the Guarantor except during an Event of Default.
(b) The Capital Securities Guarantee Trustee shall not
be removed in accordance with Section 4.2(a) until a Successor
Capital Securities Guarantee Trustee has been appointed and has
accepted such appointment by written instrument executed by such
Successor Capital Securities Guarantee Trustee and delivered to
the Guarantor.
(c) The Capital Securities Guarantee Trustee shall
hold office until a Successor Capital Securities Guarantee
Trustee shall have been appointed or until its removal or resig-
nation. The Capital Securities Guarantee Trustee may resign from
office (without need for prior or subsequent accounting) by an
instrument in writing executed by the Capital Securities Guaran-
tee Trustee and delivered to the Guarantor, which resignation
shall not take effect until a Successor Capital Securities
Guarantee Trustee has been appointed and has accepted such ap-
pointment by instrument in writing executed by such Successor
Capital Securities Guarantee Trustee and delivered to the Guaran-
tor and the resigning Capital Securities Guarantee Trustee.
(d) If no Successor Capital Securities Guarantee
Trustee shall have been appointed and accepted appointment as
provided in this Section 4.2 within 60 days after delivery of an
instrument of removal or resignation, the Capital Securities
Guarantee Trustee resigning or being removed may petition any
court of competent jurisdiction for appointment of a Successor
Capital Securities Guarantee Trustee. Such court may thereupon,
after prescribing such notice, if any, as it may deem proper,
appoint a Successor Capital Securities Guarantee Trustee.
(e) No Capital Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Capital
Securities Guarantee Trustee.
(f) Upon termination of this Series B Capital Securi-
ties Guarantee or removal or resignation of the Capital Securiti-
es Guarantee Trustee pursuant to this Section 4.2, the Guarantor
shall pay to the Capital Securities Guarantee Trustee all amounts
due to the Capital Securities Guarantee Trustee accrued to the
date of such termination, removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to
pay in full to the Holders the Guarantee Payments (without
duplication of amounts theretofore paid by the Issuer), as and
when due, regardless of any defense, right of set-off or counter-
claim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders
or by causing the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of
this Series B Capital Securities Guarantee and of any liability
to which it applies or may apply, presentment, demand for pay-
ment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of
redemption and all other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of
the Guarantor under this Series B Capital Securities Guarantee
shall in no way be affected or impaired by reason of the happen-
ing from time to time of any of the following:
(a) the release or waiver, by operation of law or
otherwise, of the performance or observance by the Issuer of any
express or implied agreement, covenant, term or condition relat-
ing to the Series B Capital Securities to be performed or ob-
served by the Issuer;
(b) the extension of time for the payment by the
Issuer of all or any portion of the Distributions, Redemption
Price, Liquidated Damages or any other sums payable under the
terms of the Series B Capital Securities or the extension of time
for the performance of any other obligation under, arising out
of, or in connection with, the Series B Capital Securities (other
than an extension of time for payment of Distributions,
Redemption Price, Liquidated Damages or other sum payable that
results from the extension of any interest payment period on the
Debentures permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence
on the part of the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred on the Holders
pursuant to the terms of the Series B Capital Securities, or any
action on the part of the Issuer granting indulgence or extension
of any kind;
(d) the voluntary or involuntary liquidation, dissolu-
tion, sale of any collateral, receivership, insolvency, bank-
ruptcy, assignment for the benefit of creditors, reorganization,
arrangement, composition or readjustment of debt of, or other
similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the
Series B Capital Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of
a guarantor, it being the intent of this Section 5.3 that the
obligations of the Guarantor with respect to the Guarantee
Payments shall be absolute and unconditional under any and all
circumstances.
There shall be no obligation of the Holders to give
notice to, or obtain consent of, the Guarantor with respect to
the happening of any of the foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of
the Series B Capital Securities have the right to direct the
time, method and place of conducting any proceeding for any
remedy available to the Capital Securities Guarantee Trustee in
respect of this Series B Capital Securities Guarantee or exer-
cising any trust or power conferred upon the Capital Securities
Guarantee Trustee under this Series B Capital Securities Guaran-
tee.
(b) If the Capital Securities Guarantee Trustee fails
to enforce such Series B Capital Securities Guarantee, any Holder
may institute a legal proceeding directly against the Guarantor
to enforce the Capital Securities Guarantee Trustee's rights
under this Series B Capital Securities Guarantee, without first
instituting a legal proceeding against the Issuer, the Capital
Securities Guarantee Trustee or any other person or entity. The
Guarantor waives any right or remedy to require that any action
be brought first against the Issuer or any other person or entity
before proceeding directly against the Guarantor.
SECTION 5.5 Guarantee of Payment
This Series B Capital Securities Guarantee creates a
guarantee of payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any)
rights of the Holders against the Issuer in respect of any
amounts paid to such Holders by the Guarantor under this Series B
Capital Securities Guarantee; provided, however, that the Guaran-
tor shall not (except to the extent required by mandatory provi-
sions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reim-
bursement or other agreement, in all cases as a result of payment
under this Series B Capital Securities Guarantee, if, at the time
of any such payment, any amounts are due and unpaid under this
Series B Capital Securities Guarantee. If any amount shall be
paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and
to pay over such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereun-
der are independent of the obligations of the Issuer with respect
to the Series B Capital Securities, and that the Guarantor shall
be liable as principal and as debtor hereunder to make Guarantee
Payments pursuant to the terms of this Series B Capital Securi-
ties Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section
5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Capital Securities remain outstanding,
the Guarantor shall not (i) declare or pay any dividends or
distributions on, or redeem, purchase, acquire, or make a liqui-
dation payment with respect to, any of the Guarantor's capital
stock (which includes common and preferred stock) or (ii) make
any payment of principal of or premium, if any, or interest on or
repay, repurchase or redeem any debt securities of the Guarantor
(including any Other Debentures) that rank pari passu with or
junior in right of payment to the Debentures or (iii) make any
guarantee payments with respect to any guarantee by the Guarantor
of the debt securities of any subsidiary of the Guarantor (in-
cluding Other Guarantees) if such guarantee ranks pari passu with
or junior in right of payment to the Debentures (other than (a)
dividends or distributions in shares of, or options, warrants,
rights to subscribe for or purchase shares of, common stock of
the Guarantor, (b) any declaration of a dividend in connection
with the implementation of a stockholders' rights plan, or the
issuance of stock under any such plan in the future, or the
redemption or repurchase of any such rights pursuant thereto, (c)
payments under this Series B Capital Securities Guarantee or the
Series A Capital Securities Guarantee, (d) as a result of a
reclassification of the Guarantor's capital stock or the exchange
or the conversion of one class or series of the Guarantor's
capital stock for another class or series of the Guarantor's
capital stock, (e) the purchase of fractional interests in shares
of the Guarantor's capital stock pursuant to the conversion or
exchange provisions of such capital stock or the security being
converted or exchanged, and (f) purchases of common stock related
to the issuance of common stock or rights under any of the
Guarantor's benefit plans for its directors, officers or employ-
ees or any of the Guarantor's dividend reinvestment plans) if at
such time (i) there shall have occurred any event of which the
Guarantor has actual knowledge that (a) is, or with the giving of
notice or the lapse of time, or both, would be an Indenture Event
of Default and (b) in respect of which the Guarantor shall not
have taken reasonable steps to cure, (ii) if such Debentures are
held by the Property Trustee, the Guarantor shall be in default
with respect to its payment of any obligations under this
Series B Capital Securities Guarantee or (iii) the Guarantor
shall have given notice of its election of the exercise of its
right to extend the interest payment period pursuant to Section
16.01 of the Indenture and any such extension shall be continu-
ing.
SECTION 6.2 Ranking
This Series B Capital Securities Guarantee will con-
stitute an unsecured obligation of the Guarantor and will rank
(i) subordinate and junior in right of payment to Senior Indebt-
edness (as defined in the Indenture), to the same extent and in
the same manner that the Debentures are subordinated to Senior
Indebtedness pursuant to the Indenture (except as indicated
below), it being understood that the terms of Article XV of the
Indenture shall apply to the obligations of the Guarantor under
this Common Securities Guarantee as if (x) such Article XV were
set forth herein in full and (y) such obligations were substitut-
ed for the term "Securities" appearing in such Article XV, except
that with respect to Section 15.03 of the Indenture only, the
term "Senior Indebtedness" shall mean all liabilities of the
Guarantor, whether or not for money borrowed (other than obliga-
tions in respect of Other Guarantees), (ii) pari passu with the
most senior preferred or preference stock now or hereafter issued
by the Guarantor, any guarantee now or hereafter entered into by
the Guarantor in respect of any preferred or preference stock of
any Affiliate of the Guarantor, any Other Guarantee and any Other
Common Securities Guarantee, and (iii) senior to the Guarantor's
capital stock.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Series B Capital Securities Guarantee shall termi-
nate (i) upon full payment of the Redemption Price (as defined in
the Trust Agreement) of all Series B Capital Securities, or (ii)
upon liquidation of the Issuer, the full payment of the amounts
payable in accordance with the Trust Agreement or the distribu-
tion of the Debentures to the Holders. Notwithstanding the
foregoing, this Capital Securities Guarantee will continue to be
effective or will be reinstated, as the case may be, if at any
time any Holder must restore payment of any sums paid under the
Series B Capital Securities or under this Series B Capital
Securities Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible
or accountable in damages or otherwise to the Guarantor or any
Covered Person for any loss, damage or claim incurred by reason
of any act or omission performed or omitted by such Indemnified
Person in good faith in accordance with this Series B Capital
Securities Guarantee and in a manner that such Indemnified Person
reasonably believed to be within the scope of the authority con-
ferred on such Indemnified Person by this Series B Capital
Securities Guarantee or by law, except that an Indemnified Person
shall be liable for any such loss, damage or claim incurred by
reason of such Indemnified Person's negligence or willful miscon-
duct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in
relying in good faith upon the records of the Guarantor and upon
such information, opinions, reports or statements presented to
the Guarantor by any Person as to matters the Indemnified Person
reasonably believes are within such other Person's professional
or expert competence and who has been selected with reasonable
care by or on behalf of the Guarantor, including information,
opinions, reports or statements as to the value and amount of the
assets, liabilities, profits, losses, or any other facts perti-
nent to the existence and amount of assets from which Distribu-
tions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified
Person for, and to hold each Indemnified Person harmless against,
any and all loss, liability, damage, claim or expense incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against,
or investigating, any claim or liability in connection with the
exercise or performance of any of its powers or duties hereunder.
The obligation to indemnify as set forth in this Section 8.2
shall survive the termination of this Series B Capital Securities
Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Se-
ries B Capital Securities Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Guarantor
and shall inure to the benefit of the Holders then outstanding.
SECTION 9.2 Amendments
Except with respect to any changes that do not materi-
ally adversely affect the rights of Holders (in which case no
consent of Holders will be required), this Series B Capital
Securities Guarantee may only be amended with the prior approval
of the Holders of a Majority in liquidation amount of the Securi-
ties (including the stated amount that would be paid on redemp-
tion, liquidation or otherwise, plus accrued and unpaid Distribu-
tions to the date upon which the voting percentages are deter-
mined). The provisions of the Trust Agreement with respect to
consents to amendments thereof (whether at a meeting or other-
wise) shall apply to the giving of such approval.
SECTION 9.3 Notices
All notices provided for in this Series B Capital
Securities Guarantee shall be in writing, duly signed by the
party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administra-
tive Trustee at the Issuer's mailing address set forth below (or
such other address as the Issuer may give notice of to the
Holders and the Capital Securities Guarantee Trustee):
Patriot Capital Trust I
c/o Patriot Bank Corp.
High and Hanover Streets
Pottstown, PA 19464
Attention: Administrative Trustee
Telecopy: (610) 323-1500
(b) If given to the Capital Securities Guarantee
Trustee, at the Capital Securities Guarantee Trustee's mailing
address set forth below (or such other address as the Capital
Securities Guarantee Trustee may give notice of to the Holders
and the Issuer):
The Bank of New York
101 Barclay Street, 21 West
New York, New York 10286
Attention: Corporate Trust Trustee
Administration
Telecopy: (212) 815-5915
(c) If given to the Guarantor, at the Guarantor's
mailing address set forth below (or such other address as the
Guarantor may give notice of to the Holders and the Capital
Securities Guarantee Trustee):
Patriot Bank Corp.
High and Hanover Streets
Pottstown, PA 19464
Attention: Richard A. Elko
Telecopy: (610) 323-1500
(d) If given to any Holder, at the address set forth
on the books and records of the Issuer.
All such notices shall be deemed to have been given
when received in person, telecopied with receipt confirmed, or
mailed by first class mail, postage prepaid except that if a
notice or other document is refused delivery or cannot be deliv-
ered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
SECTION 9.4 Benefit
This Series B Capital Securities Guarantee is solely
for the benefit of the Holders and, subject to Section 3.1(a), is
not separately transferable from the Series B Capital Securities.
SECTION 9.5 Governing Law
THIS SERIES B CAPITAL SECURITIES GUARANTEE SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF
LAWS PRINCIPLES THEREOF.
THIS SERIES B CAPITAL SECURITIES GUARANTEE is executed
as of the day and year first above written.
PATRIOT BANK CORP., as Guarantor
By________________________________
Name:
Title:
THE BANK OF NEW YORK, as Capital
Securities Guarantee Trustee
By________________________________
Name:
Title: Authorized Signatory
October __, 1997
Patriot Capital Trust I
Patriot Bank Corp.
High and Hanover Streets
Pottstown, Pennsylvania 19464
Ladies and Gentlemen:
We have acted as counsel to Patriot Bank Corp., a Delaware
corporation (the "Company"), and Patriot Capital Trust I, a
business trust formed under the Business Trust Act of the State
of Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del
L. Sec. 3801 et. seq.) (the "Trust"), in connection with the
preparation of the Registration Statement on Form S-4 filed by
the Company and the Trust with respect to the registration under
the Securities Act of 1933, as amended (the "Act"), of (i) the
guarantee by the Company of 19,000 of the Trust's 10.30% exchange
capital securities, liquidation amount of $1,000 per capital
security (the "Exchange Capital Securities") with respect to
distributions and payments upon liquidation, redemption and
otherwise (the "Exchange Guarantee"), (ii) $19,000,000 principal
amount of 10.30% Exchange Junior Subordinated Deferrable Interest
Debentures due June 1, 2027 (the "Exchange Junior Subordinated
Debentures") to be issued by the Company and (iii) the Exchange
Capital Securities.
This opinion is being provided in accordance with the
requirements of Item 601(b)(5) of Regulation S-K under the
Securities Act of 1933, as amended (the "Act").
In connection with this opinion, we have reviewed originals
or copies, certified or otherwise identified to our satisfaction,
of the following documents:
(i) the Registration Statement on Form S-4 (File
No. 333-______) as filed by the Company and the Trust with the
Securities and Exchange Commission (the "Commission") on
October ___, 1997 under the Act, and Amendment No. 1 thereto
filed with the Commission on October __, 1997 (such Registration
Statement, as so amended, being hereinafter referred to as the
"Registration Statement");
(ii) the Certificate of Trust of the Trust filed with the
Secretary of State of the State of Delaware on May 29, 1997;
(iii) the Amended and Restated Declaration of Trust of the
Trust, dated as of June 5, 1997 (the "Declaration"), among
Joseph W. Major, Gary N. Gieringer, and Richard A. Elko, as
administrative trustees, The Bank of New York, as property
trustee (the "Property Trustee") and The Bank of New York
(Delaware), as Delaware trustee;
(iv) the form of the Exchange Capital Securities and a
specimen certificate thereof;
(v) an executed copy of the Registration Rights Agreement,
dated as of June 5, 1997 (the "Registration Agreement"), among
the Company, the Trust and each of Sandler O'Neill & Partners,
L.P. and Janney Montgomery Scott Inc.;
(vi) an executed copy of the Indenture, dated as of June 1,
1997 (the "Indenture"), between The Bank of New York, as
Indenture Trustee, and the Company;
(vii) the form of the Exchange Junior Subordinated
Debentures and a specimen certificate thereof;
(viii) the Exchange Guarantee;
(ix) the Articles of Incorporation and Bylaws of the
Company as certified by the Secretary of the Company, and
(x) resolutions adopted by the Board of Directors of the
Company on September 25, 1997 and May 19, 1997 as certified by
the Secretary of the Company.
_____________________________________
Based upon our review of the foregoing documents, and
subject to the qualifications set forth below, it is our opinion
that when the Registration Statement becomes effective:
1. The Exchange Guarantee has been duly authorized by
the Company, and when (i) the Declaration and Indenture have been
qualified under the Trust Indenture Act of 1939, as amended, and
(ii) the Exchange Guarantee is duly executed and delivered by the
Company and issued in the exchange offer as contemplated by the
Registration Agreement and the Registration Statement, the
Exchange Guarantee will constitute a valid, legal and binding
agreement of the Company in favor of the holders of Exchange
Capital Securities, enforceable against the Company in accordance
with its terms, except to the extent that enforcement thereof may
be limited by (1) bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws now or
hereafter in effect relating to creditors' rights generally and
(2) general principles of equity (regardless of whether
enforceability is considered in a proceeding at law or in
equity).
2. The Exchange Junior Subordinated Debentures have
been duly authorized for issuance by the Company, and when
(i) the Declaration and Indenture have been qualified under the
Trust Indenture Act of 1939, as amended, and (ii) the Exchange
Junior Subordinated Debentures are duly executed, authenticated
and issued in accordance with the Indenture and delivered and
issued in the exchange offer as contemplated by the Registration
Agreement and the Registration Statement, the Exchange Junior
Subordinated Debentures will constitute valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, except to the extent that
enforcement thereof may be limited by (1) bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other
similar laws now or hereafter in effect relating to creditors'
rights generally and (2) general principles of equity (regardless
of whether enforceability is considered in a proceeding at law or
in equity).
3. The Exchange Capital Securities have been duly
authorized for issuance by the Trust, and when (i) the
Declaration has been qualified under the Trust Indenture Act of
1939, as amended, and (ii) the Exchange Capital Securities are
duly executed, authenticated and issued in accordance with the
Declaration and delivered and issued in the exchange offer as
contemplated by the Registration Agreement and the Registration
Statement, the Exchange Capital Securities will represent,
subject to the qualifications set forth in paragraph 4 below,
fully paid and nonassessable undivided beneficial interests in
the assets of the Trust and will entitle the holders thereof to
the benefits of the Declaration except to the extent that
enforcement of the Declaration may be limited by (1) bankruptcy,
insolvency, reorganization, moratorium or other similar laws now
or hereafter in effect relating to creditors' rights generally
and (2) general principles of equity regardless of whether
enforcement is considered in a proceeding in equity or at law.
4. The holders of the Exchange Capital Securities
will be entitled to the same limitation of personal liability
extended to stockholders of private corporations for profit
organized under the General Corporation Law of the State of
Delaware. We bring to your attention, however, that the holders
of the Exchange Capital Securities may be obligated, pursuant to
the Declaration, to (i) provide indemnity and/or security in
connection with, and pay taxes or governmental charges arising
from, transfers of Exchange Capital Securities and (ii) provide
security and indemnity in connection with requests of or
directions to the Property Trustee to exercise its rights and
powers under the Declaration.
___________________________
In providing this opinion we have assumed, without
investigation, the authenticity of documents submitted to us as
originals, the conformity to the originals of any document
submitted to us as a copy, the authenticity of the originals of
such documents submitted to us as copies, the genuineness of all
signatures and the legal capacities of natural persons. In
addition, we have assumed that each of the entities or persons
other than the Company, the Trust and their respective
representatives executing the documents had the power and
authority to enter into and perform all of its obligations under
such documents, and have also assumed the due execution and
delivery of these documents by each such entity or person.
We hereby consent to the filing of this opinion with the
Commission as an exhibit to the Registration Statement. We also
consent to the reference to our firm under the caption "Validity
of Exchange Securities" in the prospectus which forms a part of
the Registration Statement. In giving this consent, we do not
thereby admit that we are included in the category of persons
whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission.
This opinion is expressed as of the date hereof, and we
disclaim any undertaking to advise you of any subsequent changes
in the facts stated or assumed herein or of any subsequent
changes in applicable law.
Very truly yours,
/s/ STEVENS & LEE
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
November __, 1997
Patriot Capital Trust I
Patriot Bank Corp.
c/o Patriot Bank Corp.
High and Hanover Streets
Pottstown, PA 19464
Re: Patriot Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Patriot
Bank Corp., a Delaware corporation (the "Company) and Patriot
Capital Trust I, a Delaware business trust (the "Trust"), in
connection with the matters set forth herein. At your request,
this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set
forth, our examination of documents has been limited to the
examination of originals or copies of the following:
(a) The Certificate of Trust of the Trust (the
"Certificate"), dated May 29, 1997, as filed in the office of
the Secretary of State of the State of Delaware (the "Secretary
of State") on May 29, 1997;
(b) The Declaration of Trust, dated as of May 29,
1997, as amended by the Amended and Restated Declaration of
Trust, dated as of June 5, 1997 (the "Declaration"), among
Patriot Bank Corp., as Sponsor (the "Sponsor"), BNY(DE), as
Delaware trustee (the "Delaware Trustee"), The Bank of New
York, as Property Trustee and the Administrative Trustees named
therein;
(c) The Registration Statement (the "Registration
Statement") on Form S-4, relating to the Capital Securities of
the Trust representing preferred undivided beneficial interests
in the Trust (each, a "Capital Security" and collectively, the
"Capital Securities"), as filed by the Company and the Trust
with the Securities and Exchange Commission on October 14,
1997;
(d) A Certificate of Good Standing for the Trust,
dated October __, 1997, obtained from the Secretary of State.
Initially capitalized terms used herein and not
otherwise defined are used as defined in the Declaration.
For purposes of this opinion, we have not reviewed
any documents other than the documents listed in paragraphs (a)
through (d) above. In particular, we have not reviewed any
document (other than the documents listed in paragraphs (a)
through (d) above) that is referred to in or incorporated by
reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not
reviewed that is inconsistent with the opinions stated herein.
We have conducted no independent factual investigation of our
own but rather have relied solely upon the foregoing documents,
the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we
have assumed to be true, complete and accurate in all material
respects.
With respect to all documents examined by us, we have
assumed (i) the authenticity of all documents submitted to us
as authentic originals, (ii) the conformity with the originals
of all documents submitted to us as copies or forms, and (iii)
the genuineness of all signatures.
For purposes of this opinion, we have assumed (i)
that the Declaration constitutes the entire agreement among the
parties thereto with respect to the subject matter thereof,
including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the
Certificate of Trust are in full force and effect and have not
been amended, (ii) except to the extent provided in paragraph
1 below, the due creation or due organization or due formation,
as the case may be, and valid existence in good standing of
each party to the documents examined by us under the laws of
the jurisdiction governing its creation, organization or
formation, (iii) the legal capacity of natural persons who are
parties to the documents examined by us, (iv) that each of the
parties to the documents examined by us has the power and
authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization,
execution and delivery by all parties thereto of all documents
examined by us, (vi) the receipt by each Person to whom a
Capital Security is to be issued by the Trust (collectively,
the "Capital Security Holders") of a Capital Security
Certificate for such Capital Security and the payment for the
Capital Security, in accordance with the Declaration and the
Registration Statement, and (vii) that the Capital Securities
are issued and sold to the Capital Security Holders in
accordance with the Declaration and the Registration Statement.
We have not participated in the preparation of the
Registration Statement and assume no responsibility for its
contents.
This opinion is limited to the laws of the State of
Delaware (excluding the securities laws of the State of
Delaware), and we have not considered and express no opinion on
the laws of any other jurisdiction, including federal laws and
rules and regulations relating thereto. Our opinions are
rendered only with respect to Delaware laws and rules,
regulations and orders thereunder which are currently in
effect.
Based upon the foregoing, and upon our examination of
such questions of law and statutes of the State of Delaware as
we have considered necessary or appropriate, and subject to the
assumptions, qualifications, limitations and exceptions set
forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly
existing in good standing as a business trust under the
Delaware Business Trust Act, 12 Del. C. Section 3801, et seq.
2. The Capital Securities of the Trust will
represent valid and, subject to the qualifications set forth in
paragraph 3 below, fully paid and nonassessable undivided
beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial
owners of the Trust, will be entitled to the same limitation of
personal liability extended to stockholders of private
corporations for profit organized under the General Corporation
Law of the State of Delaware. We note that the Capital
Security Holders may be obligated to make payments as set forth
in the Declaration.
We consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the
Registration Statement. In addition, we hereby consent to the
use of our name under the heading "Legal Matters" in the
Prospectus. In giving the foregoing consents, we do not
thereby admit that we come within the category of persons whose
consent is required under Section 7 of the Securities Act of
1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion
may not be furnished or quoted to, or relied upon by, any other
person for any purpose.
Very truly yours,
/c/Richards, Layton & Finger
GCK/ks
__________, 1997
Patriot Bank Corp.
High and Hanover Streets
Pottstown, Pennsylvania 19464
Patriot Capital Trust I
High and Hanover Streets
Pottstown, Pennsylvania 19464
Re: Registration Statement on Form S-4
Registration No. 333-37783
Ladies and Gentlemen:
We have acted as special United States tax counsel for
Patriot Bank Corp., a Delaware corporation (the "Company"), and
Patriot Capital Trust I, a statutory business trust formed under
the laws of the State of Delaware (the "Trust"), in connection
with the above-captioned registration statement on Form S-4 (the
"Registration Statement") filed with the Securities and Exchange
Commission (the "Commission") for the purpose of (i) registering
(a) the guarantee by the Company of 19,000 of the Trust's 10.30%
exchange capital securities, liquidation amount of $1,000 per
capital security (the "Exchange Capital Securities") with respect
to distributions and payments upon liquidation, redemption and
otherwise (the "Exchange Guarantee"), (b) $19,000,000 principal
amount of 10.30% Exchange Junior Subordinated Deferrable Interest
Debentures due June 1, 2027 (the "Exchange Junior Subordinated
Debentures") to be issued by the Company and (c) an aggregate of
19,000 Exchange Capital Securities, and (ii) exchanging (a) such
Exchange Guarantee for the previously issued guarantee, (b) such
Exchange Junior Subordinated Debentures for the previously issued
junior subordinated debentures and (c) such Exchange Capital
Securities for the previously issued capital securities.
We hereby confirm that, although the discussion set forth
under the heading "CERTAIN UNITED STATES FEDERAL INCOME TAX
CONSEQUENCES" in the Registration Statement does not purport to
discuss all possible United States federal income tax
consequences of the purchase, ownership and disposition of the
Exchange Capital Securities, in our opinion, such discussion
constitutes, in all material respects, a fair and accurate
summary of the United States federal income tax consequences of
the purchase, ownership and disposition of the Exchange Capital
Securities, based upon current law. It is possible that contrary
positions may be taken by the Internal Revenue Service and that a
court may agree with such contrary positions.
This opinion is furnished to you solely for your benefit in
connection with the filing of the Registration Statement and,
except as set forth below, is not to be used, circulated, quoted
or otherwise referred to for any other purpose or relied upon by
any other person for any purpose without our prior written
consent. We hereby consent to the use of our name under the
heading "Validity of Exchange Securities" and the filing of this
opinion with the Commission as Exhibit 8 to the Registration
Statement. In giving this consent, we do not thereby admit that
we are within the category of persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission promulgated thereunder.
This opinion is expressed as of the date hereof unless otherwise
expressly stated and applies only to the disclosure under the
heading "CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES"
set forth in the Registration Statement filed as of the date
hereof. We disclaim any undertaking to advise you of any
subsequent changes of the facts stated or assumed herein or any
subsequent changes in applicable law.
Very truly yours,
/s/ STEVENS & LEE
<TABLE>
<CAPTION>
Exhibit 12.1
Six Months
Ended
June 30,
At December 31,
1997 1996
1996 1995 1994 1993 1992
<S> <C> <C>
<C> <C> <C> <C> <C>
Earnings
Pretax income 2,479
2,079 3,226 1,926 1,901 3,777 2,551
add fixed charges
interest whether expensed or capitalized 14,527
6,454 17,502 9,549 8,125 9,628 12,141
amort debt exp & discount or premium 24
0 18 0 0 0 0
portion of rent exp that can be demonstrated
as interest (leases immaterial) 0
0 0 0 0 0 0
Preferred stock dividend requirements 0
0 0 0 0 0 0
registrants share income majority owned
subsidiaries (equity method) 0
0 0 0 0 0 0
previously capitalized interest 0
0 0 0 0 0 0
17,030
8,533 20,746 11,475 10,026 13,405 14,692
Fixed Charges
interest whether expensed or capitalized 14,527
6,454 17,502 9,549 8,125 9,628 12,141
amort debt exp & discount or premium 0
0 0 0 0 0 0
portion of rent exp that can be demonstrated
as interest (leases immaterial) 0
0 0 0 0 0 0
Preferred stock dividend requirements 0
0 0 0 0 0 0
registrants share income majority owned
subsidiaries (equity method) 0
0 0 0 0 0 0
previously capitalized interest 0
0 0 0 0 0 0
14,527
6,454 17,502 9,549 8,125 9,628 12,141
Fixed Charges Excluding Interest on Deposits
Fixed Charges 14,527
6,454 17,502 9,549 8,125 9,628 12,141
Interest on Deposits (6,336)
(1,784) (9,895) (8,980) (7,762) (9,405)(11,957)
8,161
4,670 7,607 569 363 223 184
Six Months
Ended
June 30,
At December 31,
1997 1996
1996 1995 1994 1993 1992
Ratios of Earnings to Fixed Charges
Including interest on deposits 1.17x
1.32x 1.19x 1.20x 1.23x 1.39x 1.21x
Excluding interest on deposits 2.09x
1.83x 2.73x 20.17x 27.62x 60.11x 79.85x
</TABLE>
================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________
SOVEREIGN CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 23-7896381
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1130 Berkshire Boulevard
Wyomissing, Pennsylvania 19610
(Address of principal executive offices) (Zip code)
______________________
Exchange Subordinated Capital Income Securities
(Title of the indenture securities)
================================================================
<PAGE>
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of 2 Rector Street
the State of New York New York, N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza
New York New York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 15th day of October, 1997.
THE BANK OF NEW YORK
By: /s/ Lucille Firrincieli
Name: Lucille Firrincieli
Title: Vice President
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 35,352,045
LESS: Allowance for loan and
lease losses .............. 625,042
LESS: Allocated transfer risk
reserve........................ 429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
Total assets ......................... $57,514,958
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ...... 11,213,657
Interest-bearing ......... 15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing ......... 596,369
Interest-bearing ......... 15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
Total liabilities .................... 52,937,421
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
Total equity capital ................ 4,577,537
Total liabilities and equity
capital ........................... $57,514,958
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Alan R. Griffith
J. Carter Bacot
Thomas A. Renyi Directors
================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________
SOVEREIGN BANCORP, INC.
(Exact name of obligor as specified in its charter)
Pennsylvania 23-2453088
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
1130 Berkshire Boulevard
Wyomissing, Pennsylvania 19610
(Address of principal executive offices) (Zip code)
______________________
Exchange Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================
<PAGE>
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street
State of New York New York, N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza
New York New York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 23rd day of July, 1997.
THE BANK OF NEW YORK
By: /S/THOMAS E. TABOR
Name: THOMAS E. TABOR
Title: ASSISTANT TREASURER
Exhibit 25.3
================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
________________________________________
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
________________________________________
PATRIOT BANK CORP.
(Exact name of obligor as specified in its charter)
Delaware 23-2820537
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
High and Hanover Streets
Pottstown, Pennsylvania 19464
(Address of principal executive offices) (Zip code)
______________________
Guarantee of Exchange Capital
Securities of
Patriot Capital Trust I
(Title of the indenture securities)
================================================================<PAGE>
1. General information. Furnish the following information as
to the Trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Name Address
Superintendent of Banks of the 2 Rector Street
State of New York New York, N.Y. 10006, and
Albany, N.Y. 12203
Federal Reserve Bank of 33 Liberty Plaza
New York New York, N.Y. 10045
Federal Deposit Insurance Washington, D.C. 20429
Corporation
New York Clearing House New York, New York 10005
Association
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and 17 C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in
effect, which contains the authority to commence
business and a grant of powers to exercise corporate
trust powers. (Exhibit 1 to Amendment No. 1 to Form
T-1 filed with Registration Statement No. 33-6215,
Exhibits 1a and 1b to Form T-1 filed with Registration
Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration
Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 15th day of October, 1997.
THE BANK OF NEW YORK
By: /s/ Lucille Firrincieli
Name: Lucille Firrincieli
Title: Vice President
<PAGE>
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business
June 30, 1997, published in accordance with a call made by the
Federal Reserve Bank of this District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................. 35,352,045
LESS: Allowance for loan and
lease losses .............. 625,042
LESS: Allocated transfer risk
reserve........................ 429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
Total assets ......................... $57,514,958
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ...... 11,213,657
Interest-bearing ......... 15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing ......... 596,369
Interest-bearing ......... 15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
Total liabilities .................... 52,937,421
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
Total equity capital ................ 4,577,537
Total liabilities and equity
capital ........................... $57,514,958
I, Robert E. Keilman, Senior Vice President and Comptroller
of the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of
this Report of Condition and declare that it has been examined by
us and to the best of our knowledge and belief has been prepared
in conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
Alan R. Griffith
J. Carter Bacot
Thomas A. Renyi Directors
LETTER OF TRANSMITTAL
PATRIOT CAPITAL TRUST I
OFFER TO EXCHANGE ITS
10.30% EXCHANGE CAPITAL SECURITIES
("EXCHANGE CAPITAL SECURITIES")
(LIQUIDATION AMOUNT $1,000 PER EXCHANGE CAPITAL SECURITY)
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
FOR ANY AND ALL OF ITS OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
("ORIGINAL CAPITAL SECURITIES")
(LIQUIDATION AMOUNT $1,000 PER ORIGINAL CAPITAL SECURITY)
UNCONDITIONALLY GUARANTEED, AS DESCRIBED HEREIN,
BY
PATRIOT BANK CORP.
PURSUANT TO THE PROSPECTUS DATED __________, 1997
(AS THE SAME MAY BE AMENDED OR SUPPLEMENTED, THE "PROSPECTUS")
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON ____________, 1997,
OR ON SUCH LATER DATE OR TIME TO WHICH THE TRUST
MAY EXTEND THE EXCHANGE OFFER (THE "EXPIRATION DATE").
TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M.,
NEW YORK CITY TIME, ON THE EXPIRATION DATE.
The Exchange Agent For The Exchange Offer Is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C>
<C>
By Registered or Certified Mail: Facsimile Transmissions:
By Hand or Overnight Delivery
The Bank of New York (Eligible Institutions Only)
The Bank of New York
Floor 7E (212) 815-6639
101 Barclay Street
101 Barclay Street Confirm by Telephone:
Corporate Trust
New York, NY 10286 (212) 8152742
Services Window
Attention: Enrique Lopez,
Ground Level
Reorganization Section
New York, NY 10286
Attention: Enrique Lopez,
Reorganization Section
</TABLE>
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS
OTHER THAN AS SET FORTH ABOVE OR TRANSMISSION OF THIS
LETTER OF TRANSMITTAL VIA FACSIMILE TO A NUMBER
OTHER THAN AS SET FORTH ABOVE
DOES NOT CONSTITUTE A VALID DELIVERY.
THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY
BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
Capitalized terms used but not defined herein shall have the
same meaning given them in the Prospectus. As used herein, the
term "Holder" means a holder of Original Capital Securities,
including any participant ("DTC Participant") in the book-entry
transfer facility system of The Depository Trust Company ("DTC")
whose name appears on a security position listing as the owner of
the Original Capital Securities. As used herein, the term
"Certificates" means physical certificates representing Original
Capital Securities.
To participate in the Exchange Offer (as defined below),
Holders must tender by (a) book-entry transfer pursuant to the
procedures set forth in the Prospectus under "The Exchange
Offer -- Procedures for Tendering Original Capital Securities,"
or (b) forwarding Certificates herewith. Holders who are DTC
Participants tendering by book-entry transfer must execute such
tender through the Automated Tender Offer Program ("ATOP") of
DTC. A Holder using ATOP should transmit its acceptance to DTC
on or prior to the Expiration Date. DTC will verify such
acceptance, execute a book-entry transfer of the tendered
Original Capital Securities into the Exchange Agent's account at
DTC and then send to the Exchange Agent confirmation of such
book-entry transfer (a "book-entry confirmation"), including an
agent's message ("Agent's Message") confirming that DTC has
received an express acknowledgement from such Holder that such
Holder has received and agrees to be bound by this Letter of
Transmittal and that the Trust and the Corporation may enforce
this Letter of Transmittal against such Holder. The book-entry
confirmation must be received by the Exchange Agent in order for
the tender relating thereto to be effective. Book-entry transfer
to DTC in accordance with DTC's procedures does not constitute
delivery of the book-entry confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as
well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in
order for such tender to be effective.
Holders of Original Capital Securities who cannot complete
the procedures for delivery by book-entry transfer of such
Original Capital Securities on a timely basis or who cannot
deliver their Certificates for such Original Capital Securities
and all other required documents to the Exchange Agent on or
prior to the Expiration Date, must, in order to participate in
the Exchange Offer, tender their Original Capital Securities
according to the guaranteed delivery procedures set forth in the
Prospectus under "The Exchange Offer -- Procedures for Tendering
Original Capital Securities."
THE METHOD OF DELIVERY OF THE BOOK-ENTRY CONFIRMATION OR
CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED
BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT
DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
NOTE: SIGNATURES MUST BE PROVIDED BELOW.
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY.
ALL TENDERING HOLDERS COMPLETE THIS BOX:
- -----------------------------------------------------------------
<PAGE>
DESCRIPTION OF ORIGINAL CAPITAL SECURITIES
- -----------------------------------------------------------------
IF BLANK, PLEASE PRINT NAME AND ORIGINAL CAPITAL SECURITIES
ADDRESS OF REGISTERED HOLDER. TENDERED (ATTACH ADDITIONAL
SCHEDULES)
- -----------------------------------------------------------------
AGGREGATE LIQUIDATION
CERTIFICATE AGGREGATE LIQUIDATION AMOUNT OF ORIGINAL
NUMBER(S)* AMOUNT OF ORIGINAL CAPITAL SECURITIES
CAPITAL SECURITIES TENDERED**
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
_____________________________________________________________
TOTAL AMOUNT TENDERED
- -----------------------------------------------------------------
* Need not be completed by book-entry holders.
** Original Capital Securities may be tendered in whole or in
part in denominations of $100,000 and integral multiples of
$1,000 in excess thereof, provided that if any Original
Capital Securities are tendered for exchange in part, the
untendered principal amount thereof must be $100,000 or any
integral multiple of $1,000 in excess thereof. All Original
Capital Securities held shall be deemed tendered unless a
lesser number is specified in this column. See
Instruction 4.
=================================================================
(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)
[ ] CHECK HERE IF TENDERED ORIGINAL CAPITAL SECURITIES ARE BEING
DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT
MAINTAINED BY THE EXCHANGE AGENT WITH DTC, AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution
- -----------------------------------------------------------------
DTC Account Number
- -----------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------
[ ] CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF
GUARANTEED DELIVERY IF TENDERED ORIGINAL CAPITAL SECURITIES
ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED
DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT, AND COMPLETE
THE FOLLOWING:
Name of Registered Holder(s)
- -----------------------------------------------------------------
Window Ticket Number (if any)
- -----------------------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery
- -----------------------------------------------------------------
Name of Institution which Guaranteed Delivery
- -----------------------------------------------------------------
If Guaranteed Delivery is to be made By Book-Entry Transfer:
Name of Tendering Institution
- -----------------------------------------------------------------
DTC Account Number
- -----------------------------------------------------------------
Transaction Code Number
- -----------------------------------------------------------------
[ ] CHECK HERE IF YOU ARE A BROKER-DEALER WHO ACQUIRED THE
ORIGINAL CAPITAL SECURITIES FOR YOUR OWN ACCOUNT AS A RESULT
OF MARKET MAKING OR OTHER TRADING ACTIVITIES AND WISH TO
RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES
OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.
Name:
- -----------------------------------------------------------------
Address:
- -----------------------------------------------------------------
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Patriot Capital Trust I, a
trust formed under the laws of the State of Delaware (the
"Trust") and Patriot Bank Corp., a Delaware corporation (the
"Corporation"), the above described aggregate Liquidation Amount
of the Trust's Original Capital Securities in exchange for a like
aggregate Liquidation Amount of the Trust's Exchange Capital
Securities which have been registered under the Securities Act of
1933, as amended (the "Securities Act"), upon the terms and
subject to the conditions set forth in the Prospectus, receipt of
which is hereby acknowledged, and in this Letter of Transmittal
(which, together with the Prospectus, constitute the "Exchange
Offer").
Subject to and effective upon the acceptance for exchange of
all or any portion of the Original Capital Securities tendered
herewith in accordance with the terms and conditions of the
Exchange Offer (including, if the Exchange Offer is extended or
amended, the terms and conditions of any such extension or
amendment), the undersigned hereby sells, assigns and transfers
to or upon the order of the Trust all right, title and interest
in and to such Original Capital Securities as are being tendered
herewith. The undersigned hereby irrevocably constitutes and
appoints the Exchange Agent as its agent and attorney-in-fact
(with full knowledge that the Exchange Agent is also acting as
agent of the Corporation and the Trust in connection with the
Exchange Offer) with respect to the tendered Original Capital
Securities, with full power of substitution (such power of
attorney being deemed to be an irrevocable power coupled with an
interest) subject only to the right of withdrawal described in
the Prospectus, to (i) deliver Certificates for Original Capital
Securities to the Corporation or the Trust together with all
accompanying evidences of transfer and authenticity to, or upon
the order of, the Trust, upon receipt by the Exchange Agent, as
the undersigned's agent, of the Exchange Capital Securities to be
issued in exchange for such Original Capital Securities,
(ii) present Certificates for such Original Capital Securities
for transfer, and to transfer the Original Capital Securities on
the books of the Trust, and (iii) receive for the account of the
Trust all benefits and otherwise exercise all rights of
beneficial ownership of such Original Capital Securities, all in
accordance with the terms and conditions of the Exchange Offer.
THE UNDERSIGNED HEREBY REPRESENTS AND WARRANTS THAT THE
UNDERSIGNED HAS FULL POWER AND AUTHORITY TO TENDER, EXCHANGE,
SELL, ASSIGN AND TRANSFER THE ORIGINAL CAPITAL SECURITIES
TENDERED HEREBY AND THAT, WHEN THE SAME ARE ACCEPTED FOR
EXCHANGE, THE TRUST WILL ACQUIRE GOOD, MARKETABLE AND
UNENCUMBERED TITLE THERETO, FREE AND CLEAR OF ALL LIENS,
RESTRICTIONS, CHARGES AND ENCUMBRANCES, AND THAT THE ORIGINAL
CAPITAL SECURITIES TENDERED HEREBY ARE NOT SUBJECT TO ANY ADVERSE
CLAIMS OR PROXIES. THE UNDERSIGNED WILL, UPON REQUEST, EXECUTE
AND DELIVER ANY ADDITIONAL DOCUMENTS DEEMED BY THE TRUST OR THE
EXCHANGE AGENT TO BE NECESSARY OR DESIRABLE TO COMPLETE THE
EXCHANGE, ASSIGNMENT AND TRANSFER OF THE ORIGINAL CAPITAL
SECURITIES TENDERED HEREBY, AND THE UNDERSIGNED WILL COMPLY WITH
ITS OBLIGATIONS UNDER THE REGISTRATION AGREEMENT. THE
UNDERSIGNED HAS READ AND AGREES TO ALL OF THE TERMS OF THE
EXCHANGE OFFER.
The name(s) and address(es) of the registered Holder(s) of
the Original Capital Securities tendered hereby should be printed
in the box entitled "Description of Original Capital Securities"
above, if they are not already set forth in such box, as they
appear on the Certificates representing such Original Capital
Securities or on the records of DTC, as the case may be. The
Certificate number(s) of any such Certificates and the
liquidation amount of such Original Capital Securities should be
specified in such box as indicated therein.
The undersigned understands that tenders of Original Capital
Securities pursuant to any one of the procedures described in
"The Exchange Offer -- Procedures for Tendering Original Capital
Securities" in the Prospectus and in the instructions attached
hereto will, upon the Corporation's and the Trust's acceptance
for exchange of such tendered Original Capital Securities,
constitute a binding agreement between the undersigned, the
Corporation and the Trust upon the terms and subject to the
conditions of the Exchange Offer.
The undersigned recognizes that, under certain circumstances
set forth in the Prospectus, the Corporation and the Trust may
not be required to accept for exchange any of the Original
Capital Securities tendered hereby.
Unless otherwise indicated in the box entitled "Special
Issuance Instructions" below, the undersigned hereby directs that
the Exchange Capital Securities be issued in the name(s) of the
undersigned or credited to the account at DTC indicated above in
the case of a book-entry transfer of Original Capital Securities.
If any Original Capital Securities are submitted for more
Original Capital Securities than are tendered or accepted for
exchange, then, without expense to the tendering Holder, promptly
following the expiration or termination of the Exchange Offer,
such non-exchanged or non-tendered Original Capital Securities
will, if evidenced by Certificates, be returned, or will, if
evidenced by book-entry, be credited to the account at DTC
indicated above. If applicable, substitute Certificates
representing non-exchanged Original Capital Securities will be
issued to the undersigned or non-exchanged original Capital
Securities will be credited to the account at DTC indicated above
in the case of a book-entry transfer of Original Capital
Securities.
Unless otherwise indicated under "Special Delivery
Instructions," certificates for Original Capital Securities and
for Exchange Capital Securities will be delivered to the
undersigned at the address shown below the undersigned's
signature.
BY TENDERING ORIGINAL CAPITAL SECURITIES AND EXECUTING THIS
LETTER OF TRANSMITTAL, THE UNDERSIGNED HEREBY REPRESENTS AND
AGREES THAT (i) THE UNDERSIGNED IS NOT AN "AFFILIATE" (AS DEFINED
IN RULE 144 UNDER THE SECURITIES ACT) OF THE CORPORATION OR THE
TRUST, (ii) ANY EXCHANGE CAPITAL SECURITIES TO BE RECEIVED BY THE
UNDERSIGNED ARE BEING ACQUIRED IN THE ORDINARY COURSE OF ITS
BUSINESS, (iii) THE UNDERSIGNED HAS NO ARRANGEMENT OR
UNDERSTANDING WITH ANY PERSON TO PARTICIPATE IN A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF EXCHANGE CAPITAL
SECURITIES TO BE RECEIVED IN THE EXCHANGE OFFER, AND (IV) IF THE
UNDERSIGNED IS NOT A BROKER-DEALER, THE UNDERSIGNED IS NOT
ENGAGED IN, AND DOES NOT INTEND TO ENGAGE IN, A DISTRIBUTION
(WITHIN THE MEANING OF THE SECURITIES ACT) OF SUCH EXCHANGE
CAPITAL SECURITIES. BY TENDERING ORIGINAL CAPITAL SECURITIES
PURSUANT TO THE EXCHANGE OFFER AND EXECUTING THIS LETTER OF
TRANSMITTAL, A HOLDER OF ORIGINAL CAPITAL SECURITIES THAT IS A
BROKER-DEALER REPRESENTS AND AGREES, CONSISTENT WITH CERTAIN
INTERPRETIVE LETTERS ISSUED BY THE STAFF OF THE DIVISION OF
CORPORATION FINANCE OF THE SECURITIES AND EXCHANGE COMMISSION TO
THIRD PARTIES, THAT (A) SUCH ORIGINAL CAPITAL SECURITIES ARE HELD
BY SUCH BROKER-DEALER ONLY AS A NOMINEE, OR (B) SUCH ORIGINAL
CAPITAL SECURITIES WERE ACQUIRED BY IT FOR ITS OWN ACCOUNT AS A
RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES
AND IT WILL DELIVER THE PROSPECTUS MEETING THE REQUIREMENTS OF
THE SECURITIES ACT IN CONNECTION WITH ANY RESALE OF SUCH EXCHANGE
CAPITAL SECURITIES (PROVIDED THAT, BY SO ACKNOWLEDGING AND BY
DELIVERING THE PROSPECTUS, IT WILL NOT BE DEEMED TO ADMIT THAT IT
IS AN "UNDERWRITER" WITHIN THE MEANING OF THE SECURITIES ACT).
THE CORPORATION AND THE TRUST HAVE AGREED THAT, SUBJECT TO
THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT, THE
PROSPECTUS MAY BE USED IN CONNECTION WITH RESALES OF EXCHANGE
CAPITAL SECURITIES RECEIVED IN EXCHANGE FOR ORIGINAL CAPITAL
SECURITIES BY A BROKER-DEALER WHO ACQUIRED ORIGINAL CAPITAL
SECURITIES FOR ITS OWN ACCOUNT AS A RESULT OF MARKET-MAKING OR
OTHER TRADING ACTIVITIES (A "PARTICIPATING BROKER-DEALER") FOR A
PERIOD ENDING 180 DAYS AFTER THE EXPIRATION DATE (SUBJECT TO
EXTENSION UNDER CERTAIN LIMITED CIRCUMSTANCES DESCRIBED IN THE
PROSPECTUS) OR, IF EARLIER, WHEN ALL SUCH EXCHANGE CAPITAL
SECURITIES HAVE BEEN DISPOSED OF BY SUCH PARTICIPATING
BROKER-DEALER. IN THAT REGARD, EACH PARTICIPATING BROKER-DEALER,
BY TENDERING SUCH ORIGINAL CAPITAL SECURITIES AND EXECUTING THIS
LETTER OF TRANSMITTAL OR BY TENDERING THROUGH BOOK-ENTRY TRANSFER
IN LIEU THEREOF, AGREES THAT, UPON RECEIPT OF NOTICE FROM THE
CORPORATION OR THE TRUST OF THE OCCURRENCE OF ANY EVENT OR THE
DISCOVERY OF ANY FACT WHICH MAKES ANY STATEMENT CONTAINED OR
INCORPORATED BY REFERENCE IN THE PROSPECTUS UNTRUE IN ANY
MATERIAL RESPECT OR WHICH CAUSES THE PROSPECTUS TO OMIT TO STATE
A MATERIAL FACT NECESSARY IN ORDER TO MAKE THE STATEMENTS
CONTAINED OR INCORPORATED BY REFERENCE THEREIN, IN LIGHT OF THE
CIRCUMSTANCES UNDER WHICH THEY WERE MADE, NOT MISLEADING OR OF
THE OCCURRENCE OF CERTAIN OTHER EVENTS SPECIFIED IN THE
REGISTRATION RIGHTS AGREEMENT, SUCH PARTICIPATING BROKER-DEALER
WILL SUSPEND THE SALE OF EXCHANGE CAPITAL SECURITIES PURSUANT TO
THE PROSPECTUS UNTIL (1) THE CORPORATION AND THE TRUST HAVE
AMENDED OR SUPPLEMENTED THE PROSPECTUS TO CORRECT SUCH
MISSTATEMENT OR OMISSION AND HAVE FURNISHED COPIES OF THE AMENDED
OR SUPPLEMENTED PROSPECTUS TO THE PARTICIPATING BROKER-DEALER OR
(2) THE CORPORATION OR THE TRUST HAS GIVEN NOTICE THAT THE SALE
OF THE EXCHANGE CAPITAL SECURITIES MAY BE RESUMED, AS THE CASE
MAY BE. IF THE CORPORATION OR THE TRUST GIVES SUCH NOTICE TO
SUSPEND THE SALE OF THE EXCHANGE CAPITAL SECURITIES, THEY SHALL
EXTEND THE 180-DAY PERIOD REFERRED TO ABOVE DURING WHICH
PARTICIPATING BROKER-DEALERS ARE ENTITLED TO USE THE PROSPECTUS
IN CONNECTION WITH THE RESALE OF EXCHANGE CAPITAL SECURITIES BY
THE NUMBER OF DAYS DURING THE PERIOD FROM AND INCLUDING THE DATE
OF THE GIVING OF SUCH NOTICE TO AND INCLUDING THE DATE ON WHICH
(1) PARTICIPATING BROKER-DEALERS SHALL HAVE RECEIVED COPIES OF
THE SUPPLEMENTED OR AMENDED PROSPECTUS NECESSARY TO PERMIT
RESALES OF THE EXCHANGE CAPITAL SECURITIES OR (2) THE CORPORATION
OR THE TRUST HAS GIVEN NOTICE THAT THE SALE OF EXCHANGE CAPITAL
SECURITIES MAY BE RESUMED, AS THE CASE MAY BE.
AS A RESULT, A PARTICIPATING BROKER-DEALER WHO INTENDS TO
USE THE PROSPECTUS IN CONNECTION WITH RESALES OF EXCHANGE CAPITAL
SECURITIES RECEIVED IN EXCHANGE FOR ORIGINAL CAPITAL SECURITIES
PURSUANT TO THE EXCHANGE OFFER MUST NOTIFY THE CORPORATION AND
THE TRUST, OR CAUSE THE CORPORATION AND THE TRUST TO BE NOTIFIED,
ON OR PRIOR TO THE EXPIRATION DATE, THAT IT IS A PARTICIPATING
BROKER-DEALER. SUCH NOTICE MAY BE GIVEN IN THE SPACE PROVIDED
ABOVE OR MAY BE DELIVERED TO THE EXCHANGE AGENT AT THE ADDRESS
SET FORTH IN THE PROSPECTUS UNDER "THE EXCHANGE OFFER -- EXCHANGE
AGENT."
Holders whose Original Capital Securities are accepted for
exchange will not receive Distributions on such Original Capital
Securities, and the undersigned hereby waives the right to
receive any Distributions on such Original Capital Securities
accumulated from and including June 5, 1997. Accordingly,
holders of Exchange Capital Securities (as of the record date)
for the payment of Distributions on December 1, 1997 will be
entitled to Distributions accumulated from and including June 5,
1997.
The undersigned will, upon request, execute and deliver any
additional documents deemed by the Corporation or the Trust to be
necessary or desirable to complete the sale, assignment and
transfer of the Original Capital Securities tendered hereby. All
authority herein conferred or agreed to be conferred in this
Letter of Transmittal shall survive the death or incapacity of
the undersigned and any obligation of the undersigned hereunder
shall be binding upon the heirs, executors, administrators,
personal representatives, trustees in bankruptcy, legal
representatives, successors and assigns of the undersigned.
Except as stated in the Prospectus, this tender is irrevocable.
THE UNDERSIGNED, BY COMPLETING THE BOX ENTITLED "DESCRIPTION
OF ORIGINAL CAPITAL SECURITIES" ABOVE AND SIGNING THIS LETTER,
WILL BE DEEMED TO HAVE TENDERED THE ORIGINAL CAPITAL SECURITIES
AS SET FORTH IN SUCH BOX.
HOLDER(S) SIGN HERE
(SEE ATTACHED INSTRUCTIONS 2, 5 AND 6)
(PLEASE COMPLETE SUBSTITUTE FORM W-9 ON THE LAST PAGE)
(NOTE: SIGNATURE(S) MUST BE GUARANTEED
IF REQUIRED BY INSTRUCTION 2)
Must be signed by registered Holder(s) exactly as name(s)
appear(s) on Certificate(s) for the Original Capital Securities
hereby tendered or on the records of DTC, as the case may be, or
by any person(s) authorized to become the registered Holder(s) by
endorsements and documents transmitted herewith (including such
opinions of counsel, certifications and other information as may
be required by the Trust to comply with the restrictions on
transfer applicable to the Original Capital Securities). If
signature is by an attorney-in-fact, executor, administrator,
trustee, guardian, officer of a corporation or another acting in
a fiduciary capacity or representative capacity, set forth the
signatory's full title. See Instruction 5.
- -----------------------------------------------------------------
- -----------------------------------------------------------------
(SIGNATURE(S) OF HOLDER(S))
Date _________________________, 1997
Name(s)__________________________________________________________
_________________________________________________________________
(PLEASE PRINT)
Capacity (full title)
_________________________________________________________________
Address__________________________________________________________
_________________________________________________________________
_________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )
_________________________________________________________________
Tax Identification or Social Security Number ____________________
GUARANTEE OF SIGNATURE(S)
(SEE ATTACHED INSTRUCTIONS 2 AND 5)
Authorized Signature_____________________________________________
Date _________________________, 1997
Name of Firm_____________________________________________________
Capacity (full title)____________________________________________
(PLEASE PRINT)
Address__________________________________________________________
_________________________________________________________________
(INCLUDE ZIP CODE)
Area Code and Telephone Number ( )_____________________________
SPECIAL ISSUANCE INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Exchange Capital Securities or
non-tendered or non-exchange Original Capital Securities are to
be issued in the name of someone other than the registered
Holder(s) of the Original Capital Securities whose name(s)
appear(s) above.
Issue:
[ ] Non-tendered or non-exchanged Original Capital
Securities to:
[ ] Exchange Capital Securities to:
Name(s)________________________________________________
Address________________________________________________
________________________________________________
(INCLUDE ZIP CODE)
________________________________________________
Area Code and
Telephone Number
_________________________________________________________________
_________________________________________________________________
(TAX IDENTIFICATION OR
SOCIAL SECURITY NUMBER(S))
==================================================
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 1, 5 AND 6)
To be completed ONLY if Certificates for Exchange Capital
Securities or non-tendered or non-exchanged Original Capital
Securities are to be sent to someone other than the registered
Holder(s) of the Original Capital Securities whose name(s)
appear(s) above, or such registered Holder(s) at an address other
than that shown above.
Mail:
[ ] Non-tendered or non-exchanged Original Capital Securities
to:
[ ] Exchange Capital Securities to:
Name(s)
_________________________________________________________________
Address
_________________________________________________________________
_________________________________________________________________
(INCLUDE ZIP CODE)
_________________________________________________________________
Area Code and
Telephone Number
_________________________________________________________________
------------------------------------
(TAX IDENTIFICATION OR
SOCIAL SECURITY NUMBER(S))
------------------------------------
INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE EXCHANGE OFFER
1. BOOK-ENTRY TRANSFER; DELIVERY OF LETTER OF TRANSMITTAL
AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. To tender in
the Exchange Offer, Holders must tender by (a) forwarding
Certificates herewith or (b) book-entry transfer pursuant to the
procedures set forth in "The Exchange Offer -- Procedures for
Tendering Original Capital Securities" in the Prospectus.
Holders who are DTC Participants tendering by book-entry transfer
must execute such tender through DTC's ATOP system. A Holder
using ATOP should transmit its acceptance to DTC on or prior to
the Expiration Date. DTC will verify such acceptance, execute a
book-entry transfer of the tendered Original Capital Securities
into the Exchange Agent's account at DTC, and then send to the
Exchange Agent a book-entry confirmation, including an Agent's
Message confirming that DTC has received an express
acknowledgement from such Holder that such Holder has received
and agrees to be bound by this Letter of Transmittal and that the
Trust and the Corporation may enforce this Letter of Transmittal
against such Holder. The book-entry confirmation must be
received by the Exchange Agent in order for the tender relating
thereto to be effective. Book-entry transfer to DTC in
accordance with DTC's procedure does not constitute delivery of
the book-entry confirmation to the Exchange Agent.
If the tender is not made through ATOP, Certificates, as
well as this Letter of Transmittal (or facsimile thereof),
properly completed and duly executed, with any required signature
guarantees, and any other documents required by this Letter of
Transmittal, must be received by the Exchange Agent at its
address set forth herein on or prior to the Expiration Date in
order for such tender to be effective.
Original Capital Securities may be tendered in whole or in
part in the liquidation amount of $100,000 (100 Original Capital
Securities) and integral multiples of $1,000 in excess thereof,
provided that, if any Original Capital Securities are tendered
for exchange in part, the untendered principal amount thereof
must be $100,000 (100 Original Capital Securities) or any
integral multiple of $1,000 in excess thereof.
Holders who wish to tender their Original Capital Securities
and (i) whose Original Capital Securities are not immediately
available or (ii) who cannot deliver their Original Capital
Securities, this Letter of Transmittal and all other required
documents to the Exchange Agent on or prior to the Expiration
Date or (iii) who cannot complete the procedures for delivery by
book-entry transfer on a timely basis, may tender their Original
Capital Securities by properly completing and duly executing a
Notice of Guaranteed Delivery pursuant to the guaranteed delivery
procedures set forth in the Prospectus under "The Exchange
Offer -- Guaranteed Delivery." Pursuant to such procedures:
(i) such tender must be made by or through an Eligible
Institution (as defined below); (ii) a properly completed and
duly executed Notice of Guaranteed Delivery, substantially in the
form accompanying this Letter of Transmittal, must be received by
the Exchange Agent on or prior to the Expiration Date; and
(iii) (a) a book-entry confirmation or (b) the certificates
representing all tendered Original Capital Securities, in proper
form for transfer, together with a Letter of Transmittal (or
facsimile thereof), properly completed and duly executed, with
any required signature guarantees and any other documents
required by this Letter of Transmittal, must be, in any case,
received by the Exchange Agent within three New York Stock
Exchange trading days after the date of execution of such Notice
of Guaranteed Delivery, all as provided in the Prospectus under
"The Exchange Offer -- Guaranteed Delivery".
A Notice of Guaranteed Delivery may be delivered by hand or
transmitted by facsimile or mail to the Exchange Agent, and must
include a guarantee by an Eligible Institution in the form set
forth in such Notice. For Original Capital Securities to be
properly tendered pursuant to the guaranteed delivery procedure,
the Exchange Agent must receive a Notice of Guaranteed Delivery
on or prior to the Expiration Date. As used herein and in the
Prospectus, "Eligible Institution" means a firm or other entity
identified in Rule 17Ad-15 under the Exchange Act as "an eligible
guarantor institution," including (as such terms are defined
therein) (i) a bank; (ii) a broker, dealer, municipal securities
broker or dealer or government securities broker or dealer;
(iii) a credit union; (iv) a national securities exchange,
registered securities association or clearing agency; or (v) a
savings association that is a participant in a Securities
Transfer Association.
THE METHOD OF DELIVERY OF THE BOOK-ENTRY CONFIRMATION OR
CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED
DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER
AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED
BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, REGISTERED MAIL
WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT
DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME
SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.
Neither the Corporation nor the Trust will accept any
alternative, conditional or contingent tenders. Each tendering
Holder, by book-entry transfer through ATOP or execution of a
Letter of Transmittal (or facsimile thereof), waives any right to
receive any notice of the acceptance of such tender.
2. GUARANTEE OF SIGNATURES. No signature guarantee on
this Letter of Transmittal is required if:
(i) this Letter of Transmittal is signed by the
registered Holder(s) of Original Capital
Securities tendered herewith, unless such
Holder(s) has completed either the box entitled
"Special Issuance Instructions" or the box
entitled "Special Delivery Instructions" above, or
(ii) such Original Capital Securities are tendered for
the account of a firm that is an Eligible
Institution.
In all other cases, an Eligible Institution must guarantee
the signatures) on this Letter of Transmittal. See
Instruction 5.
3. INADEQUATE SPACE. If the space provided in the box
captioned "Description of Original Capital Securities" is
inadequate, the Certificate number(s) and/or the principal amount
of Original Capital Securities and any other required information
should be listed on a separate signed schedule which is attached
to this Letter of Transmittal.
4. PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of
Original Capital Securities will be accepted only in the
liquidation amount of $100,000 (100 Original Capital Securities)
and integral multiples of $1,000 in excess thereof, provided that
if any Original Capital Securities are tendered for exchange in
part, the untendered liquidation amount thereof must be $100,000
(100 Original Capital Securities) or any integral multiple of
$1,000 in excess thereof. If less than all the Original Capital
Securities are to be tendered, fill in the liquidation amount of
Original Capital Securities that are to be tendered in the box
entitled "Aggregate Liquidation Amount of Original Capital
Securities Tendered." If applicable, new Certificate(s) for the
Original Capital Securities that were not tendered will be sent
to the address designated herein by such Holder promptly after
the Expiration Date. All Original Capital Securities represented
by Certificates delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Except as otherwise provided herein, tenders of Original
Capital Securities may be withdrawn at any time on or prior to
the Expiration Date. In order for a withdrawal to be effective
on or prior to such date, a written or facsimile transmission of
such notice of withdrawal must be timely received by the Exchange
Agent at one of its addresses set forth above or in the
Prospectus on or prior to such date. Any such notice of
withdrawal must specify the name of the person who tendered the
Original Capital Securities to be withdrawn, the aggregate
liquidation amount of Original Capital Securities to be
withdrawn, and, if any Certificates for Original Capital
Securities have been tendered, the name of the registered Holder
of the Original Capital Securities as set forth on any such
Certificates, if different from that of the person who tendered
such Original Capital Securities. If Certificates for the
Original Capital Securities have been delivered or otherwise
identified to the Exchange Agent, then prior to the physical
release of such Certificates, the tendering Holder must submit
the serial numbers shown on the particular Certificates to he
withdrawn and the signature on the notice of withdrawal must be
guaranteed by an Eligible Institution, except in the case of
Original Capital Securities tendered for the account of an
Eligible Institution. If Original Capital Securities have been
tendered pursuant to the procedures for book-entry transfer set
forth in the Prospectus under "The Exchange Offer -- Procedures
for Tendering Original Capital Securities," the notice of
withdrawal must specify the name and number of the account at DTC
to be credited with the withdrawal of Original Capital
Securities. Withdrawals of tenders of Original Capital
Securities may not be rescinded. Original Capital Securities
properly withdrawn will not be deemed validly tendered for
purposes of the Exchange Offer, but may be retendered at any
subsequent time on or prior to the Expiration Date by following
any of the procedures described herein.
All questions as to the validity, form and eligibility
(including time of receipt) of such withdrawal notices will be
determined by the Trust, in its sole discretion, whose
determination shall be final and binding on all parties. Neither
the Corporation, the Trust, any affiliates or assigns of the
Corporation or the Trust, the Exchange Agent nor any other person
shall be under any duty to give any notification of any
irregularities in any notice of withdrawal or incur any liability
for failure to give any such notification. Any Original Capital
Securities which have been tendered but which are withdrawn will
be returned to the Holder thereof promptly after withdrawal.
5. SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND
ENDORSEMENTS. If this Letter of Transmittal is signed by the
registered Holder(s) of the Original Capital Securities tendered
hereby, the signature(s) must correspond exactly with the name(s)
as written on the face of the Certificate(s) for such Original
Capital Securities, without alteration, enlargement or any change
whatsoever, or as recorded in DTC's book-entry transfer facility
system, as the case may be.
If any Certificates tendered hereby are owned of record by
two or more joint owners, all such owners must sign this Letter
of Transmittal.
If any tendered Original Capital Securities are registered
in different names on several Certificates, it will be necessary
to complete, sign and submit as many separate Letters of
Transmittal as there are different registrations of Certificates.
If any tendered Original Capital Securities are registered in
different names in several book-entry accounts, proper procedures
for book-entry transfer must be followed for each account.
If this Letter of Transmittal or any Certificates or bond
powers are signed by trustees, executors, administrators,
guardians, attorneys-in-fact, officers of corporations or others
acting in a fiduciary or representative capacity, such persons
should so indicate when signing and must submit proper evidence
satisfactory to the Corporation and the Trust, in their sole
discretion, of each such person's authority so to act.
When this Letter of Transmittal is signed by the registered
Holder(s) of the Original Capital Securities listed and
transmitted hereby, or book-entry transfer is effectuated by such
Holder(s), no endorsement(s) of Certificate(s) or separate bond
power(s) are required except if Exchange Capital Securities are
to be issued in the name of a person other than the registered
Holder(s). If such exception applies, signature(s) on such
Certificate(s) or bond power(s) must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other
than the registered Holder(s) of the Original Capital Securities
listed, the Certificate(s) must be endorsed or accompanied by
appropriate bond powers, signed exactly as the name(s) of the
registered Holder(s) appear(s) on the Certificates, and also must
be accompanied by such opinions of counsel, certifications and
other information as the Corporation or the Trust may require in
accordance with the restrictions on transfer applicable to the
Original Capital Securities. In such event, signatures on such
Certificates or bond powers must be guaranteed by an Eligible
Institution.
6. SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If
Exchange Capital Securities are to be issued in the name of a
person other than the signer of this Letter of Transmittal, or if
Exchange Capital Securities are to be sent to someone other than
the signer of this Letter of Transmittal or to an address other
than that shown above, the appropriate boxes on this Letter of
Transmittal should be completed. Original Capital Securities not
exchanged will be returned, if evidenced by Certificates, by mail
or, if tendered by book-entry transfer, by crediting the account
at DTC indicated above in Instruction 4.
7. IRREGULARITIES. The Corporation and the Trust will
determine, in their sole discretion, all questions as to the form
of documents, validity, eligibility (including time of receipt)
and acceptance for exchange of any tender of Original Capital
Securities, which determination shall be final and binding on all
parties. The Corporation and the Trust reserve the absolute
right to reject any and all tenders determined by either of them
not to be in proper form or the acceptance of which, or exchange
for which, may in the view of counsel to the Corporation and the
Trust be unlawful. The Corporation and the Trust also reserve
the absolute right, subject to applicable law, to waive any of
the conditions of the Exchange Offer set forth in the Prospectus
under "The Exchange Offer -- Conditions to the Exchange Offer" or
any conditions or irregularity in any tender of Original Capital
Securities of any particular Holder whether or not similar
conditions or irregularities are waived in the case of other
Holders. The Corporation's and the Trust's interpretation of the
terms and conditions of the Exchange Offer (including this Letter
of Transmittal and the instructions hereto) will be final and
binding. No tender of Original Capital Securities will be deemed
to have been validly made until all irregularities with respect
to such tender have been cured or waived. The Corporation, the
Trust, any affiliates or assigns of the Corporation, the Trust,
the Exchange Agent, or any other person shall not be under any
duty to give notification of any irregularities in tenders or
incur any liability for failure to give such notification.
8. QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL
COPIES. Questions and requests for assistance may be directed to
the Exchange Agent at its address and telephone number set forth
on the front cover of this Letter of Transmittal. Additional
copies of the Prospectus, the Notice of Guaranteed Delivery and
this Letter of Transmittal may be obtained from the Exchange
Agent or from your broker, dealer, commercial bank, trust company
or other nominee.
9. BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under U.S.
Federal income tax law, a Holder whose tendered Original Capital
Securities are accepted for exchange is required to provide the
Exchange Agent with such Holder's correct taxpayer identification
number ("TIN") on Substitute Form W-9 below. If the Exchange
Agent is not provided with the correct TIN, the Internal Revenue
Service (the "IRS") may subject the Holder or other payee to a
$50 penalty. In addition, payments to such Holders or other
payees with respect to Original Capital Securities exchanged
pursuant to the Exchange Offer may be subject to 31% backup
withholding.
The box in Part 2 of the Substitute Form W-9 may be checked
if the tendering Holder has not been issued a TIN and has applied
for a TIN or intends to apply for a TIN in the near future. If
the box in Part 2 is checked, the Holder or other payee must also
complete the Certificate of Awaiting Taxpayer Identification
Number below in order to avoid backup withholding.
Notwithstanding that the box in Part 2 is checked and the
Certificate of Awaiting Taxpayer Identification Number is
completed, the Exchange Agent will withhold 31% of all payments
made prior to the time a properly certified TIN is provided to
the Exchange Agent. The Exchange Agent will retain such amounts
withheld during the 60-day period following the date of the
Substitute Form W-9. If the Holder furnishes the Exchange Agent
with its TIN within 60 days after the date of the Substitute
Form W-9, the amounts retained during the 60-day period will be
remitted to the Holder and no further amounts shall be retained
or withheld from payments made to the Holder thereafter. If,
however, the Holder has not provided the Exchange Agent with its
TIN within such 60-day period, amounts withheld will be remitted
to the IRS as backup withholding. In addition, 31% of all
payments made thereafter will be withheld and remitted to the IRS
until a correct TIN is provided.
The Holder is required to give the Exchange Agent the TIN
(e.g., social security number or employer identification number)
of the registered owner of the Original Capital Securities or of
the last transferee appearing on the transfers attached to, or
endorsed on, the Original Capital Securities. If the Original
Capital Securities are registered in more than one name or are
not in the name of the actual owner, consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9" for additional guidance on which number
to report.
Certain Holders (including, among others, corporations,
financial institutions and certain foreign persons) may not be
subject to these backup withholding and reporting requirements.
Such Holders should nevertheless complete the attached Substitute
Form W-9 below, and write "exempt" on the face thereof, to avoid
possible erroneous backup withholding. A foreign person may
qualify as an exempt recipient by submitting a properly completed
IRS Form W-8, signed under penalties of perjury, attesting to
that holder's exempt status. Please consult the enclosed
"Guidelines for Certification of Taxpayer Identification Number
on Substitute Form W-9" for additional guidance on which Holders
are exempt from backup withholding.
Backup withholding is not an additional U.S. Federal income
tax. Rather, the U.S. Federal income tax liability of a person
subject to backup withholding will be reduced by the amount of
tax withheld. If withholding results in an overpayment of taxes,
a refund may be obtained.
10. WAIVER OF CONDITIONS. The Corporation and the Trust
reserve the absolute right to waive satisfaction of any or all
conditions enumerated in the Prospectus.
11. NO CONDITIONAL TENDERS. No alternative, conditional or
contingent tenders will be accepted. All tendering Holders, by
execution of this Letter of Transmittal, shall waive any right to
receive notice of the acceptance of Original Capital Securities
for exchange.
Neither the Corporation, the Trust, the Exchange Agent nor
any other person is obligated to give notice of any defect or
irregularity with respect to any tender of Original Capital
Securities nor shall any of them incur any liability for failure
to give any such notice.
12. LOST, DESTROYED OR STOLEN CERTIFICATES. If any
Certificate(s) representing Original Capital Securities have been
lost, destroyed or stolen, the Holder should promptly notify the
Exchange Agent. The Holder will then be instructed as to the
steps that must be taken in order to replace the Certificate(s).
This Letter of Transmittal and related documents cannot be
processed until the procedures for replacing lost, destroyed or
stolen Certificate(s) have been followed.
13. SECURITY TRANSFER TAXES. Holders who tender their
Original Capital Securities for exchange will not be obligated to
pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be
issued in the name of, any person other than the registered
Holder of the Original Capital Securities tendered, or if a
transfer tax is imposed for any reason other than the exchange of
Original Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer tax (whether imposed
on the registered holder or any other persons) will be payable by
the tendering Holder. If satisfactory evidence of payment of
such taxes or exemption therefrom is not submitted with this
Letter of Transmittal, the amount of such transfer taxes will be
billed directly to such tendering Holder.
IMPORTANT: BOOK-ENTRY CONFIRMATION OR THIS LETTER OF
TRANSMITTAL (OR FACSIMILE THEREOF) AND ALL OTHER REQUIRED
DOCUMENTS MUST BE RECEIVED BY THE EXCHANGE AGENT ON OR PRIOR
TO THE EXPIRATION DATE.
TO BE COMPLETED BY ALL TENDERING SECURITYHOLDERS
(SEE INSTRUCTION 9)
PAYOR'S NAME: THE BANK OF NEW YORK
=================================================================
- -----------------------------------------------------------------
SUBSTITUTE PART 1 -- PLEASE PROVIDE TIN:
FORM W-9 YOUR TIN IN THE BOX AT _______________
RIGHT AND CERTIFY BY Social Security
SIGNING AND DATING BELOW: or Employer
Identification
Number
----------------------------------------------
DEPARTMENT OF PART 2 -- TIN Applied for [ ]
THE TREASURY
INTERNAL
REVENUE
SERVICE
----------------------------------------------
CERTIFICATION -- UNDER THE PENALTIES OF
PERJURY, I Certify (1) The number shown on
this form is my correct taxpayer
identification number (or I am waiting for a
number to be issued to me), (2) I am not
subject to backup withholding either because
(i) I am exempt from backup withholding,
(ii) I have not been notified by the Internal
Revenue Service ("IRS") that I am subject to
backup withholding as a result of a failure
to report all interest or dividends, or
(iii) the IRS has notified me that I am no
longer subject to backup withholding, and
(3) any other information provided on this
form is true and correct.
Signature __________________________________
PAYOR'S REQUEST
FOR TAXPAYER
IDENTIFICATION Date:____________________
NUMBER ("TIN") AND
CERTIFICATION
- -----------------------------------------------------------------
You must cross out item (iii) in Part (2) above if you have been
notified by the IRS that you are subject to backup withholding
because of underreporting interest or dividends on your tax
return and you have not been notified by the IRS that you are no
longer subject to backup withholding.
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY IN CERTAIN
CIRCUMSTANCES RESULT IN BACKUP WITHHOLDING OF 31% OF
ANY AMOUNTS PAID TO YOU PURSUANT TO THE EXCHANGE OFFER.
PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION
OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE
FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU CHECKED
THE BOX IN PART 2 OF THE SUBSTITUTE FORM W-9.
- -----------------------------------------------------------------
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer
identification number has not been issued to me, and either (1) I
have mailed or delivered an application to receive a taxpayer
identification number to the appropriate Internal Revenue Service
Center or Social Security Administration Office or (2) I intend
to mail or deliver an application in the near future. I
understand that if I do not provide a taxpayer identification
number by the time of payment, 31% of all payments made to me on
account of the Exchange Capital Securities shall be retained
until I provide a taxpayer identification number to the Exchange
Agent and that, if I do not provide my taxpayer identification
number within 60 days, such retained amounts shall be remitted to
the Internal Revenue Service as backup withholding and 31% of all
reportable payments made to me thereafter will be withheld and
remitted to the Internal Revenue Service until I provide a
taxpayer identification number.
=================================================================
Signature(s) Date
- -----------------------------------------------------------------
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
ANY AND ALL OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
(LIQUIDATION AMOUNT $1,000 PER CAPITAL SECURITY)
OF
PATRIOT CAPITAL TRUST I
FULLY AND UNCONDITIONALLY GUARANTEED BY
PATRIOT BANK CORP.
This Notice of Guaranteed Delivery, or one substantially
equivalent to this form, must be used to accept the Exchange
Offer (as defined below) if (i) certificates for the Trust's (as
defined below) 10.30% Original Capital Securities (the "Original
Capital Securities") are not immediately available, (ii) Original
Capital Securities, the Letter of Transmittal and all other
required documents cannot be delivered to The Bank of New York
(the "Exchange Agent") on or prior to the Expiration Date (as
defined in the Prospectus referred to below) or (iii) the
procedures for delivery by book-entry transfer cannot be
completed on a timely basis. This Notice of Guaranteed Delivery
may be delivered by hand, overnight courier or mail, or
transmitted by facsimile transmission, to the Exchange Agent.
See "The Exchange Offer -Procedures for Tendering Original
Capital Securities" in the Prospectus. In addition, in order to
utilize the guaranteed delivery procedure to tender Original
Capital Securities pursuant to the Exchange Offer, a completed,
signed and dated Letter of Transmittal relating to the Original
Capital Securities (or facsimile thereof) must also be received
by the Exchange Agent on or prior to the Expiration Date.
Capitalized terms not defined herein have the meanings assigned
to them in the Letter of Transmittal.
The Exchange Agent For The Exchange Offer Is:
THE BANK OF NEW YORK
<TABLE>
<CAPTION>
<S> <C>
<C>
By Registered or Certified Mail: Facsimile Transmissions
By Hand or Overnight Delivery
The Bank of New York (Eligible Institutions Only)
The Bank of New York
Floor 7E (212) 815-6639
101 Barclay Street
101 Barclay Street Confirm by Telephone:
Corporate Trust
New York, NY 10286 (212) 815-2742
Securities Window
Attention: Enrique Lopez,
Ground Level
Reorganization Section
New York, NY 10286
Attention: Enrique Lopez,
Reorganization Section
</TABLE>
Delivery of this Notice of Guaranteed Delivery to an address
other than as set forth above or transmission of this Notice of
Guaranteed Delivery via facsimile to a number other than as set
forth above will not constitute a valid delivery.
THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO
GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL
IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER
THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN
THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER
OF TRANSMITTAL.
<PAGE>
LADIES AND GENTLEMEN:
The undersigned hereby tenders to Patriot Capital Trust I, a
Delaware business trust (the "Trust") and to Patriot Bank Corp.,
a Delaware corporation (the "Corporation"), upon the terms and
subject to the conditions set forth in the Prospectus dated
_______________, 1997 (as the same may be amended or supplemented
from time to time, the "Prospectus"), and the related Letter of
Transmittal (which together constitute the "Exchange Offer"),
receipt of which is hereby acknowledged, the aggregate principal
amount of Original Capital Securities set forth below pursuant to
the guaranteed delivery procedures set forth in the Prospectus
under the caption "The Exchange Offer -- Procedures for Tendering
Original Capital Securities."
Name(s) of Registered Holder(s):
_________________________________________________________________
Aggregate Liquidation Amount of Original Capital Securities:
$___________________________
Amount Tendered: $__________*
If Original Capital Securities will be tendered by
forwarding a Certificate or Certificates, provide the following
information:
Certificate No(s)
(if available): __________________________
__________________________
Total Liquidation Amount
Represented by Original Capital
Securities Certificate(s):
$________________________
If Original Capital Securities will be tendered by book-entry
transfer, provide the following information:
DTC Account Number: __________________
Date: __________________
* Must be in denominations of a Liquidation Amount of $1,000
and any integral multiple thereof, and not less than
$100,000 aggregate Liquidation Amount.
____________________________________________________________
All authority herein conferred or agreed to be conferred
shall survive the death or incapacity of the undersigned and
every obligation of the undersigned hereunder shall be binding
upon the heirs, personal representatives, successors and assigns
of the undersigned.
_________________________________________________________________
PLEASE SIGN HERE
X_____________________________ _____________________________
X_____________________________ _____________________________
Signature(s) of Owner(s) Date
or Authorized Signatory
Area Code and Telephone Number: __________________
This Notice of Guaranteed Delivery must be signed by the
holder(s) of the Original Capital Securities as their name(s)
appear(s) on certificates for Original Capital Securities or on a
security position listing in the records of DTC, or by person(s)
authorized to become registered Holder(s) by endorsement and
documents transmitted with this Notice of Guaranteed Delivery.
If signature is by a trustee, executor, administrator, guardian,
attorney-in-fact, officer or other person acting in a fiduciary
or representative capacity, such person must set forth his or her
full title below.
Please print name(s) and address(es):
Name(s): __________________________________________________
__________________________________________________
__________________________________________________
Capacity: __________________________________________________
Address(es): __________________________________________________
__________________________________________________
__________________________________________________
<PAGE>
THE GUARANTEE ON THE REVERSE SIDE MUST BE COMPLETED
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a firm or other entity identified in Rule
17Ad-15 under the Securities Exchange Act of 1934, as amended, as
an "eligible guarantor institution," including (as such terms are
defined therein): (i) a bank; (ii) a broker, dealer, municipal
securities broker, municipal securities dealer, government
securities broker or government securities dealer; (iii) a credit
union; (iv) a national securities exchange, registered securities
association or clearing agency; or (v) a savings association that
is a participant in a Securities Transfer Association recognized
program (each of the foregoing being referred to as an "Eligible
Institution"), hereby guarantees to deliver to the Exchange
Agent, at one of its addresses set forth above, either the
Original Capital Securities tendered hereby in proper form for
transfer, or confirmation of the book-entry transfer of such
original Capital Securities to the Exchange Agent's account at
The Depository Trust Company ("DTC"), pursuant to the procedures
for book-entry transfer set forth in the Prospectus, in either
case together with one or more properly completed and duly
executed Letter(s) of Transmittal (or facsimile thereof) and any
other required documents within three business days after the
date of execution of this Notice of Guaranteed Delivery.
The undersigned acknowledges that it must deliver the
Letter(s) of Transmittal and the Original Capital Securities
tendered hereby to the Exchange Agent within the time period set
forth above and that failure to do so could result in a financial
loss to the undersigned.
_________________________ __________________________________
Name of Firm Authorized Signature
_________________________ __________________________________
Address Title
_________________________ __________________________________
Zip Code (Please Type or Print)
_________________________ __________________________________
Area Code and Telephone No. Dated:
NOTE: DO NOT SEND CERTIFICATES FOR ORIGINAL CAPITAL SECURITIES
WITH THIS FORM. CERTIFICATES FOR ORIGINAL CAPITAL SECURITIES
SHOULD ONLY BE SENT WITH YOUR LETTER OF TRANSMITTAL.
_________________, 1997
The Bank of New York
Corporate Trust Administration
101 Barclay Street
New York, New York 10286
Ladies and Gentlemen:
Patriot Capital Trust I, a trust formed under the laws of
the State of Delaware (the "Trust") proposes to make an offer
(the "Exchange Offer") to exchange any and all of its outstanding
10.30% Capital Securities (Liquidation Amount $1,000 per Capital
Security) (the "Original Capital Securities") for its 10.30%
Exchange Capital Securities (Liquidation Amount $1,000 per
Capital Security) (the "Exchange Capital Securities"). All of
the beneficial interests represented by common securities of the
Trust are owned by Patriot Bank Corp., a Delaware corporation
(the "Corporation"). The terms and conditions of the Exchange
Offer as currently contemplated are set forth in a prospectus,
dated ____________, 1997 (the "Prospectus"), to be distributed to
all record holders of the Original Capital Securities. A copy of
the Prospectus is attached hereto as Exhibit A. The Original
Capital Securities and the Exchange Capital Securities are
collectively referred to herein as the "Securities." Capitalized
terms used but not defined herein shall have the same meaning
given them in the Prospectus.
A copy of each of the form of the Letter of Transmittal, the
form of the Notice of Guaranteed Delivery, the form of letter to
brokers and the form of letter to clients are attached hereto as
Exhibit B.
The Trust hereby appoints The Bank of New York to act as
exchange agent (the "Exchange Agent") in connection with the
Exchange Offer. References hereinafter to "you" shall refer to
The Bank of New York.
The Exchange Offer is expected to be commenced by the Trust
on or about _____________, 1997. The Letter of Transmittal
accompanying the Prospectus (or in the case of book entry
securities, the ATOP system) is to be used by the holders of the
Original Capital Securities to accept the Exchange Offer and
contains instructions with respect to (i) the delivery of
certificates for Original Capital Securities tendered in
connection therewith and (ii) the book entry transfer of
Securities to the Exchange Agent's account.
The Exchange Offer shall expire at 5:00 p.m., New York City
time, on ________________, 1997 or on such later date or time to
which the Trust may extend the Exchange Offer (the "Expiration
Date"). Subject to the terms and conditions set forth in the
Prospectus, the Trust expressly reserves the right to extend the
Exchange Offer from time to time by giving oral (to be confirmed
in writing) or written notice to you before 9:00 a.m., New York
City time, on the Business Day following the previously scheduled
Expiration Date.
The Trust expressly reserves the right to amend or terminate
the Exchange Offer, and not to accept for exchange any Original
Capital Securities not theretofore accepted for exchange, upon
the occurrence of any of the conditions of the Exchange Offer
specified in the Prospectus under the caption "The Exchange Offer
- -- Conditions to the Exchange Offer." The Trust will give you
prompt oral (confirmed in writing) or written notice of any
amendment, termination or nonacceptance of Original Capital
Securities.
In carrying out your duties as Exchange Agent, you are to
act in accordance with the following instructions:
1. You will perform such duties and only such duties as
are specifically set forth in the section of the Prospectus
captioned "The Exchange Offer" or as specifically set forth
herein; provided, however, that in no way will your general duty
to act in good faith be discharged by the foregoing.
2. You will establish an account with respect to the
Original Capital Securities at The Depository Trust Company (the
"Book-Entry Transfer Facility") for purposes of the Exchange
Offer within two Business Days after the date of the Prospectus,
and any financial institution that is a participant in the Book-
Entry Transfer Facility's system may make book-entry delivery of
the Original Capital Securities by causing the Book-Entry
Transfer Facility to transfer such Original Capital Securities
into your account in accordance with the Book-Entry Transfer
Facility's procedure for such transfer.
3. You are to examine each of the Letters of Transmittal
and certificates for Original Capital Securities (or confirmation
of book-entry transfer into your account at the Book-Entry
Transfer Facility) and any other documents delivered or mailed to
you by or for holders of the Original Capital Securities to
ascertain whether: (i) the Letters of Transmittal and any such
other documents are duly executed and properly completed in
accordance with instructions set forth therein and (ii) the
Original Capital Securities have otherwise been properly
tendered. In each case where the Letter of Transmittal or any
other document has been improperly completed or executed or any
of the certificates for Original Capital Securities are not in
proper form for transfer or some other irregularity in connection
with the acceptance of the Exchange Offer exists, you will
endeavor to inform such holders of the need for fulfillment of
all requirements and to take any other action as may be necessary
or advisable to cause such irregularity to be corrected.
4. With the approval of any Administrative Trustee of the
Trust or any person designated in writing by the Corporation (a
"Designated Officer") (such approval, if given orally, to be
confirmed in writing) or any other party designated by any such
Administrative Trustee or Designated Officer in writing, you are
authorized to waive any irregularities in connection with any
tender of Original Capital Securities pursuant to the Exchange
Offer.
5. Tenders of Original Capital Securities may be made only
as set forth in the Letter of Transmittal and in the section of
the Prospectus captioned "The Exchange Offer -- Procedures for
Tendering Original Capital Securities," and Original Capital
Securities shall be considered properly tendered to you only when
tendered in accordance with the procedures set forth therein.
Notwithstanding the provisions of this paragraph 5, Original
Capital Securities which any Administrative Trustee of the Trust
or Designated Officer of the Corporation shall approve as having
been properly tendered shall be considered to be properly
tendered. Such approval, if given orally, shall be confirmed in
writing.
6. You shall advise the Trust and the Corporation with
respect to any Original Capital Securities received subsequent to
the Expiration Date and accept their instructions with respect to
disposition of such Original Capital Securities.
7. You shall accept tenders:
(a) in cases where the Original Capital Securities are
registered in two or more names only if signed by all named
holders;
(b) in cases where the signing person (as indicated on
the Letter of Transmittal) is acting in a fiduciary or a
representative capacity only when proper evidence of such
person's authority so to act is submitted; and
(c) from persons other than the registered holder of
Original Capital Securities provided that customary transfer
requirements, including satisfaction of any applicable transfer
taxes, are fulfilled.
You shall accept partial tenders of Original Capital
Securities where so indicated and as permitted in the Letter of
Transmittal and deliver certificates for Original Capital
Securities to the transfer agent for division and return any
untendered Original Capital Securities to the holder (or such
other person as may be designated in the Letter of Transmittal)
as promptly as practicable after expiration or termination of the
Exchange Offer.
8. Upon satisfaction or waiver of all of the conditions to
the Exchange Offer, the Trust will notify you (such notice, if
given orally, to be confirmed in writing) of its acceptance,
promptly after the Expiration Date, of all Original Capital
Securities properly tendered and you, on behalf of the Trust,
will exchange such Original Capital Securities for Exchange
Capital Securities and cause such Original Capital Securities to
be canceled. Delivery of Exchange Capital Securities will be
made on behalf of the Trust by you at the rate of $1,000
liquidation amount of Exchange Capital Securities for each $1,000
liquidation amount of the corresponding series of Original
Capital Securities tendered promptly after notice (such notice,
if given orally, to be confirmed in writing) of acceptance of
said Original Capital Securities by the Trust; provided, however,
that in all cases, Original Capital Securities tendered pursuant
to the Exchange Offer will be exchanged only after timely receipt
by you of certificates for such original Capital Securities (or
confirmation of book-entry transfer into your account at the
Book-Entry Transfer Facility), a properly completed and duly
executed Letter of Transmittal (or facsimile thereof) with any
required signature guarantees and any other required documents.
You shall issue Exchange Capital Securities only in denominations
of $100,000 and integral multiples of $1,000 in excess thereof.
Original Capital Securities may be tendered in whole or in part
in denominations of $100,000 and integral multiples of $1,000 in
excess thereof, provided that if any Original Capital Securities
are tendered for exchange in part, the untendered principal
amount thereof must be $100,000 or any integral multiple of
$1,000 in excess thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable,
except that, subject to the terms and upon the conditions set
forth in the Prospectus and the Letter of Transmittal, Original
Capital Securities tendered pursuant to the Exchange Offer may be
withdrawn at any time on or prior to the Expiration Date.
10. The Trust shall not be required to exchange any
Original Capital Securities tendered if any of the conditions set
forth in the Exchange Offer are not met. Notice of any decision
by the Trust not to exchange any Original Capital Securities
tendered shall be given orally (and confirmed in writing) by the
Trust to you.
11. If, pursuant to the Exchange Offer, the Trust does not
accept for exchange all or part of the Original Capital
Securities tendered because of an invalid tender, the occurrence
of certain other events set forth in the Prospectus under the
caption "The Exchange Offer -- Conditions to the Exchange Offer"
or otherwise, you shall promptly after the expiration or
termination of the Exchange Offer return those certificates for
unaccepted Original Capital Securities (or effect appropriate
book-entry transfer), together with any related required
documents and the Letters of Transmittal relating thereto that
are in your possession, to the persons who deposited them.
12. All certificates for reissued Original Capital
Securities, unaccepted Original Capital Securities or for
Exchange Capital Securities shall be forwarded (a) by first-class
mail, under a blanket surety bond protecting you and the Trust
from loss or liability arising out of the non-receipt or non-
delivery of such certificates; or (b) by effectuating appropriate
book-entry transfer.
13. You are not authorized to pay or offer to pay any
concessions, commissions or solicitation fees to any broker,
dealer, bank or other persons or to engage or utilize any person
to solicit tenders.
14. As Exchange Agent hereunder, you:
(a) shall have no duties or obligations other than
those specifically set forth herein or as may be subsequently
agreed to in writing by you and the Trust;
(b) will be regarded as making no representations and
having no responsibilities as to the validity, sufficiency, value
or genuineness of any of the certificates or the Original Capital
Securities represented thereby deposited with you pursuant to the
Exchange Offer, and will not be required to and will make no
representation as to the validity, value or genuineness of the
Exchange Offer or the Letter of Transmittal or any other
disclosure materials delivered in connection therewith;
(c) shall not be obligated to take any legal action
hereunder which might in your reasonable judgment involve any
expense or liability, unless you shall have been furnished with
indemnity reasonably satisfactory to you;
(d) may reasonably rely on and shall be protected in
acting in reliance upon any certificate, instrument, opinion,
notice, letter, telegram or other document or security delivered
to you and reasonably believed by you to be genuine and to have
been signed by the proper party or parties;
(e) may reasonably act upon any tender, statement,
request, agreement or other instrument whatsoever not only as to
its due execution and validity and effectiveness of its
provisions, but also as to the truth and accuracy of any
information contained therein, which you shall in good faith
believe to be genuine or to have been signed or represented by a
proper person or persons;
(f) may rely on and shall be protected in acting upon
written or oral instructions from any Administrative Trustee of
the Trust or from any Designated Officer of the Corporation;
(g) may consult with counsel satisfactory to you,
including counsel for the Trust, with respect to any questions
relating to your duties and responsibilities and the advice or
opinion of such counsel shall be full and complete authorization
and protection in respect of any action taken, suffered or
omitted to be taken by you hereunder in good faith and in
accordance with the advice or opinion of such counsel, provided
that you shall promptly notify the Corporation of any action
taken or omitted by you in reliance upon such advice or opinion;
and
(h) shall not advise any person tendering Original
Capital Securities pursuant to the Exchange Offer as to the
wisdom of making such tender or as to the market value or decline
or appreciation in market value of any Original Capital
Securities.
15. You shall take such action as may from time to time be
requested by the Trust or its counsel or any Designated Officer
of the Corporation (and such other action as you may reasonably
deem appropriate) to furnish copies of the Prospectus, Letter of
Transmittal and the Notice of Guaranteed Delivery or such other
forms as may be approved from time to time by the Trust or the
Corporation, to all persons requesting such documents and to
accept and comply with telephone requests for information
relating to the Exchange Offer, provided that such information
shall relate only to the procedures for accepting (or withdrawing
from) the Exchange Offer. The Trust will furnish you with copies
of such documents at your request. All other requests for
information relating to the Exchange Offer shall be directed to
the Trust, Attention: Richard A. Elko.
16. You shall advise by facsimile transmission or
telephone, and promptly thereafter confirm in writing to
Richard A. Elko of the Trust, and such other person or persons as
the Trust or the Corporation may request, daily (and more
frequently during the week immediately preceding the Expiration
Date and if otherwise requested) up to and including the
Expiration Date, as to the number of Original Capital Securities
which have been tendered pursuant to the Exchange Offer and the
items received by you pursuant to this Agreement, separately
reporting and giving cumulative totals as to items properly
received and items improperly received. In addition, you will
also inform, and cooperate in making available to, the Trust or
the Corporation or any such other person or persons, upon oral
request made from time to time on or prior to the Expiration
Date, such other information as it or such person reasonably
requests. Such cooperation shall include, without limitation,
the granting by you to the Trust or the Corporation, and such
person as the Trust or the Corporation may request, of access to
those persons on your staff who are responsible for receiving
tenders, in order to ensure that immediately prior to the
Expiration Date the Trust or the Corporation shall have received
information in sufficient detail to enable it to decide whether
to extend the Exchange Offer. You shall prepare a final list of
all persons whose tenders were accepted, the aggregate principal
amount of Original Capital Securities tendered, the aggregate
principal amount of Original Capital Securities accepted and
deliver said list to the Trust promptly after the Expiration
Date.
17. Letters of Transmittal and Notices of Guaranteed
Delivery shall be stamped by you as to the date and the time of
receipt thereof and shall be preserved by you for a period of
time at least equal to the period of time you preserve other
records pertaining to the transfer of securities. You shall
dispose of unused Letters of Transmittal and other surplus
materials by returning them to the Company.
18. You hereby expressly waive any lien, encumbrance or
right of set-off whatsoever that you may have with respect to
funds deposited with you for the payment of transfer taxes by
reasons of amounts, if any, borrowed by the Trust, or any of its
subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder, you
shall be entitled to the compensation set forth on Schedule I
attached hereto, plus reasonable out-of-pocket expenses and
reasonable attorneys' fees, incurred in connection with your
services hereunder, within thirty days following receipt by the
Corporation of an itemized statement of such expenses and fees in
reasonable detail.
20. (a) The Trust covenants and agrees to indemnify and
hold you harmless in your capacity as Exchange Agent hereunder
against any loss, liability, cost or expense, including
attorneys' fees and expenses, arising out of or in connection
with any act, omission, delay or refusal made by you in reliance
upon any signature, endorsement, assignment, certificate, order,
request, notice, instruction or other instrument or document
reasonably believed by you to be valid, genuine and sufficient
and in accepting any tender or effecting any transfer of Original
Capital Securities reasonably believed by you in good faith to be
authorized, and in delaying or refusing in good faith to accept
any tenders or effect any transfer of Original Capital
Securities; provided, however, that the Trust shall not be liable
for indemnification or otherwise for any loss, liability, cost or
expense to the extent arising out of your gross negligence or
willful misconduct. In no case shall the Trust be liable under
this indemnity with respect to any claim against you unless the
Trust shall be notified by you, by letter or by facsimile
confirmed by letter, of the written assertion of a claim against
you or of any other action commenced against you, promptly after
you shall have received any such written assertion or notice of
commencement of action. The Trust shall be entitled to
participate at its own expense in the defense of any such claim
or other action, and, if the Trust so elects, the Trust shall
assume the defense of any suit brought to enforce any such claim.
In the event that the Trust shall assume the defense of any such
suit, the Trust shall not be liable for the fees and expenses of
any additional counsel thereafter retained by you so long as the
Trust shall retain counsel satisfactory to you to defend such
suit, and so long as you have not determined, in your reasonable
judgment, that a conflict of interest exists between you and the
Trust.
(b) You agree that, without the prior written consent
of the Trust (which consent shall not be unreasonably withheld),
you will not settle, compromise or consent to the entry of any
pending or threatened claim, action, or proceeding in respect of
which indemnification could be sought in accordance with the
indemnification provisions of this Agreement (whether or not you
or the Trust or any of its trustees or controlling persons is an
actual or potential party to such claim, action or proceeding),
unless such settlement, compromise or consent includes an
unconditional release of the Trust and its trustees and
controlling persons from all liability arising out of such claim,
action or proceeding.
21. You shall arrange to comply with all requirements under
the tax laws of the United States, including those relating to
missing Tax Identification Numbers, and shall file any
appropriate reports with the Internal Revenue Service. The Trust
understands that you are required in certain instances to deduct
31% of the amounts to be paid with respect to interest paid on
the Exchange Capital Securities and proceeds from the sale,
exchange, redemption or retirement of the Exchange Capital
Securities from holders who have not supplied their correct
Taxpayer Identification Number or required certification. Such
funds will be turned over to the Internal Revenue Service in
accordance with applicable regulations.
22. You shall notify the Trust of the amount of any
transfer taxes payable in respect of the exchange of Original
Capital Securities and, upon receipt of written approval from the
Trust, you shall deliver or cause to be delivered, in a timely
manner to each governmental authority to which any transfer taxes
are payable in respect of the exchange of Original Capital
Securities, your check in the amount of all transfer taxes so
payable, and the Trust shall reimburse you for the amount of any
and all transfer taxes payable in respect of the exchange of
Original Capital Securities; provided, however, that you shall
reimburse the Trust for amounts refunded to you in respect of
your payment of any such transfer taxes, at such time as such
refund is received by you.
23. This Agreement and your appointment as Exchange Agent
hereunder shall be construed and enforced in accordance with the
laws of the State of New York applicable to agreements made and
to be performed entirely within such state, and without regard to
conflict of laws principles, and shall inure to the benefit of,
and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto, and no
other person shall have any rights hereunder.
24. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
25. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way
be affected or impaired thereby.
26. This Agreement shall not be deemed or construed to be
modified, amended, rescinded, canceled or waived, in whole or in
part, except by a written instrument signed by a duly authorized
representative of the party to be charged. This Agreement may
not be modified orally.
27. Unless otherwise provided herein, all notices, requests
and other communications to any party hereunder shall be in
writing (including facsimile or similar writing) and shall be
given to such party, addressed to it, at its address or facsimile
number set forth below:
If to the Trust:
Patriot Capital Trust I
c/o Patriot Bank Corp.
High and Hanover Streets
Pottstown, Pennsylvania 19464
Facsimile: (610) 323-1500
Attention: Richard A. Elko
If to the Exchange Agent:
The Bank of New York
Floor 21 West
101 Barclay Street
New York, New York 10286
Facsimile: (212) 815-5915
Attention: Corporate Trust Administration
28. Unless terminated earlier by the parties hereto, this
Agreement shall terminate 180 days following the Expiration Date.
Notwithstanding the foregoing, Paragraphs 19, 20 and 22 shall
survive the termination of this Agreement. Upon any termination
of this Agreement, you shall promptly deliver to the Trust any
certificates for Securities, funds or property then held by you
as Exchange Agent under this Agreement.
29. This Agreement shall be binding and effective as of the
date hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the
enclosed copy.
PATRIOT CAPITAL TRUST I
By_________________________________
Name: Richard A. Elko
Title: Administrative Trustee
Accepted as the date
first above written:
THE BANK OF NEW YORK, as Exchange
Agent
By_________________________________
Name: ___________________
Title: __________________<PAGE>
SCHEDULE I
FEES
THE BANK OF NEW YORK
CORPORATE FINANCE UNIT
SCHEDULE OF FEES
FOR
PATRIOT CAPITAL TRUST I
10.30% EXCHANGE CAPITAL SECURITIES
I. EXCHANGE AGENT $________
Covers review of the Letter of Transmittal, the Exchange
Agent Agreement and other related documentation; establishment of
accounts and systems link with depositories; operational and
administrative charges and time spent in connection with the
review, receipt and processing of Letters of Transmittal, Agent's
Messages and Notices of Guaranteed Delivery.
Note: The fees set forth in this schedule are subject to
review of documentation and our internal credit and conflict
review. The fees are also subject to change should circumstances
warrant. Out-of-pocket expenses and disbursements, including
counsel fees, incurred in the performance of our duties will be
added to the billed fees. We may place orders to buy/sell
financial instruments with outside broker-dealers that we select,
as well as The Bank of New York or its affiliates. These
transactions (for which normal and customary spreads will be
earned in addition to the charges quoted above) will be executed
on a riskless principal basis solely for your account(s) and
without recourse to us or our affiliates. If you choose to
invest in any mutual fund, The Bank of New York and/or our
affiliates may earn service fees/expenses associated with these
funds as disclosed in the mutual fund prospectus provided to you,
in addition to the charges quoted above. We will provide
periodic account statements describing transactions executed for
your account(s). Trade confirms will be available upon your
request at no additional charge. If a deal should fail to close
for reasons beyond our control, we reserve the right to charge
our acceptance fee plus reimbursement for legal fees incurred.
Fees for any services not specifically covered in this or
other applicable schedules will be based on an appraisal of
services rendered.
PATRIOT CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
IN EXCHANGE FOR
10.30% EXCHANGE CAPITAL SECURITIES
To: Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees:
Patriot Capital Trust I (the "Trust") is offering, upon and
subject to the terms and conditions set forth in a prospectus
dated __________, 1997 (the "Prospectus"), and the enclosed
letter of transmittal (the "Letter of Transmittal"), to exchange
(the "Exchange Offer") its 10.30% Exchange Capital Securities for
any and all of its outstanding 10.30% Original Capital Securities
(the "Original Capital Securities"). The Exchange Offer is being
made in order to satisfy certain obligations of the Trust and
Patriot Bank Corp. (the "Corporation") contained in the
registration rights agreement dated June 5, 1997, among the
Trust, the Corporation and the initial purchasers referred to
therein.
We are requesting that you contact your clients for whom you
hold Original Capital Securities regarding the Exchange Offer.
For your information and for forwarding to your clients for whom
you hold Original Capital Securities registered in your name or
in the name of your nominee, or who hold Original Capital
Securities registered in their own names, we are enclosing the
following documents:
1. The Prospectus dated __________, 1997;
2. The Letter of Transmittal for your use and for the
information (or the use, where relevant) of your clients;
3. A Notice of Guaranteed Delivery to be used to
accept the Exchange Offer if certificates for Original Capital
Securities are not immediately available or time will not permit
all required documents to reach the Exchange Agent prior to the
Expiration Date (as defined below) or if the procedure for book-
entry transfer cannot be completed on a timely basis;
4. A form of letter which may be sent to your clients
for whose account you hold Original Capital Securities registered
in your name or the name of your nominee, with space provided for
obtaining such clients' instructions with regard to the Exchange
Offer; and
5. Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
YOUR PROMPT ACTION IS REQUESTED. THE EXCHANGE OFFER WILL
EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON __________, 1997, OR
ON SUCH LATER DATE OR TIME TO WHICH THE CORPORATION OR THE TRUST
MAY EXTEND THE EXCHANGE OFFER (THE "EXPIRATION DATE"). THE
ORIGINAL CAPITAL SECURITIES TENDERED PURSUANT TO THE EXCHANGE
OFFER MAY BE WITHDRAWN AT ANY TIME BEFORE THE EXPIRATION DATE.
To participate in the Exchange Offer, your clients must
tender by having you execute for them a book-entry transfer of
tendered Original Capital Securities into the account of The Bank
of New York, as Exchange Agent, at The Depository Trust Company
("DTC") using DTC's Automated Tender Offer Program. (Your clients
may also tender by having certificates representing the Original
Capital Securities, a duly executed and properly completed Letter
of Transmittal (or facsimile thereof), with any required
signature guarantees, and any other required documents delivered
to such Exchange Agent.) The Letter of Transmittal and the
Prospectus should be consulted for complete instructions and
information about participation in the Exchange Offer.
If holders of Original Capital Securities wish to tender,
but it is impracticable for them to forward their certificates
for Original Capital Securities prior to the expiration of the
Exchange Offer or to comply with the book-entry transfer
procedures on a timely basis, a tender may be effected by
following the guaranteed delivery procedures described in the
Prospectus under "The Exchange Offer -- Procedures for Tendering
Original Capital Securities -- Guaranteed Delivery."
The Trust will, upon request, reimburse brokers, dealers,
commercial banks and trust companies for reasonable and necessary
costs and expenses incurred by them in forwarding the Prospectus
and the related documents to the beneficial owners of Original
Capital Securities held by them as nominee or in a fiduciary
capacity. The Trust will pay or cause to be paid all stock
transfer taxes applicable to the exchange of Original Capital
Securities pursuant to the Exchange Offer, except as set forth in
Instruction 6 of the Letter of Transmittal.
Any inquiries you may have with respect to the Exchange
Offer, or requests for additional copies of the enclosed
materials, should be directed to The Bank of New York, the
Exchange Agent for the Original Capital Securities, at its
address and telephone number set forth on the front of the Letter
of Transmittal.
Very truly yours,
PATRIOT CAPITAL TRUST I
NOTHING HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU OR ANY PERSON AS AN AGENT OF THE TRUST OR THE EXCHANGE AGENT,
OR AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE
ANY STATEMENTS ON BEHALF OF EITHER OF THEM WITH RESPECT TO THE
EXCHANGE OFFER, EXCEPT FOR STATEMENTS EXPRESSLY MADE IN THE
PROSPECTUS OR THE LETTER OF TRANSMITTAL.
Enclosures
PATRIOT CAPITAL TRUST I
OFFER FOR ALL OUTSTANDING
10.30% ORIGINAL CAPITAL SECURITIES
IN EXCHANGE FOR
10.30% EXCHANGE CAPITAL SECURITIES
To Our Clients:
Enclosed for your consideration is a prospectus dated
______, 1997 (the "Prospectus"), and the related letter of
transmittal (the "Letter of Transmittal"), relating to the offer
(the "Exchange Offer") of Patriot Capital Trust I (the "Trust")
and Patriot Bank Corp. (the "Corporation") to exchange the
Trust's 10.30% Exchange Capital Securities (the "Exchange Capital
Securities") for any and all of the Trust's outstanding 10.30%
Original Capital Securities (the "Original Capital Securities"),
upon the terms and subject to the conditions described in the
Prospectus. The Exchange Offer is being made in order to satisfy
certain obligations of the Trust and the Corporation contained in
the registration rights agreement dated June 5, 1997, among the
Trust, the Corporation, and the initial purchasers referred to
therein.
This material is being forwarded to you as the beneficial
owner of the Original Capital Securities carried by us in your
account but not registered in your name. A TENDER OF SUCH
ORIGINAL CAPITAL MAY ONLY BE MADE BY US AS THE HOLDER OF RECORD
AND PURSUANT TO YOUR INSTRUCTIONS.
Accordingly, we request instructions as to whether you wish
us to tender on your behalf the Original Capital Securities held
by us for your account, pursuant to the terms and conditions set
forth in the enclosed Prospectus and Letter of Transmittal.
Your instructions should be forwarded to us as promptly as
possible in order to permit us to tender the Original Capital
Securities on your behalf in accordance with the provisions of
the Exchange Offer. The Exchange Offer shall expire at
5:00 p.m., New York City time, on _________, 1997, or on such
later date or time to which the Corporation or the Trust may
extend the Exchange Offer. Any Original Capital Securities
tendered pursuant to the Exchange Offer may be withdrawn at any
time before the Expiration Date.
Your attention is directed to the following:
1. The Exchange Offer is for any and all Original Capital
Securities.
2. The Exchange Offer is subject to certain conditions set
forth in the Prospectus in the section captioned "The Exchange
Offer -- Conditions to the Exchange Offer."
3. Any transfer taxes incident to the transfer of Original
Capital Securities from the holder to the Corporation will be
paid by the Corporation, except as otherwise provided in the
Instructions in the Letter of Transmittal.
4. The Exchange Offer expires at 5:00 p.m., New York City
time, on __________, 1997, or on such later date or time to which
the Corporation or the Trust may extend the Exchange Offer.
If you wish to have us tender your Original Capital
Securities, please so instruct us by completing, executing and
returning to us the instruction form on the back of this letter.
THE LETTER OF TRANSMITTAL IS FURNISHED TO YOU FOR INFORMATION
ONLY AND MAY NOT BE USED DIRECTLY BY YOU TO TENDER ORIGINAL
CAPITAL SECURITIES.
<PAGE>
INSTRUCTIONS WITH RESPECT TO THE EXCHANGE OFFER
The undersigned acknowledge(s) receipt of your letter and
the enclosed material referred to therein relating to the
Exchange Offer made by Patriot Capital Trust I with respect to
its Original Capital Securities.
This will instruct you to tender the Original Capital
Securities held by you for the account of the undersigned, upon
and subject to the terms and conditions set forth in the
Prospectus and the related Letter of Transmittal.
Please tender the Original Capital Securities held by you
for my account as indicated below:
Aggregate Liquidation Amount at
Maturity of Original Capital
Securities Tendered
__________________________________
10.30% Original
Capital Securities
[ ] Please do not tender
any Original Capital
Securities held by
you for my account.
Dated: ___________, 1997
__________________________________
__________________________________
Signature(s)
__________________________________
__________________________________
Please print name(s) here
__________________________________
__________________________________
__________________________________
Addresses
__________________________________
Area Code and Telephone Number
__________________________________
Tax Identification or Social
Security
None of the Original Capital Securities held by us for your
account will be tendered unless we receive written instructions
from you to do so. Unless a specific contrary instruction is
given in the space provided, your signature(s) hereon shall
constitute an instruction to us to tender all the Original
Capital Securities held by us for your account.
