<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 4, 1999
REGISTRATION NO. 333-87881
REGISTRATION NO. 333-87881-01
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
PRE-EFFECTIVE
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------------
ENTERBANK HOLDINGS, INC. EBH CAPITAL TRUST I
(EXACT NAME OF REGISTRANT AND CO-REGISTRANT AS SPECIFIED IN CHARTERS)
<TABLE>
<S> <C> <C> <C>
DELAWARE 43-1706259 DELAWARE 51-6513837
(STATE OR OTHER JURISDICTION (IRS EMPLOYER (STATE OR OTHER JURISDICTION (IRS EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
</TABLE>
150 NORTH MERAMEC, ST. LOUIS, MISSOURI 63105
(314) 725-5500
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S AND CO-REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
-------------------------
JAMES C. WAGNER,
CHIEF FINANCIAL OFFICER
ENTERBANK HOLDINGS, INC.
150 NORTH MERAMEC, ST. LOUIS, MISSOURI 63105
(314) 725-5500
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
-------------------------
WITH COPIES TO:
JOHN L. GILLIS, JR., ESQ. THOMAS C. ERB, ESQ.
ARMSTRONG TEASDALE LLP LEWIS, RICE & FINGERSH, L.C.
ONE METROPOLITAN SQUARE, SUITE 2600 500 NORTH BROADWAY
ST. LOUIS, MISSOURI 63102-2740 ST. LOUIS, MISSOURI 63102
(314) 621-5070 (314) 444-7600
-------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY
NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT TO COMPLETION. DATED OCTOBER 4, 1999
PROSPECTUS
1,250,000 PREFERRED SECURITIES
EBH CAPITAL TRUST I
[ENTERBANK HOLDINGS, INC. LOGO]
% CUMULATIVE PREFERRED SECURITIES
FULLY, IRREVOCABLY AND UNCONDITIONALLY GUARANTEED
ON A SUBORDINATED BASIS BY
ENTERBANK HOLDINGS, INC.
------------------------
The preferred securities of EBH Capital Trust I being offered generally
consist of an indirect beneficial interest in % junior subordinated
debentures of Enterbank Holdings, Inc. The junior subordinated debentures have
the same payment terms as the preferred securities and will be purchased and
held by EBH Trust using the proceeds of this offering. A brief description of
the preferred securities can be found under "Prospectus Summary -- The Offering"
in this prospectus.
The preferred securities have been approved for listing on the American
Stock Exchange under the trading symbol "EBT.Pr.A".
------------------------
YOU SHOULD CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 8 BEFORE INVESTING
IN THE PREFERRED SECURITIES.
------------------------
THE PREFERRED SECURITIES ARE NOT SAVINGS ACCOUNTS, DEPOSITS, OR OTHER
OBLIGATIONS OF A BANK AND ARE NOT INSURED BY THE BANK INSURANCE FUND OF THE
FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
<TABLE>
<CAPTION>
PER PREFERRED
SECURITY TOTAL
------------- -----
<S> <C> <C>
Price to Public........................................... $8.00 $10,000,000
Proceeds to EBH Trust..................................... $8.00 $10,000,000
</TABLE>
This is a firm commitment underwriting. Enterbank will pay underwriting
commissions of $ per preferred security, or a total of $ , for the
arranging of the investment in its junior subordinated debentures. The
underwriter has been granted a 30-day option to purchase up to an additional
125,000 preferred securities to cover over-allotments, if any.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
STIFEL, NICOLAUS & COMPANY
INCORPORATED
DATE OF THIS PROSPECTUS IS , 1999.
<PAGE> 3
[MAP OF ENTERBANK SERVICE AREA]
i
<PAGE> 4
PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
The summary is not complete and does not contain all of the information that you
should consider before investing in the preferred securities. You should read
the entire prospectus carefully. Unless the context otherwise requires,
references in this prospectus to Enterbank include Enterbank Holdings, Inc. and
Enterprise Bank, but not EBH Capital Trust I.
GENERAL
Enterprise Bank, a Missouri bank, was organized in 1988 to focus primarily
on the banking needs of closely-held businesses, their owners and professional
individuals. Enterbank Holdings, Inc., a Delaware Corporation, was formed to
serve as a holding company for Enterprise Bank in 1995. From 1988 through 1996,
commercial banking services were provided to Enterprise Bank customers from a
single location in Clayton, Missouri, an affluent residential and business
oriented suburb of St. Louis. We opened two additional facilities in St. Peters
and Sunset Hills, both also located in the St. Louis Metropolitan Statistical
Area, in 1997. We selected these locations based on our expectations for growth
and the high concentration of closely-held businesses and professionals in these
markets. We opened a central operations facility in St. Louis County in 1998.
As a complement to our banking services, we operate Enterprise Financial
Advisors, a fee-based financial planning and trust service, and our subsidiary,
Enterprise Merchant Banc, Inc., which provides merchant banking services to
closely-held businesses and their owners.
FINANCIAL SUMMARY
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
Net income.............. $ 1,672 $ 1,326 $ 3,011 $ 2,222 $ 1,702 $ 1,304 $ 1,001
Earnings per share
(diluted)(1).......... 0.22 0.18 0.40 0.33 0.32 0.26 0.21
Total assets............ 410,451 317,408 375,304 291,365 184,584 153,706 122,212
Total deposits.......... 369,334 288,847 339,180 264,301 168,961 141,140 104,799
Total shareholders'
equity................ 30,790 27,613 29,240 26,067 14,758 12,052 10,781
Return on average total
assets(2)............. 0.89% 0.93% 0.94% 0.97% 1.12% 0.99% 0.96%
Return on average total
shareholders'
equity(2)............. 11.20 9.94 10.86 9.78 12.73 11.13 9.71
</TABLE>
- -------------------------
(1) Per share data has been adjusted to give retroactive effect to a 3-for-1
stock split effective September 29, 1999.
(2) Ratios for six month periods are annualized.
1
<PAGE> 5
ENTERPRISE BANK
Enterprise Bank offers a broad range of commercial and personal banking
services to our customers. Loans include commercial, real estate, financial and
industrial development, real estate construction and development and consumer
loans which are made primarily to owners and affiliates of our commercial
customers. We also provide cash management, Automated Clearing House,
safe-deposit box, lock box and online banking services.
We have experienced significant internal growth since our inception while
consistently increasing profitability and maintaining asset quality at a level
which we believe compares favorably to our peer group. For the period from
December 31, 1994 to June 30, 1999:
- our loans, assets and deposits increased at compounded annual growth
rates of 35%, 31%, and 32%, respectively;
- our shareholders' equity increased at a compounded annual growth rate of
26%;
- our net income increased at a compounded annual growth rate of 30%; and
- our net loan charge-offs to average loans ratio averaged 0.06%.
We believe our profitable growth and above average asset quality has
resulted principally from our ability to compete effectively in our target
market through our continued emphasis on customer service and responsiveness,
our officers' and directors' relationships within the business community and our
ability to react to the customer dislocation that has accompanied industry
consolidation within our banking markets.
ENTERPRISE MERCHANT BANC, INC.
Enterprise Merchant Banc, Inc. was first established by us in 1995 to
provide merchant banking services to closely-held businesses and their owners.
Its current operations include a minority investment in Enterprise Merchant
Banc, LLC, which focuses on providing equity capital and equity-linked debt
investments to growing companies in need of additional capital to finance
internal and acquisition-related growth. Additionally, Enterprise Merchant Banc,
Inc. receives fee income for its role as a financial advisor in capital raising
transactions as well as mergers and acquisitions. It focuses on "second stage"
and mezzanine financing for established companies rather than "seed money" for
start up operations. Due to our relatively recent entry into this business and
the long-term nature of merchant banking returns, Enterprise Merchant Banc
Inc.'s present contributions to Enterbank Holdings' revenues and net income are
minimal. We believe, however, that it is well-positioned to become a significant
part of our strategy to achieve continued growth and profitability.
ENTERPRISE FINANCIAL ADVISORS
Enterprise Financial Advisors was organized as a division of Enterprise
Bank in late 1997 to provide fee-based personal and corporate financial
consulting and trust services to our target market. Personal financial
consulting includes estate planning, investment management, retirement planning,
trust services and custodial services. Corporate consulting services are focused
in the areas of retirement plans, management compensation and management
succession issues. Some investment management services are provided
2
<PAGE> 6
through Argent Capital Management, a money management company that invests
principally in large capitalization companies. We own an 8% interest in Argent
Capital Management. We also receive assistance in staffing, training, marketing
and regulatory compliance from Moneta Group, Inc., a nationally recognized firm
in the financial planning industry. Enterprise Financial Advisors has been an
integral part of Enterbank Holdings' growth, and we believe that it will play a
key role in our strategy to achieve continued growth and profitability as it
continues to expand the products and services it offers to customers.
EBH CAPITAL TRUST I
EBH Trust is a Delaware business trust created in 1999 for the single
purpose of offering the preferred securities and purchasing the junior
subordinated debentures of Enterbank Holdings. EBH Trust will have a term of 35
years, but may dissolve earlier as provided in its trust agreement.
Enterbank Holdings' and EBH Trust's principal executive offices are located
at 150 N. Meramec, St. Louis, Missouri 63105. The main telephone number for both
Enterbank Holdings and EBH Trust is (314) 725-5500.
3
<PAGE> 7
THE OFFERING
Preferred Securities issuer..... EBH Capital Trust I.
Securities offered.............. EBH Trust is offering 1,250,000 of its
preferred securities, which represent an
indirect beneficial interest in junior
subordinated debentures issued by Enterbank
and held by EBH Trust.
EBH Trust will sell its preferred securities
to the public and its common securities to
Enterbank. Together, the preferred
securities and the common securities are
referred to as trust securities. EBH Trust
will use the proceeds from the sale of trust
securities to buy a series of % junior
subordinated debentures due ,
2029, from Enterbank with the same payment
terms as the preferred securities.
Quarterly distributions are
payable to you on the Preferred
Securities.................... The distributions payable on each preferred
security will:
- be fixed and accumulate at a rate per year
of %;
- accrue from the date of issuance of the
preferred securities; and
- be payable quarterly on the 15th day of
March, June, September and December of
each year that the preferred securities
are outstanding, beginning on December 15,
1999, subject to the right to defer
distributions on the preferred securities.
Enterbank and EBH Trust have
rights to defer distributions
to you on the Preferred
Securities.................... EBH Trust may defer distributions on the
preferred securities if Enterbank defers
interest payments on the junior subordinated
debentures. Enterbank generally has the
right to defer interest payments on the
junior subordinated debentures for up to 20
consecutive quarters. During any deferral
period, you will still accumulate the right
to receive distributions when subsequently
made at the annual rate of %, plus you
will earn interest at the annual rate of
%, compounded quarterly, on any unpaid
distributions.
4
<PAGE> 8
You will still be taxed even if
distributions on the Preferred
Securities are deferred....... If distributions on the preferred securities
are deferred, you will also be required to
accrue interest income in the form of
original issue discount and include it in
your gross income for United States federal
income tax purposes for as long as the
junior subordinated debentures remain
outstanding, even if you are a cash basis
taxpayer. For further information on
deferrals and their tax consequences, see
"Risk Factors -- Distributions on the
Preferred Securities may be deferred; you
may have to include interest in your taxable
income before you receive cash,"
"Description of the Junior Subordinated
Debentures -- Option to Extend Interest
Payment Period" and "Material Federal Income
Tax Consequences -- Interest Income and
Original Issue Discount."
You will be required to sell
your Preferred Securities to EBH
Trust when the Junior
Subordinated Debentures
mature........................ The junior subordinated debentures will
mature on , 2029. You will be
required to sell your preferred securities
to EBH Trust upon the stated maturity date
of the junior subordinated debentures or
earlier if they are prepaid.
If the Junior Subordinated
Debentures are prepaid, your
Preferred Securities will be
redeemed...................... Upon Enterbank having received prior
approval of the Board of Governors of the
Federal Reserve System, if required, we may
prepay the junior subordinated debentures
prior to maturity:
- on or after, 2004; or
- at any time upon events occurring which
may have a significant adverse effect on
the benefits to Enterbank of having the
preferred securities outstanding.
Upon any prepayment of the junior
subordinated debentures, your preferred
securities will be redeemed at the
liquidation amount of $8 per preferred
security plus any accrued and unpaid
distributions to the date of redemption. For
further information on redemptions, see
"Description of the Preferred
Securities -- Redemption -- Mandatory and
Optional Rights of Enterbank" and
"Description of the Junior Subordinated
Debentures -- Redemption."
5
<PAGE> 9
At its option, Enterbank may
require you to exchange your
Preferred Securities for its
Junior Subordinated
Debentures.................... Enterbank has the right at any time to
dissolve or liquidate EBH Trust and
distribute the junior subordinated
debentures to you in exchange for your
preferred securities. However, Enterbank
must receive prior approval of the Federal
Reserve and first pay the creditors, if any,
of EBH Trust. Upon a dissolution or
liquidation of EBH Trust, you will receive
junior subordinated debentures in exchange
for the principal amount of your holdings in
preferred securities, plus accrued and
unpaid interest equal to the accrued and
unpaid distributions on the preferred
securities. For further information
concerning distribution of the junior
subordinated debentures, see "Description of
the Preferred Securities -- Distribution of
Junior Subordinated Debentures."
Your Preferred Securities are
fully and unconditionally
guaranteed by Enterbank on a
subordinated basis............ Enterbank will fully, irrevocably and
unconditionally guarantee the preferred
securities on a subordinated basis. If
Enterbank does not make a payment on the
junior subordinated debentures, EBH Trust
will not have sufficient funds to make
payments on the preferred securities. The
preferred securities guarantee does not
cover payments when EBH Trust does not have
sufficient funds. For further information
concerning our guarantee of the preferred
securities, see "Description of the
Preferred Securities Guarantee."
Your Preferred Securities rank
lower in payment compared to
other obligations of
Enterbank..................... Enterbank's obligations under its preferred
securities guarantee, the junior subordinated debentures and other governing
documents described in this prospectus are
unsecured and rank junior in right of
payment to all current and future senior and
subordinated debt of Enterbank. In addition,
because Enterbank is a bank holding company,
all existing and future liabilities of any
Enterbank subsidiary will rank prior to all
obligations of Enterbank relating to the
preferred securities and the junior
subordinated debentures. There is no limit
on the amount of other preferred securities
or other junior subordinated debentures of
Enterbank or its subsidiaries that may be
issued in the future.
6
<PAGE> 10
Future issuances of this type will rank
equally with Enterbank's obligations under
the junior subordinated debentures and its
preferred securities guarantee described in
this prospectus. The preferred securities
will generally rank equally and payments on
them will be made proportionately, with the
common securities of EBH Trust, which will
be held by Enterbank.
You will have limited voting
rights.......................... As a holder of preferred securities, you
have only limited voting rights. These
rights relate only to the dissolution or
termination of EBH Trust and removal of the
property trustee and the indenture trustee
of EBH Trust upon selected events described
in this prospectus. See "Description of the
Preferred Securities -- Voting Rights;
Amendment of the Trust Agreement."
The Preferred Securities will be
in book entry form only......... You will not receive a certificate for your
preferred securities. Instead, the preferred
securities will be represented by a global
security that will be deposited with and
registered in the name of The Depository
Trust Company or its nominee.
There is no established market
for the Preferred Securities.... The preferred securities have been approved
for listing on the American Stock Exchange
under the trading symbol "EBT.Pr.A". Prior
to this offering, there has been no public
market for the preferred securities. We can
not give any assurance as to the liquidity
of any trading market for the preferred
securities.
Use of proceeds of sale of the
Preferred Securities.......... The proceeds of the sale of the preferred
securities will be invested by EBH Trust in
the junior subordinated debentures.
Enterbank will receive the proceeds from the
issuance of the junior subordinated
debentures. Enterbank intends to:
- repay approximately $5 million of
Enterbank Holdings' debt under its
revolving credit facility; and
- retain the remainder for general corporate
purposes including investments from time
to time in Enterprise Bank in the form of
additional capital.
7
<PAGE> 11
RISK FACTORS
In addition to the other information in this prospectus, you should
carefully consider the following factors before investing in the preferred
securities.
RISK FACTORS RELATING TO THE PREFERRED SECURITIES
ENTERBANK'S OBLIGATIONS UNDER THE PREFERRED SECURITIES GUARANTEE AND THE
JUNIOR SUBORDINATED DEBENTURES RANK LOWER THAN OTHER ENTERBANK OBLIGATIONS.
Enterbank's obligations under the junior subordinated debentures are
unsecured and will rank junior in priority of payment to any senior and
subordinated debt Enterbank may incur, which generally includes indebtedness,
liabilities or obligations of Enterbank, contingent or otherwise. Enterbank's
obligations under the junior subordinated debentures will also be effectively
subordinated to all existing and future liabilities and obligations of its
subsidiaries, including Enterprise Bank.
The preferred securities, the junior subordinated debentures and the
preferred securities guarantee do not limit the ability of Enterbank or
Enterprise Bank to incur unlimited future indebtedness, liabilities and
obligations, which may rank senior to the junior subordinated debentures and the
preferred securities guarantee.
For more information on Enterbank's obligations under the preferred
securities guarantee and the junior subordinated debentures, see "Description of
the Preferred Securities Guarantee -- Status of the Preferred Securities
Guarantee" and "Description of the Junior Subordinated Debentures
- -- Subordination of Junior Subordinated Debentures to Senior and Subordinated
Debt of Enterbank."
IF WE DO NOT MAKE PAYMENTS UNDER THE JUNIOR SUBORDINATED DEBENTURES, EBH
TRUST WILL BE UNABLE TO PAY DISTRIBUTIONS AND LIQUIDATION AMOUNTS AND THE
PREFERRED SECURITIES GUARANTEE WILL NOT APPLY.
The ability of EBH Trust to pay distributions and, upon redemption, the
liquidation amount of $8 per preferred security is solely dependent upon our
ability to make the related payments on the junior subordinated debentures when
due. If we default on our obligation to pay principal of or interest on the
junior subordinated debentures, EBH Trust will not have sufficient funds to pay
distributions or the liquidation amount.
In that case, you will not be able to rely upon the preferred securities
guarantee for payment of these amounts because the preferred securities
guarantee only applies if we make a payment of principal or interest on the
junior subordinated debentures. For more information on our obligations under
the preferred securities guarantee and the junior subordinated debentures, see
"Description of the Preferred Securities Guarantee -- Status of the Preferred
Securities Guarantee" and "Description of the Junior Subordinated Debentures
- -- Subordination of Junior Subordinated Debentures to Senior and Subordinated
Debt of Enterbank."
OUR INTEREST PAYMENTS ON THE JUNIOR SUBORDINATED DEBENTURES ARE DEPENDENT
ON OUR RECEIPT OF DIVIDENDS FROM ENTERPRISE BANK.
A substantial majority of our assets consists of our investment in
Enterprise Bank. Thus, our ability to pay interest and principal on the junior
subordinated debentures to
8
<PAGE> 12
EBH Trust depends primarily upon our receipt of cash dividends from Enterprise
Bank. Dividend payments from Enterprise Bank to us are subject to, among other
things:
- regulatory limitations, generally based on current and retained earnings
and capital maintenance requirements, imposed by various bank regulatory
agencies;
- profitability, financial condition and capital expenditures and other
cash flow requirements of Enterprise Bank; and
- prior claims of creditors of Enterprise Bank.
If Enterprise Bank is unable to pay sufficient dividends to us, then we
will likely be unable to make payments on the junior subordinated debentures,
thereby leaving insufficient funds for EBH Trust to make payments to you on the
preferred securities.
DISTRIBUTIONS ON THE PREFERRED SECURITIES MAY BE DEFERRED; YOU MAY HAVE TO
INCLUDE INTEREST IN YOUR TAXABLE INCOME BEFORE YOU RECEIVE CASH.
It is possible that you will not receive cash distributions on the
preferred securities for up to 20 consecutive quarters (in each case, an
"extension period"). Because you will still be required to include interest in
your income for United States federal income tax purposes as it accrues, you may
have to pay taxes before you actually receive the cash distributions.
We have the right, at one or more times, to defer interest payments on the
junior subordinated debentures for up to 20 consecutive quarters, but not beyond
the maturity date of the junior subordinated debentures and must make payments
of all deferred interest upon the earlier of the end of the extension period or
the maturity date. This right exists only if no event of default under the
junior subordinated debentures has occurred and is continuing. If we exercise
this right, EBH Trust would defer distributions on the preferred securities
during any extension period. However, you would still accumulate distributions
at the annual rate of % of the liquidation amount of $8 per preferred
security, plus you will earn interest at the annual rate of %, compounded
quarterly, on any unpaid distributions. When we pay all the accumulated amounts
due to you during an extension period, the extension period will terminate.
However, we have the right to begin another extension period under the same
terms outlined above. There is no limit on the number of times we can elect to
begin an extension period. During an extension period, the preferred securities
may trade at a price that does not fully reflect the value of accrued but unpaid
distributions. See "Description of the Preferred Securities."
You will also not receive the cash distributions related to any accrued and
unpaid interest from EBH Trust if you sell the preferred securities before the
end of an extension period. However, you will be required to include accrued
interest income as original issue discount for United States federal income tax
purposes in respect of your pro rata share of the junior subordinated debentures
held by EBH Trust. While we will take the position that original issue discount
will not arise before the first extension period, it is possible that all
interest on the junior subordinated debentures would be required to be accounted
for as original issue discount. In these circumstances, the receipt of interest
would not separately be reported as taxable income. See "Material Federal Income
Tax Consequences" for more information regarding the tax consequences of the
preferred securities.
We have no current intention of exercising our right to defer interest
payments on the junior subordinated debentures. However, if we exercise our
right in the future, the market price of the preferred securities is likely to
be adversely affected.
9
<PAGE> 13
IF WE REDEEM THE JUNIOR SUBORDINATED DEBENTURES IT WILL CAUSE A REDEMPTION
OF THE PREFERRED SECURITIES AND YOU MAY NOT BE ABLE TO REINVEST THE PROCEEDS AT
THE SAME OR HIGHER RATE OF RETURN.
You are subject to prepayment risk of your preferred securities. If your
preferred securities are redeemed, you may not be able to reinvest the money you
receive in the redemption at a rate that is equal to or higher than the rate of
return you receive on the preferred securities. Although the junior subordinated
debentures have a stated maturity date of , 2029, they may
be redeemed by us prior to maturity which, in turn, would cause an early
redemption of the preferred securities, in the following circumstances:
- In whole or in part, beginning on , 2004 at our
option.
- In whole upon a change in the federal tax laws or a change in the
interpretation of the tax laws by the courts or the Internal Revenue
Service, which would result in a risk that (1) EBH Trust may be subject
to federal income tax, (2) the interest we pay on the junior subordinated
debentures will not be deductible by us for federal income tax purposes,
or (3) EBH Trust is or will be subject to more than a minimal amount of
other taxes or governmental charges.
- In whole upon a change in the laws or regulations to the effect that EBH
Trust is or will be considered to be an investment company that is
required to be registered under the Investment Company Act of 1940.
- In whole upon a change in the laws or regulations if there is a risk that
we will not be able to treat all or a substantial portion of the
preferred securities as core capital for purposes of federal banking
guidelines.
Our exercise of these redemption rights is subject to our receipt of prior
approval of federal banking regulators, if required. For further information
concerning tax or regulatory events that may trigger redemption of the junior
subordinated debentures and prepayment of the preferred securities, see
"Description of the Preferred Securities -- Redemption."
YOU ARE SUBJECT TO PREPAYMENT RISK BECAUSE POSSIBLE TAX LAW CHANGES COULD
RESULT IN A REDEMPTION OF THE PREFERRED SECURITIES.
Future legislation may be enacted that could adversely affect the ability
of Enterbank to deduct its interest payments on the junior subordinated
debentures for federal income tax purposes, making redemption of the junior
subordinated debentures likely and resulting in a redemption of the preferred
securities.
From time to time, the Clinton Administration has proposed federal income
tax law changes that would, among other things, generally deny interest
deductions to a corporate issuer if the debt instrument has a term exceeding 15
years and if the debt instrument is not reflected as indebtedness on the
issuer's consolidated balance sheet. Other proposed tax law changes would have
denied interest deductions if the debt instrument had a term exceeding 20 years.
These proposals were not enacted into law. Although it is impossible to predict
future proposals, if a future proposal of this sort were to become effective in
a form applicable to already issued and outstanding securities, Enterbank could
be precluded from deducting interest on the junior subordinated debentures.
Enactment of any such proposal might in turn give rise to a tax event as
described under "Description of the Preferred Securities -- Redemption
- -- Mandatory and Optional Rights of Enterbank."
You should also be aware that a petition was recently filed in the United
States Tax Court as a result of a challenge by the Internal Revenue Service
("IRS") of a taxpayer's
10
<PAGE> 14
treatment as indebtedness of a security issued with characteristics similar to
the junior subordinated indentures. Although the IRS agreed to dismissal of the
adjustments related to this issue, it could assert similar adjustments against
other taxpayers. If such adjustments were proposed and the issue were litigated
to a conclusion in which the IRS's position on this matter were sustained, such
a judicial determination could constitute a tax event which could result in an
early redemption of the preferred securities. For further information, see
"Description of the Preferred Securities -- Redemption -- Mandatory and Optional
Rights of Enterbank," "Description of the Junior Subordinated Indentures --
Redemption" and "Material Federal Income Tax Consequences."
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF PREFERRED
SECURITIES MAY HAVE AN ADVERSE EFFECT ON THE MARKET PRICE OF YOUR INVESTMENT.
Your investment in the preferred securities may decrease in value if the
junior subordinated debentures are distributed to you in exchange for your
preferred securities. We cannot predict the liquidity or market prices for the
junior subordinated debentures that may be distributed. Accordingly, the junior
subordinated debentures that you receive upon a distribution, or the preferred
securities you hold pending such a distribution, may trade at a discount to the
price that you paid to purchase the preferred securities.
Because you may receive junior subordinated debentures, you must also make
an investment decision with regard to these securities. You should carefully
review all the information regarding the junior subordinated debentures
contained in this prospectus.
Under "Material Federal Income Tax Consequences" we discuss applicable
United States federal income tax consequences of a distribution of the junior
subordinated debentures.
IN THE EVENT OF A DEFAULT UNDER THE PREFERRED SECURITIES, YOU MAY BE
REQUIRED TO RELY ON THE PROPERTY TRUSTEE OF EBH TRUST TO ENFORCE YOUR RIGHTS.
You may not be able to directly enforce rights against us if an event of
default occurs with respect to the junior subordinated debentures. For a listing
of events that are events of default, see "Description of the Preferred
Securities -- Events of Default; Notice" and "Description of the Junior
Subordinated Debentures -- Indenture Events of Default."
If an event of default under the junior subordinated debentures occurs and
is continuing, this event will also be an event of default under the preferred
securities. In that case, you generally would first have to rely on the property
trustee's enforcement of its rights as holder of the junior subordinated
debentures against us. If the property trustee fails to exercise its rights
under the junior subordinated debentures, you will then be able to exercise any
other remedies available under the junior subordinated debentures.
However, if the default arises because we fail to pay interest or principal
(except during an extension period) on the junior subordinated debentures, you
may proceed directly against us without first relying on the property trustee.
LIMITED COVENANTS RELATING TO THE PREFERRED SECURITIES AND THE JUNIOR
SUBORDINATED DEBENTURES WILL NOT NECESSARILY PROTECT YOU.
Our obligations as set forth in the governing documents (i.e., relating to
the preferred securities and the junior subordinated debentures) are limited. As
a result, the governing documents will not necessarily protect you in the event
of an adverse change in our financial condition or results of operations. The
governing documents do not limit our ability or any of our subsidiaries to incur
additional debt. You should not consider the terms of the governing documents to
be a significant factor in evaluating whether we will
11
<PAGE> 15
be able to comply with our obligations under the junior subordinated debentures
or the preferred securities guarantee.
WE WILL CONTROL EBH TRUST BECAUSE YOU WILL HAVE LIMITED VOTING RIGHTS.
As a holder of preferred securities, you have limited voting rights. These
rights relate only to the modification of the preferred securities and removal
of the property and indenture trustees of EBH Trust upon a limited number of
events. You will not have any voting rights regarding Enterbank Holdings'
business or any matters regarding the administrative trustees. See "Description
of the Preferred Securities -- Voting Rights; Amendment of the Trust Agreement"
for more information on your limited voting rights.
TRADING CHARACTERISTICS OF THE PREFERRED SECURITIES MAY CREATE ADVERSE TAX
CONSEQUENCES FOR YOU.
The preferred securities may trade at a price that does not reflect the
value of accrued but unpaid interest on the underlying junior subordinated
debentures. If you dispose of your preferred securities between record dates for
payments on the preferred securities, you may have adverse tax consequences.
Under these circumstances, you will be required to include accrued but unpaid
interest on the junior subordinated debentures allocable to the preferred
securities through the date of disposition in your income as ordinary income if
you use the accrual method of accounting or if such interest represents original
issue discount.
If interest on the junior subordinated debentures is included in income
under the original issue discount provisions, you would add this amount to your
adjusted tax basis in your share of the underlying junior subordinated
debentures deemed disposed. If your selling price is less than your adjusted tax
basis, which will include all accrued but unpaid original issue discount
interest included in your income, you could recognize a capital loss which,
subject to certain limited exceptions, cannot be applied to offset ordinary
income for federal income tax purposes. See "Material Federal Income Tax
Consequences -- Interest Income and Original Issue Discount" and "-- Sale or
Redemption of Preferred Securities" for more information on possible adverse tax
consequences to you.
THERE HAS NOT BEEN A PRIOR PUBLIC MARKET FOR THE PREFERRED SECURITIES, AND
AN ACTIVE TRADING MARKET FOR THE PREFERRED SECURITIES MAY NOT DEVELOP.
The preferred securities constitute a new issue of securities with no
established trading market. Although the preferred securities have been approved
for listing on the American Stock Exchange, a listing does not guarantee that an
active trading market for the preferred securities will develop. There is no
assurance of the depth of that market or that holders of preferred securities
will be able to sell their preferred securities easily. An inactive or illiquid
trading market could adversely affect the price of your preferred securities.
ENTERBANK HOLDINGS RISK FACTORS
ANY CHANGES IN INTEREST RATES OR OUR COST OF FUNDS MAY ADVERSELY AFFECT OUR
EARNINGS AND FINANCIAL CONDITION.
Changes in interest rates affect our operating performance and financial
condition in diverse ways. Our profitability depends in substantial part on our
"net interest spread," which is the difference between the rates we receive on
loans and investments and the rates we pay for deposits and other sources of
funds. Our net interest spread will depend on many factors that are partly or
entirely outside our control, including competition, federal economic, monetary
and fiscal policies, and economic conditions generally.
12
<PAGE> 16
Historically, net interest spreads for many financial institutions have widened
and narrowed in response to these and other factors, which are often
collectively referred to as "interest rate risk." We intend to try to minimize
our exposure to interest rate risk, but we will be unable to eliminate it. In
addition, we fund a portion of our loans through wholesale deposits, which are
considered to be a lower cost, more stable source than alternative borrowed
funds. If we are unable to attract wholesale deposits, our cost of funds may
rise, which could have a material adverse effect on our operating results.
In our banking operations, we are subject to interest rate risk on loans
held in our portfolio arising from mismatches (i.e., the interest rate
sensitivity gap) between the dollar amount of repricing or maturing assets and
liabilities, which is measured in terms of the ratio of the interest rate
sensitivity gap to total assets. A higher level of assets repricing or maturing
than liabilities over a given time frame is considered asset-sensitive and is
reflected as a positive gap. In contrast, a higher level of liabilities
repricing or maturing than assets over a given time frame is considered
liability-sensitive and is reflected as a negative gap. An asset-sensitive
position (i.e., a positive gap) will generally enhance earnings in a rising
interest rate environment and will negatively impact earnings in a falling
interest rate environment. A liability-sensitive position (i.e., a negative gap)
will generally enhance earnings in a falling interest rate environment and
negatively impact earnings in a rising interest rate environment. Fluctuations
in interest rates are not predictable or controllable. Although we have
attempted to structure our asset and liability management strategies to mitigate
the impact on net interest income of changes in market interest rates, we can
not give any assurance that a sudden or significant change in prevailing
interest rates will not have a material adverse effect on our operating results.
IF BORROWERS DO NOT REPAY LOANS IT WILL ADVERSELY AFFECT ENTERBANK.
Some borrowers may not repay loans that Enterprise Bank makes to them. This
risk is inherent in the commercial banking business. If a significant amount of
loans are not repaid, it would have an adverse effect on Enterbank's earnings
and overall financial condition, and could cause the insolvency of Enterbank.
Like all financial institutions, Enterprise Bank maintains an allowance for
loan losses to provide for loan defaults and nonperformance. The allowance for
loan losses is maintained at a level management feels is adequate to absorb
losses inherent in the loan portfolio, an evaluation that is primarily based
upon a review of Enterprise Bank's and the banking industry's historical loan
loss experience, known and inherent risks contained in the loan portfolio,
composition, and growth of the loan portfolio, and current and projected
economic factors. However, Enterprise Bank's allowance for loan losses may not
be adequate to cover actual losses, and future provisions for loan losses may
adversely affect Enterbank's earnings. In addition, various regulatory agencies,
as an integral part of the examination process, periodically review Enterprise
Bank's loan portfolio. Such agencies may require Enterprise Bank to add to the
allowance for loan losses based on their judgments and interpretations of
information available to them at the time of their examinations.
OUR ABILITY TO IMPLEMENT OUR STRATEGY IS DEPENDENT UPON THE FUTURE SUCCESS
OF OUR SUBSIDIARIES.
The growth and success of our subsidiaries is important to our ability to
implement our strategy. In particular, both Enterprise Merchant Banc and
Enterprise Financial Advisors are unproven and relatively new operating units
still in the formative stages of growth. Their present contributions to our
revenues and net income are minimal. We do not control the operations of
Enterprise Merchant Banc, LLC, the profitability of which
13
<PAGE> 17
has a direct impact on Enterprise Merchant Banc. Moreover, the business and
profitability of Enterprise Financial Advisors are dependent, in part, on the
performance of third parties over which we have no control, including Argent
Capital Management and Moneta Group, Inc. The failure of these subsidiaries to
grow and be profitable in the future could adversely affect our financial
condition and our ability to meet our strategic objectives.
IF THERE ARE ADVERSE CONDITIONS IN OUR GEOGRAPHIC AREA OR WITH A FEW
CUSTOMERS, THERE MAY HAVE A DISPROPORTIONATELY LARGE EFFECT ON OUR FINANCIAL
RESULTS.
Our success is dependent to a certain extent upon the general economic
conditions in the St. Louis metropolitan area and, in particular, the conditions
for entrepreneurial entities and small businesses which are the focus of our
customer base. Although we expect that economic conditions will be favorable in
our markets, there can be no assurance that favorable economic conditions will
occur or, if they occur, that they will continue. Adverse changes in economic
conditions in the St. Louis metropolitan area could impair our ability to
collect loans and have a negative effect on our overall financial condition.
WE ARE DEPENDENT ON OUR KEY PERSONNEL.
Our growth and development to date have been largely dependent on certain
key employees of Enterbank and Enterprise Bank, the loss of any of whom could
have a material adverse effect. Our key employees are Fred H. Eller, James C.
Wagner, David J. Mishler, James E. Graser, Richard C. Leuck and Paul L. Vogel.
Each of these persons are officers of Enterbank or Enterprise Bank. We carry
"key person" life insurance on the lives of Mr. Eller and Mr. Vogel.
WE ARE IMPACTED BY COMPETITION FROM MANY OTHERS.
Our commercial banking, merchant banking and financial advisory businesses
are all extremely competitive. Many of our competitors are, or are affiliates
of, enterprises that have greater resources than we do.
Through our various businesses, we compete with different institutions,
including:
- other banks and thrift institutions;
- investment companies, mutual funds and money market funds;
- full service and discount broker dealers;
- insurance companies;
- credit unions; and
- mortgage companies.
Some of our competitors are not regulated as extensively as we are and,
therefore, may have greater flexibility in competing for business. Some of these
competitors are subject to similar regulation but have the advantages of
established customer bases, higher lending limits, extensive branch networks,
numerous automated teller machines or other factors. We compete by offering
market rates on our products and prompt service to our customers.
WE OPERATE A BUSINESS THAT IS SUBJECT TO SIGNIFICANT GOVERNMENT REGULATION.
The banking industry is heavily regulated. Our success depends not only on
competitive factors but also on the cost of complying with state and federal
regulations affecting banks and bank holding companies. We are subject to
regulation by the Federal
14
<PAGE> 18
Deposit Insurance Corporation, the Missouri Division of Finance and the Board of
Governors of the Federal Reserve System. These regulations put us at a
competitive disadvantage compared to less regulated competitors such as finance
companies, mortgage banking companies and leasing companies. Banking industry
regulations are primarily intended to protect depositors, not shareholders, and
are subject to continuous change. The ultimate effect of regulatory change
cannot be predicted with certainty. Additional statutes affecting financial
institutions may be proposed and enacted in the future. We are currently subject
to regulations which may change at any time. There can be no assurance that the
cost of complying with government regulations will not adversely affect our
business or economic performance.
WE MAY INCUR SIGNIFICANT COSTS IF WE FORECLOSE ON ENVIRONMENTALLY
CONTAMINATED REAL ESTATE.
If we foreclose on a defaulted real estate loan to recover our investment
in such real estate loan, we may be subject to environmental liabilities in
connection with the underlying real property. These liabilities could exceed the
fair value of the real property. It is also possible that hazardous substances
or wastes, contaminants, pollutants or their sources (as defined by state and
federal laws and regulations) may be discovered on properties during our
ownership or after they are sold to a third party. If they are discovered on a
property that we have acquired through foreclosure or otherwise, we may be
required to remove those substances and clean up the property. We may have to
pay for the entire cost of any removal and clean-up without the contribution of
any other third parties. These costs may also exceed the fair value of the
property. We may also be liable to tenants and other users of neighboring
properties. In addition, we may find it difficult or impossible to sell the
property prior to or following any such clean-up.
THE YEAR 2000 PROBLEM MAY HAVE AN ADVERSE IMPACT ON US OR ON OTHERS UPON
WHOM WE DEPEND.
Much of today's information technology (i.e., computer systems) and
embedded technology (e.g., microcontrollers) identifies a particular year on the
basis of the last two digits of that year. For example, the year "1998" is
recognized by the digits "98." The inability of information technology and
embedded technology to properly recognize a year that begins with "20" instead
of "19," if not corrected, may result in the production of erroneous results or
the failure of systems which rely on information technology and embedded
technology. This failure of systems, production of erroneous results and the
resulting damages is commonly known as the "Y2K Problem."
We are dependent, to a substantial degree, upon the proper functioning of
our computer systems as well as those of our vendors, suppliers and customers.
Most of our products and services rely on information and data provided by
others. Most of this information and data is provided electronically and is
dependent on information systems and telecommunications. The inability of our
vendors and suppliers to provide accurate information in a timely manner, our
inability to accurately and timely process such information, the inability of
our customers to receive and use our products and services, and a general
disruption of telecommunications and utilities as a result of the Y2K Problem
would most likely result in business interruption or shutdown, financial loss,
potential regulatory action, harm to our reputation and potential legal
liability.
We have developed a Y2K Problem compliance program and, as of September 15,
1999, all phases of the program were complete. We have also developed a Y2K
Problem contingency plan for which we believe all training will be completed by
October 31, 1999.
15
<PAGE> 19
Our contingency plan includes, among other things, the preparation and
maintenance of electronic and paper back up reports of Enterprise Bank's
accounts. If we are required to resort to our contingency plan due to the Y2K
Problem, we will incur additional costs, which may be significant, due to
inefficiencies associated with the contingency plan.
Our most likely risk from the Y2K Problem is that our core banking
software, which is used to monitor Enterprise Bank's loans and deposits, will be
unable to perform accurate calculations and maintain records. In the event our
core banking software does not function properly, our record keeping and
calculations will be performed manually by Enterprise Bank personnel. Any such
failure in our core banking software could have a material adverse effect on our
operations and financial performance.
We have incurred costs of approximately $100,000 for our Y2K Problem
compliance program. Although we do not anticipate any significant additional
costs, there can be no assurance that we will not incur additional costs which,
if incurred, may be significant.
Although we have conducted internal development and testing of our computer
systems to insure Y2K Problem compliance, we can give no assurance that our
internal systems will be completely free of errors. Furthermore, we can give no
assurance that all of our vendors will deliver Y2K Problem compliant
certificates or that the vendors will in fact be Y2K Problem compliant despite
their certification of compliance. If either our computer systems or those of
our vendors fail to function properly because of the Y2K Problem, the results of
our operations may materially suffer.
16
<PAGE> 20
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements contained in (i) this prospectus, (ii) any applicable
amendment to this prospectus and (iii) the documents incorporated by reference
into this prospectus, may constitute "forward-looking statements" within the
meaning of the federal securities laws. Forward-looking statements are based on
management's beliefs, assumptions and expectations of our future economic
performance, taking into account the information currently available to them.
These statements are not statements of historical fact. Forward-looking
statements involve risks and uncertainties that may cause our actual results,
performance or financial condition to be materially different from the
expectations of future results, performance or financial condition we express or
imply in any forward-looking statements. Some of the important factors that
could cause our actual results, performance or financial condition to differ
materially from our expectations are:
- The effect that changes in interest rates and our cost of funds have on
our earnings and assets.
- Our level of loan defaults and delinquencies.
- Our ability to successfully grow and realize profits from our commercial
banking operations and our strategic non-banking lines of business.
- Concentrations of our loans in one geographic area.
- Our ability to retain key personnel.
- The degree and nature of our competition.
- Changes in government regulation of our business.
- Environmental liability associated with foreclosures.
- The effect of the Year 2000 problem on us and on those entities with
which we do business.
When used in our documents or oral presentations, the words "believe,"
"may," "will," "should," "intend," "anticipate," "estimate," "expect,"
"objective," "projection," "forecast," "goal," or similar words or the negatives
of these words are intended to identify forward-looking statements. We qualify
any such forward-looking statements entirely by these cautionary factors.
17
<PAGE> 21
USE OF PROCEEDS
All of the proceeds from the sale of preferred securities by EBH Trust will
be invested in the junior subordinated debentures. The net proceeds to Enterbank
Holdings from the sale of the junior subordinated debentures, after deducting
underwriting commissions and estimated offering expenses, will be approximately
$ , or $ if the Underwriter's over-allotment option is
exercised in full. We intend to use the net proceeds to:
- repay approximately $5 million outstanding as of September , 1999 under
Enterbank Holdings' revolving credit facility from Jefferson Bank and
Trust Company; and
- retain the remainder for general corporate purposes, including
investments from time to time in Enterprise Bank in the form of
additional capital.
On September 23, 1999, the interest rate on our $5 million revolving credit
facility from Jefferson Bank and Trust Company was 7.75%. Borrowings under the
revolving credit facility, which matures March 31, 2000, have been used to fund
the short term working capital needs of Enterbank Holdings and to provide
additional capital infusions to Enterprise Bank and other subsidiaries of
Enterbank Holdings.
ACCOUNTING TREATMENT
For financial reporting purposes, we will treat EBH Trust as our
subsidiary. Accordingly, we will include the accounts of EBH Trust in our
consolidated financial statements. We will include the preferred securities in
debt in our consolidated balance sheets, and will include appropriate
disclosures about the preferred securities, the guarantee and the junior
subordinated debentures in the notes to our consolidated financial statements.
For financial reporting purposes, we will record distributions on the preferred
securities as interest expense in our consolidated statements of income.
Future reports of Enterbank filed under the Securities Exchange Act of 1934
will include a footnote to the consolidated financial statements stating that:
- EBH Trust is a wholly-owned subsidiary of Enterbank;
- the sole asset of EBH Trust is the junior subordinated debentures,
specifying the principal amount, interest rate and maturity date of the
junior subordinated debentures; and
- the obligations of Enterbank described in this prospectus, in the
aggregate, constitute a full, irrevocable and unconditional guarantee on
a subordinated basis by Enterbank of the obligations of EBH Trust under
the preferred securities. EBH Trust will not provide separate reports
under the Securities Exchange Act of 1934.
18
<PAGE> 22
CAPITALIZATION
The following table sets forth (a) our historical capitalization at June
30, 1999 and (b) our adjusted capitalization at June 30, 1999 after giving
effect to the offering and the use of net proceeds as described in "Use of
Proceeds" above, and assuming the underwriter's over-allotment option is not
exercised.
<TABLE>
<CAPTION>
AT JUNE 30, 1999
----------------------------
AS ADJUSTED
FOR THE
ACTUAL OFFERING
-------- -----------
(DOLLARS IN THOUSANDS
EXCEPT PER SHARE AMOUNTS)
<S> <C> <C>
LONG-TERM DEBT:
Notes payable....................................... $ 2,250 $ --
Guaranteed preferred beneficial interests in
Enterbank's subordinated debentures.............. -- 10,000
-------- --------
Total long-term debt............................. 2,250 10,000
SHAREHOLDERS' EQUITY:
Common Stock (10,500,000 shares authorized;
7,140,636 shares issued and outstanding)(1)...... 24 24
Surplus............................................. 19,327 19,327
Retained Earnings................................... 11,471 11,471
Accumulated other comprehensive loss................ (32) (32)
-------- --------
Total shareholders' equity....................... 30,790 30,790
-------- --------
Total capitalization............................. $ 33,040 $ 40,790
======== ========
CAPITAL RATIOS:
Ratio of equity to total assets..................... 7.50% 9.94%
Leverage ratio(2)(3)(4)(5).......................... 8.20% 10.56%
Risk-based capital ratios:(3)(4)(5)
Tier 1 capital to risk-weighted assets........... 8.77% 11.28%
Total capital to risk-weighted assets............ 9.74% 12.23%
</TABLE>
- -------------------------
(1) Adjusted to give retroactive effect to a 3-for-1 stock split to be effective
September 29, 1999.
(2) The leverage ratio is Tier 1 capital divided by average quarterly assets,
after deducting intangible assets and net deferred tax assets in excess of
regulatory maximum limits.
(3) The capital ratios, as adjusted, are computed including the total estimated
net proceeds from the sale of the preferred securities, in a manner
consistent with Federal Reserve guidelines.
(4) Federal Reserve guidelines for calculation of Tier 1 capital to
risk-weighted assets limits the amount of cumulative preferred securities
which can be included in Tier 1 capital to 25% of total Tier 1 capital. The
total amount of preferred securities offered hereby will be included as Tier
1 capital for Enterbank Holdings.
(5) Unrealized gain (loss), net of tax, on available for sale securities, which
is reflected as accumulated other comprehensive loss above, is not included
in calculating regulatory capital ratios.
19
<PAGE> 23
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents our selected consolidated financial data as of
and for the five years in the period ended December 31, 1998 and the six month
periods ended June 30, 1999 and 1998. The information as of and for the five
years in the period ended December 31, 1998 has been derived from our
consolidated financial statements, as incorporated in this prospectus by
reference to our 1998 Annual Report on Form 10-K. The information as of and for
the six month periods ended June 30, 1999 and 1998 is unaudited and, in the
opinion of our management, reflects all adjustments considered necessary for a
fair presentation of the results for such interim periods. Our unaudited interim
results have been derived from our unaudited consolidated financial statements
incorporated in this prospectus by reference to our Quarterly Report on Form
10-Q for the quarter ending June 30, 1999. The information should be read in
conjunction with the financial statements, including the notes thereto,
contained in our Reports on Form 10-K and 10-Q. See "Where You Can Find More
Information." Historical results are not necessarily indicative of results to be
expected for any future period.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Interest income............. $ 14,377 $ 11,823 $ 25,414 $ 18,759 $ 12,554 $ 10,914 $ 7,374
Interest expense............ 6,410 5,438 11,869 8,582 5,569 4,887 2,570
--------- --------- --------- --------- --------- --------- ---------
Net interest income......... 7,967 6,385 13,545 10,177 6,985 6,027 4,804
Provision for possible loan
losses.................... 237 521 711 775 345 631 450
--------- --------- --------- --------- --------- --------- ---------
Net interest income after
provision for possible
loan losses............... 7,730 5,864 12,834 9,402 6,640 5,396 4,354
Noninterest income.......... 979 862 2,079 476 1,239 836 805
Noninterest expense......... 6,288 4,581 10,052 6,339 5,146 4,187 3,551
--------- --------- --------- --------- --------- --------- ---------
Income before provision for
income taxes.............. 2,421 2,145 4,861 3,539 2,733 2,045 1,608
Provision for income
taxes..................... 870 819 1,850 1,317 1,031 741 607
--------- --------- --------- --------- --------- --------- ---------
Income before cumulative
effect of a change in
accounting principle...... 1,551 1,326 3,011 2,222 1,702 1,304 1,001
Cumulative effect on prior
years of a change in asset
classification............ 121 -- -- -- -- -- --
--------- --------- --------- --------- --------- --------- ---------
Net income.................. $ 1,672 $ 1,326 $ 3,011 $ 2,222 $ 1,702 $ 1,304 $ 1,001
========= ========= ========= ========= ========= ========= =========
DIVIDENDS
Common stock dividends
declared.................. $ 143 $ 117 $ 235 $ 195 $ 122 $ 102 $ 88
Dividend payout ratio....... 8.57% 8.77% 7.81% 8.49% 7.21% 7.87% 8.82%
PER SHARE DATA(1)
Earnings per common share:
Basic....................... $ 0.23 $ 0.19 $ 0.43 $ 0.35 $ 0.37 $ 0.30 $ 0.23
Diluted..................... 0.22 0.18 0.40 0.33 0.32 0.26 0.21
Common stock cash
dividends................. 0.020 0.017 0.033 0.030 0.027 0.023 0.020
Average common shares and
common share equivalents
outstanding............... 7,649,979 7,478,640 7,544,820 6,674,901 5,252,058 5,056,437 4,844,424
Book value (period end)..... $ 4.31 $ 3.89 $ 4.11 $ 3.78 $ 2.96 $ 2.75 $ 2.46
</TABLE>
20
<PAGE> 24
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------------- ---------------------------------------------------------
1999 1998 1998 1997 1996 1995 1994
--------- --------- --------- --------- --------- --------- ---------
(UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA (AT
PERIOD END)
Investment securities....... $ 16,209 $ 11,465 $ 46,291 $ 13,434 $ 15,246 $ 16,907 $ 16,542
Loans less unearned loan
fees...................... 338,634 248,357 273,818 225,560 134,133 110,464 85,687
Total assets................ 410,451 317,408 375,304 291,365 184,584 153,706 122,212
Total deposits.............. 369,334 288,847 339,180 264,301 168,961 141,140 104,799
Total debt.................. 9,191 -- 6,000 -- 300 -- --
Common shareholders'
equity.................... 30,790 27,613 29,240 26,067 14,758 12,052 10,781
Total shareholders'
equity.................... 30,790 27,613 29,240 26,067 14,758 12,052 10,781
SELECTED RATIOS
Return on average total
assets(2)................. 0.89% 0.93% 0.94% 0.97% 1.12% 0.99% 0.96%
Return on average total
shareholders' equity(2)... 11.20 9.94 10.86 9.78 12.73 11.13 9.71
Net interest margin......... 4.59 4.80 4.59 4.79 4.96 4.98 5.07
Efficiency ratio............ 70.29 63.21 64.34 59.50 62.57 61.01 63.31
Year end assets per
employee.................. $ 2,870 $ 3,023 $ 3,128 $ 3,469 $ 3,296 $ 3,941 $ 3,395
ASSET QUALITY RATIOS
Allowance for possible loan
losses to loans........... 1.02% 1.21% 1.17% 1.11% 1.32% 1.27% 1.17%
Nonperforming loan to
loans(3).................. 0.00 0.00 0.00 0.02 0.12 0.10 0.00
Allowance for possible loan
losses to nonperforming
loans(3).................. * * * * * * *
Nonperforming assets as a
percent of assets(4)...... 0.20 0.26 0.22 0.29 0.56 0.64 1.45
Net loan charge-offs
(recoveries) to average
loans..................... 0.00 0.03 0.01 0.02 (0.02) 0.24 0.23
CAPITAL RATIOS
Average shareholders' equity
to average assets......... 7.97 9.32 8.70 9.97 8.76 8.89 9.92
Total risk-based capital
ratio..................... 9.74 11.80 10.97 12.28 11.53 11.40 11.75
Leverage ratio.............. 8.20 9.56 9.16 11.42 9.62 9.11 10.46
RATIO OF EARNINGS (LOSS) TO
COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS(5)
Including interest on
deposits.................. 1.36x 1.37x 1.39x 1.39x 1.47x 1.40x 1.58x
Excluding interest on
deposits.................. 5.58 7.15 7.28 9.57 11.51 11.02 9.04
</TABLE>
- -------------------------
(1) Per share data has been adjusted to give retroactive effect to a 3-for-1
stock split effective September 29, 1999.
(2) Ratios for six month periods are annualized.
(3) Nonperforming loans consist of nonaccrual loans and loans with restructured
terms.
(4) Nonperforming assets consist of nonperforming loans and foreclosed assets.
(5) For purposes of calculating the ratio of earnings to combined fixed charges,
earnings consist of income before taxes plus interest and rent expense.
Fixed charges consist of interest and rent expense.
* Not meaningful.
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BUSINESS
GENERAL
Enterprise Bank was organized in 1988 to focus primarily on the banking
needs of closely-held businesses, their owners and professional individuals.
Enterbank Holdings was formed to serve as a holding company for Enterprise Bank
in 1995. From 1988 through 1996, commercial banking services were provided to
Enterprise Bank customers from a single location in Clayton, Missouri, an
affluent residential and business oriented suburb of St. Louis. We opened two
additional facilities in St. Peters and Sunset Hills, both also located in the
St. Louis Metropolitan Statistical Area, in 1997. We selected these locations
based on our expectations for growth and the high concentration of closely-held
businesses and professionals in these markets. We opened a central operations
facility in St. Louis County in 1998.
As a complement to our banking services, we operate Enterprise Financial
Advisors, a fee-based financial planning and trust service, and our subsidiary,
Enterprise Merchant Banc, Inc., which provides merchant banking services to
closely-held businesses and their owners.
ENTERPRISE BANK
Enterprise Bank offers a broad range of commercial and personal banking
services to our customers. Loans include commercial, real estate, financial and
industrial development, real estate construction and development and consumer
loans which are made primarily to owners and affiliates of our commercial
customers. We also provide cash management, Automated Clearing House,
safe-deposit box, lock box and online banking services.
We have experienced significant internal growth since our inception while
consistently increasing profitability and maintaining asset quality at a level
which we believe compares favorably to our peer group. For the period from
December 31, 1994 to June 30, 1999:
- our loans, assets and deposits increased at compounded annual growth
rates of 35%, 31%, and 32%, respectively;
- our shareholders' equity increased at a compounded annual growth rate of
26%;
- our net income increased at a compounded annual growth rate of 30%; and
- our net loan charge-offs to average loans ratio averaged 0.06%.
We believe we are able to compete effectively in our market because we
stress personal service and our officers and senior management maintain close
working relationships and personal contact with commercial customers and their
businesses. We also believe that our management structure enables us to react to
customer requests for loan and deposit services more quickly than our larger
competitors. We have significant experience in the communities we service and we
continue to target the closely-held business and professional market.
Additionally, industry consolidation has resulted in fewer independent banks and
fewer financial service companies serving our target market niche. We believe
our growth in loans and deposits is also due to the significant number of
referrals we receive from our existing customers.
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Our historical growth strategy has been both customer and asset driven. We
continuously seek to add customers that fit our target market. This strategy has
enabled us to attract customers whose borrowing needs have grown along with our
increasing capacity to fund our customers' loan requests. Additionally, we
increase our loan portfolio based on lending opportunities developed by our
relationship officers. We fund our loan growth by attracting deposits from our
customers, borrowing from the Federal Home Loan Bank and, to a lesser extent,
attracting wholesale deposits. Wholesale deposits are considered to be stable
deposit sources and, when overhead costs are considered, are priced at levels
below costs of alternative borrowed funds.
Our operating strategy has resulted in operating ratios comparable to our
peer banks despite our increasing investments in sales personnel and new lines
of business. We have expanded our customer relationships and controlled
operating costs by:
- operating stand-alone business units managed by personnel who share
directly in the equity appreciation of their units;
- operating a limited number of offices with a high asset base per office;
- emphasizing commercial loans which tend to be larger than retail loans;
- employing an experienced staff, many of whom are rewarded on the basis of
performance and customer service;
- improving data processing and operational systems to increase
productivity and control risk; and
- leasing facilities so that capital can be deployed more effectively to
support growth in earning assets.
Our Board of Directors is comprised primarily of business owners and
professionals who fit our target customer profile. The Board plays an active
role in our business development activities and the credit review process. Their
input and understanding of our needs, and the needs of our target customers, has
been critical in our past success and will be a vital element in our plans for
future growth.
We have historically had a low turnover of relationship officers, and it is
our policy to keep officers assigned to accounts for long periods of time. This
practice improves each officer's understanding of clients' businesses resulting
in knowledgeable credit assessments and superior customer service. Credit
analysts and other personnel support the relationship officers and all are
familiar with each assigned customer creating a "team approach" to serving
customers' needs.
ENTERPRISE MERCHANT BANC, INC.
Enterprise Merchant Banc, Inc. was first established by us in 1995 to
provide merchant banking services to closely-held businesses and their owners.
Its current operations include a minority investment in Enterprise Merchant
Banc, LLC, which focuses on providing equity capital and equity-linked debt
investments to growing companies in need of additional capital to finance
internal and acquisition-related growth. Additionally, Enterprise Merchant Banc,
Inc. receives fee income for its role as a financial advisor in capital raising
transactions as well as mergers and acquisitions. It focuses on "second stage"
and mezzanine financing for established companies rather than "seed money" for
start up operations. Due to our relatively recent entry into this business and
the long-term nature of merchant banking returns, Enterprise Merchant Banc
Inc.'s present contributions to Enterbank Holdings' revenues and net income are
minimal. We
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believe, however, that it is well-positioned to become a significant part of our
strategy to achieve continued growth and profitability.
In order to broaden our array of merchant banking investment activities and
potential opportunities, we recently restructured our ownership and control
positions of our various merchant banking operations. As a result of this
restructuring, we maintain ownership of our wholly-owned subsidiary, Enterprise
Merchant Banc, Inc., which in turn has a minority interest in Enterprise
Merchant Banc, LLC. The minority interest in the LLC is based on a 4.9% voting
and common stock ownership interest and a 24.9% economic interest. The new
structure provides us the ability to achieve economic benefits comparable to
those we would have realized under the previous structure, yet satisfies Federal
Reserve regulations concerning ownership and control.
ENTERPRISE FINANCIAL ADVISORS
Enterprise Financial Advisors was organized as a division of Enterprise
Bank in late 1997 to provide fee-based personal and corporate financial
consulting and trust services to our target market. Personal financial
consulting includes estate planning, investment management, retirement planning,
trust services and custodial services. Corporate consulting services are focused
in the areas of retirement plans, management compensation and management
succession issues. Some investment management services are provided through
Argent Capital Management, a money management company that invests principally
in large capitalization companies. We own an 8% interest in Argent Capital
Management. Enterprise Financial Advisors has been an integral part of Enterbank
Holdings' growth and we believe that it will play a key role in our strategy to
achieve continued growth and profitability as it continues to expand the
products and services it offers to customers.
As part of the organization of Enterprise Financial Advisors, we entered
into solicitation and referral agreements with Moneta Group, Inc., a nationally
recognized firm in the financial planning industry. Under the agreements, Moneta
provides assistance in staffing, training, marketing and regulatory compliance
and in return receives a share of the gross margin generated by Enterprise
Financial Advisors for planning and trust services. In exchange for customer
referrals, Moneta receives compensation in the form of Enterbank stock options.
The agreements are intended to leverage the trust powers of Enterprise Bank with
the established expertise and marketing power of Moneta, thereby enabling
Enterprise Financial Advisors to offer a full range of products and services
with the depth and expertise of a large financial planning firm.
EBH CAPITAL TRUST I
EBH Trust is a Delaware business trust. EBH Trust will exist solely to:
- Issue and sell its common securities to us;
- Issue and sell its preferred securities to the public;
- Use the proceeds from the sale of its common securities and preferred
securities to purchase the junior subordinated debentures from us;
- Distribute the cash payments it receives on the junior subordinated
debentures it owns to the holders of the preferred and common securities;
and
- Engage in other activities that are necessary or incidental to these
purposes.
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DESCRIPTION OF THE PREFERRED SECURITIES
The preferred securities and the common securities will be issued under the
terms of the trust agreement of EBH Trust. The trust agreement will be qualified
as an indenture under the Trust Indenture Act. Initially, Wilmington Trust
Company will be the property trustee and will act as trustee for the purpose of
complying with the Trust Indenture Act. The terms of the preferred securities
will include those stated in the trust agreement of EBH Trust and those made
part of the trust agreement by the Trust Indenture Act. The following is a
summary of the material terms and provisions of the preferred securities and the
trust agreement. Prospective investors in the preferred securities are urged to
read all the provisions of the trust agreement, including the definitions in the
trust agreement, and the Trust Indenture Act. The form of the trust agreement
has been filed as an exhibit to the registration statement of which this
prospectus is a part.
GENERAL OVERVIEW
Under the terms of the trust agreement of EBH Trust, the administrative
trustees will issue the preferred securities and the common securities,
collectively, the trust securities. The preferred securities will represent
preferred undivided beneficial interests in the assets of EBH Trust and the
holders of the preferred securities will be entitled to a preference in most
circumstances regarding distributions and amounts payable on redemption or
liquidation over the common securities of EBH Trust, as well as other benefits
as described in the trust agreement.
The preferred securities will rank pari passu, and payments will be made
thereon pro rata, with the common securities of EBH Trust except as described
under "Subordination of Common Securities of EBH Trust Held by Enterbank" below.
Legal title to the junior subordinated debentures will be held by the
property trustee in trust for the benefit of the holders of the trust
securities. The preferred securities guarantee executed by Enterbank for the
benefit of the holders of the preferred securities will be a guarantee on a
subordinated basis and will not guarantee payment of distributions or amounts
payable on redemption or liquidation of the preferred securities if EBH Trust
does not have funds on hand available to make the payments. See "Description of
Preferred Securities Guarantee." If an event of default under the indenture has
occurred and is continuing and the default is attributable to Enterbank's
failure to pay interest or principal on the junior subordinated debentures on
the due date, a holder of preferred securities may institute a legal proceeding
directly against Enterbank for payment of principal and interest on the junior
subordinated debentures having a principal amount equal to the aggregate
liquidation amount of the preferred securities of the holder. This action is
referred to in this discussion as a direct action. See "Description of the
Junior Subordinated Debentures -- Enforcement of Rights by Holders of Preferred
Securities" and "Relationship Among the Preferred Securities, the Junior
Subordinated Debentures and the Preferred Securities Guarantee."
QUARTERLY DISTRIBUTION PAYMENTS AND EXTENSIONS ON DISTRIBUTION PAYMENTS
PAYMENT OF DISTRIBUTIONS. Distributions on the preferred securities will be
payable at the annual rate of % of the stated liquidation amount of $8,
payable quarterly in arrears on the 15th day of March, June, September and
December in each year, beginning December 15, 1999. The amount of each
distribution due will include amounts accrued
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and unpaid through the date the distribution is due. Distributions on the
preferred securities will be payable to the holders as they appear on the
register of EBH Trust on the relevant record date. Until the preferred
securities do not remain in book-entry form, the relevant record date will be
one business day prior to the relevant distribution date and, in the event the
preferred securities are not in book-entry form, the relevant record date will
be the first day of the month in which the relevant distribution date occurs.
The right to receive distributions will be cumulative from the date of original
issuance of the preferred securities.
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 payment
date is not a business day, the distribution will be made on the next business
day, and without any interest or other payment regarding any delay. As used in
this prospectus, a business day means any day other than a Saturday or a Sunday,
or a day on which banking institutions in Delaware or Missouri are authorized or
required by law or executive order to remain closed.
The only funds of EBH Trust available for distribution to its preferred
securities holders will be payments by Enterbank under the junior subordinated
debentures. See "Description of Junior Subordinated Debentures." If Enterbank
does not make interest payments on the junior subordinated debentures, the
property trustee will not have funds available to pay distributions on the
preferred securities. The payment of distributions, if and to the extent EBH
Trust has legally available funds and cash sufficient to make payments, is
guaranteed by Enterbank. For further information, see "Description of the
Preferred Securities Guarantee."
EXTENSION PERIOD. Unless a debenture event of default has occurred and is
continuing, Enterbank has the right under the indenture to defer interest
payments on the junior subordinated debentures at any time for a period not
exceeding 20 consecutive quarters regarding each extension period. However, no
extension period may extend beyond the stated maturity of the junior
subordinated debentures. As a consequence of any extension election by
Enterbank, quarterly distributions on the preferred securities will be deferred
by EBH Trust during any extension period. Distributions to which holders of
preferred securities are entitled will accumulate additional amounts at the rate
per year of % thereof, compounded quarterly from the relevant distribution
date. The term distributions as used in this prospectus includes any additional
accumulated amounts.
During any extension period, Enterbank may not (1) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment regarding, any of its capital stock which includes common
and preferred stock, or (2) make any payment of principal, interest or premium,
if any, on or repay, repurchase or redeem any debt securities of Enterbank that
rank pari passu with or junior in interest to the junior subordinated debentures
or make any preferred securities guarantee payments regarding any preferred
securities guarantee by Enterbank of the debt securities of any subsidiary of
Enterbank if the preferred securities guarantee ranks pari passu with or junior
in interest to the junior subordinated debentures. These restrictions do not
apply to:
- dividends or distributions in capital stock of Enterbank;
- any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any plan of
this type in the future, or the redemption or repurchase of any rights
pursuant to this type of plan;
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- payments under the preferred securities guarantee of Enterbank; or
- purchases of common stock for issuance under any contracts, benefit plans
or similar arrangements with or for its directors, officers, employees or
consultants or a dividend reinvestment or shareholder stock purchase
plan.
Prior to the termination of any extension period, Enterbank may further
extend the extension period, provided that the extension does not cause the
extension period to exceed 20 consecutive quarters or extend beyond the stated
maturity of the junior subordinated debentures. Upon the termination of any
extension period and the payment of all amounts then due, and subject to the
above limitations, Enterbank may elect to begin a new extension period. There is
no limitation on the number of times that Enterbank may elect to begin an
extension period.
Enterbank has no current intention of exercising its right to defer
payments of interest by extending the interest payment period on the junior
subordinated debentures.
REDEMPTION -- MANDATORY AND OPTIONAL RIGHTS OF ENTERBANK
MANDATORY REDEMPTION OF PREFERRED SECURITIES. Upon the repayment or
redemption at any time, in whole or in part, of any junior subordinated
debentures, the proceeds from the repayment or redemption will be applied by the
property trustee to redeem a like amount of the trust securities at the
redemption price, as defined below. For more information, see "Description of
the Junior Subordinated Debentures -- Redemption." If less than all of the
junior subordinated debentures are to be repaid or redeemed on a redemption
date, then the proceeds will be allocated to the redemption of the preferred
securities and common securities pro rata.
OPTIONAL REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES. Enterbank will have
the right to redeem the junior subordinated debentures (1) beginning on
, 2004, in whole at any time or in part from time to time
at a redemption price equal to the accrued and unpaid interest on the junior
subordinated debentures redeemed to the date fixed for redemption, plus 100% of
the principal amount of the junior subordinated debentures, or (2) at any time,
in whole, but not in part, upon a tax event, an investment company event or a
capital treatment event as defined in the following paragraph. The redemption
price will be equal to the accrued and unpaid interest on the redeemed junior
subordinated debentures, plus 100% of the principal amount. These payments will
be subject to receipt of prior approval by the Federal Reserve if then required
under applicable capital guidelines or policies of the Federal Reserve. See
"Description of the Junior Subordinated Debentures -- Redemption."
TAX EVENT REDEMPTION, INVESTMENT COMPANY EVENT REDEMPTION, CAPITAL
TREATMENT EVENT REDEMPTION OR DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES. If
a tax event, an investment company event or a capital treatment event occurs
after original issuance of the preferred securities and is continuing, Enterbank
has the right to redeem the junior subordinated debentures in whole. If a
redemption of the junior subordinated debentures occurs, Enterbank would also
cause a mandatory redemption of the preferred securities and common securities
in whole at the redemption price, as defined below, within 90 days following the
occurrence of any of these events. In each case the redemption would be subject
to receipt of prior approval by the Federal Reserve if then required under its
applicable capital guidelines or policies. If any of these events has occurred
and is continuing, and Enterbank does not elect to redeem the junior
subordinated debentures
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and cause a mandatory redemption of the trust securities or to liquidate EBH
Trust and cause the junior subordinated debentures to be distributed to holders
of the trust securities in liquidation of EBH Trust, the trust securities will
remain outstanding. Also, additional sums, as defined below, may be payable on
the junior subordinated debentures.
A tax event requires the receipt by Enterbank and EBH Trust of a legal
opinion to the effect that, as a result of any amendment to, including any
announced prospective change in, the laws or regulations of the United States or
any political subdivision or taxing authority of the United States, or as a
result of any official administrative pronouncement or judicial decision
interpreting or applying the tax laws or regulations, there is more than an
insubstantial risk that:
- EBH Trust is, or will be within 90 days of the date of the opinion,
subject to United States federal income tax regarding income received or
accrued on the junior subordinated debentures;
- interest payable by Enterbank on the junior subordinated debentures is
not, or within 90 days of the opinion, will not be, deductible by
Enterbank, in whole or in part, for United States federal income tax
purposes; or
- EBH Trust is, or will be within 90 days of the date of the opinion,
subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges.
An investment company event requires the receipt by Enterbank and EBH Trust
of a legal opinion to the effect that, as a result of any change in law or
regulation or a change in interpretation or application of law or regulation by
any legislative body, court, governmental agency or regulatory authority, EBH
Trust is or will be considered an investment company required to be registered
under the Investment Company Act.
A capital treatment event requires the receipt by Enterbank and EBH Trust
of a legal opinion to the effect that, as a result of any amendment to,
including any proposed change in, the laws or regulations of the United States
or any of its political subdivisions, or as a result of any official action or
judicial decision interpreting the laws or regulations, there is more than an
insubstantial risk that Enterbank's ability to treat the preferred securities as
core capital or its equivalent for purposes of the Federal Reserve capital
adequacy guidelines is impaired.
Additional sums means the additional amounts as may be necessary to be paid
by Enterbank on the junior subordinated debentures so that the amount of
distributions payable by EBH Trust on the outstanding trust securities will not
be reduced as a result of any additional taxes, duties, assessments and other
governmental charges to which EBH Trust has become subject.
Like amount means (1) regarding a redemption of trust securities, trust
securities having a liquidation amount, as defined below, equal to that portion
of the principal amount of junior subordinated debentures to be
contemporaneously redeemed in accordance with the indenture, allocated to the
common securities and to the preferred securities based upon the relative
liquidation amounts of these classes and the proceeds of which will be used to
pay the redemption price of the trust securities, and (2) regarding a
distribution of junior subordinated debentures to holders of trust securities in
connection with a dissolution or liquidation of EBH Trust, junior subordinated
debentures having a
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principal amount equal to the liquidation amount of the trust securities of the
holder to whom the junior subordinated debentures are distributed.
Liquidation amount means the stated amount of $8 per trust security.
Redemption price means, regarding any trust security, the liquidation
amount of the trust security, plus accumulated and unpaid distributions to the
redemption date, allocated on a pro rata basis, based on liquidation amounts,
among the trust securities.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES
Subject to Enterbank's having received prior approval of the Federal
Reserve, Enterbank will have the right at any time to liquidate EBH Trust and,
after satisfaction of the liabilities of creditors of EBH Trust as provided by
applicable law, cause the junior subordinated debentures to be distributed to
the holders of trust securities in liquidation of EBH Trust. After the
liquidation date fixed for any distribution of junior subordinated debentures
for preferred securities:
- the preferred securities will no longer be deemed to be outstanding;
- the depositary or its nominee, as the record holder of the preferred
securities, will receive a registered global certificate or certificates
representing the junior subordinated debentures to be delivered upon the
distribution; and
- any certificates representing preferred securities not held by the
depositary or its nominee will be deemed to represent the junior
subordinated debentures having a principal amount equal to the
liquidation amount of the preferred securities, and bearing interest
equal to the accrued and unpaid distributions on the preferred
securities, until the certificates are presented to the administrative
trustees or their agent for reissuance.
There can be no assurance as to the market prices for the preferred
securities or the junior subordinated debentures that may be distributed in
exchange for the preferred securities if a dissolution and liquidation of EBH
Trust were to occur. Accordingly, the preferred securities that an investor may
purchase, or the junior subordinated debentures that the investor may receive on
dissolution and liquidation of EBH Trust, may trade at a discount to the price
that the investor paid to purchase the preferred securities. If the junior
subordinated debentures are distributed, Enterbank will use reasonable efforts
to list them on a national securities exchange or quotation system.
REDEMPTION PROCEDURES
Preferred securities redeemed on each redemption date will be redeemed at
the redemption price with the proceeds from the contemporaneous redemption of
the junior subordinated debentures. Redemptions of the preferred securities will
be made and the redemption price will be payable on each redemption date only to
the extent that EBH Trust has funds on hand available for the payment of the
redemption price. See "-- Subordination of Common Securities of EBH Trust Held
by Enterbank" and "Description of the Preferred Securities Guarantee."
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 the
holder's registered address. Unless EBH Trust defaults in payment of the
applicable redemption price, on and
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after the redemption date, distributions will cease to accrue on the preferred
securities called for redemption.
If EBH Trust gives a notice of redemption regarding the preferred
securities, then, by 12:00 noon, St. Louis, Missouri time, on the redemption
date, the property trustee will pay the redemption price to the depositary, as
the record holder of the preferred securities. The depositary thereafter will
credit the redemption price to the participants for whom it holds the preferred
securities. See "Book-Entry Issuance." If the preferred securities are no longer
in book-entry form, the property trustee, to the extent funds are available,
will deposit with the paying agent for the preferred securities funds sufficient
to pay the aggregate redemption price. The property trustee will give the paying
agent irrevocable instructions and authority to pay the redemption price upon
surrender of certificates evidencing the preferred securities. Notwithstanding
the foregoing, distributions payable on or prior to the redemption date will be
payable to the holders of the preferred securities on the relevant record dates
for the related distribution dates. If notice of redemption has been given and
funds deposited as required, then upon the date of the deposit, all rights of
the holders of the preferred securities will cease, except the right of the
holders of the preferred securities to receive the redemption price, but without
interest on the redemption price, and the preferred securities will cease to be
outstanding. If any date fixed for redemption of the preferred securities is not
a business day, then payment of the redemption price payable on the date will be
made on the next business day and without any interest or other payment for the
delay. If, however, the business day falls in the next calendar year, the
payment will be made on the immediately preceding business day. If payment of
the redemption price in respect of preferred securities called for redemption is
improperly withheld or refused and not paid either by EBH Trust or by Enterbank
under the preferred securities guarantee, distributions on the preferred
securities will continue to accrue at the then applicable rate, from the
redemption date originally established by EBH Trust for the preferred securities
to the date the redemption price is actually paid. In this case the actual
payment date will be the date fixed for redemption for purposes of calculating
the redemption price. See "Description of the Preferred Securities Guarantee."
Subject to applicable law, including, without limitation, federal
securities laws, Enterbank may at any time and from time to time purchase
outstanding preferred securities by tender, in the open market or by private
agreement.
Payment of the redemption price on the preferred securities and any
distribution of junior subordinated debentures to holders of preferred
securities will be made to the applicable record holders as they appear on the
register of the preferred securities on the relevant record date, which date
will be one business day prior to the relevant redemption date; provided,
however, that if any preferred securities are not in book-entry form, the
relevant record date for them will be a date at least 15 days prior to the
redemption date. In the case of a liquidation, the record date will be
established by the property trustee and be no more than 45 days before the
liquidation date.
If less than all of the trust securities are to be redeemed on a redemption
date, then the aggregate redemption price for the trust securities to be
redeemed will be allocated pro rata to the preferred securities and common
securities based upon the relative liquidation amounts of these classes. The
particular outstanding preferred securities to be redeemed will be selected by
any method as the property trustee deems fair and appropriate. This method may
provide for the selection for redemption of portions equal to $8 or an integral
multiple of $8 of the liquidation amount of preferred securities. The property
trustee will promptly notify the trust securities registrar in writing of the
preferred securities selected
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for redemption and, in the case of any preferred securities selected for partial
redemption, the liquidation amount thereof to be redeemed. For all purposes of
the trust agreement, unless the context otherwise requires, all provisions
relating to the redemption of preferred securities will relate to the portion of
the aggregate liquidation amount of preferred securities which has been or is to
be redeemed.
SUBORDINATION OF COMMON SECURITIES OF EBH TRUST HELD BY ENTERBANK
Payment of distributions on, and the redemption price of, the preferred
securities and common securities will be made pro rata based on the liquidation
amounts of these securities. However, if on any distribution date or redemption
date a debenture event of default has occurred and is continuing, no
distributions on or redemption of the common securities will be made. Further,
no other payment on account of the redemption, liquidation or other acquisition
of the common securities will be made unless payment in full in cash of all
distributions payable on all of the outstanding preferred securities are made,
or in the case of redemption the full redemption price on all of the outstanding
preferred securities then called for redemption, has been made or provided for.
All funds available to the property trustee will first be applied to the payment
in full in cash of all distributions on, or redemption price of, the preferred
securities then due and payable.
In the case of any event of default under the trust agreement resulting
from a debenture event of default, Enterbank as holder of the common securities
will be deemed to have waived any right to act regarding any event of default
until the effects of all events of default have been cured, waived or otherwise
eliminated. Until any events of default have been so cured, waived or otherwise
eliminated, the property trustee will act solely on behalf of the holders of the
preferred securities and not on behalf of Enterbank as holder of the common
securities, and only the holders of the preferred securities will have the right
to direct the property trustee to act on their behalf.
LIQUIDATION DISTRIBUTION UPON TERMINATION
Enterbank will have the right at any time to terminate EBH Trust and cause
the junior subordinated debentures to be distributed to the holders of the
preferred securities. This right is subject to Enterbank having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. See "Distribution of the Junior
Subordinated Debentures" above.
In addition, under the trust agreement, EBH Trust will automatically
terminate upon expiration of its term and will earlier terminate on the first to
occur of: (1) events of bankruptcy, dissolution or liquidation of Enterbank; (2)
delivery by Enterbank of written direction to the property trustee to terminate
EBH Trust, which direction is optional and wholly within the discretion of
Enterbank; (3) redemption of all of the preferred securities as described under
"-- Redemption -- Mandatory and Optional Rights of Enterbank;" and (4) the entry
of an order for the dissolution of EBH Trust by a court of competent
jurisdiction.
If an early termination occurs as described in clause (1), (2) or (4) above
or upon the expiration of the term of EBH Trust, it will be liquidated by the
trustees as expeditiously as the trustees determine to be possible. The
liquidation will be made after satisfaction of liabilities to creditors of EBH
Trust as provided by applicable law. In the liquidation, holders of the trust
securities will receive a like amount of the junior subordinated debentures,
unless this distribution is determined by the property trustee not
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to be practical. If the property trustee determines that a distribution of the
junior subordinated debentures is not practical, then the holders of preferred
securities will be entitled to receive an amount equal to the liquidation amount
of $8 per trust security plus accrued and unpaid distributions thereon to the
date of payment. This amount, payable out of the assets of EBH Trust available
for distribution, is referred to as the liquidation distribution. If the
liquidation distribution can be paid only in part because EBH Trust has
insufficient assets available to pay the full aggregate liquidation
distribution, then the amounts payable directly by EBH Trust on the preferred
securities will be paid on a pro rata basis. The holders of the common
securities will be entitled to receive distributions upon a liquidation pro rata
with the holders of the preferred securities, except that if a debenture event
of default has occurred and is continuing, the preferred securities will have a
priority over the common securities.
Under current United States federal income tax law and interpretations and
assuming, as expected, EBH Trust is treated as a grantor trust, a distribution
of the junior subordinated debentures should not be a taxable event to holders
of the preferred securities. Should there be a change in law, a change in legal
interpretation, a tax event or other circumstances, however, the distribution
could be a taxable event to holders of the preferred securities. See "Material
Federal Income Tax Consequences." If Enterbank elects neither to redeem the
junior subordinated debentures prior to maturity nor to liquidate EBH Trust and
distribute the junior subordinated debentures to holders of the preferred
securities, the preferred securities will remain outstanding until the repayment
of the junior subordinated debentures.
If Enterbank elects to liquidate EBH Trust and cause the junior
subordinated debentures to be distributed to holders of the preferred securities
in liquidation of EBH Trust, Enterbank will continue to have the right to
shorten the maturity of the junior subordinated debentures under most
circumstances. See "Description of the Junior Subordinated Debentures -- General
Overview."
EVENTS OF DEFAULT; NOTICE
Any one of the following events that has occurred and is continuing
constitutes an event of default under the trust agreement:
- the occurrence of a debenture event of default under the indenture, see
"Description of the Junior Subordinated Debentures -- Indenture Events of
Default"; or
- default by EBH Trust in the payment of any distribution when it becomes
due and payable, and continuation of the default for a period of 30 days;
or
- default by EBH Trust in the payment of any redemption price of any trust
security when it becomes due and payable; or
- default in the performance, or breach, in any material respect, of any
covenant or warranty of the property trustee in the trust agreement,
other than a default or breach in the performance of a covenant or
warranty which is addressed in the previous two points above, and
continuation of the default or breach, for a period of 60 days after
there has been given, by registered or certified mail, to the property
trustee by the holders of at least 25% in aggregate liquidation amount of
the outstanding preferred securities, a written notice specifying the
default or breach
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and requiring it to be remedied and stating that the notice is a "Notice
of Default" under the trust agreement; or
- the occurrence of events of bankruptcy or insolvency regarding the
property trustee and the failure by Enterbank to appoint a successor
property trustee within 60 days thereof.
Within five business days after the occurrence of any event of default
actually known to the property trustee, the property trustee is required to
transmit notice of the event of default to the holders of the preferred
securities, the administrative trustees and Enterbank, unless the event of
default has been cured or waived. Enterbank and the administrative trustees are
required to file annually with the property trustee a certificate as to whether
they are in compliance with all the conditions and covenants applicable to them
under the trust agreement.
If a debenture event of default has occurred and is continuing, the
preferred securities will have a preference over the common securities upon
termination of EBH Trust as described above. See "-- Liquidation Distribution
Upon Termination." Upon a debenture event of default, unless the principal of
all the junior subordinated debentures has already become due and payable,
either the property trustee or the holders of not less than 25% in aggregate
principal amount of outstanding junior subordinated debentures may declare all
of the junior subordinated debentures to be due and payable immediately. Written
notice must be given to Enterbank, and to the property trustee, if given by
holders of the junior subordinated debentures. If the property trustee or the
holders of the junior subordinated debentures fail to declare the principal of
all of the junior subordinated debentures due and payable upon a debenture event
of default, the holders of at least 25% in liquidation amount of the preferred
securities then outstanding will have the right to declare the junior
subordinated debentures immediately due and payable. In either event, payment of
principal and interest on the junior subordinated debentures will remain
subordinated to the extent provided in the indenture. In addition, holders of
the preferred securities have to bring a direct action as discussed below. See
"Description of the Junior Subordinated Debentures -- Enforcement of Rights by
Holders of Preferred Securities."
REMOVAL OF TRUSTEES
Unless a debenture event of default has occurred and is continuing, any
trustee may be removed at any time by the holder of the common securities of EBH
Trust. If a debenture event of default has occurred and is continuing, the
property trustee, Delaware trustee or both may be removed by the holders of a
majority in liquidation amount of the outstanding preferred securities. In no
event will the holders of the preferred securities have the right to vote to
appoint, remove or replace the administrative trustees, which voting rights are
vested exclusively in Enterbank as the holder of the common securities. No
resignation or removal of a trustee and no appointment of a successor trustee
will be effective until the acceptance of appointment by the successor trustee
in accordance with the provisions of the trust agreement.
CO-TRUSTEES AND SEPARATE PROPERTY TRUSTEE
Unless an event of default has occurred and is continuing, at any time, for
the purpose of meeting the legal requirements of the Trust Indenture Act or of
any jurisdiction in which any part of trust property may at the time be located,
the holders of the common securities and the administrative trustees have power
to appoint one or more persons either
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to act as (1) a co-trustee, jointly with the property trustee, of all or any
part of the trust property, or (2) to act as separate trustee of any such
property. In either case these trustees will have the powers which may be
provided in the instrument of appointment, and will have vested in them any
property, title, right or power deemed necessary or desirable, subject to the
provisions of the trust agreement. In case a debenture event of default has
occurred and is continuing, the property trustee alone will have power to make
the appointment.
MERGER OR CONSOLIDATION OF TRUSTEES
Generally, any person or successor to any of the trustees of EBH Trust may
be a successor trustee to any of the trustees, including a successor resulting
from a merger or consolidation. However, any successor trustee must meet all of
the qualifications and eligibility standards to act as a trustee to EBH Trust.
MERGERS, CONSOLIDATIONS, AMALGAMATIONS OR REPLACEMENTS OF EBH TRUST
EBH Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any trust or other person, except as described
below. EBH Trust may, at the request of Enterbank, with the consent of the
administrative trustees and without the consent of the holders of the preferred
securities, the property trustee or the Delaware trustee, undertake the
transactions described above; provided, that:
- the successor entity either (a) expressly assumes all of the obligations
of EBH Trust regarding the preferred securities or (b) substitutes for
the preferred securities other securities having substantially the same
terms as the preferred securities, so long as the successor securities
rank the same as the preferred securities rank in priority regarding
distributions and payments upon liquidation, redemption and otherwise;
- Enterbank expressly appoints a trustee of the successor entity possessing
substantially the same powers and duties as the property trustee as the
holder of the junior subordinated debentures;
- any transaction of this kind does not adversely affect the rights,
preferences and privileges of the holders of the preferred securities,
including any successor securities, in any material respect;
- the successor entity has a purpose identical to that of EBH Trust;
- the successor securities will be listed or traded on any national
securities exchange or other organization on which the preferred
securities may then be listed;
- prior to the transaction, Enterbank has received a legal opinion from
independent counsel to EBH Trust experienced in such matters to the
effect that (a) the transaction does not adversely affect the rights,
preferences and privileges of the holders of the preferred securities,
including any successor securities, in any material respect, and (b)
following any transaction of this kind, neither EBH Trust nor the
successor entity will be required to register as an investment company
under the Investment Company Act; and
- Enterbank or any permitted successor or designee owns all of the common
securities of the successor entity and guarantees the obligations of the
successor
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entity under the successor securities at least to the extent provided by
the preferred securities guarantee. Notwithstanding the foregoing, EBH
Trust will not, except with the consent of holders of 100% in liquidation
amount of the preferred securities, enter into any transaction of this
kind, or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if the transaction would cause EBH 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 TRUST AGREEMENT
Except in certain limited circumstance described below and under
"Description of the Preferred Securities Guarantee -- Amendments and
Assignment", in general, the holders of the preferred securities will have no
voting rights.
The trust agreement may be amended from time to time by Enterbank and the
trustees, without the consent of the holders of the trust securities:
- to cure any ambiguity, correct or supplement any provisions in the trust
agreement that may be inconsistent with any other provision, or to make
any other provisions regarding matters or questions arising under the
trust agreement, which are not inconsistent with the other provisions of
the trust agreement; or
- to modify, eliminate or add to any provisions of the trust agreement to
the extent that is necessary to ensure that EBH 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 EBH
Trust will not be required to register as an investment company under the
Investment Company Act.
Provided, however, that in the case of the first point above, this action
will not adversely affect in any material respect the interests of any holder of
trust securities, and any amendments of the trust agreement will become
effective when notice is given to the holders of the trust securities.
The trust agreement may be amended by the trustees and Enterbank (1) with
the consent of holders representing not less than a majority of the aggregate
liquidation amount of the outstanding trust securities, and (2) upon receipt by
the trustees of an opinion of counsel to the effect that the amendment or the
exercise of any power granted to the trustees in accordance with the amendment
will not affect EBH Trust's status as a grantor trust for United States federal
income tax purposes or EBH Trust's exemption from status as an investment
company under the Investment Company Act. However, without the consent of each
holder of trust securities, the trust agreement may not be amended to (1) 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 (2) restrict the right of a
holder of trust securities to institute suit for the enforcement of any payment
of distributions afterwards.
For the time that any junior subordinated debentures are held by the
property trustee, the trustees will not:
- direct the time, method and place of conducting any proceeding for any
remedy available to the indenture trustee, or executing any trust or
power conferred on the indenture trustee regarding the junior
subordinated debentures;
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- waive any past default that is waivable under the indenture;
- exercise any right to rescind or annul a declaration that the principal
of all the junior subordinated debentures will be due and payable; or
- consent to any amendment, modification or termination of the indenture or
the junior subordinated debentures, where this consent is required,
without, in each case, obtaining the prior approval of the holders of a
majority in aggregate liquidation amount of all outstanding preferred
securities. However, where a consent under the indenture would require
the consent of each affected holder of junior subordinated debentures,
this consent may not be given by the property trustee without the prior
consent of each holder of the preferred securities. The trustees will not
revoke any action previously authorized or approved by a vote of the
holders of the preferred securities except by subsequent vote of the
holders of the preferred securities. The property trustee will notify
each holder of the preferred securities of any notice of default
regarding the junior subordinated debentures. In addition to obtaining
these approvals of the holders of the preferred securities, prior to
taking any of the above actions, the trustees will obtain an opinion of
counsel stating that EBH Trust will not, as a consequence of the proposed
action by the property trustee, cease to be classified as a grantor trust
and will not be classified as an association taxable as a corporation for
United States federal income tax purposes on account of the action.
Any required approval of holders of the preferred securities may be given
at a meeting of holders of preferred securities convened for this purpose or
under written consent. The property trustee will cause a notice of any meeting
at which holders of the preferred securities are entitled to vote, or of any
matter upon which action by written consent of the holders is to be taken, to be
given to each holder of record of the preferred securities in the manner set
forth in the trust agreement.
No vote or consent of the holders of the preferred securities will be
required for EBH Trust to redeem and cancel the preferred securities in
accordance with the trust agreement.
Any of the preferred securities that are owned by Enterbank, the trustees
or any affiliate of Enterbank or any trustees, will, for purposes of the vote or
consent, be treated as if they were not outstanding.
GLOBAL PREFERRED SECURITIES
The preferred securities will be represented by one or more global
certificates registered in the name of the depositary or its nominee. Beneficial
interests in the preferred securities will be shown on, and transfers will be
effected only through, records maintained by participants in the depositary.
Except as described below, preferred securities in certificated form will not be
issued in exchange for the global certificates. See "Book-Entry Issuance."
A global security will be exchangeable for preferred securities registered
in the names of persons other than the depositary or its nominee only if:
- the depositary notifies Enterbank that it is unwilling or unable to
continue as a depositary for the global security and no successor
depositary has been appointed, or if at any time the depositary ceases to
be a clearing agency registered under the
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Securities Exchange Act of 1934, at a time when the depositary is
required to be so registered to act as a depositary;
- Enterbank in its sole discretion determines that the global security will
be so exchangeable; or
- there has occurred and is continuing an event of default under the
indenture. Any global security that is exchangeable under the preceding
sentence will be exchangeable for definitive certificates registered in
the names which the depositary directs. It is expected that the
instructions will be based upon directions received by the depositary
regarding ownership of beneficial interests in the global security. In
the event that preferred securities are issued in certificated form, they
will be in denominations of $8 or integral multiples of $8 and may be
transferred or exchanged at the offices described below.
Unless and until it is exchanged in whole or in part for the individual
preferred securities, the global preferred security may not be transferred
except (1) as a whole by the depositary to a nominee of the depositary or by a
nominee of the depositary to the depositary or (2) another nominee of the
depositary or (3) by the depositary or any nominee to a successor depositary or
any nominee of the successor.
Payments on preferred securities represented by a global security will be
made to the depositary, as the depositary for the preferred securities. In the
event the preferred securities are issued in certificated form, distributions
will be payable, the transfer of the preferred securities will be registrable,
and preferred securities will be exchangeable for preferred securities of other
denominations of a like aggregate liquidation amount, at the corporate office of
the property trustee, or at the offices of any paying agent or transfer agent
appointed by the administrative trustees. However, payment of any distribution
may be made at the option of the administrative trustees by check mailed to the
address of the persons entitled to payments or by wire transfer. In addition, if
the preferred securities are issued in definitive form, the record dates for
payment of distributions will be the first day of the month in which the
relevant distribution date occurs. For a description of the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance."
Upon the issuance of a global preferred security, and the deposit of the
global preferred security with or on behalf of the depositary, the depositary
will credit, on its book-entry registration and transfer system, the respective
aggregate liquidation amounts of the individual preferred securities represented
by the global preferred security to persons that have accounts with the
depositary. The accounts will be designated by the dealers, underwriters or
agents regarding the preferred securities. Ownership of beneficial interests in
a global preferred security will be limited to participants or persons that may
hold interests through participants. Ownership of beneficial interests in the
global preferred security will be shown on, and the transfer of that ownership
will be effected only through, records maintained by the depositary or its
nominee and the records of participants regarding interests of persons who hold
through participants. The laws of some states require that some purchasers of
securities in those states take physical delivery of the securities in
certificated form. The limits, under these laws, may impair the ability to
transfer beneficial interests in a global preferred security.
For the time that the depositary for a global preferred security, or its
nominee, is the registered owner of the global preferred security, this
registered owner will be considered
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the sole owner or holder of the preferred securities represented by the global
preferred security for all purposes under the trust agreement of EBH Trust.
Except as provided below, owners of beneficial interests in a global preferred
security will not be entitled to have any of the individual preferred securities
represented by the global preferred security registered in their names, will not
receive or be entitled to receive physical delivery of any the preferred
securities in certificated form and will not be considered the owners or holders
thereof.
None of Enterbank, the property trustee, any paying agent, or the
securities registrar for the preferred securities will have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of the global preferred security or
for maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
Enterbank expects that the depositary, upon receipt of any payment of the
liquidation amount or distributions in respect of a permanent global preferred
security, immediately will credit participants' accounts with payments in
amounts proportionate to their respective beneficial interest in the aggregate
liquidation amount of the global preferred security as shown on the records of
the depositary or its nominee. Enterbank also expects that payments by
participants to owners of beneficial interests in the global preferred security
held through the participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in street name. The payments will be the
responsibility of the participants.
If the depositary for the preferred securities is at any time unwilling,
unable or ineligible to continue as depositary and a successor depositary is not
appointed by Enterbank within 90 days, EBH Trust will issue individual preferred
securities in exchange for the global preferred security. In addition, EBH Trust
may at any time in its sole discretion, subject to any limitations described in
this prospectus relating to the preferred securities, determine not to have any
preferred securities represented by one or more global preferred securities. In
this event, Enterbank will issue individual preferred securities in exchange for
the global preferred security or securities representing the preferred
securities. Further, if EBH Trust specifies, an owner of a beneficial interest
in a global preferred security representing preferred securities may receive
individual preferred securities in exchange for the beneficial interests,
subject to any limitations described in this prospectus. In any such instance, a
beneficial interest owner in a global preferred security will be entitled to
physical delivery of individual preferred securities represented by the global
preferred security equal in liquidation amount to the beneficial interest, and
to have the preferred securities registered in its name. Individual preferred
securities issued will be issued in denominations, unless otherwise specified by
EBH Trust, of $8 and integral multiples of $8.
PAYMENT AND PAYING AGENCY
Payments in respect of the preferred securities will be made to the
depositary, which will credit the relevant accounts at the depositary on the
applicable distribution dates. However, if any of the preferred securities are
not held by the depositary, the payments will be made by check mailed to the
address of the holder as the address appears on the register. The paying agent
will initially be the property trustee and any co-paying agent chosen by the
property trustee and acceptable to the administrative trustees and
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Enterbank. The paying agent will be permitted to resign as paying agent upon 30
days' written notice to the property trustee and Enterbank. In the event that
the property trustee is no longer the paying agent, the administrative trustees
will appoint a successor paying agent, which will be a bank or trust company
acceptable to the administrative trustees and Enterbank.
REGISTRAR AND TRANSFER AGENT
The property trustee will act as registrar and transfer agent for the
preferred securities. Registration of transfers of the preferred securities will
be effected without charge by or on behalf of EBH Trust, but the registrar may
require payment to cover any tax or other governmental charges that may be
imposed in connection with any transfer or exchange. EBH Trust will not be
required to register or cause to be registered the transfer of the preferred
securities after the preferred securities have been called for redemption.
INFORMATION CONCERNING THE PROPERTY TRUSTEE
The property trustee, other than upon the occurrence and during the
continuance of an event of default, undertakes to perform only the duties which
are specifically set forth in the trust agreement. After an event of default,
the property trustee 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 trust agreement at the request of
any holder of preferred securities unless it is offered reasonable indemnity
against the costs, expenses and liabilities that might be incurred. 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 trust agreement or is unsure of the application of any provision of the
trust agreement, and the matter is not one on which holders of the preferred
securities are entitled under the trust agreement to vote, then the property
trustee will take action as directed by Enterbank. If the property trustee is
not so directed, it will take action as it deems advisable and in the best
interests of the holders of the trust securities and will have no liability
under the trust agreement 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 EBH Trust in such a way that EBH 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 Enterbank for United
States federal income tax purposes. In this regard, Enterbank and the
administrative trustees are authorized to take any lawful action not
inconsistent with the certificate of trust of EBH Trust or the trust agreement,
that they determine in their discretion to be necessary or desirable for these
purposes, as long as the action does not materially adversely affect the
interests of the holders of the related preferred securities. Holders of the
preferred securities have no preemptive or similar rights.
EBH Trust may not borrow money or issue debt or mortgage or pledge any of
its assets.
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DESCRIPTION OF THE JUNIOR SUBORDINATED DEBENTURES
The junior subordinated debentures will be issued under a subordinated
indenture, dated as of , 1999, between Enterbank and
Wilmington Trust Company, as the indenture trustee. The following is a summary
of the material terms and provisions of the junior subordinated debentures and
the indenture. Prospective investors are urged to read the indenture, which has
been filed as an exhibit to the registration statement of which this prospectus
forms a part. Wherever particular defined terms of the indenture are referred to
but not defined herein, such defined terms have the same meaning as that in the
indenture. The indenture is qualified under the Trust Indenture Act.
Concurrently with the issuance of the preferred securities, EBH Trust will
invest the proceeds from the sale of the preferred securities, together with the
consideration paid by Enterbank for the common securities, in junior
subordinated debentures issued by Enterbank. The junior subordinated debentures
will be issued as unsecured debt under the indenture.
GENERAL OVERVIEW
The junior subordinated debentures will bear interest at the rate of %
per year of their principal amount, payable quarterly in arrears on the 15th day
of March, June, September and December of each year, beginning December 15,
1999, to the person in whose name each junior subordinated debenture is
registered, subject to minor exceptions, at the close of business on the
business day next preceding the interest payment date. Notwithstanding the
above, in the event that either (1) the junior subordinated debentures are held
by the property trustee and the preferred securities are no longer in book-entry
only form or (2) the junior subordinated debentures are not represented by a
global subordinated debenture, the record date for the interest payment will be
the first day of the month in which the payment is made. The amount of each
interest payment due regarding the junior subordinated debentures will include
amounts accrued and unpaid through the date the interest payment is due. It is
anticipated that, until the liquidation, if any, of EBH Trust, each junior
subordinated debenture will be held in the name of the property trustee in trust
for the benefit of the holders of the preferred 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 junior subordinated debentures is not a business day, then payment of the
interest payable on that date will be made on the next business day. Accrued
interest that is not paid on the applicable interest payment date will bear
additional interest at the rate per year of % compounded quarterly. The
term interest as used in this prospectus includes quarterly interest payments,
interest on quarterly interest payments not paid on the applicable interest
payment date and additional sums, as defined below, as applicable.
The junior subordinated debentures will mature on ,
2029. This date, as it may be shortened as described below, is the stated
maturity. This date may be shortened once at any time by Enterbank before the
day which is 90 days before the scheduled maturity date to any date not earlier
than , 2004, subject to Enterbank having received prior
approval of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve. In the event that Enterbank
elects to shorten the stated maturity of the junior subordinated debentures, it
will give at least 90 days prior notice to the registered holders of the junior
subordinated
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debentures, the property trustee and the indenture trustee. The property trustee
must give notice to the holders of the trust securities of the shortening of the
stated maturity.
The junior subordinated debentures will be unsecured and will rank junior
and be subordinate in right of payment to all senior and subordinated debt (as
defined in the indenture) of Enterbank. Because Enterbank is a holding company,
the right of Enterbank to participate in any distribution of assets of
Enterprise Bank or any other subsidiary, or upon Enterprise Bank's or any other
subsidiary's liquidation or reorganization or otherwise, and thus the ability of
holders of the junior subordinated debentures to benefit indirectly from the
distribution, is subject to the prior claims of creditors of that subsidiary,
except to the extent that Enterbank may itself be recognized as a creditor of
that subsidiary. Accordingly, the junior subordinated debentures will be
effectively subordinated to all existing and future liabilities of Enterbank's
subsidiaries, and holders of junior subordinated debentures should look only to
the assets of Enterbank for payments on the junior subordinated debentures. The
indenture does not limit the incurrence or issuance of other secured or
unsecured debt of Enterbank, including senior and subordinated debt, whether
under the indenture or any existing or other indenture that Enterbank may enter
into in the future or otherwise. See "Subordination" below.
OPTION TO EXTEND INTEREST PAYMENT PERIOD
If no debenture event of default has occurred and is continuing, Enterbank
has the right under the indenture at any time during the term of the junior
subordinated debentures to defer interest payments at any time for a period not
exceeding 20 consecutive quarters. However, no extension period may extend
beyond the stated maturity of the junior subordinated debentures. At the end of
an extension period, Enterbank must pay all interest then accrued and unpaid,
together with interest at the rate of % per year, compounded quarterly.
During an extension period, interest will continue to accrue and holders of
junior subordinated debentures will be required to accrue interest income for
United States federal income tax purposes. See "Material Federal Income Tax
Consequences -- Interest Income and Original Issue Discount."
During any extension period, Enterbank may not (1) declare or pay any
dividends or distributions on, or redeem, purchase, acquire or make a
liquidation payment regarding, any of Enterbank's capital stock or (2) make any
payment of principal, interest or premium, if any, on or repay, repurchase or
redeem any debt securities of Enterbank, including other junior subordinated
debentures, that rank pari passu with or junior in interest to the junior
subordinated debentures or make any preferred securities guarantee payments
regarding any preferred securities guarantee by Enterbank of the debt securities
of any subsidiary of Enterbank if the preferred securities guarantee ranks pari
passu with or junior in interest to the junior subordinated debentures. These
restrictions do not apply to:
- dividends or distributions in capital stock of Enterbank;
- any declaration of a dividend in connection with the implementation of a
stockholders' rights plan, or the issuance of stock under any plan in the
future, or the redemption or repurchase of any rights pursuant to this
type of plan;
- payments under the preferred securities guarantee; or
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- purchases of common stock for issuance under any contracts, benefit plans
or similar arrangements with or for its directors, officers, employees or
consultants or a dividend reinvestment or shareholder stock purchase
plan.
Prior to the termination of any extension period, Enterbank may further extend
the extension period, provided that the extension does not cause the extension
period to exceed 20 consecutive quarters or extend beyond the stated maturity of
the junior subordinated debentures. Upon the termination of any extension period
and the payment of all amounts then due on any interest payment date, Enterbank
may elect to begin a new extension period subject to the above requirements. No
interest will be due and payable during an extension period, except at the end
of the extension period.
If the property trustee is the only registered holder of the junior
subordinated debentures, Enterbank must give the property trustee, the
administrative trustees and the indenture trustee notice of its election of any
extension period at least one business day prior to the earlier of (1) the date
the distributions on the preferred securities would have been payable except for
the election to begin or extend the extension period or (2) the date the
administrative trustees are required to give notice to the holders of the
preferred securities of the record date or the date the distributions are
payable, but in any event not less than one business day prior to the record
date. The indenture trustee will give notice of Enterbank's election to begin or
extend a new extension period to the administrative trustees who, in turn, will
give notice to the holders of the preferred securities. There is no limitation
on the number of times that Enterbank may elect to begin an extension period.
ADDITIONAL SUMS TO BE PAID AS A RESULT OF ADDITIONAL TAXES
If EBH Trust or the property trustee is required to pay any additional
taxes, duties, assessments or other governmental charges as a result of a tax
event, Enterbank will pay as additional amounts on the junior subordinated
debentures any amounts which will be required so that the distributions payable
by EBH Trust will not be reduced as a result of any additional taxes, duties or
other governmental charges. See "Description of the Preferred Securities
- -- Redemption -- Mandatory and Optional Rights of Enterbank" for a definition of
tax event.
REDEMPTION
Subject to Enterbank's having received prior approval of the Federal
Reserve, if then required under applicable capital guidelines or policies of the
Federal Reserve, the junior subordinated debentures are redeemable prior to
maturity at the option of Enterbank (1) beginning , 2004,
in whole at any time or in part from time to time, or (2) at any time in whole,
but not in part, upon the occurrence and during the continuance of a tax event,
an investment company event or a capital treatment event, in each case at a
redemption price equal to the accrued and unpaid interest on the junior
subordinated debentures redeemed to the date fixed for redemption, plus 100% of
the principal amount of the junior subordinated debentures. See "Description of
the Preferred Securities -- Redemption -- Mandatory and Optional Rights of
Enterbank" for definitions of tax event, investment company event and capital
treatment event.
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 junior subordinated
debentures to be redeemed at the holder's registered address. Unless Enterbank
defaults in payment of the redemption price, on and after the redemption date
interest will cease to accrue on the
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junior subordinated debentures or portions of the junior subordinated debentures
called for redemption.
The junior subordinated debentures will not be subject to any sinking fund.
DISTRIBUTION UPON LIQUIDATION
As described under "Description of the Preferred Securities -- Liquidation
Distribution Upon Termination," under circumstances involving the termination of
EBH Trust, the junior subordinated debentures may be distributed to the holders
of the preferred securities and common securities in liquidation of EBH Trust
after satisfaction of liabilities to creditors of EBH Trust. If distributed to
holders of the preferred securities in liquidation, the junior subordinated
debentures will initially be issued in the form of one or more global securities
and the depositary, or any successor depositary for the preferred securities,
will act as depositary for the junior subordinated debentures. It is anticipated
that the depositary arrangements for the junior subordinated debentures would be
substantially identical to those in effect for the preferred securities. If the
junior subordinated debentures are distributed to the holders of preferred
securities upon the liquidation of EBH Trust, there can be no assurance as to
the market price of any junior subordinated debentures that may be distributed
to the holders of preferred securities. If the junior subordinated debentures
are distributed, Enterbank will use reasonable efforts to list them on a
national securities exchange or quotation system.
RESTRICTIONS ON PAYMENTS
Enterbank has restrictions on paying dividends or making payments regarding
pari passu or junior debt if:
- there has occurred any event of which Enterbank has actual knowledge that
(a) with the giving of notice or the lapse of time, or both, would
constitute a debenture event of default and (b) in respect of which
Enterbank shall not have taken reasonable steps to cure;
- Enterbank has given notice of its election of an extension period as
provided in the indenture regarding the junior subordinated debentures
and has not rescinded the notice, or the extension period, or any
extension thereof, is continuing; or
- while the junior subordinated debentures are held by EBH Trust, Enterbank
is in default regarding its payment of any obligation under the preferred
securities guarantee.
If any of the events above have occurred, Enterbank will not:
- declare or pay any dividends or distributions on, or redeem, purchase,
acquire, or make a liquidation payment regarding, any of Enterbank's
capital stock; or
- make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of Enterbank, including other
junior subordinated debt, that rank pari passu with or junior in interest
to the junior subordinated debentures or make any preferred securities
guarantee payments regarding any preferred securities guarantee by
Enterbank of the debt securities of any subsidiary of Enterbank if the
preferred securities guarantee ranks pari passu or junior in interest to
the junior subordinated debentures.
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Provided, however, Enterbank may (a) declare and pay dividends or
distributions in common stock, (b) make any declaration of a dividend in
connection with the implementation of a stockholders' rights plan, or the
issuance of stock under this type of plan in the future or the redemption or
repurchase of any rights under such plan, (c) make payments under the preferred
securities guarantee and (d) make purchases of common stock related to the
issuance of common stock or rights under any of Enterbank's benefit plans for
its directors, officers or employees.
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES TO SENIOR AND SUBORDINATED DEBT
OF ENTERBANK
In the indenture, Enterbank has agreed that any junior subordinated
debentures will be subordinate and junior in right of payment to all senior and
subordinated debt to the extent provided in the indenture. Upon any payment or
distribution of assets to creditors upon any liquidation, dissolution, winding
up, reorganization or any bankruptcy, or similar proceedings in connection with
any insolvency or bankruptcy proceeding of Enterbank, the holders of senior and
subordinated debt will first be entitled to receive payment in full of
principal, interest and premium, if any, on the senior and subordinated debt
before the holders of junior subordinated debentures will be entitled to receive
principal or interest payments on the junior subordinated debentures.
In the event of the acceleration of the maturity of any junior subordinated
debentures, the holders of all senior and subordinated debt outstanding upon
acceleration will first be entitled to receive payment in full of all amounts
due to them, including any amounts due upon acceleration, before the holders of
junior subordinated debentures will be entitled to receive any principal or
interest payments on the junior subordinated debentures. However, holders of
subordinated debt will not be entitled to receive payment of any of these
amounts to the extent that the subordinated debt is by its terms subordinated to
trade creditors.
No principal or interest payments on the junior subordinated debentures may
be made if there has occurred and is continuing a default in any payment
regarding senior and subordinated debt or an event of default regarding any
senior and subordinated debt resulting in the acceleration of the maturity of
senior and subordinated debt, or if any judicial proceeding is pending regarding
any of this type of default.
Debt as used in this discussion means regarding any person, whether
recourse is to all or a portion of the assets of the person and whether or not
contingent:
- every obligation of the person for money borrowed;
- every obligation of the person evidenced by bonds, debentures, notes or
other similar instruments, including obligations incurred in connection
with the acquisition of property, assets or businesses;
- every reimbursement obligation of the person regarding letters of credit,
bankers' acceptances or similar facilities issued for the account of the
person;
- every obligation of the person issued or assumed as the deferred purchase
price of property or services, but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business;
- every capital lease obligation of the person; and
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- every obligation of the type referred to in all of the points immediately
above of another person and all dividends of another person the payment
of which, in either case, the person has guaranteed or is responsible or
liable, directly or indirectly, as obligor or otherwise.
Senior and subordinated debt means the principal of and premium, if any,
and interest, if any, on debt of Enterbank, including interest accruing at the
time of the filing of any petition in bankruptcy or for reorganization relating
to Enterbank, whether incurred on or prior to the date of the indenture or
thereafter incurred, unless, in the instrument creating or evidencing the debt
or under which the debt is outstanding, it is provided that the obligations are
not superior in right of payment to the junior subordinated debentures or to
other debt which is pari passu with, or subordinated to, the junior subordinated
debentures.
However, senior and subordinated debt will not be deemed to include:
- any debt of Enterbank which when incurred and without respect to any
election under section 1111(b) of the United States Bankruptcy Code was
without recourse to Enterbank;
- any debt to any employee of Enterbank;
- any debt which by its terms is subordinated to trade accounts payable or
accrued liabilities arising in the ordinary course of business to the
extent that payments made to the holders of the debt by the holders of
the junior subordinated debentures as a result of the subordination
provisions of the indenture would be greater than they otherwise would
have been as a result of any obligation of the holders to pay amounts
over to the obligees on the trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of subordination
provisions to which the debt is subject;
- the preferred securities guarantee; and
- any other debt securities issued under the indenture.
The indenture places no limitation on the amount of additional senior and
subordinated debt that may be incurred by Enterbank. Enterbank expects from time
to time to incur additional indebtedness constituting senior and subordinated
debt.
DENOMINATIONS, REGISTRATION AND TRANSFER
It is anticipated that, until the liquidation, if any, of EBH Trust, each
junior subordinated debenture will be held in the name of the property trustee
in trust for the benefit of the holders of the preferred securities. However, in
the event of either a tax event, investment company event or capital treatment
event, the junior subordinated debentures in certificated form may be exchanged
and represented by global certificates registered in the name of the depositary
or its nominee. In the event of such an exchange, beneficial interests in the
junior subordinated debentures will be shown on, and transfers thereof will be
effected only through, records maintained by the depositary. Except as described
below, junior subordinated debentures in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Issuance."
Unless and until a global subordinated debenture is exchanged in whole or
in part for the individual junior subordinated debentures, it may not be
transferred except (1) as a
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whole by the depositary for the global subordinated debenture to a nominee of
the depositary or (2) by the depositary to a successor depositary selected or
approved by Enterbank or (3) to any nominee of the successor.
A global security will be exchangeable for junior subordinated debentures
registered in the names of persons other than the depositary or its nominee only
if (1) the depositary notifies Enterbank that it is unwilling or unable to
continue as a depositary for the global security and no successor depositary has
been appointed, or if at any time the depositary ceases to be a clearing agency
registered under the Securities Exchange Act of 1934 at a time when the
depositary is required to be so registered to act as a depositary or (2)
Enterbank in its sole discretion determines that the global security will be so
exchangeable. Any global security that is exchangeable under the preceding
sentence will be exchangeable for definitive certificates registered in the
names which the depositary directs. It is expected that the instructions will be
based upon directions received by the depositary from its participants regarding
ownership of beneficial interests in the global security. In the event that
junior subordinated debentures are issued in definitive form, the junior
subordinated debentures will be in denominations of $8 and integral multiples of
$8 and may be transferred or exchanged at the offices described below.
Payments on junior subordinated debentures represented by a global security
will be made to the depositary for the junior subordinated debentures. In the
event junior subordinated debentures are issued in definitive form, principal
and interest will be payable, the transfer of the junior subordinated debentures
will be registrable, and junior subordinated debentures will be exchangeable for
junior subordinated debentures of other denominations of a like aggregate
principal amount, at the corporate office of the indenture trustee, or at the
offices of any paying agent or transfer agent appointed by Enterbank. However,
interest payments may be made at the option of Enterbank by check mailed to the
address of the persons entitled to payments or by wire transfer. In addition, if
the junior subordinated debentures are issued in certificated form, the record
dates for interest payments will be the first day of the month in which the
payment is to be made. For a description of the depositary and the terms of the
depositary arrangements relating to payments, transfers, voting rights,
redemptions and other notices and other matters, see "Book-Entry Issuance."
Enterbank will appoint the indenture trustee as securities registrar under
the indenture. Junior subordinated debentures may be presented for exchange as
provided above, and may be presented for registration of transfer with the form
of transfer endorsed, or a satisfactory written instrument of transfer, duly
executed, at the office of the securities registrar. Enterbank may at any time
rescind the designation of any registrar or approve a change in the location
through which any registrar acts, provided that Enterbank maintains a registrar
in the place of payment. Enterbank may at any time designate additional
registrars regarding the junior subordinated debentures.
In the event of any redemption of less than all of the junior subordinated
debentures, neither Enterbank nor the indenture trustee will be required to
issue, exchange or register the transfer of less than all of the junior
subordinated debentures during a period beginning at the opening of business 15
days before the day of mailing of a notice of redemption selecting for
redemption less than all of the junior subordinated debentures and ending at the
close of business on the day of mailing of the relevant notice of redemption.
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PAYMENT AND PAYING AGENTS
Payment of principal of and any interest on the junior subordinated
debentures will be made at the office of the indenture trustee, except that at
the option of Enterbank payment of any interest may be made, except in the case
of a global subordinated debenture, by check mailed to the address of the person
entitled to payment as the person's address appears in the securities register.
Payment of any interest on junior subordinated debentures will be made to the
person in whose name the junior subordinated debenture is registered at the
close of business on the regular record date for the interest payment. Enterbank
may at any time designate additional paying agents or rescind the designation of
any paying agent; however, Enterbank will at all times be required to maintain a
paying agent in each place of payment for the junior subordinated debentures.
Any moneys deposited with the indenture trustee or any paying agent, or
then held by Enterbank in trust, for the payment of the principal of or interest
on the junior subordinated debentures that are not applied and remain unclaimed
for two years after the principal or interest has become due and payable will,
at the request of Enterbank, be repaid to Enterbank. Thereafter, the holder of
the junior subordinated debenture will look, as a general unsecured creditor,
only to Enterbank for payment.
MODIFICATION OF INDENTURE
From time to time Enterbank and the indenture trustee may, without the
consent of the holders of the junior subordinated debentures, amend, waive or
supplement the indenture for specified purposes. These purposes may include,
among other things, curing ambiguities, defects or inconsistencies, provided
that this action does not materially adversely affect the interests of the
holders of the junior subordinated debentures or the preferred securities while
they remain outstanding, and qualifying, or maintaining the qualification of,
the indenture under the Trust Indenture Act. The indenture contains provisions
permitting Enterbank and the indenture trustee, with the consent of the holders
of not less than a majority in aggregate principal amount of the outstanding
junior subordinated debentures, to modify the indenture in a manner affecting
the rights of the holders of the junior subordinated debentures; provided, that,
the modification may not, without the consent of the holder of each outstanding
junior subordinated debenture:
- change the stated maturity of the junior subordinated debentures or
extend the time of payment of interest on them, except as described under
"Description of the Junior Subordinated Debentures -- General Overview"
and "-- Option to Extend Interest Payment Period," or reduce the
principal amount thereof or the rate of interest thereon; or
- reduce the percentage of principal amount of junior subordinated
debentures, the holders of which are required to consent to any such
modification of the indenture. However, while any of the preferred
securities remain outstanding, (1) no modification may be made that
adversely affects the holders of the preferred securities in any material
respect, (2) no termination of the indenture may occur, and (3) no waiver
of any debenture event of default or compliance with any covenant under
the indenture may be effective, without the prior consent of the holders
of at least a majority of the aggregate liquidation amount of the
preferred securities, until the principal and interest of the junior
subordinated debentures have been paid in full and other conditions are
satisfied.
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INDENTURE EVENTS OF DEFAULT
The indenture provides that any one or more of the following described
events regarding the junior subordinated debentures that has occurred and is
continuing constitutes a debenture event of default:
- failure for 30 days to pay any interest on the junior subordinated
debentures, when due, subject to the deferral of any due date in the case
of an extension period;
- failure to pay any principal on the junior subordinated debentures when
due whether at maturity, upon redemption, by declaration or otherwise,
provided however that a valid extension of any interest payment period by
Enterbank according to the terms of the indenture will not constitute a
debenture event of default;
- failure by Enterbank to observe or perform in any material respect any of
its other covenants or agreements contained in the indenture for 90 days
after written notice to Enterbank from the indenture trustee or to
Enterbank and the indenture trustee by the holders of at least 25% in
aggregate outstanding principal amount of the junior subordinated
debentures; or
- events in bankruptcy, insolvency or reorganization of Enterbank,
including the voluntary commencement of bankruptcy proceedings, entry of
an order for relief against Enterbank in a bankruptcy proceeding,
appointment of a custodian over substantially all of Enterbank's
property, a general assignment for the benefit of creditors, or a court
order for liquidation of Enterbank.
The holders of a majority in aggregate outstanding principal amount of the
junior subordinated debentures have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the indenture
trustee. The indenture trustee or the holders of not less than 25% in aggregate
outstanding principal amount of the 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 junior
subordinated debentures may rescind and annul the declaration and waive the
default if the default, other than the non-payment of the principal of the
junior subordinated debentures which has become due solely by the 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
indenture trustee. Should the holders of the junior subordinated debentures fail
to annul the declaration and waive the default, the holders of a majority in
aggregate liquidation amount of the preferred securities will have the right to
do so. In case a debenture event of default occurs and is continuing, the
property trustee will have the right to declare the principal of and the
interest on the junior subordinated debentures, and any other amounts payable
under the indenture, to be due and payable and to enforce its other rights as a
creditor.
Enterbank is required to file annually with the indenture trustee a
certificate as to whether Enterbank is in compliance with all the conditions and
covenants applicable to it under the indenture.
ENFORCEMENT OF RIGHTS BY HOLDERS OF PREFERRED SECURITIES
If an event of default under the indenture has occurred and is continuing
and the default is attributable to Enterbank's failure to pay interest or
principal on the junior
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subordinated debentures on the due date, a holder of preferred securities may
institute a legal proceeding directly against Enterbank for payment of principal
and interest on the junior subordinated debentures having a principal amount
equal to the aggregate liquidation amount of the preferred securities of the
holder. This action is referred to in this discussion as a direct action. If the
right to bring a direct action is removed, EBH Trust may become subject to the
reporting obligations under the Securities Exchange Act of 1934. Enterbank will
have the right under the indenture to set-off any payment made to the holder of
preferred securities by Enterbank in connection with a direct action.
The holders of the preferred securities would not be able to exercise
directly any remedies other than those set forth in the preceding paragraph
available to the holders of the junior subordinated debentures unless there has
been an event of default under the trust agreement. See "Description of the
Preferred Securities -- Events of Default; Notice."
CONSOLIDATION, MERGER, SALE OF ASSETS AND OTHER TRANSACTIONS
The indenture provides that Enterbank will not consolidate with or merge
into any other person or convey, transfer or lease its properties and assets
substantially as an entirety to any person, and no person will consolidate with
or merge into Enterbank or convey, transfer or lease its properties and assets
substantially as an entirety to Enterbank, unless:
- in case Enterbank 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 the
successor person expressly assumes Enterbank's obligations on the junior
subordinated debentures issued under the indenture;
- immediately after giving effect to this type of transaction, no debenture
event of default, and no event which, after notice or lapse of time or
both, would become a debenture event of default, has occurred and is
continuing; and
- other conditions as prescribed in the indenture are met.
The provisions of the indenture do not afford holders of the junior
subordinated debentures protection in the event of a highly leveraged or other
transaction involving Enterbank that may adversely affect holders of the junior
subordinated debentures.
SATISFACTION AND DISCHARGE
Under the indenture, Enterbank will have satisfied and discharged the
indenture when all junior subordinated debentures not previously delivered to
the indenture trustee for cancellation (1) have become due and payable or (2)
will become due and payable at their stated maturity within one year, and
Enterbank deposits in trust with the indenture trustee sufficient funds to pay
and discharge the entire indebtedness on the junior subordinated debentures to
the deposit date or to the stated maturity, as the case may be. This
satisfaction and discharge will not apply to Enterbank's obligations to pay all
other sums due under the indenture and to provide the officers' certificates and
opinions of counsel described in the indenture.
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GOVERNING LAW
The indenture and the junior subordinated debentures will be governed by
and construed in accordance with the laws of the State of Missouri.
INFORMATION CONCERNING THE INDENTURE TRUSTEE
The indenture trustee will have and be subject to all the duties and
responsibilities specified for an indenture trustee under the Trust Indenture
Act. Subject to these provisions, the indenture trustee is under no obligation
to exercise any of the powers vested in it by the indenture at the request of
any holder of junior subordinated debentures, unless offered reasonable
indemnity by the holder against the costs, expenses and liabilities which might
be incurred. The indenture 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 indenture trustee reasonably believes that repayment or adequate
indemnity is not reasonably assured to it.
COVENANTS OF ENTERBANK
Enterbank will covenant in the indenture, as to the junior subordinated
debentures, that during the time that (1) EBH Trust is the holder of all junior
subordinated debentures, (2) a tax event in respect of EBH Trust has occurred
and is continuing and (3) Enterbank has elected, and has not revoked the
election, to pay additional sums, as defined under "Description of the Preferred
Securities -- Redemption -- Mandatory and Optional Rights of Enterbank," in
respect of the preferred securities, Enterbank will pay to EBH Trust these
additional sums. Enterbank will also covenant, as to the junior subordinated
debentures:
- to maintain directly or indirectly 100% ownership of the common
securities of EBH Trust to which junior subordinated debentures have been
issued, provided that successors which are permitted under the indenture
may succeed to Enterbank's ownership of the common securities;
- to not voluntarily terminate, wind up or liquidate EBH Trust, except upon
approval of the Federal Reserve if then so required, and to use its
reasonable efforts to cause EBH Trust to remain a business trust, except
(a) in connection with a distribution of junior subordinated debentures
to the holders of the preferred securities in liquidation of EBH Trust,
(b) the redemption of all of the trust securities or (c) in connection
with mergers, consolidations, or amalgamations permitted by the trust
agreement; and
- to use its reasonable efforts to cause each holder of trust securities to
be treated as owning an individual beneficial interest in the junior
subordinated debentures.
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BOOK-ENTRY ISSUANCE
Depository Trust Company ("DTC") will act as securities depositary for all
of the preferred securities and, in the event of the distribution of the junior
subordinated debentures to holders of the preferred securities, may act as
securities depositary for all of the junior subordinated debentures. The
preferred securities and the junior subordinated debentures will be issued only
as fully-registered securities registered in the name of Cede & Co., DTC's
nominee. One or more fully-registered global certificates will be issued for the
preferred securities and deposited with DTC. In the event of the distribution of
the junior subordinated debentures to holders of the preferred securities, one
or more fully-registered global certificates may be issued for the junior
subordinated debentures and may be deposited with DTC.
DTC is a limited purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered under the provisions of Section 17A of the Securities Exchange Act of
1934. DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among participants of securities transactions, such
as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc. and the National Association of Securities Dealers, Inc. Access
to the depositary system is also available to others such as securities brokers
and dealers, banks and trust companies that clear through or maintain custodial
relationships with direct participants, either directly or indirectly. The rules
applicable to DTC and its participants are on file with the Securities and
Exchange Commission.
Purchases of preferred securities or junior subordinated debentures within
the depositary system must be made by or through direct participants, which will
receive a credit for the preferred securities or junior subordinated debentures
on DTC's records. The ownership interest of each actual purchaser of each
preferred security or junior subordinated debenture is in turn to be recorded on
the direct and indirect participants' records. Beneficial owners will not
receive written confirmation from the DTC of their purchases, but beneficial
owners are expected to receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the direct
or indirect participants through which the beneficial owners purchased preferred
securities or junior subordinated debentures. Transfers of ownership interests
in the preferred securities or junior subordinated debentures are to be
accomplished by entries made on the books of participants acting on behalf of
beneficial owners. Beneficial owners will not receive certificates representing
their ownership interests in preferred securities or junior subordinated
debentures, except in the event that use of the book-entry system for the
preferred securities or junior subordinated debentures is discontinued.
DTC has no knowledge of the actual beneficial owners of the preferred
securities or the junior subordinated debentures. DTC's records reflect only the
identity of the direct participants to whose accounts the preferred securities
or junior subordinated debentures are credited, which may or may not be the
beneficial owners. The participants will remain responsible for keeping account
of their holdings on behalf of their customers.
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Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants, and by direct
participants and indirect participants to beneficial owners and the voting
rights of direct participants, indirect participants and beneficial owners will
be governed by arrangements among them, subject to any statutory or regulatory
requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder of
the preferred securities or junior subordinated debentures. If less than all of
the preferred securities or the junior subordinated debentures are being
redeemed, DTC will determine the amount to be redeemed, in accordance with the
terms of the trust agreement.
Although voting regarding the preferred securities or the junior
subordinated debentures is limited to the holders of record of the preferred
securities or the junior subordinated debentures, in those instances in which a
vote is required, neither DTC nor Cede & Co. will itself consent or vote
regarding preferred securities or the junior subordinated debentures. Under its
usual procedures, DTC would mail an omnibus proxy to the property trustee as
soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
preferred securities or junior subordinated debentures are credited on the
record date and which are used and identified in a listing attached to the
omnibus proxy.
Distribution payments on the preferred securities or the junior
subordinated debentures will be made by the property trustee to DTC. DTC's
practice is to credit direct participants' accounts on the relevant payment date
in accordance with their respective holdings shown on DTC's records unless DTC
has reason to believe that it will not receive payments on the payment date.
Payments by participants to beneficial owners will be governed by standing
instructions and customary practices. Payments will be the responsibility of the
participant and not of DTC, the relevant trustee, EBH Trust or Enterbank,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of distributions to DTC is the responsibility of the
property trustee, disbursement of the payments to direct participants is the
responsibility of DTC, and disbursements of the payments to the beneficial
owners is the responsibility of direct and indirect participants.
DTC may discontinue providing its services as securities depositary
regarding any of the preferred securities or the junior subordinated debentures
at any time by giving reasonable notice to the property trustee and Enterbank.
In the event that a successor securities depositary is not obtained, definitive
preferred securities or subordinated debenture certificates representing the
preferred securities or junior subordinated debentures are required to be
printed and delivered. Enterbank, at its option, may, at any time, decide to
discontinue use of the system of book-entry transfers through DTC, or any
successor depositary. After a debenture event of default, the holders of a
majority in liquidation preference of preferred securities or aggregate
principal amount of junior subordinated debentures may determine to discontinue
the system of book-entry transfers through DTC. In this event, definitive
certificates for the preferred securities or junior subordinated debentures will
be printed and delivered.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that EBH Trust and Enterbank believe to be
accurate, but EBH Trust and Enterbank assume no responsibility for the accuracy
thereof. Neither EBH Trust nor Enterbank has any responsibility for the
performance by DTC or its participants of their respective obligations as
described in this prospectus or under the rules and procedures governing their
respective operations.
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DESCRIPTION OF THE PREFERRED SECURITIES GUARANTEE
The preferred securities guarantee agreement will be executed and delivered
by Enterbank and Wilmington Trust Company concurrently with the issuance of the
preferred securities. The preferred securities guarantee will be for the benefit
of the holders of the preferred securities. Wilmington Trust Company will act as
trustee under the preferred securities guarantee for the purposes of compliance
with the Trust Indenture Act, and the preferred securities guarantee will be
qualified under the Trust Indenture Act. The following is a summary of the
material provisions of the preferred securities guarantee. Prospective investors
are urged to read the form of the preferred securities guarantee which has been
filed as an exhibit to the registration statement of which this prospectus forms
a part. The guarantee trustee will hold the preferred securities guarantee for
the benefit of the holders of the preferred securities.
GENERAL OVERVIEW
The preferred securities guarantee is an irrevocable guarantee on a
subordinated basis of all of EBH Trust's obligations to make payments under the
preferred securities, but will apply only to the extent that EBH Trust has funds
sufficient to make the payments, and is not a guarantee of collection.
Enterbank will irrevocably and unconditionally agree to pay in full on a
subordinated basis, to the extent set forth in this prospectus, the preferred
securities guarantee payments, as defined below, to the holders of the preferred
securities, as and when due, regardless of any defense, right of set-off or
counterclaim that EBH Trust may have or assert other than the defense of
payment. The following payments regarding the preferred securities, to the
extent not paid by or on behalf of EBH Trust, will be subject to the preferred
securities guarantee of Enterbank:
- any accrued and unpaid distributions required to be paid on the preferred
securities, to the extent that EBH Trust has available funds on hand at
the time;
- the redemption price regarding any preferred securities called for
redemption to the extent that EBH Trust has available funds on hand at
the time; and
- upon a voluntary or involuntary dissolution, winding up or liquidation of
EBH Trust, unless the junior subordinated debentures are distributed to
holders of the preferred securities.
The amount of the preferred securities guarantee will be the lesser of (a)
the liquidation distribution and (b) the amount of assets of EBH Trust remaining
available for distribution to holders of preferred securities. Enterbank's
obligation to make a preferred securities guarantee payment may be satisfied by
direct payment of the required amounts by Enterbank to the holders of the
preferred securities or by causing EBH Trust to pay these amounts to the
holders.
If Enterbank does not make interest payments on the junior subordinated
debentures held by EBH Trust, EBH Trust will not be able to pay distributions on
the preferred securities and will not have funds legally available to pay
distributions. The preferred securities guarantee will rank subordinate and
junior in right of payment to all senior and subordinated debt of Enterbank. See
"Status of the Preferred Securities Guarantee" below. Because Enterbank is a
holding company, the right of Enterbank to participate in any distribution of
assets of any subsidiary upon the subsidiary's liquidation or reorganization or
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otherwise, is subject to the prior claims of creditors of that subsidiary,
except to the extent Enterbank may itself be recognized as a creditor of that
subsidiary. Accordingly, Enterbank's obligations under the preferred securities
guarantee will be effectively subordinated to all existing and future
liabilities of Enterbank's subsidiaries, and claimants should look only to the
assets of Enterbank for payments under the preferred securities guarantee.
Except as otherwise described in this prospectus, the preferred securities
guarantee does not limit the incurrence or issuance of other secured or
unsecured debt of Enterbank, including senior and subordinated debt whether
under the indenture, any other indenture that Enterbank may enter into in the
future, or otherwise.
Enterbank has, through the preferred securities guarantee, the trust
agreement, the junior subordinated debentures, the indenture and the expense
agreement relating to EBH Trust, taken together, fully, irrevocably and
unconditionally guaranteed on a subordinated basis all of EBH Trust's
obligations under the preferred securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
this preferred securities guarantee. It is only the combined operation of these
documents that has the effect of providing a full, irrevocable and unconditional
guarantee on a subordinated basis of all of EBH Trust's obligations under the
preferred securities. See "Relationship Among the Preferred Securities, the
Junior Subordinated Debentures and the Preferred Securities Guarantee."
STATUS OF THE PREFERRED SECURITIES GUARANTEE
The preferred securities guarantee will constitute an unsecured obligation
of Enterbank and will rank subordinate and junior in right of payment to all
senior and subordinated debt in the same manner as the junior subordinated
debentures.
The preferred securities guarantee will constitute a guarantee of payment
and not of collection. The guaranteed party may institute a legal proceeding
directly against Enterbank to enforce its rights under the preferred securities
guarantee without first instituting a legal proceeding against any other person
or entity. The preferred securities guarantee will be held for the benefit of
the holders of the preferred securities. The preferred securities guarantee does
not place a limitation on the amount of additional senior and subordinated debt
that may be incurred by Enterbank. Enterbank expects from time to time to incur
additional indebtedness constituting senior and subordinated debt.
AMENDMENTS AND ASSIGNMENT
Except regarding any changes which do not adversely affect the rights of
holders of the preferred securities in a material manner, in which case no
consent will be required, the preferred securities guarantee may not be amended
without the prior approval of the holders of not less than a majority of the
aggregate liquidation amount of the outstanding preferred securities. See
"Description of the Preferred Securities -- Voting Rights; Amendment of the
Trust Agreement." All guarantees and agreements contained in the preferred
securities guarantee will bind the successors, assigns, receivers, trustees and
representatives of Enterbank and will inure to the benefit of the holders of the
preferred securities then outstanding.
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EVENTS OF DEFAULT
An event of default under the preferred securities guarantee will occur
upon the failure of Enterbank to perform any of its payment or other obligations
under the preferred securities guarantee. The holders of not less than a
majority in aggregate liquidation amount of the preferred securities have the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the guarantee trustee regarding the preferred securities
guarantee or to direct the exercise of any trust or power conferred upon the
guarantee trustee under the preferred securities guarantee.
Any holder of preferred securities may institute a legal proceeding
directly against Enterbank to enforce the holder's rights under the preferred
securities guarantee without first instituting a legal proceeding against EBH
Trust, the guarantee trustee or any other person or entity.
Enterbank, as guarantor, is required to file annually with the guarantee
trustee a certificate as to whether Enterbank is in compliance with all the
conditions and covenants applicable to it under the preferred securities
guarantee.
INFORMATION CONCERNING THE GUARANTEE TRUSTEE
The guarantee trustee, other than during the occurrence and continuance of
a default by Enterbank in performance of the preferred securities guarantee,
undertakes to perform only the duties which are specifically set forth in the
preferred securities guarantee. After default regarding the preferred securities
guarantee, the guarantee trustee 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 is under no obligation
to exercise any of the rights or powers vested in it by the preferred securities
guarantee at the request or direction of any holder of the preferred securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred.
TERMINATION OF THE PREFERRED SECURITIES GUARANTEE
The preferred securities guarantee will terminate and be of no further
force and effect upon full payment of the redemption price of the preferred
securities, upon full payment of the amounts payable upon liquidation of EBH
Trust or upon distribution of junior subordinated debentures to the holders of
the preferred securities. The preferred securities guarantee will continue to be
effective or will be reinstated, as the case may be, if at any time any holder
of the preferred securities must restore payment of any sums paid under the
preferred securities or the preferred securities guarantee.
GOVERNING LAW
The preferred securities guarantee will be governed by and construed in
accordance with the laws of the State of Missouri.
THE EXPENSE AGREEMENT
Under the agreement as to expenses and liabilities entered into by
Enterbank under the trust agreement, Enterbank will irrevocably and
unconditionally guarantee to each person or entity to whom EBH Trust becomes
indebted or liable, the full payment of any
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costs, expenses or liabilities of EBH Trust, other than obligations of EBH Trust
to pay to the holders of the preferred securities or other similar interests in
EBH Trust of the amounts due the holders under the terms of the preferred
securities or the other similar interests, as the case may be.
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RELATIONSHIP AMONG THE PREFERRED SECURITIES, THE JUNIOR SUBORDINATED
DEBENTURES AND THE PREFERRED SECURITIES GUARANTEE
FULL AND UNCONDITIONAL PREFERRED SECURITIES GUARANTEE ON A SUBORDINATED BASIS
Payments of distributions and other amounts due on the preferred
securities, to the extent EBH Trust has funds available for the payment of the
distributions, are irrevocably guaranteed by Enterbank as and to the extent set
forth under "Description of the Preferred Securities Guarantee." Taken together,
Enterbank's obligations under the junior subordinated debentures, the indenture,
the trust agreement, the expense agreement and the preferred securities
guarantee provide, in the aggregate, a full, irrevocable and unconditional
guarantee on a subordinated basis of payments of distributions and other amounts
due on the preferred securities. No single document standing alone or operating
in conjunction with fewer than all of the other documents constitutes the
preferred securities guarantee. It is only the combined operation of those
documents that has the effect of providing a full, irrevocable and unconditional
guarantee on a subordinated basis of EBH Trust's obligations under the preferred
securities. If and to the extent that Enterbank does not make payments on the
junior subordinated debentures, EBH Trust will not pay distributions or other
amounts due on the preferred securities. The preferred securities guarantee does
not cover payment of distributions when EBH Trust does not have sufficient funds
to pay the distributions. In this event, the remedy of a holder of the preferred
securities is to institute a legal proceeding directly against Enterbank for
enforcement of payment of the distributions to the holder. The obligations of
Enterbank under the preferred securities guarantee are subordinate and junior in
right of payment to all senior and subordinated debt.
SUFFICIENCY OF PAYMENTS
As long as payments of interest and other payments are made when due on the
junior subordinated debentures, the payments will be sufficient to cover
distributions and other payments due on the preferred securities, primarily
because: (1) the aggregate principal amount of the junior subordinated
debentures will be equal to the sum of the aggregate liquidation amount of the
preferred securities and common securities; (2) the interest rate and interest
and other payment dates on the junior subordinated debentures will match the
distribution rate and distribution and other payment dates for the preferred
securities; (3) Enterbank will pay for any and all costs, expenses and
liabilities of EBH Trust except EBH Trust's obligations to holders of preferred
securities; and (4) the trust agreement further provides that EBH Trust will not
engage in any activity that is not consistent with the limited purposes of EBH
Trust.
Notwithstanding anything to the contrary in the indenture, Enterbank may
satisfy any payment it is otherwise required to make to the trust under the
indenture, by and to the extent that it has made, or is concurrently on the date
of the payment required by the indenture making, a payment under the preferred
securities guarantee.
ENFORCEMENT RIGHTS OF HOLDERS OF THE PREFERRED SECURITIES UNDER THE PREFERRED
SECURITIES GUARANTEE
A holder of any of the preferred securities may institute a legal
proceeding directly against Enterbank to enforce its rights under the preferred
securities guarantee without first
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instituting a legal proceeding against the guarantee trustee, EBH Trust or any
other person or entity.
A default or event of default under any senior and subordinated debt would
not constitute an event of default. However, in the event of payment defaults
under, or acceleration of, senior and subordinated debt, the subordination
provisions of the indenture provide that no payments may be made in respect of
the junior subordinated debentures until the senior and subordinated debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on junior subordinated debentures would
constitute an event of default.
LIMITED PURPOSE OF EBH TRUST
The preferred securities evidence a beneficial interest in EBH Trust, and
EBH Trust exists for the sole purpose of issuing the trust securities and
investing the proceeds from the sale of the trust securities in the junior
subordinated debentures. A principal difference between the rights of a holder
of the preferred securities and a holder of a junior subordinated debenture is
that a holder of a junior subordinated debenture is entitled to receive from
Enterbank the principal amount of and interest accrued on junior subordinated
debentures held, while a holder of the preferred securities is entitled to
receive distributions from EBH Trust, or from Enterbank under the preferred
securities guarantee, if and to the extent EBH Trust has funds available for the
payment of the distributions.
RIGHTS UPON TERMINATION
Upon any voluntary or involuntary termination, winding-up or liquidation of
EBH Trust involving the liquidation of the junior subordinated debentures, the
holders of preferred securities will be entitled to receive, out of assets held
by EBH Trust, the liquidation distribution in cash. See "Description of the
Preferred Securities -- Liquidation Distribution Upon Termination." Upon any
voluntary or involuntary liquidation or bankruptcy of Enterbank, the property
trustee, as holder of the junior subordinated debentures, would be a
subordinated creditor of Enterbank, subordinated in right of payment to all
senior and subordinated debt as set forth in the indenture, but entitled to
receive payment in full of principal and interest, before any shareholders of
Enterbank receive payments or distributions. Since Enterbank is the guarantor
under the preferred securities guarantee and has agreed to pay for all costs,
expenses and liabilities of EBH Trust, other than EBH Trust's obligations to the
holders of its preferred securities, the positions of a holder of the preferred
securities and a holder of junior subordinated debentures relative to other
creditors and to shareholders of Enterbank in the event of liquidation or
bankruptcy of Enterbank are expected to be substantially the same.
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MATERIAL FEDERAL INCOME TAX CONSEQUENCES
In the opinion of Armstrong Teasdale LLP, special counsel to Enterbank and
EBH Trust, the following are the material United States federal income tax
consequences of the purchase, ownership and disposition of the preferred
securities. Unless otherwise stated, this discussion deals only with preferred
securities held as capital assets by United States persons, defined below, who
are the beneficial holders (each a "holder") of the preferred securities
acquired upon their original issuance at their original offering price. As used
in this discussion, a United States person means a person that is (1) a citizen
or individual resident (or is treated as a citizen or individual resident) of
the United States for United States federal income tax purposes, (2) a
corporation, partnership or other entity created or organized (or is treated as
created or organized for United States federal income tax purposes) in or under
the laws of the United States or any political subdivision thereof, (3) an
estate the income of which is subject to United States federal income taxation
regardless of its source, or (4) any trust if a (i) court within the United
States is able to exercise primary supervision over the administration of the
trust and (ii) one or more United States persons have the authority to control
all substantial decisions of the trust.
The tax treatment of holders may vary depending on their particular
situation. This discussion does not address all the tax consequences that may be
relevant to a particular holder or to holders who may be subject to special tax
treatment, such as financial institutions, banks, real estate investment trusts,
regulated investment companies, insurance companies, dealers in securities or
currencies, tax-exempt investors, individual retirement and certain tax deferred
accounts, foreign investors, or persons that will hold the preferred securities
as part of a position in a "straddle" or as part of a "hedging" or other
integrated transaction. The following summary does not address the tax
consequences to persons whose functional currency is not the United States
dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of the preferred securities. In addition, this discussion does not
include any description of any alternative minimum tax consequences or other
collateral tax consequences under United States federal income tax laws, or the
tax laws of any state, local or foreign government that may be applicable to a
holder of the preferred securities. This discussion is based on the Internal
Revenue Code of 1986, as amended, the Treasury regulations promulgated
thereunder and administrative and judicial interpretations of those authorities,
as of the date hereof, all of which are subject to change, possibly on a
retroactive basis. Any change of this nature could cause the tax consequences to
vary substantially from the consequences described below, possibly adversely
affecting a holder of the preferred securities.
Each prospective investor should consult their own tax advisors as to the
specific United States federal income tax consequences of the purchase,
ownership and disposition of the preferred securities.
The authorities on which this discussion is based are subject to various
interpretations and the opinions of counsel are not binding on the IRS or the
courts, either of which could take a contrary position. Moreover, no rulings
have been or will be sought from the IRS regarding the transactions described in
this prospectus. Accordingly, there can be no assurance that the IRS will not
challenge the opinions expressed in this discussion or that a court would not
sustain this type of challenge. It is therefore possible that the United States
federal income tax treatment of the purchase, ownership and disposition of
preferred securities may differ from the treatment described below.
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CLASSIFICATION OF EBH TRUST
Counsel will deliver its opinion in connection with the issuance of the
preferred securities that, under current law and assuming full compliance with
the terms of the trust agreement, and based on the facts and assumptions
contained in the opinion, EBH Trust will be classified for United States federal
income tax purposes as a grantor trust and not as an association taxable as a
corporation. Accordingly, for United States federal income tax purposes each
holder of the preferred securities will be treated as owning an undivided
beneficial interest in the junior subordinated debentures, and each holder will
be required to include in its gross income its pro rata share of the interest
income or original issue discount, if any, that is paid or accrued on the junior
subordinated debentures. See "--Interest Income and Original Issue Discount."
CLASSIFICATION OF THE JUNIOR SUBORDINATED DEBENTURES
Council will deliver its opinion that under current law, the junior
subordinated debentures will be classified for United States federal income tax
purposes as indebtedness of Enterbank. By acceptance of a preferred security,
each holder covenants to treat the junior subordinated debentures as
indebtedness and the preferred securities as evidence of an indirect beneficial
ownership interest in the junior subordinated debentures. No assurance can be
given, however, that this classification will not be challenged by the IRS or,
if challenged, that such a challenge will not be successful. The remainder of
this discussion assumes that the junior subordinated debentures will be
classified for United States federal income tax purposes as indebtedness of
Enterbank. See "Risk Factors -- You are subject to prepayment risk because
possible tax law changes could result in a redemption of the Preferred
Securities."
INTEREST INCOME AND ORIGINAL ISSUE DISCOUNT
Except as set forth below, stated interest on the junior subordinated
debentures generally will be included in income by a holder as ordinary income
at the time the interest income is paid or accrued in accordance with the
holder's regular method of tax accounting.
Enterbank's option to defer the payment of interest on the junior
subordinated debentures during an extension period might cause the junior
subordinated debentures to be considered initially issued with original issue
discount or treated as contingent payment debt instruments. Enterbank believes,
and will take the position, that this result will not arise because of a
provision in the Treasury regulations that applies when there is a remote
likelihood that a contingency, such as election to defer the payment of
interest, will occur. However, the Treasury regulations described above have not
yet been addressed in any rulings or other definitive interpretations by the
IRS. It is possible that the IRS could take a contrary position. If the IRS were
to assert successfully that the junior subordinated debentures were issued with
original issue discount regardless of whether Enterbank exercises its right to
defer payments of interest on the debentures, all holders, including those
utilizing the cash method of accounting, would be required to include the
original issue discount in income on a daily economic accrual basis as described
below.
If Enterbank exercises its right to defer payments of interest on the
junior subordinated debentures, the junior subordinated debentures will become
original issue discount instruments. In this event, all holders would be
required to include those amounts treated as original issue discount on the
junior subordinated debentures as a consequence
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of such reclassification in income on a daily economic accrual basis during the
extension period, even though Enterbank would not be expected to pay the
interest until the end of the extension period, and even though some holders may
use the cash method of tax accounting. Thereafter the junior subordinated
debentures would continue to be taxed as original issue discount instruments for
as long as they remained outstanding. Thus, even after the end of the extension
period, all holders would be required to continue to include those amounts
treated as original issue discount on the junior subordinated debentures in
income on a daily economic accrual basis, regardless of their method of tax
accounting and in advance of receipt of the cash attributable to this interest
income. In this event, actual cash payments of interest on the junior
subordinated debentures would not be reported separately as taxable income, but
the amount of original issue discount should be approximately equal to the
aggregate of all future payments of interest on the junior subordinated
debentures. Any amount of original issue discount included in a holder's gross
income (whether or not during a period during which payment is deferred) with
respect to a preferred security will increase such holder's tax basis in the
preferred security, and the amount of distribution received by a holder in
respect of such accrued original issue discount will reduce the tax basis of
such preferred security.
Because income on the preferred securities will constitute interest income
for United States federal income tax purposes, corporate holders of the
preferred securities will not be able to claim a dividends received deduction in
respect of such income.
Enterbank does not anticipate that additional sums, as defined in the
indenture, will be paid. However, if additional sums are paid, they will be
taxable to the security holder as ordinary income, generally as interest income.
DISTRIBUTION OF JUNIOR SUBORDINATED DEBENTURES TO HOLDERS OF PREFERRED
SECURITIES
Under current United States federal income tax law, a distribution by EBH
Trust of the junior subordinated debentures as described under the caption
"Description of the Preferred Securities -- Liquidation and Distribution Upon
Termination" will be a non-taxable event and will result in the holder receiving
directly its pro rata share of the junior subordinated debentures previously
held indirectly through EBH Trust. The junior subordinated debentures received
by the holder will have a holding period and aggregate tax basis equal to the
holding period and aggregate tax basis the holder had in its preferred
securities immediately before the distribution. If, however, the liquidation of
EBH Trust were to occur because EBH Trust is subject to United States federal
income tax on income accrued or received on the junior subordinated debentures
as a result of a tax event or otherwise, the distribution by EBH Trust of junior
subordinated debentures to holders would be a taxable event to EBH Trust and
each holder. A holder would recognize gain or loss as if the holder had sold or
exchanged its preferred securities for the junior subordinated debentures it
received upon the liquidation of EBH Trust. See "-- Sales or Redemption of
Preferred Securities." A security holder would recognize interest income in
respect of junior subordinated debentures received from EBH Trust in the manner
described above under "-- Interest Income and Original Issue Discount."
SALES OR REDEMPTION OF PREFERRED SECURITIES
Gain or loss will be recognized by a holder on a sale or other taxable
disposition of preferred securities, including a redemption for cash, in an
amount equal to the difference between the amount realized (which for this
purpose will exclude amounts attributable to
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accrued interest or original issue discount not previously included in income,)
and the holder's adjusted tax basis in the preferred securities sold or
redeemed. A holder's adjusted tax basis generally will be its initial purchase
price, increased by any original issue discount previously included in the
holder's gross income to the date of disposition, and decreased by payments, if
any, received on the preferred securities in respect of original issue discount.
Any gain or loss on the taxable disposition of the preferred securities
generally will be treated as capital gain or loss. In general, amounts
attributable to accrued interest on a holder's pro rata share of the junior
subordinated debentures not previously included in income will be taxable as
ordinary income. However, because there is no clear authority regarding whether
a cash basis taxpayer is required to include in income accrued interest in the
event the preferred securities are sold for less than their principal amount,
investors are advised to consult their own tax advisors in such circumstances.
For taxpayers other than corporations, net capital gain, which is defined as net
long-term capital gain over net short-term capital loss for the taxable year,
realized from property, with limited exceptions, is subject to a maximum
marginal stated tax rate of 20%, or 10% in the case of taxpayers in the lowest
tax bracket. Capital gain or loss is long-term if the holding period for the
asset is more than one year, and is short-term if the holding period for the
asset is one year or less. Capital gains realized from assets held for one year
or less are taxed at the same rates as ordinary income. Subject to limited
exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
The preferred securities may trade at a price that does not fully reflect
the value of accrued but unpaid interest on the underlying junior subordinated
debentures. A holder that disposes of its preferred securities between record
dates for payments of distributions, and consequently does not receive a
distribution from EBH Trust for the period prior to the disposition, will
nevertheless be required to include in income accrued but unpaid interest or
accrued original issue discount on the junior subordinated debentures through
the date of disposition and will add this amount to its adjusted tax basis in
its preferred securities. The holder will recognize a capital loss on the
disposition of its preferred securities to the extent the selling price, (which
may not fully reflect the value of accrued but unpaid original issue discount)
is less than the holder's adjusted tax basis in the preferred securities, which
will include accrued but unpaid original issue discount that has been included
in income. As stated previously, subject to limited exceptions, capital losses
cannot be applied to offset ordinary income for United States federal income tax
purposes.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
The amount of interest paid or original issue discount accrued, if any, on
the junior subordinated debentures, beneficial ownership of which is reflected
in the preferred securities held of record by United States persons, other than
corporations and other tax-exempt holders, will be reported to the IRS.
Generally, income on the preferred securities will be reported on Form 1099,
which form should be mailed to holders by January 31 following each calendar
year. Backup withholding at a rate of 31% will apply to payments of interest to
non-exempt United States persons unless the holder complies with certain
identification and other requirements in applicable Treasury regulations. Any
amounts withheld from a holder under the backup withholding rules will be
allowed as a credit against the holder's United States federal income tax
liability, provided the required information is furnished to the IRS. Payment of
the proceeds from the disposition of the preferred securities to or through the
United States office of a broker is subject to information reporting and backup
withholding unless the holder or beneficial owner establishes an exemption from
information reporting and backup withholding.
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TAX LAW UNCERTAINTIES AND POSSIBLE TAX LAW CHANGES AFFECTING PREFERRED
SECURITIES
The combined tax effects of the trust's purchase of debt instruments such
as the junior subordinated debentures and simultaneous issuance of equity
interests such as the preferred securities has not been addressed in any
Treasury regulations or court decision and has not been approved or disapproved
by the IRS in any published ruling or notice. In a case filed in the United
States Tax Court, the IRS proposed disallowance of the deduction of the interest
expense claimed by a corporation on subordinated debt instruments issued by such
corporation and sold to a related trust. Although the IRS agreed to dismissal of
the relevant adjustments in that case prior to trial, it is not precluded from
asserting similar adjustments against other taxpayers. A variation of the
structure described in this prospectus involving a limited life company rather
than a trust was accepted by the IRS as creating debt giving rise to deductible
interest in Technical Advice Memorandum issued as LR 1999-10046. However,
taxpayers other than the taxpayer to whom a Private Letter Ruling or Technical
Advice Memorandum is addressed are not entitled to rely on them. In addition,
there can be no assurance that the facts underlying the Technical Advice
Memorandum are analogous to the facts underlying the preferred securities
described herein.
Legislative proposals have previously been made by the current
administration, which if enacted, could have adversely affected the ability of
Enterbank to deduct interest paid on the junior subordinated debentures.
Although these proposals were not enacted, there can be no assurance that future
legislation will not affect the ability of Enterbank to deduct interest on the
junior subordinated debentures or otherwise adversely affect the tax treatment
of the transactions described in this prospectus.
Although the IRS agreed to dismissal of the adjustments in the litigation
described above, it could assert similar adjustments against other taxpayers. It
if were to do so and the issue was litigated to a conclusion in which the IRS's
position on this matter was sustained, such a judicial determination could
constitute a tax event which could result in an early redemption of the
preferred securities. Similarly, if legislative proposals of the type described
above were to be enacted, a change of this nature could give rise to a tax
event, which may permit Enterbank to cause a redemption of the preferred
securities. See "Risk Factors -- You are subject to prepayment risk because
possible tax law changes could result in a redemption of the preferred
securities," "Description of the Preferred Securities -- Redemption -- Mandatory
and Optional Rights of Enterbank" and "Description of the Junior Subordinated
Debentures -- Redemption."
THE UNITED STATES FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED
FOR GENERAL INFORMATION ONLY AND MAY NOT BE APPLICABLE DEPENDING UPON THE
PARTICULAR SITUATION OF A HOLDER OF THE PREFERRED SECURITIES. HOLDERS OF THE
PREFERRED SECURITIES SHOULD CONSULT THEIR OWN TAX ADVISORS REGARDING THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE PREFERRED
SECURITIES, INCLUDING THE TAX CONSEQUENCES UNDER STATE, LOCAL, FOREIGN, AND
OTHER TAX LAWS AND THE POSSIBLE EFFECTS OF CHANGES IN UNITED STATES FEDERAL OR
OTHER TAX LAWS.
63
<PAGE> 67
ERISA CONSIDERATIONS
Employee benefit plans that are subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Code,
generally may purchase preferred securities subject to the investing fiduciary's
determination that the investment in preferred securities satisfies ERISA's
fiduciary standards and other requirements applicable to investments by the
plan.
However, Enterbank and any of its affiliates may be considered a party in
interest, within the meaning of Section 3(14) of ERISA, or a disqualified
person, within the meaning of Section 4975 of the Code, regarding plans
maintained or sponsored by, or contributed to by, Enterbank or an affiliate, or
regarding which Enterbank or an affiliate is a fiduciary, or plans for which
Enterbank or an affiliate provide services. The acquisition and ownership of
preferred securities by an individual retirement arrangement or other plan
described in Section 4975(e)(1) of the Code, regarding which Enterbank or any of
its affiliates is considered a party in interest or a disqualified person, may
constitute or result in a prohibited transaction under ERISA or Section 4975 of
the Code, which could give rise to the imposition of substantial taxes unless
the preferred securities are acquired under and in accordance with an applicable
exemption.
As a result, plans regarding which Enterbank and/or any of its affiliates
is a party in interest or a disqualified person should not acquire preferred
securities unless the preferred securities are acquired under and in accordance
with an applicable exemption. Any plans or entities whose assets include plan
assets subject to ERISA or Section 4975 of the Code proposing to acquire
preferred securities should consult with their own counsel.
64
<PAGE> 68
UNDERWRITING
Subject to the terms and conditions of the underwriting agreement among us,
EBH Trust and the underwriter, Stifel, Nicolaus & Company, Incorporated, the
underwriter has agreed to purchase from EBH Trust, and EBH Trust has agreed to
sell to the underwriter, 1,250,000 preferred securities.
In the underwriting agreement, the obligations of the underwriter are
subject to approval of certain legal matters by its counsel and to various other
conditions. Under the terms and conditions of the underwriting agreement, the
underwriter is committed to accept and pay for all of the preferred securities,
if any are taken.
The underwriter proposes to offer the preferred securities directly to the
public at the public offering price set forth on the cover page of this
prospectus, and to certain securities dealer at this price, less a concession
not in excess of $ per preferred security. The underwriter may allow,
and the selected dealers may reallow, a discount not in excess of $ per
preferred security to certain brokers and dealers. After the preferred
securities are released for sale to the public, the offering price and other
selling terms may from time to time be changed by the underwriter.
EBH Trust has granted to the underwriter an option, exercisable within 30
days after the date of this prospectus, to purchase up to 125,000 additional
preferred securities at the same price per preferred security to be paid by the
Underwriter for the other preferred securities being offered. The underwriter
may exercise the option only for the purpose of covering over-allotments, if
any, made in connection with the distribution of the Preferred securities being
offered.
If the underwriter exercises its option to purchase additional preferred
securities, EBH Trust will issue and sell to us additional common securities and
we will issue and sell to EBH Trust junior subordinated debentures in an
aggregate principal amount equal to the total aggregate liquidation amount of
the additional preferred securities being purchased under the option and the
additional common securities sold to us.
The table below shows the price and proceeds on a per security and
aggregate basis. The proceeds to be received by EBH Trust as shown in the below
do not reflect estimated expenses of $ payable by us as set forth in
the table below.
<TABLE>
<CAPTION>
PER PREFERRED
SECURITY TOTAL
------------- -----
<S> <C> <C>
Public Offering Price......................... $8.00 $10,000,000
Proceeds to EBH Trust......................... $8.00 $10,000,000
</TABLE>
In view of that fact that the proceeds of the sale of the preferred
securities will be used by EBH Trust to purchase the junior subordinated
debentures from us, we have agreed to pay the underwriter $ per
preferred security, or a total of $ , as compensation for arranging the
investment in the junior subordinated debentures. Should the underwriter
exercise the over-allotment option, an aggregate of $ will be paid to
the underwriter for arranging the investment in the junior subordinate
debentures.
During a period of 30 days from the date of this prospectus, neither EBH
Trust nor we will, subject to certain exceptions, without the prior written
consent of the underwriter, directly or indirectly, sell, offer to sell, grant
any option for sale of, or other dispose of, any preferred securities, any
security convertible into or exchangeable for preferred securities or junior
subordinated debentures or any debt securities substantially similar to the
junior
65
<PAGE> 69
subordinated debentures or equity securities substantially similar to the
preferred securities (except for junior subordinated debentures and the
preferred securities being offered).
The offering of the preferred securities is made for delivery when, as and
if accepted by the underwriter and subject to prior sale and to withdrawal,
cancellation or modification of the offering without notice. The underwriter
reserves the right to reject any order for the purchase of the preferred
securities.
Enterprise Holdings and EBH Trust have agreed to indemnify the underwriter
against several liabilities, including liabilities under the Securities Act of
1933.
Although the preferred securities have been approved for listing on the
American Stock Exchange, no assurances can be made as to the liquidity of the
preferred securities or that an active and liquid market will develop or, if
developed, that the market will continue. The offering price and distribution
rate have been determined by negotiations among representatives of Enterprise
Holdings and the underwriter, and the offering price of the preferred securities
may not be indicative of the market price following the offering.
In connection with the offering, the underwriter may engage in transactions
that are intended to stabilize, maintain or otherwise affect the price of the
preferred securities during and after the offering, such as the following:
- the underwriter may over-allot or otherwise create a short position in
the preferred securities for their own account by selling more preferred
securities than have been sold to them;
- the underwriter may elect to cover any short position by purchasing
preferred securities in the open market or by exercising the
over-allotment option;
- the underwriter may stabilize or maintain the price of the preferred
securities by bidding; and
- the underwriter may impose penalty bids, under which selling concessions
allowed to syndicate members or broker-dealers participating in this
offering are reclaimed if preferred securities previously distributed in
the offering are repurchased in connection with stabilization
transactions or otherwise.
The effect of these transactions may be to stabilize or maintain the market
price at a level above that which might otherwise prevail in the open market.
The imposition of a penalty bid may also affect the price of the preferred
securities to the extent that it discourages resales. No representation is made
as to the magnitude or effect of any such stabilization or other transactions.
Such transactions may be effected on the American Stock Exchange or otherwise
and, if commenced, may be discontinued at any time.
66
<PAGE> 70
The following table sets forth the estimated expenses in connection with
the sale and distribution of the preferred securities, other than underwriting
discounts and commissions. All such expenses will be paid by Enterbank.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 3,058
NASD filing fee............................................. 1,600
Blue Sky filing fees and expenses........................... 2,000
American Stock Exchange listing fees........................ 15,000
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 80,000
Printing, postage and mailing............................... 25,000
Other....................................................... 3,342
--------
Total............................................. $180,000
========
</TABLE>
Because the National Association of Securities Dealers may view the
preferred securities as interests in a direct participation program, the offer
and sale of the preferred securities is being made in compliance with the
provisions of Rule 2810 under the NASD Conduct Rules.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You may read and copy, upon payment of a fee set by
the SEC, any document that we file with the SEC at its public reference rooms in
Washington, D.C. (450 Fifth Street, N.W., 20549), New York, New York (Seven
World Trade Center, 13th Floor, Suite 1300, 10048) and Chicago, Illinois
(Citicorp Center, 500 West Madison Street, 14th Floor, Suite 1400, 60661). You
may also call the SEC at 1-800-432-0330 for more information on the public
reference rooms. Our filings are also available to the public on the internet,
through the SEC's EDGAR database. You may access the EDGAR database at the SEC's
web site at http://www.sec.gov.
You may also obtain a copy of these filings from us at no cost upon your
written or oral request to us. Please direct your requests to Jennifer Smith at
Enterbank Holdings, Inc., 150 North Meramec, St. Louis, Missouri, 63105, or by
telephoning us at (314) 725-5500. To obtain timely delivery, you must request
the information no later than five business days prior to the date you decide to
invest in EBH Capital Trust's preferred securities.
The SEC allows us to "incorporate by reference" into this prospectus the
information we file with them. This means that we can disclose important
business, financial and other information in our SEC filings by referring you to
the documents containing this information. Any information referred to in this
way is considered part of this prospectus, and any information filed with the
SEC by us after the date of this prospectus will automatically be deemed to
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we file a
post-effective amendment to the Form S-3 indicating the termination of this
offering:
- Annual Report on Form 10-K for the year ended December 31, 1998.
- Quarterly Report on Form 10-Q for the three months ended March 31, 1999.
- Quarterly Report on Form 10-Q for the six months ended June 30, 1999.
67
<PAGE> 71
- Proxy Statement on Schedule 14A filed September 13, 1999.
There are not separate financial statements of EBH Capital Trust in this
prospectus. We do not believe such financial statements would be helpful
because:
- EBH Capital Trust is a subsidiary of Enterbank Holdings, Inc., which
files consolidated financial information under the Exchange Act.
- EBH Capital Trust does not have any independent operations other than
issuing the preferred and common securities and purchasing the junior
subordinated debentures of Enterbank Holdings, Inc.
- EBH Capital Trust's only material assets will be the junior subordinated
debentures of Enterbank Holdings, Inc. when issued.
- The combined obligations of Enterbank Holdings, Inc. under the junior
subordinated debentures, the guarantee, the trust agreement and the
indenture have the effect of providing a full and unconditional guarantee
of EBH Capital Trust's obligations under its preferred securities. See
"Description of Junior Subordinated Securities," "Description of the
Preferred Securities," "Description of Preferred Securities Guarantee"
and "Relationship Among the Preferred Securities, the Junior Subordinated
Debentures and the Guarantee."
LEGAL MATTERS
The validity of the preferred securities we are offering, and certain
matters relating to United States federal income tax consequences of this
offering, will be passed upon for us and for EBH Trust by Armstrong Teasdale
LLP, St. Louis, Missouri. Richards, Layton & Finger, Wilmington, Delaware, will
pass upon certain matters relating to Delaware law for EBH Trust. Certain legal
matters will be passed upon for the underwriter by Lewis, Rice & Fingersh, L.C.,
St. Louis, Missouri.
EXPERTS
The consolidated financial statements of Enterbank Holdings, Inc. as of
December 31, 1998 and 1997 and for each of the years in the three-year period
ended December 31, 1998, have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement on Form S-3 that we and
EBH Capital Trust have filed with the Securities and Exchange Commission
relating to EBH Capital Trust's preferred securities being offered by this
prospectus. As permitted by SEC rules, this prospectus does not contain all of
the information contained in the registration statement and accompanying
exhibits and schedules we file with the SEC. You may refer to the registration
statement, the exhibits and schedules for more information about us and EBH
Capital Trust's preferred securities. The registration statement, exhibits and
schedules are also available at the SEC's public reference rooms or through its
EDGAR database on the internet.
68
<PAGE> 72
------------------------------------------------------
------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 1
The Offering.......................... 4
Risk Factors.......................... 8
Special Note Regarding Forward-Looking
Statements.......................... 17
Use of Proceeds....................... 18
Accounting Treatment.................. 18
Capitalization........................ 19
Selected Consolidated Financial
Data................................ 20
Business.............................. 22
Description of the Preferred
Securities.......................... 25
Description of the Junior Subordinated
Debentures.......................... 40
Book-Entry Issuance................... 51
Description of the Preferred
Securities Guarantee................ 53
Relationship Among the Preferred
Securities, the Junior Subordinated
Debentures and the Preferred
Securities Guarantee................ 57
Material Federal Income Tax
Consequences........................ 59
ERISA Considerations.................. 64
Underwriting.......................... 65
Where You Can Find More Information... 67
Legal Matters......................... 68
Experts............................... 68
About this Prospectus................. 68
</TABLE>
- - WE HAVE NOT AUTHORIZED ANYONE TO GIVE YOU ANY INFORMATION THAT DIFFERS FROM
THE INFORMATION IN THIS PROSPECTUS. IF YOU RECEIVE ANY DIFFERENT INFORMATION,
YOU SHOULD NOT RELY ON IT.
- - THE DELIVERY OF THIS PROSPECTUS SHALL NOT, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT ENTERBANK HOLDINGS, INC. IS OPERATING UNDER THE SAME
CONDITIONS THAT IT WAS OPERATING UNDER WHEN THIS PROSPECTUS WAS WRITTEN. DO
NOT ASSUME THAT THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT AT ANY
TIME PAST THE DATE INDICATED.
- - THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF
AN OFFER TO BUY, ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES.
- - THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR THE SOLICITATION OF
AN OFFER TO BUY, THE SECURITIES TO WHICH IT RELATES IN ANY CIRCUMSTANCES IN
WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
------------------------------------------------------
1,250,000 PREFERRED SECURITIES
EBH CAPITAL TRUST I
% CUMULATIVE PREFERRED SECURITIES
FULLY, IRREVOCABLY AND
UNCONDITIONALLY GUARANTEED ON A
SUBORDINATED BASIS BY
[ENTERBANK HOLDINGS, INC. LOGO]
ENTERBANK HOLDINGS,
INC.
------------------------
$10,000,000
% SUBORDINATED DEBENTURES
OF
ENTERBANK HOLDINGS, INC.
------------------------
PROSPECTUS
, 1999
------------------------
STIFEL, NICOLAUS & COMPANY
INCORPORATED
------------------------------------------------------
------------------------------------------------------
<PAGE> 73
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the estimated expenses in connection with
the sale and distribution of the securities being registered hereby, other than
underwriting discounts and commissions. All such expenses are to be paid by
Enterbank Holdings, Inc.:
<TABLE>
<S> <C>
SEC registration fee........................................ $ 3,058
NASD filing fee............................................. 1,600
Blue Sky filing fees and expenses........................... 2,000
American Stock Exchange Listing Fees........................ 15,000
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 80,000
Printing, postage and mailing............................... 25,000
Other....................................................... 3,342
--------
Total............................................. $180,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under Sections 102(b)(7) and 145 of the Delaware General Corporate Law
("DGCL"), the Company has broad power to indemnify and insure its directors and
officers against liabilities they may incur in their capacities as such. Section
102(b)(7) of the DGCL permits a corporation to adopt a provision in its
Certificate of Incorporation eliminating or limiting the personal liability of a
director to the corporation or its shareholders for monetary damages for breach
of fiduciary duty as a director, except that such provision shall not limit the
liability of a director for: (i) any breach of the director's duty of loyalty to
the corporation or its shareholders; (ii) acts or omissions not in good faith or
which involve intentional misconduct or a knowing violation of law; (iii)
liability under Section 174 of the DGCL for unlawful payment of dividends or
stock purchases or redemptions; or (iv) any transaction from which the director
derived an improper personal benefit. The Company's Certificate of Incorporation
limits the personal liability of the Company's directors for monetary damages to
the fullest extent permissible under applicable law. Under Section 145 of the
DGCL, a corporation may indemnify any person made a party or threatened to be
made a party to any type of proceeding (other than an action by or in the right
of the corporation) because he is or was an officer, director, employee or agent
of the corporation, or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or entity, against
expenses, judgments, fines and amounts paid in settlement actually and
reasonably incurred in connection with such proceeding: (i) if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation; or (ii) in the case of a criminal proceeding, he
had no reasonable cause to believe that his conduct was unlawful. A corporation
may indemnify any person made a party or threatened to be made a party to any
threatened, pending or completed action or suit brought by or in the right of
the corporation because he was an officer, director, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or other entity,
against expenses actually and reasonably incurred in connection with such action
or suit if he acted in good
II-1
<PAGE> 74
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the corporation, except that there may be no such indemnification
if the person is found liable to the corporation unless, in such a case, the
court determines the person is entitled thereto. A corporation must indemnify a
director, officer, employee or agent against expenses actually and reasonably
incurred by him who successfully defends himself in a proceeding to which he was
a party because he was a director, officer, employee or agent of the
corporation. Expenses incurred by an officer or director (or other employees or
agents as deemed appropriate by the Board of Directors) in defending a civil or
criminal proceeding may be paid by the Company in advance of the final
disposition of such proceeding upon delivery of a written affirmation by the
director of his good faith belief that the standard of conduct necessary for
indemnification has been met and upon receipt of an undertaking by or on behalf
of such director or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation. The
Delaware law indemnification and expense advancement provisions are not
exclusive of any other rights which may be granted by the bylaws, a vote of
shareholders or disinterested directors, agreement or otherwise. The Company's
Bylaws provide for the indemnification of (but not advancement of defense costs
to the) directors and officers (but not employees and agents) of the Company to
the fullest extent not prohibited by Delaware law. The Company has also obtained
directors and officers liability insurance covering, subject to certain
exceptions, actions taken by the Company's directors and officers in their
capacities as such. The indemnification and insurance provisions discussed above
may be sufficiently broad to permit indemnification of the Company's officers
and directors for liabilities arising under the Securities Act. The Company has
been advised that the Securities and Exchange Commission is of the opinion that
indemnification for liabilities under the Securities Act is against public
policy.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following is a list of exhibits filed as part of this Registration
Statement and also serves as the Exhibit Schedules:
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
4.1* Certificate of Trust of EBH Capital Trust
4.2* Restated Certificate of Trust of EBH Capital Trust
4.3* EBH Capital Trust I Trust Agreement
4.4* Form of EBH Capital Trust I Amended and Restated Trust
Agreement
4.5* Form of Preferred Securities Certificate (included as an
exhibit to Exhibit 4.4)
4.6** Form of Subordinated Indenture
4.7** Form of Junior Subordinated Debenture (included as an
exhibit to Exhibit 4.6)
4.8* Form of Preferred Securities Guarantee Agreement
5.1* Opinion of Armstrong Teasdale LLP regarding legality of
securities being registered
5.2* Opinion of Richards, Layton & Finger
8.1* Opinion of Armstrong Teasdale LLP regarding tax matters
12.1* Computation of ratio of earnings to fixed charges
</TABLE>
II-2
<PAGE> 75
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
23.1** Consent of KPMG LLP
23.2* Consent of Armstrong Teasdale LLP (contained in Exhibit 5.1
and Exhibit 8.1)
23.3* Consent of Richards, Layton & Finger (contained in Exhibit
5.2)
24.1* Powers of Attorney (see the signature page of this
Registration Statement)
25.1* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the Subordinated Indenture
25.2* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the EBH Trust Amended and Restated Trust Agreement
25.3* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the Preferred Securities Guarantee Agreement
</TABLE>
- -------------------------
* Previously filed.
** Filed herewith.
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes as follows:
(a) For purposes of determining any liability under the Securities Act
of 1933, the information omitted form the form of Prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(b) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
Prospectus shall be deemed to be a new Registration Statement related to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, when 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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering hereof.
Insofar as indemnification for liabilities arising under the Securities Act
for 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against 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 the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in
II-3
<PAGE> 76
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, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-4
<PAGE> 77
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Pre-Effective
Amendment No. 1 to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Clayton, State of
Missouri, on the 4th day of October, 1999.
<TABLE>
<S> <C>
ENTERBANK HOLDINGS, INC
By: /s/ FRED H. ELLER By: /s/ JAMES C. WAGNER
---------------------------------- ----------------------------------
Fred H. Eller James C. Wagner
Chief Executive Officer Chief Financial Officer
</TABLE>
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons in the capacities indicated on October 4, 1999.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ FRED H. ELLER President, Chief Executive Officer and Director
- ------------------------------------
Fred H. Eller
* Chairman of the Board of Directors
- ------------------------------------
Ronald E. Henges
Director
- ------------------------------------
Kevin C. Eichner
* Director
- ------------------------------------
Randall D. Humphreys
Director
- ------------------------------------
Paul R. Cahn
Director
- ------------------------------------
William B. Moskoff
* Director
- ------------------------------------
Birch M. Mullins
Director
- ------------------------------------
Robert E. Saur
* Director
- ------------------------------------
Paul L. Vogel
</TABLE>
II-5
<PAGE> 78
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
* Director
- ------------------------------------
James A. Williams
* Director
- ------------------------------------
Henry D. Warshaw
* Director
- ------------------------------------
James L. Wilhite
Director
- ------------------------------------
Ted C. Wetterau
*By: /s/ FRED H. ELLER
-------------------------------
Fred H. Eller
Attorney-in-fact
*By: /s/ JAMES C. WAGNER
-------------------------------
James C. Wagner
Attorney-in-fact
</TABLE>
II-6
<PAGE> 79
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Pre-Effective Amendment No. 1 to the Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Clayton, State of Missouri, on the 4th day of October, 1999.
EBH Capital Trust I
By: Enterbank Holdings, Inc., as
Sponsor
By: /s/ FRED H. ELLER
-----------------------------------
Fred H. Eller
Chief Executive Officer
II-7
<PAGE> 80
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<C> <S>
1.1* Form of Underwriting Agreement
4.1* Certificate of Trust of EBH Capital Trust
4.2* Restated Certificate of Trust of EBH Capital Trust
4.3* EBH Capital Trust I Trust Agreement
4.4* Form of EBH Capital Trust I Amended and Restated Trust
Agreement
4.5* Form of Preferred Securities Certificate (included as an
exhibit to Exhibit 4.4)
4.6** Form of Subordinated Indenture
4.7** Form of Junior Subordinated Debenture (included as an
exhibit to Exhibit 4.6)
4.8* Form of Preferred Securities Guarantee Agreement
5.1* Opinion of Armstrong Teasdale LLP regarding legality of
securities being registered
5.2* Opinion of Richards, Layton & Finger
8.1* Opinion of Armstrong Teasdale LLP regarding tax matters
12.1* Computation of ratio of earnings to fixed charges
23.1** Consent of KPMG LLP
23.2* Consent of Armstrong Teasdale LLP (contained in Exhibit 5.1
and Exhibit 8.1)
23.3* Consent of Richards, Layton & Finger (contained in Exhibit
5.2)
24.1* Powers of Attorney (see the signature page of this
Registration Statement)
25.1* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the Subordinated Indenture
25.2* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the EBH Trust Amended & Restated Trust Agreement
25.3* Form of Eligibility on Form T-1 under Trust Indenture Act of
1939, as amended, of Wilmington Trust Company, as Trustee
under the Preferred Securities Guarantee Agreement
</TABLE>
- -------------------------
* Previously filed.
** Filed herewith.
<PAGE> 1
EXHIBIT 4.6
------------------------------------------------------
SUBORDINATED INDENTURE
ENTERBANK HOLDINGS, INC.,
AS ISSUER
TO
WILMINGTON TRUST COMPANY,
AS TRUSTEE
___% JUNIOR SUBORDINATED DEBENTURES
DATED AS OF ______________, 1999
------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - DEFINITIONS.......................................................1
1.01 DEFINITIONS.................................................1
ARTICLE II - DESCRIPTION, TERMS, CONDITIONS, REGISTRATION
AND EXCHANGE OF THE JUNIOR SUBORDINATED DEBENTURES...................9
2.01 DESIGNATION AND PRINCIPAL AMOUNT............................9
2.02 MATURITY....................................................9
2.03 FORM AND PAYMENT...........................................10
2.04 GLOBAL SUBORDINATED DEBENTURE..............................10
2.05 INTEREST...................................................12
2.06 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.............13
2.07 REGISTRATION AND TRANSFER..................................13
2.08 MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR SUBORDINATED
DEBENTURES.................................................14
ARTICLE III - REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES...................15
3.01 REDEMPTION.................................................15
3.02 SPECIAL EVENT REDEMPTION...................................15
3.03 OPTIONAL REDEMPTION BY COMPANY.............................16
3.04 NOTICE OF REDEMPTION.......................................16
3.05 PAYMENT UPON REDEMPTION....................................17
3.06 NO SINKING FUND............................................18
ARTICLE IV - EXTENSION OF INTEREST PAYMENT PERIOD............................18
4.01 EXTENSION OF INTEREST PAYMENT PERIOD.......................18
4.02 NOTICE OF EXTENSION........................................19
4.03 LIMITATION OF TRANSACTIONS DURING EXTENSION................19
ARTICLE V - PARTICULAR COVENANTS OF THE COMPANY..............................19
5.01 PAYMENT OF PRINCIPAL AND INTEREST..........................19
5.02 MAINTENANCE OF AGENCY......................................20
5.03 PAYING AGENTS..............................................20
5.04 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE...........21
5.05 COMPLIANCE WITH CONSOLIDATION PROVISIONS...................21
5.06 RESTRICTIONS ON CERTAIN PAYMENTS...........................21
5.07 COVENANTS AS TO THE TRUST..................................22
ARTICLE VI - SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY AND THE
TRUSTEE.............................................................22
</TABLE>
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<TABLE>
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6.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS............................................22
6.02 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS............................................23
6.03 REPORTS BY THE COMPANY.....................................23
6.04 REPORTS BY THE TRUSTEE.....................................24
ARTICLE VII - REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF
DEFAULT....................................................24
7.01 EVENTS OF DEFAULT..........................................24
7.02 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE....................................................26
7.03 APPLICATION OF MONEYS COLLECTED............................27
7.04 LIMITATION ON SUITS........................................28
7.05 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.....................................................29
7.06 CONTROL BY SECURITYHOLDERS.................................29
7.07 UNDERTAKING TO PAY COSTS...................................30
ARTICLE VIII - FORM OF JUNIOR SUBORDINATED DEBENTURE AND ORIGINAL ISSUE......30
8.01 FORM OF JUNIOR SUBORDINATED DEBENTURE......................30
8.02 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES...........30
ARTICLE IX - CONCERNING THE TRUSTEE..........................................31
9.01 CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.........31
9.02 CERTAIN RIGHTS OF TRUSTEE..................................32
9.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF THE
JUNIOR SUBORDINATED DEBENTURES.............................33
9.04 MAY HOLD JUNIOR SUBORDINATED DEBENTURES....................34
9.05 MONEYS HELD IN TRUST.......................................34
9.06 COMPENSATION AND REIMBURSEMENT.............................34
9.07 RELIANCE ON OFFICERS' CERTIFICATE..........................35
9.08 DISQUALIFICATION; CONFLICTING INTERESTS....................35
9.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY....................35
9.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR..........35
9.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.....................37
9.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS...................................................37
9.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY......37
9.14 APPOINTMENT OF AUTHENTICATING AGENT........................38
</TABLE>
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<TABLE>
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ARTICLE X - CONCERNING THE SECURITYHOLDERS...................................39
10.01 EVIDENCE OF ACTION BY SECURITYHOLDERS......................39
10.02 PROOF OF EXECUTION BY SECURITYHOLDERS......................40
10.03 WHO MAY BE DEEMED OWNERS...................................40
10.04 CERTAIN JUNIOR SUBORDINATED DEBENTURES OWNED BY COMPANY
DISREGARDED................................................40
10.05 ACTIONS BINDING ON FUTURE SECURITYHOLDERS..................41
ARTICLE XI - SUPPLEMENTAL INDENTURES.........................................41
11.01 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF
SECURITYHOLDERS............................................41
11.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS....42
11.03 EFFECT OF SUPPLEMENTAL INDENTURES..........................43
11.04 JUNIOR SUBORDINATED DEBENTURES AFFECTED BY SUPPLEMENTAL
INDENTURES.................................................43
11.05 EXECUTION OF SUPPLEMENTAL INDENTURES.......................43
ARTICLE XII - SUCCESSOR CORPORATION..........................................44
12.01 COMPANY MAY CONSOLIDATE, ETC...............................44
12.02 SUCCESSOR SUBSTITUTED......................................44
12.03 EVIDENCE OF CONSOLIDATION, ETC., TO TRUSTEE................44
ARTICLE XIII - SATISFACTION AND DISCHARGE....................................45
13.01 SATISFACTION AND DISCHARGE OF INDENTURE....................45
13.02 DISCHARGE OF OBLIGATIONS...................................45
13.03 DEPOSITED MONEYS TO BE HELD IN TRUST.......................45
13.04 PAYMENT OF MONEYS HELD BY PAYING AGENTS....................46
13.05 REPAYMENT TO COMPANY.......................................46
ARTICLE XIV - IMMUNITY OF INCORPORATORS, STOCKHOLDERS, OFFICERS AND
DIRECTORS....................................................46
14.01 NO RECOURSE................................................46
ARTICLE XV - MISCELLANEOUS PROVISIONS........................................47
15.01 EFFECT ON SUCCESSORS AND ASSIGNS...........................47
15.02 ACTIONS BY SUCCESSOR.......................................47
15.03 SURRENDER OF COMPANY POWERS................................47
15.04 NOTICES....................................................47
15.05 GOVERNING LAW..............................................47
15.06 TREATMENT OF JUNIOR SUBORDINATED DEBENTURES AS DEBT........47
15.07 COMPLIANCE CERTIFICATES AND OPINIONS.......................48
</TABLE>
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15.08 PAYMENTS ON BUSINESS DAYS..................................48
15.09 CONFLICT WITH TRUST INDENTURE ACT..........................48
15.10 COUNTERPARTS...............................................48
15.11 SEPARABILITY...............................................48
15.12 ASSIGNMENT.................................................49
15.13 ACKNOWLEDGMENT OF RIGHTS...................................49
ARTICLE XVI - SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES................49
16.01 AGREEMENT TO SUBORDINATE...................................49
16.02 DEFAULT ON SENIOR AND SUBORDINATED DEBT....................49
16.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY.......................50
16.04 SUBROGATION................................................51
16.05 TRUSTEE TO EFFECTUATE SUBORDINATION........................52
16.06 NOTICE BY THE COMPANY......................................52
16.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR AND SUBORDINATED
DEBT.......................................................53
16.08 SUBORDINATION MAY NOT BE IMPAIRED..........................53
EXHIBIT A...................................................................A-1
</TABLE>
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ENTERBANK HOLDINGS, INC.
RECONCILIATION AND TIE BETWEEN TRUST INDENTURE ACT OF 1939,
AS AMENDED, AND SUBORDINATED INDENTURE,
DATED AS OF ______________, 1999
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<CAPTION>
TRUST INDENTURE ACT SECTION SUBORDINATED INDENTURE SECTION
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Section 310 15.09
Section 310(b) 9.08
Section 311 15.09
Section 311(a) 9.13
(b) 9.13
Section 312 15.09
Section 312(b) 6.02
Section 313 15.09
Section 313(a) 6.04
(b) 6.04
(c) 6.04
Section 314 15.09
Section 315 15.09
Section 316 15.09
Section 317 15.09
</TABLE>
NOTE: This reconciliation and tie shall not, for any purpose, be deemed to be a
part of the Subordinated Indenture.
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SUBORDINATED INDENTURE
SUBORDINATED INDENTURE (the "Indenture"), dated as of ____________,
1999, between ENTERBANK HOLDINGS, INC., a Delaware corporation (the "Company")
and WILMINGTON TRUST COMPANY, a Delaware banking corporation, as trustee (the
"Trustee");
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the execution and delivery of this Indenture to provide for the
issuance of its securities to be known as its __% Junior Subordinated
Debentures due _____________, 2029 (hereinafter referred to as the "Junior
Subordinated Debentures"), the form and substance of such Junior Subordinated
Debentures and the terms, provisions and conditions thereof to be set forth as
provided in this Indenture; and
WHEREAS, EBH Capital Trust I, a Delaware statutory business trust (the
"Trust"), has offered to the public $_____[A]_____ aggregate liquidation amount
of its ___% Cumulative Trust Preferred Securities (the "Preferred Securities"),
representing undivided beneficial interests in the assets of the Trust and
proposes to invest the proceeds from such offering, together with the proceeds
of the issuance and sale by the Trust to the Company of $____[B]____ aggregate
liquidation amount of its __% Common Securities, in $_[A]+[B]__ aggregate
principal amount of the Junior Subordinated Debentures; and
WHEREAS, the Company has requested that the Trustee execute and
deliver this Indenture and all requirements necessary to make this Indenture a
valid instrument in accordance with its terms, and to make the Junior
Subordinated Debentures, when executed by the Company and authenticated and
delivered by the Trustee, the valid obligations of the Company; and
WHEREAS, to provide the terms and conditions upon which the Junior
Subordinated Debentures are to be authenticated, issued and delivered, the
Company has duly authorized the execution and delivery of this Indenture; and
WHEREAS, all things necessary to make this Indenture a valid agreement
of the Company, in accordance with its terms, have been done.
NOW, THEREFORE, in consideration of the premises and the purchase of
the Junior Subordinated Debentures by the holders thereof, it is mutually
covenanted and agreed as follows for the equal and ratable benefit of the
holders of Junior Subordinated Debentures:
ARTICLE I
DEFINITIONS
1.01 DEFINITIONS. The terms defined in this Section (except as in this
Indenture otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section and shall
include the plural as well as the singular. All other terms used in this
Indenture that are defined in the Trust Indenture Act of 1939, as amended, or
that are by reference in said Trust Indenture Act defined in the Securities Act
of 1933, as amended (except as herein otherwise
<PAGE> 8
expressly provided or unless the context otherwise requires), shall have the
meanings assigned to such terms in said Trust Indenture Act and in said
Securities Act as in force at the date of the execution of this Indenture.
"Accelerated Maturity Date" means, if the Company elects to accelerate
the Maturity Date in accordance with Section 2.02, the date selected by the
Company which is prior to the Scheduled Maturity Date, but is after
____________, 2004.
"Additional Sums" shall have the meaning set forth in Section 2.05(c).
"Administrative Trustees" has the meaning set forth in the Trust
Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding with power to vote 10% or
more of the outstanding voting securities or other ownership interests of the
specified Person, (b) any Person 10% or more of whose outstanding voting
securities or other ownership interests are directly or indirectly owned,
controlled or held with power to vote by the specified Person, (c) any Person
directly or indirectly controlling, controlled by, or under common control with
the specified Person, (d) a partnership in which the specified Person is a
general partner, (e) any officer or director of the specified Person, and (f)
if the specified Person is an individual, any entity of which the specified
Person is an officer, director or general partner.
"Authenticating Agent" means an authenticating agent with respect to
the Junior Subordinated Debentures appointed by the Trustee pursuant to Section
9.14.
"Bankruptcy Law" means Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" means the Board of Directors of the Company or
any duly authorized committee of such Board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification.
"Business Day" means any day other than a day on which federal or
state banking institutions in the State of Missouri or Delaware are authorized
or obligated by law, executive order or regulation to close or a day on which
the Trustee is closed.
"Capital Treatment Event" means the reasonable determination by the
Company that, as a result of any amendment to, or change (including any
proposed change) in, the laws (or any regulations thereunder) of the United
States or any political subdivision thereof or therein, or as a result of any
official or administrative pronouncement or action or judicial decision
interpreting or
2
<PAGE> 9
applying such laws or regulations, which amendment or change is effective or
such proposed change, pronouncement or decision is announced on or after the
date of issuance of the Preferred Securities under the Trust Agreement, there
is more than an insubstantial risk of impairment of the Company's ability to
treat the Preferred Securities (or any substantial portion thereof) as Tier I
Capital for purposes of any then applicable capital adequacy guidelines of the
Federal Reserve, as then in effect and applicable to the Company.
"Certificate" means a certificate signed by the principal executive
officer, the principal financial officer or the principal accounting officer of
the Company. The Certificate need not comply with the provisions of Section
15.07.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this Indenture such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties at such time.
"Common Securities" means undivided beneficial interests in the assets
of the Trust which rank pari passu with Preferred Securities issued by the
Trust; provided, however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of Distributions
and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
"Company" means Enterbank Holdings, Inc., a corporation duly organized
and existing under the laws of the State of Delaware, and, subject to the
provisions of Article XII, shall also include its successors and assigns.
"Compounded Interest" shall have the meaning set forth in Section
4.01.
"Corporate Trust Office" means the office of the Trustee at which, at
any particular time, its corporate trust business shall be principally
administered, which office at the date hereof is located at 1100 North Market
Street, Wilmington, Delaware 19890-0001, Attention: Corporate Trust
Administration.
"Coupon Rate" shall have the meaning set forth in Section 2.05(a).
"Custodian" means any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"Debt" means with respect to any Person, whether recourse is to all or
a portion of the assets of such Person and whether or not contingent, (a) every
obligation of such Person for money borrowed; (b) every obligation of such
Person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (c) every reimbursement obligation of such Person with
respect to letters of credit,
3
<PAGE> 10
bankers' acceptances or similar facilities issued for the account of such
Person; (d) every obligation of such Person issued or assumed as the deferred
purchase price of property or services (but excluding trade accounts payable or
accrued liabilities arising in the ordinary course of business); (e) every
capital lease obligation of such Person; and (f) every obligation of the type
referred to in clauses (a) through (e) of another Person and all dividends of
another Person the payment of which, in either case, such Person has guaranteed
or for which such Person is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Default" means any event, act or condition that with notice or lapse
of time, or both, would constitute an Event of Default.
"Deferred Interest" shall have the meaning set forth in Section 4.01.
"Depositary" means, with respect to Junior Subordinated Debentures
issued as a Global Subordinated Debenture, The Depository Trust Company, New
York, New York, another clearing agency, or any successor registered as a
clearing agency under the Exchange Act, or other applicable statute or
regulation, which, in each case, shall be designated by the Company pursuant to
either Section 2.01 or 2.04.
"Dissolution Event" means that as a result of the occurrence and
continuation of a Special Event, the Trust is to be dissolved in accordance
with the Trust Agreement and the Junior Subordinated Debentures held by the
Property Trustee are to be distributed to the holders of the Trust Securities
issued by the Trust pro rata in accordance with the Trust Agreement.
"Distributions" shall have the meaning set forth in the Trust
Agreement.
"Event of Default" means any event specified in Section 7.01,
continued for the period of time, if any, therein designated.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 4.01.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Global Subordinated Debenture" means a Junior Subordinated Debenture
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with this
Indenture, which shall be registered in the name of the Depositary or its
nominee.
"Governmental Obligations" means securities that are (a) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (b) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States
4
<PAGE> 11
of America, the payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America that, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or interest on
any such Governmental Obligation held by such custodian for the account of the
holder of such depositary receipt; provided, however, that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by
the custodian in respect of the Governmental Obligation or the specific payment
of principal of or interest on the Governmental Obligation evidenced by such
depositary receipt.
"Herein," "hereof" and "hereunder," and other words of similar import,
refer to this Indenture as a whole and not to any particular Article, Section
or other subdivision.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into in accordance with the terms hereof.
"Interest Payment Date," when used with respect to any installment of
interest on the Junior Subordinated Debentures, means the date specified in the
Junior Subordinated Debenture as the fixed date on which an installment of
interest with respect to the Junior Subordinated Debentures is due and payable.
"Investment Company Act" means the Investment Company Act of 1940, as
amended.
"Investment Company Event" means the receipt by the Company and the
Trust of an Opinion of Counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority (a "Change in Investment
Company Act Law"), the Trust is or will be considered an "investment company"
that is required to be registered under the Investment Company Act, which
Change in Investment Company Act Law becomes effective on or after the date of
original issuance of the Preferred Securities under the Trust Agreement.
"Junior Subordinated Debentures" means the __% Junior Subordinated
Debentures due 2029 authenticated and delivered under this Indenture.
"Liquidation Amount" means the stated amount of $8.00 per Trust
Security.
"Maturity Date" shall have the meaning set forth in Section 2.02.
"Non Book-Entry Preferred Securities" shall have the meaning set forth
in Section 2.04(a).
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"Officers' Certificate" means a certificate signed by the Chief
Executive Officer, the President or a Vice President and by the Chief
Accounting Officer or the Controller or an Assistant Controller or the
Secretary or an Assistant Secretary of the Company that is delivered to the
Trustee in accordance with the terms hereof. Each such certificate shall
include the statements provided for in Section 15.07, if and to the extent
required by the provisions thereof.
"Opinion of Counsel" means an opinion in writing of legal counsel, who
may be an employee of or counsel for the Company, that is delivered to the
Trustee in accordance with the terms hereof. Each such opinion shall include the
statements provided for in Section 15.07, if and to the extent required by the
provisions thereof.
"Outstanding," when used with reference to Junior Subordinated
Debentures means, subject to the provisions of Section 10.04, as of any
particular time, all Junior Subordinated Debentures theretofore authenticated
and delivered by the Trustee under this Indenture, except (a) Junior
Subordinated Debentures theretofore canceled by the Trustee or any paying
agent, or delivered to the Trustee or any paying agent for cancellation or that
have previously been canceled; (b) Junior Subordinated Debentures or portions
thereof for the payment or redemption of which moneys or Governmental
Obligations in the necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or shall have been
set aside and segregated in trust by the Company (if the Company shall act as
its own paying agent); provided, however, that if such Junior Subordinated
Debentures or portions of such Junior Subordinated Debentures are to be
redeemed prior to the maturity thereof, notice of such redemption shall have
been given as provided in Article III, or provision satisfactory to the Trustee
shall have been made for giving such notice; and (c) Junior Subordinated
Debentures in lieu of or in substitution for which other Junior Subordinated
Debentures shall have been authenticated and delivered pursuant to the terms of
Section 2.08.
"Person" means any individual, corporation, partnership, joint
venture, joint-stock company, unincorporated organization or government or any
agency or political subdivision thereof.
"Predecessor Junior Subordinated Debenture" means every previous
Junior Subordinated Debenture evidencing all or a portion of the same debt as
that evidenced by such particular Junior Subordinated Debenture; and, for the
purposes of this definition, any Junior Subordinated Debenture authenticated
and delivered under Section 2.08 in lieu of a lost, destroyed or stolen Junior
Subordinated Debenture shall be deemed to evidence the same debt as the lost,
destroyed or stolen Junior Subordinated Debenture.
"Preferred Securities" means undivided beneficial interests in the
assets of the Trust which rank pari passu with Common Securities issued by the
Trust; provided, however, that upon the occurrence of an Event of Default, the
rights of holders of Common Securities to payment in respect of Distributions
and payments upon liquidation, redemption and otherwise are subordinated to the
rights of holders of Preferred Securities.
6
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"Preferred Securities Certificate" has the meaning set forth in the
Trust Agreement.
"Preferred Securities Guarantee" means any guarantee that the Company
may enter into with the Property Trustee or other Persons that operates
directly or indirectly for the benefit of holders of Preferred Securities of
the Trust.
"Property Trustee" has the meaning set forth in the Trust Agreement.
"Redemption Price" means the amount equal to 100% of the principal
amount of Junior Subordinated Debentures to be redeemed plus any accrued and
unpaid interest thereon to the date of the redemption of such Junior
Subordinated Debentures.
"Responsible Officer" when used with respect to the Trustee means any
Vice President or any corporate trust officer with direct responsibility for
the administration of this Indenture or any other officer or assistant officer
of the Trustee customarily performing functions similar to those performed by
the Persons who at the time shall be such officers, respectively, or to whom
any corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Scheduled Maturity Date" means ______________, 2029.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 2.07.
"Securityholder," "Holder," "Registered Holder," or other similar
term, means the Person or Persons in whose name or names particular Junior
Subordinated Debentures shall be registered in the Securities Register.
"Senior and Subordinated Debt" means the principal of (and premium, if
any) and interest, if any (including interest accruing on or after the filing of
any petition in bankruptcy or for reorganization relating to the Company whether
or not such claim for post-petition interest is allowed in such proceeding), on
Debt of the Company, whether incurred on or prior to the date of this Indenture
or thereafter incurred, unless, in the instrument creating or evidencing the
same or pursuant to which the same is outstanding, it is provided that such
obligations are not superior in right of payment to the Junior Subordinated
Debentures or to other Debt which is pari passu with, or subordinated to, the
Junior Subordinated Debentures; provided, however, that Senior and Subordinated
Debt shall not be deemed to include (a) any Debt of the Company which when
incurred and without respect to any election under section 1111(b) of the United
States Bankruptcy Code of 1978, as amended, was without recourse to the Company,
(b) any Debt to any employee of the Company, (c) any Debt which by its terms is
subordinated to any trade accounts payable or accrued liabilities arising in the
ordinary course of business but only to the extent that payments made to the
holders of such Debt by the Holders of the Junior Subordinated Debentures as a
result of the subordination provisions of this Indenture would
7
<PAGE> 14
be greater than they otherwise would have been as a result of any obligation of
such Holders to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result
of subordination provisions to which such Debt is subject, (d) the Preferred
Securities Guarantee, and (e) any other debt securities issued pursuant to this
Indenture.
"Special Event" means a Tax Event, an Investment Company Event or a
Capital Treatment Event.
"Subsidiary" means, with respect to any Person, (a) any corporation at
least a majority of whose outstanding Voting Stock shall at the time be owned,
directly or indirectly, by such Person, or by one or more of its Subsidiaries,
or by such Person and one or more of its Subsidiaries, (b) any general
partnership, joint venture or similar entity, at least a majority of whose
outstanding partnership or similar interests shall at the time be owned by such
Person, or by one or more of its Subsidiaries, or by such Person and one or
more of its Subsidiaries, and (c) any limited partnership of which such Person
or any of its Subsidiaries is a general partner.
"Tax Event" means the receipt by the Company and the Trust of an
Opinion of Counsel experienced in such matters to the effect that, as a result
of any amendment to, or change (including any announced prospective change) in,
the laws (or any regulations thereunder) of the United States or any political
subdivision or taxing authority thereof or therein, or as a result of any
official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after the date of issuance
of the Junior Subordinated Debentures there is more than an insubstantial risk
that (a) interest payable by the Company on the Junior Subordinated Debentures
is not, or within 90 days after the date of such Opinion of Counsel will not
be, deductible by the Company, in whole or in part, for United States federal
income tax purposes, (b) the Trust is, or will be within 90 days after the date
of such Opinion of Counsel, subject to United States federal income tax with
respect to income received or accrued on the Junior Subordinated Debentures, or
(c) the Trust is, or will be within 90 days after the date of such Opinion of
Counsel, subject to more than a de minimis amount of other taxes, duties,
assessments or other governmental charges.
"Trust" means EBH Capital Trust I, a Delaware statutory business trust
created for the purpose of issuing Trust Securities in connection with the
issuance of Junior Subordinated Debentures under this Indenture.
"Trust Agreement" means the Amended and Restated Trust Agreement,
dated as of _______________, 1999, of the Trust.
"Trustee" means Wilmington Trust Company and, subject to the
provisions of Article IX, shall also include its successors and assigns, and,
if at any time there is more than one Person acting in such capacity hereunder,
"Trustee" shall mean each such Person.
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"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date of execution of this Indenture; provided, however, that in
the event the Trust Indenture Act of 1939 is amended after such date, "Trust
Indenture Act" means, to the extent required by any such amendment, the Trust
Indenture Act of 1939 as so amended.
"Trust Securities" means Common Securities and Preferred Securities of
the Trust.
"Voting Stock" as applied to stock of any Person, means shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person having ordinary voting power for the election of a
majority of the directors (or the equivalent) of such Person, other than
shares, interests, participations or other equivalents having such power only
by reason of the occurrence of a contingency.
ARTICLE II
DESCRIPTION, TERMS, CONDITIONS, REGISTRATION
AND EXCHANGE OF THE JUNIOR SUBORDINATED DEBENTURES
2.01 DESIGNATION AND PRINCIPAL AMOUNT. There is hereby authorized a
series of Securities designated the "__% Junior Subordinated Debentures due
2029," limited in aggregate principal amount to $__________, which amount shall
be as set forth in any written order of the Company for the authentication and
delivery of Junior Subordinated Debentures pursuant to Section 8.02 of this
Indenture.
2.02 MATURITY.
(a) The Maturity Date will be either:
(i) the Scheduled Maturity Date; or
(ii) if the Company elects to accelerate the Maturity
Date to be a date prior to the Scheduled Maturity Date in
accordance with Section 2.02(b), the Accelerated Maturity
Date.
(b) The Company may, at any time before the day which is 90
days before the Scheduled Maturity Date, elect to shorten the Maturity
Date only once to the Accelerated Maturity Date, provided that the
Company has received the prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the
Federal Reserve, but in no case shall such Accelerated Maturity Date
be a date before ____________, 2004.
(c) If the Company elects to accelerate the Maturity Date in
accordance with Section 2.02(b), the Company shall give notice to the
Registered Holders of the Junior Subordinated Debentures, the Property
Trustee and the Trustee of the acceleration of the
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Maturity Date and the Accelerated Maturity Date at least 90 days
before the Accelerated Maturity Date.
2.03 FORM AND PAYMENT. Except as provided in Section 2.04, the Junior
Subordinated Debentures shall be issued in fully registered certificated form
without interest coupons. Principal and interest on the Junior Subordinated
Debentures issued in certificated form will be payable, the transfer of such
Junior Subordinated Debentures will be registrable and such Junior Subordinated
Debentures will be exchangeable for Junior Subordinated Debentures bearing
identical terms and provisions at the office or agency of the Trustee;
provided, however, that payment of interest may be made at the option of the
Company by check mailed to the Holder at such address as shall appear in the
Securities Register. Notwithstanding the foregoing, so long as the Holder of
any Junior Subordinated Debentures is the Property Trustee, the payment of the
principal of and interest (including Compounded Interest and Additional Sums,
if any) on such Junior Subordinated Debentures held by the Property Trustee
will be made at such place and to such account as may be designated by the
Property Trustee.
2.04 GLOBAL SUBORDINATED DEBENTURE.
(a) In connection with a Dissolution Event:
(i) the Junior Subordinated Debentures in
certificated form may be presented to the Trustee by the
Property Trustee in exchange for a Global Subordinated
Debenture in an aggregate principal amount equal to the
aggregate principal amount of all outstanding Junior
Subordinated Debentures (a "Global Subordinated Debenture"),
to be registered in the name of the Depositary, or its
nominee, and delivered by the Trustee to the Depositary for
crediting to the accounts of its participants pursuant to the
instructions of the Administrative Trustees. The Company upon
any such presentation shall execute a Global Subordinated
Debenture in such aggregate principal amount and deliver the
same to the Trustee for authentication and delivery in
accordance with this Indenture. Payments on the Junior
Subordinated Debentures issued as a Global Subordinated
Debenture will be made to the Depositary; and
(ii) if any Preferred Securities are held in non
book-entry certificated form, the Junior Subordinated
Debentures in certificated form may be presented to the
Trustee by the Property Trustee and any Preferred Securities
Certificate which represents Preferred Securities other than
Preferred Securities held by the Depositary or its nominee
("Non Book-Entry Preferred Securities") will be deemed to
represent beneficial interests in Junior Subordinated
Debentures presented to the Trustee by the Property Trustee
having an aggregate principal amount equal to the aggregate
Liquidation Amount of the Non Book-Entry Preferred Securities
until such Preferred Securities Certificates are presented to
the Securities Registrar for transfer or reissuance at which
time such Preferred Securities Certificates will be canceled
and
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a Junior Subordinated Debenture, registered in the name of
the holder of the Preferred Securities Certificate or the
transferee of the holder of such Preferred Securities
Certificate, as the case may be, with an aggregate principal
amount equal to the aggregate Liquidation Amount of the
Preferred Securities Certificate canceled, will be executed
by the Company and delivered to the Trustee for
authentication and delivery in accordance with this
Indenture. On issue of such Junior Subordinated Debentures,
Junior Subordinated Debentures with an equivalent aggregate
principal amount that were presented by the Property Trustee
to the Trustee will be deemed to have been canceled.
(b) A Global Subordinated Debenture may be transferred, in
whole but not in part, only to another nominee of the Depositary, or
to a successor Depositary selected or approved by the Company or to a
nominee of such successor Depositary.
(c) If at any time the Depositary notifies the Company that
it is unwilling or unable to continue as Depositary or if at any time
the Depositary for such series shall no longer be registered or in
good standing under the Exchange Act or other applicable statute or
regulation, and a successor Depositary for such series is not
appointed by the Company within 90 days after the Company receives
such notice or becomes aware of such condition, as the case may be,
the Company will execute, and the Trustee, upon written notice from
the Company, will authenticate and deliver the Junior Subordinated
Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Subordinated Debenture in
exchange for such Global Subordinated Debenture. In addition, the
Company may at any time determine that the Junior Subordinated
Debentures shall no longer be represented by a Global Subordinated
Debenture. In such event the Company will execute, and the Trustee,
upon receipt of an Officers' Certificate evidencing such determination
by the Company, will authenticate and deliver the Junior Subordinated
Debentures in definitive registered form without coupons, in
authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Subordinated Debenture in
exchange for such Global Subordinated Debenture. Upon the exchange of
the Global Subordinated Debenture for such Junior Subordinated
Debentures in definitive registered form without coupons, in
authorized denominations, the Global Subordinated Debenture shall be
canceled by the Trustee. Such Junior Subordinated Debentures in
definitive registered form issued in exchange for the Global
Subordinated Debenture shall be registered in such names and in such
authorized denominations as the Depositary, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct
the Trustee. The Trustee shall deliver such Junior Subordinated
Debentures to the Depositary for delivery to the Persons in whose
names such Junior Subordinated Debentures are so registered.
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2.05 INTEREST.
(a) Each Junior Subordinated Debenture will bear interest at
the rate of __% per annum (the "Coupon Rate") from the original date
of issuance until the principal thereof becomes due and payable, and
on any overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) on any overdue
installment of interest at the Coupon Rate, compounded quarterly,
payable (subject to the provisions of Article IV) quarterly in arrears
on the fifteenth day of March, June, September and December in each
year (each, an "Interest Payment Date"), commencing on December 15,
1999, to the Person in whose name such Junior Subordinated Debenture
or any Predecessor Junior Subordinated Debenture is registered at the
close of business on the regular record date for such interest
installment, which, in respect of (i) Junior Subordinated Debentures
of which the Property Trustee is the Holder and the Preferred
Securities are in book-entry-only form or (ii) a Global Subordinated
Debenture, shall be the close of business on the Business Day next
preceding that Interest Payment Date. Notwithstanding the foregoing
sentence, if (A) the Junior Subordinated Debentures are held by the
Property Trustee and the Preferred Securities are no longer in
book-entry only form or (B) the Junior Subordinated Debentures are not
represented by a Global Subordinated Debenture, the record date for
such interest installment shall be the first day of the month in which
such payment is to be made. The amount of each interest payment due
with respect to the Junior Subordinated Debentures will include
amounts accrued through the date the interest payment is due.
(b) The amount of interest payable for any period will be
computed on the basis of a 360-day year of twelve 30-day months.
Except as provided in the following sentence, the amount of interest
payable for any period shorter than a full quarterly period for which
interest is computed will be computed on the basis of the actual
number of days elapsed in such a quarterly period. In the event that
any date on which interest is payable on the Junior Subordinated
Debentures is not a Business Day, then payment of interest 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 is in the next succeeding
calendar year, such payment shall be made on the immediately preceding
Business Day, in each case with the same force and effect as if made
on such date.
(c) If, at any time while the Property Trustee is the Holder
of any Junior Subordinated Debentures, the Trust or the Property
Trustee is required to pay any taxes, duties, assessments or
governmental charges of whatever nature (other than withholding taxes)
imposed by the United States, or any other taxing authority, then, in
any case, the Company will pay as additional interest ("Additional
Sums") on the Junior Subordinated Debentures held by the Property
Trustee such additional amounts as shall be required so that the net
amounts received and retained by the Trust and the Property Trustee
after paying such taxes, duties, assessments or other governmental
charges will be equal to the amounts the Trust and the Property
Trustee would have received had no such taxes, duties, assessments or
other government charges been imposed.
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2.06 EXECUTION, AUTHENTICATION, DELIVERY AND DATING. The Junior
Subordinated Debentures shall be executed on behalf of the Company by its Chief
Executive Officer, its President or any Vice President and attested by its
Secretary or Assistant Secretary. The signature of any of these officers on the
Junior Subordinated Debentures may be manual or facsimile.
Junior Subordinated Debentures bearing the manual or facsimile
signatures of individuals who were at any time the proper officers of the
Company shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the authentication and delivery
of such Junior Subordinated Debentures or did not hold such offices at the date
of such Junior Subordinated Debentures.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Junior Subordinated Debentures executed
by the Company to the Trustee for authentication, together with a Company order
for the authentication and delivery of such Junior Subordinated Debentures. The
Trustee in accordance with such Company order shall authenticate and deliver
such Junior Subordinated Debentures as provided in this Indenture and not
otherwise.
Upon the initial issuance, each Junior Subordinated Debenture shall be
dated ______________, 1999, and thereafter Junior Subordinated Debentures
issued hereunder shall be dated the date of their authentication.
No Junior Subordinated Debenture shall be entitled to any benefit
under this Indenture or be valid or obligatory for any purpose unless there
appears on such Junior Subordinated Debenture a certificate of authentication
substantially in the form provided for herein executed by the Trustee by manual
signature, and such certificate upon any Junior Subordinated Debenture shall be
conclusive evidence, and the only evidence, that such Junior Subordinated
Debenture has been duly authenticated and delivered hereunder and is entitled
to the benefits of this Indenture.
2.07 REGISTRATION AND TRANSFER. The Company shall cause to be kept at
the Corporate Trust Office of the Trustee a register (the register maintained
in such office or any other office or agency pursuant to Section 5.02 being
herein sometimes referred to as the "Securities Register") in which, subject to
such reasonable regulations as it may prescribe, the Company shall provide for
the registration of the Junior Subordinated Debentures and transfers of the
Junior Subordinated Debentures. The Trustee is hereby appointed "Securities
Registrar" for the purpose of registering the Junior Subordinated Debentures
and transfers of the Junior Subordinated Debentures as herein provided.
Upon surrender for registration of transfer of any Junior Subordinated
Debenture at an office or agency of the Company designated pursuant to Section
5.02 for such purpose, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, a new Junior Subordinated Debenture of the authorized
denomination.
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All Junior Subordinated Debentures issued upon any registration of
transfer of Junior Subordinated Debentures shall be valid obligations of the
Company, evidencing the same debt and entitled to the same benefits under this
Indenture as the Junior Subordinated Debentures surrendered upon such
registration of transfer.
Every Junior Subordinated Debenture presented or surrendered for
registration of transfer shall be duly endorsed for transfer (if so required by
the Company or the Trustee), or shall be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Securities Registrar duly
executed by the Holder thereof or such Holder's attorney duly authorized in
writing.
No service charge shall be made for any registration of transfer of
Junior Subordinated Debentures, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer of Junior Subordinated Debentures.
The Company shall not be required to issue or register the transfer of
any Junior Subordinated Debenture during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Junior Subordinated Debentures selected for redemption pursuant to Article III
and ending at the close of business on the day of such mailing.
2.08 MUTILATED, DESTROYED, LOST AND STOLEN JUNIOR
SUBORDINATED DEBENTURES. If any mutilated Junior Subordinated Debenture is
surrendered to the Trustee, the Company shall execute and the Trustee shall
authenticate and deliver in exchange therefor a new Junior Subordinated
Debenture of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any Junior
Subordinated Debenture and (b) such security or indemnity as may be required by
them to save each of them harmless, then, in the absence of notice to the
Company or the Trustee that such Junior Subordinated Debenture has been
acquired by a protected purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Junior Subordinated Debenture, a new Junior
Subordinated Debenture of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Junior
Subordinated Debenture has become or is about to become due and payable, the
Company in its discretion may, instead of issuing a new Junior Subordinated
Debenture, pay such Junior Subordinated Debenture.
Upon the issuance of any new Junior Subordinated Debenture under this
Section, the Company may require the payment of a sum sufficient to cover any
tax or other governmental charge
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that may be imposed in relation thereto and any other expenses (including the
fees and expenses of the Trustee) connected therewith.
Every new Junior Subordinated Debenture issued pursuant to this
Section in lieu of any destroyed, lost or stolen Junior Subordinated Debenture
shall constitute an original additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Junior Subordinated Debenture
shall be at any time enforceable by anyone, and shall be entitled to all of the
benefits of this Indenture.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Junior
Subordinated Debentures.
ARTICLE III
REDEMPTION OF JUNIOR SUBORDINATED DEBENTURES
3.01 REDEMPTION. Subject to the Company having received prior approval
of the Federal Reserve, if then required under the applicable capital
guidelines or policies of the Federal Reserve, the Company may redeem the
Junior Subordinated Debentures in accordance with this Article III.
3.02 SPECIAL EVENT REDEMPTION. Subject to the Company having received
the prior approval of the Federal Reserve, if then required under the
applicable capital guidelines or policies of the Federal Reserve, if a Special
Event has occurred and is continuing, then, notwithstanding Section 3.03, the
Company shall have the right upon not less than 30 days' nor more than 60 days'
notice to the Holders of the Junior Subordinated Debentures to redeem the
Junior Subordinated Debentures, in whole but not in part, for cash within 90
days following the occurrence of such Special Event (the "90-Day Period") at
the Redemption Price, provided that if at the time there is available to the
Company the opportunity to eliminate, within the 90-Day Period, the Tax Event
by taking some ministerial action ("Ministerial Action"), such as filing a form
or making an election, or pursuing some other similar reasonable measure which
has no adverse effect on the Company, the Trust or the Holders of the Trust
Securities issued by the Trust, the Company shall pursue such Ministerial
Action in lieu of redemption, and, provided, further, that the Company shall
have no right to redeem the Junior Subordinated Debentures while the Trust is
pursuing any Ministerial Action to eliminate the Tax Event. The Redemption
Price shall be paid prior to 2:00 p.m., St. Louis, Missouri time, on the date
of such redemption or such earlier time as the Company determines, provided
that the Company shall deposit with the Trustee an amount sufficient to pay the
Redemption Price by 12:00 noon, St. Louis, Missouri time, on the date such
Redemption Price is to be paid.
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3.03 OPTIONAL REDEMPTION BY COMPANY.
(a) Except as otherwise may be specified in this Indenture,
the Company shall have the right to redeem the Junior Subordinated
Debentures, in whole or in part, from time to time, on or after
_____________, 2004, at the Redemption Price. Any redemption pursuant
to this Section 3.03 will be made upon not less than 30 days' nor more
than 60 days' notice to the Holders of the Junior Subordinated
Debentures, at the Redemption Price. If the Junior Subordinated
Debentures are only partially redeemed pursuant to this Section 3.03,
the Junior Subordinated Debentures 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 Junior Subordinated Debentures are
registered as a Global Subordinated Debenture, the Depositary shall
determine, in accordance with its procedures, the principal amount of
such Junior Subordinated Debentures held by each Holder of Junior
Subordinated Debentures to be redeemed. The Redemption Price shall be
paid prior to 2:00 p.m., St. Louis, Missouri 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 Redemption Price by 12:00 noon, St. Louis, Missouri time,
on the date such Redemption Price is to be paid.
(b) If a partial redemption of the Junior Subordinated
Debentures would result in the delisting of the Preferred Securities
issued by the Trust from the NASDAQ National Market or any national
securities exchange or other organization on which the Preferred
Securities may then be listed, if any, the Company shall not be
permitted to effect such partial redemption and may only redeem the
Junior Subordinated Debentures in whole or in part to such extent as
would not cause such delisting.
3.04 NOTICE OF REDEMPTION.
(a) In case the Company shall desire to exercise such right
to redeem all or, as the case may be, a portion of the Junior
Subordinated Debentures in accordance with the right reserved so to
do, the Company shall, or shall cause the Trustee to, give notice of
such redemption to Holders of the Junior Subordinated Debentures to be
redeemed by mailing, first class postage prepaid, a notice of such
redemption not less than 30 days and not more than 60 days before the
date fixed for redemption to such Holders at their last addresses as
they shall appear upon the Securities Register. Any notice that is
mailed in the manner herein provided shall be conclusively presumed to
have been duly given, whether or not the Registered Holder receives
the notice. In any case, failure duly to give such notice to the
Holder of any Junior Subordinated Debenture designated for redemption
in whole or in part, or any defect in the notice, shall not affect the
validity of the proceedings for the redemption of any other Junior
Subordinated Debentures. In the case of any redemption of Junior
Subordinated Debentures prior to the expiration of any restriction on
such redemption provided elsewhere in this Indenture, the Company
shall furnish the Trustee with an Officers' Certificate evidencing
compliance with any such restriction.
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Each such notice of redemption shall specify the date fixed
for redemption and the Redemption Price, and shall state that payment
of the Redemption Price of such Junior Subordinated Debentures to be
redeemed will be made at the office or agency of the Property Trustee
in Wilmington, Delaware upon presentation and surrender of such Junior
Subordinated Debentures, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, that from and
after said date interest will cease to accrue. If less than all the
Junior Subordinated Debentures are to be redeemed, the notice to the
Holders of Junior Subordinated Debentures to be redeemed in whole or
in part shall specify the particular Junior Subordinated Debentures to
be so redeemed. In case any Junior Subordinated Debenture is to be
redeemed in part only, the notice that relates to such Junior
Subordinated Debenture shall state the portion of the principal amount
thereof to be redeemed, and shall state that on and after the
redemption date, upon surrender of such Junior Subordinated Debenture,
a new Junior Subordinated Debenture or Junior Subordinated Debentures
in principal amount equal to the unredeemed portion thereof shall be
issued to the Holder.
(b) If less than all the Junior Subordinated Debentures are
to be redeemed, the Company shall give the Trustee at least 45 days'
notice in advance of the date fixed for redemption as to the aggregate
principal amount of Junior Subordinated Debentures to be redeemed, and
thereupon the Trustee shall select, by lot or in such other manner as
it shall deem appropriate and fair in its discretion and that may
provide for the selection of a portion or portions (equal to ten
dollars U.S. ($10) or any integral multiple thereof), the Junior
Subordinated Debentures to be redeemed and shall thereafter promptly
notify the Company in writing of the numbers of the Junior
Subordinated Debentures to be redeemed, in whole or in part.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its Chief Executive
Officer, its President or any Vice President, instruct the Trustee or
any paying agent to call all or any part of the Junior Subordinated
Debentures for redemption and to give notice of redemption in the
manner set forth in this Section, such notice to be in the name of the
Company or in the name of the Trustee or the paying agent, as the
Trustee or such paying agent may deem advisable. In any case in which
notice of redemption is to be given by the Trustee or any such paying
agent, the Company shall deliver or cause to be delivered to, or
permit to remain with, the Trustee or such paying agent, as the case
may be, such Securities Register, transfer books or other records, or
suitable copies or extracts therefrom, sufficient to enable the
Trustee or such paying agent to give any notice by mail that may be
required under the provisions of this Section.
3.05 PAYMENT UPON REDEMPTION.
(a) If the giving of notice of redemption shall have been
completed as above provided, the Junior Subordinated Debentures or
portions of Junior Subordinated Debentures to be redeemed specified in
such notice shall become due and payable on the date and at the
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place stated in such notice at the Redemption Price (which includes
interest accrued to the date fixed for redemption) and interest on
such Junior Subordinated Debentures or portions of Junior Subordinated
Debentures shall cease to accrue on and after the date fixed for
redemption, unless the Company shall default in the payment of such
Redemption Price with respect to any such Junior Subordinated
Debentures or portions thereof. On presentation and surrender of such
Junior Subordinated Debentures on or after the date fixed for
redemption at the place of payment specified in the notice, such
Junior Subordinated Debentures shall be paid and redeemed at the
Redemption Price (which includes the interest accrued thereon to the
date fixed for redemption) (but if the date fixed for redemption is an
Interest Payment Date, the interest installment payable on such date
shall be payable to the Registered Holder at the close of business on
the applicable record date pursuant to Section 2.05(a)).
(b) Upon presentation of any Junior Subordinated Debenture
that is to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the Junior
Subordinated Debenture is presented shall deliver to the Holder
thereof, at the expense of the Company, a new Junior Subordinated
Debenture or Junior Subordinated Debentures of authorized
denominations in principal amount equal to the unredeemed portion of
the Junior Subordinated Debenture so presented.
3.06 NO SINKING FUND. The Junior Subordinated Debentures are not
entitled to the benefit of any sinking fund.
ARTICLE IV
EXTENSION OF INTEREST PAYMENT PERIOD
4.01 EXTENSION OF INTEREST PAYMENT PERIOD. So long as no Event of
Default has occurred and is continuing, the Company shall have the right, at
any time and from time to time during the term of the Junior Subordinated
Debentures, to defer payments of interest by extending the interest payment
period of such Junior Subordinated Debentures for a period not exceeding 20
consecutive quarters (the "Extended Interest Payment Period"), during which
Extended Interest Payment Period no interest shall be due and payable; provided
that no Extended Interest Payment Period may extend beyond the Maturity Date.
To the extent permitted by applicable law, interest, the payment of which has
been deferred because of the extension of the interest payment period pursuant
to this Section 4.01, will bear interest thereon at the Coupon Rate compounded
quarterly for each quarter of the Extended Interest Payment Period ("Compounded
Interest"). At the end of the Extended Interest Payment Period, the Company
shall pay all interest accrued and unpaid on the Junior Subordinated
Debentures, including any Additional Sums and Compounded Interest (together,
"Deferred Interest") that shall be payable to the Holders of the Junior
Subordinated Debentures in whose names the Junior Subordinated Debentures are
registered in the Securities Register on the record date for the Interest
Payment Date coinciding with the end of the Extended Interest Payment Period.
Before the termination of any Extended Interest Payment Period, the Company may
further extend such period, provided that such period together with all such
further extensions thereof shall not exceed 20 consecutive quarters, or extend
beyond the Maturity Date.
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Upon the termination of any Extended Interest Payment Period and upon the
payment of all Deferred Interest then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements. No
interest shall be due and payable during an Extended Interest Payment Period,
except at the end thereof, but the Company may prepay at any time all or any
portion of the interest accrued during an Extended Interest Payment Period.
4.02 NOTICE OF EXTENSION.
(a) If the Property Trustee is the only Registered Holder of
the Junior Subordinated Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give written
notice to the Administrative Trustees, the Property Trustee and the
Trustee of its selection of such Extended Interest Payment Period one
Business Day before the earlier of (i) the next succeeding date on
which Distributions are payable, or (ii) the date the Trust is
required to give notice of the record date, or the date such
Distributions are payable, to the Preferred Securities holders or to
the NASDAQ National Market or other applicable self-regulatory
organization, if any, but in any event at least one Business Day
before such record date.
(b) If the Property Trustee is not the only Holder of the
Junior Subordinated Debentures at the time the Company selects an
Extended Interest Payment Period, the Company shall give the Holders
of the Junior Subordinated Debentures and the Trustee written notice
of its selection of such Extended Interest Payment Period at least one
Business Day before the earlier of (i) the next succeeding Interest
Payment Date, or (ii) the date the Company is required to give notice
of the record or payment date of such interest payment to the Holders
of the Junior Subordinated Debentures or to the NASDAQ National Market
or other applicable self-regulatory organization, if any.
(c) The quarter in which any notice is given pursuant to
paragraph (a) or paragraph (b) of this Section 4.02 shall be counted
as one of the 20 quarters permitted in the maximum Extended Interest
Payment Period permitted under Section 4.01.
4.03 LIMITATION OF TRANSACTIONS DURING EXTENSION. If (a) the
Company shall exercise its right to defer payment of interest as provided in
Section 4.01; or (b) there shall have occurred any Event of Default, then the
Company shall be subject to the restrictions on payments set forth under
Section 5.06.
ARTICLE V
PARTICULAR COVENANTS OF THE COMPANY
5.01 PAYMENT OF PRINCIPAL AND INTEREST. The Company will duly and
punctually pay or cause to be paid the principal of and interest on the Junior
Subordinated Debentures at the time and place and in the manner provided herein
and established with respect to such Junior Subordinated Debentures.
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5.02 MAINTENANCE OF AGENCY. So long as any Junior Subordinated
Debentures remain Outstanding, the Company agrees to maintain an office or
agency in Wilmington, Delaware, or at such other location or locations as may
be designated as provided in this Section 5.02, where (a) Junior Subordinated
Debentures may be presented for payment, (b) Junior Subordinated Debentures may
be presented as hereinabove authorized for registration of transfer and
exchange, and (c) notices and demands to or upon the Company in respect of the
Junior Subordinated Debentures and this Indenture may be given or served, such
designation to continue with respect to such office or agency until the Company
shall, by written notice signed by its Chief Executive Officer, its President
or a Vice President and delivered to the Trustee, designate some other office
or agency for such purposes or any of them. If at any time the Company shall
fail to maintain any such required office or agency or shall fail to furnish
the Trustee with the address thereof, such presentations, notices and demands
may be made or served at the Corporate Trust Office of the Trustee, and the
Company hereby appoints the Trustee as its agent to receive all such
presentations, notices and demands.
5.03 PAYING AGENTS.
(a) If the Company shall appoint one or more paying agents
for the Junior Subordinated Debentures, other than the Trustee, the
Company will cause each such paying agent to execute and deliver to
the Trustee an instrument in which such agent shall agree with the
Trustee, subject to the provisions of this Section:
(i) that it will hold all sums held by it as such
agent for the payment of the principal of or interest on the
Junior Subordinated Debentures (whether such sums have been
paid to it by the Company or by any other obligor) in trust
for the benefit of the Persons entitled thereto;
(ii) that it will give the Trustee notice of any
failure by the Company (or by any other obligor) to make any
payment of the principal of or interest on the Junior
Subordinated Debentures when the same shall be due and
payable;
(iii) that it will, at any time during the
continuance of any failure referred to in the preceding
paragraph (a)(ii) above, upon the written request of the
Trustee, forthwith pay to the Trustee all sums so held in
trust by such paying agent; and
(iv) that it will perform all other duties of paying
agent as set forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to the Junior Subordinated Debentures, it will on or before
each due date of the principal of or interest on Junior Subordinated
Debentures, set aside, segregate and hold in trust for the benefit of
the Persons entitled thereto a sum sufficient to pay such principal or
interest so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and
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will promptly notify the Trustee of such action, or any failure (by it
or any other obligor) to take such action. Whenever the Company shall
have one or more paying agents for the Junior Subordinated Debentures,
it will, prior to each due date of the principal of or interest on the
Junior Subordinated Debentures, deposit with the paying agent a sum
sufficient to pay the principal or interest so becoming due, such sum
to be held in trust for the benefit of the Persons entitled to such
principal or interest, and (unless such paying agent is the Trustee)
the Company will promptly notify the Trustee of this action or failure
so to act.
(c) Notwithstanding anything in this Section to the contrary,
(i) the agreement to hold sums in trust as provided in this Section is
subject to the provisions of Section 13.05, and (ii) the Company may
at any time, for the purpose of obtaining the satisfaction and
discharge of this Indenture or for any other purpose, pay, or direct
any paying agent to pay, to the Trustee all sums held in trust by the
Company or such paying agent, such sums to be held by the Trustee upon
the same terms and conditions as those upon which such sums were held
by the Company or such paying agent; and, upon such payment by any
paying agent to the Trustee, such paying agent shall be released from
all further liability with respect to such money.
5.04 APPOINTMENT TO FILL VACANCY IN OFFICE OF TRUSTEE. The
Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 9.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
5.05 COMPLIANCE WITH CONSOLIDATION PROVISIONS. The Company will not,
while any of the Junior Subordinated Debentures remain Outstanding, consolidate
with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other company unless the provisions of
Article XII hereof are complied with.
5.06 RESTRICTIONS ON CERTAIN PAYMENTS. If at any time (a) there shall
have occurred any event of which the Company has actual knowledge that (i) with
the giving of notice or the lapse of time, or both, would constitute an Event
of Default and (ii) in respect to which the Company shall not have taken
reasonable steps to cure, or (b) the Company shall have given notice of its
election of an Extended Interest Payment Period as provided herein with respect
to the Junior Subordinated Debentures and shall not have rescinded such notice,
or such Extended Interest Payment Period, or any extension thereof, shall be
continuing; or (c) while the Junior Subordinated Debentures are held by the
Trust, the Company shall be in default with respect to its payment of any
obligation under the Preferred Securities Guarantee, then the Company 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 or (ii) make any payment of principal, interest or premium, if
any, on or repay, repurchase or redeem any debt securities of the Company
(including the Junior Subordinated Debentures) that rank pari passu with or
junior in interest to the Junior Subordinated Debentures or make any guarantee
payments with respect to any guarantee by the Company of the debt securities of
any Subsidiary of the Company if such guarantee ranks pari passu or junior in
interest to the Junior Subordinated Debentures (other than (A) dividends or
distributions
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in common stock, (B) any declaration of a dividend in connection with the
implementation of a shareholders' 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 Preferred Securities Guarantee and (D)
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).
5.07 COVENANTS AS TO THE TRUST. For so long as the Trust Securities of
the Trust remain outstanding, the Company will (a) maintain 100% direct or
indirect ownership of the Common Securities of the Trust; provided, however,
that any permitted successor of the Company under this Indenture may succeed to
the Company's ownership of the Common Securities, (b) use its reasonable
efforts to cause the Trust (i) to remain a business trust, except in connection
with a distribution of Junior Subordinated Debentures, the redemption of all of
the Trust Securities of the Trust or certain mergers, consolidations or
amalgamations, each as permitted by the Trust Agreement, and (ii) to otherwise
continue not to be treated as an association taxable as a corporation or
partnership for United States federal income tax purposes and (c) to use its
reasonable efforts to cause each Holder of Trust Securities to be treated as
owning an individual undivided beneficial interest in the Junior Subordinated
Debentures.
If the Junior Subordinated Debentures are to be issued as a Global
Subordinated Debenture in connection with the distribution of the Junior
Subordinated Debentures to the holders of the Preferred Securities issued by
the Trust upon a Dissolution Event, the Company will use its best efforts to
list such Junior Subordinated Debentures on the NASDAQ National Market or on
such other exchange as the Preferred Securities may then be listed.
ARTICLE VI
SECURITYHOLDERS' LISTS AND REPORTS
BY THE COMPANY AND THE TRUSTEE
6.01 COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee (a) on each regular record date (as defined in Section 2.05(a)) a list,
in such form as the Trustee may reasonably require, of the names and addresses
of the Holders as of such regular record date, provided that the Company shall
not be obligated to furnish or cause to furnish such list at any time that the
list shall not differ in any respect from the most recent list furnished to the
Trustee by the Company and (b) at such other times as the Trustee may request
in writing within 30 days after the receipt by the Company of any such request,
a list of similar form and content as of a date not more than 15 days prior to
the time such list is furnished; provided, however, that, in either case, no
such list need be furnished if the Trustee shall be the Securities Registrar.
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6.02 PRESERVATION OF INFORMATION; COMMUNICATIONS WITH
SECURITYHOLDERS.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, all information as to the names and addresses
of the Holders contained in the most recent list furnished to it as
provided in Section 6.01 and as to the names and addresses of Holders
received by the Trustee in its capacity as Securities Registrar (if
acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 6.01 upon receipt of a new list so furnished.
(c) Securityholders may communicate as provided in Section
312(b) of the Trust Indenture Act with other Securityholders with
respect to their rights under this Indenture or under the Junior
Subordinated Debentures.
6.03 REPORTS BY THE COMPANY.
(a) The Company covenants and agrees to file with the
Trustee, within 15 days after the Company is required to file the same
with the Commission, copies of the annual reports and of the
information, documents and other reports (or copies of such portions
of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Company may be required to
file with the Commission pursuant to Section 13 or Section 15(d) of
the Exchange Act; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections,
then to file with the Trustee and the Commission, in accordance with
the rules and regulations prescribed from time to time by the
Commission, such of the supplementary and periodic information,
documents and reports that may be required pursuant to any applicable
rules and regulations of the Commission.
(b) The Company covenants and agrees to file with the Trustee
and the Commission, in accordance with the rules and regulations
prescribed from time to time by the Commission, such additional
information, documents and reports with respect to compliance by the
Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable overnight delivery service
that provides for evidence of receipt, to the Securityholders, as
their names and addresses appear upon the Securities Register, within
30 days after the filing thereof with the Trustee, such summaries of
any information, documents and reports required to be filed by the
Company pursuant to subsections (a) and (b) of this Section as may be
required by rules and regulations prescribed from time to time by the
Commission.
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6.04 REPORTS BY THE TRUSTEE.
(a) Beginning July 31, 2000, on or before July 31 in each
year in which any of the Junior Subordinated Debentures are
Outstanding, the Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear
upon the Securities Register, a brief report dated as of the preceding
December 31, if and to the extent required under Section 313(a) of the
Trust Indenture Act.
(b) The Trustee shall comply with Section 313(b) and 313(c)
of the Trust Indenture Act.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the
Company, and also with the Commission.
ARTICLE VII
REMEDIES OF THE TRUSTEE AND
SECURITYHOLDERS ON EVENT OF DEFAULT
7.01 EVENTS OF DEFAULT.
(a) Whenever used herein, "Event of Default" means any one or
more of the following events that has occurred and is continuing:
(i) the Company defaults in the payment of any
installment of interest upon any of the Junior Subordinated
Debentures, as and when the same shall become due and
payable, and continuance of such default for a period of 30
days; provided, however, that a valid extension of an
interest payment period by the Company in accordance with the
terms of this Indenture shall not constitute a default in the
payment of interest for this purpose;
(ii) the Company defaults in the payment of the
principal of any of the Junior Subordinated Debentures as and
when the same shall become due and payable whether at
maturity, upon redemption, by declaration or otherwise;
(iii) the Company fails to observe or perform any
other of its covenants or agreements hereunder with respect
to the Junior Subordinated Debentures for a period of 90 days
after the date on which written notice of such failure,
requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been
given to the Company by the Trustee, by registered or
certified mail, or to the Company and the Trustee by the
Holders of at least 25% in principal amount of the Junior
Subordinated Debentures at the time Outstanding;
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(iv) the Company pursuant to or within the meaning
of any Bankruptcy Law (A) commences a voluntary case, (B)
consents to the entry of an order for relief against it in an
involuntary case, (C) consents to the appointment of a
custodian of it or for all or substantially all of its
property or (D) makes a general assignment for the benefit of
its creditors;
(v) a court of competent jurisdiction enters an
order under any Bankruptcy Law that (A) is for relief against
the Company in an involuntary case, (B) appoints a custodian
of the Company for all or substantially all of its property,
or (C) orders the liquidation of the Company, and the order
or decree remains unstayed and in effect for 90 days; or
(vi) in the event Junior Subordinated Debentures are
issued to the Trust or a trustee of the Trust in connection
with the issuance of Trust Securities by the Trust, the Trust
shall have voluntarily or involuntarily dissolved, wound up
its business or otherwise terminated its existence, except in
connection with (A) the distribution of Junior Subordinated
Debentures to holders of Trust Securities in liquidation of
their interests in the Trust, (B) the redemption of all of
the outstanding Trust Securities of the Trust or (C) certain
mergers, consolidations or amalgamations, each as permitted
by the Trust Agreement.
(b) In each and every such case, unless the principal of all
the Junior Subordinated Debentures shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Junior Subordinated Debentures then
Outstanding hereunder, by notice in writing to the Company (and to the
Trustee if given by such Securityholders) may declare the principal of
all the Junior Subordinated Debentures to be due and payable
immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, notwithstanding anything
contained in this Indenture or in the Junior Subordinated Debentures
to the contrary.
(c) At any time after the principal of the Junior
Subordinated Debentures shall have been so declared due and payable,
and before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
Holders of a majority in aggregate principal amount of the Junior
Subordinated Debentures then Outstanding, by written notice to the
Company and the Trustee, may rescind and annul such declaration and
its consequences if: (i) the Company has paid or deposited with the
Trustee a sum sufficient to pay all matured installments of interest
upon all the Junior Subordinated Debentures and the principal of any
and all Junior Subordinated Debentures that shall have become due
otherwise than by acceleration (with interest upon such principal and,
to the extent that such payment is enforceable under applicable law,
upon overdue installments of interest, at the rate per annum expressed
in the Junior Subordinated Debentures to the date of such payment or
deposit) and the amount payable to the Trustee under Section 9.06, and
(ii) any and all Events of Default under this Indenture, other than
the nonpayment of
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principal on Junior Subordinated Debentures that shall not have become
due by their terms, shall have been remedied or waived as provided in
Section 7.06. Should the Holders fail to annul such declaration and
waive such default, then the holders of a majority in aggregate
Liquidation Amount of the Preferred Securities shall have such right.
No such rescission and annulment shall extend to or shall
affect any subsequent default or impair any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Junior Subordinated Debentures under this
Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any other
reason or shall have been determined adversely to the Trustee, then
and in every such case the Company and the Trustee shall be restored
respectively to their former positions and rights hereunder, and all
rights, remedies and powers of the Company and the Trustee shall
continue as though no such proceedings had been taken.
7.02 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE.
(a) The Company covenants that (i) in case it shall default
in the payment of any installment of interest on any of the Junior
Subordinated Debentures as and when the same shall have become due and
payable, and such default shall have continued for a period of 90
Business Days, or (ii) in case it shall default in the payment of the
principal of any of the Junior Subordinated Debentures when the same
shall have become due and payable, whether upon maturity of the Junior
Subordinated Debentures or upon redemption or upon declaration or
otherwise, then, upon demand of the Trustee, the Company will pay to
the Trustee, for the benefit of the Holders of the Junior Subordinated
Debentures, the whole amount that then shall have become due and
payable on all such Junior Subordinated Debentures for principal or
interest, or both, as the case may be, with interest upon the overdue
principal and (to the extent that payment of such interest is
enforceable under applicable law and, if the Junior Subordinated
Debentures are held by the Trust or a trustee of the Trust, without
duplication of any other amounts paid by the Trust or trustee in
respect thereof) upon overdue installments of interest at the rate per
annum expressed in the Junior Subordinated Debentures; and, in
addition thereto, such further amount as shall be sufficient to cover
the costs and expenses of collection, and the amount payable to the
Trustee under Section 9.06.
(b) If the Company shall fail to pay such amounts forthwith
upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any action
or proceedings at law or in equity for the collection of the sums so
due and unpaid, and may prosecute any such action or proceeding to
judgment or final decree, and may enforce any such judgment or final
decree against the Company or other obligor upon the Junior
Subordinated Debentures and collect the moneys adjudged or
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decreed to be payable in the manner provided by law out of the
property of the Company or other obligor upon the Junior Subordinated
Debentures, wherever situated.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement, composition or
judicial proceedings affecting the Company or the creditors or
property of either, the Trustee shall have power to intervene in such
proceedings and take any action therein that may be permitted by the
court and shall (except as may be otherwise provided by law) be
entitled to file such proofs of claim and other papers and documents
as may be necessary or advisable in order to have the claims of the
Trustee and of the Holders of Junior Subordinated Debentures allowed
for the entire amount due and payable by the Company under this
Indenture at the date of institution of such proceedings and for any
additional amount that may become due and payable by the Company after
such date, and to collect and receive any moneys or other property
payable or deliverable on any such claim, and to distribute the same
after the deduction of the amount payable to the Trustee under Section
9.06; and any receiver, assignee or trustee in bankruptcy or
reorganization is hereby authorized by each of the Holders to make
such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to such
Securityholders, to pay to the Trustee any amount due it under Section
9.06.
(d) All rights of action and of asserting claims under this
Indenture may be enforced by the Trustee without the possession of any
of the Junior Subordinated Debentures, or the production thereof at
any trial or other proceeding relative thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall,
after provision for payment to the Trustee of any amounts due under
Section 9.06, be for the ratable benefit of the Holders of the Junior
Subordinated Debentures.
In case of an Event of Default hereunder, the Trustee may in
its discretion proceed to protect and enforce the rights vested in it
by this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any of such
rights, either at law or in equity or in bankruptcy or otherwise,
whether for the specific enforcement of any covenant or agreement
contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable
right vested in the Trustee by this Indenture or by law.
Nothing contained herein shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Junior Subordinated Debentures or the rights
of any Holder thereof or to authorize the Trustee to vote in respect
of the claim of any Securityholder in any such proceeding.
7.03 APPLICATION OF MONEYS COLLECTED. Any moneys collected by the
Trustee pursuant to this Article with respect to the Junior Subordinated
Debentures shall be applied
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in the following order, at the date or dates fixed by the Trustee and, in case
of the distribution of such moneys on account of principal or interest, upon
presentation of the Junior Subordinated Debentures, and notation thereon the
payment, if only partially paid, and upon surrender thereof if fully paid:
FIRST, to the payment of costs and expenses of collection and
of all amounts payable to the Trustee under Section 9.06;
SECOND, to the payment of all Senior and Subordinated Debt of
the Company if and to the extent required by Article XVI; and
THIRD, to the payment of the amounts then due and unpaid upon
Junior Subordinated Debentures for principal and interest, in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Junior Subordinated Debentures for
principal and interest, respectively.
7.04 LIMITATION ON SUITS. No Holder shall have any right by virtue of
or by availing any provision of this Indenture to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Indenture
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless (a) such Holder previously shall have given to the Trustee
written notice of an Event of Default and of the continuance thereof; (b) the
Holders of not less than 25% in aggregate principal amount of the Junior
Subordinated Debentures then Outstanding shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
trustee hereunder; (c) such Holder or Holders shall have offered to the Trustee
such reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby; and (d) the Trustee for 60 days
after its receipt of such notice, request and offer of indemnity shall have
failed to institute any such action, suit or proceeding; and (e) during such
60-day period, the Holders of a majority in principal amount of the Junior
Subordinated Debentures do not give the Trustee a direction inconsistent with
the request.
Notwithstanding any other provisions of this Indenture to the
contrary, the right of any Holder to receive payment of the principal of and
interest on the Junior Subordinated Debentures on or after the respective due
dates (or in the case of redemption, on the redemption date), or to institute
suit for the enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the consent of
such Holder; and by accepting a Junior Subordinated Debenture hereunder it is
expressly understood, intended and covenanted by the Holder thereof with every
other such Holder and the Trustee, that no one or more Holders shall have any
right in any manner whatsoever by virtue of or by availing any provision of
this Indenture to affect, disturb or prejudice the rights of any other Holders,
or to obtain or seek to obtain priority over or preference to any such other
Holders, or to enforce any right under this Indenture, except in the manner
herein provided and for the equal, ratable and common benefit of all Holders of
Junior Subordinated Debentures. For the protection and enforcement of the
provisions of this Section, each
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and every Securityholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
7.05 RIGHTS AND REMEDIES CUMULATIVE; DELAY OR OMISSION NOT
WAIVER.
(a) Except as otherwise provided in Section 7.02, all powers
and remedies given by this Article to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed
cumulative and not exclusive of any other powers and remedies
available to the Trustee or the Holders of the Junior Subordinated
Debentures, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in
this Indenture or otherwise established with respect to such Junior
Subordinated Debentures.
(b) No delay or omission of the Trustee or of any Holder of
any of the Junior Subordinated Debentures to exercise any right or
power accruing upon any Event of Default occurring and continuing as
aforesaid shall impair any such right or power, or shall be construed
to be a waiver of any such default or on acquiescence therein; and,
subject to the provisions of Section 7.04, every power and remedy
given by this Article or by law to the Trustee or the Securityholders
may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Securityholders.
7.06 CONTROL BY SECURITYHOLDERS. The Holders of a majority in
aggregate principal amount of the Junior Subordinated Debentures at the time
Outstanding, determined in accordance with Section 10.04, shall have the right
to direct the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred on
the Trustee; provided, however, that such direction shall not be in conflict
with any rule of law or with this Indenture. Subject to the provisions of
Section 9.01, the Trustee shall have the right to decline to follow any such
direction if the Trustee in good faith shall, by a Responsible Officer or
Officers of the Trustee, determine that the proceeding so directed would
involve the Trustee in personal liability. The Holders of a majority in
aggregate principal amount of the Junior Subordinated Debentures at the time
Outstanding affected thereby, determined in accordance with Section 10.04, may
on behalf of the Holders of all of the Junior Subordinated Debentures waive any
past default in the performance of any of the covenants contained herein and
its consequences, except (a) a default in the payment of the principal of or
interest on any of the Junior Subordinated Debentures as and when the same
shall become due by its terms otherwise than by acceleration (unless such
default has been cured and a sum sufficient to pay all matured installments of
interest and principal has been deposited with the Trustee in accordance with
Section 7.01(c)), (b) a default in the covenants contained in Section 5.06 or
(c) in respect of a covenant or provision hereof which under Article XI cannot
be modified or amended without the consent of the Holder of each Outstanding
Junior Subordinated Debenture affected; provided, however, that if the Junior
Subordinated Debentures are held by the Trust or a Trustee of the Trust, such
waiver or modification to such waiver shall not be effective until the Holders
of a majority in Liquidation Amount of Trust
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Securities of the Trust shall have consented to such waiver or modification to
such waiver; provided further, that if the consent of the Holder of each
Outstanding Junior Subordinated Debenture is required, such waiver shall not be
effective until each Holder of the Trust Securities of the Trust shall have
consented to such waiver. Upon any such waiver, the default covered thereby
shall be deemed to be cured for all purposes of this Indenture and the Company,
the Trustee and the Holders of the Junior Subordinated Debentures shall be
restored to their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or impair any right
consequent thereon.
7.07 UNDERTAKING TO PAY COSTS. All parties to this Indenture agree,
and each Holder of any Junior Subordinated Debentures by such Holder's
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken
or omitted by it as Trustee, the filing by any party litigant in such suit of
an undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding more than 10% in aggregate principal amount of the
Outstanding Junior Subordinated Debentures, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of or
interest on the Junior Subordinated Debentures on or after the due dates
thereof.
ARTICLE VIII
FORM OF JUNIOR SUBORDINATED DEBENTURE AND ORIGINAL ISSUE
8.01 FORM OF JUNIOR SUBORDINATED DEBENTURE. The Junior Subordinated
Debenture and the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the forms contained as Exhibit A to this
Indenture, attached hereto and incorporated herein by reference.
8.02 ORIGINAL ISSUE OF JUNIOR SUBORDINATED DEBENTURES. Junior
Subordinated Debentures in the aggregate principal amount of $__________ may,
upon execution of this Indenture, be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate
and deliver the Junior Subordinated Debentures to or upon the written order of
the Company, signed by its Chairman, its Vice Chairman, its Chief Executive
Officer, its President or any Vice President, without any further action by the
Company.
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ARTICLE IX
CONCERNING THE TRUSTEE
9.01 CERTAIN DUTIES AND RESPONSIBILITIES OF THE TRUSTEE.
(a) The Trustee, prior to the occurrence of an Event of
Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform with respect to the Junior
Subordinated Debentures such duties and only such duties as are
specifically set forth in this Indenture, and no implied covenants
shall be read into this Indenture against the Trustee. In case an
Event of Default has occurred (that has not been cured or waived), the
Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their
exercise as a prudent person would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of an Event of Default
and after the curing or waiving of all such Events of Default
that may have occurred:
(A) the duties and obligations of the
Trustee shall be determined solely by the express
provisions of this Indenture, and the Trustee shall
not be liable except for the performance of such
duties and obligations as are specifically set forth
in this Indenture, and no implied covenants or
obligations shall be read into this Indenture
against the Trustee; and
(B) in the absence of bad faith on the part
of the Trustee, the Trustee may conclusively rely,
as to the truth of the statements and the
correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the
Trustee and conforming to the requirements of this
Indenture; but in the case of any such certificates
or opinions that by any provision hereof are
specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not they
conform to the requirement of this Indenture;
(ii) the Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer or
Responsible Officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Trustee shall not be liable with respect
to any action taken or omitted to be taken by it in good
faith in accordance with the direction of the Holders of not
less than a majority in principal amount of the Junior
Subordinated Debentures
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at the time Outstanding relating to the time, method and
place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred
upon the Trustee under this Indenture; and
(iv) none of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own
funds or otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not
reasonably assured to it.
(c) Within 90 days after actual knowledge by a Responsible
Officer of the Trustee of the occurrence of any default hereunder with
respect to the Securities, the Trustee shall transmit by mail to all
Holders of Securities, as their names and addresses appear in the
Securities Register, notice of such default, unless such default shall
have been cured or waived; provided, however, that, except in the case
of a default in the payment of the principal of (or premium, if any)
or interest (including any Additional Interest) on any Security, the
Trustee shall be protected in withholding such notice if and so long
as the board of directors, the executive committee or a trust
committee of directors and/or Responsible Officers of the Trustee in
good faith determines that the withholding of such notice is in the
interests of the Holders of Securities. For the purpose of this
Section 9.01, the term "default" means any event that is, or after
notice or lapse of time or both would become, an Event of Default with
respect to the Securities.
9.02 CERTAIN RIGHTS OF TRUSTEE. Except as otherwise provided in
Section 9.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order,
approval, bond, security or other paper or document believed by it to
be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board Resolution
or an instrument signed in the name of the Company by the Chief
Executive Officer, the President or any Vice President and by the
Secretary or an Assistant Secretary or the Chief Accounting Officer
thereof (unless other evidence in respect thereof is specifically
prescribed herein);
(c) the Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken
or suffered or omitted hereunder in good faith and in reliance
thereon;
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(d) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request,
order or direction of any of the Securityholders, pursuant to the
provisions of this Indenture, unless such Securityholders shall have
offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities that may be incurred therein or
thereby; nothing contained herein shall, however, relieve the Trustee
of the obligation, upon the occurrence of an Event of Default (that
has not been cured or waived) to exercise such of the rights and
powers vested in it by this Indenture, and to use the same degree of
care and skill in their exercise as a prudent person would exercise or
use under the circumstances in the conduct of his own affairs;
(e) the Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon
it by this Indenture;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other papers or documents, unless
requested in writing so to do by the Holders of not less than a
majority in principal amount of the Outstanding Junior Subordinated
Debentures (determined as provided in Section 10.04); provided,
however, that if the payment within a reasonable time to the Trustee
of the costs, expenses or liabilities likely to be incurred by it in
the making of such investigation is, in the opinion of the Trustee,
not reasonably assured to the Trustee by the security afforded to it
by the terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a condition
to so proceeding. The reasonable expense of every such examination
shall be paid by the Company or, if paid by the Trustee, shall be
repaid by the Company upon demand; and
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
9.03 TRUSTEE NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF THE
JUNIOR SUBORDINATED DEBENTURES.
(a) The recitals contained herein and in the Junior
Subordinated Debentures shall be taken as the statements of the
Company and the Trustee assumes no responsibility for the correctness
of the same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Junior Subordinated
Debentures.
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(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Junior Subordinated
Debentures or of the proceeds of such Junior Subordinated Debentures,
or for the use or application of any moneys paid over by the Trustee
in accordance with any provision of this Indenture, or for the use or
application of any moneys received by any paying agent other than the
Trustee.
9.04 MAY HOLD JUNIOR SUBORDINATED DEBENTURES. The Trustee or any
paying agent or Securities Registrar, in its individual or any other capacity,
may become the owner or pledgee of Junior Subordinated Debentures with the same
rights it would have if it were not Trustee, paying agent or Securities
Registrar.
9.05 MONEYS HELD IN TRUST. Subject to the provisions of Section 13.05,
all moneys received by the Trustee shall, until used or applied as herein
provided, be held in trust for the purposes for which they were received, but
need not be segregated from other funds except to the extent required by law.
The Trustee shall be under no liability for interest on any moneys received by
it hereunder except such as it may agree with the Company to pay thereon.
9.06 COMPENSATION AND REIMBURSEMENT.
(a) The Company covenants and agrees to pay to the Trustee,
and the Trustee shall be entitled to, such reasonable compensation
(which shall not be limited by any provision of law in regard to the
compensation of a trustee of an express trust), as the Company and the
Trustee may from time to time agree in writing, for all services
rendered by it in the execution of the trusts hereby created and in
the exercise and performance of any of the powers and duties hereunder
of the Trustee, and, except as otherwise expressly provided herein,
the Company will pay or reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by
the Trustee in accordance with any of the provisions of this Indenture
(including the reasonable compensation and the expenses and
disbursements of its counsel and of all Persons not regularly in its
employ) except any such expense, disbursement or advance as may arise
from its negligence or bad faith. The Company also covenants to
indemnify the Trustee (and its officers, agents, directors and
employees) for, and to hold it harmless against, any loss, liability
or expense incurred without negligence or bad faith on the part of the
Trustee and arising out of or in connection with the acceptance or
administration of this trust, including the costs and expenses of
defending itself against any claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness shall
be secured by a lien prior to that of the Junior Subordinated
Debentures upon all property and funds held or collected by the
Trustee as such, except funds held in trust for the benefit of the
Holders of the Junior Subordinated Debentures.
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(c) When the Trustee incurs expenses or renders services
after an Event of Default specified in Section 7.01(iv), (v) or (vi)
occurs, the expenses and the compensation for the services are
intended to constitute expenses of administration under the Bankruptcy
Reform Act of 1978 or any successor statute.
9.07 RELIANCE ON OFFICERS' CERTIFICATE. Except as otherwise provided
in Section 9.01, whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or suffering or omitting to take any
action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith
on the part of the Trustee, be deemed to be conclusively proved and established
by an Officers' Certificate delivered to the Trustee and such certificate, in
the absence of negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted to be
taken by it under the provisions of this Indenture upon the faith thereof.
9.08 DISQUALIFICATION; CONFLICTING INTERESTS. If the Trustee has or
shall acquire any "conflicting interest" within the meaning of Section 310(b)
of the Trust Indenture Act, the Trustee and the Company shall in all respects
comply with the provisions of Section 310(b) of the Trust Indenture Act.
9.09 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all times
be a Trustee with respect to the Junior Subordinated Debentures issued
hereunder which shall at all times be a corporation organized and doing
business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia, or a corporation or other
Person permitted to act as trustee by the Commission, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal,
state, territorial, or District of Columbia authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. No Affiliate of the Company may serve
as Trustee. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 9.10.
9.10 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR.
(a) The Trustee, or any successor hereafter appointed, may at
any time resign by giving written notice thereof to the Company and by
transmitting notice of resignation by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear
upon the Securities Register. Upon receiving such notice of
resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of
Directors, one copy of which instrument shall be delivered to the
resigning
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Trustee and one copy to the successor trustee. If no successor trustee
shall have been so appointed and have accepted appointment within 30
days after the mailing of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee, or any Securityholder who has been
a bona fide Holder of Junior Subordinated Debentures for at least six
months may, subject to the provisions of Section 7.07, on behalf of
such Securityholder and all other Holders, petition any such court for
the appointment of a successor trustee. Such court may thereupon,
after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any one of the following shall occur:
(i) the Trustee shall fail to comply with the
provisions of Section 9.08 after written request therefor by
the Company or by any Securityholder who has been a bona fide
Holder of Junior Subordinated Debentures for at least six
months; or
(ii) the Trustee shall cease to be eligible in
accordance with the provisions of Section 9.09 and shall fail
to resign after written request therefor by the Company or by
any such Securityholder; or
(iii) the Trustee shall become incapable of acting,
or shall be adjudged a bankrupt or insolvent, or commence a
voluntary bankruptcy proceeding, or a receiver of the Trustee
or of its property shall be appointed or consented to, or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, the
Company may remove the Trustee and appoint a successor
trustee by written instrument, in duplicate, executed by
order of the Board of Directors, one copy of which instrument
shall be delivered to the Trustee so removed and one copy to
the successor trustee, or, subject to the provisions of
Section 7.07, unless the Trustee's duty to resign is stayed
as provided herein, any Securityholder who has been a bona
fide Holder of Junior Subordinated Debentures for at least
six months may, on behalf of that Holder and all other
Holders, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any,
as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount
of the Junior Subordinated Debentures at the time Outstanding may at
any time remove the Trustee by so notifying the Trustee and the
Company and may appoint a successor Trustee with the consent of the
Company.
(d) Any resignation or removal of the Trustee and appointment
of a successor trustee pursuant to any of the provisions of this
Section shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 9.11.
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9.11 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor
trustee, every such successor trustee so appointed shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties of the
retiring Trustee; but, on the request of the Company or the successor
trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such successor
trustee all the rights, powers, and trusts of the retiring Trustee and
shall duly assign, transfer and deliver to such successor trustee all
property and money held by such retiring Trustee hereunder.
(b) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor trustee all such rights,
powers and trusts referred to in paragraph (a) of this Section.
(c) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be
qualified and eligible under this Article.
(d) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of the
succession of such trustee hereunder by mail, first class postage
prepaid, to the Securityholders, as their names and addresses appear
upon the Securities Register. If the Company fails to transmit such
notice within ten days after acceptance of appointment by the
successor trustee, the successor trustee shall cause such notice to be
transmitted at the expense of the Company.
9.12 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to the corporate trust business of the Trustee,
shall be the successor of the Trustee hereunder, provided that such corporation
shall be qualified and eligible under the provisions of this Article IX,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. In
case any Junior Subordinated Debentures shall have been authenticated, but not
delivered, by the Trustee then in office, any successor by merger, conversion
or consolidation to such authenticating Trustee may adopt such authentication
and deliver the Junior Subordinated Debentures so authenticated with the same
effect as if such successor Trustee had itself authenticated such Junior
Subordinated Debentures.
9.13 PREFERENTIAL COLLECTION OF CLAIMS AGAINST THE COMPANY.
The Trustee shall comply with Section 311(a) of the Trust Indenture Act,
excluding any creditor relationship described in Section 311(b) of the Trust
Indenture Act. A Trustee who has resigned or
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been removed shall be subject to Section 311(a) of the Trust Indenture Act to
the extent included therein.
9.14 APPOINTMENT OF AUTHENTICATING AGENT. At any time when any of the
Junior Subordinated Debentures remain Outstanding, the Trustee may appoint an
Authenticating Agent or Agents which shall be authorized to act on behalf of
the Trustee to authenticate Junior Subordinated Debentures issued upon original
issuance, exchange, registration of transfer or partial redemption thereof or
pursuant to Section 2.08, and Junior Subordinated Debentures so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and delivery
of Junior Subordinated Debentures by the Trustee or the Trustee's certificate
of authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating Agent.
Each Authenticating Agent shall be acceptable to the Company and shall at all
times be a corporation organized and doing business under the laws of the
United States of America, any state thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $50,000,000 and subject to supervision or
examination by federal or state authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of such supervision or examining authority, for the purposes of
this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. If at any time an Authenticating Agent
shall cease to be eligible in accordance with the provisions of this Section,
such Authenticating Agent shall resign immediately in the manner and with the
effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
notice of resignation or upon such termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first class mail, postage prepaid, to all Securityholders
as their names and addresses appear in the Securities Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all
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the rights, powers and duties of its predecessor hereunder, with the like
effect as if originally named as an Authenticating Agent herein. No successor
Authenticating Agent shall be appointed unless eligible under the provisions of
this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 9.06.
If an appointment is made pursuant to this Section, the Junior
Subordinated Debentures may have endorsed thereon, in lieu of the form of
certificate of authentication set forth in Section 8.01, a certificate of
authentication in the following form:
"This is one of the Junior Subordinated Debentures described in the
within mentioned Indenture."
------------------------------------,
as Trustee
By
------------------------------------,
as Authenticating Agent
By
------------------------------------,
Authorized Signature
ARTICLE X
CONCERNING THE SECURITYHOLDERS
10.01 EVIDENCE OF ACTION BY SECURITYHOLDERS. Whenever in this
Indenture it is provided that the Holders of a majority or specified percentage
in aggregate principal amount of the Junior Subordinated Debentures may take any
action (including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that at the time
of taking any such action the Holders of such majority or specified percentage
have joined therein may be evidenced by any instrument or any number of
instruments of similar tenor executed by such Holders in Person or by agent or
proxy appointed in writing.
If the Company shall solicit from the Securityholders any request,
demand, authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, as evidenced by an Officers' Certificate, fix in
advance a record date for the determination of Securityholders entitled to give
such request, demand, authorization, direction, notice, consent, waiver or
other action, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other action may be given before or after the record date,
but only the Securityholders of record at the close of business on the record
date shall
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be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of Outstanding Junior Subordinated
Debentures have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other action, and for that
purpose the Outstanding Junior Subordinated Debentures shall be computed as of
the record date; provided, however, that no such authorization, agreement or
consent by such Securityholders on the record date shall be deemed effective
unless it shall become effective pursuant to the provisions of this Indenture
not later than six months after the record date.
10.02 PROOF OF EXECUTION BY SECURITYHOLDERS. Subject to the provisions
of Section 6.01, proof of the execution of any instrument by a Securityholder
(such proof will not require notarization) or his agent or proxy and proof of
the holding by any Person of any of the Junior Subordinated Debentures shall be
sufficient if made in the following manner:
(a) The fact and date of the execution by any such Person of
any instrument may be proved in any reasonable manner acceptable to
the Trustee.
(b) The ownership of Junior Subordinated Debentures shall be
proved by the Securities Register or by a certificate of the
Securities Registrar thereof.
(c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
10.03 WHO MAY BE DEEMED OWNERS. Prior to the due presentment for
registration of transfer of any Junior Subordinated Debenture, the Company, the
Trustee, any paying agent and any Securities Registrar may deem and treat the
Person in whose name such Junior Subordinated Debenture shall be registered
upon the books of the Company as the absolute owner of such Junior Subordinated
Debenture (whether or not such Junior Subordinated Debenture shall be overdue
and notwithstanding any notice of ownership or writing thereon made by anyone
other than the Securities Registrar) for the purpose of receiving payment of or
on account of the principal of and (subject to Section 2.03) interest on such
Junior Subordinated Debenture and for all other purposes; and neither the
Company nor the Trustee nor any paying agent nor any Securities Registrar shall
be affected by any notice to the contrary.
10.04 CERTAIN JUNIOR SUBORDINATED DEBENTURES OWNED BY COMPANY
DISREGARDED. In determining whether the Holders of the requisite aggregate
principal amount of Junior Subordinated Debentures have concurred in any
direction, consent or waiver under this Indenture, the Junior Subordinated
Debentures that are owned by the Company or any other obligor on the Junior
Subordinated Debentures or by any Person directly or indirectly controlling or
controlled by or under common control with the Company or any other obligor on
the Junior Subordinated Debentures shall be disregarded and deemed not to be
Outstanding for the purpose of any such determination, except that for the
purpose of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Junior Subordinated Debentures that a
Responsible Officer of the Trustee actually knows are so owned shall be so
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disregarded. The Junior Subordinated Debentures so owned that have been pledged
in good faith may be regarded as Outstanding for the purposes of this Section,
if the pledgee shall establish to the satisfaction of the Trustee the pledgee's
right with respect to such Junior Subordinated Debentures and that the pledgee
is not a Person directly or indirectly controlling or controlled by or under
direct or indirect common control with the Company or any such other obligor.
In case of a dispute as to such right, any decision by the Trustee taken upon
the advice of counsel shall be full protection to the Trustee.
10.05 ACTIONS BINDING ON FUTURE SECURITYHOLDERS. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 10.01, of
the taking of any action by the Holders of the majority or percentage in
aggregate principal amount of the Junior Subordinated Debentures specified in
this Indenture in connection with such action, any Holder who is shown by the
evidence to have consented to such action may, by filing written notice with the
Trustee, and upon proof of holding as provided in Section 10.02, revoke such
action so far as concerns such Holder's Junior Subordinated Debentures. Except
as aforesaid any such action taken by the Holder shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Holder's Junior
Subordinated Debentures, and of any Junior Subordinated Debentures issued in
exchange therefor, on registration of transfer thereof or in place thereof,
irrespective of whether or not any notation in regard thereto is made upon such
Junior Subordinated Debentures. Any action taken by the Holders of the majority
or percentage in aggregate principal amount of the Junior Subordinated
Debentures specified in this Indenture in connection with such action shall be
conclusively binding upon the Company, the Trustee and the Holders of all the
Junior Subordinated Debentures.
ARTICLE XI
SUPPLEMENTAL INDENTURES
11.01 SUPPLEMENTAL INDENTURES WITHOUT THE CONSENT OF SECURITYHOLDERS.
In addition to any supplemental indenture otherwise authorized by this
Indenture, the Company and the Trustee may from time to time and at any time
enter into an indenture or indentures supplemental hereto (which shall conform
to the provisions of the Trust Indenture Act as then in effect), without the
consent of the Securityholders, for one or more of the following purposes:
(a) to cure any ambiguity, defect, or inconsistency herein,
or in the Junior Subordinated Debentures, provided that any such
action does not materially adversely affect the interests of the
Holders or the holders of the Preferred Securities so long as they
remain outstanding;
(b) to comply with Article XII;
(c) to provide for uncertificated Junior Subordinated
Debentures in addition to or in place of certificated Junior
Subordinated Debentures;
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(d) to add to the covenants of the Company for the benefit of
the Holders or to surrender any right or power herein conferred upon
the Company;
(e) to add to, delete from, or revise the conditions,
limitations, and restrictions on the authorized amount, terms, or
purposes of issue, authentication, and delivery of Junior Subordinated
Debentures, as herein set forth;
(f) to make any change that does not adversely affect the
rights of any Securityholder in any material respect; or
(g) to establish the form of any certifications required to
be furnished pursuant to the terms of this Indenture or to add to the
rights of the Holders.
The Trustee is hereby authorized to join with the Company in the
execution of any such supplemental indenture, and to make any further
appropriate agreements and stipulations that may be therein contained, but the
Trustee shall not be obligated to enter into any such supplemental indenture
that affects the Trustee's own rights, duties or immunities under this
Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this
Section may be executed by the Company and the Trustee without the consent of
the Holders of any of the Junior Subordinated Debentures at the time
Outstanding, notwithstanding any of the provisions of Section 11.02.
11.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With the
consent (evidenced as provided in Section 10.01) of the Holders of not less than
a majority in aggregate principal amount of the Junior Subordinated Debentures
at the time Outstanding, the Company, when authorized by Board Resolutions, and
the Trustee may from time to time and at any time enter into an indenture or
indentures supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act as then in effect) for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or of any supplemental indenture or of modifying in any manner not
covered by Section 11.01 the rights of the Holders of the Junior Subordinated
Debentures under this Indenture; provided, however, that no such supplemental
indenture shall without the consent of the Holders of each Junior Subordinated
Debenture then Outstanding, (a) change (except as expressly provided herein
pursuant to Section 2.02) the stated maturity of the Junior Subordinated
Debentures or reduce the principal amount thereof; or reduce the rate or extend
(except as expressly provided herein pursuant to Section 4.01) the time of
payment of interest thereon; or (b) reduce the percentage of principal amount of
Junior Subordinated Debentures, the Holders of which are required to consent to
any such supplemental indenture; provided, further, that if the Junior
Subordinated Debentures are held by the Trust or a trustee of the Trust, such
supplemental indenture shall not be effective until the holders of a majority in
aggregate Liquidation Amount of Preferred Securities shall have consented to
such supplemental indenture; provided further, that if the consent of the Holder
of each Outstanding
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Junior Subordinated Debenture is required, such supplemental indenture shall
not be effective until each Holder of the Trust Securities shall have consented
to such supplemental indenture.
It shall not be necessary for the consent of the Securityholders to
approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such consent shall approve the substance thereof.
11.03 EFFECT OF SUPPLEMENTAL INDENTURES. Upon the execution of any
supplemental indenture pursuant to the provisions of this Article or of Section
12.01, this Indenture shall be and be deemed to be modified and amended in
accordance therewith.
11.04 JUNIOR SUBORDINATED DEBENTURES AFFECTED BY SUPPLEMENTAL
INDENTURES. Junior Subordinated Debentures, affected by a supplemental
indenture, authenticated and delivered after the execution of such supplemental
indenture pursuant to the provisions of this Article or of Section 12.01, may
bear a notation in form approved by the Company, as to any matter provided for
in such supplemental indenture. If the Company shall so determine, new Junior
Subordinated Debentures so modified as to conform, in the opinion of the Board
of Directors, to any modification of this Indenture contained in any such
supplemental indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Junior Subordinated Debentures then
Outstanding.
11.05 EXECUTION OF SUPPLEMENTAL INDENTURES. Upon the request of the
Company, accompanied by Board Resolutions authorizing the execution of any such
supplemental indenture, and upon the filing with the Trustee of evidence of the
consent of Securityholders required to consent thereto as aforesaid, the
Trustee shall join with the Company in the execution of such supplemental
indenture unless such supplemental indenture affects the Trustee's own rights,
duties or immunities under this Indenture or otherwise, in which case the
Trustee may in its discretion but shall not be obligated to enter into such
supplemental indenture. The Trustee, subject to the provisions of Section 9.01,
may receive an Opinion of Counsel as conclusive evidence that any supplemental
indenture executed pursuant to this Article is authorized or permitted by, and
conforms to, the terms of this Article and that it is proper for the Trustee
under the provisions of this Article to join in the execution thereof.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Company
shall transmit by mail, first class postage prepaid, a notice, setting forth in
general terms the substance of such supplemental indenture, to the
Securityholders as their names and addresses appear upon the Securities
Register. Any failure of the Company to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
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ARTICLE XII
SUCCESSOR CORPORATION
12.01 COMPANY MAY CONSOLIDATE, ETC. The Company shall not consolidate
with or merge into any other Person or convey, transfer or lease its properties
and assets substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless (a)
in case the Company 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 Company's obligations on the Junior Subordinated Debentures issued
under this Indenture; (b) immediately after giving effect thereto, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and (c) such
successor Person expressly assumes the due and punctual performance and
observance of all the covenants and conditions of this Indenture to be kept and
performed by the Company by executing and delivering a supplemental indenture
in form and substance satisfactory to the Trustee.
12.02 SUCCESSOR SUBSTITUTED.
(a) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition and upon the assumption by
the successor Person by supplemental indenture, executed and delivered
to the Trustee and satisfactory in form to the Trustee, of the due and
punctual payment of the principal of and interest on all of the Junior
Subordinated Debentures Outstanding and the due and punctual
performance of all of the covenants and conditions of this Indenture
to be performed by the Company, such successor Person shall succeed to
and be substituted for the Company, with the same effect as if it had
been named as the Company herein, and thereupon the predecessor
corporation shall be relieved of all obligations and covenants under
this Indenture and the Junior Subordinated Debentures.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in phraseology
and form (but not in substance) may be made in the Junior Subordinated
Debentures thereafter to be issued as may be appropriate.
12.03 EVIDENCE OF CONSOLIDATION, ETC., TO TRUSTEE. The Trustee,
subject to the provisions of Section 9.01, may receive an Opinion of Counsel as
conclusive evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply with the
provisions of this Article.
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ARTICLE XIII
SATISFACTION AND DISCHARGE
13.01 SATISFACTION AND DISCHARGE OF INDENTURE. If at any time: (a) the
Company shall have delivered to the Trustee for cancellation all Junior
Subordinated Debentures theretofore authenticated (other than any Junior
Subordinated Debentures that shall have been destroyed, lost or stolen and that
shall have been replaced or paid as provided in Section 2.08) and Junior
Subordinated Debentures for whose payment money or Governmental Obligations
have theretofore been deposited in trust or segregated and held in trust by the
Company (and thereupon repaid to the Company or discharged from such trust, as
provided in Section 13.05); or (b) all such Junior Subordinated Debentures not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and the Company shall
deposit or cause to be deposited with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient or a combination
thereof sufficient, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption all Junior
Subordinated Debentures not theretofore delivered to the Trustee for
cancellation, including principal and interest due or to become due to such
date of maturity or date fixed for redemption, as the case may be, and if the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company; then this Indenture shall thereupon cease to be of further effect
except for the provisions of Sections 2.02, 2.03, 2.04, 2.05, 4.01, 4.02, 4.03
and 9.10, that shall survive until the date of maturity or redemption date, as
the case may be, and Sections 9.06 and 13.05, that shall survive to such date
and thereafter, and the Trustee, on demand of the Company and at the cost and
expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
13.02 DISCHARGE OF OBLIGATIONS. If at any time all such Junior
Subordinated Debentures not theretofore delivered to the Trustee for
cancellation or that have not become due and payable as described in Section
13.01 shall have been paid by the Company by depositing irrevocably with the
Trustee, as trust funds, moneys or an amount of Governmental Obligations
sufficient to pay at maturity or upon redemption all such Junior Subordinated
Debentures not theretofore delivered to the Trustee for cancellation, including
principal and interest due or to become due to such date of maturity or date
fixed for redemption, as the case may be, and if the Company shall also pay or
cause to be paid all other sums payable hereunder by the Company, then after
the date such moneys or Governmental Obligations, as the case may be, are
deposited with the Trustee the obligations of the Company under this Indenture
shall cease to be of further effect except for the provisions of Sections 2.02,
2.03, 2.04, 2.05, 4.01, 4.02, 4.03, 9.06, 9.10 and 13.05 hereof that shall
survive until such Junior Subordinated Debentures shall mature and be paid.
Thereafter, Sections 9.06 and 13.05 shall survive.
13.03 DEPOSITED MONEYS TO BE HELD IN TRUST. All moneys or Governmental
Obligations deposited with the Trustee pursuant to Sections 13.01 or 13.02
shall be held in trust and
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shall be available for payment as due, either directly or through any paying
agent (including the Company acting as its own paying agent), to the Holders of
the Junior Subordinated Debentures for the payment or redemption of which such
moneys or Governmental Obligations have been deposited with the Trustee.
13.04 PAYMENT OF MONEYS HELD BY PAYING AGENTS. In connection with the
satisfaction and discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of this
Indenture shall, upon demand of the Company, be paid to the Trustee and
thereupon such paying agent shall be released from all further liability with
respect to such moneys or Governmental Obligations.
13.05 REPAYMENT TO COMPANY. Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by the Company in
trust for payment of principal of or interest on the Junior Subordinated
Debentures that are not applied but remain unclaimed by the Holders of such
Junior Subordinated Debentures for at least two years after the date upon which
the principal of or interest on such Junior Subordinated Debentures shall have
respectively become due and payable, shall be repaid to the Company on the
second annual anniversary of when such payment was originally due or (if then
held by the Company) shall be discharged from such trust; and thereupon the
paying agent and the Trustee shall be released from all further liability with
respect to such moneys or Governmental Obligations, and the Holder of any of
the Junior Subordinated Debentures entitled to receive such payment shall
thereafter, as an unsecured general creditor, look only to the Company for the
payment thereof.
ARTICLE XIV
IMMUNITY OF INCORPORATORS,
STOCKHOLDERS, OFFICERS AND DIRECTORS
14.01 NO RECOURSE. No recourse under or upon any obligation, covenant
or agreement of this Indenture, or of any Junior Subordinated Debenture, or for
any claim based thereon or otherwise in respect thereof, shall be had against
any incorporator, stockholder, officer or director as such, past, present or
future, of the Company or of any predecessor or successor corporation, either
directly or through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or rule of law, or
by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that this Indenture and the obligations issued hereunder
are solely corporate obligations, and that no such personal liability whatever
shall attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of the creation
of the indebtedness hereby authorized, or under or by reason of the
obligations, covenants or agreements contained in this Indenture or in any of
the Junior Subordinated Debentures or implied therefrom; and that any and all
such personal liability of every name and nature, either at common law or in
equity or by constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or director as
such, because of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements
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contained in this Indenture or in any of the Junior Subordinated Debentures or
implied therefrom, are hereby expressly waived and released as a condition of,
and as a consideration for, the execution of this Indenture and the issuance of
such Junior Subordinated Debentures.
ARTICLE XV
MISCELLANEOUS PROVISIONS
15.01 EFFECT ON SUCCESSORS AND ASSIGNS. All the covenants,
stipulations, promises and agreements in this Indenture contained by or on
behalf of the Company or the Trustee shall bind their respective successors and
assigns, whether so expressed or not.
15.02 ACTIONS BY SUCCESSOR. Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by any board,
committee or officer of the Company shall and may be done and performed with
like force and effect by the corresponding board, committee or officer of any
corporation that shall at the time be the lawful sole successor of the Company.
15.03 SURRENDER OF COMPANY POWERS. The Company by instrument in
writing executed by authority of two-thirds of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved to the
Company, and thereupon such power so surrendered shall terminate both as to the
Company and as to any successor corporation.
15.04 NOTICES. Except as otherwise expressly provided herein any
notice or demand that by any provision of this Indenture is required or
permitted to be given or served by the Trustee or by the Holders of Junior
Subordinated Debentures to or on the Company may be given or served by being
deposited first class postage prepaid in a post-office letterbox addressed
(until another address is filed in writing by the Company with the Trustee), as
follows: c/o Enterbank Holdings, Inc., 150 North Meramec, Clayton, Missouri
63105, Attention: Chief Executive Officer. Any notice, election, request or
demand by the Company or any Securityholder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, if given or
made in writing at the Corporate Trust Office of the Trustee.
15.05 GOVERNING LAW. This Indenture and each Junior Subordinated
Debenture shall be deemed to be a contract made under the internal laws of the
State of Missouri and for all purposes shall be construed in accordance with
the laws of said state, provided that the immunities and the standard of care
of the Trustee shall be governed by Delaware law.
15.06 TREATMENT OF JUNIOR SUBORDINATED DEBENTURES AS DEBT. It is
intended that the Junior Subordinated Debentures will be treated as indebtedness
and not as equity for federal income tax purposes. The provisions of this
Indenture shall be interpreted to further this intention.
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15.07 COMPLIANCE CERTIFICATES AND OPINIONS.
(a) Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this
Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent provided for in this
Indenture relating to the proposed action have been complied with and
an Opinion of Counsel stating that in the opinion of such counsel all
such conditions precedent have been complied with, except that in the
case of any such application or demand as to which the furnishing of
such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Every certificate or opinion delivered to the Trustee
with respect to compliance with a condition or covenant in this
Indenture shall include (i) a statement that the Person making such
certificate or opinion has read such covenant or condition; (ii) a
brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based; (iii) a statement that, in the
opinion of such Person, such Person has made such examination or
investigation as is necessary to enable such Person to express an
informed opinion as to whether or not such covenant or condition has
been complied with; and (iv) a statement as to whether or not, in the
opinion of such Person, such condition or covenant has been complied
with.
15.08 PAYMENTS ON BUSINESS DAYS. In any case where the date of
maturity of interest or principal of the Junior Subordinated Debentures or the
date of redemption of the Junior Subordinated Debentures shall not be a
Business Day, then payment of interest or principal will be made on the next
succeeding Business Day (without any additional interest or other payment in
respect of any such delay), except that, if such Business Day is in the next
succeeding calendar year, such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on the date such payment was originally payable.
15.09 CONFLICT WITH TRUST INDENTURE ACT. If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
15.10 COUNTERPARTS. This Indenture may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.
15.11 SEPARABILITY. In case any one or more of the provisions
contained in this Indenture or in the Junior Subordinated Debentures shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provisions of this Indenture or of the Junior Subordinated Debentures, but this
Indenture and the Junior Subordinated Debentures shall be construed as if such
invalid or illegal or unenforceable provision had never been contained herein
or therein.
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15.12 ASSIGNMENT. The Company will have the right at all times to
assign any of its respective rights or obligations under this Indenture to a
direct or indirect wholly owned Subsidiary of the Company, provided that, in
the event of any such assignment, the Company will remain liable for all such
obligations. Subject to the foregoing, this Indenture is binding upon and
inures to the benefit of the parties thereto and their respective successors
and assigns. This Indenture may not otherwise be assigned by the parties
hereto.
15.13 ACKNOWLEDGMENT OF RIGHTS. The Company acknowledges that, with
respect to any Junior Subordinated Debentures held by the Trust or a trustee of
the Trust, if the Property Trustee of the Trust fails to enforce its rights
under this Indenture as the Holder of the Junior Subordinated Debentures held
as the assets of the Trust, any holder of Preferred Securities may institute
legal proceedings directly against the Company to enforce such Property
Trustee's rights under this Indenture without first instituting any legal
proceedings against such Property Trustee or any other Person or entity.
Notwithstanding the foregoing, if an Event of Default has occurred and is
continuing and such event is attributable to the failure of the Company to pay
interest or principal on the Junior Subordinated Debentures on the date such
interest or principal is otherwise payable (or in the case of redemption, on
the redemption date), the Company acknowledges that a holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such holder of the principal of or interest on the Junior Subordinated
Debentures having a principal amount equal to the aggregate Liquidation Amount
of the Preferred Securities of such holder on or after the respective due date
specified in the Junior Subordinated Debentures. This Section 15.13 may not be
amended without the prior written consent of the holders of all of the
Preferred Securities.
ARTICLE XVI
SUBORDINATION OF JUNIOR SUBORDINATED DEBENTURES
16.01 AGREEMENT TO SUBORDINATE. The Company covenants and agrees, and
each Holder of Junior Subordinated Debentures issued hereunder by such Holder's
acceptance thereof likewise covenants and agrees, that all Junior Subordinated
Debentures shall be issued subject to the provisions of this Article XVI; and
each Holder, whether upon original issue or upon transfer or assignment
thereof, accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of and interest on all
Junior Subordinated Debentures issued hereunder shall, to the extent and in the
manner hereinafter set forth, be subordinated and junior in right of payment to
the prior payment in full of all Senior and Subordinated Debt, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article XVI shall prevent the occurrence of any
default or Event of Default hereunder.
16.02 DEFAULT ON SENIOR AND SUBORDINATED DEBT. In the event and during
the continuation of any default by the Company in the payment of principal,
premium, interest or any
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other payment due on any Senior and Subordinated Debt of the Company or in the
event that the maturity of any Senior and Subordinated Debt of the Company has
been accelerated because of a default, then, in either case, no payment shall
be made by the Company with respect to the principal of or interest on the
Junior Subordinated Debentures.
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraph of this Section 16.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior and
Subordinated Debt or their respective representatives, or to the trustee or
trustees under any indenture pursuant to which any of such Senior and
Subordinated Debt may have been issued, as their respective interests may
appear, but only to the extent that the holders of the Senior and Subordinated
Debt (or their representative or representatives or a trustee) notify the
Trustee in writing within 90 days of such payment of the amounts then due and
owing on the Senior and Subordinated Debt and only the amounts specified in
such notice to the Trustee shall be paid to the holders of Senior and
Subordinated Debt.
16.03 LIQUIDATION; DISSOLUTION; BANKRUPTCY. Upon any payment by the
Company or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding-up or liquidation or reorganization of the Company, whether voluntary
or involuntary or in bankruptcy, insolvency, receivership or other proceedings,
all amounts due upon all Senior and Subordinated Debt of the Company shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made by the Company on account of the
principal or interest on the Junior Subordinated Debentures; and upon any such
dissolution or winding-up or liquidation or reorganization, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the Holders or the Trustee
would be entitled to receive from the Company, except for the provisions of
this Article XVI, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Holders or by the Trustee under the Indenture if
received by them or it, directly to the holders of Senior and Subordinated Debt
of the Company (pro rata to such holders on the basis of the respective amounts
of Senior and Subordinated Debt held by such holders, as calculated by the
Company) or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior and Subordinated Debt may have been issued, as their respective
interests may appear, to the extent necessary to pay such Senior and
Subordinated Debt in full, in money or money's worth, after giving effect to
any concurrent payment or distribution to or for the holders of such Senior and
Subordinated Debt, before any payment or distribution is made to the Holders or
to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in
cash, property or securities, prohibited by the foregoing, shall be received by
the Trustee before all Senior and Subordinated Debt of the Company is paid in
full, or provision is made for such payment in money in accordance with its
terms, such payment or distribution shall be held in trust for the benefit of
and shall be paid over or delivered to
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the holders of such Senior and Subordinated Debt or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior and Subordinated Debt may have
been issued, and their respective interests may appear, as calculated by the
Company, for application to the payment of all Senior and Subordinated Debt of
the Company, as the case may be, remaining unpaid to the extent necessary to
pay such Senior and Subordinated Debt in full in money in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the benefit of the holders of such Senior and Subordinated Debt.
For purposes of this Article XVI, the words "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated at least to the extent provided in this
Article XVI with respect to the Junior Subordinated Debentures to the payment
of all Senior and Subordinated Debt of the Company, as the case may be, that
may at the time be outstanding, provided that (a) such Senior and Subordinated
Debt is assumed by the new corporation, if any, resulting from any such
reorganization or readjustment, and (b) the rights of the holders of such
Senior and Subordinated Debt are not, without the consent of such holders,
altered by such reorganization or readjustment. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance or transfer
of its property as an entirety, or substantially as an entirety, to another
corporation upon the terms and conditions provided for in Article XII of this
Indenture shall not be deemed a dissolution, winding-up, liquidation or
reorganization for the purposes of this Section 16.03 if such other corporation
shall, as a part of such consolidation, merger, conveyance or transfer, comply
with the conditions stated in Article XII of this Indenture. Nothing in Section
16.02 or in this Section 16.03 shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 9.06 of this Indenture.
16.04 SUBROGATION. Subject to the payment in full of all Senior and
Subordinated Debt of the Company, the rights of the Holders of the Junior
Subordinated Debentures shall be subrogated to the rights of the holders of
such Senior and Subordinated Debt to receive payments or distributions of cash,
property or securities of the Company, as the case may be, applicable to such
Senior and Subordinated Debt until the principal of and interest on the Junior
Subordinated Debentures shall be paid in full; and, for the purposes of such
subrogation, no payments or distributions to the holders of such Senior and
Subordinated Debt of any cash, property or securities to which the Holders of
the Junior Subordinated Debentures or the Trustee would be entitled except for
the provisions of this Article XVI, and no payment over pursuant to the
provisions of this Article XVI to or for the benefit of the holders of such
Senior and Subordinated Debt by Holders of the Junior Subordinated Debentures
or the Trustee, shall, as between the Company, its creditors other than holders
of Senior and Subordinated Debt of the Company, and the Holders of the Junior
Subordinated Debentures, be deemed to be a payment by the Company to or on
account of such Senior and Subordinated Debt. It is understood that the
provisions of this Article XVI are and are intended solely for the purposes of
defining the relative rights of the Holders of the Junior Subordinated
Debentures, on the one hand, and the holders of such Senior and Subordinated
Debt on the other hand.
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Nothing contained in this Article XVI or elsewhere in this Indenture
or in the Junior Subordinated Debentures is intended to or shall impair, as
between the Company, its creditors other than the holders of Senior and
Subordinated Debt of the Company, and the Holders of the Junior Subordinated
Debentures, the obligation of the Company, which is absolute and unconditional,
to pay to the Holders of the Junior Subordinated Debentures the principal of
and interest on the Junior Subordinated Debentures as and when the same shall
become due and payable in accordance with their terms, or is intended to or
shall affect the relative rights of the Holders of the Junior Subordinated
Debentures and creditors of the Company, other than the holders of Senior and
Subordinated Debt of the Company, nor shall anything herein or therein prevent
the Trustee or the Holder of any Junior Subordinated Debenture from exercising
all remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article XVI of the holders
of such Senior and Subordinated Debt in respect of cash, property or securities
of the Company, as the case may be, received upon the exercise of any such
remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article XVI, the Trustee, subject to the provisions of Section 9.01,
and the Holders of the Junior Subordinated Debentures shall be entitled to
conclusively rely upon any order or decree made by any court of competent
jurisdiction in which such dissolution, winding-up, liquidation or
reorganization proceedings are pending, or a certificate of the receiver,
trustee in bankruptcy, liquidation trustee, agent or other Person making such
payment or distribution, delivered to the Trustee or to the Holders of the
Junior Subordinated Debentures, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior and
Subordinated Debt and other indebtedness of the Company, as the case may be,
the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article
XVI.
16.05 TRUSTEE TO EFFECTUATE SUBORDINATION. Each Holder of Junior
Subordinated Debentures by such Holder's acceptance thereof authorizes and
directs the Trustee on such Holder's behalf to take such action as may be
necessary or appropriate to effectuate the subordination provided in this
Article XVI and appoints the Trustee such Holder's attorney-in-fact for any and
all such purposes.
16.06 NOTICE BY THE COMPANY. The Company shall give prompt written
notice to a Responsible Officer of the Trustee of any fact known to the Company
that would prohibit the making of any payment of moneys to or by the Trustee in
respect of the Junior Subordinated Debentures pursuant to the provisions of
this Article XVI. Notwithstanding the provisions of this Article XVI or any
other provision of this Indenture, the Trustee shall not be charged with
knowledge of the existence of any facts that would prohibit the making of any
payment of moneys to or by the Trustee in respect of the Junior Subordinated
Debentures pursuant to the provisions of this Article XVI, unless and until a
Responsible Officer of the Trustee shall have received written notice thereof
from the Company or a holder or holders of Senior and Subordinated Debt or from
any trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Section 9.01, shall be entitled in all
respects to assume that no such facts exist; provided, however, that if the
Trustee shall not have received the notice provided for in this Section
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16.06 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of or interest on any Junior
Subordinated Debenture), then, anything herein contained to the contrary
notwithstanding, the Trustee shall have full power and authority to receive such
money and to apply the same to the purposes for which it was received, and shall
not be affected by any notice to the contrary that may be received by it within
two Business Days prior to such date.
The Trustee, subject to the provisions of Section 9.01, shall be
entitled to conclusively rely on the delivery to it of a written notice by a
Person representing himself to be a holder of Senior and Subordinated Debt of
the Company (or a trustee on behalf of such holder), to establish that such
notice has been given by a holder of such Senior and Subordinated Debt or a
trustee on behalf of any such holder or holders. In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of such Senior and Subordinated Debt to
participate in any payment or distribution pursuant to this Article XVI, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior and Subordinated
Debt held by such Person, the extent to which such Person is entitled to
participate in such payment or distribution and any other facts pertinent to
the rights of such Person under this Article XVI, and, if such evidence is not
furnished, the Trustee may defer any payment to such Person pending judicial
determination as to the right of such Person to receive such payment.
16.07 RIGHTS OF THE TRUSTEE; HOLDERS OF SENIOR AND SUBORDINATED DEBT.
The Trustee in its individual capacity shall be entitled to all the rights set
forth in this Article XVI in respect of any Senior and Subordinated Debt at any
time held by it, to the same extent as any other holder of Senior and
Subordinated Debt, and nothing in this Indenture shall deprive the Trustee of
any of its rights as such holder.
With respect to the holders of Senior and Subordinated Debt of the
Company, the Trustee undertakes to perform or to observe only such of its
covenants and obligations as are specifically set forth in this Article XVI,
and no implied covenants or obligations with respect to the holders of such
Senior and Subordinated Debt shall be read into this Indenture against the
Trustee. The Trustee shall not be deemed to owe any fiduciary duty to the
holders of such Senior and Subordinated Debt and, subject to the provisions of
Section 9.01, the Trustee shall not be liable to any holder of such Senior and
Subordinated Debt if it shall pay over or deliver to Holders of Junior
Subordinated Debentures, the Company or any other Person money or assets to
which any holder of such Senior and Subordinated Debt shall be entitled by
virtue of this Article XVI or otherwise.
16.08 SUBORDINATION MAY NOT BE IMPAIRED. No right of any present or
future holder of any Senior and Subordinated Debt of the Company to enforce
subordination as herein provided shall at any time in any way be prejudiced or
impaired by any act or failure to act on the part of the Company or by any act
or failure to act, in good faith, by any such holder, or by any noncompliance
by the Company with the terms, provisions and covenants of this Indenture,
regardless of any knowledge thereof that any such holder may have or otherwise
be charged with.
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<PAGE> 60
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior and Subordinated Debt of the Company may, at any time and
from time to time, without the consent of or notice to the Trustee or the
Holders of the Junior Subordinated Debentures, without incurring responsibility
to the Holders of the Junior Subordinated Debentures and without impairing or
releasing the subordination provided in this Article XVI or the obligations
hereunder of the Holders of the Junior Subordinated Debentures to the holders
of such Senior and Subordinated Debt, do any one or more of the following: (a)
change the manner, place or terms of payment or extend the time of payment of,
or renew or alter, such Senior and Subordinated Debt, or otherwise amend or
supplement in any manner such Senior and Subordinated Debt or any instrument
evidencing the same or any agreement under which such Senior and Subordinated
Debt is outstanding; (b) sell, exchange, release or otherwise deal with any
property pledged, mortgaged or otherwise securing such Senior and Subordinated
Debt; (c) release any Person liable in any manner for the collection of such
Senior and Subordinated Debt; and (d) exercise or refrain from exercising any
rights against the Company and any other Person.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
ENTERBANK HOLDINGS, INC.
By:
---------------------------------
Chief Executive Officer
Attest:
- ---------------------------
WILMINGTON TRUST COMPANY, as Trustee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Attest:
- ---------------------------
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<PAGE> 61
EXHIBIT A
(FORM OF FACE OF JUNIOR SUBORDINATED DEBENTURE)
Registered Principal Amount
Registered No. _______________ $__________
[CUSIP NO. _______________]
ENTERBANK HOLDINGS, INC.
____% JUNIOR SUBORDINATED DEBENTURE
DUE ________________, 2029
ENTERBANK HOLDINGS, INC., a Delaware corporation (the "Company," which
term includes any successor corporation under the Indenture hereinafter
referred to), for value received, hereby promises to pay to WILMINGTON TRUST
COMPANY as Property Trustee of EBH Capital Trust I or registered assigns, the
principal sum of _______________________________________ Dollars ($__________)
on ________________, 2029 (which date may be shortened as provided in the
Indenture, the "Stated Maturity"), and to pay interest on said principal sum
from ________________, 1999, 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, quarterly (subject to deferral as set forth herein) in
arrears on the 15th day of March, June, September and December in each year
commencing December 15, 1999, at the rate of ____% per annum until the
principal hereof shall have become due and payable, and on any overdue
principal 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 quarterly. The amount of each
interest payment due with respect to the Junior Subordinated Debentures will
include amounts accrued through the date the interest payment is due. 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. In the event that any date
on which interest is payable on this Junior Subordinated Debenture is not a
Business Day (as defined in the Indenture), then payment of 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 Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on such date. 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 Junior Subordinated Debenture (or one or more Predecessor
Junior Subordinated Debentures, as defined in the Indenture) is registered at
the close of business on the regular record date for such interest installment,
which shall be the close of business on the business day next preceding such
Interest Payment Date unless otherwise provided in the Indenture. The principal
of and the interest on this Junior Subordinated Debenture shall be payable at
the office or
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agency of the Trustee (as defined in the Indenture) 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
check mailed to the Registered Holder (as defined in the Indenture) at such
address as shall appear in the Securities Register (as defined in the
Indenture). Notwithstanding the foregoing, so long as the Holder of this Junior
Subordinated Debenture is the Property Trustee (as defined in the Indenture),
the payment of the principal of and interest on this Junior Subordinated
Debenture will be made at such place and to such account as may be designated
by the Property Trustee.
The Stated Maturity may be shortened at any time by the Company to any
date not earlier than ________________, 2004, subject to the Company having
received prior approval of the Federal Reserve (as defined in the Indenture) if
then required under applicable capital guidelines or policies of the Federal
Reserve.
The indebtedness evidenced by this Junior Subordinated Debenture is,
to the extent provided in the Indenture, subordinate and junior in right of
payment to the prior payment in full of all Senior and Subordinated Debt (as
defined in the Indenture), and this Junior Subordinated Debenture is issued
subject to the provisions of the Indenture with respect thereto. Each Holder of
this Junior Subordinated Debenture, 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 and Subordinated Debt, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Junior Subordinated Debenture shall not be entitled to any
benefit under the Indenture, 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.
The provisions of this Junior Subordinated Debenture are continued on
the reverse side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be
executed.
Dated: ENTERBANK HOLDINGS, INC.
------------------
By:
------------------------------------
Chief Executive Officer
Attest:
By:
-------------------------------
Secretary
A-3
<PAGE> 64
[FORM OF CERTIFICATE OF AUTHENTICATION]
CERTIFICATE OF AUTHENTICATION
This is one of the Junior Subordinated Debentures described in the
within-mentioned Indenture.
Dated: WILMINGTON TRUST COMPANY, as Trustee
---------------------
By:
------------------------------
Authorized Signature
A-4
<PAGE> 65
[FORM OF REVERSE OF JUNIOR SUBORDINATED DEBENTURE]
____% JUNIOR SUBORDINATED DEBENTURE
(CONTINUED)
This Junior Subordinated Debenture is one of the junior subordinated
debentures of the Company (herein sometimes referred to as the "Junior
Subordinated Debentures"), specified in the Indenture, all issued under and
pursuant to a Subordinated Indenture dated as of ________________, 1999 (the
"Indenture") duly executed and delivered between the Company and WILMINGTON
TRUST COMPANY, 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 Junior Subordinated Debentures. The Junior Subordinated
Debentures are limited in aggregate principal amount as specified in the
Indenture.
Because of the occurrence and continuation of a Special Event (as
defined in the Indenture), in certain circumstances, this Junior Subordinated
Debenture may become due and payable at the option of the Company at the
principal amount together with any interest accrued thereon (the "Redemption
Price"). The Redemption Price shall be paid prior to 2:00 p.m. St. Louis,
Missouri time, on the date of such redemption or at such earlier time as the
Company determines.
The Company shall have the right to redeem this Junior Subordinated
Debenture at the option of the Company, in whole or in part, from time to time,
on or after ________________, 2004, at a redemption price equal to 100% of the
principal amount to be redeemed plus any accrued but unpaid interest thereon to
the date of such redemption. Any redemption pursuant to this paragraph will be
made upon not less than 30 days' nor more than 60 days' notice. If the Junior
Subordinated Debentures are only partially redeemed by the Company pursuant to
this paragraph, the Junior Subordinated Debentures 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 Junior Subordinated Debentures are registered as a
Global Subordinated Debenture (as defined in the Indenture), the Depositary (as
defined in the Indenture) shall determine the principal amount of such Junior
Subordinated Debentures held by each Junior Subordinated Debenture Holder to be
redeemed in accordance with its procedures.
In the event of redemption of this Junior Subordinated Debenture in
part only, a new Junior Subordinated Debenture for the unredeemed portion
hereof will be issued in the name of the Holder hereof upon the cancellation
hereof.
In case an Event of Default (as defined in the Indenture), shall have
occurred and be continuing, the principal of all of the Junior Subordinated
Debentures 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 not less than a majority in
aggregate principal amount of the Junior Subordinated
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<PAGE> 66
Debentures at the time Outstanding, as defined in the Indenture, to execute
supplemental 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 any
supplemental indenture or of modifying in any manner the rights of the Holders
of the Junior Subordinated Debentures; provided, however, that no such
supplemental indenture shall (i) change the stated maturity of the Junior
Subordinated Debentures except as provided in the Indenture, or reduce the
principal amount thereof, or reduce the rate or extend the time of payment of
interest thereon, without the consent of the Holder of each Junior Subordinated
Debenture so affected, or (ii) reduce the aforesaid percentage of Junior
Subordinated Debentures, the Holders of which are required to consent to any
such supplemental indenture, without the consent of the Holders of each Junior
Subordinated Debenture then Outstanding and affected thereby. The Indenture
also contains provisions permitting the Holders of a majority in aggregate
principal amount of the Junior Subordinated Debentures at the time Outstanding,
on behalf of all of the Holders of the Junior Subordinated Debentures, 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 interest on any of the
Junior Subordinated Debentures. Any such consent or waiver by the registered
Holder of this Junior Subordinated Debenture (unless revoked as provided in the
Indenture) shall be conclusive and binding upon such Holder and upon all future
Holders and owners of this Junior Subordinated Debenture and of any Junior
Subordinated Debenture 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 Junior Subordinated
Debenture.
No reference herein to the Indenture and no provision of this Junior
Subordinated Debenture or of the Indenture shall alter or impair the obligation
of the Company, which is absolute and unconditional, to pay the principal of
and interest on this Junior Subordinated Debenture at the time and place and at
the rate and in the money herein prescribed.
The Company shall have the right at any time during the term of the
Junior Subordinated Debentures and from time to time to extend the interest
payment period of such Junior Subordinated Debentures for up to 20 consecutive
quarters (an "Extended Interest Payment Period"), 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 Junior Subordinated Debentures
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 extend such Extended Interest Payment Period, provided that
such Extended Interest Payment Period together with all such further extensions
thereof shall not exceed 20 consecutive quarters or extend beyond the Stated
Maturity. At the termination of any such Extended Interest Payment Period and
upon the payment of all accrued and unpaid interest and any additional amounts
then due, the Company may commence a new Extended Interest Payment Period.
The Company has agreed that if at any time (a) there shall have
occurred any event of which the Company has actual knowledge that (i) with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default and (ii) in respect to which the Company shall not have taken
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<PAGE> 67
reasonable steps to cure, or (b) the Company shall have given notice of its
election of an Extended Interest Payment Period as provided herein and shall
not have rescinded such notice, or such Extended Interest Payment Period, or
any extension thereof, shall be continuing; or (c) while the Junior
Subordinated Debentures are held by the Trust, the Company shall be in default
with respect to its payment of any obligation under the Preferred Securities
Guarantee, then the Company 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 or (ii) make any payment of
principal, interest or premium, if any, on or repay, repurchase or redeem any
debt securities of the Company (including the Junior Subordinated Debentures)
that rank pari passu with or junior in interest to the Junior Subordinated
Debentures or make any guarantee payments with respect to any guarantee by the
Company of the debt securities of any subsidiary of the Company if such
guarantee ranks pari passu or junior in interest to the Junior Subordinated
Debentures (other than (A) dividends or distributions in common stock, (B) any
declaration of a dividend in connection with the implementation of a
shareholders' 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 Preferred Securities Guarantee and (D) 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).
As provided in the Indenture and subject to certain limitations
therein set forth, this Junior Subordinated Debenture is transferable by the
registered Holder hereof on the Securities Register of the Company, upon
surrender of this Junior Subordinated Debenture for registration of transfer at
the office or agency of the Trustee accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the registered Holder hereof or such Holder's attorney duly
authorized in writing, and thereupon one or more new Junior Subordinated
Debentures of authorized denominations and for the same aggregate principal
amount 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 Junior
Subordinated Debenture, the Company, the Trustee, any paying agent and the
Securities Registrar (as defined in the Indenture) may deem and treat the
Registered Holder hereof as the absolute owner hereof (whether or not this
Junior Subordinated Debenture shall be overdue and notwithstanding any notice
of ownership or writing hereon made by anyone other than the Securities
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and interest due hereon and for all other purposes, and
neither the Company nor the Trustee nor any paying agent nor any Securities
Registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or the
interest on this Junior Subordinated Debenture, 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 corporation,
whether by virtue
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<PAGE> 68
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.
The Junior Subordinated Debentures are issuable only in registered
form without coupons in denominations of $10 and any integral multiple thereof.
All terms used in this Junior Subordinated Debenture that are defined
in the Indenture shall have the meanings assigned to them in the Indenture.
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<PAGE> 1
EXHIBIT 23.1
Independent Auditor's Consent
The Board of Directors
Enterbank Holdings, Inc.:
We consent to incorporation by reference in pre-effective Amendment No. 1 to the
registration statement on Form S-3 of Enterbank Holdings, Inc. of our report
dated January 29, 1999 relating to the consolidated balance sheets of Enterbank
Holdings, Inc. and subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of income, shareholders' equity, cash flows, and
comprehensive income for each of the years in the three-year period ended
December 31, 1998, which report appears in the December 31, 1998 annual report
on Form 10-K of Enterbank Holdings, Inc.
/s/ KPMG, LLP
St. Louis, Missouri
October 4, 1999
