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REGISTRATION NO. 333-________
333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
PREMIER BANCORP, INC. PBI CAPITAL TRUST
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(Exact name of Registrant as (Exact name of Registrant as
specified in its charter) specified in its trust agreement)
PENNSYLVANIA DELAWARE
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(State or other jurisdiction of (State or other jurisdiction
incorporation or organization) of incorporation or organization)
6022 6022
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(Primary Standard Industrial (Primary Standard Industrial
Classification Code Number) Classification Code Number)
23-2921058 23-2971704
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(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
379 NORTH MAIN STREET
DOYLESTOWN, PENNSYLVANIA 18901
(215) 345-5100
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(Address, including zip code, and telephone number, including area code,
of Registrants' principal executive offices)
JOHN C. SOFFRONOFF
PRESIDENT AND CHIEF EXECUTIVE OFFICER
PREMIER BANCORP, INC.
379 NORTH MAIN STREET
DOYLESTOWN, PENNSYLVANIA 18901
(215) 345-5100
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
H. Anderson Ellsworth
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Jay W. Waldman
Ellsworth, Carlton & Waldman, P.C.
1105 Berkshire Boulevard, Suite 320
Wyomissing, PA 19610
(610) 374-1135
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after this Registration Statement becomes effective.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering.[_]________
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering.[_]________
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, check the following box. [X]
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CALCULATION OF REGISTRATION FEE
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Proposed Proposed
maximum maximum
Title of each offering aggregate Amount of
class of securities Amount to be price per offering registration
to be registered registered unit(1) price(1) fee(2)
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Exchange Capital Securities
of PBI Capital Trust $10,000,000 100% $10,000,000 $2,780
Exchange Junior
Subordinated Deferrable
Interest Debentures of
Premier Bancorp, Inc.(2)
Premier Bancorp, Inc.
Exchange Guarantee with
respect to Exchange Capital
Securities(3)
Total(4) $10,000,000(5) 100% $10,000,000(5) $2,780
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(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Exchange Junior
Subordinated Deferrable Interest Debentures of Premier Bancorp, Inc. (the
"Exchange Junior Subordinated Debentures") distributed upon any liquidation
of PBI Capital Trust.
(3) No separate consideration will be received for the Premier Bancorp, Inc.
Exchange Guarantee.
(4) This Registration Statement is deemed to cover rights of holders of
Exchange Junior Subordinated Deferrable Interest Debentures under the
Indenture, the rights of holders of Exchange Capital Securities of PBI
Capital Trust under an Amended and Restated Declaration of Trust, the
rights of holders of such Capital Securities under the Exchange Guarantee
and certain backup undertakings as described herein.
(5) Such amount represents the liquidation amount of the PBI Capital Trust
Exchange Capital Securities to be exchanged hereunder and the principal
amount of Exchange Junior Subordinated Deferrable Interest Debentures that
may be distributed to holders of such Capital Securities upon any
liquidation of PBI Capital Trust.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SUCH
SECTION 8(a), MAY DETERMINE.
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SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY __, 1999
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.
PBI CAPITAL TRUST
Offer to exchange its
8.57% Exchange Capital Securities
(Liquidation Amount $1,000 per Exchange Capital Security)
for any and all of its outstanding
8.57% Original Capital Securities
(Liquidation Amount $1,000 per Original Capital Security)
Fully and Unconditionally Guaranteed as described in this Prospectus by
PREMIER BANCORP, INC.
PBI Capital Trust, a Delaware statutory business trust, is offering to
exchange up to $10,000,000 aggregate liquidation amount of its 8.57% Exchange
Capital Securities for a similar amount of its outstanding 8.57% Original
Capital Securities. The Exchange Capital Securities are registered under the
Securities Act of 1933. There is currently $10,000,000 aggregate liquidation
amount of the Original Capital Securities outstanding.
As part of this Exchange Offer, Premier Bancorp, Inc. is also offering to
exchange its guarantee of PBI Capital Trust's obligations under the Original
Capital Securities for a similar guarantee of the Trust's obligations under the
Exchange Capital Securities, as described in this Prospectus. Also as part of
this Exchange Offer, Premier Bancorp, Inc. is offering to exchange up to
$10,000,000 of its 8.57% Exchange Junior Subordinated Debentures for a similar
amount of its 8.57% Original Junior Subordinated Debentures. The exchanged
guarantee and the Exchange Junior Subordinated Debentures are also registered
under the Securities Act of 1933.
The terms of the Exchange Capital Securities, the Exchange Junior
Subordinated Debentures and the exchanged guarantee of Premier Bancorp, Inc. are
the same as the terms of the Original Capital Securities, the Original Junior
Subordinated Debentures and the original guarantee of Premier Bancorp, Inc.
except that:
* each of the exchanged securities are registered under the
Securities Act of 1933 and do not have the same restrictions on
transfer as the original securities
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* the distribution rate on the exchanged securities will not have
the potential to increase, and
* the Exchange Junior Subordinated Debentures will not be entitled
to any liquidated damages.
This Prospectus and a transmittal letter describing the procedures for
exchanging original securities for the exchange securities are first being
mailed to all of the holders of the original securities on February __, 1999.
You should carefully consider the "Risk Factors" beginning on page 18
before deciding whether to exchange your Original Capital Securities for
Exchange Capital Securities.
These securities are not deposits or other obligations of a bank and are
not insured by the Federal Deposit Insurance Corporation or any other
governmental agency.
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.
The date of this Prospectus is February __, 1999.
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TABLE OF CONTENTS
Where You Can Find More Information 1
Incorporation of Certain Documents by Reference 1
Forward Looking Statements 3
Summary Selected Consolidated Financial Data 16
Risk Factors 18
Ratios of Earnings to Combined Fixed Charges 31
Information Concerning PBI Capital Trust 32
Information Concerning Premier Bancorp, Inc. 33
Capitalization 39
Accounting Treatment 40
The Exchange Offer 40
Description of Exchange Securities 53
Description of Original Securities 86
Relationship Among the Exchange Capital Securities, 87
The Exchange Junior Subordinated Debentures and
the Exchange Guarantee
Certain Federal Income Tax Consequences 89
ERISA Considerations 95
Plan of Distribution 96
Validity of Exchange Securities 97
Experts 98
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WHERE YOU CAN FIND MORE INFORMATION
Premier Bancorp, Inc. (the "Company") files annual, quarterly and special
reports, proxy statements and other information with the Securities and Exchange
Commission ("SEC") in compliance with the information reporting requirements of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"). You may
read and copy any document the Company files at the SEC's following locations:
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<S> <C> <C>
Public Reference Room New York Regional Office Chicago Regional Office
450 Fifth Street, N.W. 7 World Trade Center Citicorp Center
Room 1024 Suite 1300 500 West Madison Street
Washington, DC 20549 New York, NY 10048 Suite 1400
Chicago, IL 60661-2511
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You may also obtain copies of this information by mail from the Public
Reference Section of the SEC, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549 at prescribed rates. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms. The Company's SEC filings are
also available to the public from commercial document retrieval services and at
the web site maintained by the SEC at "http://www/sec/gov."
Separate financial statements of PBI Capital Trust (the "Trust") are not
included in this Prospectus. We do not believe that such financial statements
are helpful because the Trust is a newly formed special purpose entity; the
Trust has no operating history or independent operations; and the Trust is not
engaged in, and does not propose to engage in, any activity other than holding
as trust assets the Junior Subordinated Debentures, issuing the Trust Securities
and engaging in incidental activities. See "Information Concerning PBI Capital
Trust" and "Description of Exchange Securities". In addition, the Company does
not expect that the Trust will file reports and other information under the
Exchange Act with the SEC.
This Prospectus is part of a registration statement filed by the Company
and the Trust with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"). As allowed by SEC rules, this Prospectus does not contain all
the information you can find in the registration statement or the exhibits filed
with the registration statement. You should review the registration statement
and the exhibits filed with such registration statement for further information
regarding the Company, the Trust and the Exchange Capital Securities being
offered by this Prospectus. The registration statement and its exhibits may be
inspected at the public reference facilities of the SEC at the addresses listed
above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The SEC allows us to "incorporate by reference" information into this
Prospectus, which means that we can disclose important information to you by
referring you to another document we filed separately with the SEC. The
information incorporated by reference is considered to be
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a part of this Prospectus, except for any information superseded by information
in this Prospectus. This Prospectus incorporates by reference the documents
listed below that the Company has previously filed with the SEC. These documents
contain important information about the Company and its financial condition.
Premier Bancorp, Inc. Filings Period
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Annual report on Form 10-KSB Year ended December 31, 1997
Quarterly Reports on Form 10-QSB Quarters ended March 31, 1998,
June 30, 1998 and September 30, 1998
We incorporate by reference additional documents that we may file with the
SEC after the date of this Prospectus and before the end of the offering of the
exchange securities offered by this Prospectus. These documents include periodic
reports, such as Annual Reports on Form 10-KSB, Quarterly Reports on Form 10-QSB
and Current Reports on Form 8-K, as well as proxy statements.
You can obtain any of the documents incorporated by reference in this
Prospectus from the Company, or from the SEC through the SEC's web site address
listed above. Documents incorporated by reference are available from the Company
at no cost by writing or telephoning us at:
PREMIER BANCORP, INC.
Bruce E. Sickel
Chief Financial Officer
379 North Main Street
Doylestown, Pennsylvania 18901
(215) 345-5100
If you request any incorporated documents from us, we will mail them to you
by first class mail, or another equally prompt means, within one business day
after we receive your request.
As used in this Prospectus, the term "Prospectus" and "herein" mean this
Prospectus, including the documents incorporated or deemed incorporated in this
Prospectus by reference, as such documents may be amended, supplemented or
otherwise modified from time to time. Statements contained in this Prospectus as
to the contents of any contract or other document referred to in this Prospectus
do not claim to be complete, and where reference is made to the particular
provisions of such contract or other document, such provisions are qualified in
all respects by reference to all of the provisions of such contract or other
document.
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We have not authorized anyone to give any information or make any
representation that is different from, or in addition to, that contained in this
Prospectus or in any of the documents that we have incorporated by reference
into this Prospectus in connection with this Exchange Offer. Therefore, if
anyone does give you information of this sort, you should not rely on it. If you
are in a jurisdiction where offers to exchange or sell, or solicitations of
offers to exchange or purchase, the securities offered by this Prospectus, or if
you are a person to whom it is unlawful to direct these types of activities,
then the offer presented in this Prospectus does not extend to you. The
information contained in this Prospectus speaks only as of the date of this
Prospectus unless the information specifically indicates that another date
applies.
FORWARD-LOOKING STATEMENTS
Information contained in this Prospectus, or information incorporated by
reference in this Prospectus, may constitute "forward-looking statements." These
statements can be identified by the use of forward-looking terminology such as
"believes," "expects," "may," "will," "should," "projected," "contemplates" or
"anticipates," the negative thereof, other variations or comparable terminology.
These forward-looking statements involve certain risks and uncertainties and we
cannot give you assurance that the future results covered by the forward-looking
statements will be achieved. Factors that may cause actual results to differ
materially from those contemplated by such forward-looking statements include,
among other things, the following possibilities: (1) general economic
conditions, including their impact on capital expenditures; (2) business
conditions in the banking industry; (3) the regulatory environment; (4) rapidly
changing technology and evolving banking industry standards; (5) competitive
factors, including increased competition with community, regional and national
financial institutions; (6) new service and product offerings by competitors and
price pressures; (7) the inability of the Company to accurately estimate the
cost of systems preparation for Year 2000 compliance; and (8) similar items.
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SUMMARY
This summary provides an overview of selected information contained
elsewhere in this Prospectus and does not contain all the information you should
consider. Therefore, you should also read the more detailed information
appearing elsewhere in this Prospectus, the Company's financial statements and
the other information that is incorporated by reference in this Prospectus.
PBI CAPITAL TRUST
The Trust is a statutory business trust formed under Delaware law by (1) a
Trust Agreement executed by the Company, as Sponsor; First Union Trust Company,
National Association, as Property Trustee and as Delaware Trustee; and the two
individual Administrative Trustees named therein; and (2) the filing of a
certificate of trust with the Delaware Secretary of State on July 28, 1998. The
Trust's business and affairs are conducted by the Issuer Trustees: First Union
Trust Company, National Association, as Property Trustee and as Delaware
Trustee, and the two individual Administrative Trustees who are employees or
officers of, or affiliated with, the Company. The Trust exists solely to
* issue and sell the Trust's securities;
* use the proceeds from the sale of the Trust's securities to acquire
Junior Subordinated Debentures issued by the Company; and
* engage in only those other activities necessary or incidental to such
activities (such as registering the transfer of the Trust's
securities).
The Junior Subordinated Debentures will be the sole assets of the Trust,
and payments under the Junior Subordinated Debentures will be the sole revenue
of the Trust. All of the Trust's Common Securities will be owned by the Company.
PREMIER BANCORP, INC.
The Company
The Company is a Pennsylvania business corporation and a registered bank
holding company headquartered in Doylestown, Bucks County, Pennsylvania. The
Company is the holding company for Premier Bank (the "Bank"). The Bank was
organized in 1990 as a Pennsylvania state-chartered banking institution and
began operations on April 24, 1992. The
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Company's consolidated financial condition and results of operations consist
almost entirely of the Bank's financial condition and results of operations. At
September 30, 1998, the Company had total consolidated assets of $232.6 million,
total deposits of $174.4 million and total shareholders' equity of $11.1
million.
The Bank
The Bank conducts business from its main office and two other retail
offices located in Southampton, Bucks County and Easton, Northampton County,
Pennsylvania. The Bank also has a loan origination office in Yardley, Bucks
County. The Bank plans to open a fourth branch office in Lower Makefield
Township, Bucks County, Pennsylvania, shortly.
The Bank is a community-oriented financial services provider whose business
primarily consists of attracting retail deposits from the general public and
small businesses and originating commercial and consumer loans in the Bank's
market area.
The Bank provides a wide variety of products and services which include
checking, savings and money market accounts, as well as certificates of deposit.
Credit products include residential mortgage loans, home equity loans and lines
of credit, personal lines of credit, working capital lines and other consumer
and commercial loans. The Bank also offers other services such as electronic
banking, cash management services, safe deposit boxes, telephone banking and
automated teller services.
The Bank places an emphasis on serving customer needs by providing personal
attention and service.
The Bank is a member of the Federal Reserve System and the Bank's deposits
are insured by the Bank Insurance Fund of the Federal Deposit Insurance
Corporation to the fullest extent provided by law.
Recent Developments
On December 22, 1998, the Company commenced an offering of 500,000 shares
of its common stock at $11.00 per share. The Company intends to use the net
proceeds of that offering to further its general corporate purposes, including
investments in or advances to the Bank in order to increase the Bank's capital
position. The Company anticipates that this will permit the Bank to provide for
higher per borrower lending limits which, in turn, will permit the Bank to make
larger loans and increase its lending activity. In addition, the Company may use
the net proceeds of that offering to support the continuing development of the
Bank's franchise through possible expansion into related businesses. We cannot
assure you that any of the 500,000 offered shares will be sold.
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THE EXCHANGE OFFER
The Exchange Offer We are offering to exchange up to $10,000,000
aggregate Liquidation Amount of Exchange Capital
Securities for an equal aggregate Liquidation
Amount of Original Capital Securities. You may
exchange all of your Original Capital Securities
or less than all of them provided that the
Original Capital Securities you intend to exchange
have a Liquidation Amount of at least $100,000
(100 Capital Securities) or any integral multiple
of $1,000 (one Capital Security) in excess of
$100,000.
We are making this Exchange Offer in order to
satisfy our obligations under a Registration
Rights Agreement relating to your Original Capital
Securities. See "The Exchange Offer--Procedures
for Tendering Original Capital Securities" for a
description of the procedures for tendering your
Original Capital Securities.
Expiration Date The Exchange Offer will expire at 5:00 p.m.,
New York City time, on _________, 1999, unless we
extend it (in which case the Expiration Date will
be the latest date and time to which we extend the
Exchange Offer). See "The Exchange Offer--Terms of
the Exchange Offer."
Conditions to the The Exchange Offer is subject to certain
Exchange Offer conditions, which we have the discretion to waive.
The Exchange Offer is not conditioned upon the
tender of any minimum Liquidation Amount of
Original Capital Securities. See "The Exchange
Offer--Conditions to the Exchange Offer."
Terms of the Exchange We reserve the right, in our discretion and
Offer subject to applicable law, at any time and from
time to time:
* to delay the acceptance of the Original
Capital Securities for exchange;
* to end the Exchange Offer if certain
specified conditions are not satisfied;
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* to extend the Exchange Offer's Expiration
Date and keep all of the Original Capital
Securities tendered pursuant to the Exchange
Offer, subject, however, to your right to
withdraw your tendered Original Capital
Securities; or
* to waive any condition or otherwise change
the terms of the Exchange Offer in any way.
See "The Exchange Offer--Terms of the Exchange
Offer."
Withdrawal Rights You may withdraw your tender of Original Capital
Securities at any time before the Expiration Date
by delivering written notice of such withdrawal to
the Exchange Agent as provided in the procedures
described below under the caption "The Exchange
Offer--Withdrawal Rights."
Procedures for Tendering You must appropriately complete and sign a "Letter
Original Capital of Transmittal" and mail, fax or hand deliver it,
Securities together with any other documents required by the
Letter of Transmittal, to the Exchange Agent,
either with your Original Capital Securities or in
compliance with the specified procedures for
guaranteed delivery of Original Capital
Securities. Certain brokers, dealers, commercial
banks, trust companies and other nominees may also
effect tenders by book-entry transfer. If your
Original Capital Securities are registered in the
name of a broker, dealer, commercial bank, trust
company or other nominee, you should contact such
person promptly if you wish to tender your
Original Capital Securities pursuant to the
Exchange Offer. See "The Exchange Offer--
Procedures for Tendering Original Capital
Securities."
Please do not send your "Letter of Transmittal"
and certificates representing your Original
Capital Securities to us. You should only send
such documents to the Exchange Agent.
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Resales of Exchange In making the Exchange Offer, we are relying on
Capital Securities the position of the staff of the SEC's Division of
Corporation Finance contained in certain
interpretive letters addressed to third parties in
other transactions. However, we have not sought
our own interpretive letter. Therefore, there is
no guarantee that the staff of the SEC's Division
of Corporation Finance would make a similar
determination regarding the Exchange Offer as it
has in the interpretive letters to third parties.
Accordingly, based on these interpretations, and
subject to the provisions of the two immediately
following paragraphs, we believe that you may sell
or otherwise transfer Exchange Capital Securities
issued to you pursuant to this Exchange Offer in
exchange for your Original Capital Securities (so
long as you are not a broker-dealer) without
further compliance with the registration and
prospectus delivery requirements of the
Securities Act.
However, if you are an "affiliate" of either the
Company or the Trust, if you intend to participate
in the Exchange Offer for the purpose of
distributing the Exchange Capital Securities, or
if you are a broker-dealer who purchased the
Original Capital Securities from the Trust to
resell them pursuant to Rule 144A or any other
available exemption under the Securities Act:
* you will not be able to rely on the
interpretations described above;
* you will not be permitted or entitled to
tender such Original Capital Securities in
the Exchange Offer; and
* you must comply with the registration and
prospectus delivery requirements of the
Securities Act in connection with any sale or
other transfer of your Original Capital
Securities unless such sale is made pursuant
to an exemption from such requirements.
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In addition, as described below, if you are a
broker-dealer holding Original Capital Securities
which you acquired for your own account as a
result of market-making or other trading
activities and you exchange such Original Capital
Securities for Exchange Capital Securities, then
you must deliver a prospectus which meets the
requirements of the Securities Act in connection
with any resales of such Exchange Capital
Securities.
If you wish to exchange your Original Capital
Securities for Exchange Capital Securities, you
will be required to represent that:
* you are not an "affiliate" of either the
Company or the Trust;
* you are acquiring Exchange Capital Securities
in the ordinary course of your business;
* you have no arrangement or understanding with
any person to participate in a distribution
(within the meaning of the Securities Act) of
such Exchange Capital Securities; and
* if you are not a broker-dealer, you are not
engaged in, and do not intend to engage in, a
distribution (within the meaning of the
Securities Act) of such Exchange Capital
Securities.
If you are a broker-dealer receiving Exchange
Capital Securities for your own account in
exchange for Original Capital Securities, and if
such Original Capital Securities were acquired by
you as a result of market-making or other trading
activities, then you must acknowledge that you
will deliver a prospectus meeting the requirements
of the Securities Act in connection with any
resale of such Exchange Capital Securities. The
Letter of Transmittal states that your
acknowledgment and delivery of such a prospectus
will mean that you will not be deemed to admit
that you are an "underwriter" within the meaning
of the Securities Act.
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Based on the interpretive letters referred to
above, we believe that if you are a "Participating
Broker-Dealer" who acquired Original Capital
Securities for your own account as a result of
market-making or other trading activities, you may
fulfill your prospectus delivery requirements with
respect to the Exchange Capital Securities
received upon exchange of your Original Capital
Securities (other than Original Capital Securities
which represent an unsold allotment from the
initial sale of the Original Capital Securities)
with a prospectus meeting the requirements of the
Securities Act. This may be the prospectus
prepared for an exchange offer as long as it
contains a description of the plan of distribution
with respect to the resale of such Exchange
Capital Securities. Accordingly, this Prospectus,
as it may be changed or supplemented from time to
time, may be used for such purposes.
Nevertheless, subject to certain provisions in the
Registration Rights Agreement and subject to the
limitations described under the caption "The
Exchange Offer--Resales of Exchange Capital
Securities," we have agreed that this Prospectus,
as it may be changed or supplemented from time to
time, may be used by you if you are a
"Participating Broker-Dealer" in connection with
resales of such Exchange Capital Securities for a
period which ends on the 180th day after the
Expiration Date (subject to extension under
certain limited circumstances) or, if earlier,
when you have disposed of all such Exchange
Capital Securities. See "Plan of Distribution."
If you are a "Participating Broker-Dealer" and are
also an "affiliate" of the Company or the Trust,
you may not rely on such interpretive letters and
you must comply with the registration and
prospectus delivery requirements of the Securities
Act in connection with any resale transaction. See
"The Exchange Offer--Resales of Exchange Capital
Securities."
Exchange Agent The exchange agent with respect to the
Exchange Offer is First Union Trust Company,
National Association (the "Exchange Agent"). The
address, telephone and facsimile numbers of the
Exchange Agent are listed in "The
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Exchange Offer--Exchange Agent" and in the Letter
of Transmittal.
Use of Proceeds Neither the Company nor the Trust will receive any
cash proceeds from the issuance of the Exchange
Capital Securities.
Certain United States You should review carefully the information
Federal Income Tax contained under the caption "Certain United States
Consequences; ERISA Federal Income Tax Consequences" and "ERISA
Considerations Considerations" before tendering your Original
Capital Securities in the Exchange Offer.
THE EXCHANGE CAPITAL SECURITIES
Securities Offered We have registered up to $10,000,000 aggregate
Liquidation Amount of the Trust's Exchange Capital
Securities (Liquidation Amount $1,000) under the
Securities Act. The terms of the Exchange Capital
Securities are the same as the terms of the
Original Capital Securities, except that the
Exchange Capital Securities:
* have been registered under the Securities
Act;
* will not be subject to certain transfer
restrictions applicable to the Original
Capital Securities; and
* will not provide for any increase in the
Distribution Rate thereon.
See "The Exchange Offer--Purpose of the Exchange
Offer," "Description of Exchange Securities" and
"Description of Original Securities."
Distribution Dates February 15 and August 15 of each year, beginning
August 15, 1999.
Extension Periods If no default has occurred and is
continuing, the Company will have the right, at
any time, to defer payments of interest on the
Exchange Junior Subordinated Debentures
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for a period not exceeding 10 consecutive
semi-annual periods (each an "Extension Period").
Distributions on the Exchange Capital Securities
will be deferred during any Extension Period
elected by the Company with respect to the payment
of interest on the Exchange Junior Subordinated
Debentures. No Extension Period will extend beyond
the Stated Maturity Date of the Exchange Junior
Subordinated Debentures. See "Description of
Exchange Securities--Description of Exchange
Junior Subordinated Debentures--Option to Extend
Interest Payment Date".
During an Extension Period, interest will continue
to accrue on the Exchange Junior Subordinated
Debentures. Therefore, holders of Exchange Capital
Securities would be required to accrue income for
United States federal income tax purposes. This
means that you would have income from the Exchange
Capital Securities for United States federal
income tax purposes but that you would not receive
any cash with which to pay any tax that might be
due on that income. See "Certain United States
Federal Income Tax Consequences--Interest Income
and Original Issue Discount" and "Risk
Factors--Option to Extend Interest Payment Period;
Tax Considerations."
The Company does not currently intend to exercise
its right to defer payments of interest by
extending the interest payment period of the
Exchange Junior Subordinated Debentures.
Ranking The Exchange Capital Securities will rank equally
with, and payments thereon will be made pro rata
with, the Original Capital Securities and the
Common Securities of the Trust except as described
under "Description of Exchange
Securities--Description of Exchange Capital
Securities--Subordination of Common Securities."
The Exchange Junior Subordinated Debentures will
rank equally with the Original Junior Subordinated
Debentures and all other junior subordinated debt
securities to be issued by the Company pursuant to
the Indenture with substantially similar
subordination terms, and which are issued and sold
to other trusts to be established by the Company
similar to the Trust ("Other Trusts"). The
12
<PAGE>
Exchange Junior Subordinated Debentures will be
unsecured and subordinate and junior in right of
payment as described in the Indenture to all
Senior Indebtedness of the Company. See
"Description of Exchange Securities--Description
of Exchange Junior Subordinated Debentures."
The Exchange Guarantee will rank equally with the
Original Guarantee and all other guarantees to be
issued by the Company with respect to capital
securities to be issued by Other Trusts, and will
constitute an unsecured obligation of the Company
and will rank subordinate and junior in right of
payment as described in the Guarantee to all
Senior Indebtedness. See "Description of Exchange
Securities--Description of Exchange Guarantee."
In addition, because the Company is a holding
company, the Junior Subordinated Debentures and
the Guarantee are effectively subordinated to all
existing and future liabilities of the Company's
subsidiaries, including the Bank's deposits.
Redemption You may be required to sell your Exchange Capital
Securities to the Trust if the Junior Subordinated
Debentures are prepaid. In this case, the Trust
will buy your Exchange Capital Securities at a
redemption price equal to the applicable Optional
Prepayment Price described in the Indenture.
Subject to Federal Reserve approval, if then
required under the Federal Reserve's applicable
capital guidelines or policies, the Company may
redeem the Junior Subordinated Debentures prior to
maturity:
* on or after August 15, 2008, in whole at any
time or in part from time to time; or
* at any time, in whole (but not in part) upon
the occurrence and during the continuance of
a Special Event.
See "Description of Exchange
Securities--Description of Exchange Capital
Securities--Redemption."
13
<PAGE>
Reserve Account The Company has established the Reserve Account in
which it deposited $857,000 from the net proceeds
of the sale of the Original Junior Subordinated
Debentures. The amount deposited in the Reserve
Account is invested in highly marketable
securities. If the Company does not have enough
funds available to make an interest payment on the
Junior Subordinated Debentures and does not elect
to defer such interest payments, then funds in the
Reserve Account, as needed, will be used to make
the interest payment then due on the Junior
Subordinated Debentures.
The Company is required to maintain the balance in
the Reserve Account at the Reserve Account
Required Amount at all times except during times
that:
* the ratio of the Company's total unsecured
debt (on a consolidated basis) to
shareholders' equity is not more than 70%;
and
* without obtaining prior regulatory approval,
the Bank can pay dividends to the Company of
at least two times the amount of interest
payable on the Junior Subordinated Debentures
for a one-year period.
Although the Company is required to maintain the
balance in the Reserve Account at the Reserve
Account Required Amount, under certain
circumstances, the Company will have up to 24
months from the later to occur of:
* a balance in the Reserve Account less than
the Reserve Account Required Amount, or
* the termination of an Extension Period
to restore the balance in the Reserve Account to
the Reserve Account Required Amount.
Holders of the Junior Subordinated Debentures will
have no rights to funds in the Reserve Account
until funds in the Reserve Account are used to
make an interest payment, and any rights in funds
used from the Reserve Account to make an interest
payment will be subordinated and junior to the
14
<PAGE>
rights of holders of Senior Indebtedness. See
"Description of Exchange Securities--Description
of Exchange Junior Subordinated
Debentures--Reserve Account."
Transfer Restrictions The Exchange Capital Securities will
be issued, and may be transferred, only in blocks
having a Liquidation Amount of not less than
$100,000 (100 Capital Securities) and multiples of
$1,000 in excess of $100,000.
ERISA Considerations You should consider carefully the restrictions on
purchase described under the caption "ERISA
Considerations."
Absence of Market for The Exchange Capital Securities will be a new
the Exchange Capital issue of securities for which there currently is
Securities no market. Accordingly, we cannot assure you that
any market will develop for the Exchange Capital
Securities. We do not intend to apply for listing
of the Exchange Capital Securities on any
securities exchange or for quotation through the
National Association of Securities Dealers
Automated Quotation System ("NASDAQ"). See "Plan
of Distribution."
Risk Factors You should consider carefully the "Risk
Factors" beginning on page 18.
15
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following is a summary of selected consolidated financial data. This
information should be read in conjunction with the historical Consolidated
Financial Statements of the Company included in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1997 and the Company's Quarterly
Report on Form 10-QSB for the quarter ended September 30, 1998. The selected
consolidated financial statements include the accounts of Premier Bancorp, Inc.
and its wholly-owned subsidiaries, Premier Bank and PBI Capital Trust. All
material intercompany balances and transactions have been eliminated. Results
for the periods ended September 30, 1998 and 1997 are not necessarily indicative
of results of operations that may be expected for the entire year.
<TABLE>
<CAPTION>
At or for
the nine
months ended At or for the year ended
September 30, December 31,
------------- ------------
1998 1997 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- ------- -------
(Dollars in thousands, except per share data and percentages)
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
Total Interest Income ............... $11,920 $ 9,764 $13,448 $10,103 $ 7,001 $ 3,926 $ 2,037
Total Interest Expense .............. 6,569 5,466 7,532 5,543 3,685 1,632 936
------- ------- ------- ------- ------- ------- -------
Net Interest Income ................. 5,351 4,298 5,916 4,560 3,316 2,294 1,101
Provision for Loan Losses ........... 355 280 400 350 150 315 190
Total Non-Interest Income ........... 233 134 150 208 137 50 88
Total Non-Interest Expense .......... 3,473 2,766 3,735 2,887 2,436 1,627 1,359
------- ------- ------- ------- ------- ------- -------
Net Income Before Income Taxes ...... 1,756 1,386 1,931 1,531 867 402 (360)
Provision for Income Taxes .......... 575 440 590 435 96 (140) --
------- ------- ------- ------- ------- ------- -------
Net income .......................... 1,181 946 1,341 1,096 771 542 (360)
PER SHARE AND SHARE DATA(1):
Earnings Per Share-Basic ............ 0.45 0.36 0.51 0.42 0.30 0.24 (0.24)
Earnings Per Share-Diluted .......... 0.40 0.35 0.49 0.40 0.30 0.24 (0.24)
Book Value Per Share at End of Period 4.23 3.82 3.97 3.43 3.01 2.65 2.52
Average Basic Shares ................ 2,630 2,604 2,606 2,604 2,544 2,230 1,529
Average Diluted Shares .............. 2,919 2,738 2,752 2,706 2,585 2,302 1,529
</TABLE>
(Footnotes on following page)
16
<PAGE>
<TABLE>
<CAPTION>
At or for
the nine
months ended At or for the year ended
September 30, December 31,
------------- ------------
1998 1997 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data and percentages)
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA
Loans, Net of Unearned Income ............. $129,954 $102,265 $108,533 $ 82,910 $ 60,097 $ 45,169 $ 26,922
Investment Securities Available for Sale .. 83,535 61,073 62,434 52,900 37,656 3,664 2,797
Investment Securities Held to Maturity .... 9,854 13,346 15,170 13,888 10,787 12,508 5,138
Total Assets .............................. 232,557 184,575 193,523 153,687 113,995 63,500 38,336
Deposits .................................. 174,405 140,789 143,603 118,093 92,807 50,346 33,103
Borrowings ................................ 27,655 30,817 36,343 23,641 11,026 6,275 --
Shareholders' Equity ...................... 11,135 9,946 10,434 8,943 7,831 6,144 4,255
AVERAGE BALANCE SHEET DATA
Loans, Net of Unearned Income ............. 117,936 91,764 95,146 68,594 50,227 34,909 17,195
Investment Securities ..................... 77,408 67,727 69,352 55,007 32,417 13,570 9,945
Interest Earning Assets ................... 198,953 161,072 166,293 125,545 84,751 50,334 29,486
Total Assets .............................. 205,619 166,737 172,198 129,510 87,648 51,872 30,912
Deposits .................................. 163,790 128,129 131,773 102,179 73,366 42,318 26,574
Borrowings ................................ 25,908 26,944 28,447 17,003 5,663 3,274 88
Shareholders' Equity ...................... 10,861 9,200 9,392 8,228 7,069 5,474 3,789
PERFORMANCE RATIOS
Return on Average Assets (4) .............. 0.77% 0.76% 0.78% 0.85% 0.88% 1.04% (1.16)%
Return on Average Stockholders' Equity(4) . 14.53% 13.75% 14.28% 13.32% 10.91% 9.90% (9.50)%
Net Interest Margin(2)(4) ................. 3.60% 3.57% 3.56% 3.63% 3.91% 4.56% 3.73%
Efficiency Ratio(3) ....................... 62.20% 62.27% 61.57% 60.55% 70.55% 69.41% (14.30)%
Number of Full Service Branches ........... 3 3 3 2 2 1 1
ASSET QUALITY RATIOS
Allowance for Loan Losses to Non-performing
Loans ................................ 135.16% 241.59% 209.64% 88.75% 113.71% 474.02% NM
Allowance for Loan Losses to Total Loans .. 1.27% 1.21% 1.25% 1.16% 1.22% 1.33% 1.06%
Non-performing Assets to Total Assets ..... 0.84% 0.83% 0.67% 0.96% 0.57% 0.20% --%
Net Charge-offs to Average Loans .......... 0.05% --% --% 0.19% 0.03% --% 0.02%
CAPITAL RATIOS
Shareholders' Equity to Total Assets ...... 4.79% 5.39% 5.39% 5.82% 6.87% 9.68% 11.10%
Tier I Risk-Based Capital ................. 8.77% 8.70% 8.60% 9.84% 11.32% 12.68% 14.86%
Total Risk-Based Capital .................. 14.07% 11.11% 10.97% 10.90% 12.40% 13.93% 15.92%
Tier I Leverage ........................... 7.02% 5.39% 5.51% 5.80% 6.80% 9.98% 11.13%
</TABLE>
(1) Per share information for all periods has been restated to reflect a
3-for-1 stock split effective December 31, 1997 which increased total
shares outstanding to 2,630,340.
(2) Net interest income divided by average interest-earning assets.
(3) Non-interest expense divided by the sum of net interest income and
non-interest income.
(4) Interim periods have been annualized.
NM - Not Measurable
17
<PAGE>
RISK FACTORS
You should consider carefully the following risk factors as well as the
other information contained in this Prospectus or incorporated by reference in
this Prospectus in connection with the Exchange Offer and the Exchange Capital
Securities offered by the Exchange Offer.
To the extent that any information in this Prospectus is considered to be
"forward-looking information," the risk factors described below are cautionary
statements which identify important factors that could cause the Company's
actual results to differ materially from those results expressed in any
forward-looking statements.
Risk Factors Relating to the Capital Securities
Ranking of the Company's Obligations Under the Guarantee and the Junior
Subordinated Debentures
The ability of the Trust to make the required payments on the Capital
Securities depends completely upon the Company making its required payments on
the Junior Subordinated Debentures. The Company's obligations under the
Guarantee, the Junior Subordinated Debentures and the other documents described
in this Prospectus are unsecured and rank lower in right of payment to all
current and future Senior Indebtedness of the Company. Neither principal,
interest, nor any other payment may be made regarding the Junior Subordinated
Debentures at any time when (a) the Company is in continuing default regarding
any payment of Senior Indebtedness, or if the maturity of any Senior
Indebtedness has been accelerated because of a default; or (b) the maturity of
the Junior Subordinated Debentures has been accelerated, in which case payment
may not be made until all Senior Indebtedness has been paid in full. At
September 30, 1998, the Company had no outstanding Senior Indebtedness; however,
at that date, the Bank had $1.5 million of subordinated debt outstanding.
The Company and its subsidiaries may incur an unlimited amount of
additional debt under the Indenture, the Guarantee and the Trust Agreement. The
Company may also issue additional junior subordinated debentures in connection
with future offerings of Capital Securities, and any such additional debentures
would rank equally with the Junior Subordinated Debentures.
Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary (including the Bank)
upon such subsidiary's liquidation or reorganization or otherwise (and thus your
ability to benefit indirectly from such distribution) is subject to the prior
claims of creditors of that subsidiary (including depositors in the case of the
Bank), except to the extent that the Company may itself be recognized as a
creditor of that subsidiary. At September 30, 1998, the Company's subsidiaries
had total liabilities, not including liabilities owed to the Company, of $211.4
million. Accordingly, all existing and future liabilities of the Company's
subsidiaries, including the Bank's deposit
18
<PAGE>
liabilities, will rank prior to all obligations of the Company relating to the
securities described in this Prospectus. At September 30, 1998, the Bank had
total deposit liabilities of $174.9 million.
As a result, you should look only to the assets of the Company, and not to
the assets of its subsidiaries, for principal and interest payments on the
Junior Subordinated Debentures. See "Description of Exchange
Securities--Description of Exchange Guarantee--Status of the Guarantee" and
"Description of Exchange Securities--Description of Exchange Junior Subordinated
Debentures--Subordination."
The Trust's ability to make payments on the Capital Securities depends
entirely upon the Company making payments on the Junior Subordinated Debentures
when required.
Status of Company as a Bank Holding Company
The Company is a bank holding company regulated by the Board of Governors
of the Federal Reserve System (the "Federal Reserve"). The Company is a legal
entity separate and distinct from the Bank. Virtually all of the Company's
assets are owned by the Bank, the Company's only subsidiary other than the
Trust. The Company relies entirely on cash dividends from the Bank to meet its
obligations for payment of principal and interest on its outstanding debt
obligations and corporate expenses. The Bank's ability to pay dividends to the
Company depends on several factors including the following:
(1) regulatory limitations imposed by the various regulatory agencies with
authority over the Bank, generally based on current and retained
earnings;
(2) regulatory restrictions if such dividends would impair the capital of
the Bank; and
(3) the Bank's profitability and financial condition and its capital
expenditures and other cash flow requirements.
We cannot assure you that the Bank will be able to pay dividends at past
levels, or at all, in the future. See the section entitled "Supervision and
Regulation" in the Company's Annual Report on Form 10-KSB for the year ended
December 31, 1997, which is incorporated herein by reference. Under applicable
banking statutes at September 30, 1998, the Bank could have declared additional
cash dividends of approximately $3.6 million.
In addition to the restrictions on the payment of dividends, the Bank is
subject to additional restrictions required by federal law on extensions of
credit to, and certain other transactions with, the Company (and any affiliated
companies that are existing or may be formed in the future) and on investments
in stock or other securities of the Company and such other affiliates. These
restrictions prevent the Company and such other affiliates from borrowing from
the Bank, unless the loans are secured by various types of collateral. In
addition, the amount of
19
<PAGE>
such secured loans, other transactions and investments by the Bank are generally
limited as follows:
(1) as to the Company and as to each of such other affiliates, 10% of the
Bank's capital and surplus; and
(2) as to the Company and all of such other affiliates, an aggregate of
20% of the Bank's capital and surplus.
Under the Federal Deposit Insurance Act, the Bank would be prohibited from
making capital distributions, including the payment of cash dividends, if, after
making any such distribution, the institution would become "undercapitalized"
(as such term is used in the statute). Based on the Bank's current financial
conditions, the Company does not expect that this prohibition will have any
impact on its ability to obtain cash dividends from the Bank.
Reserve Account. The Company has established the Reserve Account in which
it deposited $857,000 from the net proceeds of the sale of the Original Junior
Subordinated Debentures. The amount deposited in the Reserve Account is invested
in highly marketable securities. If the Company does not have enough funds
available to make an interest payment on the Junior Subordinated Debentures and
does not elect to defer such interest payments, then funds in the Reserve
Account, as needed, will be used to make the interest payment due on the Junior
Subordinated Debentures.
The Company is required to maintain the balance in the Reserve Account at
the Reserve Account Required Amount at all times except during times that:
(1) the ratio of the Company's total unsecured debt (on a consolidated
basis) to shareholders' equity is not more than 70%; and
(2) the Bank can pay dividends to the Company of at least two times the
amount of interest payable on the Junior Subordinated Debentures for a
one-year period.
Although the Company is required to maintain the balance in the Reserve
Account at the Reserve Account Required Amount, the Company will have up to 24
months from the later to occur of:
(1) a balance in the Reserve Account less than the Reserve Account
Required Amount, or
(2) the termination of an interest deferral period
to restore the balance in the Reserve Account to the Reserve Account Required
Amount.
Holders of the Junior Subordinated Debentures will have no interest in the
Reserve Account until funds in the Reserve Account are used to make an interest
payment, and any interest in funds used from the Reserve Account to make an
interest payment will be subordinated and junior to the interests of holders of
Senior Indebtedness. See "Description of
20
<PAGE>
Exchange Securities--Description of Exchange Junior Subordinated
Debentures--Reserve Account."
Option to Extend Interest Payment Period; Tax Considerations; Market Price
Consequences
If no event of default under the Junior Subordinated Debentures has
occurred and is continuing, the Company has the right under the Indenture to
defer interest payments on the Junior Subordinated Debentures at one or more
times for a period of not more than 10 consecutive semi-annual periods with
respect to each Extension Period, but not beyond the Stated Maturity Date of the
Junior Subordinated Debentures. If the Company defers interest payments on the
Junior Subordinated Debentures, then the Trust will also defer semi-annual
Distributions on the Trust Securities. However, during such Extension Period,
you will still accumulate distributions at the rate of 8.57% per year,
compounded semi-annually, on any unpaid distributions, to the extent permitted
by law.
During any such Extension Period, the Company will not be permitted to make
certain payments or distributions with respect to the Company's capital stock
(including dividends on or redemptions of its capital stock), the Company will
not be permitted to make certain payments with respect to any debt securities of
the Company that rank equally with or junior in interest to the Junior
Subordinated Debentures and the Company will not be permitted to 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 equally with
or junior in interest to the Junior Subordinated Debentures. However, the
Company may:
(1) pay dividends or distributions in common stock of the Company;
(2) redeem rights or take certain other actions under a shareholders'
rights plan, if any;
(3) make payments under the Guarantee;
(4) make a distribution of its capital stock as a result of a
reclassification of its capital stock or the exchange or conversion of
one class or series of its capital stock for another class or series
of its capital stock;
(5) purchase fractional shares of its capital stock as a result of the
conversion of exchange of the capital stock or other security being
converted or exchanged; and
(6) make purchases of common stock related to the issuance of common stock
or rights under any future benefit plans for the Company's directors,
officers or employees.
21
<PAGE>
Before the termination of any Extension Period, the Company may further
extend such Extension Period if such extension does not cause such Extension
Period to exceed 10 consecutive semi-annual periods or to extend beyond the
Stated Maturity Date. Following termination of any Extension Period and the
payment of all interest then accrued and unpaid (together with interest thereon
at the annual rate of 8.57%, compounded semi-annually, if permitted by
applicable law), the Company may elect to begin a new Extension Period subject
to the above requirements. There is no limitation on the number of times that
the Company may elect to begin an Extension Period. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Distributions" and
"Description of Exchange Securities--Description of Exchange Junior Subordinated
Debentures--Option to Extend Interest Payment Date."
The Company believes the likelihood of it exercising its option to defer
payments of interest is remote. Consequently, the Junior Subordinated Debentures
will be treated as issued without "original issue discount" ("OID") for United
States federal income tax purposes, and you will be treated as owning an
undivided beneficial interest in the Junior Subordinated Debentures. Therefore,
you will include interest on the Junior Subordinated Debentures in taxable
income under your own method of accounting (i.e., cash or accrual). If the
Company were to exercise its right to defer interest payments or if the Internal
Revenue Service ("IRS") successfully took the position that the exercise of such
right was not remote at the time of issuance of the Junior Subordinated
Debentures, OID would arise, and you would be required to include your pro rata
share of OID in gross income as it accrues for United States federal income tax
purposes before receiving cash. In addition, you would not receive the cash
related to any accrued and unpaid interest from the Trust if you sell or
otherwise transfer your Capital Securities before the record date for the
payment of Distributions after the end of such Extension Period. See "Certain
Federal Income Tax Consequences--Interest Income and Original Issue Discount"
and "--Sales of Exchange Capital Securities."
The Company does not currently intend to exercise its right to defer
interest payments by extending the interest payment period on the Junior
Subordinated Debentures. However, if the Company does elect to exercise this
right in the future, the market price of the Capital Securities is likely to be
adversely affected. Therefore, if you sell your Capital Securities during an
Extension Period, you might not receive the same return on your investment as
someone else who continues to hold the Capital Securities. In addition, the mere
existence of the Company's right to defer interest payments on the Junior
Subordinated Debentures may cause the market price of the Capital Securities to
be more volatile than the market prices of other securities on which OID accrues
that are not subject to such deferrals.
22
<PAGE>
Special Event Redemption
At any time a Special Event occurs (a Regulatory Capital Event or a Tax
Event, in each case as defined under the caption "Description of Junior
Subordinated Debentures--Special Event Prepayment") and is continuing, the
Company may prepay the Junior Subordinated Debentures in whole, but not in part.
The prepayment of the Junior Subordinated Debentures will cause a mandatory
redemption of the Trust Securities within 90 days of such Special Event at a
redemption price equal to the "Special Event Prepayment Price". The Company may
not exercise such right without first receiving any required regulatory
approval. See "Description of Exchange Securities--Description of Exchange
Capital Securities--Redemption."
"Special Event Prepayment Price" is defined under the caption "Description
of Exchange Securities--Description of Exchange Junior Subordinated
Debentures--Special Event Prepayment."
Pending Tax Litigation
You should be aware that the IRS disallowed a deduction for interest paid
by Enron Corporation ("Enron") in 1993 and 1994 on securities issued by Enron
that are similar to the Junior Subordinated Debentures. Enron has filed a
petition in the United States Tax Court challenging the disallowance of its
deductions. Although Enron's debt obligations differ in certain respects from
the Junior Subordinated Debentures, the IRS' arguments that interest on those
obligations is not deductible are not focused on those different terms and, as a
result, could apply to the Junior Subordinated Debentures.
A decision by the Tax Court in favor of the IRS in Enron's case would not
necessarily affect the tax treatment of interest paid on the Junior Subordinated
Debentures because such a decision may be based on factors that differ from
those pertaining to the Junior Subordinated Debentures, the Trust or the
Company. However, it is possible that such a decision would result in the
receipt by the Company or the Trust of an opinion of counsel that there is more
than an insubstantial risk that interest payable on the Junior Subordinated
Debentures is not or will not be deductible. The receipt of such an opinion
would constitute a Tax Event, which would permit the Company to cause a
redemption of the Trust Securities. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Redemption."
Possible Tax Law Changes Affecting the Capital Securities
In recent years, Congress and the Clinton Administration have periodically
considered proposals that would generally deny an issuer a deduction for United
States income tax purposes for interest paid on instruments similar to the
Junior Subordinated Debentures. Such proposals have been considered in
connection with recent legislation, including the Taxpayer Relief Act of 1997
(the "Relief Act"). While no such proposals have been included in the final
provisions of
23
<PAGE>
such recent legislation, including the Relief Act, and although no such
legislation is currently pending, we cannot assure you that similar legislation
proposed and enacted after the date of this Prospectus would not adversely
affect the Company's ability to deduct interest payable on the Junior
Subordinated Debentures. Accordingly, we cannot assure you that a Tax Event will
not occur. Such a Tax Event would permit the Company to cause a redemption of
the Trust Securities. See "Description of Exchange Securities--Description of
Exchange Capital Securities--Redemption."
Liquidation Distribution of Junior Subordinated Debentures; Possible Adverse
Effect on Market Prices
The Company may at any time dissolve the Trust, and after satisfaction of
liabilities to the Trust's creditors as provided by applicable law, cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities in liquidation of the Trust. The Company's ability to exercise this
right is subject to its receipt of:
(1) an opinion of counsel stating that a distribution of the Junior
Subordinated Debentures will not be a taxable event to you, and
(2) any required regulatory approval.
Under current United States federal income tax law, a distribution of
Junior Subordinated Debentures upon the dissolution of the Trust would not be a
taxable event to you. If the Trust is dissolved following a Special Event and
you receive distributions of cash, such distributions would constitute a taxable
event to you. See "Certain Federal Income Tax Consequences--US Holders--Receipt
of Exchange Junior Subordinated Debentures or Cash Upon Liquidation of the
Trust."
Because you may receive Junior Subordinated Debentures upon liquidation of
the Trust and because Distributions are otherwise limited to payments on the
Junior Subordinated Debentures, you are also making an investment decision with
regard to the Junior Subordinated Debentures. Accordingly, you should carefully
review all the information regarding the Junior Subordinated Debentures
contained in this Prospectus. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Liquidation Distribution
upon Termination" and "Description of Exchange Securities--Description of
Exchange Junior Subordinated Debentures."
We cannot predict the market prices for the Capital Securities or the
Junior Subordinated Debentures that may be distributed to you if a termination
of the Trust were to occur. Accordingly, the Capital Securities or the Junior
Subordinated Debentures may trade at a discount from the price that you paid for
the Capital Securities.
24
<PAGE>
Rights Under the Guarantee
First Union Trust Company, National Association will act as Guarantee
Trustee and will hold the Guarantee for your benefit. First Union Trust Company,
National Association will also act as Debenture Trustee under the Indenture and
as Property Trustee under the Trust Agreement. First Union Trust Company,
National Association, will also act as Delaware Trustee under the Trust
Agreement.
Under the Guarantee, the Company has agreed to pay you the following
amounts, to the extent not paid to you by or on behalf of the Trust:
(1) any accumulated and unpaid Distributions required to be paid on your
Capital Securities, but only to the extent that the Trust has funds on
hand legally available for the payment of such Distributions;
(2) the applicable Redemption Price with respect to your Capital
Securities to be redeemed, but only to the extent that the Trust has
funds on hand legally available for the redemption of such Capital
Securities at such time; and
(3) upon a voluntary or involuntary termination and liquidation of the
Trust (unless the Junior Subordinated Debentures are distributed to
you), the lesser of (a) the aggregate Liquidation Amount of your
Capital Securities and all accumulated and unpaid Distributions on
your Capital Securities to the date of payment, to the extent that the
Trust has funds on hand legally available for payment of such amounts
at such time, and (b) the amount of assets of the Trust remaining
available for distribution to you at such time, after the satisfaction
of liabilities to creditors of the Trust as provided by applicable
law.
The holders of at least a majority in Liquidation Amount of the Capital
Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available with respect to the Guarantee
or to direct the exercise of any trust power conferred under the Guarantee. As a
holder of Capital Securities, you may institute a legal proceeding directly
against the Company to enforce your rights under the Guarantee without first
instituting a legal proceeding against the Trust, the Guarantee Trustee or any
other person or entity. If the Company defaults on its obligation to pay amounts
payable under the Junior Subordinated Debentures, the Trust will not have
sufficient funds for the payment of Distributions or amounts payable on
redemption of the Capital Securities, in which case, you will not be able to
rely upon the Guarantee for payment of such amounts.
Instead, if an event of default shall have occurred and be continuing under
the Indenture and such event is because of the failure of the Company to pay the
principal of (or premium, if any) or interest on the Junior Subordinated
Debentures on the day on which such payment is due and payable, then you may
institute a legal proceeding directly against the Company for
25
<PAGE>
enforcement of payment. Notwithstanding any payments made to you by the Company
in connection with such an action, the Company shall remain obligated to pay the
principal of (and premium, if any) and interest on the Junior Subordinated
Debentures, and it shall be subrogated to your rights with respect to payments
on the Capital Securities to the extent of any payments made by the Company to
you in connection with your actions taken against the Company.
Except as described in this Prospectus, you will not be able to exercise
directly any other remedy available to the holders of the Junior Subordinated
Debentures or to assert directly any other rights in respect of the Junior
Subordinated Debentures. See "Description of Exchange Securities--Description of
Exchange Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of Capital Securities," "Description of Exchange Securities--Description
of Exchange Junior Subordinated Debentures--Debenture Events of Default" and
"Description of Exchange Securities--Description of Exchange Guarantee." The
Trust Agreement provides that each holder of Capital Securities by acceptance of
such securities agrees to the provisions of the Indenture.
Limited Voting Rights
As a holder of Capital Securities, you will have limited voting rights
relating only to changing certain terms of the Capital Securities, the
termination or liquidation of the Trust, and the exercise of the Trust's rights
as holder of Junior Subordinated Debentures. In general, only the Company can
replace or remove any of the Trustees. However, if an event of default under the
Indenture is continuing, holders of at least a majority in aggregate liquidation
amount of Capital Securities may replace the Property Trustee and the Delaware
Trustee (but not the Administrative Trustees who may only be removed by the
Company as holder of the Common Securities).
The Property Trustee, the Administrative Trustees and the Company may
change the Trust Agreement without your consent in order to ensure that the
Trust will be classified for United States federal income tax purposes as a
grantor trust, even if such action adversely affects your interests. You will
have no voting rights with respect to any matters submitted to a vote of the
shareholders of the Company. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Voting Rights; Amendment
of the Trust Agreement" and "--Removal of Issuer Trustees; Appointment of
Successors."
Consequences of a Failure to Exchange Original Capital Securities
The Original Capital Securities have not been registered under the
Securities Act or any state securities laws. As a result, the Original Capital
Securities may not be offered, sold or otherwise transferred except in
compliance with the registration requirements of the Securities Act and any
applicable state securities laws, or in connection with an exemption from such
requirements.
Original Capital Securities which are not exchanged for Exchange Capital
Securities in this Exchange Offer will continue to have a legend which describes
these transfer restrictions. In
26
<PAGE>
addition, after the Exchange Offer ends, holders of Original Capital Securities
who have not exchanged their Original Capital Securities will no longer have the
right to have such Original Capital Securities registered under the Securities
Act and will no longer have any rights under the Registration Rights Agreement
(except for certain limited exceptions). We do not intend to register any
Original Securities under the Securities Act which have not been exchanged after
the Exchange Offer ends (except for such limited exceptions, if applicable).
Your ability to sell unexchanged Original Capital Securities could be adversely
affected if there are Original Capital Securities which have been exchanged for
Exchange Capital Securities.
The Exchange Capital Securities, together with any unexchanged Original
Capital Securities which remain outstanding after the Exchange Offer ends, will
vote together as a single class for purposes of calculating whether holders of a
required percentage of Capital Securities have taken certain actions or
exercised certain rights under the Trust Agreement. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Voting Rights; Amendment
of Trust Agreement."
The Original Capital Securities provide that, among other things, if a
registration statement relating to the Exchange Capital Securities has not been
filed by January 8, 1999 or has not been declared effective by February 7, 1999,
then the Distribution rate on the Original Capital Securities, beginning on the
date after the registration was required to be filed or become effective, will
increase by 0.25% per year until the Exchange Offer has ended. At the end of the
Exchange Offer, you will not be entitled to any increase in the Distribution
rate on your Original Capital Securities or any further registration rights
under the Registration Rights Agreement, except for certain limited
circumstances. See "Description of Original Securities".
Absence of Public Market
The Original Capital Securities were issued to, and the Company believes
that such securities are currently owned by, a relatively small number of
beneficial owners. The Original Capital Securities have not been registered
under the Securities Act and will be subject to transfer restrictions if they
are not exchanged for the Exchange Capital Securities. Although you may resell
or otherwise transfer the Exchange Capital Securities (as long as you are not an
"affiliate" of the Company or the Trust) without compliance with the
registration requirements of the Securities Act, they will constitute a new
issue of securities with no established trading market. Capital Securities may
be transferred only in blocks having a Liquidation Amount of at least $100,000
(100 Capital Securities).
We cannot assure you that an active public or other market will develop for
the Exchange Capital Securities or the Original Capital Securities. We also
cannot give you any assurance as to the liquidity of or the trading market for
the Exchange Capital Securities or the Original Capital Securities. If an active
public market does not develop, the market price and liquidity of the Exchange
Capital Securities may be adversely affected.
27
<PAGE>
If a public trading market develops for the Exchange Capital Securities,
future trading prices will depend on many factors, including, among other
things, prevailing interest rates, the financial condition of the Company and
the market for similar securities. Depending on these and other factors, the
Exchange Capital Securities may trade at a discount to your purchase price.
Notwithstanding the registration of the Exchange Capital Securities in the
Exchange Offer, if you are an "affiliate" (as defined under Rule 405 of the
Securities Act) of the Company or the Trust, you may publicly offer for sale or
resell the Exchange Capital Securities only in compliance with Rule 144 under
the Securities Act.
If you are a broker-dealer who receives Exchange Capital Securities for
your own account in exchange for Original Capital Securities, and if such
Original Capital Securities were acquired by you as a result of market-making or
other trading activities, you must acknowledge that you will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
See "Plan of Distribution."
Exchange Offer Procedures
Except for holders who tender Original Capital Securities through the
Automated Tender Offer Program of DTC ("ATOP"), Exchange Capital Securities will
be issued in exchange for Original Capital Securities in the Exchange Offer only
after a timely receipt by the Trust of a properly completed and executed Letter
of Transmittal, the Original Capital Securities and all other required
documents. Therefore, if you want to tender your Original Capital Securities in
exchange for Exchange Capital Securities, you should allow sufficient time to
ensure timely delivery. Neither the Company nor the Trust is under any duty to
give notification of defects or irregularities regarding the tenders of Original
Capital Securities for exchange.
Risk Factors Relating to the Company
Economic Conditions and Impact of Interest Rates
The Company's primary source of income is commercial banking. This source
of income is affected by local, regional, national and international economic
and political conditions, and by governmental monetary and fiscal policies.
Conditions such as inflation, recession, unemployment, volatile interest rates,
tight money supply, scarce natural resources, real estate values, international
conflicts and other factors beyond the Company's and the Bank's control can
adversely affect the potential profitability of the Company and the Bank.
Although increases in interest rates may increase the income yield on the
Company's and the Bank's earning assets, such increases may also increase the
Company's and the Bank's cost of funds and adversely affect loan demand and,
consequently, the profitability of the Company and the Bank. On the other hand,
decreases in interest rates may also adversely affect the Company's and the
Bank's profitability because any such decrease may reduce the return the Company
and the Bank earn on their assets to a greater extent than any resulting
decrease in cost
28
<PAGE>
of funds. In addition, economic downturns, particularly in the Bank's primary
service area, could result not only in decreased loan demand but also in a
decreased ability of some loan borrowers to repay those loans which are
outstanding.
Concentrations of Credit Risk
The Bank's loan portfolio contains loans principally made in Bucks County
and Northampton County, Pennsylvania. Most of these loans are secured by either
residential or commercial real estate. Accordingly, the Bank's primary
concentration of credit risk is related to the real estate market in Bucks and
Northampton Counties. The ultimate collectibility of this portion of the Bank's
portfolio is sensitive to changes in local market conditions, and is, therefore,
dependent upon the local economic environment. In addition, loan concentrations
are also considered to exist when there are amounts loaned or committed to be
loaned to a multiple number of borrowers engaged in similar activities which
would cause their ability to meet contractual obligations to be similarly
affected by economic or other conditions. Although the Bank views many of its
loans as made to individuals or secured by residential real estate, the Bank's
loan portfolio contains many borrowers who are employed in various professions
such as medical, dental, legal and real estate professions.
At September 30, 1998, the Company's investment portfolio included $38.9
million of corporate bonds. These bonds consist of fixed and floating rate
securities issued by other United States banking companies. The ultimate
collectibility of these bonds depends on the continued success of these
financial institutions. The Company evaluates the credit-worthiness of each
issuer prior to investing in such securities. These financial institutions
include some of the largest banking companies in the country, as well as smaller
regional and super-regional institutions. These companies are influenced by the
general economic conditions in the United States, and may also be subject, to a
much greater extent than the Company, to international economic events and
conditions.
Dependence on Key Personnel
The Company's and the Bank's success depends to a great extent upon the
services of John C. Soffronoff, Bruce E. Sickel and John J. Ginley as Directors
and/or officers of the Company and the Bank. The Company, the Bank and Messrs.
Soffronoff, Sickel and Ginley each entered into Change of Control Agreements.
The Agreements provide certain severance benefits that will be paid by the
Company and the Bank to Messrs. Soffronoff, Sickel and Ginley in the event of a
change of control of the Company or the Bank.
The Bank employs forty-eight (48) full-time equivalent employees. The loss
of key personnel by the Company or the Bank would have a material adverse effect
upon the Company and the Bank. The Company has instituted the "Premier Bank
Stock Incentive Plan" to encourage key employees and directors to maintain their
relationship with the Company or the Bank, as the case may be.
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<PAGE>
Intense Competition
The banking business in Pennsylvania is highly competitive. In
Pennsylvania, larger banks generally dominate the commercial banking industry.
In addition to commercial banks, the Company and the Bank also compete with
savings and loan associations, credit unions, finance companies, money market
funds, mutual funds, stock brokerage firms, insurance companies and other
similar institutions operating locally and elsewhere. Also, future competitors,
including large out-of-state banks as well as new commercial banks, may enter
the Bank's market area. The Company's profitability depends upon the Bank's
ability to compete in its primary market area.
The Company's and Bank's strategy is to attract customers by providing
personalized services and to utilize the directors' business and personal
contacts within their communities. We cannot assure you that the Company and the
Bank can successfully continue pursuing this strategy. The Company and the Bank
cannot predict the effect of competition on its ability to continue to gain
market acceptance and to operate profitably.
Possible Effects of Year 2000 Computer Problems
The "Year 2000 Problem" arose because many existing computer programs use
only the last two digits to refer to a year. Therefore, these computer programs
do not properly recognize a year that begins with "20" instead of the familiar
"19." If not corrected, many computer applications could fail or create
erroneous results by or at the year 2000. This could cause entire system
failures, miscalculations, and disruptions of normal business operations,
including, among other things, a temporary inability to process transactions,
generate statements, compute payments, interest or delinquency, or engage in
similar daily business activities. The extent of the potential impact of the
Year 2000 Problem is not yet known, and if not timely corrected, it could affect
the global economy. The Company has followed the guidelines contained in the
series of Federal Financial Institutions Examination Council's Interagency
Guidelines and the SEC's Release No. 33-7558 and has designed and initiated an
enterprise-wide program to prepare the Company's computer systems and
applications for the year 2000 and beyond. See "Information Concerning Premier
Bancorp, Inc.--Year 2000 Issues".
30
<PAGE>
RATIOS OF EARNINGS TO COMBINED FIXED CHARGES
The following table sets forth the ratios of earnings to combined fixed
charges of the Corporation for the respective periods indicated.
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Years Ended December 31,
------------- ------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to combined fixed charges:
Including interest on deposits 1.26x 1.25x 1.25x 1.27x 1.23x 1.24x 0.62x
Excluding interest on deposits 2.54x 2.13x 2.14x 2.53x 3.27x 3.17x (13.80)x
</TABLE>
For purposes of computing the ratios of earnings to combined fixed charges,
earnings represent net income (loss) before extraordinary items and cumulative
effect of changes in accounting principles plus applicable income taxes and
fixed charges. Fixed charges, excluding interest on deposits, include gross
interest expense (other than on deposits) and the proportion deemed
representative of the interest factor of rent expense, net of income from
subleases. Fixed charges, including gross interest on deposits, include all
interest expense and the proportion deemed representative of the interest factor
of rent expense, net of income from subleases.
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<PAGE>
INFORMATION CONCERNING PBI CAPITAL TRUST
The Trust is a statutory business trust formed under Delaware law pursuant
to (i) the Amended and Restated Declaration of Trust, executed by the Company,
as Sponsor, First Union Trust Company, National Association, as Property Trustee
and as Delaware Trustee, and the Administrative Trustees named therein (the
"Trust Agreement"), and (ii) the filing of a certificate of trust with the
Delaware Secretary of State on July 28, 1998. The Trust exists for the exclusive
purposes of: (i) issuing and selling the Trust Securities; (ii) using the
proceeds from the sale of Trust Securities to acquire the Junior Subordinated
Debentures; and (iii) engaging in only those other activities necessary or
incidental thereto (such as registering the transfer of the Capital Securities).
Accordingly, the Junior Subordinated Debentures are the sole assets of the
Trust, and payments under the Junior Subordinated Debentures are the sole
revenues of the Trust. All of the Common Securities will be owned by the
Company. The Common Securities will rank pari passu, and payments are and will
be made thereon pro rata, with the Capital Securities, except that upon the
occurrence and continuance of an event of default under the Trust Agreement
resulting from a Debenture Event of Default, the rights of the Company as holder
of the Common Securities to payments in respect of Distributions and payments
upon liquidation, redemption or otherwise will be subordinated to the rights of
the holders of the Capital Securities. See "Description of Exchange
Securities--Description of Exchange Capital Securities--Subordination of Common
Securities." The Company has acquired Common Securities in a Liquidation Amount
equal to 3% of the total capital of the Trust.
The Trust has a term of 31 years, but may terminate earlier as provided in
the Trust Agreement. The Trust's business and affairs are conducted by its
trustees, each appointed by the Company as holder of the Common Securities. The
trustees for the Trust are First Union Trust Company, National Association as
the Property Trustee (the "Property Trustee") and as the Delaware Trustee (the
"Delaware Trustee"), and two individual trustees (the "Administrative Trustees")
who are employees or officers of or affiliated with the Company (collectively,
the "Issuer Trustees"). First Union Trust Company, National Association, as
Property Trustee, currently acts as sole indenture trustee under the Trust
Agreement. First Union also acts as indenture trustee under the Exchange
Guarantee and the Indenture. See "Description of Exchange Guarantee" and
"Description of Exchange Junior Subordinated Debentures."
The holder of the Common Securities of the Trust or, if an Event of Default
under the Trust Agreement has occurred and is continuing, the holders of a
majority in Liquidation Amount of the Capital Securities will be entitled to
appoint, remove or replace the Property Trustee and/or the Delaware Trustee. In
no event do the holders of the Capital Securities have the right to vote to
appoint, remove or replace the Administrative Trustees; such voting rights are
vested exclusively in the holder of the Common Securities. The duties and
obligations of each Issuer Trustee are governed by the Trust Agreement.
Pursuant to the expense provisions under the Indenture, the Company, as
issuer of the Junior Subordinated Debentures, has and will continue to pay all
fees and expenses related to the Trust and the offering of the Capital
Securities and has and will continue to pay, directly or
32
<PAGE>
indirectly, all ongoing costs, expenses and liabilities of the Trust. See
"Description of Exchange Securities--Expenses and Taxes." The principal
executive office of the Trust is c/o Premier Bancorp, Inc., 379 North Main
Street, Doylestown, Pennsylvania 18901. Telephone inquires may be directed to
Bruce E. Sickel at (215) 345-5100.
INFORMATION CONCERNING PREMIER BANCORP, INC.
General
The Company is a Pennsylvania business corporation and registered bank
holding company headquartered in Doylestown, Bucks County, Pennsylvania. The
Company's wholly owned banking subsidiary is the Bank. The Bank was organized in
1990 as a Pennsylvania state-chartered banking institution and commenced
operations on April 24, 1992. At September 30, 1998, the Company had total
consolidated assets of $232.6 million, total deposits of $174.4 million and
total shareholders' equity of $11.1 million.
The Bank conducts business from its main office and two other retail
offices located in Southampton, Bucks County and Easton, Northampton County,
Pennsylvania. The Bank also has a loan origination office in Yardley, Bucks
County. The Bank plans to open a fourth branch office in Lower Makefield
Township, Bucks County, Pennsylvania, shortly.
The Bank is a community-oriented financial services provider whose business
primarily consists of attracting retail deposits from the general public and
small businesses and originating commercial and consumer loans in the Bank's
market area. The Bank also originates residential mortgage loans through an
arrangement with a mortgage company.
The Bank endeavors to promote a sales culture in which highly motivated and
trained team members attract and retain profitable customer relationships. The
Bank's primary operating strategy is to maintain a reputation as a community
bank where consumers and small business customers can obtain a wide range of
financial products and services, usually associated with larger financial
institutions, while providing personal attention, service and responsiveness.
The Bank provides a wide variety of products and services which include
checking, savings and money market accounts, as well as certificates of deposit.
Credit products include residential mortgage loans, home equity loans and lines
of credit, personal lines of credit, working capital lines and other consumer
and commercial loans. The Bank also offers other services such as electronic
banking, cash management services, safe deposit boxes, telephone banking and
automated teller services.
The Bank uses short and long-term advances from the Federal Home Loan Bank
of Pittsburgh and overnight borrowings from Atlantic Central Bankers Bank as
sources of funds.
On December 22, 1998, the Company commenced an offering of 500,000 shares
of its common stock at $11.00 per share. The Company intends to use the net
proceeds of that offering
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<PAGE>
to further its general corporate purposes, including investments in or advances
to the Bank in order to increase the Bank's capital position. The Company
anticipates that this will permit the Bank to provide for higher per borrower
lending limits which, in turn, will permit the Bank to make larger loans and
increase its lending activity. In addition, the Company may use the net proceeds
of that offering to support the continuing development of the Bank's franchise
through possible expansion into related businesses.
The Company as a bank holding company is subject to regulation and
examination by the Federal Reserve. The Bank is subject to regulation and
examination by the Commonwealth of Pennsylvania and the Federal Deposit
Insurance Corporation ("FDIC"). The Bank's deposits are insured by the FDIC to
the maximum extent permitted by law through the Bank Insurance Fund.
The principal executive offices of the Company and the Bank are located at
379 North Main Street. Doylestown, Pennsylvania 18901 and its telephone number
is (215) 345-5100.
The Company is a legal entity separate and distinct from its subsidiaries,
including the Bank. The ability of holders of debt and equity securities of the
Company to benefit from the distribution of assets of any subsidiary upon the
liquidation or reorganization of such subsidiary is subordinate to prior claims
of creditors of the subsidiary (including depositors in the case of the Bank)
except to the extent that a claim of the Company as a creditor may be
recognized.
There are various statutory and regulatory limitations on the extent to
which the Bank can finance or otherwise transfer funds to the Company or its
nonbanking subsidiaries, whether in the form of loans, extensions of credit,
investments or asset purchases. In addition, there are regulatory limitations on
the payment of dividends directly or indirectly to the Company from the Bank.
Under applicable banking statutes, at September 30, 1998, the Bank could have
declared additional dividends of approximately $3.6 million. However, Federal
and state regulatory agencies also have the authority to further limit payment
of dividends by the Bank based on other factors, such as the maintenance of
adequate capital by the Bank, which could reduce the amount of dividends
otherwise payable.
Year 2000 Issues
The following section contains forward-looking statements which involve
risks and uncertainties. The actual impact on the Company of the Year 2000 issue
could materially differ from that which is anticipated in the forward-looking
statements as a result of certain factors identified below.
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<PAGE>
General
The "Year 2000 Problem" (Y2K) arose because many existing computer programs
use only the last two digits to refer to a year. Therefore, these computer
programs do not properly recognize a year that begins with "20" instead of the
familiar "19". If not corrected, many computer applications could fail or create
erroneous results by or at the year 2000. This could cause entire system
failures, miscalculations, and disruptions of normal business operations
including, among other things, a temporary inability to process transactions,
generate statements, compute payments, interest or delinquency, or engage in
similar daily business activities. The extent of the potential impact of the
Year 2000 Problem is not yet known, and if not timely corrected, it could affect
the global economy.
The Bank is subject to the regulation and oversight of various banking
regulators, whose oversight includes the provision of specific timetables,
programs and guidance regarding Year 2000 issues. Regulatory examination of the
Bank's Year 2000 programs are conducted on a quarterly basis and reports are
submitted by the Bank to the banking regulators on a periodic basis. In
addition, oral reports are currently provided on a monthly basis to the Board of
Directors.
The Company's State of Readiness
Management is committed to ensuring that the Company's daily operations
suffer little or no impact from the century date change. The Company has applied
due diligence throughout the Y2K process, following the guidelines contained in
the series of Federal Financial Institutions Examinations Council's Interagency
Guidelines and the SEC's Release No. 33-7558. The guidelines identify the
following phases: awareness, assessment, renovation or remediation, testing or
validation and implementation.
Based on an ongoing assessment, the Company has determined that it will be
required to modify or replace portions of its software so that its computer
systems will properly use dates beyond December 31, 1999. The Company presently
believes that as a result of modifications to existing software and hardware and
conversions to new software, the Year 2000 Problem can be mitigated. However, if
such modifications and conversions are not made, or are not completed on a
timely basis, the Year 2000 Problem could have a material adverse impact on the
operations of the Company.
Management has initiated an enterprise-wide program to prepare the
Company's computer systems and applications for the Year 2000. The Company has
developed a comprehensive inventory of all PC based applications, third-party
relationships, environmental systems, proprietary programs and non-computer
related systems (such as postage meters and fax machines). The Company
recognizes that the Bank's operating, processing and accounting operations are
computer reliant and could be affected by the Y2K issue and has developed a plan
to make the systems Y2K ready and to conduct testing on them by March 1999. As
of
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<PAGE>
September 30, 1998, approximately 80% of the Company's systems were Year 2000
ready, with all systems expected to be ready by March 1999.
The Company has acquired its mission-critical system which supports the
Company's core business processes from a highly regarded third-party vendor.
This vendor began in 1997 and completed by October 1998 renovations to its
systems to make them Y2K ready. The remediated software was placed into daily
production in September 1998. Beginning in November 1998, the Bank, along with
other clients of this vendor, began comprehensive testing of the system's Y2K
readiness. Such testing is anticipated to be completed in January 1999. However,
because most computer systems are, by their very nature, interdependent, it is
possible that noncompliant third-party computers could impact the Company's
computer systems. The Company could be adversely affected by the Y2K problem if
it or unrelated parties fail to successfully address the problem. The Company
has taken steps to communicate with the unrelated parties with whom it deals to
coordinate Year 2000 compliance. Additionally, the Company is dependent on
external suppliers, such as, wire transfer systems, telephone systems, electric
companies, and other utility companies for continuation of service. The Company
is also assessing the impact, if any, the century date change may have on its
credit risk.
The Company has initiated communications with all of its significant
vendors, suppliers and large commercial customers to determine the extent to
which the Company is vulnerable to those third-parties' failure to remedy their
own Year 2000 Problems. The Y2K Project Manager has available each vendors' Y2K
readiness efforts which includes their remediation plan, renovation approach,
testing methodologies and target dates. In the event that any of the Company's
significant vendors, suppliers and large commercial customers do not
successfully achieve Year 2000 compliance in a timely manner, the Company's
business or operations could be adversely affected. If significant suppliers
fail to meet Year 2000 operating requirements, the Company intends to engage
alternative suppliers. For insignificant vendors, the Company will not
necessarily validate that they are Year 2000 compliant. However, for any
insignificant vendor who responds that they will not be compliant by March 1999,
the Company will seek a new vendor or system that is compliant. The Bank has
surveyed its large commercial customers as to their Y2K preparedness. At the
present time, in excess of 95% of these surveys have been returned. Respondents
have acknowledged their awareness of Y2K issues and currently believe that these
issues will not materially affect their financial condition, liquidity, or
results of operations. The extent to which customers are Y2K compliant is
considered in the Bank's decision to extend credit.
Costs of Year 2000
As of September 30, 1998, $31,000 has been expended as Year 2000 costs.
Management expects to spend a total of $150,000 for the entire project. Of the
total project's cost, approximately $75,000 is attributable to the purchase of
new software which will be capitalized. The remaining $75,000 will be expensed
as incurred over the next 15 months. The estimated Year 2000 project costs
include the costs and time associated with the impact of third-parties'
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<PAGE>
Year 2000 issues, and are based on presently available information. The total
cost of the project is being funded through operating cash flows. The Company
continues to evaluate appropriate courses of corrective action, including
replacement of certain systems whose associated costs would be recorded as
assets and amortized. Accordingly, the Company does not expect the amounts
required to be expensed over the next 15 months to have a material effect on the
financial position or results of operations. The Company believes that the cost
of addressing the Y2K issues will not be a material event or uncertainty that
would cause reported financial information not to be necessarily indicative of
future operating results or financial conditions. However, if compliance is not
achieved in a timely manner by the Company or any of its significant related
third-parties, be it a supplier of services or customer, the Y2K issue could
possibly have a material effect on the Company's operations and financial
position. The Company believes that the costs or the consequences of incomplete
or untimely resolution of its Year 2000 issues do not represent a known material
event or uncertainty that is reasonably likely to affect its future financial
results, or cause its reported financial information not to be necessarily
indicative of future operating results or future financial condition.
The cost of the projects and the date on which the Company plans to
complete both Year 2000 modifications and systems conversions are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources,
third-party modification plans and other factors. However, there can be no
guarantee that these estimates will be achieved and actual results could differ
materially from those plans. Specific factors that might cause such material
differences include, but are not limited to, the availability and cost of
personnel trained in this area, the ability to locate and correct all relevant
computer codes, and similar uncertainties.
Risks of Year 2000
At present, management believes it's progress in remedying the Company's
systems, programs and applications and installing Y2K compliant upgrades is on
target. The Y2K computer problem creates risk for the Company from unforeseen
problems in its own computer systems and from third-party vendors who provide
the majority of mainframe and PC based computer applications. Failure of
third-party systems relative to the Y2K issue could have a material impact on
the Company's ability to conduct business.
Contingency Plans
The Company is in the process of obtaining back-up service providers,
working up contingency plans and assessing the potential adverse risks to the
Company. The Company's contingency plans involve the use of manual labor to
compensate for the loss of certain automated computer systems and inconveniences
caused by disruption in command systems.
A contingency plan will be developed for mission-critical and required
mainframe and PC based applications, third-party relationships, environmental
systems, proprietary programs
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<PAGE>
and non-computer related systems. This contingency plan will identify scheduled
completion dates, test dates and trigger dates.
A business resumption contingency plan is currently under development with
a target completion date of June 1999. The resumption contingency plan will
calculate a risk factor for each core business line and/or product. Based upon
the calculated risk factor, such business resumption contingency plan will be
designed and tested.
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CAPITALIZATION
The following table sets forth the historical consolidated capitalization
of the Company as of September 30, 1998. The following data should be read in
conjunction with the financial information included in documents incorporated in
this Prospectus by reference. See "Incorporation of Certain Documents by
Reference."
September 30, 1998
------------------
(In thousands)
-------
Subordinated debt ..................................... 1,500
Corporation-obligated mandatorily redeemable capital
securities of subsidiary trust holding solely junior
subordinated debentures of the Corporation (1) ..... 10,000
Shareholders' equity:
Common stock, $0.33 par; 30,000,000 shares
authorized; 2,630,340 shares issued ............... 877
Additional paid-in capital .......................... 7,120
Retained earnings ................................... 3,565
Accumulated other comprehensive income .............. (427)
Total shareholders' equity .......................... 11,135
-------
Total capitalization ................................ 22,635
=======
(1) Reflects the Capital Securities. The Trust is a subsidiary of the
Corporation and holds the Junior Subordinated Debentures as its sole asset.
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ACCOUNTING TREATMENT
The financial statements of the Trust are consolidated into the Company's
consolidated financial statements, with the Capital Securities treated as
minority interest and shown in the Company's consolidated balance sheet as
"Corporation-Obligated Mandatorily Redeemable Capital Securities of Subsidiary
Trust Holding Solely Junior Subordinated Debentures of the Corporation." The
financial statement footnotes in the Quarterly Report of the Company for the
quarter ended September 30, 1998 reflect that the sole asset of the Trust is $10
million principal amount of the Junior Subordinated Debentures, bearing interest
at 8.57% and maturing on August 15, 2028. All future reports filed by the
Company under the Exchange Act will present information regarding the Trust and
other similar trusts in the manner described above.
THE EXCHANGE OFFER
Purpose of the Exchange Offer
In connection with the sale of the Original Capital Securities, the Company
and the Trust entered into the Registration Rights Agreement with the Initial
Purchasers, pursuant to which the Company and the Trust agreed to file and to
use their reasonable efforts to cause to become effective with the SEC a
registration statement with respect to the exchange of the Original Capital
Securities for capital securities with terms identical in all material respects
to the terms of the Original Capital Securities. A copy of the Registration
Rights Agreement has been filed as an Exhibit to the Registration Statement of
which this Prospectus is a part.
The Exchange Offer is being made to satisfy the contractual obligations of
the Company and the Trust under the Registration Rights Agreement. The form and
terms of the Exchange Capital Securities are the same as the form and terms of
the Original Capital Securities except that the Exchange Capital Securities have
been registered under the Securities Act and will not be subject to certain
restrictions on transfer applicable to the Original Capital Securities, and will
not provide for any increase in the Distribution rate thereon. In that regard,
the Original Capital Securities provide, among other things, that, if a
registration statement relating to the Exchange Offer has not been filed by
January 8, 1999 or has not been declared effective by February 7, 1999, then the
Distribution rate borne by the Original Capital Securities, commencing on the
day after the registration statement was required to be filed or become
effective as the case may be, will increase by 0.25% per annum until the
Exchange Offer is consummated. Upon consummation of the Exchange Offer, holders
of Original Capital Securities will not be entitled to any increase in the
Distribution rate thereon or any further registration rights under the
Registration Rights Agreement, except under limited circumstances. See "Risk
Factors--Consequences of a Failure to Exchange Original Capital Securities" and
"Description of Original Securities."
The Exchange Offer is not being made to, nor will the Trust accept tenders
for exchange from, holders of Original Capital Securities in any jurisdiction in
which the Exchange Offer or
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the acceptance thereof would not be in compliance with the securities or blue
sky laws of such jurisdiction.
Unless the context requires otherwise, the term "holder" with respect to
the Exchange Offer means any person in whose name the Original Capital
Securities are registered on the books of the Trust or any other person who has
obtained a properly completed bond power from the registered holder, or any
person whose Original Capital Securities are held of record by The Depository
Trust Company ("DTC") who desires to deliver such Original Capital Securities by
book-entry transfer at DTC.
Pursuant to the Exchange Offer, the Company will exchange as soon as
practicable after the date hereof the Original Guarantee for the Exchange
Guarantee and the Original Junior Subordinated Debentures, in an amount
corresponding to the Original Capital Securities accepted for exchange, for a
like aggregate principal amount of the Exchange Junior Subordinated Debentures.
The Exchange Guarantee and Exchange Junior Subordinated Debentures have been
registered under the Securities Act.
Terms of the Exchange Offer
The Trust hereby offers, upon the terms and subject to the conditions set
forth in this Prospectus and in the accompanying Letter of Transmittal, to
exchange up to $10,000,000 aggregate Liquidation Amount of Exchange Capital
Securities for a like aggregate Liquidation Amount of Original Capital
Securities properly tendered on or prior to the Expiration Date and not properly
withdrawn in accordance with the procedures described below. The Trust will
issue, promptly after the Expiration Date, an aggregate Liquidation Amount of up
to $10,000,000 of Exchange Capital Securities in exchange for a like principal
amount of outstanding Original Capital Securities tendered and accepted in
connection with the Exchange Offer. Holders may tender their Original Capital
Securities in whole or in part in a Liquidation Amount of not less than $100,000
(100 Capital Securities) or any integral multiple of $1,000 Liquidation Amount
(one Capital Security) in excess thereof.
The Exchange Offer is not conditioned upon any minimum Liquidation Amount
of Original Capital Securities being tendered. As of the date of this
Prospectus, $10,000,000 aggregate Liquidation Amount of the Original Capital
Securities is outstanding.
Holders of Original Capital Securities do not have any appraisal or
dissenters' rights in connection with the Exchange Offer. Original Capital
Securities which are not tendered for or are tendered but not accepted in
connection with the Exchange Offer will remain outstanding and be entitled to
the benefits of the Trust Agreement, but will not be entitled to any further
registration rights under the Registration Rights Agreement, except under
limited circumstances. See "Risk Factors--Consequences of a Failure to Exchange
Original Capital Securities" and "Description of Original Securities."
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If any tendered Original Capital Securities are not accepted for exchange
because of an invalid tender, the occurrence of certain other events set forth
herein or otherwise, certificates for any such unaccepted Original Capital
Securities will be returned, without expense, to the tendering holder thereof
promptly after the Expiration Date (as defined below).
Holders who tender Original Capital Securities in connection with the
Exchange Offer will not be required to pay brokerage commissions or fees or,
subject to the instructions in the Letter of Transmittal, transfer taxes with
respect to the exchange of Original Capital Securities in connection with the
Exchange Offer. The Company will pay all charges and expenses, other than
certain applicable taxes described below, in connection with the Exchange Offer.
See "--Fees and Expenses."
Neither the Company, the Board of Directors of the Company nor any Issuer
Trustee of the Trust makes any recommendation to holders of Original Capital
Securities as to whether to tender or refrain from tendering all or any portion
of their Original Capital Securities pursuant to the Exchange Offer.
In addition, no one has been authorized to make any such recommendation.
Holders of Original Capital Securities must make their own decisions whether to
tender pursuant to the Exchange Offer and, if so, the aggregate amount of
Original Capital Securities to tender based on such holders' own financial
positions and requirements.
Expiration Date; Extensions; Amendments
The term "Expiration Date" means 5:00 p.m., New York City time, on
_____________, 1999 unless the Exchange Offer is extended by the Company or the
Trust (in which case the term "Expiration Date" shall mean the latest date and
time to which the Exchange Offer is extended).
The Company and the Trust expressly reserve the right in their sole and
absolute discretion, subject to applicable law, at any time and from time to
time, (i) to delay the acceptance of the Original Capital Securities for
exchange, (ii) to terminate the Exchange Offer (whether or not any Original
Capital Securities have theretofore been accepted for exchange) if the Trust
determines, in its sole and absolute discretion, that any of the events or
conditions referred to under "--Conditions to the Exchange Offer" have occurred
or exist or have not been satisfied, (iii) to extend the Expiration Date of the
Exchange Offer and retain all Original Capital Securities tendered pursuant to
the Exchange Offer, subject, however, to the right of holders of Original
Capital Securities to withdraw their tendered Original Capital Securities as
described under "--Withdrawal Rights," and (iv) to waive any condition or
otherwise amend the terms of the Exchange Offer in any respect. If the Exchange
Offer is amended in a manner determined by the Company and the Trust to
constitute a material change, or if the Company and the Trust waive a material
condition of the Exchange Offer, the Company and the Trust will promptly
disclose such amendment by means of a Prospectus supplement that will be
distributed to the
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holders of the Original Capital Securities, and the Company and the Trust will
extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
Any such delay in acceptance, extension, termination or amendment will be
followed promptly by oral or written notice thereof to the Exchange Agent and by
making a public announcement thereof, and such announcement in the case of an
extension will be made no later than 9:00 a.m., New York City time, on the next
business day after the previously scheduled Expiration Date. Without limiting
the manner in which the Company and the Trust may choose to make any public
announcement and subject to applicable law, the Company and the Trust shall have
no obligation to publish, advertise or otherwise communicate any such public
announcement other than by issuing a release to an appropriate news agency.
Acceptance for Exchange and Issuance of Exchange Capital Securities
Upon the terms and subject to the conditions of the Exchange Offer, the
Trust will exchange, and will issue to the Exchange Agent (as defined below),
promptly after the Expiration Date, Exchange Capital Securities for Original
Capital Securities validly tendered and not withdrawn.
In all cases, delivery of Exchange Capital Securities in exchange for
Original Capital Securities tendered and accepted for exchange pursuant to the
Exchange Offer will be made only after timely receipt by the Exchange Agent of
(i) the book-entry confirmation described below under "-- Procedures for
Tendering Original Capital Securities -- Book-Entry Transfer" or (ii)
certificates representing such Original Capital Securities, the Letter of
Transmittal (or facsimile thereof), properly completed and duly executed, with
any required signature guarantees, and any other documents required by the
Letter of Transmittal.
Subject to the terms and conditions of the Exchange Offer, the Trust will
be deemed to have accepted for exchange, and thereby exchanged, Original Capital
Securities validly tendered and not withdrawn as, if and when the Trust gives
oral or written notice to the Exchange Agent of the Trust's acceptance of such
Original Capital Securities for exchange pursuant to the Exchange Offer. The
Exchange Agent will act as agent for the Trust for the purpose of receiving
tenders of book-entry confirmations or certificates representing Original
Capital Securities, Letters of Transmittal and related documents, and as agent
for tendering holders for the purpose of receiving book-entry confirmations or
certificates representing Original Capital Securities, Letters of Transmittal
and related documents and transmitting Exchange Capital Securities to validly
tendering holders. Such exchange will be made promptly after the Expiration
Date. If for any reason whatsoever, acceptance for exchange or the exchange of
any Original Capital Securities tendered pursuant to the Exchange Offer is
delayed (whether before or after the Trust's acceptance for exchange of Original
Capital Securities) or the Trust extends the Exchange Offer or is unable to
accept for exchange or exchange Original Capital Securities tendered pursuant to
the Exchange Offer, then, without prejudice to the Trust's rights set forth
herein, the Exchange Agent may, nevertheless, on behalf of the Trust and subject
to Rule 14e-1(c) under the Exchange
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Act, retain tendered Original Capital Securities and such Original Capital
Securities may not be withdrawn except to the extent tendering holders are
entitled to withdrawal rights as described under "--Withdrawal Rights."
Pursuant to the Letter of Transmittal, a holder of Original Capital
Securities will warrant and agree in the Letter of Transmittal that it has full
power and authority to tender, exchange, sell, assign and transfer Original
Capital Securities, that the Trust will acquire good, marketable and
unencumbered title to the tendered Original Capital Securities, free and clear
of all liens, restrictions, charges and encumbrances, and the Original Capital
Securities tendered for exchange are not subject to any adverse claims or
proxies. The holder also will warrant and agree that it will, upon request,
execute and deliver any additional documents deemed by the Trust or the Exchange
Agent to be necessary or desirable to complete the exchange, sale, assignment,
and transfer of the Original Capital Securities tendered pursuant to the
Exchange Offer. Tendering holders of Original Capital Securities that use ATOP
will, by so doing, acknowledge that they are bound by the terms of the Letter of
Transmittal.
Procedures for Tendering Original Capital Securities
Book-Entry Transfer. For purposes of the Exchange Offer, the Exchange Agent
will establish an account with respect to the Original Capital Securities at DTC
within two business days after the date of this Prospectus. Any tendering
financial institution that is a participant in DTC's book-entry transfer
facility system may make a book-entry delivery of the Original Capital
Securities by causing DTC to transfer such Original Capital Securities into the
Exchange Agent's account at DTC in accordance with DTC's ATOP procedures for
transfers. Such holder of Original Capital Securities using ATOP should transmit
its acceptance to DTC on or prior to the Expiration Date (or comply with the
guaranteed delivery procedures set forth below). DTC will verify such
acceptance, execute a book-entry transfer of the tendered Original Capital
Securities into the Exchange Agent's account at DTC and then send to the
Exchange Agent confirmation of such book-entry transfer, including an agent's
message confirming that DTC has received an express acknowledgment from such
holder that such holder has received and agrees to be bound by the Letter of
Transmittal and that the Trust and the Company may enforce the Letter of
Transmittal against such holder (a "book-entry confirmation").
A beneficial owner of Original Capital Securities that are held by or
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee or custodian is urged to contact such entity promptly if such
beneficial owner wishes to participate in the Exchange Offer.
Certificates. If the tender is not made through ATOP, certificates
representing Original Capital Securities, as well as the Letter of Transmittal
(or facsimile thereof), properly completed and duly executed, with any required
signature guarantees, and any other documents required by the Letter of
Transmittal, must be received by the Exchange Agent at its address set forth
under
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"-- Exchange Agent" on or prior to the Expiration Date in order for such tender
to be effective (or the guaranteed delivery procedures set forth below must be
complied with).
If less than all of the Original Capital Securities are tendered, a
tendering holder should fill in the amount of Original Capital Securities being
tendered in the appropriate box on the Letter of Transmittal. The entire amount
of Original Capital Securities delivered to the Exchange Agent will be deemed to
have been tendered unless otherwise indicated.
Signature Guarantees. Certificates for the Original Capital Securities need
not be endorsed and signature guarantees on the Letter of Transmittal are
unnecessary unless (a) a certificate for the Original Capital Securities is
registered in a name other than that of the person surrendering the certificate
or (b) such holder completes the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" in the Letter of Transmittal. In the case of (a)
or (b) above, such certificates for Original Capital Securities must be duly
endorsed or accompanied by a properly executed bond power, with the endorsement
or signature on the bond power and on the Letter of Transmittal guaranteed by a
firm or other entity identified in Rule 17Ad-15 under the Exchange Act as an
"eligible guarantor institution," including (as such terms are defined therein):
(i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or
government securities broker or dealer; (iii) a credit union; (iv) a national
securities exchange, registered securities association or clearing agency; or
(v) a savings association that is a participant in a Securities Transfer
Association (an "Eligible Institution"), unless surrendered on behalf of such
Eligible Institution. See Instruction 1 to the Letter of Transmittal.
Delivery. The method of delivery of the book-entry confirmation or
certificates representing tendered Original Capital Securities, the Letter of
Transmittal, and all other required documents is at the option and sole risk of
the tendering holder, and delivery will be deemed made only when actually
received by the Exchange Agent. If delivery is by mail, registered mail, return
receipt requested, properly insured, or an overnight delivery service is
recommended. In all cases, sufficient time should be allowed to ensure timely
delivery.
Notwithstanding any other provision hereof, the delivery of Exchange
Capital Securities in exchange for Original Capital Securities tendered and
accepted for exchange pursuant to the Exchange Offer will in all cases be made
only after timely receipt by the Exchange Agent of (i) a book-entry confirmation
with respect to such Original Capital Securities or (ii) certificates
representing Original Capital Securities and a properly completed and duly
executed Letter of Transmittal (or facsimile thereof), together with any
required signature guarantees and any other documents required by the Letter of
Transmittal. Accordingly, the delivery of Exchange Capital Securities might not
be made to all tendering holders at the same time, and will depend upon when
book-entry confirmations with respect to Original Capital Securities or
certificates representing Original Capital Securities and other required
documents are received by the Exchange Agent.
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Guaranteed Delivery. If a holder desires to tender Original Capital
Securities pursuant to the Exchange Offer and the certificates for such Original
Capital Securities are not immediately available or time will not permit all
required documents to reach the Exchange Agent on or prior to the Expiration
Date, or the procedure for book-entry transfer cannot be completed on a timely
basis, such Original Capital Securities may nevertheless be tendered, provided
that all of the following guaranteed delivery procedures are complied with:
(1) such tenders are made by or through an Eligible Institution;
(2) a properly completed and duly executed notice to the Exchange Agent
guaranteeing delivery to the Exchange Agent of either certificates
representing the Original Capital Securities or a book-entry
confirmation in compliance with the requirements set forth herein (the
"Notice of Guaranteed Delivery") substantially in the form
accompanying the Letter of Transmittal, is received by the Exchange
Agent, as provided below, on or prior to the Expiration Date;
(3) (a) a book-entry confirmation or (b) the certificates representing all
tendered Original Capital Securities, in proper form for transfer,
together with a properly completed and duly executed Letter of
Transmittal (or facsimile thereof), with any required signature
guarantees and any other documents required by the Letter of
Transmittal, are, in any case, received by the Exchange Agent within
three New York Stock Exchange trading days after the date of execution
of such Notice of Guaranteed Delivery.
The Notice of Guaranteed Delivery may be delivered by hand, or transmitted
by facsimile or mail to the Exchange Agent and must include a guarantee by an
Eligible Institution in the form set forth in such notice.
The Trust's acceptance for exchange of Original Capital Securities tendered
pursuant to any of the procedures described above will constitute a binding
agreement between the tendering holder and the Trust upon the terms and subject
to the conditions of the Exchange Offer.
Determination of Validity. All questions as to the form of documents,
validity, eligibility (including time of receipt) and acceptance for exchange of
any tendered Original Capital Securities will be determined by the Company and
the Trust, in their sole discretion, whose determination shall be final and
binding on all parties. The Company and the Trust reserve the absolute right, in
their sole and absolute discretion, to reject any and all tenders determined by
them not to be in proper form or the acceptance of which, or exchange for, may,
in the opinion of counsel to the Company and the Trust, be unlawful.
The Company and the Trust also reserve the absolute right, subject to
applicable law, to waive any of the conditions of the Exchange Offer as set
forth under "--Conditions to the Exchange Offer" or any condition or
irregularity in any tender of Original Capital Securities of
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any particular holder whether or not similar conditions or irregularities are
waived in the case of other holders.
The interpretation by the Company and the Trust of the terms and conditions
of the Exchange Offer (including the Letter of Transmittal and the instructions
thereto) will be final and binding. No tender of Original Capital Securities
will be deemed to have been validly made until all irregularities with respect
to such tender have been cured or waived. Neither the Company, the Trust, any
affiliates or assigns of the Company or the Trust, the Exchange Agent nor any
other person shall be under any duty to give any notification of any
irregularities in tenders or incur any liability for failure to give any such
notification.
If any Letter of Transmittal, endorsement, bond power, power of attorney,
or any other document required by the Letter of Transmittal is signed by a
trustee, executor, administrator, guardian, attorney-in-fact, officer of a
corporation or other person acting in a fiduciary or representative capacity,
such person should so indicate when signing, and unless waived by the Company
and the Trust, proper evidence satisfactory to the Company and the Trust, in
their sole discretion, of such person's authority to so act must be submitted.
Resales of Exchange Capital Securities
The Trust is making the Exchange Offer for the Exchange Capital Securities
in reliance on the position of the staff of the Division of Corporation Finance
of the SEC as set forth in certain interpretive letters addressed to third
parties in other transactions. However, neither the Company nor the Trust sought
its own interpretive letter and there can be no assurance that the staff of the
Division of Corporation Finance of the SEC would make a similar determination
with respect to the Exchange Offer as it has in such interpretive letters to
third parties. Based on these interpretations by the staff of the Division of
Corporation Finance of the SEC, and subject to the two immediately following
sentences, the Company and the Trust believe that Exchange Capital Securities
issued pursuant to this Exchange Offer in exchange for Original Capital
Securities may be offered for resale, resold and otherwise transferred by a
holder thereof (other than a holder who is a broker-dealer) without further
compliance with the registration and prospectus delivery requirements of the
Securities Act, provided that such Exchange Capital Securities are acquired in
the ordinary course of such holder's business and that such holder is not
participating, and has no arrangement or understanding with any person to
participate, in a distribution (within the meaning of the Securities Act) of
such Exchange Capital Securities. However, any holder of Original Capital
Securities who is an "affiliate" of the Company or the Trust or who intends to
participate in the Exchange Offer for the purpose of distributing Exchange
Capital Securities, or any broker-dealer who purchased Original Capital
Securities from the Trust to resell pursuant to Rule 144A or any other available
exemption under the Securities Act, (a) will not be able to rely on the
interpretations of the staff of the Division of Corporation Finance of the SEC
set forth in the above-mentioned interpretive letters, (b) will not be permitted
or entitled to tender such Original Capital Securities in the Exchange Offer and
(c) must comply with the registration and prospectus delivery requirements of
the Securities Act in connection with any sale or other
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transfer of such Original Capital Securities unless such sale is made pursuant
to an exemption from such requirements. In addition, as described below, if any
broker-dealer holds Original Capital Securities acquired for its own account as
a result of market-making or other trading activities and exchanges such
Original Capital Securities for Exchange Capital Securities, then such
broker-dealer must deliver a prospectus meeting the requirements of the
Securities Act in connection with any resales of such Exchange Capital
Securities.
Each holder of Original Capital Securities who wishes to exchange Original
Capital Securities for Exchange Capital Securities in the Exchange Offer will be
required to represent that (i) it is not an "affiliate" of the Company or the
Trust, (ii) any Exchange Capital Securities to be received by it are being
acquired in the ordinary course of its business, (iii) it has no arrangement or
understanding with any person to participate in a distribution (within the
meaning of the Securities Act) of such Exchange Capital Securities, and (iv) if
such holder is not a broker-dealer, such holder is not engaged in, and does not
intend to engage in, a distribution (within the meaning of the Securities Act)
of such Exchange Capital Securities. In addition, the Company and the Trust may
require such holder, as a condition to such holder's eligibility to participate
in the Exchange Offer, to furnish to the Company and the Trust (or an agent
thereof) in writing information as to the number of "beneficial owners" (within
the meaning of Rule 13d-3 under the Exchange Act) on behalf of whom such holder
holds the Capital Securities to be exchanged in the Exchange Offer.
Each broker-dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it acquired the
Original Capital Securities for its own account as the result of market-making
activities or other trading activities and must agree that it will deliver a
prospectus meeting the requirements of the Securities Act in connection with any
resale of such Exchange Capital Securities. The Letter of Transmittal states
that by so acknowledging and by delivering a prospectus, a broker-dealer will
not be deemed to admit that it is an "underwriter" within the meaning of the
Securities Act.
Based on the position taken by the staff of the Division of Corporation
Finance of the SEC in the interpretive letters referred to above, the Company
and the Trust believe that Participating Broker-Dealers who acquired Original
Capital Securities for their own accounts as a result of market-making
activities or other trading activities may fulfill their prospectus delivery
requirements with respect to the Exchange Capital Securities received upon
exchange of such Original Capital Securities (other than Original Capital
Securities which represent an unsold allotment from the initial sale of the
Original Capital Securities) with a prospectus meeting the requirements of the
Securities Act, which may be the prospectus prepared for an exchange offer so
long as it contains a description of the plan of distribution with respect to
the resale of such Exchange Capital Securities. Accordingly, this Prospectus, as
it may be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer during the period referred to below in connection
with resales of Exchange Capital Securities received in exchange for Original
Capital Securities where such Original Capital Securities were acquired by such
Participating Broker-Dealer for its own account as a result of market-making or
other trading
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activities. Subject to certain provisions set forth in the Registration Rights
Agreement, the Company and the Trust have agreed that this Prospectus, as it may
be amended or supplemented from time to time, may be used by a Participating
Broker-Dealer in connection with resales of such Exchange Capital Securities for
a period ending 180 days after the Expiration Date (subject to extension under
certain limited circumstances described below) or, if earlier, when all such
Exchange Capital Securities have been disposed of by such Participating
Broker-Dealer. See "Plan of Distribution."
However, a Participating Broker-Dealer who intends to use this Prospectus
in connection with the resale of Exchange Capital Securities received in
exchange for Original Capital Securities pursuant to the Exchange Offer must
notify the Company or the Trust, or cause the Company or the Trust to be
notified, on or prior to the Expiration Date, that it is a Participating
Broker-Dealer. Such notice may be given in the space provided for that purpose
in the Letter of Transmittal or may be delivered to the Exchange Agent at one of
the addresses set forth herein under "--Exchange Agent." Any Participating
Broker-Dealer who is an "affiliate" of the Company or the Trust may not rely on
such interpretive letters and must comply with the registration and prospectus
delivery requirements of the Securities Act in connection with any resale
transaction.
In that regard, each Participating Broker-Dealer who surrenders Original
Capital Securities pursuant to the Exchange Offer will be deemed to have agreed,
by execution of the Letter of Transmittal, that upon receipt of notice from the
Company or the Trust of the occurrence of any event or the discovery of (i) any
fact which makes any statement contained or incorporated by reference in this
Prospectus untrue in any material respect or (ii) any fact which causes this
Prospectus to omit to state a material fact necessary in order to make the
statements contained or incorporated by reference herein, in light of the
circumstances under which they were made, not misleading, or (iii) of the
occurrence of certain other events specified in the Registration Rights
Agreement, such Participating Broker-Dealer will suspend the sale of Exchange
Capital Securities (or the Exchange Guarantee or the Exchange Junior
Subordinated Debentures, as applicable) pursuant to this Prospectus until the
Company or the Trust has amended or supplemented this Prospectus to correct such
misstatement or omission and has furnished copies of the amended or supplemented
Prospectus to such Participating Broker-Dealer, or the Company or the Trust has
given notice that the sale of the Exchange Capital Securities (or the Exchange
Guarantee or the Exchange Junior Subordinated Debentures, as applicable) may be
resumed, as the case may be. If the Company or the Trust gives such notice to
suspend the sale of the Exchange Capital Securities (or the Exchange Guarantee
or the Exchange Junior Subordinated Debentures, as applicable), it shall extend
the 180-day period referred to above during which Participating Broker-Dealers
are entitled to use this Prospectus in connection with the resale of Exchange
Capital Securities by the number of days during the period from and including
the date of the giving of such notice to and including the date when
Participating Broker-Dealers shall have received copies of the amended or
supplemented Prospectus necessary to permit resales of the Exchange Capital
Securities or to and including the date on which the Company or the Trust has
given notice that the sale of Exchange Capital
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Securities (or the Exchange Guarantee or the Exchange Junior Subordinated
Debentures, as applicable) may be resumed, as the case may be.
Withdrawal Rights
Except as otherwise provided herein, tenders of Original Capital Securities
may be withdrawn at any time on or prior to the Expiration Date.
In order for a withdrawal to be effective, a written, telegraphic, telex or
facsimile transmission of such notice of withdrawal must be timely received by
the Exchange Agent at one of its addresses set forth under "--Exchange Agent" on
or prior to the Expiration Date. Any such notice of withdrawal must specify the
name of the person who tendered the Original Capital Securities to be withdrawn,
the aggregate principal amount of Original Capital Securities to be withdrawn,
and (if certificates for such Original Capital Securities have been tendered)
the name of the registered holder of the Original Capital Securities as set
forth on the Original Capital Securities, if different from that of the person
who tendered such Original Capital Securities.
If certificates representing Original Capital Securities have been
delivered or otherwise identified to the Exchange Agent, then prior to the
physical release of such certificates, the tendering holder must submit the
serial numbers shown on the particular Original Capital Securities to be
withdrawn and the signature on the notice of withdrawal must be guaranteed by an
Eligible Institution, except in the case of Original Capital Securities tendered
for the account of an Eligible Institution. If Original Capital Securities have
been tendered pursuant to the procedures for book-entry transfer set forth in
"--Procedures for Tendering Original Capital Securities -- Book-Entry Transfer,"
the notice of withdrawal must specify the name and number of the account at DTC
to be credited with the withdrawal of Original Capital Securities. Withdrawals
of tenders of Original Capital Securities may not be rescinded. Original Capital
Securities properly withdrawn will not be deemed validly tendered for purposes
of the Exchange Offer, but may be retendered at any subsequent time on or prior
to the Expiration Date by following any of the procedures described above under
"--Procedures for Tendering Original Capital Securities."
All questions as to the validity, form and eligibility (including time of
receipt) of such withdrawal notices will be determined by the Trust, in its sole
discretion, whose determination shall be final and binding on all parties.
Neither the Company, the Trust, any affiliates or assigns of the Company or the
Trust, the Exchange Agent nor any other person shall be under any duty to give
any notification of any irregularities in any notice of withdrawal or incur any
liability for failure to give any such notification. Any Original Capital
Securities which have been tendered but which are withdrawn will be returned to
the holder thereof promptly after withdrawal.
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Distributions on Exchange Capital Securities
Holders of Original Capital Securities whose Original Capital Securities
are accepted for exchange will not receive Distributions on such Original
Capital Securities and will be deemed to have waived the right to receive any
Distributions on such Original Capital Securities accumulated from and after
February 15, 1999. Accordingly, holders of Exchange Capital Securities as of the
record date for the payment of Distributions on August 15, 1999 will be entitled
to receive Distributions accumulated from and after February 15, 1999.
Conditions to the Exchange Offer
Notwithstanding any other provisions of the Exchange Offer, or any
extension of the Exchange Offer, the Company and the Trust will not be required
to accept for exchange, or to exchange, any Original Capital Securities for any
Exchange Capital Securities, and, as described below, may terminate the Exchange
Offer (whether or not any Original Capital Securities have theretofore been
accepted for exchange) or may waive any conditions to or amend the Exchange
Offer, if any of the following conditions have occurred or exists or have not
been satisfied:
(a) there shall occur a change in the current interpretation by the staff
of the SEC which permits the Exchange Capital Securities issued
pursuant to the Exchange Offer in exchange for Original Capital
Securities to be offered for resale, resold and otherwise transferred
by holders thereof (other than broker-dealers and any such holder
which is an "affiliate" of the Company or the Trust within the meaning
of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act,
provided that such Exchange Capital Securities are acquired in the
ordinary course of such holders' business and such holders have no
arrangement or understanding with any person to participate in the
distribution of such Exchange Capital Securities; or
(b) any law, statute, rule or regulation shall have been adopted or
enacted which, in the judgment of the Company or the Trust, would
reasonably be expected to impair its ability to proceed with the
Exchange Offer; or
(c) a stop order shall have been issued by the SEC or any state securities
authority suspending the effectiveness of the Registration Statement,
or proceedings shall have been initiated or, to the knowledge of the
Company or the Trust, threatened for that purpose, or any governmental
approval has not been obtained, which approval the Company or the
Trust shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby, or
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(d) the Company determines in good faith that there is a reasonable
likelihood that, or a material uncertainty exists as to whether,
consummation of the Exchange Offer would result in an adverse tax
consequence to the Trust or the Company.
If the Company or the Trust determines in its sole and absolute discretion
that any of the foregoing events or conditions has occurred or exists or has not
been satisfied, it may, subject to applicable law, terminate the Exchange Offer
(whether or not any Original Capital Securities have theretofore been accepted
for exchange) or may waive any such condition or otherwise amend the terms of
the Exchange Offer in any respect. If such waiver or amendment constitutes a
material change to the Exchange Offer, the Company or the Trust will promptly
disclose such waiver or amendment by means of a prospectus supplement that will
be distributed to the registered holders of the Original Capital Securities and
will extend the Exchange Offer to the extent required by Rule 14e-1 under the
Exchange Act.
Exchange Agent
First Union Trust Company, National Association has been appointed as
Exchange Agent for the Exchange Offer. Delivery of the Letters of Transmittal
and any other required documents, questions, requests for assistance, and
requests for additional copies of this Prospectus or of the Letter of
Transmittal should be directed to the Exchange Agent as follows:
BY REGISTERED OR CERTIFIED MAIL:
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Department
Confirm By Telephone:
(302) 888-7532
Facsimile Transmissions:
(ELIGIBLE INSTITUTIONS ONLY)
(302) 888-7544
BY HAND OR OVERNIGHT DELIVERY:
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Department
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Confirm By Telephone:
(302) 888-7532
Delivery to other than the above addresses or facsimile number will not
constitute a valid delivery.
Fees and Expenses
The Company has agreed to pay the Exchange Agent reasonable and customary
fees for its services and will reimburse it for its reasonable out-of-pocket
expenses in connection therewith. The Company will also pay brokerage houses and
other custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of Original Capital Securities, and in handling or
tendering for their customers.
Holders who tender their Original Capital Securities for exchange will not
be obligated to pay any transfer taxes in connection therewith. If, however,
Exchange Capital Securities are to be delivered to, or are to be issued in the
name of, any person other than the registered holder of the Original Capital
Securities tendered, or if a transfer tax is imposed for any reason other than
the exchange of Original Capital Securities in connection with the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
Neither the Company nor the Trust will make any payment to brokers, dealers
or other nominees soliciting acceptances of the Exchange Offer.
DESCRIPTION OF EXCHANGE SECURITIES
Description of Exchange Capital Securities
Pursuant to the terms of the Trust Agreement, the Issuer Trustees on
behalf of the Trust will issue the Exchange Capital Securities. The Exchange
Capital Securities will represent beneficial ownership interests in the Trust
and the holders thereof will be entitled to a preference over the Common
Securities, in certain circumstances with respect to Distributions and amounts
payable on redemption of the Trust Securities or liquidation of the Trust, as
well as other benefits as described in the Trust Agreement. See "--Subordination
of Common Securities." The Trust Agreement has been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"). This summary of
certain provisions of the Exchange Capital Securities, the Common Securities and
the Trust Agreement does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, all the provisions of the Trust
Agreement, including the definitions therein of certain terms. The form of Trust
Agreement is available upon
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request from the Issuer Trustees and has been filed as an exhibit to the
Registration Statement, of which this Prospectus is a part.
General
The Exchange Capital Securities will be limited to $10 million aggregate
Liquidation Amount at any one time outstanding. The Capital Securities will rank
pari passu, and payments will be made thereon pro rata, with the Common
Securities, except as described under "--Subordination of Common Securities."
Legal title to the Junior Subordinated Debentures will be held by the Property
Trustee in trust for the benefit of the holders of the Trust Securities. The
Exchange Guarantee executed by the Company for the benefit of the holders of the
Exchange Capital Securities (the " Exchange Guarantee") will not guarantee
payment of Distributions or amounts payable on redemption of the Exchange
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand legally available for such payments. See "--Description of
Exchange Guarantee."
Distributions
The Exchange Capital Securities represent beneficial ownership interests in
the Trust, and Distributions on the Capital Securities will be cumulative and
will be payable semi-annually in arrears on February 15 and August 15 of each
year at the annual rate of 8.57% of the Liquidation Amount to the holders of the
Capital Securities on the relevant record dates. The record dates will be the
15th day preceding the relevant Distribution Date (as defined below).
Distributions will accumulate from August 11, 1998. The first Distribution Date
for the Exchange Capital Securities will be August 15, 1999. The amount of
Distributions payable for any period will be computed on the basis of a 360 day
year of twelve 30-day months. In the event that any date on which Distributions
are payable on the Exchange Capital Securities is not a Business Day (as defined
below), payment of the Distribution payable on such date will be made on the
next succeeding day that is a Business Day (and without any interest or other
payment in respect to any such delay), except that if such next succeeding
Business Day falls in the next succeeding calendar year, such payment shall be
made on the immediately preceding Business Day, in each case with the same force
and effect as if made on such date (each date on which Distributions are payable
in accordance with the foregoing, a "Distribution Date"). A "Business Day" shall
mean any day other than a Saturday or a Sunday, or a day on which banking
institutions in The City of New York, New York or Wilmington, Delaware, are
authorized or required by law or executive order to remain closed.
So long as no Debenture Event of Default shall have occurred and be
continuing, the Company will have the right under the Indenture to defer the
payment of interest on the Exchange Junior Subordinated Debentures at any time
or from time to time for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
shall end on a date other than an Interest Payment Date or extend beyond the
Stated Maturity Date. Upon any such election, semi-annual Distributions on the
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Capital Securities will be deferred by the Trust during any such Extension
Period. Distributions to which holders of the Capital Securities are entitled
during any such Extension Period will accumulate additional Distributions
thereon at the rate per annum of 8.57% thereof, compounded semi-annually from
the relevant Distribution Date, but not exceeding the interest rate then
accruing on the Junior Subordinated Debentures. The term "Distributions," as
used herein, shall include any such additional Distributions.
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end on
a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of any such Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of: (i) the
date the Distributions on the Exchange Capital Securities would have been
payable, except for the election to begin such Extension Period; or (ii) the
date the Administrative Trustees are required to give notice to any securities
exchange or to holders of such Exchange Capital Securities of the record date
for the date such Distributions are payable, but in any event not less than five
Business Days prior to such record date. There is no limitation on the number of
times that the Company may elect to begin an Extension Period. See "Description
of Exchange Junior Subordinated Debentures--Option to Extend Interest Payment
Date" and "Certain Federal Income Tax Consequences--US Holders--Interest Income
and Original Issue Discount."
During any such Extension Period, the Company may not: (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to any of the Company's capital stock; (ii)
make any payment of principal of or premium, if any, or interest on or repay,
repurchase or redeem any debt securities of the Company (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Junior Subordinated Debentures; or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any subsidiary
of the Company (including Other Guarantees) if such guarantee ranks pari passu
with or junior in right of payment to the Junior Subordinated Debentures (other
than (a) dividends or distributions in shares of, or options, warrants or rights
to subscribe for or purchase shares of, common stock of the Company, (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 Guarantee, (d) as a result of a reclassification of the
Company's capital stock or the exchange or conversion of one class or series of
the Company's capital stock for another class or series of the Company's capital
stock, (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or
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exchanged, and (f) purchases of common stock related to the issuance of common
stock or rights under any of the Company's benefit plans for its directors,
officers or employees or any of the Company's dividend reinvestment plans). The
Company has no current intention to exercise its option to defer payments of
interest on the Exchange Junior Subordinated Debentures. The revenue of the
Trust available for distribution to holders of the Exchange Capital Securities
will be limited to payments under the Exchange Junior Subordinated Debentures.
See "Description of Exchange Junior Subordinated Debentures--General." If the
Company does not make interest payments on the Exchange Junior Subordinated
Debentures, the Property Trustee will not have funds available to pay
Distributions on the Exchange Capital Securities. The payment of Distributions
(if and to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be guaranteed by the Company on a limited
basis as set forth herein under "Description of Exchange Guarantee."
The Company has established the Reserve Account in which the Company has
deposited $857,000. The Company is generally required to maintain the balance of
the Reserve Account at such Reserve Account Required Amount. See "Description of
Exchange Junior Subordinated Debentures--Reserve Account."
Redemption
Upon the repayment on the Stated Maturity Date, or prepayment, in whole or
in part, prior to the Stated Maturity Date of the Junior Subordinated Debentures
(other than following the distribution of the Junior Subordinated Debentures to
holders of the Trust Securities), the proceeds from such repayment or prepayment
shall be applied by the Property Trustee to redeem a Like Amount (as defined
below) of the Trust Securities, upon not less than 30 nor more than 60 days'
notice of a date of redemption (the "Redemption Date"), at the applicable
Redemption Price, which shall be equal to: (i) in the case of the repayment of
the Junior Subordinated Debentures on the Stated Maturity Date, the Maturity
Redemption Price (equal to the principal of, and accrued and unpaid interest on,
the Junior Subordinated Debentures); (ii) in the case of the optional prepayment
of the Junior Subordinated Debentures prior to August 15, 2008 upon the
occurrence and continuation of a Special Event, the Special Event Prepayment
Price (equal to the Special Event Prepayment Price in respect of the Junior
Subordinated Debentures); and (iii) in the case of the optional prepayment of
the Junior Subordinated Debentures on or after August 15, 2008, the Optional
Redemption Price (equal to the Optional Prepayment Price in respect of the
Junior Subordinated Debentures). See "Description of Exchange Junior
Subordinated Debentures--Optional Prepayment" and "--Special Event Prepayment."
"Like Amount" means (i) with respect to a redemption of the Trust
Securities, Trust Securities having a Liquidation Amount equal to the principal
amount of Junior Subordinated Debentures to be paid in accordance with their
terms and (ii) with respect to a distribution of Junior Subordinated Debentures
upon the liquidation of the Trust, Junior Subordinated Debentures having a
principal amount equal to the Liquidation Amount of the Trust Securities of the
holder to whom such Junior Subordinated Debentures are distributed.
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The Company will have the option to prepay the Junior Subordinated
Debentures, (i) in whole or in part, on or after August 15, 2008, at the
applicable Optional Prepayment Price and (ii) in whole but not in part, at any
time prior to August 15, 2008, upon the occurrence of a Special Event, at the
Special Event Prepayment Price, in each case subject to receipt of any required
regulatory approval. See "Description of Exchange Junior Subordinated
Debentures--Optional Prepayment" and "--Special Event Prepayment."
Liquidation of the Trust and Distribution of Junior Subordinated Debentures
The Company, as holder of the Common Securities, has the right at any time
to dissolve the Trust, after satisfaction of liabilities to creditors of the
Trust as required by applicable law, and to cause the Junior Subordinated
Debentures to be distributed to the holders of the Trust Securities in
liquidation of the Trust. Such right is subject to: (i) the Company having
received an opinion of counsel to the effect that such distribution will not be
a taxable event to holders of Capital Securities; and (ii) any required
regulatory approval.
The Trust shall dissolve and automatically terminate upon the first to
occur of: (i) certain events of bankruptcy, dissolution or liquidation of the
Company; (ii) the distribution of a Like Amount of the Junior Subordinated
Debentures to the holders of the Trust Securities, if the Company, as holder of
the Common Securities, has given written direction to the Property Trustee to
dissolve the Trust (which direction is optional and, except as described above,
wholly within the discretion of the Company, as holder of the Common
Securities); (iii) redemption of all of the Trust Securities as described under
"--Redemption"; (iv) expiration of the term of the Trust; or (v) the entry of an
order for the dissolution of the Trust by a court of competent jurisdiction.
If a termination occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust shall be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing, after satisfaction
of liabilities to creditors of the Trust as provided by applicable law, to the
holders of the Trust Securities a Like Amount of the Junior Subordinated
Debentures, unless such distribution is determined by the Property Trustee not
to be practicable, in which event such holders will be entitled to receive out
of the assets of the Trust legally available for distribution to holders, after
satisfaction of liabilities to creditors of the Trust as provided by applicable
law, an amount equal to the aggregate of the Liquidation Amount, plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because the Trust has insufficient assets on hand legally
available to pay in fall the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Trust Securities shall be paid on a
pro rata basis, except that if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have priority over the Common
Securities. See "--Subordination of Common Securities."
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If the Company elects not to prepay the Junior Subordinated Debentures
prior to maturity in accordance with their terms and either elects not to or is
unable to liquidate the Trust and distribute the Junior Subordinated Debentures
to holders of the Trust Securities, the Trust Securities will remain outstanding
until the repayment of the Junior Subordinated Debentures on the Stated Maturity
Date.
After the liquidation date is fixed for any distribution of Junior
Subordinated Debentures to holders of the Trust Securities: (i) the Trust
Securities will no longer be deemed to be outstanding; (ii) DTC or its nominee
will receive, in respect of each registered global certificate, if any,
representing Trust Securities and held by it, a registered global certificate or
certificates representing the Junior Subordinated Debentures to be delivered
upon such distribution; and (iii) any certificates representing Trust Securities
not held by DTC or its nominee will be deemed to represent Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of such
Trust Securities, and bearing accrued and unpaid interest in an amount equal to
the accumulated and unpaid Distributions on such Trust Securities until such
certificates are presented to the Administrative Trustees or their agent for
cancellation, whereupon the Company will issue to such holder, and the Debenture
Trustee will authenticate, a certificate representing such Junior Subordinated
Debentures.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debentures that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debentures that the investor may receive on
dissolution and liquidation of the Trust, may trade at a discount to the price
that the investor paid to purchase the Capital Securities offered hereby.
Redemption Procedures
If applicable, Trust Securities shall be redeemed at the applicable
Redemption Price with the proceeds from the contemporaneous repayment or
prepayment of the Exchange Junior Subordinated Debentures. Any redemption of
Trust Securities shall be made and the applicable Redemption Price shall be
payable on the Redemption Date only to the extent that the Trust has funds
legally available for the payment of such applicable Redemption Price. See also
"--Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Exchange
Capital Securities, then, by 12:00 noon, New York City time, on the Redemption
Date, to the extent funds are legally available, with respect to the Exchange
Capital Securities held by DTC or its nominees, the Property Trustee will
deposit or cause the Paying Agent (as defined below) to deposit irrevocably with
DTC funds sufficient to pay the applicable Redemption Price. See "--Form,
Denomination, Book-Entry Procedures and Transfer." With respect to the Exchange
Capital Securities held in certificated form, the Property Trustee, to the
extent funds are legally available, will irrevocably deposit with the Paying
Agent for the Exchange Capital Securities funds
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sufficient to pay the applicable Redemption Price and will give such Paying
Agent irrevocable instructions and authority to pay the applicable Redemption
Price to the holders thereof upon surrender of their certificates evidencing the
Capital Securities. See "--Payment and Paying Agency." Notwithstanding the
foregoing, Distributions payable on or prior to the Redemption Date shall be
payable to the holders of such Exchange Capital Securities on the relevant
record dates for the related Distribution Dates. If notice of redemption shall
have been given and funds deposited as required, then upon the date of such
deposit, all rights of the holders of the Exchange Capital Securities called for
redemption will cease, except the right of the holders of the Exchange Capital
Securities to receive the applicable Redemption Price, but without interest on
such Redemption Price, and the Exchange Capital Securities will cease to be
outstanding. In the event that any Redemption Date of Exchange Capital
Securities is not a Business Day, then the applicable Redemption Price payable
on such date will be paid on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay), except that
if such next succeeding Business Day falls in the next calendar year, such
payment shall be made on the immediately preceding Business Day. In the event
that payment of the applicable Redemption Price is improperly withheld or
refused and not paid either by the Trust or by the Company pursuant to the
Exchange Guarantee as described under "Description of Guarantee": (i)
Distributions on Exchange Capital Securities will continue to accumulate at the
then applicable rate, from the Redemption Date originally established by the
Trust to the date such applicable Redemption Price is actually paid; and (ii)
the actual payment date will be the Redemption Date for purposes of calculating
the applicable Redemption Price.
In the event that fewer than all of the outstanding Exchange Capital
Securities are to be redeemed, the Exchange Capital Securities will be redeemed
in accordance with the customary procedures of DTC.
Subject to applicable law (including, without limitation, United States
federal securities law), the Company or its subsidiaries may at any time and
from time to time purchase outstanding Capital Securities by tender, in the open
market or by private agreement.
Notice of any redemption will be mailed at least 30 days but not more than
60 days prior to the Redemption Date to each holder of Trust Securities at its
registered address. Unless the Company defaults in payment of the applicable
Redemption Price or in the repayment of the Junior Subordinated Debentures, on
and after the Redemption Date, Distributions will cease to accrue on the Trust
Securities called for redemption.
Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Trust
Securities, as applicable, shall be made pro rata based on the Liquidation
Amount of the Trust Securities; provided however, that if on any Distribution
Date or Redemption Date a Debenture Event of Default shall have occurred and be
continuing, no payment of any Distribution on, or applicable Redemption Price
of, any of the Common Securities, and no other payment on account of the
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redemption, liquidation or other acquisition of the Common Securities, shall be
made unless payment in full in cash of all accumulated and unpaid Distributions
on all of the outstanding Capital Securities for all Distribution periods
terminating on or prior thereto, or in the case of payment of the applicable
Redemption Price the full amount of such Redemption Price, shall have been made
or provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or Redemption
Price of, the Capital Securities then due and payable.
In the case of any Event of Default (as defined below), the Company as
holder of the Common Securities will be deemed to have waived any right to act
with respect to such Event of Default until the effect of such Event of Default
shall have been cured, waived or otherwise eliminated. Until any such Event of
Default has been so cured, waived or otherwise eliminated, the Property Trustee
shall act solely on behalf of the holders of the Capital Securities and not on
behalf of the Company as holder of the Common Securities, and only the holders
of the Capital Securities will have the right to direct the Property Trustee to
act on their behalf.
Events of Default; Notice
The occurrence of a Debenture Event of Default constitutes an "Event of
Default" under the Trust Agreement. See "Description of Exchange Junior
Subordinated Debentures--Debenture Events of Default."
Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Company, as Sponsor, unless such Event of
Default shall have been cured or waived. The Company, as Sponsor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Trust Agreement.
If a Debenture Event of Default has occurred and is continuing, the Capital
Securities shall have a preference over the Common Securities as described under
"--Liquidation of the Trust and Distribution of Junior Subordinated Debentures"
and "--Subordination of Common Securities."
Removal of Issuer Trustees; Appointment of Successors
Unless a Debenture Event of Default shall have occurred and be continuing,
any Issuer Trustee may be removed at any time by the holder of the Common
Securities. If a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are
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vested exclusively in the Company as the holder of the Common Securities. Any
Delaware Trustee must, however, meet the applicable requirements of Delaware
law. Any Property Trustee must be a national or state chartered bank, and at the
time of appointment have securities rated in one of the three highest rating
categories by a nationally recognized statistical rating organization and have
capital and surplus of at least $50,000,000. No resignation or removal of an
Issuer Trustee and no appointment of a successor trustee shall be effective
until the acceptance of appointment by the successor trustee in accordance with
the provisions of the Trust Agreement.
Merger or Consolidation of Issuer Trustees
Any entity into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any entity resulting from any merger,
conversion or consolidation to which such Issuer Trustee shall be a party, or
any entity succeeding to all or substantially all the corporate trust business
of such Issuer Trustee, shall be the successor of such Issuer Trustee under the
Trust Agreement, provided such entity shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below. The Trust may, at the request of the Company, as
Sponsor, with the consent of the Administrative Trustees but without the consent
of the holders of the Capital Securities, merge with or into, consolidate,
amalgamate, or be replaced by or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to a trust organized as
such under the laws of any State; provided, that: (i) such successor entity
either (a) expressly assumes all of the obligations of the Trust with respect to
the Capital Securities or (b) substitutes for the Capital Securities other
securities having substantially the same terms as the Capital Securities (the
"Successor Securities") so long as the Successor Securities rank the same as the
Capital Securities in priority with respect to distributions and payments upon
liquidation, redemption and otherwise; (ii) the Company expressly appoints a
trustee of such successor entity possessing the same powers and duties as the
Property Trustee with respect to the Junior Subordinated Debentures; (iii) the
Successor Securities are listed, or any Successor Securities will be listed upon
notification of issuance, on any national securities exchange or other
organization on which the Capital Securities are then listed or quoted, if any;
(iv) if the Capital Securities (including any Successor Securities) are rated by
any nationally recognized statistical rating organization prior to such
transaction, such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) or, if the Junior Subordinated Debentures are so rated, the Junior
Subordinated Debentures to be downgraded by any such nationally recognized
statistical rating organization; (v) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the holders of
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the Capital Securities (including any Successor Securities) in any material
respect; (vi) such successor entity has a purpose identical to that of the
Trust; (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Company has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect (other than any dilution of such holders' interest in the new
entity), and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940, as amended (the "Investment Company Act"); and
(viii) the Company or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge with or into, or be replaced by or
convey, transfer or lease its properties and assets as an entirety or
substantially as an entirety to any other entity or permit any other entity to
consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity not to be classified as a grantor
trust for United States federal income tax purposes.
Voting Rights; Amendment of the Trust Agreement
Except as provided below and under "--Mergers, Consolidations,
Amalgamations or Replacements of the Trust" and "Description of Exchange
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Trust Agreement, the holders of the Capital Securities will have no voting
rights.
The Trust Agreement may be amended from time to time by the Company, the
Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities: (i) to cure any ambiguity, correct or
supplement any provisions in the Trust Agreement that may be inconsistent with
any other provision, or to make any other provisions with respect to matters or
questions arising under the Trust Agreement, which shall not be inconsistent
with the other provisions of the Trust Agreement; or (ii) to modify, eliminate
or add to any provisions of the Trust Agreement to such extent as shall be
necessary to ensure that the Trust will be classified for United States federal
income tax purposes as a grantor trust at all times that any Trust Securities
are outstanding or to ensure that the Trust will not be required to register as
an "investment company" under the Investment Company Act; provided however, that
in the case of clause (i), such action shall not adversely affect in any
material respect the interests of the holder of the Trust Securities, and any
amendments of the Trust Agreement shall become effective when notice thereof is
given to the holders of the Trust Securities. The Trust Agreement may be amended
by the Issuer Trustees and the Company: (i) with the consent of holders
representing a majority (based upon Liquidation Amount) of the outstanding Trust
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Securities; and (ii) upon receipt by the Issuer Trustees of an opinion of
counsel to the effect that such amendment or the exercise of any power granted
to the Issuer Trustees in accordance with such amendment will not affect the
Trust's status as a grantor trust for United States federal income tax purposes
or the Trust's exemption from status as an "investment company" under the
Investment Company Act, provided that, without the consent of each holder of
Trust Securities, the Trust Agreement may not be amended to: (i) change the
amount or timing of any Distribution on the Trust Securities or otherwise
adversely affect the amount of any Distribution required to be made in respect
of the Trust Securities as of a specified date; or (ii) restrict the right of a
holder of Trust Securities to institute suit for the enforcement of any such
payment on or after such date. The Exchange Capital Securities and any Original
Capital Securities which remain outstanding after consummation of the Exchange
Offer will vote together as a single class for purposes of determining whether
holders of the requisite percentage in outstanding Liquidation Amount thereof
have taken certain actions or exercised certain rights under the Trust
Agreement.
So long as any Junior Subordinated Debentures are held by the Property
Trustee, the Issuer Trustees shall not: (i) direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
executing any trust or power conferred on such Property Trustee with respect to
the Junior Subordinated Debentures; (ii) waive certain past defaults under the
Indenture; (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Junior Subordinated
Debentures; or (iv) consent to any amendment, modification or termination of the
Indenture or the Junior Subordinated Debentures, where such consent shall be
required, without, in each case, obtaining the prior approval of the holders of
a majority in Liquidation Amount of all outstanding Capital Securities;
provided, however, that where a consent under the Indenture would require the
consent of each holder of Junior Subordinated Debentures affected thereby, no
such consent shall be given by the Property Trustee without the prior approval
of each holder of the Capital Securities. The Issuer Trustees shall not revoke
any action previously authorized or approved by a vote of the holders of the
Capital Securities except by subsequent vote of such holders. The Property
Trustee shall notify each holder of Capital Securities of any notice of default
with respect to the Junior Subordinated Debentures. In addition to obtaining the
foregoing approvals of such holders of the Capital Securities, prior to taking
any of the foregoing actions, the Issuer Trustees shall obtain an opinion of
counsel experienced in such matters to the effect that the Trust will not be
classified as an association taxable as a corporation for United States federal
income tax purposes on account of such action.
Any required approval of holders of Capital Securities may be given at a
meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the Trust
Agreement.
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No vote or consent of the holders of Capital Securities will be required
for the Trust to redeem and cancel the Capital Securities in accordance with the
Trust Agreement.
Notwithstanding that holders of the Capital Securities are entitled to vote
or consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Company, the Issuer Trustees or any affiliate
of the Company or any Issuer Trustees, shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
Expenses and Taxes
In the Indenture, the Company, as issuer of the Junior Subordinated
Debentures, has agreed to pay all debts and other obligations (other than with
respect to payments of Distributions, amounts payable upon redemption and the
Liquidation Amount of the Trust Securities) and all costs and expenses of the
Trust (including costs and expenses relating to the organization of the Trust,
the fees and expenses of the Issuer Trustees and the costs and expenses relating
to the operation of the Trust) and the offering of the Capital Securities, and
to pay any and all taxes and all costs and expenses with respect to the
foregoing (other than United States withholding taxes) to which the Trust might
become subject.
Form, Denomination, Book-Entry Procedures and Transfer
The Exchange Capital Securities initially will be represented by one or
more Capital Securities in registered, global form (collectively, the "Global
Capital Securities"). The Global Capital Securities will be deposited upon
issuance with the Property Trustee as custodian for DTC, in New York, New York,
and registered in the name of DTC or its nominee, in each case for credit to an
account of a direct or indirect participant in DTC as described below.
Except as set forth below, the Global Capital Securities may be
transferred, in whole and not in part, only to another nominee of DTC or to a
successor of DTC or its nominee and only in amounts that would not cause a
holder to own less than 100 Capital Securities. Beneficial interests in the
Global Capital Securities may not be exchanged for Capital Securities in
certificated form, except in the limited circumstances described below. See
"--Exchange of Book-Entry Capital Securities for Certificated Capital
Securities." In addition, transfer of beneficial interests in the Global Capital
Securities will be subject to the applicable rules and procedures of DTC and its
direct or indirect participants, which may change from time to time.
Depositary Procedures
DTC has advised the Trust and the Company that DTC is a limited-purpose
trust company organized under the laws of the State of New York, a member of the
Federal Reserve System, a "clearing corporation" within the meaning of the
Uniform Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Exchange Act. DTC was created to hold
securities for its participating organizations (collectively, the
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"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
in accounts of its Participants, thereby eliminating the need for physical
movement of certificates. The Participants include securities brokers and
dealers (including the Initial Purchaser), banks, trust companies, clearing
corporations and certain other organizations. Access to DTC's system is also
available to other entities such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly (collectively, the "Indirect Participants").
Persons who are not Participants may beneficially own securities held by or on
behalf of DTC only through the Participants or the Indirect Participants. The
ownership interest and transfer of ownership interest of each actual purchaser
of each security held by or on behalf of DTC are recorded on the records of the
Participants and Indirect Participants.
DTC has also advised the Trust and the Company that, pursuant to procedures
established by it, (i) upon deposit of the Global Capital Securities, DTC will
credit the accounts of Participants designated by the Initial Purchaser with
portions of the Liquidation Amount of the Global Capital Securities and (ii)
ownership of such interests in the Global Capital Securities will be shown on,
and the transfer of ownership thereof will be effected only through, records
maintained by DTC (with respect to the Participants) or by the Participants and
the Indirect Participants (with respect to other owners of beneficial interests
in the Global Capital Securities).
Investors in the Global Capital Securities may hold their interests therein
directly through DTC if they are participants in such system, or indirectly
through organizations which are Participants. All interests in a Global Capital
Security will be subject to the procedures and requirements of DTC. The laws of
some states require that certain persons take physical delivery in certificated
form of securities that they own. Consequently, the ability to transfer
beneficial interests in a Global Capital Security to such persons will be
limited to that extent. Because DTC can act only on behalf of Participants,
which in turn act on behalf of Indirect Participants and certain banks, the
ability of a person having beneficial interests in a Global Capital Security to
pledge such interests to persons or entities that do not participate in the DTC
system, or otherwise take actions in respect of such interests, may be affected
by the lack of a physical certificate evidencing such interests. For certain
other restrictions on the transferability of the Capital Securities, see
"--Exchange of Book-Entry Capital Securities for Certificated Capital
Securities" and "--Exchange of Certificated Capital Securities for Book-Entry
Capital Securities."
Except as described below, owners of beneficial interests in the global
capital securities will not be entitled to have Capital Securities registered in
their names, will not receive or be entitled to receive physical delivery of
Capital Securities in certificated form and will not be considered the
registered owners or holders thereof under the Trust Agreement for any purpose.
Payments in respect of the Global Capital Security registered in the name
of DTC or its nominee will be payable by the Property Trustee to DTC in its
capacity as the registered holder under the Trust Agreement. Under the terms of
the Trust Agreement, the Property Trustee will
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treat the persons in whose names the Capital Securities, including the Global
Capital Securities, are registered as the owners thereof for the purpose of
receiving such payments and for any and all other purposes whatsoever.
Consequently, neither the Property Trustee nor any agent thereof has or will
have any responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to, or payments made on
account of beneficial ownership interests in the Global Capital Securities, or
for maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Capital Securities, or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Company that its
current practice, upon receipt of any payment in respect of securities such as
the Capital Securities, is to credit the accounts of the relevant Participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in Liquidation Amount of beneficial interests in the
relevant security, as shown on the records of DTC, unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Capital
Securities will be governed by standing instructions and customary practices and
will be the responsibility of the Participants or the Indirect Participants and
will not be the responsibility of DTC, the Property Trustee, the Trust or the
Company. Neither the Trust or the Company nor the Property Trustee will be
liable for any delay by DTC or any of its Participants in identifying the
beneficial owners of the Capital Securities, and the Trust or the Company and
the Property Trustee may conclusively rely on and will be protected in relying
on instructions from DTC or its nominee for all purposes.
Secondary market trading activity in interests in the Global Capital
Securities will settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will settle in same-day funds.
DTC has advised the Trust and the Company that it will take any action
permitted to be taken by a holder of Exchange Capital Securities (including,
without limitation, the presentation of Capital Securities for exchange as
described below) only at the direction of one or more Participants to whose
account with DTC interests in the Global Capital Securities are credited and
only in respect of such portion of the Liquidation Amount of the Capital
Securities as to which such Participant or Participants has or have given such
direction. However, if there is an Event of Default under the Trust Agreement,
DTC reserves the right to exchange the Global Capital Securities for legended
Exchange Capital Securities in certificated form and to distribute such Exchange
Capital Securities to its Participants.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that the Trust and the Company believe to be
reliable, but neither the Trust nor the Corporation takes responsibility for the
accuracy thereof.
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Although DTC has agreed to the foregoing procedures to facilitate transfers
of interest in the Global Capital Securities among Participants in DTC, it is
under no obligation to perform or to continue to perform such procedures, and
such procedures may be discontinued at any time. Neither the Trust or the
Corporation nor the Property Trustee will have any responsibility for the
performance by DTC or its Participants or Indirect Participants of its
obligations under the rules and procedures governing its operations.
Exchange of Book-Entry Capital Securities for Certificated Capital
Securities
A Global Capital Security is exchangeable for Exchange Capital Securities
in registered certificated form if (i) DTC (x) notifies the Trust that it is
unwilling or unable to continue as Depositary for the Global Capital Security
and the Trust thereupon fails to appoint a successor Depositary within 90 days,
or (y) has ceased to be a clearing agency registered under the Exchange Act;
(ii) the Corporation in its sole discretion elects to cause the issuance of
Exchange Capital Securities in certificated form; or (iii) there shall have
occurred and be continuing an Event of Default or any event which after notice
or lapse of time or both, would be an Event of Default under the Trust
Agreement. In addition, beneficial interests in a Global Capital Security may be
exchanged for certificated Exchange Capital Securities upon request, but only
upon at least 20 days prior written notice given to the Property Trustee by or
on behalf of DTC in accordance with customary procedures. In all cases,
certificated Capital Securities delivered in exchange for any Global Capital
Security or beneficial interests therein will be registered in the names, and
issued in any approved denominations, requested by or on behalf of the
Depositary (in accordance with its customary procedures).
Exchange of Certificated Capital Securities for Book-Entry Capital
Securities
Capital Securities issued in certificated form may not be exchanged for
beneficial interests in any Global Capital Security unless such exchange occurs
in connection with a transfer of such Capital Securities and the transferor
first delivers to the Property Trustee a written certificate (in the form
provided in the Trust Agreement) to the effect that such transfer will comply
with the appropriate transfer restrictions applicable to such Capital
Securities.
Payment and Paying Agency
Payments in respect of the Exchange Capital Securities held in global form
shall be made to the Depositary, which shall credit the relevant accounts at the
Depositary on the applicable Distribution Dates or in respect of the Capital
Securities that are not held by the Depositary, such payments shall be made by
check mailed to the address of the holder entitled thereto as such address shall
appear on the register. The paying agent (the "Paying Agent") shall initially be
the Property Trustee and any co-paying agent chosen by the Property Trustee and
acceptable to the Administrative Trustees and the Company. The Paying Agent
shall be permitted to resign as Paying Agent upon 30 days' written notice to the
Property Trustee and the Company. In the event that the Property Trustee shall
no longer be the Paying Agent, the Administrative Trustees
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shall appoint a successor (which shall be a bank or trust company acceptable to
the Administrative Trustees and the Company) to act as Paying Agent.
Restrictions on Transfer
The Exchange Capital Securities will be issued, and may be transferred
only, in blocks having a Liquidation Amount of not less than $100,000 (100
Capital Securities). Any such transfer of Exchange Capital Securities in a block
having a Liquidation Amount of less than $100,000 shall be deemed to be void and
of no legal effect whatsoever. Any such transferee shall be deemed not to be the
holder of such Exchange Capital Securities for any purpose, including but not
limited to the receipt of Distributions on such Exchange Capital Securities, and
such transferee shall be deemed to have no interest whatsoever in such Exchange
Capital Securities.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the
Exchange Capital Securities.
Registration of transfers of the Exchange Capital Securities will be
effected without charge by or on behalf of the Trust, but upon payment of any
tax or other governmental charges that may be imposed in connection with any
transfer or exchange. The Trust will not be required to register or cause to be
registered the transfer of the Exchange Capital Securities after they have been
called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance of
an Event of Default, undertakes to perform only such duties as are specifically
set forth in the Trust Agreement and, after such an Event of Default, must
exercise the same degree of care and skill as a prudent person would exercise or
use in the conduct of his or her own affairs. Subject to this provision, the
Property Trustee is under no obligation to exercise any of the powers vested in
it by the Trust Agreement at the request of any holder of Trust Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby. If no Event of Default has occurred
and is continuing and the Property Trustee is required to decide between
alternative causes of action, construe ambiguous provisions in the 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 Capital Securities
or the Common Securities are entitled under the Trust Agreement to vote, then
the Property Trustee shall take such action as is directed by the Company and if
not so directed, shall take such action as it deems advisable and in the best
interests of the holders of the Trust Securities and will have no liability
except for its own bad faith, negligence or willful misconduct.
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Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that: (i) the Trust will not
be deemed to be an "investment company" required to be registered under the
Investment Company Act; (ii) the Trust will be classified as a grantor trust for
United States federal income tax purposes; and (iii) the Junior Subordinated
Debentures will be treated as indebtedness of the company for United States
federal income tax purposes. In this connection, the Company and the
Administrative Trustees are authorized to take any action, not inconsistent with
applicable law, the certificate of trust of the Trust or the Trust Agreement,
that the Company and the Administrative Trustees determine in their discretion
to be necessary or desirable for such purposes, as long as such action does not
materially adversely affect the interests of the holders of the Trust
Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money, issue debt, execute mortgages or pledge any
of its assets.
Description of Exchange Junior Subordinated Debentures
The Junior Subordinated Debentures were issued as a separate series under
an Indenture, as supplemented from time to time (as so supplemented, the
"Indenture"), between the Company and First Union Trust Company, National
Association, as trustee (the "Debenture Trustee"). The Indenture has been
qualified under the Trust Indenture Act. This summary of certain terms and
provisions of the Junior Subordinated Debentures and the Indenture does not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms, some
of which are not otherwise defined herein, are qualified in their entirety by
reference to all of the provisions of the Indenture and those terms made a part
of the Indenture by the Trust Indenture Act.
General
Concurrently with the issuance of the Trust Securities, the Trust invested
the proceeds thereof in the Original Junior Subordinated Debentures issued by
the Company. The Exchange Junior Subordinated Debentures, similarly to the
Original Junior Subordinated Debentures, will bear interest from August 11, 1998
at the annual rate of 8.57% of the principal amount thereof payable
semi-annually in arrears on February 15 and August 15 of each year (each, an
"Interest Payment Date"), commencing August 15, 1999, to the person in whose
name each Junior Subordinated Debenture is registered, subject to certain
exceptions, at the close of business on the 15th day preceding the relevant
payment date. It is anticipated that, until the liquidation, if any, of the
Trust, each Exchange Junior Subordinated Debenture will be held in the name of
the Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day
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months. In the event that any date on which interest is payable on the Exchange
Junior Subordinated Debentures is not a Business Day, then payment of the
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that if such next succeeding Business Day falls in the next
succeeding calendar year, then such payment shall be made on the immediately
preceding Business Day, in each case with the same force and effect as if made
on such date. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at the rate per annum of 8.57% thereof, compounded
semi-annually. The term "interest" as used herein, shall include semi-annual
interest payments, interest on semi-annual interest payments not paid on the
applicable Interest Payment Date and Additional Sums (as defined herein), as
applicable.
The Exchange Junior Subordinated Debentures will be issued pursuant to the
Indenture and will be issued in denominations of $1,000 and integral multiples
thereof. Unless previously redeemed or repurchased, the Junior Subordinated
Debentures will mature on August 15, 2028 (the "Stated Maturity Date").
The Exchange Junior Subordinated Debentures will rank pari passu with the
Original Junior Subordinated Debentures and all Other Debentures issued under
the Indenture and will be unsecured and subordinate and junior in right of
payment to all Senior Indebtedness to the extent and in the manner set forth in
the Indenture. See "--Subordination."
The Company is a non-operating holding company. Substantially all of the
operating assets of the Company are owned by the Bank. The Company relies
entirely on dividends from the Bank to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. The Company is a legal entity separate and distinct from its banking
and non-banking affiliates. The principal sources of the Company's income are
dividends, interest, and fees from its banking and non-banking affiliates. The
Bank is subject to certain restrictions imposed by federal law on any extensions
of credit to, and certain other transactions with, the Company and certain other
affiliates, and on investments in stock or other securities thereof. Such
restrictions prevent the Company and such other affiliates from borrowing from
the Bank unless the loans are secured by various types of collateral. Further,
such secured loans, other transactions and investments by the Bank are generally
limited in amount as to the Company and as to each of such other affiliates to
10% of the Bank's capital and surplus and as to the Company and all of such
other affiliates to an aggregate of 20% of the Bank's capital and surplus. In
addition, payment of dividends to the Company by the Bank is subject to ongoing
review by banking regulators and is subject to various statutory limitations and
in certain circumstances requires approval by banking regulatory authorities.
Under applicable banking statutes, at September 30, 1998, the Bank could have
declared additional dividends of approximately $3.6 million. However, federal
and state regulatory agencies also have the authority to limit further the
Bank's payment of dividends based on other factors, such as the maintenance of
adequate capital for the Bank, which could reduce the amount of dividends
otherwise payable.
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Because the Company is a holding company, the right of the Company to
participate in any distribution of assets of any subsidiary, upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of the subsidiary (including depositors, in the case of the
Bank), except to the extent that the Company may itself be recognized as a
creditor of that subsidiary. At September 30, 1998, the subsidiaries of the
Company had total liabilities (excluding liabilities owed to the Company) of
approximately $211.4 million. Accordingly, the Exchange Junior Subordinated
Debentures will be effectively subordinated to all existing and future
liabilities of the Company's subsidiaries, and holders of Exchange Junior
Subordinated Debentures should look only to the assets of the Company for
payments on the Exchange Junior Subordinated Debentures. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Company or any subsidiary, including Senior Indebtedness. See "--Subordination."
Reserve Account
The Company has established the Reserve Account in which the Company
deposited from the net proceeds of the sale of the Junior Subordinated
Debentures an amount equal to $857,000. The amount so deposited in the Reserve
Account is invested in highly marketable securities. In the event that the
Corporation does not have sufficient funds available to make an interest payment
on the Junior Subordinated Debentures and does not elect to defer such interest
payments, the funds in the Reserve Account shall be used, to the extent
necessary, to cover the interest payment due on the Junior Subordinated
Debentures. The Company is required to maintain the Reserve Account at the
Reserve Account Required Amount at all times except during times that the ratio
of total unsecured debt of the Company (on a consolidated basis) to
shareholders' equity (each as determined under generally accepted accounting
principles) is equal to or less than 70% and the Bank has the capacity to pay
dividends in an amount equal to or greater than two times the amount of interest
payable on the Junior Subordinated Debentures for a one-year period. Although
the Company is generally required to replenish the Reserve Account when the
balance in the Reserve Account falls below the Reserve Account Required Amount,
the Company will have, under certain circumstances, up to 24 months after the
later of (i) the occurrence of such shortfall, or (ii) the termination of an
Extension Period to eliminate any shortfall. Holders of the Junior Subordinated
Debentures will have no interest in the Reserve Account unless and until funds
therein are used to make an interest payment. Any interest in the funds
withdrawn from the Reserve Account that holders of the Junior Subordinated
Debentures may obtain will be subordinated and junior to the interests of
holders of Senior Indebtedness.
Form, Registration and Transfer
If the Exchange Junior Subordinated Debentures are distributed to holders
of the Trust Securities, the Exchange Junior Subordinated Debentures may be
represented by one or more global certificates registered in the name of Cede &
Co. as nominee of DTC. The depositary arrangements for such Exchange Junior
Subordinated Debentures are expected to be substantially similar to those in
effect for the Exchange Capital Securities. For a description of DTC and the
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terms of the depositary arrangements relating to payments, transfers, voting
rights, redemptions and other notices and other matters, see "Description of
Exchange Capital Securities--Form, Denomination, Book-Entry Procedures and
Transfer."
Payment and Paying Agents
Payment of principal of (and premium, if any) and any interest on Exchange
Junior Subordinated Debentures will be made at the office of the Debenture
Trustee in the City of New York or at the office of such Paying Agent or Paying
Agents as the Company may designate from time to time, except that at the option
of the Company payment of any interest may be made (except in the case of
Exchange Junior Subordinated Debentures in global form), (i) by check mailed to
the address of the Person entitled thereto as such address shall appear in the
register for Exchange Junior Subordinated Debentures or (ii) by transfer to an
account maintained by the person entitled thereto as specified in such register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Exchange Junior Subordinated
Debenture will be made to the person in whose name such Exchange Junior
Subordinated Debenture is registered at the close of business on the Record Date
for such interest, except in the case of defaulted interest. The Company may at
any time designate additional Paying Agents or rescind the designation of any
Paying Agent; however the Company will at all times be required to maintain a
Paying Agent in each Place of Payment for the Exchange Junior Subordinated
Debentures.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Company in trust, for the payment of the principal of (and
premium, if any) or interest on any Exchange Junior Subordinated Debenture and
remaining unclaimed for two years after such principal (and premium, if any) or
interest has become due and payable shall, at the request of the Company, be
repaid to the Company and the holder of such Exchange Junior Subordinated
Debenture shall thereafter look, as a general unsecured creditor, only to the
Company for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is continuing,
the Company has the right under the Indenture at any time and from time to time
during the term of the Exchange Junior Subordinated Debentures to defer the
payment of interest for a period not exceeding 10 consecutive semi-annual
periods with respect to each Extension Period, provided that no Extension Period
shall end on a date other than an Interest Payment Date or extend beyond the
Stated Maturity Date. At the end of such Extension Period, the Company must pay
all interest then accrued and unpaid (together with interest thereon at the
annual rate of 8.57%, compounded semi-annually, to the extent permitted by
applicable law). During an Extension Period, interest will continue to accrue
and holders of Exchange Junior Subordinated Debentures (and holders of the
Exchange Capital Securities while Exchange Capital Securities are outstanding)
will be required to accrue such deferred interest income for United States
federal
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income tax purposes prior to receipt of the cash attributable to such income.
See "Certain United States Federal Income Tax Consequences--Interest Income and
Original Issue Discount."
During any such Extension Period, the Company may not: (i) declare or pay
any dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to any of the Company's capital stock; (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including any Other
Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures; or (iii) make any guarantee payments
with respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company (including any Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Exchange Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company, (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 Guarantee, (d) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (e) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans).
Prior to the termination of any such Extension Period, the Company may
further extend such Extension Period, provided that such extension does not
cause such Extension Period to exceed 10 consecutive semi-annual periods, end on
a date other than an Interest Payment Date or to extend beyond the Stated
Maturity Date. Upon the termination of any such Extension Period and the payment
of all amounts then due on any Interest Payment Date, the Company may elect to
begin a new Extension Period, subject to the above requirements. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company must give the Property Trustee, the Administrative Trustees and the
Debenture Trustee notice of its election of any such Extension Period (or an
extension thereof) at least five Business Days prior to the earlier of: (i) the
date the Distributions on the Trust Securities would have been payable, except
for the election to begin such Extension Period; or (ii) the date the
Administrative Trustees are required to give notice to any securities exchange
or to holders of Exchange Capital Securities of the record date for the date
such Distributions are payable, but in any event not less than five Business
Days prior to such record date. The Debenture Trustee shall give notice of the
Company's election to begin or extend a new Extension Period to the holders of
the Capital Securities. There is no limitation on the number of times that the
Company may elect to begin an Extension Period.
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Optional Prepayment
The Exchange Junior Subordinated Debentures will be prepayable, in whole or
in part, at the option of the Company on or after August 15, 2008 (the "Initial
Optional Prepayment Date"), subject to the Company having received any required
regulatory approval at a prepayment price (the "Optional Prepayment Price")
equal to the percentage of the outstanding principal amount of the Exchange
Junior Subordinated Debentures specified below, plus, in each case, accrued
interest thereon to the date of prepayment if redeemed during the 12-month
period beginning August 15 of the years indicated below:
Year Percentage
---- ----------
2008 .............. 104.285%
2009 .............. 103.857
2010 .............. 103.428
2011 .............. 103.000
2012 .............. 102.571
2013 .............. 102.143
2014 .............. 101.714
2015 .............. 101.286
2016 .............. 100.857
2017 .............. 100.429
2018 .............. 100.000%
Special Event Prepayment
Prior to the Initial Optional Prepayment Date, if a Special Event has
occurred and is continuing, the Company may, at its option and subject to
receipt of any required regulatory approval, prepay the Exchange Junior
Subordinated Debentures, in whole, but not in part, at any time within 90 days
of the occurrence of such Special Event, at a prepayment price (the "Special
Event Prepayment Price" equal to the Make-Whole Amount. The "Make-Whole Amount"
shall mean an amount equal to the greater of (x) 100% of the principal amount of
the Exchange Junior Subordinated Debentures or (y) the sum, as determined by a
Quotation Agent, of the present values of the remaining scheduled payments of
principal and interest on the Exchange Junior Subordinated Debentures from the
prepayment date to the Maturity Date, discounted to the prepayment date on a
semi-annual basis (assuming a 360-day year consisting of twelve 30-day months)
at the Adjusted Treasury Rate, plus, in the case of each of clauses (x) and (y),
accrued and unpaid interest thereon, to the date of prepayment. If, following
the occurrence of a Special Event, the Company exercises its option to prepay
the Exchange Junior Subordinated Debentures, then the proceeds of that
prepayment must be applied to redeem a Like Amount of Trust Securities at the
Special event Prepayment Price. See "Description of Exchange Capital
Securities--Redemption."
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A "Special Event" means either a Tax Event or a Regulatory Capital Event,
as the case may be.
A "Tax Event" means the receipt by 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
such pronouncement or decision is announced on or after August 11, 1998, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States Federal income tax
with respect to income received or accrued on the Exchange Junior Subordinated
Debentures; (ii) interest payable by the Company on the Exchange Junior
Subordinated Debentures is not, or within 90 days of the date of such opinion,
will not be, deductible by the Company, in whole or in part, for United States
federal income tax purposes, or (iii) the Trust is, or will be within 90 days of
the date of such opinion, subject to more than a de minimis amount of other
taxes, duties or other governmental charges.
A "Regulatory Capital Event" means the receipt by the Company of an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (i) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of an applicable regulatory agency
or (ii) 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 original issuance of the Trust Securities, the Capital Securities do not
constitute, or within 90 days of such opinion will not constitute, Tier 1
Capital (or its then equivalent if the Company were subject to such capital
requirement), applied as if the Company (or its successors) were a bank holding
company, except as otherwise restricted under the 25% Capital Limitation, for
purposes of the capital adequacy guidelines of the Federal Reserve (or any
successor regulatory authority with jurisdiction over bank holding companies),
or any capital adequacy guidelines as then in effect and applicable to the
Company; provided, however, that the distribution of the Exchange Junior
Subordinated Debentures in connection with the liquidation of the Trust by the
Company shall not in and of itself constitute a Regulatory Capital Event, unless
such liquidation shall have occurred in connection with a Tax Event.
"Adjusted Treasury Rate" means, with respect to a prepayment date pursuant,
the rate per annum equal to (i) the yield, under the heading which represents
the average for the immediately prior week, appearing in the most recently
published statistical release designated "H.15(519)" or any successor
publication which is published weekly by the Board of Governors of the Federal
Reserve System and which establishes yields on actively traded United States
Treasury securities adjusted to constant maturity under the caption "Treasury
Constant Maturities," for the maturity corresponding to the Remaining Life, as
defined below (if no maturity is within three months
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before or three months after the maturity corresponding to the Remaining Life,
yields for the two published maturities most closely corresponding to the
Remaining Life shall be determined, and the Adjusted Treasury Rate shall be
interpolated or extrapolated from such yields on a straight-line basis, rounding
to the nearest month), or (ii) if such release (or any successor release) is not
published during the week preceding the calculation date or does not contain
such yields, the rate per annum equal to the semi-annual equivalent yield to
maturity to the Comparable Treasury Issue, calculated using a price for the
Comparable Treasury Issue (expressed as a percentage of its principal amount)
equal to the Comparable Treasury Price for such prepayment date, in each case
calculated on the third Business Day preceding the prepayment date, plus in each
case (a) 285 basis points if such prepayment occurs on or prior to August 11,
1999 and (b) 245 basis points in all other cases.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Exchange Junior Subordinated Debentures that would be utilized, at
the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
Remaining Life. If no United States Treasury security has a maturity which is
within a period from three months before to three months after the Remaining
Life, the two most closely corresponding United States Treasury securities, as
selected by the Quotation Agent, shall be used as the Comparable Treasury Issue,
and the Treasury Rate shall be interpolated or extrapolated on a straight-line
basis, rounding to the nearest month, using such securities.
"Comparable Treasury Price" means, with respect to any prepayment date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such prepayment date, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities" or (ii) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such prepayment date, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Quotation Agent" means the Reference Treasury Dealer appointed by the
Company.
"Reference Treasury Dealer" means a nationally recognized U.S. Government
securities dealer in New York City selected by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and the prepayment date, the average, as determined by
the Debenture Trustee, of the bid and asked prices for the Comparable Treasury
Issue (expressed in each case as a percentage of its principal amount) quoted in
writing to the Debenture Trustee by such Reference Treasury Dealer at 5:00 p.m.
New York City time on the third Business Day preceding such prepayment date.
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"Remaining Life" means the term of the Exchange Junior Subordinated
Debentures from any prepayment date to the Stated Maturity Date.
Notice of any prepayment will be mailed at least 30 days but not more than
60 days before the prepayment date to each holder of Exchange Junior
Subordinated Debentures to be prepaid at its registered address. Unless the
Company defaults in payment of the prepayment price, on the prepayment date
interest shall cease to accrue on such Exchange Junior Subordinated Debentures
called for prepayment.
If the Trust is required to pay any additional taxes, duties or other
governmental charges as a result of a Tax Event, the Company will pay as
additional amounts on the Exchange Junior Subordinated Debentures such amounts
as may be necessary on order that the amount of Distributions then due and
payable by the Trust on the outstanding Trust Securities shall not be reduced as
a result of any additional taxes, duties or other governmental charges to which
the Trust has become subject as a result of a Tax Event ("Additional Sums").
Restrictions on Certain Payments
The Company will also covenant that it will not: (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to any of the Company's capital stock; (ii)
make any payment of principal, interest or premium, if any, on or repay,
repurchase or redeem any debt securities of the Company (including Other
Debentures) that rank pari passu with or junior in right of payment to the
Exchange Junior Subordinated Debentures; or (iii) make any guarantee payments
with respect to any guarantee by the Company of the debt securities of any
subsidiary of the Company (including under Other Guarantees) if such guarantee
ranks pari passu with or junior in right of payment to the Exchange Junior
Subordinated Debentures (other than (a) dividends or distributions in shares of,
or options, warrants or rights to subscribe for or purchase shares of, common
stock of the Company, (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 Guarantee, (d) as a result of a
reclassification of the Company's capital stock or the exchange or conversion of
one class or series of the Company's capital stock for another class or series
of the Company's capital stock, (e) the purchase of fractional interests in
shares of the Company's capital stock pursuant to the conversion or exchange
provisions of such capital stock or the security being converted or exchanged,
and (f) purchases of common stock related to the issuance of common stock or
rights under any of the Company's benefit plans for its directors, officers or
employees or any of the Company's dividend reinvestment plans), if at such time
(1) there shall have occurred any event of which the Company has actual
knowledge that (a) is, or with the giving of notice or lapse of time, or both,
would be a Debenture Event of Default, and (b) in respect of which the Company
shall not have taken reasonable steps to cure, (2) if such Exchange Junior
Subordinated Debentures are held by the Trust, the Company shall be in default
with respect to
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its payment of any obligations under the Exchange Guarantee, or (3) the Company
shall have given notice of its election of an Extension Period as provided in
the Indenture and shall not have rescinded such notice, and such Extension
Period, or any extension thereof, shall have commenced and be continuing.
For so long as the Trust Securities remain outstanding, the Company will
covenant (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of the Company under the Indenture may succeed to the
Company's ownership of such Common Securities, (ii) not to cause, as Sponsor of
the Trust, or to permit, as holder of the Common Securities, the dissolution,
winding-up or termination of the Trust, except in connection with a distribution
of the Exchange Junior Subordinated Debentures as provided in the Trust
Agreement and in connection with certain mergers, consolidations or
amalgamations and (iii) to use its reasonable efforts to cause the Trust (a) to
remain a business trust, except in connection with the distribution of Exchange
Junior Subordinated Debentures to the holders of Trust Securities in liquidation
of the Trust, the redemption of all of the Trust Securities of the Trust, or
certain mergers, consolidations or amalgamations, each as permitted by the Trust
Agreement, and (b) to otherwise continue to be classified as a grantor trust for
United States federal income tax purposes.
Modification of Indenture
From time to time the Company and the Debenture Trustee may, without the
consent of the holders of Exchange Junior Subordinated Debentures, amend, waive
or supplement the Indenture for specified purposes, including, among other
things, curing ambiguities, defects or inconsistencies (provided that any such
action does not materially adversely affect the interest of the holders of
Exchange Junior Subordinated Debentures) and qualifying, or maintaining the
qualification of, the Indenture under the Trust Indenture Act. The Indenture
contains provisions permitting the Company and the Debenture Trustee, with the
consent of the holders of a majority in principal amount of Exchange Junior
Subordinated Debentures, to modify the Indenture in a manner affecting the
rights of the holders of Exchange Junior Subordinated Debentures; provided, that
no such modification may, without the consent of the holder of each outstanding
Exchange Junior Subordinated Debenture so affected, (i) change the Stated
Maturity Date, or reduce the principal amount of the Exchange Junior
Subordinated Debentures, or reduce the rate or extend the time of payment of
interest thereon except pursuant to the Company's right under the Indenture to
defer the payment of interest as provided therein (see "--Option to Extend
Interest Payment Date") or (ii) reduce the percentage of principal amount of
Exchange Junior Subordinated Debentures, the holders of which are required to
consent to any such modification of the Indenture.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the Exchange Junior Subordinated Debentures constitutes a
"Debenture Event of
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Default" (whatever the reason for such Debenture Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(i) failure for 30 days to pay any interest on the Exchange Junior
Subordinated Debentures or any Other Debentures when due (subject to the
deferral of any due date in the case of an Extension Period); or
(ii) failure to pay any principal or premium, if any, on the Exchange
Junior Subordinated Debentures or any Other Debentures when due, whether at
maturity, upon redemption, by declaration of acceleration of maturity or
otherwise; or
(iii) failure to observe or perform in any material respect certain other
covenants contained in the Indenture for 90 days after written notice to
the Company from the Debenture Trustee or the holders of at least 25% in
aggregate outstanding principal amount of the Exchange Junior Subordinated
Debentures; or
(iv) certain events in bankruptcy, insolvency or reorganization of the
Company.
The holders of a majority in aggregate outstanding principal amount of the
Exchange Junior Subordinated Debentures have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Exchange Junior Subordinated
Debentures may declare the principal due and payable immediately upon a
Debenture Event of Default. The holders of a majority in aggregate outstanding
principal amount of the Exchange Junior Subordinated Debentures may annul such
declaration and waive the default if the default (other than the non-payment of
the principal of the Exchange Junior Subordinated Debentures which has become
due solely by such acceleration) has been cured and a sum sufficient to pay all
matured installments of interest and principal due otherwise than by
acceleration has been deposited with the Debenture Trustee.
The holders of a majority in aggregate outstanding principal amount of the
Exchange Junior Subordinated Debentures affected thereby may, on behalf of the
holders of all the Exchange Junior Subordinated Debentures, waive any past
default, except a default in the payment of principal of (or premium, if any) or
interest (unless such default has been cured and a sum sufficient to pay all
matured installments of interest (and premium, if any) and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default in respect of a covenant or provision which under the Indenture cannot
be modified or amended without the consent of the holder of each outstanding
Exchange Junior Subordinated Debenture.
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Enforcement of Certain Rights by Holders of Exchange Capital Securities
If a Debenture Event of Default shall have occurred and be continuing and
shall be attributable to the failure of the Company to pay interest (or premium,
if any) on or principal of the Exchange Junior Subordinated Debentures on the
due date, a holder of Exchange Capital Securities may institute a Direct Action.
The Company may not amend the Indenture to remove the foregoing right to bring a
Direct Action without the prior written consent of the holders of all of the
Exchange Capital Securities. Notwithstanding any payments made to a holder of
Exchange Capital Securities by the Company in connection with a Direct Action,
the Company shall remain obligated to pay the principal of (or premium, if any)
or interest on the Exchange Junior Subordinated Debentures, and the Company
shall be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Exchange Capital Securities to the extent of any
payments made by the Company to such holder in any Direct Action.
The holders of the Exchange Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Exchange Junior Subordinated Debentures, unless
there shall have been an Event of Default under the Trust Agreement. See
"--Description of Exchange Capital Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Company shall not consolidate with or merge
into any other Person or convey, transfer or lease its properties and assets as
an entirety or substantially as an entirety to any Person, and no Person shall
consolidate with or merge into the Company or convey, transfer or lease its
properties and assets as an entirety or substantially as an entirety to the
Company, unless: (i) 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 Exchange
Junior Subordinated Debentures; (ii) immediately after giving effect thereto, no
Debenture Event of Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have occurred and be
continuing; and (iii) certain other conditions as prescribed in the Indenture
are met.
The general provisions of the Indenture do not afford holders of the
Exchange Junior Subordinated Debentures protection in the event of a highly
leveraged or other transaction involving the Company that may adversely affect
holders of the Exchange Junior Subordinated Debentures.
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Satisfaction and Discharge
The Indenture provides that when, among other things, all Exchange Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation (i) have become due and payable or (ii) will become due and payable
at maturity within one year, and the Company deposits or causes to be deposited
with the Debenture Trustee funds, in trust, for the purpose and in an amount
sufficient to pay and discharge the entire indebtedness on the Exchange Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal (and premium, if any) and interest to the date
of the deposit or to the Stated Maturity Date, as the case may be, then the
Indenture will cease to be of further effect (except as to the Company's
obligations to pay all other sums due pursuant to the Indenture and to provide
the officers' certificates and opinions of counsel described therein), and the
Company will be deemed to have satisfied and discharged the Indenture.
Subordination
In the Indenture, the Company has covenanted and agreed that any Exchange
Junior Subordinated Debentures issued thereunder shall be subordinate and junior
in right of payment to all Senior Indebtedness to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Company, all Senior Indebtedness must be paid in
full before the holders of Exchange Junior Subordinated Debentures will be
entitled to receive or retain any payment or distribution in respect thereof.
In the event of the acceleration of the maturity of the Exchange Junior
Subordinated Debentures, the holders of all Senior Indebtedness outstanding at
the time of such acceleration will first be entitled to receive payment in full
of all such Senior Indebtedness before the holders of the Exchange Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect of the Exchange Junior Subordinated Debentures.
No payments on account of principal (or premium, if any) or interest, if
any, in respect of the Exchange Junior Subordinated Debentures may be made if
there shall have occurred and be continuing a default in any payment with
respect to Senior Indebtedness, or an event of default with respect to any
Senior Indebtedness resulting in the acceleration of the maturity thereof, or if
any judicial proceeding shall be pending with respect to any such default.
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of the Indenture or thereafter
created, assumed or incurred, except Indebtedness Ranking on a Parity with the
Exchange Junior Subordinated Debentures or
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Indebtedness Ranking Junior to the Exchange Junior Subordinated Debentures, and
any deferrals, renewals or extensions of such Senior Indebtedness.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments.
"Indebtedness Ranking on a Parity with the Exchange Junior Subordinated
Debentures" shall mean (i) Indebtedness for Money Borrowed, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, which specifically by its terms ranks equally with and not prior to
the Exchange Junior Subordinated Debentures in the right of payment upon the
happening of the dissolution or winding up or liquidation or reorganization of
the Company, (ii) all other debt securities, and guarantees in respect of those
debt securities, issued to any other trust, or a partnership or other entity
affiliated with the Company that is a financing vehicle of the Company (a
"financing entity") in connection with the issuance by such financing entity of
equity securities or other securities guaranteed by the Company pursuant to an
instrument that ranks pari passu with or junior in right of payment to the
Guarantee.
"Indebtedness Ranking Junior to the Exchange Junior Subordinated
Debentures" shall mean any Indebtedness for Money Borrowed, whether outstanding
on the date of execution of the Indenture or thereafter created, assumed or
incurred, which specifically by its terms ranks junior to and not equally with
or prior to the Exchange Junior Subordinated Debentures (and any other
Indebtedness Ranking on a Parity with the Exchange Junior Subordinated
Debentures) in right of payment upon the happening of the dissolution or winding
up or liquidation or reorganization of the Company. The securing of any
Indebtedness for Money Borrowed, otherwise constituting Indebtedness Ranking on
a Parity with the Exchange Junior Subordinated Debentures or Indebtedness
Ranking Junior to the Exchange Junior Subordinated Debentures, as the case may
be, shall not be deemed to prevent such Indebtedness for Money Borrowed from
constituting Indebtedness Ranking on a Parity with the Exchange Junior
Subordinated Debentures or Indebtedness Ranking Junior to the Exchange Junior
Subordinated Debentures, as the case may be.
The Company is a non-operating holding company and almost all of the
operating assets of the Company are owned by the Bank. The Company relies
entirely on dividends from the Bank to meet its obligations for payment of
principal and interest on its outstanding debt obligations and corporate
expenses. The Company is a legal entity separate and distinct from its banking
and non-banking affiliates. Accordingly, the Exchange Junior Subordinated
Dentures will be effectively subordinated to all existing and future liabilities
of the Company's subsidiaries. Holders of Exchange Junior Subordinated
Debentures should look only to the assets of the Company for payments of
interest and principal and premium, if any.
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The Indenture places no limitation on the amount of Senior Indebtedness
that may be incurred by the Company. The Company expects from time to time to
incur additional indebtedness constituting Senior Indebtedness.
Restrictions on Transfer
The Exchange Junior Subordinated Debentures will be issued, and may be
transferred only in blocks having an aggregate principal amount of not less than
$100,000 (100 Exchange Junior Subordinated Debentures). Any such transfer of
Exchange Junior Subordinated Debentures in a block having an aggregate principal
amount of less than $100,000 shall be deemed to be void and of no legal effect
whatsoever. Any such transferee shall be deemed not to be the holder of such
Exchange Junior Subordinated Debentures for any purpose, including but not
limited to the receipt of payments on such Exchange Junior Subordinated
Debentures, and such transferee shall be deemed to have no interest whatsoever
in such Exchange Junior Subordinated Debentures.
Governing Law
The Indenture and the Exchange Junior Subordinated Debentures will be
governed by and construed in accordance with the laws of the State of New York.
Information Concerning the Debenture Trustee
Following the Exchange Offer and the qualification of the Indenture under
the Trust Indenture Act, the Debenture Trustee shall have and be subject to all
the duties and responsibilities specified with respect to an indenture trustee
under the Trust Indenture Act. Subject to such provisions, the Debenture Trustee
is under no obligation to exercise any of the powers vested in it by the
Indenture at the request of any holder of Exchange Junior Subordinated
Debentures, unless offered reasonable indemnity by such holder against the
costs, expenses and liabilities which might be incurred thereby. The Debenture
Trustee is not required to expend or risk its own funds or otherwise incur
personal financial liability in the performance of its duties if the Debenture
Trustee reasonably believes that repayment or adequate indemnity is not
reasonably assured to it.
Description of Exchange Guarantee
The Exchange Guarantee will be executed and delivered by the Company
concurrently with the issuance by the Trust of the Exchange Capital Securities
for the benefit of the holders from time to time of such Exchange Capital
Securities. First Union Trust Company, National Association will act as
Guarantee Trustee under the Exchange Guarantee. The Exchange Guarantee has been
qualified under the Trust Indenture Act. This summary of certain provisions of
the Exchange Guarantee does not purport to be complete and is subject to, and
qualified in its entirety by reference to, all of the provisions of the Exchange
Guarantee, including the
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definitions therein of certain terms, and the Trust Indenture Act. The Guarantee
Trustee will hold the Exchange Guarantee for the benefit of the holders of the
Exchange Capital Securities.
General
The Company will irrevocably agree to pay in full on a subordinated basis,
to the extent set forth herein, the Guarantee Payments (as defined below) to the
holders of the Exchange Capital Securities, as and when due, regardless of any
defense, right of set-off or counterclaim that the Trust may have or assert
other than the defense of payment. The following payments with respect to the
Exchange Capital Securities, to the extent not paid by or on behalf of the Trust
(the "Guarantee Payments"), will be subject to the Exchange Guarantee: (i) any
accumulated and unpaid Distributions required to be paid on the Exchange Capital
Securities, to the extent that the Trust has funds on hand legally available
therefor at such time, (ii) the applicable Redemption Price with respect to
Exchange Capital Securities called for redemption, to the extent that the Trust
has funds on hand legally available therefor at such time, and (iii) upon a
voluntary or involuntary termination and liquidation of the Trust the lesser of
(a) the Liquidation Distribution and (b) the amount of assets of the Trust
remaining available for distribution to holders of the Exchange Capital
Securities. The Company's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Company to the
holders of the Exchange Capital Securities or by causing the Trust to pay such
amounts to such holders.
The Exchange Guarantee will rank subordinate and junior in right of payment
to all Senior Indebtedness to the extent provided therein. See "--Status of the
Exchange Guarantee." Because the Company is a holding company, the right of the
Company to participate in any distribution of assets of any subsidiary upon such
subsidiary's liquidation or reorganization or otherwise, is subject to the prior
claims of creditors of that subsidiary, except to the extent the Company may
itself be recognized as a creditor of that subsidiary. Accordingly, the
Company's obligations under the Exchange Guarantee will be effectively
subordinated to all existing and future liabilities of the Company's
subsidiaries, and claimants should look only to the assets of the Company for
payments thereunder. See "Description of the Exchange Junior Subordinated
Debentures--General." The Guarantee does not limit the incurrence or issuance of
other secured or unsecured debt of the Company, including Senior Indebtedness,
whether under the Indenture or any other indenture that the Company may enter
into in the future or otherwise.
The Company has, through the Exchange Guarantee, the Trust Agreement, the
Exchange Junior Subordinated Debentures and the Indenture, taken together,
fully, irrevocably and unconditionally guaranteed all of the Trust's obligations
under the Exchange Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Exchange Capital Securities. See "Relationship
Among the Exchange Capital Securities, the Exchange Junior Subordinated
Debentures and the Exchange Guarantee."
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Status of the Exchange Guarantee
The Exchange Guarantee will constitute an unsecured obligation of the
Company and will rank subordinate and junior in right of payment to all Senior
Indebtedness in the same manner as Exchange Junior Subordinated Debentures
except in the case of a bankruptcy or insolvency proceeding in respect of the
Company, in which case the Exchange Guarantee will rank subordinate and junior
in right of payment to all liabilities (other than Other Guarantees) of the
Company.
The Exchange Guarantee will rank pari passu with all Other Guarantees
issued by the Company. The Exchange Guarantee will constitute a guarantee of
payment and not of collection (i.e., the guaranteed party may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against any other person
or entity). The Exchange Guarantee will be held for the benefit of the holders
of the Exchange Capital Securities. The Exchange Guarantee will not be
discharged except by payment of the Guarantee Payments in full to the extent not
paid by the Trust or upon distribution to the holders of the Exchange Capital
Securities of the Exchange Junior Subordinated Debentures. The Guarantee does
not place a limitation on the amount of additional Senior Indebtedness that may
be incurred by the Company.
Amendments and Assignment
Except with respect to any changes that do not materially adversely affect
the rights of holders of the Exchange Capital Securities (in which case no vote
will be required), the Exchange Guarantee may not be amended without the prior
approval of the holders of a majority of the Liquidation Amount of such
outstanding Exchange Capital Securities. The manner of obtaining any such
approval will be as set forth under "--Description of Exchange Capital
Securities--Voting Rights; Amendment of the Trust Agreement." All guarantees and
agreements contained in the Exchange Guarantee shall bind the successors,
assigns, receivers, trustees and representatives of the Company and shall inure
to the benefit of the holders of the Exchange Capital Securities then
outstanding.
Events of Default
An event of default under the Exchange Guarantee will occur upon the
failure of the Company to perform any of its payment or other obligations
thereunder. The holders of a majority in Liquidation Amount of the Exchange
Capital Securities will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Guarantee Trustee in
respect of the Exchange Guarantee or to direct the exercise of any trust or
power conferred upon the Guarantee Trustee under the Exchange Guarantee.
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Any holder of the Exchange Capital Securities may institute a legal
proceeding directly against the Company to enforce its rights under the Exchange
Guarantee without first instituting a legal proceeding against the Trust, the
Guarantee Trustee or any other person or entity.
The Company, as guarantor, is required to file annually with the Guarantee
Trustee a certificate as to whether or not the Company is in compliance with all
the conditions and covenants applicable to it under the Exchange Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance of
a default by the Company in performance of the Guarantee, will undertake to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee will be
under no obligation to exercise any of the powers vested in it by the Guarantee
at the request of any holder of the Capital Securities unless it is offered
reasonable indemnity against the costs, expenses and liabilities that might be
incurred thereby.
Termination of the Exchange Guarantee
The Exchange Guarantee will terminate and be of no further force and effect
upon full payment of the applicable Redemption Price of the Exchange Capital
Securities, upon full payment of the Liquidation Amount payable upon liquidation
of the Trust or upon distribution of Exchange Junior Subordinated Debentures to
the holders of the Exchange Capital Securities. The Exchange Guarantee will
continue to be effective or will be reinstated, as the case may be, if at any
time any holder of the Exchange Capital Securities must restore payment of any
sums paid under the Exchange Capital Securities or the Exchange Guarantee.
Governing Law
The Exchange Guarantee will be governed by and construed in accordance with
the laws of the State of New York.
DESCRIPTION OF ORIGINAL SECURITIES
The terms of the Original Securities are identical in all materials
respects to the Exchange Securities, except that (i) the Original Securities
have not been registered under the Securities Act, are subject to certain
restrictions on transfer and are entitled to certain rights under the
Registration Rights Agreement (which rights will terminate upon consummation of
the Exchange Offer, except under limited circumstances), (ii) the Exchange
Capital Securities will not provide for any increase in the Distribution rate
thereon and (iii) the Exchange Junior Subordinated Debentures will not provide
for any liquidated damages thereon. The Original Securities provide
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that, in the event that a registration statement relating to the Exchange Offer
has not been filed by January 8, 1999 and been declared effective by February 7,
1999, or, in certain limited circumstances, in the event a shelf registration
statement (the "Shelf Registration Statement") with respect to the resale of the
Original Capital Securities is not declared effective by February 7, 1999, then
liquidated damages will accrue at the rate of 0.25% per annum on the principal
amount of the Original Junior Subordinated Debentures and Distributions will
accrue at the rate of 0.25% per annum on the Liquidation Amount of the Original
Capital Securities, for the period from the occurrence of such event until such
time as such required Exchange Offer is consummated or any required Shelf
Registration Statement is effective. The Exchange Securities are not, and upon
consummation of the Exchange Offer the Original Securities will not be, entitled
to any such additional interest or Distributions. Accordingly, holders of
Original Capital Securities should review the information set forth under "Risk
Factors--Consequences of a Failure to Exchange Original Capital Securities" and
"Description of Exchange Securities."
RELATIONSHIP AMONG THE EXCHANGE CAPITAL SECURITIES,
THE EXCHANGE JUNIOR SUBORDINATED DEBENTURES
AND THE EXCHANGE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Exchange Capital
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) are irrevocably guaranteed by the Company as and
to the extent set forth under "Description of Exchange Guarantee." Taken
together, the Company's obligations under the Exchange Junior Subordinated
Debentures, the Indenture, the Trust Agreement and the Exchange Guarantee
provide, in the aggregate, a full, irrevocable and unconditional guarantee of
payments of Distributions and other amounts due on the Exchange Capital
Securities. No single document standing alone or operating in conjunction with
fewer than all of the other documents constitutes such guarantee. It is only the
combined operation of these documents that has the effect of providing a full,
irrevocable and unconditional guarantee of the Trust's obligations under the
Exchange Capital Securities. If and to the extent that the Company does not make
the required payments on the Exchange Junior Subordinated Debentures, the Trust
will not have sufficient funds to make the related payments, including
Distributions, on the Exchange Capital Securities. The Guarantee does not cover
any such payment when the Trust does not have sufficient funds on hand legally
available therefor. In such event, the remedy of a holder of Exchange Capital
Securities is to institute a Direct Action. The obligations of the Company under
the Exchange Guarantee are subordinate and junior in right of payment to all
Senior Indebtedness.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on the
Exchange Junior Subordinated Debentures, such payments will be sufficient to
cover Distributions and other payments due on the Exchange Capital Securities,
primarily because: (i) the aggregate
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principal amount or Prepayment Price of the Exchange Junior Subordinated
Debentures will be equal to the sum of the Liquidation Amount or Redemption
Price, as applicable, of the Trust Securities; (ii) the interest rate and
interest and other payment dates on the Exchange Junior Subordinated Debentures
will match the Distribution rate and Distribution and other payment dates for
the Trust Securities; (iii) the Company, as Sponsor, shall pay for all and any
costs, expenses and liabilities of the Trust except the Trust's obligations to
holders of Trust Securities under such Trust Securities; and (iv) the Trust
Agreement further provides that the Trust is not authorized to engage in any
activity that is not consistent with the limited purposes thereof.
Enforcement Rights of Holders of Exchange Capital Securities
A holder of any Exchange Capital Security may institute a legal proceeding
directly against the Company to enforce its rights under the Exchange Guarantee
without first instituting a legal proceeding against the Guarantee Trustee, the
Trust or any other person or entity.
A default or event of default under any Senior Indebtedness would not
constitute a default or Event of Default under the Trust Agreement. However, in
the event of payment defaults under, or acceleration of, Senior Indebtedness,
the subordination provisions of the Indenture provide that no payments may be
made in respect of the Exchange Junior Subordinated Debentures until such Senior
Indebtedness has been paid in full or any payment default thereunder has been
cured or waived. Failure to make required payments on Exchange Junior
Subordinated Debentures would constitute an Event of Default under the Trust
Agreement.
Limited Purpose of the Trust
The Capital Securities evidence a beneficial interest in the Trust, and the
Trust exists for the sole purpose of issuing and selling the Trust Securities,
using the proceeds from the sale of the Trust Securities to acquire the Junior
Subordinated Debentures and engaging in only those other activities necessary,
advisable or incidental thereto. A principal difference between the rights of a
holder of an Exchange Capital Security and a holder of an Exchange Junior
Subordinated Debenture is that a holder of an Exchange Junior Subordinated
Debenture will be entitled to receive from the Company the principal amount of
(and premium, if any) and interest on Exchange Junior Subordinated Debentures
held, while a holder of Exchange Capital Securities is entitled to receive
Distributions from the Trust (or, in certain circumstances, from the Company
under the Guarantee) if and to the extent the Trust has funds on hand legally
available for the payment of such Distributions.
Rights Upon Termination
Unless the Exchange Junior Subordinated Debentures are distributed to
holders of the Trust Securities, upon any voluntary or involuntary termination
and liquidation of the Trust, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Exchange Securities--Description of
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Exchange Capital Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debentures." Upon any voluntary or involuntary liquidation or
bankruptcy of the Company, the Property Trustee, as holder of the Exchange
Junior Subordinated Debentures, would be a subordinated creditor of the Company,
subordinated in right of payment to all Senior Indebtedness as set forth in the
Indenture, but entitled to receive payment in full of principal (and premium, if
any) and interest, before any shareholders of the Company receive payments or
distributions. Since the Company is the guarantor under the Exchange Guarantee
and has agreed to pay for all costs, expenses and liabilities of the Trust
(other than the Trust's obligations to the holders of its Trust Securities), the
positions of a holder of Exchange Capital Securities and a holder of Exchange
Junior Subordinated Debentures relative to other creditors and to shareholders
of the Company in the event of liquidation or bankruptcy of the Company are
expected to be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Ellsworth, Carlton & Waldman, P.C., Wyomissing,
Pennsylvania, in its capacity as special tax counsel to the Company ("Tax
Counsel"), the following discussion summarizes the material United States
federal income tax consequences of the purchase, ownership and disposition of
the Exchange Capital Securities by a holder who purchases such Exchange Capital
Securities upon original issuance.
This summary is based on the Internal Revenue Code of 1986, as amended (the
"Code"), Treasury regulations thereunder, and administrative and judicial
interpretations thereof, each as of the date hereof, all of which are subject to
change, possibly on a retroactive basis. The authorities on which this summary
is based are subject to various interpretations, and the opinions of Tax 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 with
respect to the transactions described herein. Accordingly, there can be no
assurance that the IRS will not challenge the opinions expressed herein or that
a court would not sustain such a challenge.
Except as otherwise stated, this summary deals only with the Exchange
Capital Securities held as a capital asset by a holder who or which (i)
purchased the Exchange Capital Securities upon original issuance (an "Initial
Holder") at their original offering price and (ii) is a US Holder (as defined
below). This summary does not address all the tax consequences that may be
relevant to a US Holder, nor does it address the tax consequences, except as
stated below, to holders that are not US Holders ("Non-US Holders") or to
holders that may be subject to special tax treatment (such as banks, thrift
institutions, real estate investment trusts, regulated investment companies,
insurance companies, brokers and dealers in securities or currencies, other
financial institutions, tax-exempt organizations, persons holding the Exchange
Capital Securities as a position in a "straddle," as part of a "synthetic
security," "hedging," "conversion" or other integrated investment, persons
having a functional currency other than the U.S. Dollar and
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certain United States expatriates). Further, this summary does not address (a)
the income tax consequences to shareholders in, or partners or beneficiaries of,
a holder of the Exchange Capital Securities, (b) the United States federal
alternative minimum tax consequences of the purchase, ownership or disposition
of the Exchange Capital Securities, or (c) any state, local or foreign tax
consequences of the purchase, ownership and disposition of Exchange Capital
Securities.
A "US Holder" is a holder of the Exchange Capital Securities who or which
is (i) a citizen or individual resident (or is treated as a citizen or
individual resident) of the United States for income tax purposes, (ii) a
corporation or partnership created or organized (or treated as created or
organized for income tax purposes) in or under the laws of the United States or
any political subdivision thereof, (iii) an estate the income of which is
includible in its gross income for United States federal income tax purposes
without regard to its source, or (iv) a trust if (a) a court within the United
States is able to exercise primary supervision over the administration of the
trust and (b) one or more United States trustees have the authority to control
all substantial decisions of the trust.
HOLDERS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE TAX
CONSEQUENCES TO THEM OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE EXCHANGE
CAPITAL 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.
US Holders
Exchange of Capital Securities. The exchange of Original Securities for
Exchange Securities should not be a taxable event to holders for United States
federal income tax purposes. The exchange of Original Securities for Exchange
Securities pursuant to the Exchange Offer should not be treated as an "exchange"
for United States federal income tax purposes because the Exchange Securities
should not be considered to differ materially in kind or extent from the
Original Securities and because the exchange will occur by operation of the
terms of the Original Securities. Accordingly, the Exchange Capital Securities
should have the same issue price as the Original Capital Securities, and a
holder should have the same adjusted tax basis and holding period in the
Exchange Capital Securities as the holder had in the Original Capital Securities
immediately before the exchange. Moreover, a holder which had acquired Original
Capital Securities with either market discount or bond premium will be treated
as holding Exchange Capital Securities with the same amount of market discount
or bond premium and will be required to include such market discount in or
deduct such bond premium from their income in the same manner as on the Original
Capital Securities. Holders are urged to consult their tax advisors regarding
the applicability of the market discount and bond premium rules.
Characterization of the Trust. In connection with the issuance of the
Exchange Capital Securities, Tax Counsel will render its opinion generally to
effect that, under then current law
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and based on the representations, facts and assumptions set forth in this
Prospectus, and assuming full compliance with the terms of the Trust Agreement
(and other relevant documents), and based on certain assumptions and
qualifications referenced in the opinion, the Trust will be characterized for
United States federal income tax purposes as a grantor trust and will not be
characterized as an association taxable as a corporation. Accordingly, for
United States federal income tax purposes, each holder of the Exchange Capital
Securities generally will be considered the owner of an undivided interest in
the Exchange Junior Subordinated Debentures owned by the Trust, and each US
Holder will be required to include all income or gain recognized for United
States federal income tax purposes with respect to its allocable share of the
Exchange Junior Subordinated Debentures on its own income tax return.
Characterization of the Exchange Junior Subordinated Debentures. The
Company and the Trust will agree to treat the Exchange Junior Subordinated
Debentures as indebtedness for all United States federal income tax purposes. In
connection with the issuance of the Exchange Junior Subordinated Debentures, Tax
Counsel will render its opinion generally to the effect that, under then current
law and based on the representations, facts and assumptions set forth in this
Prospectus, and assuming full compliance with the terms of the Indenture (and
other relevant documents), and based on certain assumptions and qualifications
referenced in the opinion, the Exchange Junior Subordinated Debentures will be
characterized for United States federal income tax purposes as debt of the
Company.
Interest Income and Original Issue Discount. Under the terms of the
Exchange Junior Subordinated Debentures, the Company has the ability to defer
payments of interest from time to time by extending the interest payment period
for a period not exceeding 10 consecutive semi-annual periods, but not beyond
the maturity of the Exchange Junior Subordinated Debentures. Recently issued
Treasury regulations under Section 1273 of the Code provide that debt
instruments like the Exchange Junior Subordinated Debentures will not be
considered issued with original issue discount ("OID") by reason of the
Company's ability to defer payments of interest if the likelihood of such
deferral is "remote."
The Company has concluded, and this discussion assumes, that, as of the
date of this Prospectus, the likelihood of deferring payments of interest under
the terms of the Exchange Junior Subordinated Debentures is "remote" within the
meaning of the applicable Treasury regulations, in part because exercising that
option would prevent the Company from declaring dividends on its stock and would
prevent the Company from making any payments with respect to debt securities
that rank pari passu with or junior to the Exchange Junior Subordinated
Debentures. Therefore, the Exchange Junior Subordinated Debentures should not be
treated as issued with OID by reason of the Company's deferral option. Rather,
stated interest on the Exchange Junior Subordinated Debentures will generally be
taxable to a US Holder as ordinary income when paid or accrued in accordance
with that holder's method of accounting for income tax purposes. It should be
noted, however, that these Treasury regulations have not yet been interpreted in
any rulings or any other published authorities of the IRS. Accordingly, it is
possible that the IRS could take a position contrary to the interpretation
described herein.
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In the event the Company exercises its option to defer payments of
interest, the Exchange Junior Subordinated Debentures would be treated as
redeemed and reissued for OID purposes and the sum of the remaining interest
payments (and any de minimis OID) on the Exchange Junior Subordinated Debentures
would thereafter be treated as OID, which would accrue, and be includible in a
US Holder's taxable income, on an economic accrual basis (regardless of the US
Holder's method of accounting for income tax purposes) over the remaining term
of the Exchange Junior Subordinated Debentures (including any period of interest
deferral), without regard to the timing of payments under the Exchange Junior
Subordinated Debentures. (Subsequent distributions of interest on the Exchange
Junior Subordinated Debentures generally would not be taxable.) The amount of
OID that would accrue in any period would generally equal the amount of interest
that accrued on the Exchange Junior Subordinated Debentures in that period at
the stated interest rate. Consequently, during any period of interest deferral,
US Holders will include OID in gross income in advance of the receipt of cash,
and a US Holder which disposes of a Capital Security prior to the record date
for payment of distributions on the Exchange Junior Subordinated Debentures
following that period will be subject to income tax on OID accrued through the
date of disposition (and not previously included in income), but will not
receive cash from the Trust with respect to the OID.
If the possibility of the Company's exercise of its option to defer
payments of interest is not treated as remote, the Exchange Junior Subordinated
Debentures would be treated as initially issued with OID in an amount equal to
the aggregate stated interest (plus any de minimis OID) over the term of the
Exchange Junior Subordinated Debentures. That OID would generally be includible
in a US Holder's taxable income, over the term of the Exchange Junior
Subordinated Debentures, on an economic accrual basis.
Characterization of Income. Because the income underlying the Exchange
Capital Securities will not be characterized as dividends for income tax
purposes, corporate holders of the Exchange Capital Securities will not be
entitled to a dividends-received deduction for any income recognized with
respect to the Exchange Capital Securities.
Market Discount and Bond Premium. Holders of the Exchange Capital
Securities other than Initial Holders may be considered to have acquired their
undivided interests in the Exchange Junior Subordinated Debentures with market
discount or acquisition premium (as each phrase is defined for United States
federal income tax purposes).
Receipt of Exchange Junior Subordinated Debentures or Cash Upon Liquidation
of the Trust. Under certain circumstances described herein (See "Description of
Exchange Capital Securities--Liquidation of the Trust and Distribution of
Exchange Junior Subordinated Debentures"), the Trust may distribute the Exchange
Junior Subordinated Debentures to holders in exchange for the Exchange Capital
Securities and in liquidation of the Trust. Except as discussed below, such a
distribution would not be a taxable event for United States federal income tax
purposes, and each US Holder would have an aggregate adjusted basis in its
Exchange Junior Subordinated Debentures for United States federal income tax
purposes equal to
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such holder's aggregate adjusted basis in its Exchange Capital Securities. For
United States federal income tax purposes, a US Holder's holding period in the
Exchange Junior Subordinated Debentures received in such a liquidation of the
Trust would include the period during which the Exchange Capital Securities were
held by the holder. If, however, the relevant event is a Tax Event which results
in the Trust being treated as an association taxable as a corporation, the
distribution would likely constitute a taxable event to US Holders of the
Exchange Capital Securities for United States federal income tax purposes.
Under certain circumstances described herein (see "Description of Exchange
Capital Securities"), the Exchange Junior Subordinated Debentures may be
redeemed for cash and the proceeds of such redemption distributed to holders in
redemption of their Exchange Capital Securities. Such a redemption would be
taxable for United States federal income tax purposes, and a US Holder would
recognize gain or loss as if it had sold the Exchange Capital Securities for
cash. See "--Sales of Exchange Capital Securities" below.
Sales of Exchange Capital Securities. A US Holder that sells Exchange
Capital Securities will recognize gain or loss equal to the difference between
its adjusted basis in the Exchange Capital Securities and the amount realized on
the sale of such Exchange Capital Securities. A US Holder's adjusted basis in
the Exchange Capital Securities generally will be its initial purchase price,
increased by OID previously included (or currently includible) in such holder's
gross income to the date of disposition, and decreased by payments received on
the Exchange Capital Securities (other than any interest received with respect
to the period prior to the effective date of the Company's first exercise of its
option to defer payments of interest). Any such gain or loss generally will be
capital gain or loss, and generally will be a long-term capital gain or loss if
the Exchange Capital Securities have been held for more than one year prior to
the date of disposition. Tax rates on long-term capital gains received by
individual US Holders vary depending on each US Holder's income and holding
period for the Exchange Capital Securities. US Holders that are individuals
should contact their own tax advisors for more information or for the capital
gains rate applicable to a specific Capital Security.
A holder who disposes of his Exchange Capital Securities between record
dates for payments of distributions thereon will be required to include accrued
but unpaid interest (or OID) on the Exchange Junior Subordinated Debentures
through the date of disposition in its taxable income for United States federal
income tax purposes (notwithstanding that the holder may receive a separate
payment from the purchaser with respect to accrued interest), and to deduct that
amount from the sales proceeds received (including the separate payment, if any,
with respect to accrued interest) for the Exchange Capital Securities (or as to
OID only, to add such amount to such holder's adjusted tax basis in its Exchange
Capital Securities). To the extent the selling price is less than the holder's
adjusted tax basis (which will include accrued but unpaid OID, if any), a holder
will recognize a capital loss. Subject to certain limited exceptions, capital
losses cannot be applied to offset ordinary income for United States federal
income tax purposes.
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Pending Tax Litigation Affecting the Exchange Capital Securities. Recently,
a taxpayer filed a petition in the United States Tax Court contesting the IRS'
proposed disallowance of the interest deductions the taxpayer claimed in respect
of securities issued in 1993 and 1994 that are in some respects, similar to the
Exchange Capital Securities of the Trust (Enron Corp. v. Commissioner, Docket
No. 6149, filed April 1, 1998). It is possible that an adverse decision by the
Tax Court concerning the deductibility of such interest could give rise to a Tax
Event. Such a Tax Event would give the Company the right to redeem the Exchange
Junior Subordinated Debentures. See "Description of Exchange Junior Subordinated
Debentures--Special Event Prepayment" and "Description of the Exchange Capital
Securities--Redemption".
Non-US Holders
The following discussion applies to a Non-US Holder.
Payments to a holder of a Capital Security which is a Non-US Holder will
generally not be subject to withholding of income tax, provided that (a) the
beneficial owner of the Capital Security does not (directly or indirectly,
actually or constructively) own 10% or more of the total combined voting power
of all classes of stock of the Company entitled to vote, (b) the beneficial
owner of the Capital Security is not a controlled foreign corporation that is
related to the Company through stock ownership, and (c) either (i) the
beneficial owner of the Exchange Capital Securities certifies to the Trust or
its agent, under penalties of perjury, that it is a Non-US Holder and provides
its name and address, or (ii) a securities clearing organization, bank or other
financial institution that holds customers' securities in the ordinary course of
its trade or business (a "Financial Institution"), and holds the Capital
Security in such capacity, certifies to the Trust or its agent, under penalties
of perjury, that such a statement has been received from the beneficial owner by
it or by another Financial Institution between it and the beneficial owner in
the chain of ownership, and furnishes the Trust or its agent with a copy
thereof.
A Non-US Holder of a Capital Security will generally not be subject to
withholding of income tax on any gain realized upon the sale or other
disposition of a Capital Security.
A Non-US Holder which holds the Exchange Capital Securities in connection
with the active conduct of a United States trade or business will be subject to
income tax on all income and gains recognized with respect to its proportionate
share of the Exchange Junior Subordinated Debentures.
Information Reporting
In general, information reporting requirements will apply to payments made
on, and proceeds from the sale of, the Exchange Capital Securities held by a
non-corporate US Holder within the United States. In addition, payments made on,
and payments of the proceeds from the sale of, the Exchange Capital Securities
to or through the United States office of a broker or through certain US-related
financial intermediaries are subject to information reporting unless
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the holder thereof certifies as to its Non-United States status or otherwise
establishes an exemption from information reporting and backup withholding. See
"--Backup Withholding." Taxable income on the Exchange Capital Securities for a
calendar year should be reported to US Holders on the appropriate form by the
following January 31st.
Backup Withholding
Payments made on, and proceeds from the sale of, the Exchange Capital
Securities may be subject to a "backup" withholding tax of 31% unless the holder
complies with certain identification or exemption requirements. Any amounts so
withheld will be allowed as a credit against the holder's income tax liability,
or refunded, provided the required information is provided to the IRS.
THE PRECEDING DISCUSSION IS ONLY A SUMMARY AND DOES NOT ADDRESS THE
CONSEQUENCES TO A PARTICULAR HOLDER OF THE PURCHASE, OWNERSHIP AND DISPOSITION
OF THE EXCHANGE CAPITAL SECURITIES. POTENTIAL HOLDERS OF THE EXCHANGE CAPITAL
SECURITIES ARE URGED TO CONTACT THEIR OWN TAX ADVISORS TO DETERMINE THEIR
PARTICULAR TAX CONSEQUENCES.
ERISA CONSIDERATIONS
Each of the Company (the obligor with respect to the Exchange Junior
Subordinated Debentures held by the Trust) and its affiliates and the Property
Trustee may be considered a "party in interest" (within the meaning of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") or a
"disqualified person" (within the meaning of Section 4975 of the Code) with
respect to many employee benefit plans ("Plans") that are subject to ERISA and
certain employee benefit-related provisions of the Code. The purchase and/or
holding of Capital Securities by a Plan (including individual retirement
arrangements and other plans described in Section 4975(c)(1) of the Code) that
is subject to the fiduciary responsibility provisions of ERISA or the prohibited
transaction provisions of Section 4975 of the Code and with respect to which the
Company, the Property Trustee or any affiliate is a service provider (or
otherwise is a party in interest or a disqualified person) may constitute or
result in a prohibited transaction under ERISA or Section 4975 of the Code,
unless such Capital Securities are acquired pursuant to and in accordance with
an applicable exemption, such as Prohibited Transaction Class Exemption ("PTCE")
84-14 (an exemption for certain transactions determined by an independent
qualified professional asset manager), PTCE 91-38 (an exemption for certain
transactions involving banks' collective investment funds), PTCE 90-1 (an
exemption for certain transactions involving insurance company pooled separate
accounts), PTCE 95-60 (an exemption for certain transactions involving certain
insurance company general accounts) or PTCE 96-23 (an exemption for certain
transactions determined by an in-house asset manager). Accordingly, each
purchaser of Capital Securities, by its acceptance thereof, shall be deemed to
have represented to the Company, Trust and the Initial Purchaser either (a) that
it is not a Plan, a trustee or other
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person acting on behalf of a Plan or any other person or entity using the assets
of any Plan to finance such purchase, or (b) that such purchase will not result
in a prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code for which there is no applicable statutory or administrative exemption.
In addition, a Plan fiduciary considering the purchase of Capital
Securities should be aware that the assets of the Trust may be considered "plan
assets" for ERISA purposes. In such event, any persons exercising discretion
with respect to Junior Subordinated Debentures may become fiduciaries, parties
in interest or disqualified persons with respect to investing Plans.
Accordingly, each investing Plan, by purchasing the Capital Securities, will be
deemed to have directed the Trust to invest in the Junior Subordinated
Debentures and to have consented to the appointment of the Property Trustee. In
this regard, it should be noted that, in an Event of Default, the Company may
not remove the Property Trustee without the approval of a majority of the
holders of the Capital Securities. Also, a Plan fiduciary should consider
whether the purchase of Capital Securities could result in a delegation of
fiduciary authority to the Property Trustee, and, if so, whether such a
delegation of authority is consistent with the terms of the Plan's governing
instrument or any investment management agreement with the Plan. Further, prior
to an Event of Default with respect to the Junior Subordinated Debentures, the
Property Trustee will have only limited custodial and ministerial authority with
respect to trust assets.
THE SALE OF INVESTMENTS TO PLANS IS IN NO RESPECT A REPRESENTATION BY THE
TRUST, THE COMPANY, THE PROPERTY TRUSTEE, THE INITIAL PURCHASER OR ANY OTHER
PERSON ASSOCIATED WITH THE SALE OF THE CAPITAL SECURITIES THAT SUCH SECURITIES
MEET AL RELEVANT LEGAL REQUIREMENTS WITH RESPECT TO INVESTMENTS BY PLANS
GENERALLY OR ANY PARTICULAR PLAN OR THAT SUCH SECURITIES ARE OTHERWISE
APPROPRIATE FOR PLANS GENERALLY OR ANY PARTICULAR PLAN. ANY PURCHASER PROPOSING
TO ACQUIRE CAPITAL SECURITIES WITH ASSETS OF ANY PLAN SHOULD CONSULT WITH ITS
COUNSEL.
PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Capital Securities for its own
account pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Capital Securities.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of Exchange Capital
Securities received in exchange for Capital Securities where such Capital
Securities were acquired by such broker-dealer as a result of market-making
activities or other trading activities. The Trust and the Company have agreed
that, starting on the Expiration Date and ending on the close of business on the
180th day following the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in
96
<PAGE>
connection with any such resale. In addition, until ________, 1999, all dealers
effecting transactions in the Exchange Securities may be required to deliver a
prospectus.
The Trust and the Company will not receive any proceeds from any sale of
Exchange Capital Securities by broker-dealers. Exchange Capital Securities
received by broker-dealers for their own account pursuant to the Exchange Offer
may be sold from time to time in one or more transactions, in the
over-the-counter market, in negotiated transactions, through the writing of
options on the Exchange Capital Securities or a combination of such methods of
resale, at market prices prevailing at the time of resale, at prices related to
such prevailing market prices or at negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Capital Securities. Any
broker-dealer that resells Exchange Capital Securities that were received by it
for its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Capital Securities may be deemed
to be an "underwriter" within the meaning of the Securities Act and any profit
of any such resale of Exchange Capital Securities and any commissions or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.
For a period of 180 days after the Expiration Date, the Trust and the
Company will promptly send additional copies of this Prospectus and any
amendment or supplement to this Prospectus to any broker-dealer that requests
such documents in the Letter of Transmittal. The Trust and the Company have
agreed to pay all expenses incident to the Exchange Offer (including the
expenses of one counsel for the holders of the Capital Securities) other than
commissions or concessions of any brokers or dealers and will indemnify the
holders of the Capital Securities (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act.
VALIDITY OF EXCHANGE SECURITIES
The validity of the Exchange Guarantee and the Exchange Junior Subordinated
Debentures will be passed upon for the Company by Ellsworth, Carlton & Waldman,
P.C., Wyomissing, Pennsylvania. Certain matters relating to United States
federal income tax consequences will be passed upon for the Company by
Ellsworth, Carlton & Waldman, P.C., Wyomissing, Pennsylvania.
Certain matters of Delaware law relating to the validity of the Exchange
Capital Securities will be passed upon on behalf of the Trust by Richards,
Layton & Finger, special Delaware counsel to the Trust.
97
<PAGE>
EXPERTS
The consolidated financial statements of the Company and its subsidiaries
as of December 31, 1997 and 1996 and for each of the years then ended,
incorporated by reference in the Company's 1997 Annual Report on Form 10-KSB,
have been incorporated by reference in this Prospectus and in the Registration
Statement of which this Prospectus forms a part, in reliance upon the report of
KPMG LLP, independent certified public accountants, incorporated by reference,
and upon the authority of said firm as experts in accounting and auditing.
98
<PAGE>
THIS PAGE INTENTIONALLY LEFT BLANK
99
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Subchapter D of Chapter 17 of the Pennsylvania Business Corporation Law of
1988, as amended (15 Pa. C.S. ss.ss.1741-1750), provides that a business
corporation such as Premier Bancorp, Inc. has the power under certain
circumstances to indemnify its directors, officers, employees and agents against
certain expenses incurred by them in connection with any threatened, pending or
completed action, suit or proceeding. The bylaws of Premier Bancorp, Inc.
contain a number of provisions that require the Registrant to indemnify these
persons in accordance with Pennsylvania law.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits.
4.1 Indenture of Premier Bancorp, Inc. relating to the Junior Subordinated
Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debentures*
4.3 Certificate of Trust of PBI Capital Trust
4.4 Declaration of Trust of PBI Capital Trust
4.5 Amended and Restated Declaration of Trust for PBI Capital Trust
4.6 Form of Exchange Capital Security Certificate for PBI Capital Trust*
4.7 Form of Exchange Guarantee Agreement of Premier Bancorp, Inc. relating to
the Exchange Capital Securities*
4.8 Registration Rights Agreement
5.1 Opinion and consent of Ellsworth, Carlton & Waldman, P.C. to Premier
Bancorp, Inc. as to legality of the Exchange Junior Subordinated Debentures
and the Exchange Guarantee to be issued by Premier Bancorp, Inc.*
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to
legality of the Exchange Capital Securities to be issued by PBI Capital
Trust*
100
<PAGE>
8.1 Opinion of Ellsworth, Carlton & Waldman, P.C., special tax counsel, as to
certain federal income tax matters*
10.1 Change of Control Agreement between Premier Bank and John C. Soffronoff.
(Incorporated by reference to Exhibit 10.1 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
10.2 Change of Control Agreement between Premier Bank and John J. Ginley.
(Incorporated by reference to Exhibit 10.2 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
10.3 Change of Control Agreement between Premier Bank and Bruce E. Sickel.
(Incorporated by reference to Exhibit 10.3 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
12.1 Computation of ratio of earnings to fixed charges (excluding interest on
deposits)*
12.2 Computation of ratio of earnings to fixed charges (including interest on
deposits)*
23.1 Consent of KPMG LLP.
23.2 Consent of Ellsworth, Carlton & Waldman, P.C. (included in Exhibit 5.1)*
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)*
24.1 Power of Attorney of certain officers and directors of Premier Bancorp,
Inc.
25.1 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Amended and Restated Declaration
of Trust of PBI Capital Trust*
25.2 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Indenture*
25.3 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Exchange Guarantee for the benefit
of the holders of Exchange Capital Securities of PBI Capital Trust*
99.1 Form of Letter of Transmittal*
99.2 Form of Notice of Guaranteed Delivery*
101
<PAGE>
99.3 Form of Exchange Agent Agreement*
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees*
99.5 Form of Letter to Clients*
- -------
* To be filed by amendment.
(b) Financial Statement Schedules.
Not applicable.
ITEM 22. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the
most recent post-effective amendment thereof) which, individually or in
the aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20% change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement
102
<PAGE>
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) Each of the undersigned Registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each undersigned Registrant pursuant to the foregoing provisions, or otherwise,
each Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by each
undersigned Registrant of expenses incurred or paid by a director, officer of
controlling person of each Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, each Registrant will, unless
in the opinion of its counsel the matter has been settled by the controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
(d) The undersigned Registrants hereby undertake to respond to requests for
information that is incorporated by reference into the Prospectus pursuant to
Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned Registrants hereby undertake to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired or involved therein, that was not the subject of and
included in the registration statement when it became effective.
103
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Premier
Bancorp, Inc. certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-4 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Doylestown, in the Commonwealth of Pennsylvania,
on the 7th day of January, 1999.
PREMIER BANCORP, INC.
By: /s/ John C. Soffronoff
----------------------
John C. Soffronoff,
President and CEO
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ John C. Soffronoff Director, President and CEO January 7, 1999
- ---------------------- (Principal Executive Officer)
John C. Soffronoff
/s/ Clark S. Frame Director and Chairman of January 7, 1999
- ---------------------- the Board
Clark S. Frame
/s/ Bruce E. Sickel Director and CFO January 7, 1999
- ---------------------- (Principal Financial and
Bruce E. Sickel Accounting Officer)
/s/ Barry J. Miles, Sr. Director and Vice Chairman January 7, 1999
- ----------------------- of the Board
Barry J. Miles, Sr.
/s/ Daniel E. Cohen Director January 7, 1999
- -----------------------
Daniel E. Cohen
104
<PAGE>
/s/ Peter A. Cooper Director January 7, 1999
- ---------------------
Peter A. Cooper
/s/ Helen Beth Garofalo-Vilcek Director January 7, 1999
- ------------------------------
Helen Beth Garofalo-Vilcek
/s/ Thomas E. Mackell Director January 7, 1999
- -----------------------
Dr. Thomas E. Mackell
_____________________ Director
Dr. Daniel A. Nesi
/s/ Neil Norton Director January 7, 1999
- ------------------------
Neil Norton
_____________________ Director
Thomas M. O'Mara
_____________________ Director
Michael Perrucci
/s/ Brian R. Rich Director January 7, 1999
- -------------------------
Brian R. Rich
/s/ Richard F. Ryan Director January 7, 1999
- -------------------------
Richard F. Ryan
/s/ Gerald Schatz Director January 7, 1999
- -------------------------
Gerald Schatz
/s/ Irving N. Stein Director January 7, 1999
- -------------------------
Irving N. Stein
105
<PAGE>
/s/ Thomas P. Stitt Director January 7, 1999
- --------------------------
Thomas P. Stitt
_____________________ Director
John A. Zebrowski
/s/ Ezio U. Rossi Director January 7, 1999
- ---------------------------
Ezio U. Rossi
_____________________ Director
George H. Wetherill
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, PBI Capital
Trust certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-4 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Doylestown, and Commonwealth of Pennsylvania, on
January 7, 1999.
PBI CAPITAL TRUST
By: /s/ John C. Soffronoff
--------------------------
John C. Soffronoff
as Administrative Trustee
By: /s/ Bruce E. Sickel
--------------------------
Bruce E. Sickel
as Administrative Trustee
106
<PAGE>
EXHIBIT INDEX
4.1 Indenture of Premier Bancorp, Inc. relating to the Junior Subordinated
Debentures
4.2 Form of Certificate of Exchange Junior Subordinated Debentures*
4.3 Certificate of Trust of PBI Capital Trust
4.4 Declaration of Trust of PBI Capital Trust
4.5 Amended and Restated Declaration of Trust for PBI Capital Trust
4.6 Form of Exchange Capital Security Certificate for PBI Capital Trust*
4.7 Form of Exchange Guarantee Agreement of Premier Bancorp, Inc. relating to
the Exchange Capital Securities*
4.8 Registration Rights Agreement
5.1 Opinion and consent of Ellsworth, Carlton & Waldman, P.C. to Premier
Bancorp, Inc. as to legality of the Exchange Junior Subordinated Debentures
and the Exchange Guarantee to be issued by Premier Bancorp, Inc.*
5.2 Opinion of Richards, Layton & Finger, special Delaware counsel, as to
legality of the Exchange Capital Securities to be issued by PBI Capital
Trust*
8.1 Opinion of Ellsworth, Carlton & Waldman, P.C., special tax counsel, as to
certain federal income tax matters*
10.1 Change of Control Agreement between Premier Bank and John C. Soffronoff.
(Incorporated by reference to Exhibit 10.1 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
10.2 Change of Control Agreement between Premier Bank and John J. Ginley.
(Incorporated by reference to Exhibit 10.2 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
10.3 Change of Control Agreement between Premier Bank and Bruce E. Sickel.
(Incorporated by reference to Exhibit 10.3 to Registration Statement No.
333- 64855 of Premier Bancorp, Inc. on Form SB-2 filed on September 30,
1998).
107
<PAGE>
12.1 Computation of ratio of earnings to fixed charges (excluding interest on
deposits)*
12.2 Computation of ratio of earnings to fixed charges (including interest on
deposits)*
23.1 Consent of KPMG LLP.
23.2 Consent of Ellsworth, Carlton & Waldman, P.C. (included in Exhibit 5.1)*
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2)*
24.1 Power of Attorney of certain officers and directors of Premier Bancorp,
Inc.
25.1 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Amended and Restated Declaration
of Trust of PBI Capital Trust*
25.2 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Indenture*
25.3 Form T-1 Statement of Eligibility of First Union Trust Company, National
Association, to act as trustee under the Exchange Guarantee for the benefit
of the holders of Exchange Capital Securities of PBI Capital Trust*
99.1 Form of Letter of Transmittal*
99.2 Form of Notice of Guaranteed Delivery*
99.3 Form of Exchange Agent Agreement*
99.4 Form of Letter to Brokers, Dealers, Commercial Banks, Trust Companies and
Other Nominees*
99.5 Form of Letter to Clients*
- ------------------
* To be filed by amendment.
108
<PAGE>
EXHIBIT 4.1
================================================================================
PREMIER BANCORP, INC.
--------------------------------
INDENTURE
Dated as of August 11, 1998
--------------------------------
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Trustee
---------------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
================================================================================
<PAGE>
TIE-SHEET Reconciliation and tie of provisions of Trust Indenture Act of 1939,
as amended, with Indenture dated as of August 11, 1998 between Premier Bancorp,
Inc. and First Union Trust Company, National Association, Trustee (to the extent
such provisions are applicable to the Securities authenticated and issued under
this Indenture):
ACT SECTION INDENTURE Section
310(a)(1).................................................................6.09
(a)(2)............................................................... 6.09
310(a)(3)..................................................................N/A
(a)(4)..................................................................N/A
310(a)(5)...........................................................6.10, 6.11
310(b).....................................................................N/A
310(c)....................................................................6.13
311(a) and (b).............................................................N/A
311(c)...........................................................4.01, 4.02(a)
312(a)....................................................................4.02
312(b) and (c)............................................................4.04
313(a)....................................................................4.04
313(b)(1).................................................................4.04
313(b)(2).................................................................4.04
313(c)....................................................................4.04
313(d)....................................................................4.04
314(a)....................................................................4.03
314(b).....................................................................N/A
314(c)(1) and (2).........................................................6.07
314(c)(3)..................................................................N/A
314(d).....................................................................N/A
314(e)....................................................................6.07
314(f).....................................................................N/A
315(a)(c) and (d).........................................................6.01
315(b)....................................................................5.08
315(e)....................................................................5.09
316(a)(1).................................................................5.07
316(a)(2)..................................................................N/A
316(a) last sentence......................................................2.09
316(b)....................................................................9.02
317(a)....................................................................5.05
317(b)....................................................................6.05
318(a)...................................................................13.08
- ------------------------
THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
TABLE OF CONTENTS*
Page
----
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions......................................................1
Additional Sums.......................................................1
Adjusted Treasury Rate................................................1
Affiliate.............................................................2
Authenticating Agent..................................................2
Bank..................................................................2
Bankruptcy Law........................................................2
Board of Directors....................................................2
Board Resolution......................................................2
Business Day..........................................................2
Capital Securities....................................................2
Capital Securities Guarantee..........................................2
Commission............................................................3
Common Securities.....................................................3
Common Securities Guarantee...........................................3
Common Stock..........................................................3
Company...............................................................3
Company Request.......................................................3
Company Order.........................................................3
Comparable Treasury Issue.............................................3
Comparable Treasury Price.............................................3
Compounded Interest...................................................4
Custodian.............................................................4
Default...............................................................4
Deferred Interest.....................................................4
Definitive Securities.................................................4
Depositary............................................................4
Dissolution Event.....................................................4
Duffs.................................................................4
Eligible Investments..................................................4
Event of Default......................................................5
Exchange Act..........................................................5
Exchange Offer........................................................5
Extended Interest Payment Period......................................5
Federal Reserve.......................................................5
Financial Ratio-Capacity Test.........................................5
Fitch.................................................................5
Global Security.......................................................6
Indebtedness for Money Borrowed.......................................6
Indebtedness Ranking on a Parity with the Securities..................6
Indebtedness Ranking Junior to the Securities.........................6
Indenture.............................................................6
Initial Optional Redemption Date......................................6
- ----------------------------
* THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO BE A
PART OF THE INDENTURE.
(i)
<PAGE>
Interest Payment Date.................................................6
Liquidated Damages....................................................6
Make Whole Amount.....................................................6
Maturity Date.........................................................6
Moody's...............................................................7
Mortgage..............................................................7
Non Book-Entry Capital Securities.....................................7
Officers..............................................................7
Officers' Certificate.................................................7
Opinion of Counsel....................................................7
Optional Prepayment Price.............................................7
Other Debentures......................................................7
Other Guarantees......................................................7
Outstanding...........................................................7
PBI Capital Trust.....................................................8
Person................................................................8
Predecessor Security..................................................8
Prepayment Price......................................................8
Principal Office of the Trustee.......................................8
Purchase Agreement....................................................8
Property Trustee......................................................8
Quarterly Officer's Certificate.......................................8
Quotation Agent.......................................................8
Rating Agency.........................................................8
Redemption Price......................................................8
Reference Treasury Dealer.............................................8
Reference Treasury Dealer Quotations..................................8
Registration Rights Agreement.........................................8
Regulatory Capital Event..............................................8
Remaining Life........................................................9
Reserve Account.......................................................9
Reserve Account Balance...............................................9
Reserve Account Property..............................................9
Reserve Account Required Amount.......................................9
Reserve Account Shortfall Amount......................................9
Reserve Account Withdrawal............................................9
Responsible Officer...................................................9
Restricted Security...................................................9
Rule 144A.............................................................9
S&P..................................................................10
Securities...........................................................10
Securities Act.......................................................10
Securityholder.......................................................10
Holder of Securities.................................................10
Security Register....................................................10
Senior Indebtedness..................................................10
Series A Securities..................................................10
Series B Securities..................................................10
Special Event........................................................10
Special Event Prepayment Price.......................................10
Subsidiary...........................................................10
Tax Event............................................................10
(ii)
<PAGE>
Trust Agreement......................................................11
Trustee..............................................................11
Trust Indenture Act of 1939..........................................11
Trust Securities.....................................................11
25% Capital Limitation...............................................11
U.S. Government Obligations..........................................11
ARTICLE II
SECURITIES
SECTION 2.01. Forms Generally.................................................12
SECTION 2.02. Execution and Authentication....................................12
SECTION 2.03. Form and Payment................................................12
SECTION 2.04. Legends.........................................................13
SECTION 2.05. Global Security.................................................13
SECTION 2.06. Interest........................................................14
SECTION 2.07. Transfer and Exchange ..........................................15
SECTION 2.08. Replacement Securities..........................................16
SECTION 2.09. Temporary Securities............................................17
SECTION 2.10. Cancellation....................................................17
SECTION 2.11. Defaulted Interest .............................................17
SECTION 2.12. CUSIP Numbers...................................................18
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal, Premium and Interest......................18
SECTION 3.02. Offices for Notices and Payments, etc...........................18
SECTION 3.03. Appointments to Fill Vacancies in Trustee' Office...............19
SECTION 3.04. Provision as to Paying Agent....................................19
SECTION 3.05. Certificate to Trustee..........................................20
SECTION 3.06. Compliance with Consolidation Provision.........................20
SECTION 3.07. Limitation on Dividends.........................................20
SECTION 3.08. Covenants as to PBI Capital Trust...............................21
SECTION 3.09. Payment of Expenses ............................................21
SECTION 3.10. Payment Upon Resignation or Removal.............................22
SECTION 3.11. Reserve Account.................................................22
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists..........................................24
SECTION 4.02. Preservation and Disclosure of Lists............................25
SECTION 4.03. Reports by Company .............................................26
SECTION 4.04. Reports by the Trustee..........................................27
(iii)
<PAGE>
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default...............................................27
SECTION 5.02. Payment of Securities on Default; Suit Therefor.................29
SECTION 5.03. Application of Monies Collected by Trustee......................30
SECTION 5.04. Proceedings by Securityholders..................................31
SECTION 5.05. Proceedings by Trustee..........................................31
SECTION 5.06. Remedies Cumulative and Continuing..............................32
SECTION 5.07. Direction of Proceedings and Waiver of
Defaults by Majority of Securityholders......................32
SECTION 5.08. Notice of Defaults .............................................32
SECTION 5.09. Undertaking to Pay Costs........................................33
ARTICLE VI
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee..........................33
SECTION 6.02. Reliance on Documents, Opinions, etc............................34
SECTION 6.03. No Responsibility for Recitals, etc.............................35
SECTION 6.04. Trustee, Authenticating Agent, Paying
Agents, Transfer Agents or Registrar May
Own Securities...............................................36
SECTION 6.05. Monies to be Held in Trust......................................36
SECTION 6.06. Compensation and Expenses of Trustee............................36
SECTION 6.07. Officers' Certificate as Evidence...............................37
SECTION 6.08. Conflicting Interest of Trustee.................................37
SECTION 6.09. Eligibility of Trustee..........................................37
SECTION 6.10. Resignation or Removal of Trustee...............................37
SECTION 6.11. Acceptance by Successor Trustee.................................38
SECTION 6.12. Succession by Merger, etc.......................................39
SECTION 6.13. Limitation on Rights of Trustee as a Creditor...................39
SECTION 6.14. Authenticating Agents...........................................40
ARTICLE VII
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders.......................................41
SECTION 7.02. Proof of Execution by Securityholders...........................41
SECTION 7.03. Who Are Deemed Absolute Owners..................................41
SECTION 7.04. Securities Owned by Company Deemed Not
Outstanding..................................................42
SECTION 7.05. Revocation of Consents; Future Holders
Bound .......................................................42
(iv)
<PAGE>
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings............................................42
SECTION 8.02. Call of Meetings by Trustee.....................................43
SECTION 8.03. Call of Meetings by Company or
Securityholders .............................................43
SECTION 8.04. Qualifications for Voting.......................................43
SECTION 8.05. Regulations ....................................................43
SECTION 8.06. Voting .........................................................44
ARTICLE IX
AMENDMENTS
SECTION 9.01. Without Consent of Securityholders..............................44
SECTION 9.02. With Consent of Securityholders.................................46
SECTION 9.03. Compliance with Trust Indenture Act;
Effect of Supplemental Indentures............................46
SECTION 9.04. Notation on Securities..........................................47
SECTION 9.05. Evidence of Compliance of Supplemental
Indenture to be Furnished Trustee............................47
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms ...............47
SECTION 10.02. Successor Corporation to be Substituted for Company............48
SECTION 10.03. Opinion of Counsel to be Given Trustee.........................48
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture.........................................48
SECTION 11.02. Deposited Monies and U.S. Government
Obligations to be Held in Trust by Trustee..................49
SECTION 11.03. Paying Agent to Repay Monies Held..............................49
SECTION 11.04. Return of Unclaimed Monies.....................................49
SECTION 11.05. Defeasance Upon Deposit of Monies or
U.S. Government Obligations.................................50
(v)
<PAGE>
ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely
Corporate Obligations.......................................51
ARTICLE XIII
MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors ....................................................51
SECTION 13.02. Official Acts by Successor Corporation.........................51
SECTION 13.03. Surrender of Company Powers....................................52
SECTION 13.04. Addresses for Notices, etc.....................................52
SECTION 13.05. Governing Law .................................................52
SECTION 13.06. Evidence of Compliance with Conditions
Precedent ..................................................52
SECTION 13.07. Business Days .................................................53
SECTION 13.08. Trust Indenture Act to Control.................................53
SECTION 13.09. Table of Contents, Headings, etc...............................53
SECTION 13.10. Execution in Counterparts......................................53
SECTION 13.11. Separability ..................................................53
SECTION 13.12. Assignment ....................................................53
SECTION 13.13. Acknowledgement of Rights......................................53
ARTICLE XIV
PREPAYMENT OF SECURITIES -- MANDATORY
AND OPTIONAL SINKING FUND
SECTION 14.01. Special Event Prepayment.......................................54
SECTION 14.02. Optional Prepayment by Company.................................54
SECTION 14.03. No Sinking Fund ...............................................55
SECTION 14.04. Notice of Prepayment Selection of
Securities..................................................55
SECTION 14.05. Payment of Securities Called for
Prepayment..................................................56
(vi)
<PAGE>
ARTICLE XV
SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.......................................57
SECTION 15.02. Default on Senior Indebtedness.................................57
SECTION 15.03. Liquidation; Dissolution; Bankruptcy...........................57
SECTION 15.04. Subrogation ...................................................59
SECTION 15.05. Trustee to Effectuate Subordination............................59
SECTION 15.06. Notice by the Company..........................................60
SECTION 15.07. Rights of the Trustee; Holders of Senior
Indebtedness................................................60
SECTION 15.08. Subordination May Not Be Impaired..............................61
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period...........................61
SECTION 16.02. Notice of Extension ...........................................62
EXHIBIT A ......................................................................
Testimonium
Signatures
Acknowledgements
(vii)
<PAGE>
THIS INDENTURE, dated as of August 11, 1998, between Premier Bancorp, Inc.,
a Pennsylvania corporation (hereinafter sometimes called the "Company"), and
First Union Trust Company, National Association, a national banking association,
as trustee (hereinafter sometimes called the "Trustee"),
W I T N E S S E T H :
In consideration of the premises, and the purchase of the Securities by the
holders thereof, the Company covenants and agrees with the Trustee for the equal
and proportionate benefit of the respective holders from time to time of the
Securities, as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
The terms defined in this Section 1.01 (except as herein otherwise
expressly provided or unless the context otherwise requires) for all purposes of
this Indenture shall have the respective meanings specified in this Section
1.01. All other terms used in this Indenture which are defined in the Trust
Indenture Act of 1939, as amended, or which are by reference therein defined in
the Securities Act of 1933, as amended, shall (except as herein otherwise
expressly provided or unless the context otherwise requires) have the meanings
assigned to such terms in said Trust Indenture Act (to the extent such terms are
applicable to the provisions of this Indenture) and in said Securities Act as in
force at the date of this Indenture as originally executed. The following terms
have the meanings given to them in the Trust Agreement: (i) Clearing Agency;
(ii) Delaware Trustee; (iii) Capital Security Certificate; (iv) Property
Trustee; (v) Administrative Trustees; (vi) Series A Capital Securities; (vii)
Series B Capital Securities; (viii) Direct Action; and (ix) Distributions. All
accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting
principles and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation.
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. Headings are used for convenience of reference only and do
not affect interpretation. The singular includes the plural and vice versa.
"Additional Sums" shall have the meaning set forth in Section 2.06(c).
"Adjusted Treasury Rate" shall mean, with respect to a prepayment date
pursuant to Section 14.01, the rate per annum equal to (i) the yield, under the
heading which represents the average for the immediately prior week, appearing
in the most recently published statistical release designated "H.15(519)" or any
successor publication which is published weekly by the Board of Governors of the
Federal Reserve System and which establishes yields on actively traded United
States Treasury securities adjusted to constant maturity under the caption
"Treasury Constant Maturities," for the maturity corresponding to the Remaining
Life, (if no maturity is within three months before or three months after the
maturity corresponding to the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined,
and the Adjusted Treasury Rate shall be interpolated or extrapolated from such
yields on a straight-line basis, rounding to the nearest month), or (ii) if such
release (or any successor release) is not published during the week preceding
the calculation date or does not contain such yields, the rate per annum equal
to the semi-annual equivalent yield to maturity to the Comparable Treasury
Issue, calculated using a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such prepayment date, in each case calculated on the third Business
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Day preceding the prepayment date, plus in each case (a) 285 basis points if
such prepayment occurs on or prior to August 11, 1999 and (b) 245 basis points
in all other cases.
"Affiliate" shall mean, with respect to a specified Person, (a) any Person
directly or indirectly owning, controlling or holding the 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" shall mean any agent or agents of the Trustee which
at the time shall be appointed and acting pursuant to Section 6.14.
"Bank" shall mean Premier Bank, a Pennsylvania state-chartered banking
institution, the Company's wholly owned banking subsidiary.
"Bankruptcy Law" shall mean Title 11, U.S. Code, or any similar federal or
state law for the relief of debtors.
"Board of Directors" shall mean either the Board of Directors of the
Company or any duly authorized committee of that board.
"Board Resolution" shall mean a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" shall mean, with respect to any series of Securities, any
day other than a Saturday or a Sunday or a day on which banking institutions in
The City of New York or Wilmington, Delaware are authorized or required by law
or executive order to close.
"Capital Securities" shall mean undivided beneficial interests in the
assets of PBI Capital Trust which rank pari passu with the Common Securities
issued by PBI Capital Trust; provided, however, that if an Event of Default has
occurred and is continuing, no payments in respect of Distributions on, or
payments upon liquidation, prepayment or otherwise with respect to, the Common
Securities shall be made until the holders of the Capital Securities shall be
paid in full the Distributions and the liquidation, prepayment and other
payments to which they are entitled. References to "Capital Securities" shall
include collectively any Series A Capital Securities and any Series B Capital
Securities.
"Capital Securities Guarantee" shall mean any guarantee that the Company
may enter into with First Union Trust Company, National Association or other
Person that operates directly or indirectly for the benefit of holders of
Capital Securities of PBI Capital Trust and shall include a Series A Capital
Securities Guarantee and a Series B Capital Securities Guarantee with respect to
the Series A Capital Securities and the Series B Capital Securities,
respectively.
"Commission" shall mean 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
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<PAGE>
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" shall mean undivided beneficial interests in the assets
of PBI Capital Trust which rank pari passu with Capital Securities issued by PBI
Capital Trust; provided, however, that if an Event of Default has occurred and
is continuing, no payments in respect of Distributions on, or payments upon
liquidation, prepayment or otherwise with respect to, the Common Securities
shall be made until the holders of the Capital Securities shall be paid in full
the Distributions and the liquidation, prepayment and other payments to which
they are entitled.
"Common Securities Guarantee" shall mean any guarantee that the Company may
enter into with any Person that operates directly or indirectly for the benefit
of holders of Common Securities of PBI Capital Trust.
"Common Stock" shall mean the Common Stock, $0.33 par value per share, of
the Company or any other class of stock resulting from changes or
reclassifications of such Common Stock consisting solely of changes in par
value, or from par value to no par value, or from no par value to par value.
"Company" shall mean Premier Bancorp, Inc., a Pennsylvania corporation,
and, subject to the provisions of Article X, shall include its successors and
assigns.
"Company Request" or "Company Order" shall mean a written request or order
signed in the name of the Company by the Chairman, the Chief Executive Officer,
the President, a Vice Chairman, an Executive Vice President, a Vice President,
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Comptroller, the Secretary or an Assistant Secretary of the Company, and
delivered to the Trustee.
"Comparable Treasury Issue" shall mean the United States Treasury security
selected by the Quotation Agent as having a maturity comparable to the Remaining
Life of the Securities that would be utilized, at the time of selection and in
accordance with customary financial practice, in pricing new issues of corporate
debt securities of comparable maturity to the Remaining Life. If no United
States Treasury security has a maturity which is within a period from three
months before to three months after the Remaining Life, the two most closely
corresponding United States Treasury securities, as selected by the Quotation
Agent, shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month, using such securities.
"Comparable Treasury Price" shall mean, with respect to any prepayment date
pursuant to Section 14.01, (i) the average of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) on the third Business Day preceding such prepayment date, as
set forth in the daily statistical release (or any successor release) published
by the Federal Reserve Bank of New York and designated "Composite 3:30 p.m.
Quotations for U.S. Government Securities" or (ii) if such release (or any
successor release) is not published or does not contain such prices on such
Business Day, (A) the average of the Reference Treasury Dealer Quotations for
such prepayment date, after excluding the highest and lowest such Reference
Treasury Dealer Quotations, or (B) if the Trustee obtains fewer than three such
Reference Treasury Dealer Quotations, the average of all such Quotations.
"Compounded Interest" shall have the meaning set forth in Section 16.01.
3
<PAGE>
"Custodian" shall mean any receiver, trustee, assignee, liquidator, or
similar official under any Bankruptcy Law.
"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 16.01.
"Definitive Securities" shall mean those securities issued in fully
registered certificated form not otherwise in global form.
"Depositary" shall mean, with respect to Securities of any series, for
which the Company shall determine that such Securities will be issued as a
Global Security, 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 Section 2.05(d).
"Dissolution Event" means the liquidation of PBI Capital Trust pursuant to
the Trust Agreement, and the distribution of the Securities held by the Property
Trustee to the holders of the Trust Securities issued by PBI Capital Trust pro
rata in accordance with the Trust Agreement.
"Duff's" means Duff & Phelps Credit Rating Co.
"Eligible Investments" means any and all of the following:
(i) direct obligations of, and obligations fully guaranteed for timely
payment by, the United States of America, the Federal Home Loan Mortgage
Corporation, the Federal National Mortgage Association, the Federal Home Loan
Banks or any agency or instrumentality of the United States of America which has
a rating of AAA by Moody's or AAA by Duff's at the time of such investment the
obligation of which are backed by the full faith and credit of the United States
of America;
(ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Debenture Trustee or its agents
acting in their respective commercial capacities) incorporated under the laws of
the United States of America or any State thereof and subject to supervision and
examination by federal and/or state authorities, so long as at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company has a short term unsecured debt rating
in the highest available rating category, and provided that each such investment
has an original maturity of no more than 365 days and provided that each such
investment has an original maturity of no more than 365 days and (B) any other
demand or time deposit or deposit which is fully insured by the Federal Deposit
Insurance Corporation;
(iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with a
depository institution or trust company (acting as principal) rated A or higher
by S&P, AA+ by Duff's, A1 or higher by Moody's or Prime-1 by Moody's or A by
Fitch; provided, however, that collateral transferred pursuant to such
repurchase obligation must (A) be valued weekly at current market price plus
accrued interest, (B) pursuant to such valuation, equal, at all times, 105% of
the cash transferred by the Debenture Trustee in exchange for such collateral
and (C) be
4
<PAGE>
delivered to the Debenture Trustee or, if the Debenture Trustee is supplying the
collateral, an agent for the Debenture Trustee, in such a manner as to
accomplish perfection of a security interest in the collateral by possession of
certificated securities;
(iv) commercial paper having an original maturity of less than 365
days and having an original maturity of less than 365 days and issued by an
institution having a short term unsecured debt rating in the highest available
rating category of any Rating Agency at the time of such investment;
(v) Money market funds having ratings in the highest available rating
category of any Rating Agency at the time of such investment; and
(vi) such other securities, including but not limited to, trust
preferred securities, corporate debentures, agency debentures, and agency
pass-throughs, provided that such securities qualify as investment grade
securities.
"Event of Default" shall mean any event specified in Section 5.01,
continued for the period of time, if any, and after the giving of the notice, if
any, therein designated.
"Exchange Act" shall mean the Securities Exchange Act of 1934, or any
successor legislation, in each case, as amended.
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Company to exchange Series B Securities
for Series A Securities and to exchange a Series B Capital Securities Guarantee
for a Series A Capital Securities Guarantee and (ii) by PBI Capital Trust to
exchange Series B Capital Securities for Series A Capital Securities.
"Extended Interest Payment Period" shall have the meaning set forth in
Section 16.01.
"Federal Reserve" shall mean the Board of Governors of the Federal Reserve
System.
"Financial Ratio-Capacity Test" means the following: (i) the Company has a
ratio of total unsecured debt (on a consolidated basis) to shareholders' equity
(each as determined under generally accepted accounting principles) equal to or
less than 70% and (ii) the Bank has the capacity to pay dividends to the
Company, without obtaining prior regulatory approval, in an amount equal to or
greater than two times the amount of interest payable on the Securities for a
one year period.
"Fitch" shall mean Fitch Investors Service, Inc.
"Global Security" shall mean, with respect to the Securities, a Security
executed by the Company and delivered by the Trustee to the Depositary or
pursuant to the Depositary's instruction, all in accordance with the Indenture,
which shall be registered in the name of the Depositary or its nominee.
"Indebtedness for Money Borrowed" shall mean any obligation of, or any
obligation guaranteed by, the Company for the repayment of borrowed money,
whether or not evidenced by bonds, debentures, notes or other written
instruments.
"Indebtedness Ranking on a Parity with the Securities" shall mean (i)
Indebtedness for Money Borrowed, whether outstanding on the date of execution of
this Indenture or hereafter created, assumed or
5
<PAGE>
incurred, which specifically by its terms ranks equally with and not prior to
the Securities in the right of payment upon the happening of the dissolution or
winding up or liquidation or reorganization of the Company, (ii) all other debt
securities, and guarantees in respect of those debt securities, issued to any
trust other than PBI Capital Trust, or a partnership or other entity affiliated
with the Company that is a financing vehicle of the Company (a "financing
entity") in connection with the issuance by such financing entity of equity
securities or other securities guaranteed by the Company pursuant to an
instrument that ranks pari passu with or junior in right of payment to the
Capital Securities Guarantee.
"Indebtedness Ranking Junior to the Securities" shall mean any Indebtedness
for Money Borrowed, whether outstanding on the date of execution of this
Indenture or hereafter created, assumed or incurred, which specifically by its
terms ranks junior to and not equally with or prior to the Securities (and any
other Indebtedness Ranking on a Parity with the Securities) in right of payment
upon the happening of the dissolution or winding up or liquidation or
reorganization of the Company. The securing of any Indebtedness for Money
Borrowed, otherwise constituting Indebtedness Ranking on a Parity with the
Securities or Indebtedness Ranking Junior to the Securities, as the case may be,
shall not be deemed to prevent such Indebtedness for Money Borrowed from
constituting Indebtedness Ranking on a Parity with the Securities or
Indebtedness Ranking Junior to the Securities, as the case may be.
"Indenture" shall mean this instrument as originally executed or, if
amended as herein provided, as so amended.
"Initial Optional Prepayment Date" means August 15, 2008.
"Interest Payment Date" shall have the meaning set forth in Section 2.06.
"Liquidated Damages" shall have the meaning set forth in the Registration
Rights Agreement.
"Make-Whole Amount" shall mean an amount equal to the greater of (x) 100%
of the principal amount of the Securities or (y) the sum, as determined by a
Quotation Agent, of the present values of the remaining scheduled payments of
principal and interest on the Securities from the prepayment date to the
Maturity Date, discounted to the prepayment date on a semi-annual basis
(assuming a 360-day year consisting of twelve 30-day months) at the Adjusted
Treasury Rate, plus, in the case of each of clauses (x) and (y), accrued and
unpaid interest thereon and Liquidated Damages, if any, to the date of
prepayment.
"Maturity Date" shall mean August 15, 2028.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" shall mean and include any mortgage, pledge, lien, security
interest, conditional sale or other title retention agreement or other similar
encumbrance.
"Non Book-Entry Capital Securities" shall have the meaning set forth in
Section 2.05.
"Officers" shall mean any of the Chairman, a Vice Chairman, the Chief
Executive Officer, the President, an Executive Vice President, a Vice President,
the Chief Financial Officer, the Treasurer, an Assistant Treasurer, the
Comptroller, the Secretary or an Assistant Secretary of the Company.
"Officers' Certificate" shall mean a certificate signed by two Officers and
delivered to the Trustee.
6
<PAGE>
"Opinion of Counsel" shall mean a written opinion of counsel, who may be an
employee of the Company, and who shall be acceptable to the Trustee.
"Optional Prepayment Price" shall have the meaning set forth in Section
14.02.
"Other Debentures" shall mean all junior subordinated debentures issued by
the Company from time to time and sold to trusts to be established by the
Company (if any), in each case similar to the Trust.
"Other Guarantees" shall mean all guarantees to be issued by the Company
with respect to capital securities (if any) and issued to other trusts to be
established by the Company (if any), in each case similar to the Trust.
The term "Outstanding" when used with reference to Securities, shall,
subject to the provisions of Section 7.04, shall mean, as of any particular
time, all Securities authenticated and delivered by the Trustee or the
Authenticating Agent under this Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to the
Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of which
monies in the necessary amount shall have been deposited in trust with
the Trustee or with any paying agent (other than the Company) or shall
have been set aside and segregated in trust by the Company (if the
Company shall act as its own paying agent); provided that, if such
Securities, or portions thereof, are to be prepaid prior to maturity
thereof, notice of such prepayment shall have been given as in Article
XIV provided or provision satisfactory to the Trustee shall have been
made for giving such notice; and
(c) Securities in lieu of or in substitution for which other Securities
shall have been authenticated and delivered pursuant to the terms of
Section 2.08 unless proof satisfactory to the Company and the Trustee
is presented that any such Securities are held by bona fide holders in
due course.
"PBI Capital Trust" or the "Trust" shall mean PBI Capital Trust, a Delaware
business trust created for the purpose of issuing its undivided beneficial
interests in connection with the issuance of Securities under this Indenture.
"Person" shall mean any individual, corporation, estate, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
"Predecessor Security" of any particular Security shall mean every previous
Security evidencing all or a portion of the same debt and as that evidenced by
such particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 2.08 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Prepayment Price" shall mean the Special Event Prepayment Price or the
Optional Prepayment Price, as the context requires.
7
<PAGE>
"Principal Office of the Trustee", or other similar term, shall mean the
office of the Trustee at which at any particular time its corporate trust
business shall be administered.
"Purchase Agreement" shall mean the Purchase Agreement dated August 6, 1998
among the Company, PBI Capital Trust and the Initial Purchaser named therein.
"Property Trustee" shall have the same meaning as set forth in the Trust
Agreement.
"Quarterly Officers' Certificate" shall mean a certificate signed by two
Officers and delivered to the Debenture Trustee demonstrating whether or not the
Financial Ratio-Capacity Test is met.
"Quotation Agent" shall mean the Reference Treasury Dealer appointed by the
Company.
"Rating Agency" shall mean any nationally recognized securities rating
organization, including S&P, Moody's, Fitch and Duff's.
"Reference Treasury Dealer" shall mean a nationally recognized U.S.
Government securities dealer in New York City selected by the Company.
"Reference Treasury Dealer Quotations" shall mean, with respect to each
Reference Treasury Dealer and the prepayment date pursuant to Section 14.01, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Reference Treasury
Dealer at 5:00 p.m. New York City time on the third Business Day preceding such
prepayment date.
"Registration Rights Agreement" shall mean the Registration Rights
Agreement, dated as of August 6, 1998, by and among the Company, the Trust and
the Initial Purchaser named therein as such agreement may be amended, modified
or supplemented from time to time.
"Regulatory Capital Event" shall mean the receipt by the Company of an
opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (i) any amendment to, or change (including any
announced prospective change) in, the laws (or any regulations thereunder) of
the United States or any rules, guidelines or policies of an applicable
regulatory agency or (ii) 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 original issuance of the Trust Securities, the Capital Securities do
not constitute, or within 90 days of such opinion will not constitute, Tier 1
Capital (or its then equivalent if the Company were subject to such capital
requirement), applied as if the Company (or its successors) were a bank holding
company, except as otherwise restricted under the 25% Capital Limitation, for
purposes of the capital adequacy guidelines of the Federal Reserve (or any
successor regulatory authority with jurisdiction over bank holding companies),
or any capital adequacy guidelines as then in effect and applicable to the
Company; provided, however, that the distribution of the Securities in
connection with the liquidation of the Trust by the Company shall not in and of
itself constitute a Regulatory Capital Event, unless such liquidation shall have
occurred in connection with a Tax Event.
"Remaining Life" shall mean the term of the Securities from any prepayment
date pursuant to Section 14.01 to the Maturity Date.
8
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"Reserve Account" shall mean the segregated account established by the
Trustee pursuant to Section 3.11 hereof.
"Reserve Account Balance" shall mean, as of the date of determination, the
principal amount of the securities plus the cash balance held in the Reserve
Account.
"Reserve Account Required Amount" shall mean, as of the date of
determination, the amount equal to the product of (A) the then outstanding
principal amount of the Securities times (b) 8.57%.
"Reserve Account Shortfall Amount" shall mean, as of the date of
determination, the amount equal to the positive difference, if any, between (A)
the Reserve Account Required Amount and (B) the Reserve Account Balance (after
giving effect to any withdrawal from the Reserve Account).
"Reserve Account Withdrawal" shall have the meaning set forth in Section
3.11(d).
"Responsible Officer" shall mean the chairman or any vice chairman of the
board of directors, the chairman or any vice chairman of the executive committee
of the board of directors, the chairman of the trust committee, the president,
any vice president, the cashier, any assistant cashier, the secretary, the
treasurer, any assistant treasurer, any trust officer or assistant trust
officer, the controller or any assistant controller or any other officer or
assistant officer of the Trustee customarily performing functions similar to
those performed by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other officer to whom such
matter is referred because of his knowledge of and familiarity with the
particular subject.
"Restricted Security" shall mean Securities that bear or are required to
bear the legends relating to transfer restrictions under the Securities Act set
forth in Exhibit A hereto.
"Rule 144A" shall mean Rule 144A under the Securities Act, as such Rule may
be amended from time to time, or under any similar rule or regulation hereafter
adopted by the Commission.
"S&P" shall mean Standard & Poors Corporation.
"Securities" shall mean, collectively, the Series A Securities and the
Series B Securities.
"Securities Act" shall mean the Securities Act of 1933, or any successor
legislation, in each case, as amended.
"Securityholder", or "Holder of Securities", or other similar terms, shall
mean any Person in whose name at the time a particular Security is registered on
the register kept by the Company or the Trustee for that purpose in accordance
with the terms hereof.
"Security Register" shall mean (i) prior to a Dissolution Event, the list
of holders provided to the Trustee pursuant to Section 4.01, and (ii) following
a Dissolution Event, any security register maintained by a security registrar
for the Securities appointed by the Company following the execution of a
supplemental indenture providing for transfer procedures as provided for in
Section 2.07(a).
"Senior Indebtedness" shall mean all Indebtedness for Money Borrowed,
whether outstanding on the date of execution of this Indenture or hereafter
created, assumed or incurred, except Indebtedness
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Ranking on a Parity with the Securities or Indebtedness Ranking Junior to the
Securities, and any deferrals, renewals or extensions of such Senior
Indebtedness.
"Series A Securities" shall mean the Company's Series A 8.57% Junior
Subordinated Deferrable Interest Debentures due August 15, 2028, as
authenticated and issued under this Indenture.
"Series B Securities" shall mean the Company's Series B 8.57% Junior
Subordinated Deferrable Interest Debentures due August 15, 2028, as
authenticated and issued under this Indenture.
"Special Event" shall mean either a Regulatory Capital Event or a Tax
Event.
"Special Event Prepayment Price" shall mean, with respect to any prepayment
of the Securities pursuant to Section 14.01 hereof, an amount in cash equal to
the Make-Whole Amount.
"Subsidiary" shall mean with respect to any Person, (i) any corporation at
least a majority of the outstanding voting stock of which is owned, directly or
indirectly, by such Person or by one or more of its Subsidiaries, or by such
Person and one or more of its Subsidiaries, (ii) any general partnership, joint
venture or similar entity, at least a majority of 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 (iii) any limited partnership of which such Person or any of its
Subsidiaries is a general partner. For the purposes of this definition, "voting
stock" shall mean shares, interests, participations or other equivalents in the
equity interest (however designated) in such Person having ordinary voting power
for the election of a majority of the directors (or the equivalent) of such
Person, other than shares, interests, participations or other equivalents having
such power only by reason of the occurrence of a contingency.
"Tax Event" shall mean the receipt by PBI Capital Trust and the Company of
an opinion of counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement or decision is announced on or after August 11, 1998, there
is more than an insubstantial risk that (i) PBI Capital Trust is, or will be
within 90 days of the date of such opinion, subject to United States Federal
income tax with respect to income received or accrued on the Securities, (ii)
interest payable by the Company on the Securities is not, or within 90 days of
the date of such opinion, will not be, deductible by the Company, in whole or in
part, for United States federal income tax purposes, or (iii) PBI Capital Trust
is, or will be within 90 days of the date of such opinion, subject to more than
a de minimis amount of other taxes, duties or other governmental charges.
"Trust Agreement" shall mean the Amended and Restated Declaration of Trust
of PBI Capital Trust, dated as of August 11, 1998.
"Trustee" shall mean the Person identified as "Trustee" in the first
paragraph hereof, and, subject to the provisions of Article VI hereof, shall
also include its successors and assigns as Trustee hereunder. The term "Trustee"
as used with respect to a particular series of the Securities shall mean the
trustee with respect to that series.
"Trust Indenture Act of 1939" shall mean the Trust Indenture Act of 1939,
as modified, amended or supplemented from time to time, except as provided in
Section 9.03.
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"Trust Securities" shall mean the Capital Securities and the Common
Securities, collectively.
"25% Capital Limitation" shall mean the limitation relating to the amount
of capital received from the proceeds of the sale of the Capital Securities
which can qualify as Tier 1 or core capital with respect to the Company under
the risk based capital guidelines established by the Federal Reserve.
"U.S. Government Obligations" shall mean securities that are (i) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (ii) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case under
clauses (i) or (ii) are not callable or redeemable at the option of the issuer
thereof, and shall also include a depository receipt issued by a bank or trust
company as custodian with respect to any such U.S. Government Obligation or a
specific payment of interest on or principal of any such U.S. Government
Obligation held by such custodian for the account of the holder of a depository
receipt, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in respect of the
U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
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ARTICLE II
SECURITIES
Section 2.01. Forms Generally.
The Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit A, the terms of which are incorporated in
and made a part of this Indenture. The Securities may have notations, legends or
endorsements required by law, stock exchange rule, agreements to which the
Company is subject or usage. Each Security shall be dated the date of its
authentication. The Securities shall be issued in denominations of $1,000 and
integral multiples thereof.
Section 2.02. Execution and Authentication.
The Securities shall be executed by the Company by manual or facsimile
signature in the form attached. If an Officer whose signature is on a Security
no longer holds that office at the time the Security is authenticated, the
Security shall nevertheless be valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Security has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Securities shall be
substantially as set forth in Exhibit A hereto.
The Trustee shall, upon a Company Order, authenticate for original issue up
to, and the aggregate principal amount of Securities outstanding at any time may
not exceed, $10,310,000 aggregate principal amount of the Securities, except as
provided in Sections 2.07, 2.08, 2.09 and 14.05. The series of Securities to be
initially issued hereunder shall be the Series A Securities.
Section 2.03. Form and Payment.
Except as provided in Section 2.05, the Securities shall be issued in fully
registered certificated form without interest coupons. Principal of, premium, if
any, and interest on the Securities issued in certificated form will be payable,
the transfer of such Securities will be registrable and such Securities will be
exchangeable for Securities bearing identical terms and provisions at the office
or agency of the Company maintained for such purpose under Section 3.02;
provided, however, that payment of interest with respect to Securities (other
than a Global Security) may be made at the option of the Company (i) by check
mailed to the holder at such address as shall appear in the Security Register or
(ii) by transfer to an account maintained by the Person entitled thereto,
provided that proper transfer instructions have been received in writing by the
relevant record date. Notwithstanding the foregoing, so long as the holder of
any Securities is the Property Trustee, the payment of the principal of,
premium, if any, interest (including Compounded Interest and Additional Sums, if
any) and Liquidated Damages, if any, on such Securities held by the Property
Trustee will be made at such place and to such account as may be designated by
the Property Trustee.
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Section 2.04. Legends.
(a) Except as permitted by subsection (b) of this Section 2.04 or as
otherwise determined by the Company in accordance with applicable law, each
Security shall bear the applicable legends relating to restrictions on transfer
pursuant to the securities laws in substantially the form set forth on Exhibit A
hereto.
(b) In the event of an Exchange Offer, the Company shall issue and the
Trustee shall, upon Company Order, authenticate Series B Securities in exchange
for Series A Securities accepted for exchange in the Exchange Offer, which
Series B Securities shall not bear the legends required by subsection (a) above,
in each case unless the holder of such Series A Securities is either (A) a
broker dealer who purchased such Series A Securities directly from the Company
for resale pursuant to Rule 144A or any other available exemption under the
Securities Act, (B) a Person participating in the distribution of the Series A
Securities or (C) a Person who is an affiliate (as defined in Rule 144 under the
Securities Act) of the Company.
Section 2.05. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Capital Securities are held in book-entry form, the related
Definitive Securities shall be presented to the Trustee (if an arrangement with
the Depositary has been maintained) by the Property Trustee in exchange for one
or more Global Securities (as may be required pursuant to Section 2.07) in an
aggregate principal amount equal to the aggregate principal amount of all
outstanding Securities, 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 one or more
Global Securities in such aggregate principal amount and deliver the same to the
Trustee for authentication and delivery in accordance with this Indenture; and
payments on the Securities issued as a Global Security will be made to the
Depositary; and
(ii) if any Capital Securities are held in certificated form, the related
Definitive Securities may be presented to the Trustee by the Property Trustee
and any Capital Security certificate which represents Capital Securities other
than Capital Securities in book-entry form ("Non Book-Entry Capital Securities")
will be deemed to represent beneficial interests in Securities presented to the
Trustee by the Property Trustee having an aggregate principal amount equal to
the aggregate liquidation amount of the Non Book-Entry Capital Securities until
such Capital Security certificates are presented to the Security Registrar for
transfer or reissuance, at which time such Capital Security certificates will be
canceled and a Security, registered in the name of the holder of the Capital
Security certificate or the transferee of the holder of such Capital Security
certificate, as the case may be, with an aggregate principal amount equal to the
aggregate liquidation amount of the Capital Security certificate canceled, will
be executed by the Company and delivered to the Trustee for authentication and
delivery in accordance with this Indenture. Upon the issuance of such
Securities, Securities with an equivalent aggregate principal amount that were
presented by the Property Trustee to the Trustee will be deemed to have been
canceled.
(b) The Global Securities shall represent the aggregate amount of
outstanding Securities from time to time endorsed thereon; provided, that the
aggregate amount of outstanding Securities represented thereby may from time to
time be reduced or increased, as appropriate, to reflect exchanges and
redemptions. Any endorsement of a Global Security to reflect the amount of any
increase or decrease in the amount of outstanding Securities represented thereby
shall be made by the Trustee, in accordance with instructions given by the
Company as required by this Section 2.05.
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(c) The Global Securities may be transferred, in whole but not in part,
only to the Depositary, another nominee of the Depositary, or to a successor
Depositary selected or approved by the Company or to a nominee of such successor
Depositary.
(d) If at any time the Depositary notifies the Company that it is unwilling
or unable to continue as Depositary or the Depositary has ceased to be a
clearing agency registered under the Exchange Act, and a successor Depositary 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 receipt of a Company Order, will authenticate and
make available for delivery the Definitive Securities, in authorized
denominations, and in an aggregate principal amount equal to the principal
amount of the Global Security in exchange for such Global Security. If there is
an Event of Default, the Depositary shall have the right to exchange the Global
Securities for Definitive Securities. In addition, the Company may at any time
determine that the Securities shall no longer be represented by a Global
Security. In the event of such an Event of Default or such a determination, the
Company shall execute, and subject to Section 2.07, the Trustee, upon receipt of
an Officers' Certificate evidencing such determination by the Company and a
Company Order, will authenticate and make available for delivery the Definitive
Securities, in authorized denominations, and in an aggregate principal amount
equal to the principal amount of the Global Security in exchange for such Global
Security. Upon the exchange of the Global Security for such Definitive
Securities, in authorized denominations, the Global Security shall be canceled
by the Trustee. Such Definitive Securities issued in exchange for the Global
Security 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 Definitive Securities to the Depositary for delivery to the Persons in
whose names such Definitive Securities are so registered.
Section 2.06. Interest.
(a) Each outstanding Security will bear interest at the rate of 8.57% per
annum (the "Coupon Rate") from the most recent date to which interest has been
paid or duly provided for or, if no interest has been paid or duly provided for,
from August 11, 1998, until the principal thereof becomes due and payable, and
at the Coupon Rate on any overdue principal (and premium, if any) and (to the
extent that payment of such interest is enforceable under applicable law) on any
overdue installment of interest, compounded semi-annually, payable (subject to
the provisions of Article XVI) semi-annually in arrears on February 15 and
August 15 of each year (each, an "Interest Payment Date") commencing on February
15, 1999, to the Person in whose name such Security or any predecessor Security
is registered, at the close of business on the regular record date for such
interest installment, which shall be the 15th day preceding the relevant
Interest Payment Date.
(b) Interest will be computed on the basis of a 360-day year consisting of
twelve 30-day months. In the event that any Interest Payment Date falls on a day
that 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
next succeeding Business Day falls in the next succeeding calendar year, then
such payment shall be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date.
(c) During such time as the Property Trustee is the holder of any
Securities, the Company shall pay any additional amounts on the Securities as
may be necessary in order that the amount of Distributions then due and payable
by the PBI Capital Trust on the outstanding Trust Securities shall not be
reduced as a result of any additional taxes, duties and other governmental
charges to which PBI Capital Trust has become subject as a result of a Tax Event
("Additional Sums").
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Section 2.07. Transfer and Exchange.
(a) Transfer Restrictions. (i) The Series A Securities, and those Series B
Securities with respect to which any Person described in Section 2.04(b)(A), (B)
or (C) is the beneficial owner, may not be transferred except in compliance with
the legend contained in Exhibit A unless otherwise determined by the Company in
accordance with applicable law. Upon any distribution of the Securities
following a Dissolution Event, the Company and the Trustee shall enter into a
supplemental indenture pursuant to Section 9.01 to provide for the transfer
restrictions and procedures with respect to the Securities substantially similar
to those contained in the Trust Agreement to the extent applicable in the
circumstances existing at such time.
(ii) The Securities will be issued and may be transferred only in blocks
having an aggregate principal amount of not less than $100,000. Any such
transfer of the Securities in a block having an aggregate principal amount of
less than $100,000 shall be deemed to be voided and of no legal effect
whatsoever. Any such transferee shall be deemed not to be a holder of such
Securities for any purpose, including, but not limited to the receipt of
payments on such Securities, and such transferee shall be deemed to have no
interest whatsoever in such Securities.
(b) General Provisions Relating to Transfers and Exchanges. To permit
registrations of transfers and exchanges, the Company shall execute and the
Trustee shall authenticate Definitive Securities and Global Securities at the
Trustee's request. All Definitive Securities and Global Securities issued upon
any registration of transfer or exchange of Definitive Securities or Global
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Definitive
Securities or Global Securities surrendered upon such registration of transfer
or exchange.
No service charge shall be made to a holder for any registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any transfer tax or similar governmental charge payable in connection
therewith.
The Company shall not be required to (i) issue, register the transfer of or
exchange Securities during a period beginning at the opening of business 15 days
before the day of mailing of a notice of prepayment or any notice of selection
of Securities for prepayment under Article XIV hereof and ending at the close of
business on the day of such mailing; or (ii) register the transfer of or
exchange any Security so selected for prepayment in whole or in part, except the
unredeemed portion of any Security being redeemed in part.
Prior to due presentment for the registration of a transfer of any
Security, the Trustee, any Agent and the Company may deem and treat the Person
in whose name any Security is registered as the absolute owner of such Security
for the purpose of receiving payment of principal of and premium, if any, and
interest on such Securities, and neither the Trustee, any Agent nor the Company
shall be affected by notice to the contrary.
(c) Exchange of Series A Securities for Series B Securities. The Series A
Securities may be exchanged for Series B Securities pursuant to the terms of the
Exchange Offer. The Trustee shall make the exchange as follows:
The Company shall present the Trustee with an Officers' Certificate
certifying the following:
(A) upon issuance of the Series B Securities, the transactions contemplated
by the Exchange Offer have been consummated; and
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(B) the principal amount of Series A Securities properly tendered in the
Exchange Offer that are represented by a Global Security and the
principal amount of Series A Securities properly tendered in the
Exchange Offer that are represented by Definitive Securities, the name
of each holder of such Definitive Securities, the principal amount
properly tendered in the Exchange Offer by each such holder and the
name and address to which Definitive Securities for Series B Securities
shall be registered and sent for each such holder.
The Trustee, upon receipt of (i) such Officers' Certificate, (ii) an
Opinion of Counsel (x) to the effect that the Series B Securities have been
registered under Section 5 of the Securities Act and the Indenture has been
qualified under the Trust Indenture Act and (y) with respect to the matters set
forth in Section 3(p) of the Registration Rights Agreement and (iii) a Company
Order, shall authenticate (A) a Global Security representing Series B Securities
in aggregate principal amount equal to the aggregate principal amount of Series
A Securities represented by a Global Security indicated in such Officers'
Certificate as having been properly tendered and (B) Definitive Securities
representing Series B Securities registered in the names of, and in the
principal amounts indicated in, such Officers' Certificate.
If the principal amount of the Global Security for the Series B Securities
is less than the principal amount of the Global Security for the Series A
Securities, the Trustee shall make an endorsement on such Global Security for
Series A Securities indicating a reduction in the principal amount represented
thereby.
The Trustee shall deliver such Definitive Securities representing Series B
Securities to the holders thereof as indicated in such Officers' Certificate.
Section 2.08. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, or the Company and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Security, the Company shall issue and the Trustee shall
authenticate a replacement Security if the Trustee's requirements for
replacements of Securities are met. An indemnity bond must be supplied by the
holder that is sufficient in the judgment of the Trustee and the Company to
protect the Company, the Trustee, any agent thereof or any authenticating agent
from any loss that any of them may suffer if a Security is replaced. The Company
or the Trustee may charge for its expenses in replacing a Security.
Every replacement Security is an obligation of the Company and shall be
entitled to all of the benefits of this Indenture equally and proportionately
with all other Securities duly issued hereunder.
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Section 2.09. Temporary Securities.
Pending the preparation of Definitive Securities, the Company may execute,
and upon Company Order the Trustee shall authenticate and make available for
delivery, temporary Securities that are printed, lithographed, typewritten,
mimeographed or otherwise reproduced, in any authorized denomination,
substantially of the tenor of the Definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
conclusively evidenced by their execution of such Securities.
If temporary Securities are issued, the Company shall cause Definitive
Securities to be prepared without unreasonable delay. The Definitive Securities
shall be printed, lithographed or engraved, or provided by any combination
thereof, or in any other manner permitted by the rules and regulations of any
applicable securities exchange, all as determined by the officers executing such
Definitive Securities. After the preparation of Definitive Securities, the
temporary Securities shall be exchangeable for Definitive Securities upon
surrender of the temporary Securities at the office or agency maintained by the
Company for such purpose pursuant to Section 3.02 hereof, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Securities,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, in exchange therefor the same aggregate principal amount of
Definitive Securities of authorized denominations. Until so exchanged, the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as Definitive Securities.
Section 2.10. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Trustee and no one else shall cancel all Securities
surrendered for registration of transfer, exchange, payment, replacement or
cancellation and shall retain or destroy canceled Securities in accordance with
its normal practices (subject to the record retention requirement of the
Exchange Act) unless the Company directs them to be returned to it. The Company
may not issue new Securities to replace Securities that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.
Section 2.11. Defaulted Interest.
Any interest on any Security that is payable, but is not punctually paid or
duly provided for, on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the holder on the relevant
regular record date by virtue of having been such holder; and such Defaulted
Interest shall be paid by the Company, at its election, as provided in clause
(a) or clause (b) below:
(a) The Company may make payment of any Defaulted Interest on Securities to
the Persons in whose names such Securities (or their respective Predecessor
Securities) are registered at the close of business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each such Security and the date of the
proposed payment, and at the same time the Company shall deposit with the
Trustee an amount of money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the benefit of the Persons entitled
to such Defaulted Interest as in this clause provided. Thereupon the Trustee
shall fix a special record date for the payment of such Defaulted Interest which
shall not be more than 15 nor less than 10 days prior to the date of the
proposed payment and not less than 10 days after the receipt by the Trustee
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of the notice of the proposed payment. The Trustee shall promptly notify the
Company of such special record date and, in the name and at the expense of the
Company, shall cause notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first class postage prepaid,
to each Securityholder at his or her address as it appears in the Security
Register, not less than 10 days prior to such special record date. Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest shall be paid to the
Persons in whose names such Securities (or their respective Predecessor
Securities) are registered on such special record date and shall be no longer
payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on any
Securities in any other lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by the
Company to the Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Section 2.12. CUSIP Numbers.
The Company in issuing the Securities may use "CUSIP" numbers (if then
generally in use), and, if so, the Trustee shall use "CUSIP" numbers in notices
of prepayment as a convenience to Securityholders; provided that any such notice
may state that no representation is made as to the correctness of such numbers
either as printed on the Securities or as contained in any notice of a
prepayment and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such prepayment shall not be affected
by any defect in or omission of such numbers. The Company will promptly notify
the Trustee of any change in the CUSIP numbers.
ARTICLE III
PARTICULAR COVENANTS OF THE COMPANY
Section 3.01. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit of the holders of the
Securities that it will duly and punctually pay or cause to be paid the
principal of and premium, if any, and interest on the Securities at the place,
at the respective times and in the manner provided herein. Except as provided in
Section 2.03, each installment of interest on the Securities may be paid by
mailing checks for such interest payable to the order of the holder of each
Security entitled thereto as they appear in the Security Register. The Company
further covenants to pay any and all amounts, including, without limitation,
Additional Sums, as may be required pursuant to Section 2.06(c), Liquidated
Damages, if any, on the dates and in the manner required under the Registration
Rights Agreement and Compounded Interest, as may be required pursuant to Section
16.01.
Section 3.02. Offices for Notices and Payments, etc.
So long as any of the Securities remain outstanding, the Company will
maintain in the Borough of Manhattan, The City of New York, an office or agency
where the Securities may be presented for payment, an office or agency where the
Securities may be presented for registration of transfer and for exchange as in
this Indenture provided and an office or agency where notices and demands to or
upon the Company in respect of the Securities or of this Indenture may be
served. The Company will give to the Trustee written notice of the location of
any such office or agency and of any change of location thereof. Until otherwise
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designated from time to time by the Company in a notice to the Trustee, any such
office or agency for all of the above purposes shall be the office of the
Trustee located at 40 Broad Street, Suite 550, Fifth Floor, New York, New York
10004. In case the Company shall fail to maintain any such office or agency in
the Borough of Manhattan, The City of New York, or shall fail to give such
notice of the location or of any change in the location thereof, presentations
and demands may be made and notices may be served at the Principal Office of the
Trustee.
In addition to any such office or agency, the Company may from time to time
designate one or more offices or agencies outside the Borough of Manhattan, The
City of New York, where the Securities may be presented for payment,
registration of transfer and for exchange in the manner provided in this
Indenture, and the Company may from time to time rescind such designation, as
the Company may deem desirable or expedient; provided, however, that no such
designation or rescission shall in any manner relieve the Company of its
obligation to maintain any such office or agency in the Borough of Manhattan,
The City of New York, for the purposes above mentioned. The Company will give to
the Trustee prompt written notice of any such designation or rescission thereof.
Section 3.03. Appointments to Fill Vacancies in Trustee's Office.
The Company, whenever necessary to avoid or fill a vacancy in the office of
Trustee, will appoint, in the manner provided in Section 6.10, a Trustee, so
that there shall at all times be a Trustee hereunder.
Section 3.04. Provision as to Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee with
respect to the Securities, it will cause such paying agent to execute
and deliver to the Trustee an instrument in which such agent shall
agree with the Trustee, subject to the provision of this Section 3.04,
(1) that it will hold all sums held by it as such agent for the payment
of the principal of and premium, if any, or interest on the
Securities (whether such sums have been paid to it by the Company
or by any other obligor on the Securities) in trust for the benefit
of the holders of the Securities; and
(2) that it will give the Trustee notice of any failure by the Company
(or by any other obligor on the Securities) to make any payment of
the principal of and premium or interest (including Additional Sums
and Compounded Interest, if any) and Liquidated Damages, if any, on
the Securities when the same shall be due and payable.
(b) If the Company shall act as its own paying agent, it will, on or before
each due date of the principal of and premium, if any, or interest on
the Securities, set aside, segregate and hold in trust for the benefit
of the holders of the Securities a sum sufficient to pay such
principal, premium or interest so becoming due and will notify the
Trustee of any failure to take such action and of any failure by the
Company (or by any other obligor under the Securities) to make any
payment of the principal of and premium, if any, or interest on the
Securities when the same shall become due and payable.
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(c) Anything in this Section 3.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction
and discharge with respect to the Securities hereunder, or for any
other reason, pay or cause to be paid to the Trustee all sums held in
trust for such Securities by the Trustee or any paying agent hereunder,
as required by this Section 3.04, such sums to be held by the Trustee
upon the trusts herein contained.
(d) Anything in this Section 3.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 3.04 is
subject to Sections 11.03 and 11.04.
Section 3.05. Certificate to Trustee.
The Company will deliver to the Trustee on or before 120 days after the end
of each fiscal year in each year, commencing with the first fiscal year ending
after the date hereof, so long as Securities are outstanding hereunder, an
Officers' Certificate, one of the signers of which shall be the principal
executive, principal financial or principal accounting officer of the Company
stating that in the course of the performance by the signers of their duties as
officers of the Company they would normally have knowledge of any default by the
Company in the performance of any covenants contained herein, stating whether or
not they have knowledge of any such default and, if so, specifying each such
default of which the signers have knowledge and the nature thereof.
Section 3.06. Compliance with Consolidation Provisions.
The Company will not, while any of the Securities remain outstanding,
consolidate with, or merge into, or merge into itself, or sell or convey all or
substantially all of its property to any other Person unless the provisions of
Article X hereof are complied with.
Section 3.07. Limitation on Dividends.
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 or repurchase or redeem any debt securities of
the Company (including any Other Debentures) that rank pari passu with or junior
in right of payment to the Securities or (iii) make any guarantee payments with
respect to any guarantee by the Company of the debt securities of any Subsidiary
of the Company (including any Other Guarantees) if such guarantee ranks pari
passu or junior in right of payment to the Securities (other than (a) dividends
or distributions in shares of, or options, warrants or rights to subscribe for
or purchase shares of, Common Stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee, (d) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock for another class or series of the Company's capital
stock; (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged; and (f) purchases of Common
Stock related to the issuance of Common Stock or rights under any of the
Company's benefit plans for its directors, officers or employees or any of the
Company's dividend reinvestment plans) if at such time (i) there shall have
occurred any event of which the Company has actual knowledge that (a) is or,
with the giving of notice or the lapse of time, or both, would constitute an
Event of Default and (b) in respect of which the Company shall not have taken
reasonable steps to cure, (ii) if such Securities are held by the Property
Trustee, the Company shall be in
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default with respect to its payment obligations under the Capital Securities
Guarantee or (iii) the Company shall have given notice of its election of the
exercise of its right to extend the interest payment period pursuant to Section
16.01 and any such extension shall be continuing.
Section 3.08. Covenants as to PBI Capital Trust.
In the event Securities are issued to PBI Capital Trust or a trustee of
such trust in connection with the issuance of Trust Securities by PBI Capital
Trust, for so long as such Trust Securities remain outstanding, the Company (i)
will maintain 100% direct or indirect ownership of the Common Securities of PBI
Capital Trust; provided, however, that any successor of the Company, permitted
pursuant to Article X, may succeed to the Company's ownership of such Common
Securities, (ii) will not cause, as sponsor of PBI Capital Trust, or permit, as
holder of the Common Securities, the dissolution, winding-up or termination of
the Trust, except in connection with a distribution of the Securities as
provided in the Trust Agreement and in connection with certain mergers,
consolidations or amalgamations and (iii) will use its reasonable best efforts
to cause PBI Capital Trust (a) to remain a business trust, except in connection
with a distribution of Securities to the holders of Trust Securities in
liquidation of the Trust, the redemption of all of the Trust Securities of PBI
Capital Trust or certain mergers, consolidations or amalgamations, each as
permitted by the Trust Agreement of PBI Capital Trust, and (b) to otherwise
continue to be treated as a grantor trust and not an association taxable as a
corporation for United States federal income tax purposes.
Section 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the Securities to PBI
Capital Trust and in connection with the sale of the Trust Securities by PBI
Capital Trust, the Company, in its capacity as borrower with respect to the
Securities, shall:
(a) pay all costs and expenses relating to the offering, sale and issuance
of the Securities, including commissions to the initial purchasers payable
pursuant to the Purchase Agreement, fees and expenses in connection with any
exchange offer, filing of a shelf registration statement or other action to be
taken pursuant to the Registration Rights Agreement and compensation of the
Trustee in accordance with the provisions of Section 6.06;
(b) pay all costs and expenses of the Trust, including, but not limited to,
costs and expenses relating to the organization of PBI Capital Trust, the
offering, sale and issuance of the Trust Securities (including commissions to
the initial purchaser in connection therewith), the fees and expenses of the
Property Trustee and the Delaware Trustee, the costs and expenses relating to
the operation of PBI Capital Trust, including without limitation, costs and
expenses of accountants, attorneys, statistical or bookkeeping services,
expenses for printing and engraving and computing or accounting equipment,
paying agent(s), registrar(s), transfer agent(s), duplicating, travel and
telephone and other telecommunications expenses and costs and expenses incurred
in connection with the acquisition, financing, and disposition of assets of PBI
Capital Trust;
(c) be primarily and fully liable for any indemnification obligations
arising with respect to the Trust Agreement;
(d) pay any and all taxes (other than United States withholding taxes
attributable to PBI Capital Trust or its assets) and all liabilities, costs and
expenses with respect to such taxes of the Trust; and
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(e) pay all other fees, expenses, debts and obligations (other than in
respect of the Trust Securities) related to PBI Capital Trust.
Section 3.10. Payment Upon Resignation or Removal.
Upon termination of this Indenture or the removal or resignation of the
Trustee, unless otherwise stated, the Company shall pay to the Trustee all
amounts accrued and owing to the date of such termination, removal or
resignation. Upon termination of the Trust Agreement or the removal or
resignation of the Delaware Trustee or the Property Trustee, as the case may be,
pursuant to Section 5.7 of the Trust Agreement, the Company shall pay to the
Delaware Trustee or the Property Trustee, as the case may be, all amounts
accrued and owing to the date of such termination, removal or resignation.
Section 3.11. Reserve Account.
(a) The Debenture Trustee, on behalf of the Company, hereby establishes the
Reserve Account to be held (together with all property therein from time to
time) by and maintained with the Debenture Trustee in accordance with the
provisions hereof. The Reserve Account shall be held as one or more segregated
accounts and shall be titled as follows: "First Union Trust Company, National
Association, as the Debenture Trustee for the 8.57% Junior Subordinated
Deferrable Interest Debentures, due August 15, 2028-- Reserve Account." On the
Closing Date, the Company shall make an initial deposit into the Reserve Account
in an amount equal to $857,000. As set forth in paragraph (h) of this Section
3.11, the Debenture Trustee shall invest the amounts deposited in the Reserve
Account in Eligible Investments. Except as set forth in this Section 3.11, at
all times that the Company does not meet the Financial Ratio-Capacity Test, the
Company shall maintain the Reserve Account Balance at an amount equal to the
Reserve Account Required Amount.
(b) To the extent that the Company's available funds are insufficient to
pay the interest that is due and payable on the Securities on an Interest
Payment Date, the amount on deposit in the Reserve Account shall be used to make
such payment, unless the Company has elected to defer the payment of interest
under Section 16.01. The Company shall notify the Debenture Trustee at least 10
days prior to any Interest Payment Date of the need for funds to be withdrawn
from the Reserve Account to make an interest payment on the Securities. The
Debenture Trustee shall promptly, but in no event later then two Business Days
prior to any such Interest Payment Date, withdraw the additional funds needed by
the Company to make such interest payment on the Securities. The Debenture
Trustee is authorized to sell Eligible Investments held in the Reserve Account
in an amount so as to yield cash proceeds therefrom to cover interest payments
due on the Securities on an Interest Payment Date; provided, however, that the
Debenture Trustee shall not be liable or responsible for losses resulting from
its sale of Eligible Investments. Any excess cash remaining from the sale of
Eligible Investments in excess of the amount needed to make interest payments
shall remain in the Reserve Account and be reinvested in other Eligible
Investments in accordance with paragraph (h) of this Section 3.11.
(c) The Debenture Trustee shall deliver to the Company by the fifteenth day
of each calendar quarter a report indicating (i) the Reserve Account Balance
with the identity of the investments included therein, and (ii) the outstanding
principal balance of the Securities, as of the end of the previous calendar
quarter. The Company shall pay any Reserve Account Shortfall Amount that, based
on the most recent report from the Debenture Trustee, exists with respect to the
Reserve Account, to the Debenture Trustee for deposit in the Reserve Account
within 24 months after the later of (i) the receipt of such report from the
Debenture Trustee, or (ii) the termination of any Extended Interest Payment
Period then in effect; provided, however,
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that if, based on the most recent report from the Debenture Trustee, the
majority in value of the Eligible Investments in the Reserve Account shall be
Eligible Investments described in clause (vi) of the definition of Eligible
Investments set forth in Section 1.01 hereof, the Company shall, within 180 days
after the later of (i) the receipt of such report from the Debenture Trustee, or
(ii) the termination of any Extended Interest Payment Period then in effect, pay
any Reserve Account Shortfall Amount, as determined based on the report from the
Debenture Trustee dated the date closest to the date determined by clause (i) or
(ii) above, to the Debenture Trustee for deposit in the Reserve Account. Upon
receipt of any funds (or Eligible Investments) from the Company, the Debenture
Trustee shall promptly deposit such funds (or Eligible Investments) in the
Reserve Account and provide a written confirmation to the Company acknowledging
a reduction or payment in full of the Reserve Account Shortfall Amount.
(d) If, based on any report delivered by the Debenture Trustee, the balance
in the Reserve Account is greater than the Reserve Account Required Amount, the
Debenture Trustee, at the written direction of a Responsible Officer of the
Company, shall sell an amount of Eligible Investments approximately equal to the
amount in excess of the Reserve Account Required Amount, release and pay such
amount (a "Reserve Account Withdrawal") to the Company.
(e) The Company may deliver to the Debenture Trustee an Officers'
Certificate, together with a letter from the Company's independent certified
public accountant confirming the accuracy of the Officers' Certificate
("Accountant's Letter"), demonstrating in reasonable detail that the Financial
Ratio-Capacity Test has been met for two consecutive quarters and requesting
that any amounts on deposit in the Reserve Account be paid or distributed to the
Company by the Debenture Trustee. Upon receipt of such an Officers' Certificate
and Accountant's Letter, the Debenture Trustee shall return the requested amount
on deposit in the Reserve Account to the Company. Thereafter, the Company shall
provide, on a quarterly basis, a Quarterly Officers' Certificate certifying that
the Financial Ratio-Capacity Test continues to be met. If the Quarterly
Officers' Certificate demonstrates that the Financial Ratio-Capacity Test is no
longer met, or if the Company fails to deliver the Quarterly Officers'
Certificate, the Company shall deposit additional funds into the Reserve Account
until the Reserve Account Balance is equal to or greater than the Reserve
Account Required Amount within 24 months after the later of (i) the date of the
most recent Quarterly Officers' Certificate that demonstrated that the Financial
Ratio-Capacity Test was met or (ii) the termination of any Extended Interest
Payment Period then in effect.
(f) The Company agrees to treat all money, security and other property on
deposit in the Reserve Account (including income and gains or losses thereon)
(the "Reserve Account Property") as its assets (and earnings) for federal, state
and local tax purposes and not to sell, transfer or otherwise dispose of any
Reserve Account Property or its interest therein.
(g) The Company and the Debenture Trustee agree that any cash or assets
held in the Reserve Account shall be held solely in the name of the Debenture
Trustee, as described herein, and shall be subject to the exclusive custody and
control of the Debenture Trustee.
(h) Money in the Reserve Account established hereunder shall, from time to
time, at the written direction of a Responsible Officer of the Company, be
invested by the Debenture Trustee in Eligible Investments and shall mature, or
be subject to repurchase, withdrawal without penalty, or redemption at the
option of the holder, on or before the dates on which such amounts are
reasonably expected to be needed for the purposes hereof. So long as no Event of
Default has occurred and is continuing hereunder, the Debenture Trustee shall be
permitted to, from time to time, at the written direction of a Responsible
Officer of the Company, substitute one Eligible Investment for another Eligible
Investment.
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If the Company shall not give directions as to the investment of money held
by the Debenture Trustee, the Debenture Trustee shall make such investments in
Eligible Investments as are permitted under applicable law and as it deems
advisable.
The Debenture Trustee shall not be liable or responsible for any loss
resulting from any investment or deposit made in accordance with the provisions
of this Section or resulting from any sale by the Debenture Trustee of any such
investment or deposit. For the purpose of this Section, investments and deposits
shall be valued at the then market value thereof. The Debenture Trustee may
request an opinion of legal counsel satisfactory to it as to whether an
investment or deposit directed under this Section is appropriate and may rely
upon such opinion.
(i) Holders of the Securities will have no interest in the Reserve Account
unless and until funds therein are used to make an interest payment. Any
interest in the funds withdrawn from the Reserve Account that holders of the
Securities may obtain will be subordinated and junior to the interests of
holders of Senior Indebtedness.
(j) On any date on or after the date this Indenture ceases to be in effect
pursuant to Section 11.01 hereof, the Debenture Trustee shall withdraw all cash
amounts and securities then on deposit in the Reserve Account and deliver or
distribute such amounts to the Company or its designee in accordance with the
provisions of Section 11.03 hereof.
ARTICLE IV
SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
Section 4.01. Securityholders' Lists.
The Company covenants and agrees that it will furnish or cause to be
furnished to the Trustee:
(a) on a semi-annual basis on each regular record date for the Securities,
a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Securityholders as of such record date; and
(b) at such other times as the Trustee may request in writing, within 30
days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to
the time such list is furnished,
except that, no such lists need be furnished so long as the Trustee is in
possession thereof by reason of its acting as Security registrar.
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Section 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the
holders of the Securities (1) contained in the most recent list
furnished to it as provided in Section 4.01 or (2) received by it in
the capacity of Securities registrar (if so acting) hereunder. The
Trustee may destroy any list furnished to it as provided in Section
4.01 upon receipt of a new list so furnished.
(b) In case three or more holders of Securities (hereinafter referred to as
"applicants") apply in writing to the Trustee and furnish to the
Trustee reasonable proof that each such applicant has owned a Security
for a period of at least six months preceding the date of such
application, and such application states that the applicants desire to
communicate with other holders of Securities or with holders of all
Securities with respect to their rights under this Indenture and is
accompanied by a copy of the form of proxy or other communication which
such applicants propose to transmit, then the Trustee shall within 5
Business Days after the receipt of such application, at its election,
either:
(1) afford such applicants access to the information preserved at the
time by the Trustee in accordance with the provisions of subsection
(a) of this Section 4.02, or
(2) inform such applicants as to the approximate number of holders of
all Securities, whose names and addresses appear in the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section 4.02, and as to the
approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such
application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall, upon the written request of such
applicants, mail to each Securityholder whose name and address appear
in the information preserved at the time by the Trustee in accordance
with the provisions of subsection (a) of this Section 4.02 a copy of
the form of proxy or other communication which is specified in such
request with reasonable promptness after a tender to the Trustee of the
material to be mailed and of payment, or provision for the payment, of
the reasonable expenses of mailing, unless within five days after such
tender, the Trustee shall mail to such applicants and file with the
Commission, together with a copy of the material to be mailed, a
written statement to the effect that, in the opinion of the Trustee,
such mailing would be contrary to the best interests of the holders of
Securities of such series or all Securities, as the case may be, or
would be in violation of applicable law. Such written statement shall
specify the basis of such opinion. If the Commission, after opportunity
for a hearing upon the objections specified in the written statement so
filed, shall enter an order refusing to sustain any of such objections
or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall
enter an order so declaring, the Trustee shall mail copies of such
material to all such Securityholders with reasonable promptness after
the entry of such order and the renewal of such tender; otherwise the
Trustee shall be relieved of any obligation or duty to such applicants
respecting their application.
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(c) Each and every holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the Company nor
the Trustee nor any paying agent shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of
the holders of Securities in accordance with the provisions of
subsection (b) of this Section 4.02, regardless of the source from
which such information was derived, and that the Trustee shall not be
held accountable by reason of mailing any material pursuant to a
request made under said subsection (b).
Section 4.03. Reports by Company.
(a) The Company covenants and agrees to file with the Trustee, within 15
days after the date on which 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 said Commission may from time to time by rules
and regulations prescribe) which the Company may be required to file
with the Commission pursuant to Section 13 or Section 15(d) of the
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 rules and
regulations prescribed from time to time by the Commission, such of the
supplementary and periodic information, documents and reports which may
be required pursuant to Section 13 of the Exchange Act in respect of a
security listed and registered on a national securities exchange as may
be prescribed from time to time in such rules and regulations.
(b) 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 said 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 to all holders of
Securities, as the names and addresses of such holders appear upon the
Security 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 4.03 as may be required by rules and regulations
prescribed from time to time by the Commission.
(d) Delivery of such reports, information and documents to the Trustee is
for informational purposes only and the Trustee's receipt of such shall
not constitute constructive notice of any information contained therein
or determinable from information contained therein, including the
Company's compliance with any of its covenants hereunder (as to which
the Trustee is entitled to rely exclusively on Officers' Certificates).
(e) So long as is required for an offer or sale of the Securities to
qualify for an exemption under Rule 144A under the Securities Act, the
Company shall, upon request, provide the information required by clause
(d)(4) thereunder to each Securityholder and to each beneficial owner
and prospective purchaser of Securities identified by each
Securityholder of Restricted Securities, unless such information is
furnished to the Commission pursuant to Section 13 or 15(d) of the
Exchange Act.
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Section 4.04. Reports by the Trustee.
(a) The Trustee shall transmit to Securityholders such reports concerning
the Trustee and its actions under this Indenture as may be required
pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant thereto. If required by Section 313(a) of the Trust
Indenture Act, the Trustee shall, within sixty days after each January
31 following the date of this Indenture, commencing January 31, 1999,
deliver to Securityholders a brief report, dated as of such January 31,
which complies with the provisions of such Section 313(a) to the extent
such Section is applicable to the provisions of this Indenture.
(b) A copy of each such report shall, at the time of such transmission to
Securityholders, be filed by the Trustee with each stock exchange, if
any, upon which the Securities are listed, with the Commission and with
the Company. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange.
ARTICLE V
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
Section 5.01. Events of Default.
One or more of the following events of default shall constitute an Event of
Default hereunder:
(a) default in the payment of any interest (including Additional Sums and
Compounded Interest, if any) and Liquidated Damages, if any, upon any
Security or any Other Debentures when it becomes 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 hereof shall not constitute a default in the
payment of interest for this purpose; or
(b) default in the payment of all or any part of the principal of (or
premium, if any, on) any Security or any Other Debentures as and when
the same shall become due and payable either at maturity, upon
redemption, by declaration of acceleration of maturity or otherwise; or
(c) default in the performance, or breach, of any covenant or warranty of
the Company in this Indenture in any material respect (other than a
covenant or warranty a default in whose performance or whose breach is
elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 90 days after there has been
given, by registered or certified mail, to the Company by the Trustee
or to the Company and the Trustee by the holders of at least 25% in
aggregate principal amount of the outstanding Securities a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company in an involuntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of the Company
or for any substantial
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part of its property, or ordering the winding-up or liquidation of its
affairs and such decree or order shall remain unstayed and in effect
for a period of 90 consecutive days; or
(e) the Company shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect,
shall consent to the entry of an order for relief in an involuntary
case under any such law, or shall consent to the appointment of or
taking possession by a receiver, liquidator, assignee, trustee,
custodian, sequestrator (or other similar official) of the Company or
of any substantial part of its property, or shall make any general
assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due.
If an Event of Default with respect to Securities at the time outstanding
occurs and is continuing, then in every such case the Trustee or the holders of
not less than 25% in aggregate principal amount of the Securities then
outstanding may declare the principal amount of all Securities to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by the holders of the outstanding Securities), and upon any such
declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that if, at
any time after the principal of the Securities shall have been so declared due
and payable, and before any judgment or decree for the payment of the monies due
shall have been obtained or entered as hereinafter provided, (i) the Company
shall pay or shall deposit with the Trustee a sum sufficient to pay (A) all
matured installments of interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, upon all the Securities and
the principal of and premium, if any, on any and all Securities which shall have
become due otherwise than by acceleration (with interest upon such principal and
premium, if any, and, to the extent that payment of such interest is enforceable
under applicable law, on overdue installments of interest, at the same rate as
the rate of interest specified in the Securities to the date of such payment or
deposit) and (B) such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith, and (ii) any and all Events of Default under
the Indenture, other than the non-payment of the principal of the Securities
which shall have become due solely by such declaration of acceleration, shall
have been cured, waived or otherwise remedied as provided herein, then, in every
such case, the holders of a majority in aggregate principal amount of the
Securities then outstanding, by written notice to the Company and to the
Trustee, may rescind and annul such declaration and its consequences, but no
such waiver or rescission and annulment shall extend to or shall affect any
subsequent default or shall impair any right consequent thereon.
In case the Trustee shall have proceeded to enforce any right under this
Indenture and such proceedings shall have been discontinued or abandoned because
of such rescission or annulment or for any other reason or shall have been
determined adversely to the Trustee, then and in every such case the Company,
the Trustee and the holders of the Securities shall be restored respectively to
their several positions and rights hereunder, and all rights, remedies and
powers of the Company, the Trustee and the holders of the Securities shall
continue as though no such proceeding had been taken.
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Section 5.02. Payment of Securities on Default; Suit Therefor.
The Company covenants that (a) in case default shall be made in the payment
of any installment of interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, upon any of the Securities as
and when the same shall become due and payable, and such default shall have
continued for a period of 30 days, or (b) in case default shall be made in the
payment of the principal of or premium, if any, on any of the Securities as and
when the same shall have become due and payable, whether at maturity of the
Securities or upon redemption or by declaration or otherwise, then, upon demand
of the Trustee, the Company will pay to the Trustee, for the benefit of the
holders of the Securities, the whole amount that then shall have become due and
payable on all such Securities for principal and premium, if any, or interest
(including Additional Sums and Compounded Interest, if any) and Liquidated
Damages, if any, or both, as the case may be, with interest upon the overdue
principal and premium, if any, and (to the extent that payment of such interest
is enforceable under applicable law and, if the Securities are held by PBI
Capital Trust or a trustee of such trust, without duplication of any other
amounts paid by PBI Capital Trust or trustee in respect thereof) upon the
overdue installments of interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including a reasonable
compensation to the Trustee, its agents, attorneys and counsel, and any expenses
or liabilities incurred by the Trustee hereunder other than through its
negligence or bad faith.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the
Securities and collect in the manner provided by law out of the property of the
Company or any other obligor on the Securities wherever situated the monies
adjudged or decreed to be payable.
In case there shall be pending proceedings for the bankruptcy or for the
reorganization of the Company or any other obligor on the Securities under Title
11, United States Code, or any other applicable law, or in case a receiver or
trustee shall have been appointed for the property of the Company or such other
obligor, or in the case of any other similar judicial proceedings relative to
the Company or other obligor upon the Securities, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Securities shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 5.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of principal
and interest owing and unpaid in respect of the Securities and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for reasonable compensation to the Trustee and each
predecessor Trustee, and their respective agents, attorneys and counsel, and for
reimbursement of all expenses and liabilities incurred, and all advances made,
by the Trustee and each predecessor Trustee, except as a result of negligence or
bad faith) and of the Securityholders allowed in such judicial proceedings
relative to the Company or any other obligor on the Securities, or to the
creditors or property of the Company or such other obligor, unless prohibited by
applicable law and regulations, to vote on behalf of the holders of the
Securities in any election of a trustee or a standby trustee in arrangement,
reorganization, liquidation or other bankruptcy or insolvency proceedings or
person performing similar functions in comparable proceedings, and to collect
and receive any monies or other property payable or deliverable on any such
claims, and to distribute the same after the
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deduction of its charges and expenses; and any receiver, assignee or trustee in
bankruptcy or reorganization is hereby authorized by each of the Securityholders
to make such payments to the Trustee, and, in the event that the Trustee shall
consent to the making of such payments directly to the Securityholders, to pay
to the Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Trustee, each predecessor Trustee and their respective
agents, attorneys and counsel, and all other expenses and liabilities incurred,
and all advances made, by the Trustee and each predecessor Trustee except as a
result of negligence or bad faith.
Nothing herein contained shall be construed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Securityholder any
plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any holder thereof or to authorize the Trustee to
vote in respect of the claim of any Securityholder in any such proceeding.
All rights of action and of asserting claims under this Indenture, or under
any of the Securities, may be enforced by the Trustee without the possession of
any of the Securities, or the production thereof on any trial or other
proceeding relative thereto, and any such suit or proceeding instituted by the
Trustee shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall be for the ratable benefit of the holders of the
Securities.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Securities, and it shall not be necessary to make any holders of the
Securities parties to any such proceedings.
Section 5.03. Application of Monies Collected by Trustee.
Any monies collected by the Trustee shall be applied in the order
following, at the date or dates fixed by the Trustee for the distribution of
such monies, upon presentation of the Securities in respect of which monies have
been collected, and stamping thereon the payment, if only partially paid, and
upon surrender thereof if fully paid:
First: To the payment of costs and expenses of collection applicable to the
Securities and reasonable compensation to the Trustee, its agents, attorneys and
counsel, and of all other expenses and liabilities incurred, and all advances
made, by the Trustee except as a result of its negligence or bad faith;
Second: To the payment of all Senior Indebtedness of the Company if and to
the extent required by Article XV;
Third: In case the principal of the outstanding Securities in respect of
which monies have been collected shall not have become due and be unpaid, to the
payment of the amounts then due and unpaid upon Securities for principal of (and
premium, if any) and interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, on the Securities, in respect
of which or for the benefit of which money has been collected, ratably, without
preference or priority of any kind, according to the amounts due on such
Securities for principal (and premium, if any) and interest, respectively; and
Fourth: To the Company.
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Section 5.04. Proceedings by Securityholders.
No holder of any Security shall have any right by virtue of or by availing
of 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
such holder previously shall have given to the Trustee written notice of an
Event of Default and of the continuance thereof with respect to the Securities
specifying such Event of Default, as hereinbefore provided, and unless also the
holders of not less than 25% in aggregate principal amount of the Securities
then outstanding shall have made written request upon the Trustee to institute
such action, suit or proceeding in its own name as Trustee hereunder and 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 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, it
being understood and intended, and being expressly covenanted by the taker and
holder of every Security with every other taker and holder and the Trustee, that
no one or more holders of Securities shall have any right in any manner whatever
by virtue of or by availing of any provision of this Indenture to affect,
disturb or prejudice the rights of any other holder of Securities, or to obtain
or seek to obtain priority over or preference to any other such holder, 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 Securities.
Notwithstanding any other provisions in this Indenture, however, the right
of any holder of any Security to receive payment of the principal of (premium,
if any) and interest (including Additional Sums and Compounded Interest, if any)
and Liquidated Damages, if any, on such Security, on or after the same shall
have become due and payable, or to institute suit for the enforcement of any
such payment, shall not be impaired or affected without the consent of such
holder and by accepting a Security hereunder it is expressly understood,
intended and covenanted by the taker and holder of every Security with every
other such taker and holder and the Trustee, that no one or more holders of
Securities shall have any right in any manner whatsoever by virtue or by
availing of any provision of this Indenture to affect, disturb or prejudice the
rights of the holders of any other Securities, or to obtain or seek to obtain
priority over or preference to any other such holder, 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 Securities. For the protection and
enforcement of the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given either at law or in
equity.
The Company and the Trustee acknowledge that pursuant to the Trust
Agreement, the holders of Capital Securities are entitled, in the circumstances
and subject to the limitations set forth therein, to commence a Direct Action
with respect to any Event of Default under this Indenture and the Securities.
Section 5.05. Proceedings by Trustee.
In case an Event of Default occurs with respect to Securities and is
continuing, the Trustee may in its discretion proceed to protect and enforce the
rights vested in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce any of such
rights, either by suit in equity or by action at law or by proceeding in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture, or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
Section 5.06. Remedies Cumulative and Continuing.
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All powers and remedies given by this Article V to the Trustee or to the
Securityholders shall, to the extent permitted by law, be deemed cumulative and
not exclusive of any other powers and remedies available to the Trustee or the
holders of the Securities, by judicial proceedings or otherwise, to enforce the
performance or observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to the Securities, and no delay
or omission of the Trustee or of any holder of any of the Securities to exercise
any right or power accruing upon any Event of Default occurring and continuing
as aforesaid shall impair any such right or power, or shall be construed to be a
waiver of any such default or an acquiescence therein; and, subject to the
provisions of Section 5.04, every power and remedy given by this Article V or by
law to the Trustee or to the Securityholders may be exercised from time to time,
and as often as shall be deemed expedient, by the Trustee or by the
Securityholders.
Section 5.07. Direction of Proceedings and Waiver of Defaults by Majority
of Securityholders.
The holders of a majority in aggregate principal amount of the Securities
at the time outstanding shall have the right to direct the time, method, and
place of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee; provided, however, that
(subject to the provisions of Section 6.01) the Trustee shall have the right to
decline to follow any such direction if the Trustee shall determine that the
action so directed would be unjustly prejudicial to the holders not taking part
in such direction or if the Trustee being advised by counsel determines that the
action or proceeding so directed may not lawfully be taken or if the Trustee in
good faith by its board of directors or trustees, executive committee, or a
trust committee of directors or trustees and/or Responsible Officers shall
determine that the action or proceedings so directed would involve the Trustee
in personal liability. Prior to any declaration accelerating the maturity of the
Securities, the holders of a majority in aggregate principal amount of the
Securities at the time outstanding may on behalf of the holders of all of the
Securities waive any past default or Event of Default and its consequences
except a default (a) in the payment of principal of or premium, if any, or
interest (including Additional Sums and Compounded Interest, if any) and
Liquidated Damages, if any, on any of the Securities or (b) in respect of
covenants or provisions hereof which cannot be modified or amended without the
consent of the holder of each Security affected; provided, however, that if the
Securities are held by the Property Trustee, such waiver or modification to such
waiver shall not be effective until the holders of a majority in aggregate
liquidation amount of Trust Securities shall have consented to such waiver or
modification to such waiver; provided further, that if the consent of the holder
of each outstanding Security is required, such waiver shall not be effective
until each holder of the Trust Securities 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 Securities shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
5.07, said default or Event of Default shall for all purposes of the Securities
and this Indenture be deemed to have been cured and to be not continuing.
Section 5.08. Notice of Defaults.
(a) The Trustee shall, within 90 days after the occurrence of a default
with respect to the Securities mail to all Securityholders, as the names and
addresses of such holders appear upon the Security Register, notice of all
defaults known to the Trustee, unless such defaults shall have been cured before
the giving of such notice (the term "defaults" for the purpose of this Section
5.08 being hereby defined to be the events specified in clauses (a), (b), (c),
(d) and (e) of Section 5.01, not including periods of grace, if any, provided
for therein, and irrespective of the giving of written notice specified in
clause (c) of Section 5.01); and
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provided that, except in the case of default in the payment of the principal of
or premium, if any, or interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, on any of the Securities, 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 Securityholders; and
provided further, that in the case of any default of the character specified in
Section 5.01(c) no such notice to Securityholders shall be given until at least
60 days after the occurrence thereof but shall be given within 90 days after
such occurrence.
(b) Within five Business Days after the occurrence of any Event of Default
actually known to the Trustee, the Trustee shall transmit notice of such Event
of Default to all Securityholders, unless such Event of Default shall have been
cured or waived.
Section 5.09. Undertaking to Pay Costs.
All parties to this Indenture agree, and each holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees and
expenses, against any party litigant in such suit, having due regard to the
merits and good faith of the claims or defenses made by such party litigant; but
the provisions of this Section 5.09 shall not apply to any suit instituted by
the Trustee, to any suit instituted by any Securityholder, or group of
Securityholders, holding in the aggregate more than 10% in aggregate principal
amount of the Securities outstanding, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest (including Additional Sums and Compounded Interest,
if any) and Liquidated Damages, if any, on any Security against the Company on
or after the same shall have become due and payable.
ARTICLE VI
CONCERNING THE TRUSTEE
Section 6.01. Duties and Responsibilities of Trustee.
With respect to the holders of the Securities issued hereunder, the
Trustee, prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred, undertakes to perform
such duties and only such duties as are specifically set forth in this
Indenture. In case an Event of Default has occurred (which has not been cured or
waived) the Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as
a prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
No provision of this Indenture shall be construed to relieve the Trustee
from liability for its own negligent action, its own negligent failure to act or
its own willful misconduct, except that
(a) prior to the occurrence of an Event of Default and after the curing or
waiving of all Events of Default which may have occurred
(1) 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
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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
(2) in the absence of bad faith on the part of the Trustee, the Trustee
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming to
the requirements of this Indenture; but, in the case of any such
certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer or Officers, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith, in accordance with the
direction of the Securityholders pursuant to Section 5.07, relating to
the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, 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.
Section 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(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, bond, note, debenture
or other paper or document believed by it to be genuine and to have
been signed or presented by the proper party or parties;
(b) any request, direction, order or demand of the Company mentioned herein
may be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
Board Resolution may be evidenced to the Trustee by a copy thereof
certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its selection and any advice or
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or suffered omitted by it
hereunder in good faith and in accordance with such advice or Opinion
of Counsel;
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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 which may be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by it
in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (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 man would exercise or use under the
circumstances in the conduct of his own affairs;
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval,
bond, debenture, coupon or other paper or document, unless requested in
writing to do so by the holders of a majority in aggregate principal
amount of the outstanding Securities; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding; 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
(including any Authenticating Agent) or attorneys, and the Trustee
shall not be responsible for any misconduct or negligence on the part
of any such agent or attorney appointed by it with due care.
Section 6.03. No Responsibility for Recitals, etc.
The recitals contained herein and in the Securities (except in the
certificate of authentication of the Trustee or the Authenticating Agent) shall
be taken as the statements of the Company and the Trustee and the Authenticating
Agent assume no responsibility for the correctness of the same. The Trustee and
the Authenticating Agent make no representations as to the validity or
sufficiency of this Indenture or of the Securities. The Trustee and the
Authenticating Agent shall not be accountable for the use or application by the
Company of any Securities or the proceeds of any Securities authenticated and
delivered by the Trustee or the Authenticating Agent in conformity with the
provisions of this Indenture.
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Section 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer Agents
or Registrar May Own Securities.
The Trustee or any Authenticating Agent or any paying agent or any transfer
agent or any Security registrar, in its individual or any other capacity, may
become the owner or pledgee of Securities with the same rights it would have if
it were not Trustee, Authenticating Agent, paying agent, transfer agent or
Security registrar.
Section 6.05. Monies to be Held in Trust.
Subject to the provisions of Section 11.04, all monies received by the
Trustee or any paying agent shall, until used or applied as herein provided, be
held in trust for the purpose for which they were received, but need not be
segregated from other funds except to the extent required by law. The Trustee
and any paying agent shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
So long as no Event of Default shall have occurred and be continuing, all
interest allowed on any such monies shall be paid from time to time upon the
written order of the Company, signed by the Chairman of the Board of Directors,
the President or a Vice President or the Chief Financial Officer, the Treasurer
or an Assistant Treasurer of the Company.
Section 6.06. Compensation and Expenses of Trustee.
The Company, as issuer of Securities under this Indenture, covenants and
agrees to pay to the Trustee from time to time, and the Trustee shall be
entitled to, such compensation as shall be agreed to in writing between the
Company and the Trustee (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust), and the Company
will pay or reimburse the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance with
any of the provisions of this Indenture (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence or bad faith. The Company also covenants to indemnify
each of the Trustee or any predecessor Trustee (and its officers, agents,
directors and employees) for, and to hold it harmless against, any and all loss,
damage, claim, action, suit, liability or expense including taxes (other than
taxes based on the income of the Trustee) incurred without negligence or bad
faith on the part of the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs and expenses of
defending itself against any claim of liability in the premises. The obligations
of the Company under this Section 6.06 to compensate and indemnify the Trustee
and to pay or reimburse the Trustee for expenses, disbursements and advances
shall constitute additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon all property and
funds held or collected by the Trustee as such, except funds held in trust for
the benefit of the holders of particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 5.01(d) or Section 5.01(e), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
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Section 6.07. Officers' Certificate as Evidence.
Except as otherwise provided in Sections 6.01 and 6.02, whenever in the
administration of the provisions of this Indenture the Trustee shall deem it
necessary or desirable that a matter be proved or established prior to taking or
omitting any action hereunder, such matter (unless other evidence in respect
thereof is herein specifically prescribed) may, in the absence of negligence or
bad faith on the part of the Trustee, be deemed to be conclusively proved and
established by an Officers' Certificate delivered to the Trustee, and such
certificate, in the absence of negligence or bad faith on the part of the
Trustee, shall be full warrant to the Trustee for any action taken or omitted by
it under the provisions of this Indenture upon the faith thereof.
Section 6.08. Conflicting Interest of Trustee.
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 to the extent such Section applies to the provisions of
this Indenture.
Section 6.09. Eligibility of Trustee.
The Trustee hereunder shall at all times be a corporation organized and
doing business under the laws of the United States of America or any state or
territory thereof or of the District of Columbia or a corporation or other
Person 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 million U.S. dollars ($50,000,000) and subject to supervision or
examination by federal, state, territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least annually, pursuant
to law or to the requirements of the aforesaid supervising or examining
authority, then for the purposes of this Section 6.09 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.
The Company may not, nor may any Person directly or indirectly controlling,
controlled by, or under common control with the Company, serve as Trustee.
In case at any time the Trustee shall cease to be eligible in accordance
with the provisions of this Section 6.09, the Trustee shall resign immediately
in the manner and with the effect specified in Section 6.10.
Section 6.10. Resignation or Removal of Trustee.
(a) The Trustee, or any trustee or trustees hereafter appointed, may at any
time resign by giving written notice of such resignation to the Company
and by mailing notice thereof to the holders of the Securities at their
addresses as they shall appear on the Security register. Upon receiving
such notice of resignation, the Company shall promptly appoint a
successor trustee or trustees by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee
and one copy to the successor trustee. If no successor trustee shall
have been so appointed and have accepted appointment within 60 days
after the mailing of such notice of resignation to the affected
Securityholders, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee, or
any Securityholder who has been a bona fide holder of a Security for at
least six months
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may, subject to the provisions of Section 5.09, on behalf of himself
and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after
such notice, if any, as it may deem proper and prescribe, appoint a
successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with the provisions of Section
6.08 after written request therefor by the Company or by any
Securityholder who has been a bona fide holder of a Security or
Securities for at least six months, or
(2) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.09 and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting, or shall be adjudged
a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take
charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then,
in any such case, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee so removed and
one copy to the successor trustee, or, subject to the provisions of
Section 5.09, any Securityholder who has been a bona fide holder of
a Security for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of
a successor trustee. Such court may thereupon, after such notice,
if any, as it may deem proper and prescribe, remove the Trustee and
appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the
Securities at the time outstanding may at any time remove the Trustee
and nominate a successor trustee, which shall be deemed appointed as
successor trustee unless within 10 days after such nomination the
Company objects thereto or if no successor trustee shall have been so
appointed and shall have accepted appointment within 30 days after such
removal, in which case the Trustee so removed or any Securityholder,
upon the terms and conditions and otherwise as in subsection (a) of
this Section 6.10 provided, may petition any court of competent
jurisdiction for an appointment of a successor trustee.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section
6.10 shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11.
Section 6.11. Acceptance by Successor Trustee.
Any successor trustee appointed as provided in Section 6.10 shall execute,
acknowledge and deliver to the Company and to its predecessor trustee an
instrument accepting such appointment hereunder, and thereupon the resignation
or removal of the retiring trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, duties and
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obligations of its predecessor hereunder, with like effect as if originally
named as trustee herein; but, nevertheless, on the written request of the
Company or of the successor trustee, the trustee ceasing to act shall, upon
payment of any amounts then due it pursuant to the provisions of Section 6.06,
execute and deliver an instrument transferring to such successor trustee all the
rights and powers of the trustee so ceasing to act and shall duly assign,
transfer and deliver to such successor trustee all property and money held by
such retiring trustee thereunder. Upon request of any such successor trustee,
the Company shall execute any and all instruments in writing for more fully and
certainly vesting in and confirming to such successor trustee all such rights
and powers. Any trustee ceasing to act shall, nevertheless, retain a lien upon
all property or funds held or collected by such trustee to secure any amounts
then due it pursuant to the provisions of Section 6.06.
No successor trustee shall accept appointment as provided in this Section
6.11 unless at the time of such acceptance such successor trustee shall be
qualified under the provisions of Section 6.08 and eligible under the provisions
of Section 6.09.
Upon acceptance of appointment by a successor trustee as provided in this
Section 6.11, the Company shall mail notice of the succession of such trustee
hereunder to the holders of Securities at their addresses as they shall appear
on the Security register. If the Company fails to mail such notice within 10
days after the acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be mailed at the expense of the Company.
Section 6.12. Succession by Merger, etc.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder without
the execution or filing of any paper or any further act on the part of any of
the parties hereto.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any Securities shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor trustee; and in all such cases such certificates shall have the full
force which the Securities or this Indenture elsewhere provides that the
certificate of the Trustee shall have; provided, however, that the right to
adopt the certificate of authentication of any predecessor Trustee or
authenticate Securities in the name of any predecessor Trustee shall apply only
to its successor or successors by merger, conversion or consolidation.
Section 6.13. Limitation on Rights of Trustee as a Creditor.
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 been removed shall be subject to
Section 311(a) of the Trust Indenture Act to the extent included therein, to the
extent such Section applies to the provisions of this Indenture.
Section 6.14. Authenticating Agents.
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There may be one or more Authenticating Agents appointed by the Trustee
upon the request of the Company with power to act on its behalf and subject to
its direction in the authentication and delivery of Securities issued upon
exchange or transfer thereof as fully to all intents and purposes as though any
such Authenticating Agent had been expressly authorized to authenticate and
deliver Securities; provided, that the Trustee shall have no liability to the
Company for any acts or omissions of the Authenticating Agent with respect to
the authentication and delivery of Securities. Any such Authenticating Agent
shall at all times be a corporation organized and doing business under the laws
of the United States or of any state or territory thereof or of the District of
Columbia authorized under such laws to act as Authenticating Agent, having a
combined capital and surplus of at least $5,000,000 and being subject to
supervision or examination by federal, state, territorial or District of
Columbia authority. If such corporation publishes reports of condition at least
annually pursuant to law or the requirements of such authority, then for the
purposes of this Section 6.14 the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, it shall resign immediately in the manner and with
the effect herein specified in this Section.
Any corporation into which any Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any Authenticating Agent
shall be a party, or any corporation succeeding to the corporate trust business
of any Authenticating Agent, shall be the successor of such Authenticating Agent
hereunder, if such successor corporation is otherwise eligible under this
Section 6.14 without the execution or filing of any paper or any further act on
the part of the parties hereto or such Authenticating Agent.
Any Authenticating Agent may at any time resign by giving written notice of
resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any Authenticating Agent by giving written notice of
termination to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time any
Authenticating Agent shall cease to be eligible under this Section 6.14, the
Trustee may, and upon the request of the Company shall, promptly appoint a
successor Authenticating Agent eligible under this Section 6.14, shall give
written notice of such appointment to the Company and shall mail notice of such
appointment to all Securityholders as the names and addresses of such holders
appear on the Security Register. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent herein.
The Company, as borrower, agrees to pay to any Authenticating Agent from
time to time reasonable compensation for its services. Any Authenticating Agent
shall have no responsibility or liability for any action taken by it as such in
accordance with the directions of the Trustee.
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ARTICLE VII
CONCERNING THE SECURITYHOLDERS
Section 7.01. Action by Securityholders.
Whenever in this Indenture it is provided that the holders of a specified
percentage in aggregate principal amount of the Securities may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action) the fact that at the time
of taking any such action the holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by such Securityholders in person or by agent or proxy
appointed in writing, or (b) by the record of such holders of Securities voting
in favor thereof at any meeting of such Securityholders duly called and held in
accordance with the provisions of Article VIII, or (c) by a combination of such
instrument or instruments and any such record of such a meeting of such
Securityholders.
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
be deemed to be Securityholders for the purposes of determining whether
Securityholders of the requisite proportion of outstanding Securities have
authorized or agreed or consented to such request, demand, authorization,
direction, notice, consent, waiver or other action, and for that purpose the
outstanding Securities shall be computed as of the record date; provided,
however, that no such authorization, agreement or consent by such
Securityholders on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not later than six
months after the record date.
Section 7.02. Proof of Execution by Securityholders.
Subject to the provisions of Section 6.01, 6.02 and 8.05, proof of the
execution of any instrument by a Securityholder or his agent or proxy shall be
sufficient if made in accordance with such reasonable rules and regulations as
may be prescribed by the Trustee or in such manner as shall be satisfactory to
the Trustee. The ownership of Securities shall be proved by the Security
Register or by a certificate of the Security registrar. The Trustee may require
such additional proof of any matter referred to in this Section as it shall deem
necessary.
The record of any Securityholders' meeting shall be proved in the manner
provided in Section 8.06.
Section 7.03. Who Are Deemed Absolute Owners.
Prior to due presentment for registration of transfer of any Security, the
Company, the Trustee, any Authenticating Agent, any paying agent, any transfer
agent and any Security registrar may deem the person in whose name such Security
shall be registered upon the Security Register to be, and may treat him as, the
absolute owner of such Security (whether or not such Security shall be overdue)
for the purpose of receiving payment of or on account of the principal of and
premium, if any, and (subject to Section 2.06) interest on such Security and for
all other purposes; and neither the Company nor the Trustee nor any
Authenticating
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Agent nor any paying agent nor any transfer agent nor any Security registrar
shall be affected by any notice to the contrary. All such payments so made to
any holder for the time being or upon his order shall be valid, and, to the
extent of the sum or sums so paid, effectual to satisfy and discharge the
liability for monies payable upon any such Security.
Section 7.04. Securities Owned by Company Deemed Not Outstanding.
In determining whether the holders of the requisite aggregate principal
amount of Securities have concurred in any direction, consent or waiver under
this Indenture, Securities which are owned by the Company or any other obligor
on the Securities or by any Person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company or any
other obligor on the Securities shall be disregarded and deemed not to be
outstanding for the purpose of any such determination; provided that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, consent or waiver, only Securities which the Trustee actually
knows are so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as outstanding for the purposes of this
Section 7.04 if the pledgee shall establish to the satisfaction of the Trustee
the pledgee's right to vote such Securities and that the pledgee is not the
Company or any such other obligor or Person directly or indirectly controlling
or controlled by or under direct or indirect common control with the Company or
any such other obligor. In the case of a dispute as to such right, any decision
by the Trustee taken upon the advice of counsel shall be full protection to the
Trustee.
Section 7.05. Revocation of Consents; Future Holders Bound.
At any time prior to (but not after) the evidencing to the Trustee, as
provided in Section 7.01, of the taking of any action by the holders of the
percentage in aggregate principal amount of the Securities specified in this
Indenture in connection with such action, any holder of a Security (or any
Security issued in whole or in part in exchange or substitution therefor),
subject to Section 7.01, the serial number of which is shown by the evidence to
be included in the Securities the holders of which have consented to such action
may, by filing written notice with the Trustee at its principal office and upon
proof of holding as provided in Section 7.02, revoke such action so far as
concerns such Security (or so far as concerns the principal amount represented
by any exchanged or substituted Security). Except as aforesaid any such action
taken by the holder of any Security shall be conclusive and binding upon such
holder and upon all future holders and owners of such Security, and of any
Security issued in exchange or substitution therefor, irrespective of whether or
not any notation in regard thereto is made upon such Security or any Security
issued in exchange or substitution therefor.
ARTICLE VIII
SECURITYHOLDERS' MEETINGS
Section 8.01. Purposes of Meetings.
A meeting of Securityholders may be called at any time and from time to
time pursuant to the provisions of this Article VIII for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or to give any
directions to the Trustee, or to consent to the waiving of any default
hereunder and its consequences, or to take any other action authorized
to be taken by Securityholders pursuant to any of the provisions of
Article V;
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(b) to remove the Trustee and nominate a successor trustee pursuant to the
provisions of Article VI;
(c) to consent to the execution of an indenture or indentures supplemental
hereto pursuant to the provisions of Section 9.02; or
(d) to take any other action authorized to be taken by or on behalf of the
holders of any specified aggregate principal amount of such Securities
under any other provision of this Indenture or under applicable law.
Section 8.02. Call of Meetings by Trustee.
The Trustee may at any time call a meeting of Securityholders to take any
action specified in Section 8.01, to be held at such time and at such place in
the Borough of Manhattan, The City of New York, as the Trustee shall determine.
Notice of every meeting of the Securityholders, setting forth the time and the
place of such meeting and in general terms the action proposed to be taken at
such meeting, shall be mailed to holders of Securities at their addresses as
they shall appear on the Securities Register. Such notice shall be mailed not
less than 20 nor more than 180 days prior to the date fixed for the meeting.
Section 8.03. Call of Meetings by Company or Securityholders.
In case at any time the Company pursuant to a resolution of the Board of
Directors, or the holders of at least 10% in aggregate principal amount of the
Securities then outstanding, shall have requested the Trustee to call a meeting
of Securityholders, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or such Securityholders may determine the time and the place in
said Borough of Manhattan for such meeting and may call such meeting to take any
action authorized in Section 8.01, by mailing notice thereof as provided in
Section 8.02.
Section 8.04. Qualifications for Voting.
To be entitled to vote at any meeting of Securityholders a Person shall (a)
be a holder of one or more Securities or (b) a Person appointed by an instrument
in writing as proxy by a holder of one or more Securities. The only Persons who
shall be entitled to be present or to speak at any meeting of Securityholders
shall be the Persons entitled to vote at such meeting and their counsel and any
representatives of the Trustee and its counsel and any representatives of the
Company and its counsel.
Section 8.05. Regulations.
Notwithstanding any other provisions of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any meeting of
Securityholders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Securityholders as provided in Section 8.03, in which case the
Company or the Securityholders calling the meeting, as the case may be, shall in
like manner
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appoint a temporary chairman. A permanent chairman and a permanent secretary of
the meeting shall be elected by majority vote of the meeting.
Subject to the provisions of Section 8.04, at any meeting each holder of
Securities or proxy therefor shall be entitled to one vote for each $1,000
principal amount of Securities held or represented by him; provided, however,
that no vote shall be cast or counted at any meeting in respect of any Security
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by him or instruments in writing as aforesaid duly
designating him as the person to vote on behalf of other Securityholders. Any
meeting of Securityholders duly called pursuant to the provisions of Section
8.02 or 8.03 may be adjourned from time to time by a majority of those present,
and the meeting may be held as so adjourned without further notice.
Section 8.06. Voting.
The vote upon any resolution submitted to any meeting of holders of
Securities shall be by written ballots on which shall be subscribed the
signatures of such holders or of their representatives by proxy and the serial
number or numbers of the Securities held or represented by them. The permanent
chairman of the meeting shall appoint two inspectors of votes who shall count
all votes cast at the meeting for or against any resolution and who shall make
and file with the secretary of the meeting their verified written reports in
triplicate of all votes cast at the meeting. A record in duplicate of the
proceedings of each meeting of Securityholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 8.02. The record shall show the serial numbers of the
Securities voting in favor of or against any resolution. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting. The holders of the Series A Capital
Securities and the Series B Capital Securities shall vote for all purposes as a
single class.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
ARTICLE IX
AMENDMENTS
Section 9.01. Without Consent of Securityholders.
The Company and the Trustee may from time to time and at any time amend the
Indenture, without the consent of the Securityholders, for one or more of the
following purposes:
(a) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of
the covenants, agreements and obligations of the Company pursuant to
Article X hereof;
(b) to add to the covenants of the Company such further covenants,
restrictions or conditions for the protection of the Securityholders as
the Board of Directors and the Trustee shall consider to be for the
protection of the Securityholders, and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions
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or conditions a default or an Event of Default permitting the
enforcement of all or any of the remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such
additional covenant, restriction or condition such amendment may
provide for a particular period of grace after default (which period
may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such default
or may limit the remedies available to the Trustee upon such default;
(c) to provide for the issuance under this Indenture of Securities in
coupon form (including Securities registrable as to principal only) and
to provide for exchangeability of such Securities with the Securities
issued hereunder in fully registered form and to make all appropriate
changes for such purpose;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be
defective or inconsistent with any other provision contained herein or
in any supplemental indenture, or to make such other provisions in
regard to matters or questions arising under this Indenture; provided
that any such action shall not materially adversely affect the
interests of the holders of the Securities;
(e) to evidence and provide for the acceptance of appointment hereunder by
a successor trustee with respect to the Securities;
(f) to make provision for transfer procedures, certification, book-entry
provisions, the form of restricted securities legends, if any, to be
placed on Securities, and all other matters required pursuant to
Section 2.07 or otherwise necessary, desirable or appropriate in
connection with the issuance of Securities to holders of Capital
Securities in the event of a distribution of Securities by PBI Capital
Trust following a Dissolution Event;
(g) to qualify or maintain qualification of this Indenture under the Trust
Indenture Act; or
(h) to make any change that does not adversely affect the rights of any
Securityholder in any material respect.
The Trustee is hereby authorized to join with the Company in the execution
of any supplemental indenture to effect such amendment, to make any further
appropriate agreements and stipulations which may be therein contained and to
accept the conveyance, transfer and assignment of any property thereunder, but
the Trustee shall not be obligated to, but may in its discretion, enter into any
such supplemental indenture which affects the Trustee's own rights, duties or
immunities under this Indenture or otherwise.
Any amendment to the Indenture authorized by the provisions of this Section
9.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Securities at the time outstanding, notwithstanding any of
the provisions of Section 9.02.
Section 9.02. With Consent of Securityholders.
With the consent (evidenced as provided in Section 7.01) of the holders of
a majority in aggregate principal amount of the Securities at the time
outstanding, the Company, when authorized by a Board Resolution, and the Trustee
may from time to time and at any time amend the Indenture for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Indenture
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or of modifying in any manner the rights of the holders of the Securities;
provided, however, that no such amendment shall without the consent of the
holders of each Security then outstanding and affected thereby (i) change the
Maturity Date of any Security, or reduce the rate or extend the time of payment
of interest thereon (except as contemplated by Article XVI), or reduce the
principal amount thereof, or reduce any amount payable on redemption thereof, or
make the principal thereof or any interest or premium thereon payable in any
coin or currency other than that provided in the Securities, or impair or affect
the right of any Securityholder to institute suit for payment thereof, or (ii)
reduce the aforesaid percentage of Securities the holders of which are required
to consent to any such amendment to the Indenture, provided, however, that if
the Securities are held by PBI Capital Trust, such amendment shall not be
effective until the holders of a majority in liquidation amount of Trust
Securities shall have consented to such amendment; provided, further, that if
the consent of the holder of each outstanding Security is required, such
amendment shall not be effective until each holder of the Trust Securities shall
have consented to such amendment.
Upon the request of the Company accompanied by a copy of a resolution of
the Board of Directors certified by its Secretary or Assistant Secretary
authorizing the execution of any supplemental indenture affecting such
amendment, and upon the filing with the Trustee of evidence of the consent of
Securityholders as aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall transmit by mail, first class postage prepaid, a notice, prepared by the
Company, setting forth in general terms the substance of such supplemental
indenture, to the Securityholders as their names and addresses appear upon the
Security Register. Any failure of the Trustee to mail such notice, or any defect
therein, shall not, however, in any way impair or affect the validity of any
such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under this
Section 9.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof
Section 9.03. Compliance with Trust Indenture Act; Effect of Supplemental
Indentures.
Any supplemental indenture executed pursuant to the provisions of this
Article IX shall comply with the Trust Indenture Act to the extent required by
the Trust Indenture Act. Upon the execution of any supplemental indenture
pursuant to the provisions of this Article IX, this Indenture shall be and be
deemed to be modified and amended in accordance therewith and the respective
rights, limitations of rights, obligations, duties and immunities under this
Indenture of the Trustee, the Company and the holders of Securities shall
thereafter be determined, exercised and enforced hereunder subject in all
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respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 9.04. Notation on Securities.
Securities authenticated and delivered after the execution of any
supplemental indenture affecting such series pursuant to the provisions of this
Article IX may bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company or the Trustee shall
so determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared and executed by the
Company, authenticated by the Trustee or the Authenticating Agent and delivered
in exchange for the Securities then outstanding.
Section 9.05. Evidence of Compliance of Supplemental Indenture to be
Furnished Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any amendment or supplemental indenture executed pursuant hereto
complies with the requirements of this Article IX.
ARTICLE X
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
Section 10.01. Company May Consolidate, etc., on Certain Terms.
Nothing contained in this Indenture or in any of the Securities shall
prevent any consolidation or merger of the Company with or into any other Person
(whether or not affiliated with the Company, as the case may be), or successive
consolidations or mergers in which the Company or its successor or successors,
as the case may be, shall be a party or parties, or shall prevent any sale,
conveyance, transfer or lease of the property of the Company, or its successor
or successors as the case may be, as an entirety, or substantially as an
entirety, to any other Person (whether or not affiliated with the Company, or
its successor or successors, as the case may be authorized to acquire and
operate the same; provided, that (a) the Company is the surviving Person, or the
Person formed by or surviving any such consolidation or merger (if other than
the Company) or to which such sale, conveyance, transfer or lease of property is
made is a Person organized and existing under the law of the United States or
any State thereof or the District of Columbia, and (b) upon any such
consolidation, merger, sale, conveyance, transfer or lease, the due and punctual
payment of the principal of (and premium, if any) and interest on the Securities
according to their tenor and the due and punctual performance and observance of
all the covenants and conditions of this Indenture to be kept or performed by
the Company shall be expressly assumed, by supplemental indenture (which shall
conform to the provisions of the Trust Indenture Act, as then in effect, to the
extent required by the Trust Indenture Act) satisfactory in form to the Trustee
executed and delivered to the Trustee by the Person formed by such
consolidation, or into which the Company shall have been merged, or by the
Person which shall have acquired such property, as the case may be, and (c)
after giving effect to such consolidation, merger, sale, conveyance, transfer or
lease, no Default or Event of Default shall have occurred and be continuing.
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Section 10.02. Successor Corporation to be Substituted for Company.
In case of any such consolidation, merger, conveyance or transfer and upon
the assumption by the successor corporation, by supplemental indenture, executed
and delivered to the Trustee and satisfactory in form to the Trustee, of the due
and punctual payment of the principal of and premium, if any, and interest on
all of the Securities and the due and punctual performance and observance of all
of the covenants and conditions of this Indenture to be performed or observed by
the Company, such successor Person shall succeed to and be substituted for the
Company, with the same effect as if it had been named herein as the party of the
first part, and the Company thereupon shall be relieved of any further liability
or obligation hereunder or upon the Securities. Such successor Person thereupon
may cause to be signed, and may issue either in its own name or in the name of
Premier Bancorp, Inc., any or all of the Securities is unable hereunder which
theretofore shall not have been signed by the Company and delivered to the
Trustee or the Authenticating Agent; and, upon the order of such successor
Person instead of the Company and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee or the Authenticating
Agent shall authenticate and deliver any Securities which previously shall have
been signed and delivered by the officers of the Company to the Trustee or the
Authenticating Agent for authentication, and any Securities which such successor
Person thereafter shall cause to be signed and delivered to the Trustee or the
Authenticating Agent for that purpose. All the Securities so issued shall in all
respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Indentures had been issued at the date of the
execution hereof.
Section 10.03. Opinion of Counsel to be Given Trustee.
The Trustee, subject to the provisions of Sections 6.01 and 6.02, may
receive an Opinion of Counsel as conclusive evidence that any consolidation,
merger, sale, conveyance, transfer or lease, and any assumption, permitted or
required by the terms of this Article X complies with the provisions of this
Article X.
ARTICLE XI
SATISFACTION AND DISCHARGE OF INDENTURE
Section 11.01. Discharge of Indenture.
When (a) the Company shall deliver to the Trustee for cancellation all
Securities theretofore authenticated (other than any Securities which shall have
been destroyed, lost or stolen and which shall have been replaced as provided in
Section 2.08) and not theretofore canceled, or (b) all the Securities not
theretofore canceled or delivered to the Trustee for cancellation shall have
become due and payable, or are by their terms to become due and payable within
one year or are to be called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption, and the
Company shall deposit with the Trustee, in trust, funds sufficient to pay on the
Maturity Date or upon redemption all of the Securities (other than any
Securities which shall have been destroyed, lost or stolen and which shall have
been replaced as provided in Section 2.08) not theretofore canceled or delivered
to the Trustee for cancellation, including principal and premium, if any, and
interest (including Additional Sums and Compounded Interest, if any) and
Liquidated Damages, if any, due or to become due to the Maturity Date or
redemption date, as the case may be, but excluding, however, the amount of any
monies for the payment of principal of or premium, if any, or interest
(including Additional Sums and Compounded Interest, if any) and Liquidated
Damages, if any, on the Securities (1) theretofore repaid to the Company in
accordance with the provisions of Section 11.04, or (2) paid to any State or to
the District of Columbia pursuant to its
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unclaimed property or similar laws, and in either case the Company shall also
pay or cause to be paid all other sums payable hereunder by the Company, then
this Indenture shall cease to be of further effect except for the provisions of
Sections 2.02, 2.07, 2.08, 3.01, 3.02, 3.04, 6.06, 6.10 and 11.04 hereof, which
shall survive until such Securities shall mature and be paid. Thereafter,
Sections 6.06, 6.10 and 11.04 shall survive, and the Trustee, on demand of the
Company accompanied by any Officers' Certificate and an Opinion of Counsel and
at the cost and expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture, the Company,
however, hereby agreeing to reimburse the Trustee for any costs or expenses
thereafter reasonably and properly incurred by the Trustee in connection with
this Indenture or the Securities.
Section 11.02. Deposited Monies and U.S. Government Obligations to be Held
in Trust by Trustee.
Subject to the provisions of Section 11.04, all monies and U.S. Government
Obligations deposited with the Trustee pursuant to Sections 11.01 or 11.05 shall
be held in trust and applied by it to the payment, either directly or through
any paying agent (including the Company if acting as its own paying agent), to
the holders of the particular Securities for the payment of which such monies or
U.S. Government Obligations have been deposited with the Trustee, of all sums
due and to become due thereon for principal, premium, if any, and interest.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to Section 11.05 or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the holders of outstanding Securities.
Section 11.03. Paying Agent to Repay Monies Held.
Upon the satisfaction and discharge of this Indenture all monies then held
by any paying agent of the Securities (other than the Trustee) shall, upon
written demand of the Company, be repaid to it or paid to the Trustee, and
thereupon such paying agent shall be released from all further liability with
respect to such monies.
Section 11.04. Return of Unclaimed Monies.
Any monies deposited with or paid to the Trustee or any paying agent for
payment of the principal of or premium, if any, or interest on Securities and
not applied but remaining unclaimed by the holders of Securities for two years
after the date upon which the principal of or premium, if any, or interest
(including Additional Sums and Compounded Interest, if any) and Liquidated
Damages, if any, on such Securities, as the case may be, shall have become due
and payable, shall be repaid to the Company by the Trustee or such paying agent
on written demand; and the holder of any of the Securities shall thereafter look
only to the Company for any payment which such holder may be entitled to collect
and all liability of the Trustee or such paying agent with respect to such
monies shall thereupon cease.
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Section 11.05. Defeasance Upon Deposit of Monies or U.S. Government
Obligations.
The Company shall be deemed to have been Discharged (as defined below) from
its obligations with respect to the Securities on the 91st day after the
applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited irrevocably
with the Trustee or the Defeasance Agent (as defined below) as trust
funds in trust, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities (i) money in an
amount, or (ii) U.S. Government Obligations which through the payment
of interest and principal in respect thereof in accordance with their
terms will provide, not later than one day before the due date of any
payment, money in an amount, or (iii) a combination of (i) and (ii),
sufficient, in the opinion (with respect to (ii) and (iii)) of a
nationally recognized firm of independent public accountants expressed
in a written certification thereof delivered to the Trustee and the
Defeasance Agent, if any, to pay and discharge each installment of
principal of and interest and premium, if any, on the outstanding
Securities on the dates such installments of principal, interest or
premium are due;
(2) if the Securities are then listed on any national securities exchange,
the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that the exercise of
the option under this Section 11.05 would not cause such Securities to
be delisted from such exchange;
(3) no Default or Event of Default with respect to the Securities shall
have occurred and be continuing on the date of such deposit; and
(4) the Company shall have delivered to the Trustee and the Defeasance
Agent, if any, an Opinion of Counsel to the effect that holders of the
Securities will not recognize income, gain or loss for United States
federal income tax purposes as a result of the exercise of the option
under this Section 11.05 and will be subject to United States federal
income tax on the same amount and in the same manner and at the same
times as would have been the case if such option had not been
exercised, and such opinion shall be based on a statute so providing or
be accompanied by a private letter ruling to that effect received from
the United States Internal Revenue Service or a revenue ruling
pertaining to a comparable form of transaction to that effect published
by the United States Internal Revenue Service.
"Discharged" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities and to have satisfied all the obligations under this Indenture
relating to the Securities (and the Trustee, at the expense of the Company,
shall execute proper instruments acknowledging the same), except (A) the rights
of holders of Securities to receive, from the trust fund described in clause (1)
above, payment of the principal of and the interest and premium, if any, on the
Securities when such payments are due; (B) the Company's obligations with
respect to the Securities under Sections 2.07, 2.08, 5.02 and 11.04; and (C) the
rights, powers, trusts, duties and immunities of the Trustee hereunder.
"Defeasance Agent" means another financial institution which is eligible to
act as Trustee hereunder and which assumes all of the obligation of the Trustee
necessary to enable the Trustee to act hereunder. In the event such a Defeasance
Agent is appointed pursuant to this Section, the following conditions shall
apply:
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(1) The Trustee shall have approval rights over the document appointing
such Defeasance Agent and the document setting forth such Defeasance
Agent's rights and responsibilities;
(2) The Defeasance Agent shall provide verification to the Trustee
acknowledging receipt of sufficient money and/or U. S. Government
Obligations to meet the applicable conditions set forth in this Section
11.05.
ARTICLE XII
IMMUNITY OF INCORPORATORS, SHAREHOLDERS,
OFFICERS AND DIRECTORS
Section 12.01. Indenture and Securities Solely Corporate Obligations.
No recourse for the payment of the principal of or premium, if any, or
interest on any Security, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in this Indenture, or in any Security, or because of the creation of
any indebtedness represented thereby, shall be had against any incorporator,
shareholder, officer or director, as such, past, present or future, of the
Company or of any successor Person to the Company, either directly or through
the Company or any successor Person to the Company, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that all such liability is
hereby expressly waived and released as a condition of, and as a consideration
for, the execution of this Indenture and the issue of the Securities.
ARTICLE XIII
MISCELLANEOUS PROVISIONS
Section 13.01. Successors.
All the covenants, stipulations, promises and agreements in this Indenture
contained by the Company shall bind its successors and assigns whether so
expressed or not.
Section 13.02. Official Acts by Successor Corporation.
Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Company shall and may be done and performed with like force and effect by the
like board, committee or officer of any corporation that shall at the time be
the lawful sole successor of the Company.
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Section 13.03. Surrender of Company Powers.
The Company by instrument in writing executed by authority of 2/3
(two-thirds) of its Board of Directors and delivered to the Trustee may
surrender any of the powers reserved to the Company, and thereupon such power so
surrendered shall terminate both as to the Company, as the case may be, and as
to any successor Person.
Section 13.04. Addresses for Notices, etc.
Any notice or demand which by any provision of this Indenture is required
or permitted to be given or served by the Trustee or by the holders of
Securities on the Company may be given or served by being deposited postage
prepaid by registered or certified mail in a post office letter box addressed
(until another address is filed by the Company with the Trustee for the purpose)
to the Company at 379 North Main Street, Doylestown, Pennsylvania 18901,
Attention: Chief Executive Officer. Any notice, direction, request or demand by
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
office of the Trustee, 920 King Street, 1st Floor, Wilmington, Delaware 19801,
Attention: Corporate Trust Administration Department (unless another address is
provided by the Trustee to the Company for such purpose). Any notice or
communication to a Securityholder shall be mailed by first class mail to his or
her address shown on the register kept by the Security Registrar.
Section 13.05. Governing Law.
This Indenture and each Security shall be deemed to be a contract made
under the laws of the State of New York, and for all purposes shall be governed
by and construed in accordance with the laws of said State, without regard to
conflicts of laws principles thereof.
Section 13.06. Evidence of Compliance with Conditions Precedent.
Upon any application or demand by the Company to the Trustee to take any
action under any of the provisions of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that in the opinion of the
signers all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with and an Opinion of
Counsel stating that, in the opinion of such counsel, all such conditions
precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered to
the Trustee with respect to compliance with a condition or covenant provided for
in this Indenture (except certificates delivered pursuant to Section 3.05) shall
include (1) a statement that the Person making such certificate or opinion has
read such covenant or condition; (2) a brief statement as to the nature and
scope of the examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based; (3) a statement that, in the
opinion of such Person, he has made such examination or investigation as is
necessary to enable him to express an informed opinion as to whether or not such
covenant or condition has been complied with; and (4) a statement as to whether
or not, in the opinion of such person, such condition or covenant has been
complied with.
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Section 13.07. Business Days.
In any case where the date of payment of principal of or premium, if any,
or interest on the Securities will not be a Business Day, the payment of such
principal of or premium, if any, or interest on the Securities need not be made
on such date but may be made on the next succeeding Business Day (and without
any interest or other payment in respect of such delay) except that if such next
succeeding Business Day falls in the next succeeding calendar year, then such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the date of payment.
Section 13.08. Trust Indenture Act to Control.
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 of 1939, such imposed duties shall control, to the extent
that such Sections are applicable to this Indenture.
Section 13.09. Table of Contents, Headings, etc.
The table of contents and the titles and headings of the articles and
sections of this Indenture have been inserted for convenience of reference only,
are not to be considered a part hereof, and shall in no way modify or restrict
any of the terms or provisions hereof.
Section 13.10. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
and the same instrument.
Section 13.11. Separability.
In case any one or more of the provisions contained in this Indenture or in
the Securities shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provisions of this Indenture or of the Securities,
but this Indenture and the Securities shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein or therein.
Section 13.12. 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, the 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 thereto.
Section 13.13. Acknowledgement of Rights.
The Company acknowledges that, with respect to any Securities held by PBI
Capital Trust or a trustee of such trust, if the Property Trustee of such Trust
fails to enforce its rights under this Indenture as the holder of the Securities
held as the assets of PBI Capital Trust any holder of Capital Securities may, to
the extent permitted by applicable law, institute legal proceedings directly
against the Company to enforce
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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 principal of or premium, if any, or interest on the Securities when due, the
Company acknowledges that a holder of Capital Securities may directly institute
a proceeding for enforcement of payment to such holder of the principal of or
premium, if any, or interest on the Securities having a principal amount equal
to the aggregate liquidation amount of the Capital Securities of such holder on
or after the respective due date specified in the Securities.
ARTICLE XIV
PREPAYMENT OF SECURITIES; MANDATORY AND
OPTIONAL SINKING FUND
Section 14.01. Special Event Prepayment.
If, prior to the Initial Optional Prepayment Date, a Special Event has
occurred and is continuing then, notwithstanding Section 14.02(a), but subject
to Section 14.02(c), the Company shall have the right, at any time within 90
days following the occurrence of such Special Event, upon (i) not less than 45
days written notice to the Trustee and (ii) not less than 30 days nor more than
60 days written notice to the Securityholders, to redeem the Securities, in
whole (but not in part), at the Special Event Prepayment Price. Following a
Special Event, the Company shall take such action as is necessary to promptly
determine the Special Event Prepayment Price, including without limitation with
respect to the appointment of a Quotation Agent. The Special Event Redemption
Price shall be paid prior to 12:00 noon, New York time, on the date of such
prepayment or such earlier time as the Company determines, provided that the
Company shall deposit with the Trustee an amount sufficient to pay the Special
Event Prepayment Price by 10:00 a.m., New York time, on the date such Special
Event Prepayment Price is to be paid.
Section 14.02. Optional Prepayment by Company.
(a) Subject to the provisions of this Article XIV, the Company shall have
the right to prepay the Securities, in whole or in part, from time to time, on
or after the Initial Optional Prepayment Date, at the prepayment prices set
forth below (expressed as percentages of principal) plus, in each case, accrued
and unpaid interest thereon (including Additional Sums and Compounded Interest,
if any) and Liquidated Damages, if any, to the applicable date of prepayment
(the "Optional Prepayment Price") if redeemed during the 12- month period
beginning August 15 of the years indicated below.
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Year Percentage
---- ----------
2008 ....................................... 104.285%
2009 ....................................... 103.857
2010 ....................................... 103.428
2011 ....................................... 103.000
2012 ....................................... 102.571
2013 ....................................... 102.143
2014 ....................................... 101.714
2015 ....................................... 101.286
2016 ....................................... 100.857
2017 ....................................... 100.429
2018 and thereafter ....................................... 100.000%
If the Securities are only partially prepaid pursuant to this Section
14.02, the Securities will be prepaid pro rata or by lot or by any other method
utilized by the Trustee; provided, that if at the time of prepayment the
Securities are registered as a Global Security, the Depositary shall determine,
in accordance with its procedures, the principal amount of such Securities held
by each holder of a Security to be prepaid. The Optional Prepayment Price shall
be paid prior to 12:00 noon, New York time, on the date of such prepayment or at
such earlier time as the Company determines, provided that the Company shall
deposit with the Trustee an amount sufficient to pay the Optional Prepayment
Price by 10:00 a.m., New York time, on the date such Optional Prepayment Price
is to be paid.
(b) Notwithstanding the first sentence of Section 14.02, upon the entry of
an order for dissolution of the PBI Capital Trust by a court of competent
jurisdiction, the Securities thereafter will be subject to optional prepayment,
in whole only, but not in part, on or after August 15, 2008, at the optional
prepayment prices set forth in Section 14.02 and otherwise in accordance with
this Article XIV.
(c) Any prepayment of Securities pursuant to Section 14.01 or Section 14.02
shall be subject to the Company obtaining any required regulatory approval.
Section 14.03. No Sinking Fund.
The Securities are not entitled to the benefit of any sinking fund.
Section 14.04. Notice of Prepayment Selection of Securities:
In case the Company shall desire to exercise the right to prepay all, or,
as the case may be, any part of the Securities in accordance with their terms,
it shall fix a date for prepayment and shall mail a notice of such prepayment at
least 30 and not more than 60 days prior to the date fixed for prepayment to the
holders of Securities so to be prepaid as a whole or in part at their last
addresses as the same appear on the Security Register. Such mailing shall be by
first class mail. The notice if mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the holder
receives such notice. In any case, failure to give such notice by mail or any
defect in the notice to the holder of any Security designated for prepayment as
a whole or in part shall not affect the validity of the proceedings for the
prepayment of any other Security.
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Each such notice of prepayment shall specify the CUSIP number of the
Securities to be prepaid, the date fixed for prepayment, the prepayment price at
which the Securities are to be prepaid (or the method by which such prepayment
price is to be calculated), the place or places of payment that payment will be
made upon presentation and surrender of the Securities, that interest accrued to
the date fixed for prepayment will be paid as specified in said notice, and that
on and after said date interest thereon or on the portions thereof to be prepaid
will cease to accrue. If less than all the Securities are to be prepaid the
notice of prepayment shall specify the numbers of the Securities to be prepaid.
In case any Security is to be prepaid in part only, the notice of prepayment
shall state the portion of the principal amount thereof to be prepaid and shall
state that on and after the date fixed for prepayment, upon surrender of such
Security, a new Security or Securities in principal amount equal to the
unredeemed portion thereof will be issued.
By 10:00 a.m. New York time on the prepayment date specified in the notice
of prepayment given as provided in this Section, the Company will deposit with
the Trustee or with one or more paying agents an amount of money sufficient to
prepay on the prepayment date all the Securities so called for prepayment at the
appropriate Prepayment Price, together with accrued interest to the date fixed
for prepayment.
The Company will give the Trustee notice not less than 45 days prior to the
prepayment date as to the aggregate principal amount of Securities to be prepaid
and the Trustee shall select, in such manner as in its sole discretion it shall
deem appropriate and fair, the Securities or portions thereof (in integral
multiples of $1,000, except as otherwise set forth in the applicable form of
Security) to be prepaid.
Section 14.05. Payment of Securities Called for Prepayment.
If notice of prepayment has been given as provided in Section 14.04, the
Securities or portions of Securities with respect to which such notice has been
given shall become due and payable on the date and at the place or places stated
in such notice at the applicable Prepayment Price, together with interest
accrued to the date fixed for prepayment (subject to the rights of holders of
Securities on the close of business on a regular record date in respect of an
Interest Payment Date occurring on or prior to the prepayment date), and on and
after said date (unless the Company shall default in the payment of such
Securities at the Prepayment Price, together with interest accrued to said date)
interest (including Additional Sums and Compounded Interest, if any) and
Liquidated Damages, if any, on the Securities or portions of Securities so
called for prepayment shall cease to accrue. On presentation and surrender of
such Securities at a place of payment specified in said notice, the said
Securities or the specified portions thereof shall be paid and prepaid by the
Company at the applicable Prepayment Price, together with interest (including
Additional Sums and Compounded Interest, if any) and Liquidated Damages, if any,
accrued thereon to the date fixed for prepayment (subject to the rights of
holders of Securities on the close of business on a regular record date in
respect of an Interest Payment Date occurring on or prior to the prepayment
date)
Upon presentation of any Security prepaid in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Security or Securities
of authorized denominations, in principal amount equal to the unredeemed portion
of the Security so presented.
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ARTICLE XV
SUBORDINATION OF SECURITIES
Section 15.01. Agreement to Subordinate.
The Company covenants and agrees, and each holder of Securities issued
hereunder likewise covenants and agrees, that the Securities shall be issued
subject to the Provisions of this Article XV; and each holder of a Security,
whether upon original issue or upon transfer or assignment thereof, accepts and
agrees to be bound by such provisions.
The payment by the Company of the principal of, premium, if any, and
interest (including Additional Sums and Compounded Interest, if any) and
Liquidated Damages, if any, on all Securities issued hereunder shall, to the
extent and in the manner hereinafter set forth, be subordinated and junior in
right of payment to all Senior Indebtedness, whether outstanding at the date of
this Indenture or thereafter incurred.
No provision of this Article XV shall prevent the occurrence of any Default
or Event of Default hereunder.
Section 15.02. Default on Senior Indebtedness.
In the event and during the continuation of any default by the Company in
the payment of principal, premium, interest or any other payment due on any
Senior Indebtedness, or in the event that the maturity of any Senior
Indebtedness has been accelerated because of a default, then, in either case, no
payment shall be made by the Company with respect to the principal (including
prepayment payments) of or premium, if any, or interest on the Securities.
In the event of the acceleration of the maturity of the Securities, then no
payment shall be made by the Company with respect to the principal (including
prepayment payments) of or premium, if any, or interest on the Securities until
the holders of all Senior Indebtedness outstanding at the time of such
acceleration shall receive payment in full of such Senior Indebtedness
(including any amounts due upon acceleration).
In the event that, notwithstanding the foregoing, any payment shall be
received by the Trustee when such payment is prohibited by the preceding
paragraphs of this Section 15.02, such payment shall be held in trust for the
benefit of, and shall be paid over or delivered to, the holders of Senior
Indebtedness or their respective representatives; or to the trustee or trustees
under any indenture pursuant to which any of such Senior Indebtedness may have
been issued, as their respective interests may appear, but only to the extent
that holders of the Senior Indebtedness (or their representative or
representatives or a trustee) notify the Trustee in writing, within 90 days of
such payment of the amounts then due and owing on such Senior Indebtedness and
only the amounts specified in such notice to the Trustee shall be paid to the
holders of such Senior Indebtedness.
Section 15.03. Liquidation; Dissolution; Bankruptcy.
Upon any payment by the Company or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding-up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all Senior Indebtedness of the Company shall
first be paid in full, or payment thereof provided for in money in accordance
with its terms, before any payment is made by the
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Company on account of the principal (and premium, if any) or interest (including
Additional Sums and Compounded Interest, if any) and Liquidated Damages, if any,
on the Securities; and upon any such dissolution or winding-up or liquidation or
reorganization, any payment by the Company, or distribution of assets of the
Company of any kind or character, whether in cash, property or securities, to
which the Securityholders or the Trustee would be entitled to receive from the
Company, except for the provisions of this Article XV, shall be paid by the
Company or by any receiver, trustee in bankruptcy, liquidating trustee, agent or
other Person making such payment or distribution, or by the Securityholders or
by the Trustee under the Indenture if received by them or it, directly to the
holders of Senior Indebtedness of the Company (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, as
calculated by the Company) or their representative or representatives, or to the
trustee or trustees under any indenture pursuant to which any instruments
evidencing such Senior Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior
Indebtedness in full, in money or money's worth, after giving effect to any
concurrent payment or distribution to or for the holders of such Senior
Indebtedness, before any payment or distribution is made to the Securityholders
or to the Trustee.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company of any kind or character, whether in cash,
property or securities, prohibited by the foregoing, shall be received by the
Trustee before all Senior Indebtedness is paid in full, or provision is made for
such payment in money in accordance with its terms, such payment or distribution
shall be held in trust for the benefit of and shall be paid over or delivered to
the holders of such Senior Indebtedness or their representative or
representatives, or to the trustee or trustees under any indenture pursuant to
which any instruments evidencing such Senior Indebtedness may have been issued,
as their respective interests may appear, as calculated by the Company, for
application to the payment of all Senior Indebtedness remaining unpaid to the
extent necessary to pay all such Senior Indebtedness in full in money in
accordance with its terms, after giving effect to any concurrent payment or
distribution to or for the benefit of the holders of such Senior Indebtedness.
For purposes of this Article XV, the words "cash, property or securities"
shall not be deemed to include shares of stock of the Company as reorganized or
readjusted, or securities of the Company or any other corporation provided for
by a plan of reorganization or readjustment, the payment of which is
subordinated at least to the extent provided in this Article XV with respect to
the Securities to the payment of Senior Indebtedness that may at the time be
outstanding, provided that (i) such Senior Indebtedness is assumed by the new
corporation, if any, resulting from any such reorganization or readjustment, and
(ii) the rights of the holders of such Senior Indebtedness are not, without the
consent of such holders, altered by such reorganization or readjustment. The
consolidation of the Company with, or the merger of the Company into, another
Person or the liquidation or dissolution of the Company following the sale,
conveyance, transfer or lease of its property as an entirety, or substantially
as an entirety, to another Person upon the terms and conditions provided for in
Article X of this Indenture shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 15.03 if such
other Person shall, as a part of such consolidation, merger, sale, conveyance,
transfer or lease, comply with the conditions stated in Article X of this
Indenture. Nothing in Section 15.02 or in this Section 15.03 shall apply to
claims of, or payments to, the Trustee under or pursuant to Section 6.06 of this
Indenture.
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Section 15.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the rights
of the Securityholders shall be subrogated to the rights of the holders of such
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Company, as the case may be, applicable to such Senior
Indebtedness until the principal of (and premium, if any) and interest on the
Securities shall be paid in full; and, for the purposes of such subrogation, no
payments or distributions to the holders of such Senior Indebtedness of any
cash, property or securities to which the Securityholders or the Trustee would
be entitled except for the provisions of this Article XV, and no payment over
pursuant to the provisions of this Article XV to or for the benefit of the
holders of such Senior Indebtedness by Securityholders or the Trustee, shall, as
between the Company, its creditors other than holders of Senior Indebtedness of
the Company, and the holders of the Securities, be deemed to be a payment by the
Company to or on account of such Senior Indebtedness. It is understood that the
provisions of this Article XV are and are intended solely for the purposes of
defining the relative rights of the holders of the Securities, on the one hand,
and the holders of such Senior Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this Indenture or in
the Securities is intended to or shall impair, as between the Company, its
creditors other than the holders of Senior Indebtedness of the Company, and the
holders of the Securities, the obligation of the Company, which is absolute and
unconditional, to pay to the holders of the Securities the principal of (and
premium, if any) and interest (including Additional Sums and Compounded
Interest, if any) and Liquidated Damages, if any, on the Securities as and when
the same shall become due and payable in accordance with their terms, or is
intended to or shall affect the relative rights of the holders of the Securities
and creditors of the Company, as the case may be, other than the holders of
Senior Indebtedness of the Company, as the case may be, nor shall anything
herein or therein prevent the Trustee or the holder of any Security from
exercising all remedies otherwise permitted by applicable law upon default under
the Indenture, subject to the rights, if any, under this Article XV of the
holders of such Senior Indebtedness in respect of cash, property or securities
of the Company, 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 XV, the Trustee, subject to the provisions of Article VI of this
Indenture, and the Securityholders shall be entitled to conclusively rely upon
any order or decree made by any court of competent jurisdiction in which such
dissolution, winding-up, liquidation or reorganization proceedings are pending,
or a certificate of the receiver, trustee in bankruptcy, liquidation trustee,
agent or other Person making such payment or distribution, delivered to the
Trustee or to the Securityholders, for the purposes of ascertaining the Persons
entitled to participate in such distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, 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 XV.
Section 15.05. Trustee to Effectuate Subordination.
Each Securityholder by such Securityholder's acceptance thereof authorizes
and directs the Trustee on such Securityholder's behalf to take such action as
may be necessary or appropriate to effectuate the subordination provided in this
Article XV and appoints the Trustee such Securityholder's attorney-in-fact for
any and all such purposes.
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Section 15.06. 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 monies to or by the Trustee in respect of the Securities pursuant
to the provisions of this Article XV. Notwithstanding the provisions of this
Article XV 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 monies to or by the Trustee in respect of the
Securities pursuant to the provisions of this Article XV, 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 Indebtedness or from any
trustee therefor; and before the receipt of any such written notice, the
Trustee, subject to the provisions of Article VI of this Indenture, shall be
entitled in all respects to assume that no such facts exist; provided, however,
that if the Trustee shall not have received the notice provided for in this
Section 15.06 at least two Business Days prior to the date upon which by the
terms hereof any money may become payable for any purpose (including, without
limitation, the payment of the principal of (or premium, if any) or interest
(including Additional Sums and Compounded Interest, if any) and Liquidated
Damages, if any, on any Security), then, anything herein contained to the
contrary notwithstanding, the Trustee shall have full power and authority to
receive such money and to apply the same to the purposes for which they were
received, and shall not be affected by any notice to the contrary that may be
received by it within two Business Days prior to such date.
The Trustee, subject to the provisions of Article VI of this Indenture,
shall be entitled to conclusively rely on the delivery to it of a written notice
by a Person representing himself to be a holder of Senior Indebtedness of the
Company (or a trustee on behalf of such holder), as the case may be, to
establish that such notice has been given by a holder of such Senior
Indebtedness 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 Indebtedness to
participate in any payment or distribution pursuant to this Article XV, the
Trustee may request such Person to furnish evidence to the reasonable
satisfaction of the Trustee as to the amount of such Senior Indebtedness held by
such Person, the extent to which such Person is entitled to participate in such
payment or distribution and any other facts pertinent to the rights of such
Person under this Article XV, and, if such evidence is not furnished, the
Trustee may defer any payment to such Person pending judicial determination as
to the right of such Person to receive such payment.
Upon any payment or distribution of assets of the Company referred to in
this Article XV, the Trustee and the Securityholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Company, the amount thereof or payable thereon,
the amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article XV.
Section 15.07. Rights of the Trustee; Holders of Senior Indebtedness.
The Trustee in its individual capacity shall be entitled to all the rights
set forth in this Article XV in respect of any Senior Indebtedness at any time
held by it, to the same extent as any other holder of Senior Indebtedness, and
nothing in this Indenture shall deprive the Trustee of any of its rights as such
holder.
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With respect to the holders of Senior Indebtedness of the Company, the
Trustee undertakes to perform or to observe only such of its covenants and
obligations as are specifically set forth in this Article XV, and no implied
covenants or obligations with respect to the holders of such Senior Indebtedness
shall be read into this Indenture against the Trustee. The Trustee shall not be
deemed to owe any fiduciary duty to the holders of such Senior Indebtedness and,
subject to the provisions of Article VI of this Indenture, the Trustee shall not
be liable to any holder of such Senior Indebtedness if it shall pay over or
deliver to Securityholders, the Company or any other Person money or assets to
which any holder of such Senior Indebtedness shall be entitled by virtue of this
Article XV or otherwise.
Nothing in this Article XV shall apply to claims of, or payments to, the
Trustee under or pursuant to Section 6.06.
Section 15.08. Subordination May Not Be Impaired.
No right of any present or future holder of any Senior Indebtedness of the
Company to enforce subordination as herein provided shall at any time in any way
be prejudiced or impaired by any act or failure to act on the part of the
Company, as the case may be, or by any act or failure to act, in good faith, by
any such holder, or by any noncompliance by the Company, as the case may be,
with the terms, provisions and covenants of this Indenture, regardless of any
knowledge thereof that any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph, the
holders of Senior Indebtedness of the Company may, at any time and from time to
time, without the consent of or notice to the Trustee or the Securityholders,
without incurring responsibility to the Securityholders and without impairing or
releasing the subordination provided in this Article XV or the obligations
hereunder of the holders of the Securities to the holders of such Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter, such
Senior Indebtedness, or otherwise amend or supplement in any manner such Senior
Indebtedness or any instrument evidencing the same or any agreement under which
such Senior Indebtedness is outstanding; (ii) sell, exchange, release or
otherwise deal with any property pledged, mortgaged or otherwise securing such
Senior Indebtedness; (iii) release any Person liable in any manner for the
collection of such Senior Indebtedness; and (iv) exercise or refrain from
exercising any rights against the Company, as the case may be, and any other
Person.
ARTICLE XVI
EXTENSION OF INTEREST PAYMENT PERIOD
Section 16.01. 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
Securities, to defer payments of interest by extending the interest payment
period of such Securities for a period not exceeding 10 consecutive semi-annual
periods, including the first such semi-annual period during such extension
period (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 shall end on a date other than an Interest Payment Date
or 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 16.01, will bear interest
thereon at the Coupon Rate compounded semi-annually for each semi-annual period
of the Extended
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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 Securities, including any Additional Sums and Compounded Interest
(together, "Deferred Interest") that shall be payable to the holders of the
Securities in whose names the Securities are registered in the Security Register
on the first record date preceding the end of the Extended Interest Payment
Period. Before the termination of any Extended Interest Payment Period, the
Company may further defer payments of interest by further extending such period,
provided that such period, together with all such previous and further
extensions within such Extended Interest Payment Period, shall not exceed 10
consecutive semi-annual periods, including the first such semi-annual period
during such Extended Interest Payment Period, end on a date other than an
Interest Payment Date or extend beyond the Maturity Date of the Securities. Upon
the termination of any Extended Interest Payment Period and 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.
Section 16.02. Notice of Extension.
(a) If the Property Trustee is the only registered holder of the Securities
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 five
Business Days before the earlier of (i) the next succeeding date on which
Distributions on the Trust Securities issued by PBI Capital Trust 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 any national securities exchange or to
holders of the Capital Securities issued by the Trust, but in any event at least
five Business Days before such record date.
(b) If the Property Trustee is not the only holder of the Securities at the
time the Company selects an Extended Interest Payment Period, the Company shall
give the holders of the Securities and the Trustee written notice of its
selection of such Extended Interest Payment Period at least 10 Business Days
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 any national securities exchange.
(c) The semi-annual period in which any notice is given pursuant to
paragraphs (a) or (b) of this Section 16.02 shall be counted as one of the 10
semi-annual periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
First Union Trust Company, National Association hereby accepts the trusts
in this Indenture declared and provided, upon the terms and conditions
hereinabove set forth.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed by their respective officers hereunto duly authorized, as of the
day and year first above written.
PREMIER BANCORP, INC.
By /s/ John C. Soffronoff
-----------------------------
Name: John C. Soffronoff
Title: President
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION, as TRUSTEE
By /s/ Doris J. Krick
-----------------------------
Name: Doris J. Krick
Title: Vice President
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FACE OF SECURITY
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE
LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE DEPOSITARY TO
A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY
OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN LIMITED
CIRCUMSTANCES.
UNLESS THIS SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC") TO THE ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL IN AS MUCH AS SINCE THE REGISTERED OWNER HEREOF, CEDE & CO.,
HAS AN INTEREST HEREIN.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY OTHER
APPLICABLE SECURITIES LAW. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO OFFER, SELL
OR OTHERWISE TRANSFER THIS SECURITY, PRIOR TO THE DATE (THE "RESALE RESTRICTION
TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE ORIGINAL ISSUANCE
DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE OF THE
COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF THIS SECURITY)
ONLY (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER"
(AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO
NON-U.S. PERSONS THAT OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF
REGULATION S UNDER THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED
INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501
UNDER THE SECURITIES ACT THAT IS ACQUIRING THIS SECURITY FOR ITS OWN ACCOUNT, OR
FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT
PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY
DISTRIBUTION IN VIOLATION
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OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE
COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D),
(E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
AND/OR OTHER INFORMATION SATISFACTORY TO THE COMPANY, AND (ii) PURSUANT TO
CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON
THE REVERSE OF THIS SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE
COMPANY. SUCH HOLDER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
No. D-1 CUSIP No. 74046J A A 7
PREMIER BANCORP, INC.
SERIES A 8.57% JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURE
DUE AUGUST 15, 2028
Premier Bancorp, Inc., a Pennsylvania corporation (the "Company", which
term includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of 10,310,000 Dollars on August 15, 2028 (the "Maturity
Date"), unless previously prepaid, and to pay 8.57% interest on the outstanding
principal amount hereof from August 11, 1998, or from the most recent interest
payment date (each such date, an "Interest Payment Date") to which interest has
been paid or duly provided for, semi-annually (subject to deferral as set forth
herein) in arrears on February 15 and August 15 of each year, commencing
February 15, 1999, at the rate of 8.57% per annum until the principal hereof
shall have become due and payable, and on any overdue principal and premium, if
any, and (without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded semi-annually. The amount of interest payable on
any Interest Payment Date shall be computed on the basis of a 360-day year of
twelve 30-day months and, for any period less than a full calendar month, the
number of days elapsed in such month. In the event that any date on which the
principal of (or premium, if any) or interest on this Security is payable is not
a Business Day, then the payment payable on such date will be made on the next
succeeding day that is a Business Day (and without any interest or other payment
in respect of any such delay) except that if such next succeeding Business Day
falls in the next succeeding calendar year, then such payment shall be made on
the immediately preceding Business Day, in each case with the same force and
effect as if made on such date. Pursuant to the Indenture, in certain
circumstances the Company will be required to pay Additional Sums and Compounded
Interest (each as defined in the Indenture) with respect to this Security.
Pursuant to the Registration Rights Agreement, in certain limited circumstances
the Company will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to this Security.
The interest installment so payable, and punctually paid or duly provided
for, on any Interest Payment Date will, as provided in the Indenture, be paid to
the Person in whose name this Security (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of business on the
regular record date for such interest installment, which shall be the 15th day
preceding the relevant interest payment date. Any such interest installment not
punctually paid or duly provided for shall forthwith cease
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to be payable to the holders on such regular record date and may be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a special record date to be fixed by the
Trustee for the payment of such defaulted interest, notice whereof shall be
given to the holders of Securities not less than 10 days prior to such special
record date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities may be listed, and upon such notice as may be required by such
exchange, all as more fully provided in the Indenture.
The principal of (and premium, if any) and interest (including Additional
Sums and Compounded Interest, if any) and Liquidated Damages, if any, on this
Security shall be payable at the office or agency of the Trustee maintained for
that purpose in any coin or currency of the United States of America that at the
time of payment is legal tender for payment of public and private debts;
provided, however, that, payment of interest may be made at the option of the
Company by (i) check mailed to the holder at such address as shall appear in the
Security Register or (ii) by transfer to an account maintained by the Person
entitled thereto, provided that proper written transfer instructions have been
received by the relevant record date. Notwithstanding the foregoing, so long as
the Holder of this Security is the Property Trustee, the payment of the
principal of (and premium, if any) and interest (including Additional Sums and
Compounded Interest, if any) and Liquidated Damages, if any, on this Security
will be made at such place and to such account as may be designated by the
Property Trustee.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, subordinate and junior in right of payment to the prior payment
in full of all Senior Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his or her behalf to take such action as
may be necessary or appropriate to acknowledge or effectuate the subordination
so provided and (c) appoints the Trustee his or her attorney-in-fact for any and
all such purposes. Each holder hereof, by his or her acceptance hereof, hereby
waives all notice of the acceptance of the subordination provisions contained
herein and in the Indenture by each holder of Senior Indebtedness, whether now
outstanding or hereafter incurred, and waives reliance by each such holder upon
said provisions.
This Security shall not be entitled to any benefit under the Indenture
hereinafter referred to, be valid or become obligatory for any purpose until the
Certificate of Authentication hereon shall have been signed by or on behalf of
the Trustee.
By acceptance of this Security, the holder agrees to treat, for United
States federal income tax purposes, this Security as indebtedness.
Capitalize terms used, but not defined, in this Security shall have the
same meanings as provided in the Indenture.
The provisions of this Security are continued on the reverse side hereof
and such provisions shall for all purposes have the same effect as though fully
set forth at this place.
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IN WITNESS WHEREOF, the Company has executed this certificate this 11th day
of August, 1998.
PREMIER BANCORP, INC.
By:_________________________________________
Name: John C. Soffronoff
Title: President and Chief Executive Officer
Attest:
By:________________________________________
Name: Bruce E. Sickel
Title: Senior Vice President, Treasurer and
Chief Financial Officer
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
Dated: August 11, 1998
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By
Authorized Signatory
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REVERSE OF SECURITY
This Security is one of the Securities of the Company (herein sometimes
referred to as the "Securities"), specified in the Indenture, all issued or to
be issued under and pursuant to an Indenture, dated as of August 11, 1998 (the
"Indenture"), duly executed and delivered between the Company and First Union
Trust Company, National Association, as Trustee (the "Trustee"), to which
Indenture reference is hereby made for a description of the rights, limitations
of rights, obligations, duties and immunities thereunder of the Trustee, the
Company and the holders of the Securities.
Upon the occurrence and continuation of a Special Event prior to August 15,
2008 (the "Initial Optional Prepayment Date"), the Company shall have the right,
at any time within 90 days following the occurrence of such Special Event, to
prepay this Security in whole (but not in part) at the Special Event Prepayment
Price. "Special Event Prepayment Price" shall mean, with respect to any
prepayment of the Securities following a Special Event, an amount in cash equal
to the Make-Whole Amount. The "Make-Whole Amount" shall be equal to the greater
of: (a) 100% of the principal amount of the Securities; or (b) the sum, as
determined by a Quotation Agent, of the present values of the remaining
scheduled payments of principal and interest on the Securities, discounted to
the prepayment date on a semi-annual basis (assuming a 360-day year consisting
of twelve 30-day months) at the Adjusted Treasury Rate plus, in the case of each
of clauses (a) and (b), accrued and unpaid interest thereon and Liquidated
Damages, if any, to the date of prepayment.
In addition, the Company shall have the right to prepay this Security, in
whole or in part, at any time on or after the Initial Optional Prepayment Date
(an "Optional Prepayment"), at the prepayment prices set forth below (expressed
as percentages of principal to be prepaid) plus, in each case, accrued and
unpaid interest thereon (including Additional Sums and Compounded Interest, if
any) and Liquidated Damages, if any, to the applicable date of prepayment (the
"Optional Prepayment Price") if prepaid during the 12-month period beginning
August 15 of the years indicated below.
Year Percentage
---- ----------
2008 ..................................... 104.285%
2009 ..................................... 103.857
2010 ..................................... 103.428
2011 ..................................... 103.000
2012 ..................................... 102.571
2013 ..................................... 102.143
2014 ..................................... 101.714
2015 ..................................... 101.286
2016 ..................................... 100.857
2017 ..................................... 100.429
2018 and thereafter ..................................... 100.000%
The Optional Prepayment Price or the Special Event Prepayment Price, as the
case requires, shall be paid prior to 12:00 noon, New York time, on the date of
such prepayment or at such earlier time as the Company determines, provided,
that the Company shall deposit with the Trustee an amount sufficient to pay the
applicable Prepayment Price by 10:00 a.m., New York City time, on the date such
Prepayment Price is to be paid. Any prepayment pursuant to this paragraph will
be made upon not less than 30 days nor more than 60 days notice. If the
Securities are only partially prepaid by the Company pursuant to an Optional
Prepayment, the Securities will be prepaid pro rata or by lot or by any other
method utilized by the Trustee;
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provided that if, at the time of prepayment, the Securities are registered as a
Global Security, the Depositary shall determine the particular Securities to be
prepaid in accordance with its procedures.
In the event of prepayment of this Security in part only, a new Security or
Securities for the unprepaid portion hereof will be issued in the name of the
holder hereof upon the cancellation hereof.
Notwithstanding the foregoing, any prepayment of Securities by the Company
shall be subject to the Company having received any required regulatory
approval.
In case an Event of Default, as defined in the Indenture, shall have
occurred and be continuing, the principal of all of the Securities may be
declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of a majority in aggregate principal amount of
the Securities at the time outstanding, as defined in the Indenture, to execute
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
modifying in any manner the rights of the holders of the Securities; provided
however, that no such supplemental indenture shall, without the consent of each
holder of Securities then outstanding and affected thereby, (i) change the
Maturity Date of any Securities, or reduce the principal amount thereof, or
reduce any amount payable on prepayment thereof, or reduce the rate or extend
the time of payment of interest thereon (subject to Article XVI of the
Indenture), or make the principal of, or interest or premium on, the Securities
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Securities to institute suit for the payment thereof, or
(ii) reduce the aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture. The Indenture also
contains provisions permitting the holders of a majority in aggregate principal
amount of the Securities at the time outstanding affected thereby, on behalf of
all of the holders of the Securities, to waive any past default in the
performance of any of the covenants contained in the Indenture, or established
pursuant to the Indenture, and its consequences, except a default in the payment
of the principal of or premium, if any, or interest on any of the Securities or
a default in respect of any covenant or provision under which the Indenture
cannot be modified or amended without the consent of each holder of Securities
then outstanding. Any such consent or waiver by the holder of this Security
(unless revoked as provided in the Indenture) shall be conclusive and binding
upon such Holder and upon all future holders and owners of this Security and of
any Security issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether or not any
notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security or
of the Indenture shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and premium, if any, and
interest (including Compounded Interest and Additional Sums, if any) and
Liquidated Damages, if any, on this Security at the time and place and at the
rate and in the money herein prescribed.
So long as no Event of Default shall have occurred and be continuing, the
Company shall have the right, at any time and from time to time during the term
of the Securities, to defer payments of interest by extending the interest
payment period of such Securities for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period, and not extending beyond the Maturity Date of the Securities
(an "Extended Interest Payment Period") or ending on a date other than an
Interest Payment Date, at the end of which period the Company shall pay all
interest then accrued and unpaid (together with interest thereon at the rate
specified for the Securities to the extent that payment
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of such interest is enforceable under applicable law). Before the termination of
any such Extended Interest Payment Period, the Company may further defer
payments of interest by further extending such Extended Interest Payment Period,
provided that such Extended Interest Payment Period, together with all such
previous and further extensions within such Extended Interest Payment Period,
(i) shall not exceed 10 consecutive semi-annual periods, including the first
semi-annual period during such Extended Interest Payment Period, (ii) shall not
end on any date other than an Interest Payment Date, and (iii) shall not extend
beyond the Maturity Date of the Securities. Upon the termination of any such
Extended Interest Payment Period and the payment of all accrued and unpaid
interest and any additional amounts then due, the Company may commence a new
Extended Interest Payment Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any dividends or
distributions on, or prepay, 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 or repurchase or prepay any
debt securities of the Company that rank pari passu with or junior in right of
payment to the Securities or (iii) make any guarantee payments with respect to
any guarantee by the Company of the debt securities or any Subsidiary of the
Company (including any Other Guarantees) if such guarantee ranks pari passu or
junior in right of payment to the Securities (other than (a) dividends or
distributions in shares of, or options, warrants or rights to subscribe for or
purchase shares of, Common Stock of the Company, (b) any declaration of a
dividend in connection with the implementation of a shareholder's rights plan,
or the issuance of stock under any such plan in the future, or the prepayment or
repurchase of any such rights pursuant thereto, (c) payments under the Capital
Securities Guarantee, (d) as a result of a reclassification of the Company's
capital stock or the exchange or the conversion of one class or series of the
Company's capital stock, for another class or series of the Company's capital
stock, (e) the purchase of fractional interests in shares of the Company's
capital stock pursuant to the exchange or conversion of such capital stock or
the security being exchanged or converted, and (f) purchases of Common Stock
related to the issuance of Common Stock or rights under any of the Company's
benefit plans for its directors, officers or employees or any of the Company's
dividend reinvestment plans) if at such time (i) there shall have occurred any
event of which the Company has actual knowledge that (a) is or, with the giving
of notice or the lapse of time, or both, would be, an Event of Default and (b)
in respect of which the Company shall not have taken reasonable steps to cure,
(ii) if the Securities are held by PBI Capital Trust, the Company shall be in
default with respect to its payment obligations under the Capital Securities
Guarantee or (iii) the Company shall have given notice of its election of the
exercise of its right to extend the interest payment period and any such
extension shall be continuing.
Subject to (i) the receipt by the Company of any required regulatory
approval and (ii) the receipt by the Company of an opinion of counsel to the
effect that such distribution will not be a taxable event to holders of Capital
Securities, the Company will have the right at any time to liquidate PBI Capital
Trust and cause the Securities to be distributed to the holders of the Trust
Securities in liquidation of the Trust.
The Securities are issuable only in registered form without coupons in
denominations of $1,000.00 and any integral multiple thereof. As provided in the
Indenture and subject to the transfer restrictions limitations as may be
contained herein and therein from time to time, this Security is transferable by
the holder hereof on the Security Register of the Company, upon surrender of
this Security for registration of transfer at the office or agency of the
Company in the City and State of New York accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company or the Trustee duly
executed by the holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Securities of authorized denominations and for the
same aggregate principal amount and series will be issued to the designated
transferee or transferees. No service charge will be made for any such transfer,
but the Company
7
<PAGE>
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in relation thereto.
Prior to due presentment for registration of transfer of this Security, the
Company, the Trustee, any authenticating agent, any paying agent, any transfer
agent and the registrar may deem and treat the holder hereof as the absolute
owner hereof (whether or not this Security shall be overdue and notwithstanding
any notice of ownership or writing hereon made by anyone other than the Security
Registrar) for the purpose of receiving payment of or on account of the
principal hereof and premium, if any, and (subject to the Indenture) interest
due hereon and for all other purposes, and neither the Company nor the Trustee
nor any authenticating agent nor any paying agent nor any transfer agent nor any
registrar shall be affected by any notice to the contrary.
No recourse shall be had for the payment of the principal of or premium, if
any, or interest on this Security, or for any claim based hereon, or otherwise
in respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issuance hereof, expressly
waived and released.
All terms used in this Security that are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
THE INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAW PROVISIONS THEREOF.
8
EXHIBIT 4.3
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CERTIFICATE OF TRUST
OF
PBI CAPITAL TRUST
This Certificate of Trust is being executed as of July 28, 1998 for the
purpose of organizing a business trust pursuant to the Delaware Business Trust
Act, 12 Del. C. ss.3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "PBI Capital Trust" (the
"Trust").
2. Delaware Trustee. The name and business address of the Delaware resident
trustee of the Trust meeting the requirements of Section 3807 of the Act is as
follows:
First Union Trust Company, National Association
920 King Street, 1st Floor
Wilmington, Delaware 19801-7475
3. Effective. This Certificate of Trust shall be effective immediately upon
filing in the office of the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Delaware Trustee
By: /s/ Edward L. Truitt, Jr.
-----------------------------------
Edward L. Truitt, Jr.
Assistant Vice President
/s/ John C. Soffronoff
-----------------------------------
Name: John C. Soffronoff
As Administrative Trustee
/s/ Bruce E. Sickel
-----------------------------------
Name: Bruce E. Sickel
As Administrative Trustee
EXHIBIT 4.4
DECLARATION OF TRUST
PBI CAPITAL TRUST
DATED AS OF JULY 28, 1998
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.1 Definitions....................................................1
ARTICLE II
ORGANIZATION
Section 2.1 Name...........................................................3
Section 2.2 Office.........................................................4
Section 2.3 Purpose........................................................4
Section 2.4 Authority......................................................4
Section 2.5 Title to Property of the Trust.................................4
Section 2.6 Powers of the Trustees.........................................4
Section 2.7 Filing of Certificate of Trust.................................5
Section 2.8 Duration of Trust..............................................5
Section 2.9 Responsibilities of the Sponsor................................6
Section 2.10 Declaration Binding on Holders of Securities...................6
ARTICLE III
TRUSTEES
Section 3.1 Trustees.......................................................6
Section 3.2 Delaware Trustee...............................................7
Section 3.3 Execution of Documents.........................................7
Section 3.4 Not Responsible for Recitals or Sufficiency of Declaration.....8
ARTICLE IV
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 4.1 Exculpation....................................................8
Section 4.2 Fiduciary Duty.................................................8
Section 4.3 Indemnification................................................9
Section 4.4 Outside Businesses............................................12
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
Section 5.1 Amendments....................................................12
Section 5.2 Termination of Trust..........................................13
Section 5.3 Governing Law.................................................13
Section 5.4 Headings......................................................13
Section 5.5 Successors and Assigns........................................13
Section 5.6 Partial Enforceability........................................13
Section 5.7 Counterparts..................................................14
<PAGE>
DECLARATION OF TRUST
OF
PBI CAPITAL TRUST
July 28, 1998
DECLARATION OF TRUST ("Declaration") dated and effective as of July 28,
1998 by the Trustees (as defined herein), the Sponsor (as defined herein), and
by the holders, from time to time, of undivided beneficial interests in the
Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees and the Sponsor desire to establish a trust (the
"Trust") pursuant to the Business Trust Act (as defined herein) for the sole
purposes of (i) issuing and selling certain securities representing undivided
beneficial interests in the assets of the Trust, (ii) holding certain Debentures
of the Debenture Issuer (each as defined herein), and (iii) engaging in only
those other activities necessary, advisable or incidental thereto; and
NOW, THEREFORE, it being the intention of the parties hereto that the Trust
constitute a business trust under the Business Trust Act and that this
Declaration constitutes the governing instrument of such business trust, the
Trustees declare that all assets contributed to the Trust will be held in trust
for the benefit of the holders, from time to time, or the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Declaration.
ARTICLE I
DEFINITIONS
Section 1.1 Definitions
Unless the context otherwise requires:
(a) Capitalized terms used in this Declaration but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Declaration has the same meaning
throughout;
(c) all references to "the Declaration" or "this Declaration" are to
this Declaration of Trust as modified, supplemented or amended from time to
time;
(d) all references in this Declaration to Articles and Sections are to
Articles and Sections of this Declaration unless otherwise specified;
(e) a reference to the singular includes the plural and vice versa;
(f) a reference to any Person shall include its successors and assigns;
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(g) a reference to any agreement or instrument shall mean such
agreement or instrument as supplemented, modified, amended and restated and in
effect from time to time; and
(h) a reference to any statute, law, rule or regulation, shall include
any amendments thereto and any successor statute, law, rule or regulation.
"Administrative Trustee" means any Trustee other than the Delaware Trustee
and Property Trustee.
"Affiliate" has the same meaning as given to that term in Rule 405 of the
Securities Act or any successor rule thereunder.
"Business Day" means any day other than a day on which banking institutions
in New York, New York are authorized or required by any applicable law or
executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. C. ss.ss.3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Security" means a security representing an undivided interest in
the assets of the Trust with such terms as may be set out in any amendment to
this Declaration.
"Commission" means the Securities and Exchange Commission.
"Common Security" means a security representing an undivided beneficial
interest in the assets of the Trust with such terms as may be set out in any
amendment to this Declaration.
"Company Indemnified Person" means (a) any Administrative Trustee; (b) any
Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any employee or agent of the Trust or its
Affiliates.
"Covered Person" means any officer, director, shareholder, partner, member,
representative, employee or agent of the Trust or the Trust's Affiliates.
"Debenture Issuer" means Premier in its capacity as the issuer of the
Debentures under the Indenture.
"Debentures" means Debentures to be issued by the Debenture Issuer and
acquired by the Trust.
"Debenture Trustee" means the original trustee under the Indenture until a
successor is appointed thereunder, and thereafter means any such successor
trustee.
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<PAGE>
"Delaware Trustee" has the meaning set forth in Section 3.1.
"Exchange Act" means the Securities Exchange Act of 1934, or any successor
legislation, in each case as amended from time to time.
"Fiduciary Indemnified Person" has the meaning set forth in Section 4.3(b).
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the indenture to be entered into between Premier and the
Debenture Trustee pursuant to which the Debentures are to be issued.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"Premier" means Premier Bancorp, Inc., a Pennsylvania corporation, or any
successor entity in a merger.
"Property Trustee" has the meaning set forth in Section 3.1.
"Securities" means collectively the Common Securities and the Capital
Securities.
"Securities Act" means the Securities Act of 1933, or any successor
legislation, in each case as amended from time to time.
"Sponsor" means Premier in its capacity as sponsor of the Trust.
"Trustee" or "Trustees" means each Person who has signed this Declaration
as a trustee, so long as such Person shall continue in office in accordance with
the terms hereof, and all other Persons who may from time to time be duly
appointed, qualified and serving as Trustees in accordance with the provisions
hereof, and reference herein to a Trustee or the Trustees shall refer to such
Person or Persons solely in their capacity as trustees hereunder.
ARTICLE II
ORGANIZATION
Section 2.1 Name
The Trust created by this Declaration is named "PBI Capital Trust." The
Trust's activities may be conducted under the name of the Trust or any other
name deemed advisable by the Administrative Trustees.
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<PAGE>
Section 2.2 Office
The address of the principal office of the Trust is c/o Premier Bancorp,
Inc., 379 North Main Street, Doylestown, Pennsylvania 18901 Attention: John C.
Soffronoff, Administrative Trustee. On ten (10) Business Days written notice to
the holders of Securities the Administrative Trustees may designate another
principal office.
Section 2.3 Purpose
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities, (b) purchase and hold certain Debentures of the Debenture Issuer,
and (c) engage in only those other activities necessary, advisable or incidental
thereto. The Trust shall not borrow money, issue debt or reinvest proceeds
derived from investments, pledge any of its assets, or otherwise undertake (or
permit to be undertaken) any activity that would cause the Trust not to be
classified for United States federal income tax purposes as a grantor trust.
Section 2.4 Authority
Subject to the limitations provided in this Declaration, the Administrative
Trustees shall have exclusive and complete authority to carry out the purposes
of the Trust. An action taken by the Administrative Trustees in accordance with
their powers shall constitute the act of and serve to bind the Trust. In dealing
with the Administrative Trustees acting on behalf of the Trust, no person shall
be required to inquire into the authority of the Administrative Trustees to bind
the Trust. Persons dealing with the Trust are entitled to rely conclusively on
the power and authority of the Administrative Trustees as set forth in this
Declaration.
Section 2.5 Title to Property of the Trust
Legal title to all assets of the Trust shall be vested in the Trust.
Section 2.6 Powers of the Trustees
The Administrative Trustees shall have the exclusive power and authority to
cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this
Declaration; provided, however, that there shall be no interests in the Trust
other than the Securities;
(b) in connection with the issue and sale of the Capital Securities, at
the direction of the Sponsor, to:
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<PAGE>
(i) execute, if necessary, an offering memorandum (the "Offering
Memorandum") in preliminary and final form prepared by the Sponsor, in relation
to the offering and sale of Capital Securities (i) to qualified institutional
buyers in reliance on Rule 144A under the Securities Act, and (ii) to
institutional "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act);
(ii) execute and file any documents prepared by the Sponsor, or
take any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Capital Securities in any State or foreign
jurisdiction in which the Sponsor has determined to qualify or register such
Capital Securities for sale;
(iii) execute and deliver letters, documents, or instruments with
The Depository Trust Company relating to the Capital Securities;
(iv) execute and file an application, and all other applications,
statements, certificates, agreements and other instruments that shall be
necessary or desirable for including the Capital Securities in the Private
Offering, Resales and Trading through Automated Linkages Market;
(v) execute and enter into subscription agreements, purchase
agreements, registration rights agreements and other related agreements
providing for the sale of the Securities;
(c) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors and
consultants, and provide for reasonable compensation for such services;
(d) to incur expenses that are necessary or incidental to carry out any
of the purposes of this Declaration, which expenses shall be paid for by the
Sponsor in all respects; and
(e) to execute all documents or instruments, perform all duties and
powers, and do all things for and on behalf of the Trust in all matters
necessary or incidental to the foregoing.
Section 2.7 Filing of Certificate of Trust
On or after the date of execution of this Declaration, the Trustees shall
cause the filing of the Certificate of Trust for the Trust in the form attached
hereto as Exhibit A with the Secretary of State of the State of Delaware.
Section 2.8 Duration of Trust
The Trust, absent termination pursuant to the provisions of Section 5.2,
shall have existence for thirty-one (31) years from the date hereof.
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<PAGE>
Section 2.9 Responsibilities of the Sponsor
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Memorandum, including any amendments or
supplements thereto;
(b) to determine the States and foreign jurisdictions in which to take
appropriate action to qualify or register for sale all or part of the Capital
Securities and to do any and all such acts, other than actions which must be
taken by the Trust, and advise the Trust of actions it must take, and prepare
for execution and filing of any documents to be executed and filed by the Trust,
as the Sponsor deems necessary or advisable in order to comply with the
applicable laws of any such States and foreign jurisdictions; and
(c) to negotiate the terms of subscription agreements, purchase
agreements, registration rights agreements and other related agreements
providing for the sale of the Securities.
Section 2.10 Declaration Binding on Holders of Securities
Every Person by virtue of having become a holder of a Security or of any
interest therein in accordance with the terms of this Declaration, shall be
deemed to have expressly adopted and agreed to the terms of, and shall be bound
by, this Declaration.
ARTICLE III
TRUSTEES
Section 3.1 Trustees
The number of Trustees initially shall be three (3), and thereafter the
number of Trustees shall be such number as shall be fixed from time to time by a
written instrument signed by the Sponsor. The Sponsor is entitled to appoint or
remove without cause any Trustee at any time; provided, however, that the number
of Trustees shall in no event be less than two (2); provided further that (i)
one Trustee, in the case of a natural person, shall be a person who is a
resident of the State of Delaware or which, if not a natural person, is an
entity which has its principal place of business in the State of Delaware (the
"Delaware Trustee") and (ii) there shall be at least one Administrative Trustee
who is an employee or officer of, or is affiliated with, the Sponsor.
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<PAGE>
Except as expressly set forth in this Declaration, if there are more than
two Administrative Trustees, any power of such Administrative Trustees may be
exercised by, or with the consent of, a majority of such Administrative
Trustees; provided that if there are two Administrative Trustees, any power of
such Administrative Trustees shall be exercised by both Administrative Trustees;
provided further that if there is only one Administrative Trustee, all powers of
the Administrative Trustees shall be exercised by such one Administrative
Trustee.
The initial Administrative Trustees shall be:
John C. Soffronoff
Bruce E. Sickel
The initial Delaware Trustee shall be:
First Union Trust Company, National Association
Prior to the issuance of the Securities, the Sponsor shall appoint another
trustee (the "Property Trustee") meeting the requirements of the Trust Indenture
Act of 1939, as amended, by the execution of an amendment to this Declaration
executed by the Administrative Trustees, the Sponsor, the Property Trustee and
the Delaware Trustee.
Section 3.2 Delaware Trustee
Notwithstanding any other provision of this Declaration, the Delaware
Trustee shall not be entitled to exercise any of the powers, nor shall the
Delaware Trustee have any of the duties and responsibilities of the
Administrative Trustees described in this Declaration. The Delaware Trustee
shall be a Trustee for the sole and limited purpose of fulfilling the
requirements of ss.3807 of the Business Trust Act. Notwithstanding anything
herein to the contrary, the Delaware Trustee shall not be liable for the acts or
omissions of the Trust or of the Administrative Trustees except for such acts as
the Delaware Trustee is expressly obligated or authorized to undertake under
this Declaration or under the Business Trust Act and except for the negligence
or willful misconduct of the Delaware Trustee.
Section 3.3 Execution of Documents
(a) Unless otherwise determined by the Administrative Trustees, and
except as otherwise required by the Business Trust Act, any Administrative
Trustee is, or if there are more than two Administrative Trustees, any two
Administrative Trustees are, authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 2.6; and
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<PAGE>
(b) an Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 2.6.
Section 3.4 Not Responsible for Recitals or Sufficiency of Declaration
The recitals contained in this Declaration shall be taken as the statements
of the Sponsor, and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Declaration.
ARTICLE IV
LIMITATION OF LIABILITY OF HOLDERS OF SECURITIES,
TRUSTEES OR OTHERS
Section 4.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Trust or any Covered Person for any loss, damage
or claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Declaration or by law, except that
an Indemnified Person shall be liable for any such loss, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions; and
(b) an Indemnified Person shall be fully protected in relying in good
faith upon the records of the Trust and upon such information, opinions, reports
or statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which distributions to
holders of Securities might properly be paid.
Section 4.2 Fiduciary Duty
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Declaration shall not be liable to the Trust or to any
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<PAGE>
other Covered Person for its good faith reliance on the provisions of this
Declaration. The provisions of this Declaration, to the extent that they
restrict the duties and liabilities of an Indemnified Person otherwise existing
at law or in equity, are agreed by the parties hereto to replace such other
duties and liabilities of such Indemnified Person;
(b) unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between
Covered Persons; or
(ii) whenever this Declaration or any other agreement contemplated
herein or therein provides that an Indemnified Person shall act in a manner that
is, or provides terms that are, fair and reasonable to the Trust or any holder
of Securities, the Indemnified Person shall resolve such conflict of interest,
take such action or provide such terms, considering in each case the relative
interest of each party (including its own interest) to such conflict, agreement,
transaction or situation and the benefits and burdens relating to such
interests, any customary or accepted industry practices, and any applicable
generally accepted accounting practices or principles. In the absence of bad
faith of the Indemnified Person, the resolution, action or terms so made, taken
or provided by the Indemnified Person shall not constitute a breach of this
Declaration or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise; and
(c) whenever in this Declaration an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors as
it desires, including its own interests, and shall have no duty or obligation to
give any consideration to any interest of or factors affecting the Trust or any
other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Declaration or by
applicable law.
Section 4.3 Indemnification
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Trust) by reason of the fact
that he is or was a Company Indemnified Person, against expenses (including
reasonable attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner
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he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of any action, suit
or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the Company Indemnified Person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of the
Trust, and, with respect to any criminal action or proceeding, did not have
reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the Trust to procure a judgment in its favor by
reason of the fact that he is or was a Company Indemnified Person, against
expenses (including reasonable attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Trust, except that no such indemnification
shall be made in respect of any claim, issue or matter as to which such Company
Indemnified Person shall have been adjudged to be liable to the Trust unless and
only to the extent that the Court of Chancery of Delaware or the court in which
such action or suit was brought shall determine upon application that, despite
the adjudication of liability but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
which such Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action without
prejudice or the settlement of an action without admission of liability) in
defense of any action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a), or in defense of any claim, issue or matter therein, he
shall be indemnified, to the full extent permitted by law, against expenses
(including reasonable attorneys' fees) actually and reasonably incurred by him
in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 4.3(a) (unless ordered by a court) shall be made by the Debenture Issuer
only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances, because he has met the applicable standard of conduct set forth
in paragraphs (i) and (ii). Such determination shall be made (1) by the
Administrative Trustees by a majority vote of a quorum consisting of such
Administrative Trustees who were not parties to such action, suit or proceeding,
(2) if such a quorum is not obtainable, or, even if obtainable, if a quorum of
disinterested Administrative Trustees so directs, by independent legal counsel
in a written opinion, or (3) by the Common Security Holder of the Trust.
(v) Expenses (including attorneys' fees) incurred by a Company
Indemnified Person in defending a civil, criminal, administrative or
investigative action, suit or proceeding referred to in paragraphs (i) and (ii)
of this Section 4.3(a) shall be paid by the Debenture Issuer in advance of the
final disposition of such action, suit or proceeding upon receipt of an
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undertaking by or on behalf of such Company Indemnified Person to repay such
amount if it shall ultimately be determined that he is not entitled to be
indemnified by the Debenture Issuer as authorized in this Section 4.3(a).
Notwithstanding the foregoing, no advance shall be made by the Debenture Issuer
if a determination is reasonably and promptly made (i) by the Administrative
Trustees by a majority vote of a quorum of disinterested Administrative
Trustees, (ii) if such a quorum is not obtainable, or, even if obtainable, if a
quorum of disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (iii) the Common Security Holder of the Trust,
that, based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did not
believe to be in, or not opposed to, the best interests of the Trust, or, with
respect to any criminal proceeding, that such Company Indemnified Person
believed or had reasonable cause to believe his conduct was unlawful. In no
event shall any advance be made in instances where the Administrative Trustees,
independent legal counsel or Common Security Holder reasonably determine that
such person deliberately breached his duty to the Trust or the holder of
Securities.
(vi) The indemnification and advancement of expenses provided by,
or granted pursuant to, the other paragraphs of this Section 4.3(a) shall not be
deemed exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any agreement, vote of
stockholders or disinterested directors of the Debenture Issuer, or Capital
Security Holders of the Trust or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office. All
rights to indemnification under this Section 4.3(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company Indemnified
Person who serves in such capacity at any time while this Section 4.3(a) is in
effect. Any repeal or modification of this Section 4.3(a) shall not affect any
rights or obligations then existing.
(vii) The Sponsor or the Trust may purchase and maintain on behalf
of any person who is or was a Company Indemnified Person insurance against any
liability asserted against him and incurred by him in any such capacity, or
arising out of his status as such, whether or not the Debenture Issuer would
have the power to indemnify him against such liability under the provisions of
this Section 4.3(a).
(viii) For purposes of this Section 4.3(a), references to "the
Trust" shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in a
consolidation or merger, so that any person who is or was a director, trustee,
officer or employee of such constituent entity, or is or was serving at the
request of such constituent entity, shall stand in the same position under the
provisions of this Section 4.3(a) with respect to the resulting or surviving
entity as he would have with respect to such constituent entity if its separate
existence had continued.
(ix) The indemnification and advancement of expenses provided by,
or granted pursuant to, this Section 4.3(a) shall, unless otherwise provided
when authorized or ratified,
- 11 -
<PAGE>
continue as to a person who has ceased to be a Company Indemnified Person and
shall inure to the benefit of the heirs, executors and administrators of such a
person.
(b) The Debenture Issuer agrees to indemnify (i) the Delaware Trustee
and the Property Trustee, (ii) any Affiliate of the Delaware Trustee and the
Property Trustee, and (iii) any officers, directors, shareholders, members,
partners, employees, representatives, nominees, custodians or agents of the
Delaware Trustee and the Property Trustee, (each of the Persons in (i) through
(iii) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any loss, liability or
expense incurred without gross negligence or bad faith on its part, arising out
of or in connection with the acceptance or administration of the trust or trusts
hereunder, including the costs and expenses (including reasonable legal fees and
expenses) of defending itself against, or investigating, any claim or liability
hereunder, or in connection with the exercise or performance of any of its
powers or duties hereunder. The obligation to indemnify as set forth in this
Section 4.3(b) shall survive the termination of this Declaration.
Section 4.4. Outside Businesses
Any Covered Person, the Sponsor and the Delaware Trustee may engage in or
possess an interest in other business ventures of any nature or description,
independently or with others, similar or dissimilar to the business of the
Trust, and the Trust, and the holders of Securities shall have no rights by
virtue of this Declaration in and to such independent ventures or the income or
profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor or the Delaware Trustee shall be
obligated to present any particular investment or other opportunity to the Trust
even if such opportunity is of a character that, if presented to the Trust,
could be taken by the Trust, and any Covered Person, the Sponsor and the
Delaware Trustee shall have the right to take for its own account (individually
or as a partner or fiduciary) or to recommend to others any such particular
investment or other opportunity. Any Covered Person and the Delaware Trustee may
engage or be interested in any financial or other transaction with the Sponsor
or any Affiliate of the Sponsor, or may act as depositary, trustee or agent for,
or may act on any committee or body of holders of, securities or other
obligations of the Sponsor or its Affiliates.
ARTICLE V
AMENDMENTS, TERMINATION, MISCELLANEOUS
Section 5.1 Amendments
At any time before the issue of any Securities, this Declaration may be
amended by, and only by, a written instrument executed by all of the
Administrative Trustees and the Sponsor.
- 12 -
<PAGE>
Section 5.2 Termination of Trust
(a) The Trust shall dissolve:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or its
equivalent with respect to the Sponsor or the revocation of the Sponsor's
charter;
(iii) upon the entry of a decree of judicial dissolution of the
Sponsor or the Trust; and
(iv) before the issuance of any Securities, with the consent of all
of the Administrative Trustees and the Sponsor.
(b) As soon as is practicable after the occurrence of an event referred
to in Section 5.2(a), the Trustees shall file a certificate of cancellation with
the Secretary of State of the State of Delaware and the Trust shall terminate.
Section 5.3 Governing Law
THIS DECLARATION AND THE RIGHTS OF THE PARTIES HEREUNDER SHALL BE GOVERNED
BY AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE AND ALL
RIGHTS AND REMEDIES SHALL BE GOVERNED BY SUCH LAWS WITHOUT REGARD TO ITS
PRINCIPLES OF CONFLICT OF LAWS.
Section 5.4 Headings
Headings contained in this Declaration are inserted for convenience of
reference only and do not affect the interpretation of this Declaration or any
provision hereof.
Section 5.5 Successors and Assigns
Whenever in this Declaration any of the parties hereto is named or referred
to, the successors and assigns of such party shall be deemed to be included, and
all covenants and agreements in this Declaration by the Sponsor and the Trustees
shall bind and inure to the benefit of their respective successors and assigns,
whether so expressed.
Section 5.6 Partial Enforceability
If any provision of this Declaration, or the application of such provision
to any Person or circumstance, shall be held invalid, the remainder of this
Declaration, or the application of such provision to persons or circumstances
other than those to which it is held invalid, shall not be affected thereby.
- 13 -
<PAGE>
Section 5.7 Counterparts
This Declaration may contain more than one counterpart of the signature
page and this Declaration may be executed by the affixing of the signature of
each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
- 14 -
<PAGE>
IN WITNESS WHEREOF, the undersigned, have caused this Declaration to be
executed as of the day and year first above written.
/s/ John C. Soffronoff
-------------------------------------------
Name: John C. Soffronoff
As Administrative Trustee
/s/ Bruce E. Sickel
-------------------------------------------
Name: Bruce E. Sickel
As Administrative Trustee
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Delaware Trustee
By: /s/ Edward L. Truitt, Jr.
-------------------------------------------
Name: Edward L. Truitt, Jr.
Title: Authorized Signatory
PREMIER BANCORP, INC.
By: /s/ John C. Soffronoff
-------------------------------------------
Name: John C. Soffronoff
Title: President
- 15 -
<PAGE>
CERTIFICATE OF TRUST
OF
PBI CAPITAL TRUST
This Certificate of Trust is being executed as of July __, 1998 for the
purpose of organizing a business trust pursuant to the Delaware Business Trust
Act, 12 Del. C. ss.ss.3801 et. seq. (the "Act").
The undesigned hereby certifies as follows:
1. Name. The name of the business trust is "PBI Capital Trust" (the
"Trust").
2. Delaware Trustee. The name and business address of the Delaware resident
trustee of the Trust meeting the requirements of Section 3807 of the Act is as
follows:
First Union Trust Company, National Association
920 King Street, 1st Floor
Wilmington, Delaware 19801-7475
3. Effective. This Certificate of Trust shall be effective immediately upon
filing in the office of the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being all of the trustees of the
Trust, have duly executed this Certificate of Trust as of the day and year first
above written.
FIRST UNION TRUST COMPANY, NATIONAL ASSOCIATION
as Delaware Trustee
By:
-------------------------------------------
-----------------------------------------------
Name: John C. Soffronoff
As Administrative Trustee
-----------------------------------------------
Name: Bruce E. Sickel
As Administrative Trustee
- 16 -
EXHIBIT 4.5
================================================================================
AMENDED AND RESTATED DECLARATION
OF TRUST
PBI CAPITAL TRUST
Dated as of August 11, 1998
================================================================================
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions................................................... 2
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application............................. 11
Section 2.2 Lists of Holders of Securities............................... 12
Section 2.3 Reports by the Property Trustee.............................. 13
Section 2.4 Periodic Reports to Property Trustee......................... 13
Section 2.5 Evidence of Compliance with Conditions Precedent............. 13
Section 2.6 Events of Default; Waiver.................................... 13
Section 2.7 Event of Default; Notice..................................... 16
ARTICLE III
ORGANIZATION
Section 3.1 Name..........................................................
Section 3.2 Office........................................................
Section 3.3 Purpose.......................................................
Section 3.4 Authority.....................................................
Section 3.5 Title to Property of the Trust................................
Section 3.6 Powers and Duties of the Administrative Trustees..............
Section 3.7 Prohibition of Actions by the Trust and the Trustees..........
Section 3.8 Powers and Duties of the Property Trustee.....................
Section 3.9 Certain Duties and Responsibilities of the Property Trustee...
Section 3.10 Certain Rights of Property Trustee ...........................
Section 3.11 Delaware Trustee..............................................
Section 3.12 Execution of Documents........................................
Section 3.13 Not Responsible for Recitals or Issuance of Securities........
Section 3.14 Duration of Trust.............................................
Section 3.15 Mergers.......................................................
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.......................
Section 4.2 Responsibilities of the Sponsor...............................
Section 4.3 Right to Proceed..............................................
i
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ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees: Appointment of Co-Trustee.................
Section 5.2 Delaware Trustee..............................................
Section 5.3 Property Trustee: Eligibility.................................
Section 5.4 Certain Qualifications of Administrative
Trustees and Delaware Trustee Generally.....................
Section 5.5 Administrative Trustees.......................................
Section 5.6 Delaware Trustee..............................................
Section 5.7 Appointment, Removal and Resignation of Trustees..............
Section 5.8 Vacancies among Trustees......................................
Section 5.9 Effect of Vacancies...........................................
Section 5.10 Meetings......................................................
Section 5.11 Delegation of Power...........................................
Section 5.12 Merger, Conversion. Consolidation or Succession to Business...
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions ................................................
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.......................
Section 7.2 Execution and Authentication..................................
Section 7.3 Form and Dating...............................................
Section 7.4 Registrar, Paying Agent and Exchange Agent....................
Section 7.5 Paying Agent to Hold Money in Trust...........................
Section 7.6 Replacement Securities........................................
Section 7.7 Outstanding Capital Securities................................
Section 7.8 Capital Securities in Treasury................................
Section 7.9 Temporary Securities..........................................
Section 7.10 Cancellation..................................................
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust..........................................
ii
<PAGE>
ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities........................................
Section 9.2 Transfer Procedures and Restrictions..........................
Section 9.3 Deemed Security Holders.......................................
Section 9.4 Book Entry Interests..........................................
Section 9.5 Notices to Clearing Agency....................................
Section 9.6 Appointment of Successor Clearing Agency......................
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.....................................................
Section 10.2 Exculpation...................................................
Section 10.3 Fiduciary Duty................................................
Section 10.4 Indemnification...............................................
Section 10.5 Outside Businesses............................................
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year...................................................
Section 11.2 Certain Accounting Matters....................................
Section 11.3 Banking.......................................................
Section 11.4 Withholding...................................................
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments....................................................
Section 12.2 Meetings of the Holders: Action by Written Consent............
ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee............
Section 13.2 Representations and Warranties of Delaware Trustee............
ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement ................................
iii
<PAGE>
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.......................................................
Section 15.2 Governing Law ................................................
Section 15.3 Intention of the Parties......................................
Section 15.4 Headings......................................................
Section 15.5 Successors and Assigns........................................
Section 15.6 Partial Enforceability........................................
Section 15.7 Counterparts .................................................
ANNEX I TERMS OF SECURITIES...........................................I-1
EXHIBIT A-1 FORM OF CAPITAL SECURITY CERTIFICATE.........................A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE..........................A2-1
EXHIBIT B SPECIMEN OF DEBENTURE.........................................L-1
EXHIBIT C PURCHASE AGREEMENT............................................C-1
EXHIBIT D REGISTRATION RIGHTS AGREEMENT.................................D-1
iv
<PAGE>
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
of 1939, as amended Trust Agreement
- ------------------- ---------------
310(a) .....................................................................5.3
310(b)............................................................5.3(c); 5.3(d)
311(a) ...................................................................2.2(b)
311(b)....................................................................2.2(b)
312(a)....................................................................2.2(a)
312(b)....................................................................2.2(b)
313......................................................................... 2.3
314(a)...............................................................2.4; 3.6(j)
314(c).......................................................................2.5
315(a).......................................................................3.9
315(b)....................................................................2.7(a)
315(c)....................................................................3.9(a)
315(d)....................................................................3.9(b)
316(a).......................................................................2.6
316(c)....................................................................3.6(e)
317(a)............................................................3.8(e); 3.8(h)
317(b)...............................................................3.8(i); 7.5
- ------------------
* This Cross-Reference Table (to the extent such provisions of the Trust
Indenture Act of 1939, as amended, are applicable to Securities
authenticated and issued under this Trust Agreement) does not
constitute part of the Trust Agreement and shall not affect the
interpretation of any of its terms or provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
PBI CAPITAL TRUST
August 11, 1998
AMENDED AND RESTATED DECLARATION OF TRUST ("Trust Agreement") dated and
effective as of August 11, 1998, by the Trustees (as defined herein), the
Sponsor (as defined herein) and by the holders, from time to time, of undivided
beneficial interests in the Trust to be issued pursuant to this Trust Agreement;
WHEREAS, the Trustees and the Sponsor established PBI Capital Trust (the
"Trust"), a trust formed under the Delaware Business Trust Act pursuant to a
Declaration of Trust dated as of July 28, 1998 (the "Original Declaration"), and
a Certificate of Trust (the "Certificate of Trust") filed with the Secretary of
State of the State of Delaware (the "Secretary of State") on July 28, 1998, for
the sole purpose of issuing and selling certain securities representing
undivided beneficial interests in the assets of the Trust and investing the
proceeds thereof in certain Debentures of the Debenture Issuer (each as
hereinafter defined), and engaging in only those other activities necessary or
incidental thereto;
WHEREAS, as of the date hereof, no interests in the Trust have been issued;
WHEREAS, all of the Trustees and the Sponsor, by this Trust Agreement,
amend and restate each and every term and provision of the Original Declaration;
and
NOW, THEREFORE, it being the intention of the parties hereto to continue
the Trust as a statutory business trust under the Business Trust Act and that
this Trust Agreement constitute the governing instrument of such business trust,
the Trustees declare that all assets contributed to the Trust will be held in
trust for the benefit of the holders, from time to time, of the securities
representing undivided beneficial interests in the assets of the Trust issued
hereunder, subject to the provisions of this Trust Agreement.
1
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ARTICLE I
INTERPRETATION AND DEFINITIONS
Section 1.1 Definitions.
Unless the context otherwise requires:
(a) Capitalized terms used in this Trust Agreement but not defined in the
preamble above have the respective meanings assigned to them in this Section
1.1;
(b) a term defined anywhere in this Trust Agreement has the same meaning
throughout;
(c) all references to "the Trust Agreement" or "this Trust Agreement" are
to this Trust Agreement as modified, supplemented or amended from time to time;
(d) all references in this Trust Agreement to Articles and Sections and
Annexes and Exhibits are to Articles and Sections of and Annexes and Exhibits to
this Trust Agreement unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same meaning when
used in this Trust Agreement unless otherwise defined in this Trust Agreement or
unless the context otherwise requires; and
(f) a reference to the singular includes the plural and vice versa.
"Administrative Trustee" has the meaning set forth in Section 5.1.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Agent" means any Paying Agent, Registrar or Exchange Agent.
2
<PAGE>
"Authorized Officer" of a Person means any other Person that is authorized
to legally bind such former Person.
"Book Entry Interest" means a beneficial interest in a Global Certificate
registered in the name of a Clearing Agency or its nominee, ownership and
transfers of which shall be maintained and made through book entries by a
Clearing Agency as described in Section 9.4.
"Business Day" means any day other than a Saturday or a Sunday or a day on
which banking institutions in the City of New York, New York or Wilmington,
Delaware are authorized or required by law or executive order to close.
"Business Trust Act" means Chapter 38 of Title 12 of the Delaware Code, 12
Del. Code ss. 3801 et seq., as it may be amended from time to time, or any
successor legislation.
"Capital Security Beneficial Owner" means, with respect to a Book Entry
Interest, a Person who is the beneficial owner of such Book Entry Interest, as
reflected on the books of the Clearing Agency, or on the books of a Person
maintaining an account with such Clearing Agency (directly as a Clearing Agency
Participant or as an indirect participant, in each case in accordance with the
rules of such Clearing Agency).
"Capital Securities" means, collectively, the Series A Capital Securities
and the Series B Capital Securities.
"Capital Securities Guarantee" means, collectively, the Series A Capital
Securities Guarantee and the Series B Capital Securities Guarantee.
"Certificate of Trust" has the meaning set forth in the first WHEREAS
clause.
"Clearing Agency" means an organization registered as a "Clearing Agency"
pursuant to Section 17A of the Exchange Act that is acting as depositary for the
Capital Securities and in whose name or in the name of a nominee of that
organization shall be registered a Global Certificate and which shall undertake
to effect book entry transfers and pledges of the Capital Securities.
3
<PAGE>
"Clearing Agency Participant" means a broker, dealer, bank, other financial
institution or other Person for whom from time to time the Clearing Agency
effects book entry transfers and pledges of securities deposited with the
Clearing Agency.
"Closing Time" means the "Closing Time" under the Purchase Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor legislation.
"Commission" means the United States Securities and Exchange Commission as
from time to time constituted, or if at any time after the execution of this
Trust Agreement such Commission is not existing and performing the duties now
assigned to it under applicable Federal securities laws, then the body
performing such duties at such time.
"Common Securities" has the meaning specified in Section 7.1(a).
"Common Securities Guarantee" means the guarantee agreement dated as of
August 11, 1998 of the Sponsor in respect of the Common Securities.
"Company Indemnified Person" means (a) any Administrative Trustee; (b) any
Affiliate of any Administrative Trustee; (c) any officers, directors,
shareholders, members, partners, employees, representatives or agents of any
Administrative Trustee; or (d) any officer, employee or agent of the Trust or
its Affiliates.
"Corporate Trust Office" means the office of the Property Trustee at which
the corporate trust business of the Property Trustee shall, at any particular
time, be principally administered, which office at the date of execution of this
Agreement is located at One Rodney Square, 920 King Street, 1st Floor,
Wilmington, Delaware 19801.
"Covered Person" means: (a) any officer, director, shareholder, partner,
member, representative, employee or agent of (i) the Trust or (ii) the Trust's
Affiliates; and (b) any Holder of Securities.
4
<PAGE>
"Debenture Issuer" means Premier Bancorp, Inc., a Pennsylvania corporation,
or any successor entity resulting from any consolidation, amalgamation, merger
or other business combination, in its capacity as issuer of the Debentures under
the Indenture.
"Debenture Trustee" means First Union Trust Company, National Association,
a national banking association, as trustee under the Indenture until a successor
is appointed thereunder, and thereafter means such successor trustee.
"Debentures" means, collectively, the Series A Debentures and the Series B
Debentures.
"Default" means an event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.
"Definitive Capital Securities" shall have the meaning set forth in Section
7.3(c).
"Delaware Trustee" has the meaning set forth in Section 5.2.
"Direct Action" shall have the meaning set forth in Section 3.8(e).
"Distribution" means a distribution payable to Holders in accordance with
Section 6.1.
"DTC" means The Depository Trust Company, the initial Clearing Agency.
"Event of Default" in respect of the Securities means an Event of Default
(as defined in the Indenture) that has occurred and is continuing in respect of
the Debentures.
"Exchange Act" means the Securities Exchange Act of 1934, as amended from
time to time, or any successor legislation.
"Exchange Agent" has the meaning set forth in Section 7.4.
5
<PAGE>
"Exchange Offer" means the offer that may be made pursuant to the
Registration Rights Agreement (i) by the Trust to exchange Series B Capital
Securities for Series A Capital Securities and (ii) by the Debenture Issuer to
exchange Series B Debentures for Series A Debentures and the Series B Capital
Securities Guarantee for the Series A Capital Securities Guarantee.
"Federal Reserve Board" means the Board of Governors of the Federal Reserve
System.
"Fiduciary Indemnified Person" has the meaning set forth in Section
10.4(b).
"Fiscal Year" has the meaning set forth in Section 11.1.
"Global Capital Security" has the meaning set forth in Section 7.3(a).
"Holder" means a Person in whose name a Security is registered, such Person
being a beneficial owner within the meaning of the Business Trust Act.
"Indemnified Person" means a Company Indemnified Person or a Fiduciary
Indemnified Person.
"Indenture" means the Indenture dated as of August 11, 1998, among the
Debenture Issuer and the Debenture Trustee, as amended from time to time.
"Investment Company" means an investment company as defined in the
Investment Company Act.
"Investment Company Act" means the Investment Company Act of 1940, as
amended from time to time, or any successor legislation.
"Legal Action" has the meaning set forth in Section 3.6(g).
"List of Holders" has the meaning set forth in Section 2.2(a).
"Majority in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Capital Securities or by the
Trust Indenture Act, Holder(s) of outstanding Trust Securities
6
<PAGE>
voting together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of more than 50% of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Offering Memorandum" has the meaning set forth in Section 3.6(b).
"Officers' Certificate" means, with respect to any Person, a certificate
signed by any two of the Chairman, a Vice Chairman, the Chief Executive Officer,
the President, a Vice President, the Chief Financial Officer, the Treasurer, an
Assistant Treasurer, the Comptroller, the Secretary, or an Assistant Secretary
of such Person. Any Officers' Certificate delivered with respect to compliance
with a condition or covenant provided for in this Trust Agreement shall include:
(a) a statement that each officer signing the Certificate has read the
covenant or condition and the definitions relating thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's opinion, is necessary to enable such officer
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer, such
condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who may be an
employee of the Sponsor, and who shall be acceptable to the Property Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
7
<PAGE>
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual, corporation,
estate, partnership, joint venture, association, joint stock company, limited
liability company, trust, unincorporated association, or government or any
agency or political subdivision thereof, or any other entity of whatever nature.
"PORTAL" has the meaning set forth in Section 3.6(b)(iii).
"Property Trustee" has the meaning set forth in Section 5.3(a).
"Property Trustee Account" has the meaning set forth in Section 3.8(c).
"Purchase Agreement" means the Purchase Agreement for the initial offering
and sale of Capital Securities in the form of Exhibit C.
"QIBs" shall mean qualified institutional buyers as defined in Rule 144A.
"Quorum" means a majority of the Administrative Trustees or, if there are
only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of August 6, 1998, by and among the Trust, the Debenture Issuer and the
Initial Purchaser named therein, as amended from time to time.
"Registration Statement" has the meaning set forth in the Registration
Rights Agreement.
8
<PAGE>
"Related Party" means, with respect to the Sponsor, any direct or indirect
wholly owned subsidiary of the Sponsor or any other Person that owns, directly
or indirectly, 100% of the outstanding voting securities of the Sponsor.
"Responsible Officer" means any officer within the Corporate Trust Office
of the Property Trustee, including any vice-president, any assistant
vice-president, any assistant secretary, the treasurer, any assistant treasurer
or other officer of the Corporate Trust Office of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and also means, with respect to a particular corporate trust
matter, any other officer to whom such matter is referred because of that
officer's knowledge of and familiarity with the particular subject.
"Restricted Definitive Capital Securities" has the meaning set forth in
Section 7.3(c).
"Restricted Capital Security" means a Capital Security required by Section
9.2 to contain a Restricted Securities Legend.
"Restricted Securities Legend" has the meaning set forth in Section 9.2.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act, or any
successor rule or regulation.
"Rule 144" means Rule 144 under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Rule 144A" means Rule 144A under the Securities Act, as such rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the Commission.
"Secretary of State" has the meaning set forth in the first WHEREAS clause.
"Securities" or "Trust Securities" means the Common Securities and the
outstanding Capital Securities.
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"Securities Act" means the Securities Act of 1933, as amended from time to
time, or any successor legislation.
"Securities Guarantees" means the Common Securities Guarantee and the
Capital Securities Guarantee.
"Series A Capital Securities" has the meaning specified in Section 7.1(a).
"Series A Capital Securities Guarantee" means the guarantee agreement dated
as of August 11, 1998, by the Sponsor in respect of the Series A Capital
Securities.
"Series A Debentures" means the Series A 8.57% Junior Subordinated
Deferrable Interest Debentures due August 15, 2028 of the Debenture Issuer
issued pursuant to the Indenture.
"Series B Capital Securities" has the meaning specified in Section 7.1(a).
"Series B Capital Securities Guarantee" means the guarantee agreement to be
entered into in connection with the Exchange Offer by the Sponsor in respect of
the Series B Capital Securities.
"Series B Debentures" means the Series B 8.57% Junior Subordinated
Deferrable Interest Debentures due August 15, 2028 of the Debenture Issuer
issued pursuant to the Indenture in the event of the Exchange Offer.
"Special Event" has the meaning set forth in Annex I hereto.
"Sponsor" means Premier Bancorp, Inc., a Pennsylvania corporation, or any
successor entity resulting from any merger, consolidation, amalgamation or other
business combination, in its capacity as sponsor of the Trust.
"Successor Entity" has the meaning set forth in Section 3.15(b)(i).
"Super Majority" has the meaning set forth in Section 2.6(a)(ii).
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"10% in liquidation amount" means, with respect to the Trust Securities,
except as provided in the terms of the Capital Securities or by the Trust
Indenture Act, if applicable, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Capital Securities or Holders of outstanding Common Securities
voting separately as a class, who are the record owners of 10% or more of the
aggregate liquidation amount (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined) of all outstanding
Securities of the relevant class.
"Treasury Regulations" means the income tax regulations, including
temporary and proposed regulations, promulgated under the Code by the United
States Treasury, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
"Trustee" or "Trustees" means each Person who has signed this Trust
Agreement as a trustee, so long as such Person shall continue in office in
accordance with the terms hereof, and all other Persons who may from time to
time be duly appointed, qualified and serving as trustees in accordance with the
provisions hereof, and references herein to a Trustee or the Trustees shall
refer to such Person or Persons solely in their capacity as trustees hereunder.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as amended
from time to time, or any successor legislation.
"Unrestricted Global Capital Security" has the meaning set forth in Section
9.2(b).
ARTICLE II
TRUST INDENTURE ACT
Section 2.1 Trust Indenture Act; Application.
(a) This Trust Agreement is subject to the provisions of the Trust
Indenture Act that are required to be part of this Trust Agreement in order for
this Trust Agreement to be qualified under the Trust Indenture Act and shall, to
the extent applicable, be governed by such provisions.
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(b) The Property Trustee shall be the only Trustee which is a Trustee for
the purposes of the Trust Indenture Act, to the extent that the provisions of
the Trust Indenture Act may apply to this Trust Agreement.
(c) If and to the extent that any provision of this Trust Agreement limits,
qualifies or conflicts with the duties imposed by ss.ss. 310 to 317, inclusive,
of the Trust Indenture Act, such imposed duties shall control, to the extent
that such Section is applicable to this Trust Agreement.
(d) The application of the Trust Indenture Act to this Trust Agreement, if
applicable, shall not affect the nature of the Securities as equity securities
representing undivided beneficial interests in the assets of the Trust.
Section 2.2 Lists of Holders of Securities.
(a) Each of the Sponsor and the Administrative Trustees on behalf of the
Trust shall provide the Property Trustee, unless the Property Trustee is
Registrar for the Securities (i) within 14 days after each record date for
payment of Distributions, a list, in such form as the Property Trustee may
reasonably require, of the names and addresses of the Holders ("List of
Holders") as of such record date, provided that neither the Sponsor nor the
Administrative Trustees on behalf of the Trust shall be obligated to provide
such List of Holders at any time the List of Holders does not differ from the
most recent List of Holders given to the Property Trustee by the Sponsor and the
Administrative Trustees on behalf of the Trust, and (ii) at any other time,
within 30 days of receipt by the Trust of a written request for a List of
Holders as of a date no more than 14 days before such List of Holders is given
to the Property Trustee. The Property Trustee shall preserve, in as current a
form as is reasonably practicable, all information contained in Lists of Holders
given to it or which it receives in the capacity as Paying Agent (if acting in
such capacity), provided that the Property Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
(b) The Property Trustee shall comply with its obligations under ss.ss.
311(a), 311(b) and 312(b) of the Trust Indenture Act, to the extent such
Sections apply to this Trust Agreement.
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Section 2.3 Reports by the Property Trustee.
Within 60 days after January 31, of each year, commencing January 31, 1999,
the Property Trustee shall provide to the Holders of the Capital Securities such
reports as are required by ss. 313 of the Trust Indenture Act, if any, in the
form and in the manner provided by ss. 313 of the Trust Indenture Act, to the
extent such Section is applicable to this Trust Agreement. The Property Trustee
shall also comply with the requirements of ss. 313(d) of the Trust Indenture
Act, to the extent such Section is applicable to this Trust Agreement.
Section 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such documents, reports and information as
are required by ss. 314 (if any) and the compliance certificate required by ss.
314 of the Trust Indenture Act in the form, in the manner and at the times
required by ss. 314 of the Trust Indenture Act, to the extent such Section is
applicable to this Trust Agreement.
Section 2.5 Evidence of Compliance with Conditions Precedent.
Each of the Sponsor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent provided for in this Trust Agreement that relate to any of
the matters set forth in ss. 314(c) of the Trust Indenture Act, to the extent
such Section is applicable to this Trust Agreement. Any certificate or opinion
required to be given by an officer pursuant to ss. 314(c)(1) of the Trust
Indenture Act may be given in the form of an Officers' Certificate.
Section 2.6 Events of Default; Waiver.
(a) The Holders of a Majority in liquidation amount of Capital Securities
may, by vote or written consent, on behalf of the Holders of all of the Capital
Securities, waive any past Event of Default in respect of the Capital Securities
and its consequences, provided that, if the underlying Event of Default under
the Indenture:
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(i) is not waivable under the Indenture, the Event of Default under
the Trust Agreement shall also not be waivable; or
(ii) requires the consent or vote of greater than a majority in
aggregate principal amount of the holders of the Debentures (a "Super
Majority") to be waived under the Indenture, the Event of Default under the
Trust Agreement may only be waived by the vote of the Holders of at least
the proportion in aggregate liquidation amount of the Capital Securities
that the relevant Super Majority represents of the aggregate principal
amount of the Debentures outstanding.
The foregoing provisions of this Section 2.6(a) shall be in lieu of ss.
316(a)(1)(B) of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust
Indenture Act is hereby expressly excluded from this Trust Agreement and the
Securities, as permitted by the Trust Indenture Act, to the extent that such
Section is applicable to this Trust Agreement. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Capital Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Trust Agreement, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Capital
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Capital Securities of an Event of Default with respect to the Capital
Securities shall also be deemed to constitute a waiver by the Holders of the
Common Securities of any such Event of Default with respect to the Common
Securities for all purposes of this Trust Agreement without any further act,
vote, or consent of the Holders of the Common Securities.
(b) The Holders of a Majority in liquidation amount of the Common
Securities may, by vote, on behalf of the Holders of all of the Common
Securities, waive any past Event of Default with respect to the Common
Securities and its consequences, provided that, if the underlying Event of
Default under the Indenture:
(i) is not waivable under the Indenture, except where the Holders of
the Common Securities are deemed to have waived such Event of Default under
the Trust Agreement as provided below in this Section 2.6(b), the Event of
Default under the Trust Agreement shall also not be waivable; or
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(ii) requires the consent or vote of a Super Majority to be waived,
except where the Holders of the Common Securities are deemed to have waived
such Event of Default under the Trust Agreement as provided below in this
Section 2.6(b), the Event of Default under the Trust Agreement may only be
waived by the vote of the Holders of at least the proportion in aggregate
liquidation amount of the Common Securities that the relevant Super
Majority represents of the aggregate principal amount of the Debentures
outstanding;
provided further, the Holders of Common Securities will be deemed to have waived
any such Event of Default and all Events of Default with respect to the Common
Securities and its consequences if all Events of Default with respect to the
Capital Securities have been cured, waived or otherwise eliminated, and until
such Events of Default have been so cured, waived or otherwise eliminated, the
Property Trustee will be deemed to be acting solely on behalf of the Holders of
the Capital Securities and only the Holders of the Capital Securities will have
the right to direct the Property Trustee in accordance with the terms of the
Securities. The foregoing provisions of this Section 2.6(b) shall be in lieu of
ss.ss. 316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act and such ss.ss.
316(a)(1)(A) and 316(a)(1)(B) of the Trust Indenture Act are hereby expressly
excluded from this Trust Agreement and the Securities, as permitted by the Trust
Indenture Act, to the extent such Section was applicable to this Trust
Agreement. Subject to the foregoing provisions of this Section 2.6(b), upon such
waiver, any such default shall cease to exist and any Event of Default with
respect to the Common Securities arising therefrom shall be deemed to have been
cured for every purpose of this Trust Agreement, but no such waiver shall extend
to any subsequent or other default or Event of Default with respect to the
Common Securities or impair any right consequent thereon.
(c) A waiver of an Event of Default under the Indenture by the Property
Trustee, at the direction of the Holders of the Capital Securities, constitutes
a waiver of the corresponding Event of Default under this Trust Agreement. The
foregoing provisions of this Section 2.6(c) shall be in lieu of ss. 316(a)(1)(B)
of the Trust Indenture Act and such ss. 316(a)(1)(B) of the Trust Indenture Act
is hereby expressly excluded from this Trust Agreement and the Securities, as
permitted by the Trust Indenture Act, to the extent such Section was applicable
to this Trust Agreement.
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Section 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the occurrence of an
Event of Default, transmit by mail, first class postage prepaid, to the Holders,
notices of all defaults with respect to the Securities actually known to a
Responsible Officer, unless such defaults have been cured before the giving of
such notice (the term "defaults" for the purposes of this Section 2.7(a) being
hereby defined to be an Event of Default as defined in the Indenture, not
including any periods of grace provided for therein and irrespective of the
giving of any notice provided therein); provided that, except for a default in
the payment of principal of (or premium, if any) or interest on any of the
Debentures, the Property Trustee shall be protected in withholding such notice
if and so long as a Responsible Officer in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Property Trustee shall not be deemed to have knowledge of any
default except:
(i) a default under Sections 5.01(a) and 5.01(b) of the Indenture; or
(ii) any default as to which the Property Trustee shall have received
written notice or of which a Responsible Officer charged with the
administration of the Trust Agreement shall have actual knowledge.
(c) Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the Holders of the Capital Securities, the
Administrative Trustees and the Sponsor, unless such Event of Default shall have
been cured or waived. The Sponsor and the Administrative Trustees shall file
annually with the Property Trustee a certification as to whether or not they are
in compliance with all the conditions and covenants applicable to them under
this Trust Agreement.
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ARTICLE III
ORGANIZATION
Section 3.1 Name.
The Trust is named "PBI Capital Trust" as such name may be modified from
time to time by the Administrative Trustees following written notice to the
Holders. The Trust's activities may be conducted under the name of the Trust or
any other name deemed advisable by the Administrative Trustees.
Section 3.2 Office.
The address of the principal office of the Trust is c/o Premier Bancorp,
Inc., 379 North Main Street, Doylestown, Pennsylvania 18901. On ten Business
Days written notice to the Holders of Securities, the Administrative Trustees
may designate another principal office.
Section 3.3 Purpose.
The exclusive purposes and functions of the Trust are (a) to issue and sell
Securities, (b) use the proceeds from the sale of the Securities to acquire the
Debentures, and (c) except as otherwise limited herein, to engage in only those
other activities necessary or incidental thereto. The Trust shall not borrow
money, issue debt or reinvest proceeds derived from investments, mortgage or
pledge any of its assets, or otherwise undertake (or permit to be undertaken)
any activity that would cause the Trust not to be classified for United States
federal income tax purposes as a grantor trust.
Section 3.4 Authority.
Subject to the limitations provided in this Trust Agreement and to the
specific duties of the Property Trustee, the Administrative Trustees shall have
exclusive and complete authority to carry out the purposes of the Trust. Any
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and any action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
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authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Trust Agreement.
Section 3.5 Title to Property of the Trust.
Except as provided in Section 3.8 with respect to the Debentures and the
Property Trustee Account or as otherwise provided in this Trust Agreement, legal
title to all assets of the Trust shall be vested in the Trust. The Holders shall
not have legal title to any part of the assets of the Trust, but shall have an
undivided beneficial interest in the assets of the Trust.
Section 3.6 Powers and Duties of the Administrative Trustees.
The Administrative Trustees shall have the exclusive power, duty and
authority to cause the Trust to engage in the following activities:
(a) to issue and sell the Securities in accordance with this Trust
Agreement; provided, however, that except as contemplated in Section 7.1(a), (i)
the Trust may issue no more than one series of Capital Securities and no more
than one series of Common Securities, (ii) there shall be no interests in the
Trust other than the Securities, and (iii) the issuance of Securities shall be
limited to a simultaneous issuance of both the Capital Securities and Common
Securities at the Closing Time;
(b) in connection with the issuance and sale of the Capital Securities and
the consummation of the Exchange Offer, at the direction of the Sponsor, to:
(i) prepare and execute, if necessary, an offering memorandum (the
"Offering Memorandum") in preliminary and final form prepared by the
Sponsor, in relation to the offering and sale of Series A Capital
Securities to qualified institutional buyers in reliance on Rule 144A under
the Securities Act and to institutional "accredited investors" (as defined
in
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Rule 501(a)(1), (2), (3) or (7) under the Securities Act), and to
execute and file with the Commission, at such time as determined by the
Sponsor, any Registration Statement, including any amendments thereto, as
contemplated by the Registration Rights Agreement;
(ii) execute and file any documents prepared by the Sponsor, or take
any acts as determined by the Sponsor to be necessary in order to qualify
or register all or part of the Capital Securities in any State in which the
Sponsor has determined to qualify or register such Capital Securities for
sale;
(iii) execute and file an application, prepared by the Sponsor, to
permit the Capital Securities to trade or be quoted or listed in or on the
Private Offerings, Resales and Trading through Automated Linkages
("PORTAL") Market or any other securities exchange, quotation system or the
Nasdaq Stock Market's National Market;
(iv) execute and deliver letters, documents, or instruments with DTC
and other Clearing Agencies relating to the Capital Securities;
(v) if required, execute and file with the Commission a registration
statement on Form 8-A, including any amendments thereto, prepared by the
Sponsor, relating to the registration of the Capital Securities under
Section 12 of the Exchange Act; and
(vi) execute and enter into the Purchase Agreement and the
Registration Rights Agreement providing for, among other things, the sale
and registration of the Capital Securities;
(c) to acquire the Series A Debentures with the proceeds of the sale of the
Series A Capital Securities and the Common Securities and to exchange the Series
A Debentures for a like principal amount of Series B Debentures, pursuant to the
Exchange Offer; provided, however, that the Administrative Trustees shall cause
legal title to the Debentures to be held of record in the name of the Property
Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee prompt written notice of
the occurrence of a Special Event;
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(e) to establish a record date with respect to all actions to be taken
hereunder that require a record date be established, including and with respect
to, for the purposes of ss. 316(c) of the Trust Indenture Act, if such Section
is applicable to this Trust Agreement. Distributions, voting rights, redemptions
and exchanges, and to issue relevant notices to the Holders of Capital
Securities and Holders of Common Securities as to such actions and applicable
record dates;
(f) to take all actions and perform such duties as may be required of the
Administrative Trustees pursuant to the terms of the Securities;
(g) to bring or defend, pay, collect, compromise, arbitrate, resort to
legal action, or otherwise adjust claims or demands of or against the Trust
("Legal Action"), unless pursuant to Section 3.8(e) the Property Trustee has the
exclusive power to bring such Legal Action;
(h) to employ or otherwise engage employees and agents (who may be
designated as officers with titles) and managers, contractors, advisors, and
consultants and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations under the
Trust Indenture Act, to the extent that the Trust Indenture Act applies to this
Trust Agreement;
(j) to give the certificate required by ss. 314(a)(4) of the Trust
Indenture Act to the Property Trustee, which certificate may be executed by any
Administrative Trustee, to the extent such Section applies to this Trust
Agreement;
(k) to incur expenses that are necessary or incidental to carry out any of
the purposes of the Trust;
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(l) to act as, or appoint another Person to act as, Registrar and Exchange
Agent for the Securities or to appoint a Paying Agent for the Securities as
provided in Section 7.4 except for such time as such power to appoint a Paying
Agent is vested in the Property Trustee;
(m) to give prompt written notice to the Property Trustee and to Holders of
any notice received from the Debenture Issuer of its election to defer payments
of interest on the Debentures by extending the interest payment period under the
Indenture;
(n) to take all action that may be necessary or appropriate for the
preservation and the continuation of the Trust's valid existence, rights,
franchises and privileges as a statutory business trust under the laws of the
State of Delaware and of each other jurisdiction in which such existence is
necessary to protect the limited liability of the Holders or to enable the Trust
to effect the purposes for which the Trust was created;
(o) to take any action, not inconsistent with this Trust Agreement or with
applicable law, that the Administrative Trustees determine in their discretion
to be necessary or desirable in carrying out the activities of the Trust as set
out in this Section 3.6, including, but not limited to:
(i) causing the Trust not to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(ii) causing the Trust to be classified for United States federal
income tax purposes as a grantor trust; and
(iii) cooperating with the Debenture Issuer to ensure that the
Debentures will be treated as indebtedness of the Debenture Issuer for
United States federal income tax purposes;
(p) to take all action necessary to consummate the Exchange Offer or
otherwise cause the Capital Securities to be registered pursuant to an effective
registration statement in accordance with the provisions of the Registration
Rights Agreement;
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(q) to take all action necessary to cause all applicable tax returns and
tax information reports that are required to be filed with respect to the Trust
to be duly prepared and filed by the Administrative Trustees, on behalf of the
Trust; and
(r) to execute all documents or instruments, perform all duties and powers,
and do all things for and on behalf of the Trust in all matters necessary or
incidental to the foregoing.
The Administrative Trustees must exercise the powers set forth in this
Section 3.6 in a manner that is consistent with the purposes and functions of
the Trust set out in Section 3.3, and the Administrative Trustees shall not take
any action that is inconsistent with the purposes and functions of the Trust set
forth in Section 3.3.
Subject to this Section 3.6, the Administrative Trustees shall have none of
the powers or the authority of the Property Trustee set forth in Section 3.8.
Any expenses incurred by the Administrative Trustees pursuant to this
Section 3.6 shall be reimbursed by the Debenture Issuer.
Section 3.7 Prohibition of Actions by the Trust and the Trustees.
(a) The Trust shall not, and the Trustees (including the Property Trustee
and the Delaware Trustee) shall not, engage in any activity other than as
required or authorized by this Trust Agreement. The Trust shall not:
(i) invest any proceeds received by the Trust from holding the
Debentures, but shall distribute all such proceeds to Holders pursuant to
the terms of this Trust Agreement and of the Securities;
(ii) acquire any assets other than as expressly provided herein;
(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
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(v) possess any power or otherwise act in such a way as to vary the
Trust assets or the terms of the Securities in any way whatsoever;
(vi) issue any securities or other evidences of beneficial ownership
of, or beneficial interest in, the Trust other than the Securities;
(vii) other than as provided in this Trust Agreement or Annex I, (A)
direct the time, method and place of conducting any proceeding with respect
to any remedy available to the Debenture Trustee, or exercising any trust
or power conferred upon the Debenture Trustee with respect to the
Debentures, (B) waive any past default that is waivable under the
Indenture, or (C) exercise any right to rescind or annul any declaration
that the principal of all the Debentures shall be due and payable; or
(viii) consent to any amendment, modification or termination of the
Indenture or the Debentures where such consent shall be required unless the
Trust shall have received an opinion of a nationally recognized independent
tax counsel experienced in such matters to the effect that such amendment,
modification or termination will not cause more than an insubstantial risk
that for United States federal income tax purposes the Trust will not be
classified as a grantor trust.
Section 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and held of
record in the name of the Property Trustee in trust for the benefit of the
Holders. The right, title and interest of the Property Trustee to the Debentures
shall vest automatically in each Person who may hereafter be appointed as
Property Trustee in accordance with Section 5.7. Such vesting and cessation of
title shall be effective whether or not conveyancing documents with regard to
the Debentures have been executed and delivered.
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(b) The Property Trustee shall not transfer its right, title and interest
in the Debentures to the Administrative Trustees or to the Delaware Trustee (if
the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
(i) establish and maintain a segregated noninterest bearing trust
account (the "Property Trustee Account") in the name of and under the
exclusive control of the Property Trustee on behalf of the Holders and,
upon the receipt of payments of funds made in respect of the Debentures
held by the Property Trustee, deposit such funds into the Property Trustee
Account and make payments or cause the Paying Agent to make payments to the
Holders from the Property Trustee Account in accordance with Section 6.1.
Funds in the Property Trustee Account shall be held uninvested until
disbursed in accordance with this Trust Agreement. The Property Trustee
Account shall be an account that is maintained with a banking institution
the rating on whose long-term unsecured indebtedness by a "nationally
recognized statistical rating organization", as that term is defined for
purposes of Rule 436(g)(2) under the Securities Act, is at least investment
grade;
(ii) engage in such ministerial activities as shall be necessary or
appropriate to effect the redemption of the Trust Securities to the extent
the Debentures are redeemed or mature; and
(iii) upon written notice of distribution issued by the Administrative
Trustees in accordance with the terms of the Securities, engage in such
ministerial activities as shall be necessary or appropriate to effect the
distribution of the Debentures to Holders upon the occurrence of certain
events.
(d) The Property Trustee shall take all actions and perform such duties as
may be specifically required of the Property Trustee pursuant to the terms of
the Securities.
(e) Subject to Section 3.9(a), the Property Trustee shall take any Legal
Action which arises out of or in connection with an Event of Default of which a
Responsible Officer has actual knowledge or the Property Trustee's duties and
obligations under this Trust Agreement or the Trust Indenture Act, if
applicable, and if such Property Trustee shall have failed to take such Legal
Action, the Holders of the Capital Securities may take such Legal Action, to the
same extent as if such Holders of Capital Securities
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held an aggregate principal amount of Debentures equal to the aggregate
liquidation amount of such Capital Securities, without first proceeding against
the Property Trustee or the Trust; provided however, that if an Event of Default
has occurred and is continuing and such event is attributable to the failure of
the Debenture Issuer to pay the principal of or premium, if any, or interest on
the Debentures on the date such principal, premium, if any, or interest is
otherwise payable (or in the case of redemption, on the redemption date), then a
Holder of Capital Securities may directly institute a proceeding for enforcement
of payment to such Holder of the principal of or premium, if any, or interest on
the Debentures having a principal amount equal to the aggregate liquidation
amount of the Capital Securities of such Holder (a "Direct Action") on or after
the respective due date specified in the Debentures. In connection with such
Direct Action, the rights of the Holders of the Common Securities will be
subrogated to the rights of such Holder of Capital Securities to the extent of
any payment made by the Debenture Issuer to such Holder of Capital Securities in
such Direct Action. Except as provided in the preceding sentences, the Holders
of Capital Securities will not be able to exercise directly any other remedy
available to the holders of the Debentures.
(f) The Property Trustee shall not resign as a Trustee unless either:
(i) the Trust has been completely liquidated and the proceeds of the
liquidation distributed to the Holders pursuant to the terms of the
Securities; or
(ii) a successor Property Trustee has been appointed and has accepted
that appointment in accordance with Section 5.7 (a "Successor Property
Trustee").
(g) The Property Trustee shall have the legal power to exercise all of the
rights, powers and privileges of a holder of Debentures under the Indenture and,
if an Event of Default actually known to a Responsible Officer occurs and is
continuing, the Property Trustee shall, for the benefit of Holders, enforce its
rights as holder of the Debentures subject to the rights of the Holders pursuant
to the terms of such Securities.
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(h) The Property Trustee shall be authorized to undertake any actions set
forth in ss. 317(a) of the Trust Indenture Act, to the extent such Section is
applicable to this Trust Agreement.
(i) For such time as the Property Trustee is the Paying Agent, the Property
Trustee may authorize one or more Persons to act as additional Paying Agents and
to pay Distributions, redemption payments or liquidation payments on behalf of
the Trust with respect to all Securities and any such Paying Agent shall comply
with ss. 317(b) of the Trust Indenture Act, to the extent such Section is
applicable to this Trust Agreement. Any such additional Paying Agent may be
removed by the Property Trustee at any time the Property Trustee remains as
Paying Agent and a successor Paying Agent or additional Paying Agents may be
(but are not required to be) appointed at any time by the Property Trustee while
the Property Trustee is so acting as Paying Agent.
(j) Subject to this Section 3.8, the Property Trustee shall have none of
the duties, liabilities, powers or the authority of the Administrative Trustees
set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary in this Trust
Agreement or any Annex or Exhibit hereto, (i) the Property Trustee must exercise
the powers set forth in this Section 3.8 in a manner that is consistent with the
purposes and functions of the Trust set out in Section 3.3, and (ii) the
Property Trustee shall not take any action that is inconsistent with the
purposes and functions of the Trust set out in Section 3.3.
Section 3.9 Certain Duties and Responsibilities of the Property Trustee.
(a) The Property Trustee, before the occurrence of any Event of Default and
after the curing of all Events of Default that may have occurred, shall
undertake to perform only such duties as are specifically set forth in this
Trust Agreement and in the Securities and no implied covenants shall be read
into this Trust Agreement against the Property Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section 2.6)
of which a Responsible Officer has actual knowledge, the Property Trustee shall
exercise such of the rights and powers vested in it by this Trust Agreement, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
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(b) No provision of this Trust Agreement shall be construed to relieve the
Property Trustee from liability for its own negligent action, its own negligent
failure to act, or its own willful misconduct, except that:
(i) prior to the occurrence of an Event of Default and after the
curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Property Trustee shall be
determined solely by the express provisions of this Trust Agreement
and in the Securities and the Property Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Trust Agreement and in the Securities,
and no implied covenants or obligations shall be read into this Trust
Agreement against the Property Trustee; and
(B) in the absence of bad faith on the part of the Property
Trustee, the Property Trustee may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Property
Trustee and conforming to the requirements of this Trust Agreement;
provided, however, that in the case of any such certificates or
opinions that by any provision hereof are specifically required to be
furnished to the Property Trustee, the Property Trustee shall be under
a duty to examine the same to determine whether or not they conform to
the requirements of this Trust Agreement;
(ii) the Property Trustee shall not be liable for any error of
judgment made in good faith by a Responsible Officer, unless it shall be
proved that the Property Trustee was negligent in ascertaining the
pertinent facts;
(iii) the Property Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance with
the direction of the Holders of not less than a Majority in liquidation
amount of the Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Property Trustee,
or exercising any trust or power conferred upon the Property Trustee under
this Trust Agreement;
(iv) no provision of this Trust Agreement shall require the Property
Trustee to expend or risk its
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own funds or otherwise incur personal financial liability in the performance of
any of its duties or in the exercise of any of its rights or powers, if it shall
have reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured to it under the terms of this Trust
Agreement or indemnity reasonably satisfactory to the Property Trustee against
such risk or liability is not reasonably assured to it;
(v) the Property Trustee's sole duty with respect to the custody, safe
keeping and physical preservation of the Debentures and the Property
Trustee Account shall be to deal with such property in a similar manner as
the Property Trustee deals with similar property for its own account,
subject to the protections and limitations on liability afforded to the
Property Trustee under this Trust Agreement and the Trust Indenture Act, to
the extent such Section is applicable to this Trust Agreement.
(vi) the Property Trustee shall have no duty or liability for or with
respect to the value, genuineness, existence or sufficiency of the
Debentures or the payment of any taxes or assessments levied thereon or in
connection therewith;
(vii) the Property Trustee shall not be liable for any interest on any
money received by it except as it may otherwise agree in writing with the
Sponsor. Money held by the Property Trustee need not be segregated from
other funds held by it except in relation to the Property Trustee Account
maintained by the Property Trustee pursuant to Section 3.8(c)(i) and except
to the extent otherwise required by law; and
(viii) the Property Trustee shall not be responsible for monitoring
the compliance by the Administrative Trustees or the Sponsor with their
respective duties under this Trust Agreement, nor shall the Property
Trustee be liable for any default or misconduct of the Administrative
Trustees or the Sponsor.
Section 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be fully
protected in acting or refraining from acting upon any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or
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document believed by it to be genuine and to have been signed, sent or presented
by the proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Trust Agreement may be sufficiently evidenced
by an Officers' Certificate;
(iii) whenever in the administration of this Trust Agreement, the
Property Trustee shall deem it desirable that a matter be proved or
established before taking, suffering or omitting any action hereunder, the
Property Trustee (unless other evidence is herein specifically prescribed)
may, in the absence of bad faith on its part, request and conclusively rely
upon an Officers' Certificate which, upon receipt of such request, shall be
promptly delivered by the Sponsor or the Administrative Trustees;
(iv) the Property Trustee shall have no duty to see to any recording,
filing or registration of any instrument (including any financing or
continuation statement or any filing under tax or securities laws) or any
rerecording, refiling or registration thereof;
(v) the Property Trustee may consult with counsel or other experts of
its selection and the advice or opinion of such counsel and experts with
respect to legal matters or advice within the scope of such experts' area
of expertise shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion, such counsel may be
counsel to the Sponsor or any of its Affiliates, and may include any of its
employees. The Property Trustee shall have the right at any time to seek
instructions concerning the administration of this Trust Agreement from any
court of competent jurisdiction;
(vi) the Property Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Trust Agreement at the request
or direction of any Holder, unless such Holder shall have provided to the
Property Trustee security and indemnity, reasonably satisfactory to the
Property Trustee, against the costs, expenses (including reasonable
attorneys' fees and expenses and the expenses of the Property Trustee's
agents, nominees or custodians) and liabilities that might be incurred by
it in complying with such request or direction, including such reasonable
advances as may be requested by the Property Trustee provided, that,
nothing contained in this Section 3.10(a)(vi) shall be taken to relieve the
Property Trustee, upon the occurrence of an Event of Default, of its
obligation to exercise the rights and powers vested in it by this Trust
Agreement;
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(vii) the Property Trustee shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Property Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit;
(viii) the Property Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, custodians, nominees or attorneys and the Property Trustee shall
not be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(ix) any action taken by the Property Trustee or its agents hereunder
shall bind the Trust and the Holders, and the signature of the Property
Trustee or its agents alone shall be sufficient and effective to perform
any such action and no third party shall be required to inquire as to the
authority of the Property Trustee to so act or as to its compliance with
any of the terms and provisions of this Trust Agreement, both of which
shall be conclusively evidenced by the Property Trustee's or its agent's
taking such action;
(x) whenever in the administration of this Trust Agreement the
Property Trustee shall deem it desirable to receive instructions with
respect to enforcing any remedy or right or taking any other action
hereunder, the Property Trustee (i) may request instructions from the
Holders which instructions may only be given by the Holders of the same
proportion in liquidation amount of the Securities as would be entitled to
direct the Property Trustee under the terms of the Securities in respect of
such remedy, right or action, (ii) may refrain from enforcing such remedy
or right or taking such other action until such instructions are received,
and (iii) shall be protected in conclusively relying on or acting in or
accordance with such instructions;
(xi) except as otherwise expressly provided by this Trust Agreement,
the Property Trustee shall not be under any obligation to take any action
that is discretionary under the provisions of this Trust Agreement; and
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(xii) the Property Trustee shall not be liable for any action taken,
suffered, or omitted to be taken by it in good faith, without negligence,
and reasonably believed by it to be authorized or within the discretion or
rights or powers conferred upon it by this Trust Agreement.
(b) No provision of this Trust Agreement shall be deemed to impose any duty
or obligation on the Property Trustee to perform any act or acts or exercise any
right, power, duty or obligation conferred or imposed on it, in any jurisdiction
in which it shall be illegal, or in which the Property Trustee shall be
unqualified or incompetent in accordance with applicable law, to perform any
such act or acts, or to exercise any such right, power, duty or obligation. No
permissive power or authority available to the Property Trustee shall be
construed to be a duty.
Section 3.11 Delaware Trustee.
Notwithstanding any other provision of this Trust Agreement other than
Section 5.2, the Delaware Trustee shall not be entitled to exercise any powers,
nor shall the Delaware Trustee have any of the duties and responsibilities of
the Administrative Trustees or the Property Trustee described in this Trust
Agreement. Except as set forth in Section 5.2, the Delaware Trustee shall be a
Trustee for the sole and limited purpose of fulfilling the requirements of ss.
3807 of the Business Trust Act.
Section 3.12 Execution of Documents.
Unless otherwise determined by the Administrative Trustees, and except as
otherwise required by the Business Trust Act, a majority of the Administrative
Trustees or, if there are only two, any Administrative Trustee or, if there is
only one, such Administrative Trustee is authorized to execute on behalf of the
Trust any documents that the Administrative Trustees have the power and
authority to execute pursuant to Section 3.6; provided that, the Registration
Statements contemplated by the Registration Rights Agreement and referred to in
Section 3.6(b)(i), including any amendments thereto, shall be signed by all of
the Administrative Trustees.
Section 3.13 Not Responsible for Recitals or Issuance of Securities.
The recitals contained in this Trust Agreement and the Securities shall be
taken as the statements
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of the Sponsor, and the Trustees do not assume any responsibility for their
correctness. The Trustees make no representations as to the value or condition
of the property of the Trust or any part thereof. The Trustees make no
representations as to the validity or sufficiency of this Trust Agreement or the
Securities.
Section 3.14 Duration of Trust.
The Trust, unless terminated pursuant to the provisions of Article VIII
hereof, shall have existence up to August 15, 2029.
Section 3.15 Mergers.
(a) The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any Person, except as described in Section
3.15(b) and (c).
(b) The Trust may, at the request of the Sponsor, with the consent of the
Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees and without the consent of the Holders, the Delaware
Trustee or the Property Trustee, merge with or into, consolidate, amalgamate, or
be replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to, a trust organized as such under the
laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the Trust under
the Securities; or
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(B) substitutes for the Securities other securities having
substantially the same terms as the Securities (the "Successor
Securities") so long as the Successor Securities rank the same as the
Securities rank with respect to Distributions and payments upon
liquidation, redemption and otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor Entity
that possesses the same powers and duties as the Property Trustee as the
holder of the Debentures;
(iii) the Successor Securities are listed, or any Successor Securities
will be listed upon notification of issuance, on any national securities
exchange or with another organization on which the Capital Securities are
then listed or quoted, if any.
(iv) if the Capital Securities (including any Successor Securities)
are rated by any nationally recognized statistical rating organization
prior to such transaction, such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not cause the Capital
Securities (including any Successor Securities), or if the Debentures are
so rated, the Debentures, to be downgraded by any nationally recognized
statistical rating organization;
(v) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not adversely affect the rights, preferences and
privileges of the Holders (including the holders of any Successor
Securities) in any material respect (other than with respect to any
dilution of such Holders' interests in the new entity);
(vi) such Successor Entity has a purpose identical to that of the
Trust;
(vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Sponsor has received an opinion of an
independent counsel to the Trust experienced in such matters to the effect
that:
(A) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights,
preferences and privileges of the
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Holders (including the holders of any Successor Securities) in
any material respect (other than with respect to any dilution of the
Holders' interest in the new entity); and
(B) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor the
Successor Entity will be required to register as an Investment
Company; and
(viii) the Sponsor or any permitted successor or assignee owns all of
the common securities of such Successor Entity and guarantees the
obligations of such Successor Entity under the Successor Securities at
least to the extent provided by the Capital Securities Guarantee and the
Common Securities Guarantee.
(c) Notwithstanding Section 3.15(b), the Trust shall not, except with the
consent of Holders of 100% in liquidation amount of the Securities, consolidate,
amalgamate, merge with or into, or be replaced by, or convey, transfer or lease
its properties and assets as an entirety or substantially as an entirety to, any
other Person or permit any other Person to consolidate, amalgamate, merge with
or into, or replace it if such consolidation, amalgamation, merger, replacement,
conveyance, transfer or lease would cause the Trust or the Successor Entity not
to be classified as a grantor trust for United States federal income tax
purposes.
ARTICLE IV
SPONSOR
Section 4.1 Sponsor's Purchase of Common Securities.
At the Closing Time, the Sponsor will purchase all of the Common Securities
then issued by the Trust, in an amount at least equal to approximately, but not
less than, 3% of the capital of the Trust, at the same time as the Series A
Capital Securities are issued and sold.
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Section 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Capital Securities, the
Sponsor shall have the exclusive right and responsibility to engage in the
following activities:
(a) to prepare the Offering Memorandum and to prepare for filing by the
Trust with the Commission any Registration Statement, including any amendments
thereto, as contemplated by the Registration Rights Agreement;
(b) to determine the States in which to take appropriate action to qualify
or register for sale all or part of the Capital Securities and to do any and all
such acts, other than actions which must be taken by the Trust, and advise the
Trust of actions it must take, and prepare for execution and filing any
documents to be executed and filed by the Trust, as the Sponsor deems necessary
or advisable in order to comply with the applicable laws of any such States;
(c) if deemed necessary or advisable by the Sponsor, to prepare for filing
by the Trust an application to permit the Capital Securities to trade or be
quoted or listed in or on the Private Offerings, Resales and Trading through
Automated Linkages ("PORTAL") market, or any other securities exchange,
quotation system or the Nasdaq Stock Market's National Market for listing or
quotation of the Capital Securities;
(d) to prepare for filing by the Trust with the Commission a registration
statement on Form 8-A, including any amendments thereto, relating to the
registration of the Capital Securities under Section 12 of the Exchange Act; and
(e) to negotiate the terms of the Purchase Agreement and the Registration
Rights Agreement providing for the sale and registration of the Capital
Securities.
Section 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of Capital Securities,
in the event that a failure of the Trust to pay Distributions on the Capital
Securities is attributable to the failure of the Sponsor
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to pay interest or principal on the Debentures, to institute a proceeding
directly against the Debenture Issuer for enforcement of its payment obligations
on the Debentures.
ARTICLE V
TRUSTEES
Section 5.1 Number of Trustees; Appointment of Co-Trustee.
The number of Trustees initially shall be three (3),
and:
(a) at any time before the issuance of any Securities, the Sponsor may, by
written instrument, increase or decrease the number of Trustees; and
(b) after the issuance of any Securities, the number of Trustees may be
increased or decreased by vote of the Holders of a Majority in liquidation
amount of the Common Securities voting as a class at a meeting of the Holders of
the Common Securities;
provided, however, that, the number of Trustees shall in no event be less than
two (2); provided further that (1) one Trustee, in the case of a natural person,
shall be a person who is a resident of the State of Delaware or that, if not a
natural person, is an entity which has its principal place of business in the
State of Delaware (the "Delaware Trustee"); (2) there shall be at least one
Trustee who is an employee or officer of, or is affiliated with the Sponsor (an
"Administrative Trustee"); and (3) one Trustee shall be the Property Trustee for
so long as this Trust Agreement is required to qualify as an indenture under the
Trust Indenture Act, and such Trustee may also serve as Delaware Trustee if it
meets the applicable requirements. Notwithstanding the above, unless an Event of
Default shall have occurred and be continuing, at any time or times, for the
purpose of meeting the legal requirements of the Trust Indenture Act, if
applicable, or of any jurisdiction in which any part of the Trust's property may
at the time be located, the Holders of a Majority in liquidation amount of the
Common Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative Trustees shall have power to appoint one or
more Persons either to act as a co-trustee, jointly with the Property Trustee,
of all or any
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part of the Trust's property, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument
of appointment, and to vest in such Person or Persons in such capacity any
property, title, right or power deemed necessary or desirable, subject to the
provisions of this Trust Agreement. In case an Event of Default has occurred and
is continuing, the Property Trustee alone shall have power to make any such
appointment of a co-trustee.
Section 5.2 Delaware Trustee.
If required by the Business Trust Act, one Trustee (the "Delaware Trustee")
shall be:
(a) a natural person who is a resident of the State of Delaware; or
(b) if not a natural person, an entity which has its principal place of
business in the State of Delaware, and otherwise meets the requirements of
applicable law,
provided that, if the Property Trustee has its principal place of business in
the State of Delaware and otherwise meets the requirements of applicable law,
then the Property Trustee shall also be the Delaware Trustee and Section 3.11
shall have no application.
Section 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property Trustee") which
shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the laws of
the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Commission to act as an institutional trustee under the Trust Indenture
Act, authorized under such laws to exercise corporate trust powers, having
a combined capital and surplus of at least 50 million U.S. dollars
($50,000,000), and subject to supervision or examination by Federal, State,
Territorial or District of Columbia authority. If such corporation
publishes
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reports of condition at least annually, pursuant to law or to the
requirements of the supervising or examining authority referred to above,
then for the purposes of this Section 5.3(a)(ii), the combined capital and
surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published.
(b) If at any time the Property Trustee shall cease to be eligible to so
act under Section 5.3(a), the Property Trustee shall immediately resign in the
manner and with the effect set forth in Section 5.7(c).
(c) If the Property Trustee has or shall acquire any "conflicting interest"
within the meaning of ss. 310(b) of the Trust Indenture Act, to the extent that
such Section is applicable to this Trust Agreement, the Property Trustee and the
Holder of the Common Securities (as if it were the obligor referred to in ss.
310(b) of the Trust Indenture Act) shall in all respects comply with the
provisions of ss. 310(b) of the Trust Indenture Act, to the extent such Section
is applicable to this Trust Agreement.
(d) The Capital Securities Guarantee shall be deemed to be specifically
described in this Trust Agreement for purposes of clause (i) of the first
provision contained in Section 310(b) of the Trust Indenture Act, to the extent
such Section is applicable to this Trust Agreement.
(e) The initial Property Trustee shall be:
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Administration
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Section 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless the Property
Trustee also acts as Delaware Trustee) shall be either a natural person who is
at least 21 years of age or a legal entity that shall act through one or more
Authorized Officers.
Section 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
John C. Soffronoff
Bruce E. Sickel
(a) Except as expressly set forth in this Trust Agreement and except if a
meeting of the Administrative Trustees is called with respect to any matter over
which the Administrative Trustees have power to act, any power of the
Administrative Trustees may be exercised by, or with the consent of, any one
such Administrative Trustee.
(b) Unless otherwise determined by the Administrative Trustees, and except
as otherwise required by the Business Trust Act or applicable law, any
Administrative Trustee is authorized to execute on behalf of the Trust any
documents which the Administrative Trustees have the power and authority to
cause the Trust to execute pursuant to Section 3.6, provided, that, the
registration statement referred to in Section 3.6, including any amendments
thereto, shall be signed by all of the Administrative Trustees; and
(c) An Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purposes of signing any documents which the Administrative
Trustees have power and authority to cause the Trust to execute pursuant to
Section 3.6.
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Section 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Section 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) and to Section 6(b) of Annex I hereto,
Trustees may be appointed or removed without cause at any time:
(i) until the issuance of any Securities, by written instrument
executed by the Sponsor;
(ii) unless an Event of Default shall have occurred and be continuing
after the issuance of any Securities, by vote of the Holders of a Majority
in liquidation amount of the Common Securities voting as a class at a
meeting of the Holders of the Common Securities; and
(iii) if an Event of Default shall have occurred and be continuing
after the issuance of the Securities, with respect to the Property Trustee
or the Delaware Trustee, by vote of Holders of a Majority in liquidation
amount of the Capital Securities voting as a class at a meeting of Holders
of the Capital Securities.
(b) (i) The Trustee that acts as Property Trustee shall not be removed in
accordance with Section 5.7(a) until a Successor Property Trustee ("Successor
Property Trustee") has been appointed and has accepted such appointment by
written instrument executed by such Successor Property Trustee and delivered to
the Administrative Trustees and the Sponsor; and
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(ii) the Trustee that acts as Delaware Trustee shall not be removed in
accordance with this Section 5.7(a) until a successor Trustee possessing
the qualifications to act as Delaware Trustee under Sections 5.2 and 5.4 (a
"Successor Delaware Trustee") has been appointed and has accepted such
appointment by written instrument executed by such Successor Delaware
Trustee and delivered to the Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until his successor
shall have been appointed or until his death, removal or resignation. Any
Trustee may resign from office (without need for prior or subsequent accounting)
by an instrument in writing signed by the Trustee and delivered to the Sponsor
and the Trust, which resignation shall take effect upon such delivery or upon
such later date as is specified therein; provided, ,however, that:
(i) No such resignation of the Trustee that acts as the Property
Trustee shall be effective:
(A) until a Successor Property Trustee has been appointed and has
accepted such appointment by instrument executed by such Successor
Property Trustee and delivered to the Trust, the Sponsor and the
resigning Property Trustee; or
(B) until the assets of the Trust have been completely liquidated
and the proceeds thereof distributed to the Holders; and
(ii) no such resignation of the Trustee that acts as the Delaware
Trustee shall be effective until a Successor Delaware Trustee has been
appointed and has accepted such appointment by instrument executed by such
Successor Delaware Trustee and delivered to the Trust, the Sponsor and the
resigning Delaware Trustee.
(d) The Holders of the Common Securities or, if an Event of Default shall
have occurred and be continuing after the issuance of the Securities, the
Holders of the Capital Securities, shall use their best efforts to promptly
appoint a Successor Delaware Trustee or Successor Property Trustee, as the case
may be, if the Property Trustee or the Delaware Trustee delivers an instrument
of resignation in accordance with this Section 5.7.
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(e) If no Successor Property Trustee or Successor Delaware Trustee shall
have been appointed and accepted appointment as provided in this Section 5.7
within 60 days after delivery of an instrument of resignation or removal, the
Property Trustee or Delaware Trustee resigning or being removed, as applicable,
may petition any court of competent jurisdiction for appointment of a Successor
Property Trustee or Successor Delaware Trustee. Such court may thereupon, after
prescribing such notice, if any, as it may deem proper and prescribe, appoint a
Successor Property Trustee or Successor Delaware Trustee, as the case may be.
(f) No Property Trustee or Delaware Trustee shall be liable for the acts or
omissions to act of any Successor Property Trustee or Successor Delaware
Trustee, as the case may be.
(g) A successor Delaware Trustee appointed hereunder shall promptly file an
amendment to the Certificate of Trust with the Secretary of State identifying
the name and principal place of business of such successor Delaware Trustee in
the State of Delaware.
Section 5.8 Vacancies among Trustees.
If a Trustee ceases to hold office for any reason and the number of
Trustees is not reduced pursuant to Section 5.1, or if the number of Trustees is
increased pursuant to Section 5.1, a vacancy shall occur. A resolution
certifying the existence of such vacancy by the Administrative Trustees or, if
there are more than two, a majority of the Administrative Trustees shall be
conclusive evidence of the existence of such vacancy. The vacancy shall be
filled with a Trustee appointed in accordance with Section 5.7.
Section 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy, dissolution,
liquidation, incompetence or incapacity to perform the duties of a Trustee shall
not operate to dissolve, terminate or annul the Trust. Whenever a vacancy in the
number of Administrative Trustees shall occur, until such vacancy is filled by
the appointment of an Administrative Trustee in accordance with Section 5.7, the
Administrative Trustees in office, regardless of their number, shall have all
the powers
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granted to the Administrative Trustees and shall discharge all the duties
imposed upon the Administrative Trustees by this Trust Agreement.
Section 5.10 Meetings.
If there is more than one Administrative Trustee, meetings of the
Administrative Trustees shall be held from time to time upon the call of any
Administrative Trustee. Regular meetings of the Administrative Trustees may be
held at a time and place fixed by resolution of the Administrative Trustees.
Notice of any in-person meetings of the Administrative Trustees shall be hand
delivered or otherwise delivered in writing (including by facsimile, with a hard
copy by overnight courier) not less than 24 hours before such meeting. Notice of
any telephonic meetings of the Administrative Trustees or any committee thereof
shall be hand delivered or otherwise delivered in writing (including by
facsimile, with a hard copy by overnight courier) not less than 24 hours before
a meeting. Notices shall contain a brief statement of the time, place and
anticipated purposes of the meeting. The presence (whether in person or by
telephone) of an Administrative Trustee at a meeting shall constitute a waiver
of notice of such meeting except where an Administrative Trustee attends a
meeting for the express purpose of objecting to the transaction of any activity
on the ground that the meeting has not been lawfully called or convened. Unless
provided otherwise in this Trust Agreement, any action of the Administrative
Trustees may be taken at a meeting by vote of a majority of the Administrative
Trustees present (whether in person or by telephone) and eligible to vote with
respect to such matter, provided that a Quorum is present, or without a meeting
by the unanimous written consent of the Administrative Trustees. In the event
there is only one Administrative Trustee, any and all action of such
Administrative Trustee shall be evidenced by a written consent of such
Administrative Trustee.
Section 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney consistent with
applicable law, delegate to any other natural person over the age of 21 his or
her power for the purpose of executing any documents contemplated in Section
3.6, including any registration statement or amendment thereto filed with the
Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate from time to
time to such of
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their number or to officers of the Trust the doing of such things and the
execution of such instruments either in the name of the Trust or the names of
the Administrative Trustees or otherwise as the Administrative Trustees may deem
expedient, to the extent such delegation is not prohibited by applicable law or
contrary to the provisions of the Trust, as set forth herein.
Section 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee or any
Administrative Trustee that is not a natural person, as the case may be, may be
merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Property
Trustee or the Delaware Trustee, as the case may be, shall be a party, or any
Person succeeding to all or substantially all the corporate trust business of
the Property Trustee or the Delaware Trustee, as the case may be, shall be the
successor of the Property Trustee or the Delaware Trustee, as the case may be,
hereunder, provided such Person shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto and provided, that any such person
appointed as a successor to the Delaware Trustee shall file an amendment to the
Certificate of Trust with the Secretary of State identifying the name and
principal place of business of such successor Delaware Trustee in the State of
Delaware.
ARTICLE VI
DISTRIBUTIONS
Section 6.1 Distributions.
Holders shall receive Distributions in accordance with the applicable terms
of the relevant Holder's Securities. If and to the extent that the Debenture
Issuer makes a payment of interest (including Compounded Interest (as defined in
the Indenture) and Additional Sums (as defined in the Indenture)), premium
and/or principal on the Debentures held by the Property Trustee or Liquidated
Damages (as defined in the Registration Rights Agreement) or any other payments
pursuant to the Registration Rights Agreement with respect to the Debentures
held by the Property Trustee (the
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amount of any such payment being a "Payment Amount"), the Property Trustee shall
and is directed, to the extent funds are available for that purpose, to make a
distribution (a "Distribution") of the Payment Amount to Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
Section 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust issue one
class of capital securities representing undivided beneficial interests in the
assets of the Trust having such terms as are set forth in Annex I (the "Series A
Capital Securities") and one class of common securities representing undivided
beneficial interests in the assets of the Trust having such terms as are set
forth in Annex I (the "Common Securities"). The Administrative Trustees shall on
behalf of the Trust issue one class of capital securities representing undivided
beneficial interests in the Trust having such terms as set forth in Annex I (the
"Series B Capital Securities") in exchange for Series A Capital Securities
accepted for exchange in the Exchange Offer, which Series B Capital Securities
shall not bear the legends required by Section 9.2(i) unless the Holder of such
Series A Capital Securities is either (A) a broker-dealer who purchased such
Series A Capital Securities directly from the Trust for resale pursuant to Rule
144A or any other available exemption under the Securities Act, (B) a Person
participating in the distribution of the Series A Capital Securities or (C) a
Person who is an affiliate (as defined in Rule 144A) of the Trust. The Trust
shall issue no securities or other interests in the assets of the Trust other
than the Capital Securities and the Common Securities.
(b) The consideration received by the Trust for the issuance of the
Securities shall constitute a contribution to the capital of the Trust and shall
not constitute a loan to the Trust.
(c) Upon issuance of the Securities as provided in this Trust Agreement,
the Securities so issued shall be deemed to be validly issued, fully paid and
non-assessable.
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(d) Every Person, by virtue of having become a Holder or a Capital Security
Beneficial Owner in accordance with the terms of this Trust Agreement, shall be
deemed to have expressly assented and agreed to the terms of, and shall be bound
by, this Trust Agreement.
Section 7.2 Execution and Authentication.
(a) The Securities shall be signed on behalf of the Trust by an
Administrative Trustee by manual or facsimile signature. In case any
Administrative Trustee of the Trust who shall have signed any of the Securities
shall cease to be such Administrative Trustee before the Securities so signed
shall be delivered by the Trust, such Securities nevertheless may be delivered
as though the person who signed such Securities had not ceased to be such
Administrative Trustee; and any Securities may be signed on behalf of the Trust
by such persons who, at the actual date of execution of such Security, shall be
the Administrative Trustees of the Trust, although at the date of the execution
and delivery of the Trust Agreement any such person was not such a
Administrative Trustee.
(b) One Administrative Trustee shall sign the Securities for the Trust by
manual or facsimile signature.
A Security shall not be valid until authenticated by the manual signature
of an authorized signatory of the Property Trustee. The signature shall be
conclusive evidence that the Security has been authenticated under this Trust
Agreement.
Upon a written order of the Trust signed by one Administrative Trustee, the
Property Trustee shall authenticate the Securities for original issue. The
aggregate number of Capital Securities outstanding at any time shall not exceed
the number set forth in the Terms in Annex I hereto except as provided in
Section 7.6.
The Property Trustee may appoint an authenticating agent acceptable to the
Trust to authenticate Securities. An authenticating agent may authenticate
Securities whenever the Property Trustee may do so. Each reference in this Trust
Agreement to authentication by the Property Trustee includes authentication by
such agent. An authenticating agent has the same rights as the Property Trustee
to deal with the Sponsor or an Affiliate.
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Section 7.3 Form and Dating.
The Capital Securities shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this Trust
Agreement. The Property Trustee's certificate of authentication shall be
substantially in the form set forth in Exhibits A-1 and A-2. Certificates
representing the Securities may be printed, lithographed or engraved or may be
produced in any other manner as is reasonably acceptable to the Administrative
Trustees, as evidenced by their execution thereof. The Securities may have
letters, CUSIP or other numbers, notations or other marks of identification or
designation and such legends or endorsements required by law, stock exchange
rule, agreements to which the Trust is subject, if any, or usage (provided that
any such notation, legend or endorsement is in a form acceptable to the Trust).
The Trust at the direction of the Sponsor shall furnish any such legend not
contained in Exhibit A-1 to the Property Trustee in writing. Each Capital
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Trust Agreement and to the
extent applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Trust Agreement, expressly agree to such terms and provisions
and to be bound thereby.
(a) Global Securities. Securities offered and sold to QIBs in reliance on
Rule 144A, as provided in the Purchase Agreement, shall be issued in the form of
one or more, permanent global Securities in definitive, fully registered form
without distribution coupons with the appropriate global legends and Restricted
Securities Legend set forth in Exhibit A-1 hereto (a "Global Capital Security"),
which shall be deposited on behalf of the purchasers of the Capital Securities
represented thereby with the Property Trustee, at its New York office, as
custodian for the Clearing Agency, and registered in the name of the Clearing
Agency or a nominee of the Clearing Agency, duly executed by the Trust and
authenticated by the Property Trustee as hereinafter provided. The number of
Capital Securities represented by a Global Capital Security may from time to
time be increased or decreased by adjustments made on the records of the
Property Trustee and the Clearing Agency or its nominee as hereinafter provided.
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(b) Book-Entry Provisions. This Section 7.3(b) shall apply only to the
Global Capital Securities and such other Capital Securities in global form as
may be authorized by the Trust to be deposited with or on behalf of the Clearing
Agency.
The Trust shall execute and the Property Trustee shall, in accordance with
this Section 7.3, authenticate and make available for delivery initially one or
more Global Capital Securities that (i) shall be registered in the name of Cede
& Co. or other nominee of such Clearing Agency and (ii) shall be delivered by
the Trustee to such Clearing Agency or pursuant to such Clearing Agency's
written instructions or held by the Property Trustee as custodian for the
Clearing Agency.
Members of, or participants in, the Clearing Agency ("Participants") shall
have no rights under this Trust Agreement with respect to any Global Capital
Security held on their behalf by the Clearing Agency or by the Property Trustee
as the custodian of the Clearing Agency or under such Global Capital Security,
and the Clearing Agency may be treated by the Trust, the Property Trustee and
any agent of the Trust or the Property Trustee as the absolute owner of such
Global Capital Security for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Trust, the Property Trustee or any
agent of the Trust or the Property Trustee from giving effect to any written
certification, proxy or other authorization furnished by the Clearing Agency or
impair, as between the Clearing Agency and its Participants, the operation of
customary practices of such Clearing Agency governing the exercise of the rights
of a holder of a beneficial interest in any Global Capital Security.
(c) Definitive Capital Securities. Except as provided in Section 7.9 or
9.2(f)(i), owners of beneficial interests in a Global Capital Security will not
be entitled to receive physical delivery of certificated Capital Securities
("Definitive Capital Securities"). Purchasers of Securities (other than QIBs)
who are "accredited investors" (as defined in Rule 501(a)(1), (2), (3) or (7)
under the Securities Act) will receive Capital Securities in the form of
individual certificates in definitive, fully registered form without
distribution coupons and with the Restricted Securities Legend set forth in
Exhibit A-1 hereto ("Restricted Definitive Capital Securities"); provided,
however, that upon transfer of such Restricted Definitive Capital Securities to
a QIB, such Restricted Definitive Capital Securities will, unless the Global
Capital Security has previously been exchanged, be exchanged for an interest in
a Global Capital Security pursuant to the provisions of Section 9.2. Restricted
Definitive Capital Securities will bear the Restricted Securities Legend set
forth on Exhibit A-1 unless removed in accordance with
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this Section 7.3 or Section 9.2.
(d) Authorized Denominations. The Capital Securities are issuable only in
denominations of $1,000 and any integral multiple thereof.
Section 7.4 Registrar, Paying Agent and Exchange Agent.
The Trust shall maintain in the Wilmington, Delaware, (i) an office or
agency where Capital Securities may be presented for registration of transfer
("Registrar"), (ii) an office or agency where Capital Securities may be
presented for payment ("Paying Agent") and (iii) an office or agency where
Securities may be presented for exchange ("Exchange Agent"). The Registrar shall
keep a register of the Capital Securities and of their transfer. The Trust may
appoint the Registrar, the Paying Agent and the Exchange Agent and may appoint
one or more co-registrars, one or more additional paying agents and one or more
additional exchange agents in such other locations as it shall determine. The
term "Registrar" includes any additional registrar, "Paying Agent" includes any
additional paying agent and the term "Exchange Agent" includes any additional
exchange agent. The Trust may change any Paying Agent, Registrar, co-registrar
or Exchange Agent without prior notice to any Holder. The Paying Agent shall be
permitted to resign as Paying Agent upon 30 days' written notice to the
Administrative Trustees. The Trust shall notify the Property Trustee of the name
and address of any Agent not a party to this Trust Agreement. If the Trust fails
to appoint or maintain another entity as Registrar, Paying Agent or Exchange
Agent, the Property Trustee shall act as such. The Trust or any of its
Affiliates may act as Paying Agent, Registrar, or Exchange Agent. The Trust
shall act as Paying Agent, Registrar, co-registrar, and Exchange Agent for the
Common Securities.
The Trust initially appoints the Property Trustee as Registrar, Paying
Agent, and Exchange Agent for the Capital Securities.
Section 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the Property Trustee
to agree in writing that the Paying Agent will hold in trust for the benefit of
Holders or the Property Trustee all money held by the Paying Agent for the
payment of liquidation amounts or Distributions, and will notify the Property
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Trustee if there are insufficient funds for such purpose. While any such
insufficiency continues, the Property Trustee may require a Paying Agent to pay
all money held by it to the Property Trustee. The Trust at any time may require
a Paying Agent to pay all money held by it to the Property Trustee and to
account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the money. If the Trust or the Sponsor or an
Affiliate of the Trust or the Sponsor acts as Paying Agent, it shall segregate
and hold in a separate trust fund for the benefit of the Holders all money held
by it as Paying Agent.
Section 7.6 Replacement Securities.
If a Holder claims that a Security owned by it has been lost, destroyed or
wrongfully taken or if such Security is mutilated and is surrendered to the
Trust or in the case of the Capital Securities to the Property Trustee, the
Trust shall issue and the Property Trustee shall, upon written order of the
Trust, authenticate a replacement Security if the Property Trustee's and the
Trust's requirements, as the case may be, are met. An indemnity bond must be
provided by the Holder which, in the judgment of the Property Trustee, is
sufficient to protect the Trustees, the Sponsor, the Trust or any authenticating
agent from any loss which any of them may suffer if a Security is replaced. The
Trust may charge such Holder for its expenses in replacing a Security.
Every replacement Security is an additional beneficial interest in the
Trust.
Section 7.7 Outstanding Capital Securities.
The Capital Securities outstanding at any time are all the Capital
Securities authenticated by the Property Trustee except for those canceled by
it, those delivered to it for cancellation, and those described in this Section
as not outstanding.
If a Capital Security is replaced, paid or purchased pursuant to Section
7.6 hereof, it ceases to be outstanding unless the Property Trustee receives
proof satisfactory to it that the replaced, paid or purchased Capital Security
is held by a bona fide purchaser.
If Capital Securities are considered paid in accordance with the terms of
this Trust Agreement,
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they cease to be outstanding and Distributions on them shall cease to
accumulate.
A Capital Security does not cease to be outstanding because one of the
Trust, the Sponsor or an Affiliate of the Sponsor holds the Security.
Section 7.8 Capital Securities in Treasury.
In determining whether the Holders of the required amount of Securities
have concurred in any direction, waiver or consent, Capital Securities owned by
the Trust, the Sponsor or an Affiliate of the Sponsor, as the case may be, shall
be disregarded and deemed not to be outstanding, except that for the purposes of
determining whether the Property Trustee shall be fully protected in relying on
any such direction, waiver or consent, only Securities which the Property
Trustee actually knows are so owned shall be so disregarded.
Section 7.9 Temporary Securities.
(a) Until Definitive Securities are ready for delivery, the Trust may
prepare and, in the case of the Capital Securities, the Property Trustee shall
authenticate temporary Securities. Temporary Securities shall be substantially
in the form of Definitive Securities but may have variations that the Trust
considers appropriate for temporary Securities. Without unreasonable delay, the
Trust shall prepare and, in the case of the Capital Securities, the Property
Trustee shall authenticate Definitive Securities in exchange for temporary
Securities.
(b) A Global Capital Security deposited with the Clearing Agency or with
the Property Trustee as custodian for the Clearing Agency pursuant to Section
7.3 shall be transferred to the beneficial owners thereof in the form of
certificated Capital Securities only if such transfer complies with Section 9.2
and (i) the Clearing Agency notifies the Sponsor that it is unwilling or unable
to continue as Clearing Agency for such Global Capital Security or if at any
time such Clearing Agency ceases to be a "clearing agency" registered under the
Exchange Act and a clearing agency is not
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appointed by the Sponsor within 90 days of such notice, (ii) a Default or an
Event of Default has occurred and is continuing or (iii) the Trust at its sole
discretion elects to cause the issuance of certificated Capital Securities.
(c) Any Global Capital Security that is transferable to the beneficial
owners thereof in the form of certificated Capital Securities pursuant to this
Section 7.9 shall be surrendered by the Clearing Agency to the Property Trustee
located in the Borough of Manhattan, The City of New York, to be so transferred,
in whole or from time to time in part, without charge, and the Property Trustee
shall authenticate and make available for delivery, upon such transfer of each
portion of such Global Capital Security, an equal aggregate liquidation amount
of Securities of authorized denominations in the form of certificated Capital
Securities. Any portion of a Global Capital Security transferred pursuant to
this Section shall be registered in such names as the Clearing Agency shall
direct. Any Capital Security in the form of certificated Capital Securities
delivered in exchange for an interest in the Restricted Global Capital Security
shall, except as otherwise provided by Sections 7.3 and 9.1, bear the Restricted
Securities Legend set forth in Exhibit A-1 hereto.
(d) Subject to the provisions of Section 7.9(c), the Holder of a Global
Capital Security may grant proxies and otherwise authorize any Person, including
Participants and Persons that may hold interests through Participants, to take
any action which such Holder is entitled to take under this Trust Agreement or
the Securities.
(e) In the event of the occurrence of any of the events specified in
Section 7.9(b), the Trust will promptly make available to the Property Trustee a
reasonable supply of certificated Capital Securities in fully registered form
without distribution coupons.
Section 7.10 Cancellation.
The Trust at any time may deliver Capital Securities to the Property
Trustee for cancellation. The Registrar, Paying Agent and Exchange Agent shall
forward to the Property Trustee any Capital Securities surrendered to them for
registration of transfer, redemption, exchange or payment. The Property Trustee
shall promptly cancel all Capital Securities, surrendered for registration of
transfer, redemption, exchange, payment, replacement or cancellation and shall
dispose of canceled Capital Securities as the
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Trust directs, provided that the Property Trustee shall not be obligated to
destroy Capital Securities. The Trust may not issue new Capital Securities to
replace Capital Securities that it has paid or that have been delivered to the
Property Trustee for cancellation or that any Holder has exchanged.
Section 7.11 CUSIP Numbers.
The Trust in issuing the Capital Securities may use "CUSIP" numbers (if
then generally in use), and, if so, the Property Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders of Capital
Securities; provided that any such notice may state that no representation is
made as to the correctness of such numbers either as printed on the Capital
Securities or as contained in any notice of a redemption and that reliance may
be placed only on the other identification numbers printed on the Capital
Securities, and any such redemption shall not be affected by any defect in or
omission of such numbers. The Sponsor will promptly notify the Property Trustee
of any change in the CUSIP numbers.
ARTICLE VIII
TERMINATION OF TRUST
Section 8.1 Termination of Trust.
(a) The Trust shall automatically terminate:
(i) upon the bankruptcy of the Sponsor;
(ii) upon the filing of a certificate of dissolution or liquidation
or its equivalent with respect to the Sponsor; or the revocation of the
Sponsor's charter and the expiration of 90 days after the date of
revocation without a reinstatement thereof;
(iii) following the distribution of a Like Amount of the Debentures to
the Holders, provided that, the Property Trustee has received written
notice from the Sponsor directing the Property Trustee to terminate the
Trust (which direction is optional, and except as otherwise expressly
provided below, within the discretion of the Sponsor) and provided,
further, that such direction and such distribution is
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conditioned on (i) the receipt by the Sponsor of any required regulatory
approval and (ii) the Administrative Trustees' receipt of an opinion of an
independent tax counsel experienced in such matters, which opinion may rely
on published rulings of the Internal Revenue Service, to the effect that
the Holders will not recognize any gain or loss for United States federal
income tax purposes as a result of the dissolution of the Trust and the
distribution of Debentures;
(iv) upon the entry of a decree of judicial dissolution of the Trust
by a court of competent jurisdiction;
(v) when all of the Securities shall have been called for redemption
and the amounts necessary for redemption thereof shall have been paid to
the Holders in accordance with the terms of the Securities;
(vi) upon the repayment of the Debentures or at such time as no
Debentures are outstanding; or
(vii) the expiration of the term of the Trust provided in Section
3.14.
(b) As soon as is practicable after the occurrence of an event referred to
in Section 8.1(a), the Administrative Trustees shall file a certificate of
cancellation with the Secretary of State of the State of Delaware.
(c) The provisions of Section 3.9 and Article X shall survive the
termination of the Trust.
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ARTICLE IX
TRANSFER OF INTERESTS
Section 9.1 Transfer of Securities.
(a) Securities may only be transferred, in whole or in part, in accordance
with the terms and conditions set forth in this Trust Agreement and in the terms
of the Securities. Any transfer or purported transfer of any Security not made
in accordance with this Trust Agreement shall be null and void.
(b) Subject to this Article IX, Capital Securities may only be transferred,
in whole or in part, in accordance with the terms and conditions set forth in
this Trust Agreement. Any transfer or purported transfer of any Security not
made in accordance with this Trust Agreement shall be null and void.
(c) For so long as the Trust Securities remain outstanding, the Sponsor
will covenant (i) to directly or indirectly maintain 100% direct or indirect
ownership of the Common Securities of the Trust; provided, however, that any
permitted successor of the Sponsor under the Indenture may succeed to the
Sponsor's ownership of such Common Securities, (ii) not to cause, as sponsor of
the Trust, or to permit, as Holder of the Common Securities, the dissolution,
winding-up or termination of the Trust, except in connection with a distribution
of the Debentures as provided in the Trust Agreement and in connection with
certain mergers, consolidations or amalgamations permitted by this Trust
Agreement and (iii) to use its reasonable efforts to cause the Trust (a) to
remain a business trust, except in connection with the distribution of
Debentures to the Holders of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities, or certain mergers, consolidations or
amalgamations, each as permitted by this Trust Agreement, and (b) to otherwise
continue to be classified as a grantor trust for United States federal income
tax purposes.
(d) The Administrative Trustees shall provide for the registration of
Securities and of the transfer of Securities, which will be effected without
charge but only upon payment (with such indemnity as the Administrative Trustees
may require) in respect of any tax or other governmental charges that may be
imposed in relation to it. Upon surrender for registration of transfer of any
Securities, the Administrative Trustees shall cause one or more new Securities
to be issued in the name of the designated transferee or transferees. Every
Security surrendered for registration of transfer shall be
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accompanied by a written instrument of transfer in form satisfactory to the
Administrative Trustees duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Security surrendered for registration of
transfer shall be canceled by the Property Trustee (in the case of Capital
Securities) or the Trust (in the case of Common Securities). A transferee of a
Security shall be entitled to the rights and subject to the obligations of a
Holder hereunder upon the receipt by such transferee of a Security. By
acceptance of a Security, each transferee shall be deemed to have agreed to be
bound by this Trust Agreement.
Section 9.2 Transfer Procedures and Restrictions.
(a) General. Except as otherwise provided in Section 9.2(b), if Capital
Securities are issued upon the transfer, exchange or replacement of Capital
Securities bearing the Restricted Securities Legend set forth in Exhibit A-1
hereto, or if a request is made to remove such Restricted Securities Legend on
Capital Securities, the Capital Securities so issued shall bear the Restricted
Securities Legend, or the Restricted Securities Legend shall not be removed, as
the case may be, unless there is delivered to the Trust and the Property Trustee
such satisfactory evidence, which shall include an Opinion of Counsel licensed
to practice law in the State of New York, as may be reasonably required by the
Sponsor and the Property Trustee, that neither the legend nor the restrictions
on transfer set forth therein are required to ensure that transfers thereof are
made pursuant to an exception from the registration requirements of the
Securities Act or, with respect to Restricted Securities, that such Securities
are not "restricted" within the meaning of Rule 144. Upon provision of such
satisfactory evidence, the Property Trustee, at the written direction of the
Trust, shall authenticate and deliver Capital Securities that do not bear the
legend.
(b) Transfers After Effectiveness of a Registration Statement. After the
effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply, and beneficial interests in a Capital Security in global
form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring Holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest in
the Global Capital Security as the case may be. No such transfer or exchange of
a Restricted Definitive Capital Security or of an interest in the Global Capital
Security shall be effective unless the transferor delivers to the Trust a
certificate in a form substantially similar to that attached hereto as the form
of "Assignment" in Exhibit A-1. Except as otherwise provided in Section 9.2(m),
after
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the effectiveness of a Registration Statement, the Trust shall issue and the
Property Trustee, upon a writtenorder of the Trust signed by one Administrative
Trustee, shall authenticate a Capital Security in global form without the
Restricted Securities Legend (the "Unrestricted Global Capital Security") to
deposit with the Clearing Agency to evidence transfers of beneficial interests
from the (i) Global Capital Security and (ii) Restricted Definitive Capital
Securities.
(c) Transfer and Exchange of Definitive Capital Securities. When Definitive
Capital Securities are presented to the Registrar or co-Registrar, the Property
Trustee, at the written direction of the Trust, shall authenticate and deliver
Capital Securities that do not bear the legend.
(d) Transfers After Effectiveness of a Registration Statement. After the
effectiveness of a Registration Statement with respect to any Capital
Securities, all requirements pertaining to legends on such Capital Securities
will cease to apply, and beneficial interests in a Capital Security in global
form without legends will be available to transferees of such Capital
Securities, upon exchange of the transferring Holder's Restricted Definitive
Capital Security or directions to transfer such Holder's beneficial interest in
the Global Capital Security as the case may be. No such transfer or exchange of
a Restricted Definitive Capital Security or of an interest in the Global Capital
Security shall be effective unless the transferor delivers to the Trust a
certificate in a form substantially similar to that attached hereto as the form
of "Assignment" in Exhibit A-1. Except as otherwise provided in Section 9.2(m),
after the effectiveness of a Registration Statement, the Trust shall issue and
the Property Trustee, upon a written order of the Trust signed by one
Administrative Trustee, shall authenticate a Capital Security in global form
without the Restricted Securities Legend (the "Unrestricted Global Capital
Security") to deposit with the Clearing Agency to evidence transfers of
beneficial interests from the (i) Global Capital Security and (ii) Restricted
Definitive Capital Securities.
(e) Transfer and Exchange of Definitive Capital Securities. When Definitive
Capital Securities are presented to the Registrar or co-Registrar
(x) to register the transfer of such Definitive Capital Securities; or
(y) to exchange such Definitive Capital Securities which became mutilated,
destroyed, defaced, stolen or lost, for an equal number of Definitive Capital
Securities, the Registrar or co-registrar shall
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register the transfer or make the exchange as requested if its reasonable
requirements for such transaction are met; provided, however, that the
Definitive Capital Securities surrendered for transfer or exchange:
(i) shall be duly endorsed or accompanied by a written instrument of
transfer in form reasonably satisfactory to the Trust and the Registrar or
co-registrar, duly executed by the Holder thereof or his attorney duly
authorized in writing; and
(ii) in the case of Definitive Capital Securities that are Restricted
Definitive Capital Securities:
(A) if such Restricted Capital Securities are being delivered to
the Registrar by a Holder for registration in the name of such Holder,
without transfer, a certification from such Holder to that effect; or
(B) if such Restricted Capital Securities are being transferred:
(i) a certification from the transferor in a form substantially
similar to that attached hereto as the form of "Assignment" in Exhibit
A-1, and (ii) if the Trust or Registrar so requests, evidence
reasonably satisfactory to them relating to the compliance with the
restrictions set forth in the Restricted Securities Legend.
(d) Restrictions on Transfer of a Definitive Capital Security for a
Beneficial Interest in a Global Capital Security. A Definitive Capital Security
may not be exchanged for a beneficial interest in a Global Capital Security
except upon satisfaction of the requirements set forth below. Upon receipt by
the Property Trustee of a Definitive Capital Security, duly endorsed or
accompanied by appropriate instruments of transfer, in form satisfactory to the
Property Trustee, together with:
(i) if such Definitive Capital Security is a Restricted Capital
Security, certification (in a form substantially similar to that attached
hereto as the form of "Assignment" in Exhibit A-1); and
(ii) whether or not such Definitive Capital Security is a Restricted
Capital Security, written instructions directing the Property Trustee to
make, or to direct the Clearing Agency to
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make, an adjustment on its books and records with respect to the
appropriate Global Capital Security to reflect an increase in the number of
the Capital Securities represented by such Global Capital Security, then
the Property Trustee shall cancel such Definitive Capital Security and
cause, or direct the Clearing Agency to cause, the aggregate number of
Capital Securities represented by the appropriate Global Capital Security
to be increased accordingly. If no Global Capital Securities are then
outstanding, the Trust shall issue and the Property Trustee shall
authenticate, upon written order of any Administrative Trustee, an
appropriate number of Capital Securities in global form.
(e) Transfer and Exchange of Global Capital Securities. Subject to Section
9.2(f), the transfer and exchange of Global Capital Securities or beneficial
interests therein shall be effected through the Clearing Agency, in accordance
with this Trust Agreement (including applicable restrictions on transfer set
forth herein, if any) and the procedures of the Clearing Agency therefor.
(f) Transfer of a Beneficial Interest in a Global Capital Security for a
Definitive Capital Security.
(i) Any Person having a beneficial interest in a Global Capital
Security may upon request, but only upon 20 days prior notice to the
Property Trustee, and if accompanied by the information specified below,
exchange such beneficial interest for a Definitive Capital Security
representing the same number of Capital Securities. Upon receipt by the
Property Trustee from the Clearing Agency or its nominee on behalf of any
Person having a beneficial interest in a Global Capital Security of written
instructions or such other form of instructions as is customary for the
Clearing Agency or the Person designated by the Clearing Agency as having
such a beneficial interest in a Restricted Capital Security and a
certification from the transferor (in a form substantially similar to that
attached hereto as the form of "Assignment" in Exhibit A-1), which may be
submitted by facsimile, then the Property Trustee will cause the aggregate
number of Capital Securities represented by Global Capital Securities to be
reduced on its books and records and, following such reduction, the Trust
will execute and the Property Trustee will authenticate and make available
for delivery to the transferee a Definitive Capital Security.
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(ii) Definitive Capital Securities issued in exchange for a
beneficial interest in a Global Capital Security pursuant to this Section
9.2(f) shall be registered in such names and in such authorized
denominations as the Clearing Agency, pursuant to instructions from its
Clearing Agency Participants or otherwise, shall instruct the Property
Trustee in writing. The Property Trustee shall deliver such Capital
Securities to the Persons in whose names such Capital Securities are so
registered in accordance with such instructions of the Clearing Agency.
(g) Restrictions on Transfer and Exchange of Global Capital Securities.
Notwithstanding any other provisions of this Trust Agreement (other than the
provisions set forth in subsection (h) of this Section 9.2), a Global Capital
Security may not be transferred as a whole except by the Clearing Agency to a
nominee of the Clearing Agency or another nominee of the Clearing Agency or by
the Clearing Agency or any such nominee to a successor Clearing Agency or a
nominee of such successor Clearing Agency.
(h) Authentication of Definitive Capital Securities. If at any time:
(i) there occurs a Default or an Event of Default which is
continuing, or
(ii) the Trust, in its sole discretion, notifies the Property Trustee
in writing that it elects to cause the issuance of Definitive Capital
Securities under this Trust Agreement,
then the Trust will execute, and the Property Trustee, upon receipt of a written
order of the Trust signed by one Administrative Trustee requesting the
authentication and delivery of Definitive Capital Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Capital Securities, equal in number to the number of Capital
Securities represented by the Global Capital Securities, in exchange for such
Global Capital Securities.
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(i) Legend.
(i) Except as permitted by the following paragraph (ii), each
Capital Security certificate evidencing the Global Capital Securities and
the Definitive Capital Securities (and all Capital Securities issued in
exchange therefor or substitution thereof) shall bear a legend (the
"Restricted Securities Legend") in substantially the following form:
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS
CAPITAL SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF
IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT
FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE
(THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE
COMPANY OR ANY "AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL
SECURITY (OR ANY PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE
COMPANY (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS
ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE
144A"), TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) PURSUANT TO OFFERS
AND SALES TO NON-U.S. PERSONS THAT
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OCCUR OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER
THE SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN
THE MEANING OF SUBPARAGRAPH (a), (1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT,
OR FOR THE ACCOUNT OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR
INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE IN
CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT, OR
(F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST
AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO
CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND
(ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF TRANSFER IN
THE FORM APPEARING ON THE REVERSE OF THIS CAPITAL SECURITY IS COMPLETED AND
DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER AGREES THAT
IT WILL DELIVER TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED
A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. THE CAPITAL SECURITIES
WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS HAVING A LIQUIDATION
AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES). ANY SUCH
TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT OF
LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF
SUCH CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE
RECEIPT OF DISTRIBUTIONS OF
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SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO HAVE NO
INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY
IT IS NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE
U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH
PROHIBITION.
(ii) Upon any sale or transfer of a Restricted Capital Security
(including any Restricted Capital Security represented by a Global Capital
Security) pursuant to an effective registration statement under the
Securities Act or pursuant to Rule 144 under the Securities Act after such
registration statement ceases to be effective:
(a) in the case of any Restricted Capital Security that is a
Definitive Capital Security, the Registrar shall permit the Holder thereof
to exchange such Restricted Capital Security for a Definitive Capital
Security that does not bear the Restricted Securities Legend and rescind
any restriction on the transfer of such Restricted Capital Security; and
(B) in the case of any Restricted Capital Security that is represented
by a Global Capital Security, the Registrar shall permit the Holder of such
Global Capital Security to exchange such Global Capital Security for
another Global Capital Security that does not bear the Restricted
Securities Legend.
(j) Cancellation or Adjustment of Global Capital Security. At such time as
all beneficial interests in a Global Capital Security have either been exchanged
for Definitive Capital Securities to the extent permitted by this Trust
Agreement or redeemed, repurchased or canceled in accordance with the terms of
this Trust Agreement, such Global Capital Security shall be returned to the
Clearing Agency for
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cancellation or retained and canceled by the Property Trustee. At any time prior
to such cancellation, if any beneficial interest in a Global Capital Security is
exchanged for Definitive Capital Securities, Capital Securities represented by
such Global Capital Security shall be reduced and an adjustment shall be made on
the books and records of the Clearing Agency and the Registrar, to reflect such
reduction.
(k) Obligations with Respect to Transfers and Exchanges of Capital
Securities.
(i) To permit registrations of transfers and exchanges, the Trust
shall execute and the Property Trustee shall authenticate Definitive
Capital Securities and Global Capital Securities at the Registrar's or
co-registrar's request in accordance with the terms of this Trust
Agreement.
(ii) Registrations of transfers or exchanges will be effected without
charge, but only upon payment (with such indemnity as the Trust or the
Sponsor may require) in respect of any tax or other governmental charge
that may be imposed in relation to it.
(iii) The Registrar or co-registrar shall not be required to register
the transfer of or exchange of (a) Capital Securities during a period
beginning at the opening of business 15 days before the day of mailing of a
notice of redemption or any notice of selection of Capital Securities for
redemption and ending at the close of business on the day of such mailing;
or (b) any Capital Security so selected for redemption in whole or in part,
except the unredeemed portion of any Capital Security being redeemed in
part.
(iv) Prior to the due presentation for registration of transfer of
any Capital Security, the Trust, the Property Trustee, the Paying Agent,
the Registrar or any coregistrar may deem and treat the Person in whose
name a Capital Security is registered as the absolute owner of such Capital
Security for the purpose of receiving Distributions on such Capital
Security and for all other purposes whatsoever, and none of the Trust, the
Property Trustee, the Paying Agent, the Registrar or any co-registrar shall
be affected by notice to the contrary.
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(v) All Capital Securities issued upon any transfer or exchange
pursuant to the terms of this Trust Agreement shall evidence the same
security and shall be entitled to the same benefits under this Trust
Agreement as the Capital Securities surrendered upon such transfer or
exchange.
(1) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or obligation
to any beneficial owner of a Global Capital Security, a Clearing Agency
Participant in the Clearing Agency or other Person with respect to the
accuracy of the records of the Clearing Agency or its nominee or of any
Clearing Agency Participant thereof, with respect to any ownership interest
in the Capital Securities or with respect to the delivery to any Clearing
Agency Participant, beneficial owner or other Person (other than the
Clearing Agency) of any notice (including any notice of redemption) or the
payment of any amount, under or with respect to such Capital Securities.
All notices and communications to be given to the Holders and all payments
to be made to Holders under the Capital Securities shall be given or made
only to or upon the order of the registered Holders (which shall be the
Clearing Agency or its nominee in the case of a Global Capital Security).
The rights of beneficial owners in any Global Capital Security shall be
exercised only through the Clearing Agency subject to the applicable rules
and procedures of the Clearing Agency. The Property Trustee may
conclusively rely and shall be fully protected in relying upon information
furnished by the Clearing Agency or any agent thereof with respect to its
Clearing Agency Participants and any beneficial owners.
(ii) The Property Trustee and the Registrar shall have no obligation
or duty to monitor, determine or inquire as to compliance with any
restrictions on transfer imposed under this Trust Agreement or under
applicable law with respect to any transfer of any interest in any Capital
Security (including any transfers between or among Clearing Agency
Participants or beneficial owners in any Global Capital Security) other
than to require delivery of such certificates and other documentation or
evidence as are expressly required by, and to do so if and when expressly
required by, the terms of this Trust Agreement, and to examine the same to
determine substantial compliance as to form with the express requirements
hereof.
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(m) Exchange of Series A Capital Securities for Series B Capital
Securities. The Series A Capital Securities may be exchanged for Series B
Securities pursuant to the terms of the Exchange Offer. The Property Trustee
shall make the exchange as follows:
The Sponsor shall present the Property Trustee with an Officers'
Certificate certifying the following:
(A) upon issuance of the Series B Capital Securities, the
transactions contemplated by the Exchange Offer have been
consummated; and
(B) the number of Series A Capital Securities properly tendered
in the Exchange Offer that are represented by a Global
Capital Security and the number of Series A Capital
Securities properly tendered in the Exchange Offer that are
represented by Definitive Capital Securities, the name of
each Holder of such Definitive Capital Securities, the
liquidation amount of Capital Securities properly tendered
in the Exchange Offer by each such Holder and the name and
address to which Definitive Capital Securities for Series B
Capital Securities shall be registered and sent for each
such Holder.
The Property Trustee, upon receipt of (i) such Officers' Certificate, (ii)
an Opinion of Counsel (x) to the effect that the Series B Capital Securities
have been registered under Section 5 of the Securities Act and the Indenture has
been qualified under the Trust Indenture Act and (y) with respect to the matters
set forth in Section 3(p) of the Registration Rights Agreement and (iii) a
Company Order, shall authenticate (A) a Global Capital Security representing
Series B Capital Securities in aggregate liquidation amount equal to the
aggregate liquidation amount of Series A Capital Securities represented by a
Global Capital Security indicated in such Officers' Certificate as having been
properly tendered and (B) Definitive Capital Securities representing Series B
Capital Securities registered in the names of, and in the liquidation amounts
indicated in such Officers' Certificate.
If, upon consummation of the Exchange Offer, less than all the outstanding
Series A Capital Securities shall have been properly tendered and not withdrawn,
the Property Trustee shall make an endorsement on the Global Capital Security
representing Series A Capital Securities indicating the
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reduction in the number and aggregate liquidation amount represented thereby as
a result of the Exchange Offer.
The Trust shall deliver such Definitive Capital Securities representing
Series B Capital Securities to the Holders thereof as indicated in such
Officers' Certificate.
(n) Minimum Transfers. Series A Capital Securities and, when issued, Series
B Capital Securities may only be transferred in minimum blocks of $100,000
aggregate liquidation amount. Any transfer of Series A Capital Securities or
Series B Capital Securities in a block having an aggregate liquidation amount of
less than $100,000 shall be deemed to be void and of no legal effect whatsoever.
Any such transferee shall be deemed not to be a Holder of such Series A or
Series B Capital Securities for any purpose, including, but not limited to, the
receipt of Distributions on such Capital Securities, and such transferee shall
be deemed to have no interest whatsoever in such Capital Securities.
Section 9.3 Deemed Security Holders.
The Trustees may treat the Person in whose name any Security shall be
registered on the books and records of the Trust as the sole owner of such
Security for purposes of receiving Distributions and for all other purposes
whatsoever and, accordingly, shall not be bound to recognize any equitable or
other claim to or interest in such Security on the part of any Person, whether
or not the Trust shall have actual or other notice thereof.
Section 9.4 Book Entry Interests.
Global Capital Securities shall initially be registered on the books and
records of the Trust in the name of Cede & Co., the nominee of the Clearing
Agency, and no Capital Security Beneficial Owner will receive a definitive
Capital Security Certificate representing such Capital Security Beneficial
Owner's interests in such Global Capital Securities, except as provided in
Section 9.2 and Section 7.9. Unless and until definitive, fully registered
Capital Securities certificates have been issued to the Capital Security
Beneficial Owners pursuant to Section 9.2 and Section 7.9:
(a) the provisions of this Section 9.4 shall be in full force and effect;
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(b) the Trust and the Trustees shall be entitled to deal with the Clearing
Agency for all purposes of this Trust Agreement (including the payment of
Distributions on the Global Capital Securities and receiving approvals, votes or
consents hereunder) as the Holder of the Capital Securities and the sole holder
of the Global Certificates and shall have no obligation to the Capital Security
Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4 conflict with any
other provisions of this Trust Agreement, the provisions of this Section 9.4
shall control; and
(d) the rights of the Capital Security Beneficial Owners shall be exercised
only through the Clearing Agency and shall be limited to those established by
law and agreements between such Capital Security Beneficial Owners and the
Clearing Agency and/or the Clearing Agency Participants and receive and transmit
payments of Distributions on the Global Certificates to such Clearing Agency
Participants. DTC will make book entry transfers among the Clearing Agency
Participants.
Section 9.5 Notices to Clearing Agency.
Whenever a notice or other communication to the Capital Security Holders is
required under this Trust Agreement, the Trustees shall give all such notices
and communications specified herein to be given to the Holders of Global Capital
Securities to the Clearing Agency, and shall have no notice obligations to the
Capital Security Beneficial Owners.
Section 9.6 Appointment of Successor Clearing Agency.
If any Clearing Agency elects to discontinue its services as securities
depositary with respect to the Capital Securities, the Administrative Trustees
may, in their sole discretion, appoint a successor Clearing Agency with respect
to such Capital Securities.
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ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
Section 10.1 Liability.
(a) Except as expressly set forth in this Trust Agreement, the Securities
Guarantees and the terms of the Securities, the Sponsor shall not be:
(i) personally liable for the return of any portion of the capital
contributions (or any return thereon) of the Holders which shall be made
solely from assets of the Trust; and
(ii) required to pay to the Trust or to any Holder any deficit upon
dissolution of the Trust or otherwise.
(b) The Debenture Issuer shall be liable for all of the debts and
obligations of the Trust (other than in respect of the Securities) to the extent
not satisfied out of the Trust's assets.
(c) Pursuant to ss. 3803(a) of the Business Trust Act, the Holders shall be
entitled to the same limitation of personal liability extended to shareholders
of private corporations for profit organized under the General Corporation Law
of the State of Delaware.
Section 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or accountable in
damages or otherwise to the Trust or any Covered Person for any loss, damage or
claim incurred by reason of any act or omission performed or omitted by such
Indemnified Person in good faith on behalf of the Trust and in a manner such
Indemnified Person reasonably believed to be within the scope of the authority
conferred on such Indemnified Person by this Trust Agreement or by law, except
that an Indemnified Person shall be liable for any such 1099, damage or claim
incurred by reason of such Indemnified Person's gross negligence or willful
misconduct with respect to such acts or omissions.
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(b) An Indemnified Person shall be fully protected in relying in good faith
upon the records of the Trust and upon such information, opinions, reports or
statements presented to the Trust by any Person as to matters the Indemnified
Person reasonably believes are within such other Person's professional or expert
competence and who has been selected with reasonable care by or on behalf of the
Trust, including information, opinions, reports or statements as to the value
and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions as
Holders might properly be paid.
Section 10.3 Fiduciary Duty.
(a) To the extent that, at law or in equity, an Indemnified Person has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust or to any other Covered Person, an Indemnified Person acting under this
Trust Agreement shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Trust Agreement. The
provisions of this Trust Agreement, to the extent that they restrict the duties
and liabilities of an Indemnified Person otherwise existing at law or in equity
(other than the duties imposed on the Property Trustee under the Trust Indenture
Act), are agreed by the parties hereto to replace such other duties and
liabilities of such Indemnified Person.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises between any
Covered Persons; or
(ii) whenever this Trust Agreement or any other agreement
contemplated herein or therein provides that an Indemnified Person shall
act in a manner that is, or provides terms that are, fair and reasonable to
the Trust or any Holder of Securities, the Indemnified Person shall resolve
such conflict of interest, take such action or provide such terms,
considering in each case the relative interest of each party (including its
own interest) to such conflict, agreement, transaction or situation and the
benefits and burdens relating to such interests, any customary or accepted
industry practices, and any applicable generally accepted accounting
practices or principles. In the absence of bad faith by the Indemnified
Person, the resolution, action or term so made, taken or provided by the
Indemnified Person shall not constitute a breach of this Trust
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Agreement or any other agreement contemplated herein or of any duty or
obligation of the Indemnified Person at law or in equity or otherwise.
(c) Whenever in this Trust Agreement an Indemnified Person is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar authority, the
Indemnified Person shall be entitled to consider such interests and factors
as it desires, including its own interests, and shall have no duty or
obligation to give any consideration to any interest of or factors
affecting the Trust or any other Person; or
(ii) in its "good faith" or under another express standard, the
Indemnified Person shall act under such express standard and shall not be
subject to any other or different standard imposed by this Trust Agreement.
Section 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the Trust) by
reason of the fact that he is or was a Company Indemnified Person against
expenses (including attorneys, fees and expenses), judgments, fines and
amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith
and in a manner he reasonably believed to be in or not opposed to the best
interests of the Trust, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the Company
Indemnified Person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best
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interests of the Trust, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of the Trust to procure a judgment in its
favor by reason of the fact that he is or was a Company Indemnified Person
against expenses (including attorneys' fees and expenses) actually and
reasonably incurred by him in connection with the defense or settlement of
such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust and
except that no such indemnification shall be made in respect of any claim,
issue or matter as to which such Company Indemnified Person shall have been
adjudged to be liable to the Trust unless and only to the extent that the
Court of Chancery of Delaware or the court in which such action or suit was
brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such Person is
fairly and reasonably entitled to indemnity for such expenses which such
Court of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full extent
permitted by law, against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the Debenture
Issuer only as authorized in the specific case upon a determination that
indemnification of the Company Indemnified Person is proper in the
circumstances because he has met the applicable standard of conduct set
forth in paragraphs (i) and (ii). Such determination shall be made (1) by
the Administrative Trustees by a majority vote of a Quorum consisting of
such Administrative Trustees who were not parties to such action, suit or
proceeding, (2) if such a Quorum is not obtainable, or, even if obtainable,
if a Quorum of
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disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of the
Trust.
(v) Expenses (including attorneys' fees and expenses) incurred by a
Company Indemnified Person in defending a civil, criminal, administrative
or investigative action, suit or proceeding referred to in paragraphs (i)
and (ii) of this Section 10.4(a) shall be paid by the Debenture Issuer in
advance of the final disposition of such action, suit or proceeding upon
receipt of an undertaking by or on behalf of such Company Indemnified
Person to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the Debenture Issuer as authorized in
this Section 10.4(a). Notwithstanding the foregoing, no advance shall be
made by the Debenture Issuer if a determination is reasonably and promptly
made (i) by the Administrative Trustees by a majority vote of a quorum of
disinterested Administrative Trustees, (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or the
Common Security Holder at the time such determination is made, such Company
Indemnified Person acted in bad faith or in a manner that such person did
not believe to be in or not opposed to the best interests of the Trust, or,
with respect to any criminal proceeding, that such Company Indemnified
Person believed or had reasonable cause to believe his conduct was
unlawful. In no event shall any advance be made in instances where the
Administrative Trustees, independent legal counsel or Common Security
Holder reasonably determine that such person deliberately breached his duty
to the Trust or its Common or Capital Security Holders.
(vi) The indemnification and advancement of expenses provided by, or
granted pursuant to, the other paragraphs of this Section 10.4(a) shall not
be deemed exclusive of any other rights to which those seeking
indemnification and advancement of expenses may be entitled under any
agreement, vote of shareholders or disinterested directors of the Debenture
Issuer or Capital Security Holders of the Trust or otherwise, both as to
action in his official capacity and as to action in another capacity while
holding such office. All rights to indemnification under this Section
10.4(a) shall be deemed to be provided by a contract between the Debenture
Issuer and each Company Indemnified Person who serves in such capacity at
any time while this Section
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10.4(a) is in effect. Any repeal or modification of this Section 10.4(a)
shall not affect any rights or obligations then existing.
(vii) The Debenture Issuer or the Trust may purchase and maintain
insurance on behalf of any person who is or was a Company Indemnified
Person against any liability asserted against him and incurred by him in
any such capacity, or arising out of his status as such, whether or not the
Debenture Issuer would have the power to indemnify him against such
liability under the provisions of this Section 10.4(a).
(viii) For purposes of this Section 10.4(a), references to "the Trust"
shall include, in addition to the resulting or surviving entity, any
constituent entity (including any constituent of a constituent) absorbed in
a consolidation or merger, so that any person who is or was a director,
trustee, officer or employee of such constituent entity, or is or was
serving at the request of such constituent entity as a director, trustee,
officer, employee or agent of another entity, shall stand in the same
position under the provisions of this Section 10.4(a) with respect to the
resulting or surviving entity as he would have with respect to such
constituent entity if its separate existence had continued.
(ix) The indemnification and advancement of expenses provided by, or
granted pursuant to, this Section 10.4(a) shall, unless otherwise provided
when authorized or ratified, continue as to a person who has ceased to be a
Company Indemnified Person and shall inure to the benefit of the heirs,
executors and administrators of such a person.
(b) The Debenture Issuer agrees to indemnify the (i) Property Trustee,
(ii) the Delaware Trustee, (iii) any Affiliate of the Property Trustee and
the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or
agents of the Property Trustee and the Delaware Trustee (each of the
Persons in (i) through (iv) being referred to as a "Fiduciary Indemnified
Person") for, and to hold each Fiduciary Indemnified Person harmless
against, any and all loss, liability, damage, claim, action, suit, cost or
expense including taxes (other than taxes based on the income of such
Fiduciary Indemnified Person) of any kind and nature whatsoever incurred
without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the trust or
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trusts hereunder, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against or investigating any
claim, action, suit or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the
satisfaction and discharge of this Trust Agreement.
Section 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the Property
Trustee may engage in or possess an interest in other business ventures of any
nature or description, independently or with others, similar or dissimilar to
the business of the Trust, and the Trust and the Holders shall have no rights by
virtue of this Trust Agreement in and to such independent ventures or the income
or profits derived therefrom, and the pursuit of any such venture, even if
competitive with the business of the Trust, shall not be deemed wrongful or
improper. No Covered Person, the Sponsor, the Delaware Trustee, or the Property
Trustee shall be obligated to present any particular investment or other
opportunity to the Trust even if such opportunity is of a character that, if
presented to the Trust, could be taken by the Trust, and any Covered Person, the
Sponsor, the Delaware Trustee and the Property Trustee shall have the right to
take for its own account (individually or as a partner or fiduciary) or to
recommend to others any such particular investment or other opportunity. Any
Covered Person, the Delaware Trustee and the Property Trustee may engage or be
interested in any financial or other transaction with the Sponsor or any
Affiliate of the Sponsor, or may act as depositary for, trustee or agent for, or
act on any committee or body of holders of, securities or other obligations of
the Sponsor or its Affiliates.
ARTICLE XI
ACCOUNTING
Section 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the calendar year, or
such other year as is required by the Code.
Section 11.2 Certain Accounting Matters.
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(a) At all times during the existence of the Trust, the Administrative
Trustees shall keep, or cause to be kept, full books of account, records and
supporting documents, which shall reflect in reasonable detail, each transaction
of the Trust. The books of account shall be maintained on the accrual method of
accounting, in accordance with generally accepted accounting principles,
consistently applied. The books of account and the records of the Trust shall be
examined by and reported upon as of the end of each Fiscal Year of the Trust by
a firm of independent certified public accountants selected by the
Administrative Trustees.
(b) The Administrative Trustees shall cause to be duly prepared and
delivered to each of the Holders, any annual United States federal income tax
information statement, required by the Code, containing such information with
regard to the Securities held by each Holder as is required by the Code and the
Treasury Regulations. Notwithstanding any right under the Code to deliver any
such statement at a later date, the Administrative Trustees shall endeavor to
deliver all such information statements within 30 days after the end of each
Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly prepared and filed
with the appropriate taxing authority, an annual United States federal income
tax return, on a Form 1041 or such other form required by United States federal
income tax law, and any other annual income tax returns required to be filed by
the Administrative Trustees on behalf of the Trust with any state or local
taxing authority.
Section 11.3 Banking.
The Trust may maintain one or more bank accounts in the name and for the
sole benefit of the Trust; provided, however, that all payments of funds in
respect of the Debentures held by the Property Trustee shall be made directly to
the Property Trustee Account and no other funds of the Trust shall be deposited
in the Property Trustee Account. The sole signatories for such accounts shall be
designated by the Administrative Trustees; provided, however, that the Property
Trustee shall designate the signatories for the Property Trustee Account.
Section 11.4 Withholding.
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The Trust and the Administrative Trustees shall comply with all withholding
requirements under United States federal, state and local law. The Trust shall
request, and the Holders shall provide to the Trust, such forms or certificates
as are necessary to establish an exemption from withholding with respect to each
Holder, and any representations and forms as shall reasonably be requested by
the Trust to assist it in determining the extent of, and in fulfilling, its
withholding obligations. The Administrative Trustees shall file required forms
with applicable jurisdictions and, unless an exemption from withholding is
properly established by a Holder, shall remit amounts withheld with respect to
the Holder to applicable jurisdictions. To the extent that the Trust is required
to withhold and pay over any amounts to any authority with respect to
Distributions or allocations to any Holder, the amount withheld shall be deemed
to be a Distribution in the amount of the withholding to the Holder. In the
event of any claimed over withholding, Holders shall be limited to an action
against the applicable jurisdiction. If the amount required to be withheld was
not withheld from actual Distributions made, the Trust may reduce subsequent
Distributions by the amount of such withholding.
ARTICLE XII
AMENDMENTS AND MEETINGS
Section 12.1 Amendments.
(a) Except as otherwise provided in this Trust Agreement or by any
applicable terms of the Securities, this Trust Agreement may only be amended by
a written instrument approved and executed by:
(i) the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
(ii) the Sponsor;
(iii) if the amendment affects the rights, powers, duties, obligations
or immunities of the Property Trustee, the Property Trustee; and
(iv) if the amendment affects the rights, powers, duties, obligations
or immunities of the
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Delaware Trustee, the Delaware Trustee.
(b) No amendment shall be made, and any such purported amendment shall be
void and ineffective:
(i) unless, in the case of any proposed amendment, the Property
Trustee shall have first received an Officers' Certificate from each of the
Trust and the Sponsor that such amendment is permitted by, and conforms to,
the terms of this Trust Agreement (including the terms of the Securities);
(ii) unless, in the case of any proposed amendment which affects the
rights, powers, duties, obligations or immunities of the Property Trustee,
the Property Trustee shall have first received:
(a) an Officers' Certificate from each of the Trust and the
Sponsor that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the Securities);
and
(b) an Opinion of Counsel (who may be counsel to the Sponsor or
the Trust) that such amendment is permitted by, and conforms to, the
terms of this Trust Agreement (including the terms of the Securities)
and that all conditions precedent, if any, in this Trust Agreement to
the execution and delivery of such amendment have been satisfied,
provided, however, that the Property Trustee shall not be required to
sign any such amendment; and
(iii) to the extent the result of such amendment would be to:
(a) cause the Trust to fail to continue to be classified for
purposes of United States federal income taxation as a grantor trust;
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(B) reduce or otherwise adversely affect the powers of the
Property Trustee in contravention of the Trust Indenture Act, to the
extent applicable to this Trust Agreement; or
(C) cause the Trust to be deemed to be an Investment Company
required to be registered under the Investment Company Act;
(c) At such time after the Trust has issued any Securities that remain
outstanding, any amendment that would adversely affect the rights, privileges or
preferences of any Holder may be effected only with such additional requirements
as may be set forth in the terms of such Securities;
(d) Section 9.1(c) and this Section 12.1 shall not be amended without the
consent of all of the Holders;
(e) Article Four shall not be amended without the consent of the Holders of
a Majority in liquidation amount of the Common Securities and;
(f) The rights of the holders of the Common Securities under Article Five
to increase or decrease the number of, and appoint and remove Trustees shall not
be amended without the consent of the Holders of a Majority in liquidation
amount of the Common Securities; and
(g) Notwithstanding Section 12.1(c), this Trust Agreement may be amended
without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any provision in this
Trust Agreement that may be inconsistent with any other provision of this
Trust Agreement or to make any other provisions with respect to matters or
questions arising under this Trust Agreement which shall not be
inconsistent with the other provisions of the Trust Agreement; and
(ii) to modify, eliminate or add to any provisions of the Trust
Agreement to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a
grantor trust at all times that any Securities are outstanding or to ensure
that the
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Trust will not be required to register as an Investment Company under the
Investment Company Act.
provided, however, that in the case of clause (i), such action shall not
adversely affect in any material respect the interests of the Holders, and any
amendments of this Trust Agreement shall become effective when notice thereof is
given to the Holders.
Section 12.2 Meeting of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be called at any
time by the Administrative Trustees (or as provided in the terms of the
Securities) to consider and act on any matter on which Holders of such class of
Securities are entitled to act under the terms of this Trust Agreement, the
terms of the Securities or the rules of any stock exchange on which the Capital
Securities are listed or admitted for trading. The Administrative Trustees shall
call a meeting of the Holders of such class if directed to do so by the Holders
of at least 10% in liquidation amount of such class of Securities. Such
direction shall be given by delivering to the Administrative Trustees one or
more notices in writing stating that the signing Holders wish to call a meeting
and indicating the general or specific purpose for which the meeting is to be
called. Any Holders calling a meeting shall specify in writing the Security
Certificates held by the Holders exercising the right to call a meeting and only
those Securities specified shall be counted for purposes of determining whether
the required percentage set forth in the second sentence of this paragraph has
been met.
(b) Except to the extent otherwise provided in the terms of the Securities,
the following provisions shall apply to meetings of Holders:
(i) notice of any such meeting shall be given to all the Holders
having a right to vote thereat at least seven days and not more than 60
days before the date of such meeting. Whenever a vote, consent or approval
of the Holders is permitted or required under this Trust Agreement or the
rules of any stock exchange on which the Capital Securities are listed or
admitted for trading, such vote, consent or approval may be given at a
meeting of the Holders. Any action that may be taken at a meeting of the
Holders may be taken without a meeting if a consent in writing setting
forth the action so taken is signed by the Holders owning not less than the
minimum amount of
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Securities in liquidation amount that would be necessary to authorize or
take such action at a meeting at which all Holders having a right to vote
thereon were present and voting. Prompt notice of the taking of action
without a meeting shall be given to the Holders entitled to vote who have
not consented in writing. The Administrative Trustees may specify that any
written ballot submitted to the Security Holder for the purpose of taking
any action without a meeting shall be returned to the Trust within the time
specified by the Administrative Trustees;
(ii) each Holder may authorize any Person to act for it by proxy on
all matters in which a Holder is entitled to participate, including waiving
notice of any meeting, or voting or participating at a meeting. No proxy
shall be valid after the expiration of 11 months from the date thereof
unless otherwise provided in the proxy. Every proxy shall be revocable at
the pleasure of the Holder executing it. Except as otherwise provided
herein, all matters relating to the giving, voting or validity of proxies
shall be governed by the General Corporation Law of the State of Delaware
relating to proxies, and judicial interpretations thereunder, as if the
Trust were a Delaware corporation and the Holders were stockholders of a
Delaware corporation;
(iii) each meeting of the Holders shall be conducted by the
Administrative Trustees or by such other Person that the Administrative
Trustees may designate; and
(iv) unless the Business Trust Act, this Trust Agreement, the terms of
the Securities, the Trust Indenture Act or the listing rules of any stock
exchange on which the Capital Securities are then listed or trading,
otherwise provides, the Administrative Trustees, in their sole discretion,
shall establish all other provisions relating to meetings of Holders,
including notice of the time, place or purpose of any meeting at which any
matter is to be voted on by any Holders, waiver of any such notice, action
by consent without a meeting, the establishment of a record date, quorum
requirements, voting in person or by proxy or any other matter with respect
to the exercise of any such right to vote.
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
Section 13.1 Representations and Warranties of Property Trustee.
The Trustee that acts as initial Property Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Trust Agreement, and each
Successor Property Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a national banking association with trust
powers and authority to execute and deliver, and to carry out and perform its
obligations under the terms of, this Trust Agreement;
(b) The execution, delivery and performance by the Property Trustee of this
Trust Agreement has been duly authorized by all necessary corporate action on
the part of the Property Trustee. This Trust Agreement has been duly executed
and delivered by the Property Trustee and constitutes a legal, valid and binding
obligation of the Property Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) The execution, delivery and performance of this Trust Agreement by the
Property Trustee does not conflict with or constitute a breach of the charter or
by-laws of the Property Trustee; and
(d) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Property Trustee of this Trust
Agreement.
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Section 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents and warrants
to the Trust and to the Sponsor at the date of this Trust Agreement, and each
Successor Delaware Trustee represents and warrants to the Trust and the Sponsor
at the time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee is duly organized, validly existing and in good
standing under the laws of the United States, with its principal place of
business in the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms of, this
Trust Agreement;
(b) The execution, delivery and performance by the Delaware Trustee of this
Trust Agreement has been duly authorized by all necessary corporate action on
the part of the Delaware Trustee. This Trust Agreement has been duly executed
and delivered by the Delaware Trustee and constitutes a legal, valid and binding
obligation of the Delaware Trustee, enforceable against it in accordance with
its terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights generally and to
general principles of equity and the discretion of the court (regardless of
whether the enforcement of such remedies is considered in a proceeding in equity
or at law);
(c) No consent, approval or authorization of, or registration with or
notice to, any Delaware or federal banking authority is required for the
execution, delivery or performance by the Delaware Trustee of this Trust
Agreement; and
(d) The Delaware Trustee is a natural person who is a resident of the State
of Delaware or, if not a natural person, an entity which has its principal place
of business in the State of Delaware.
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ARTICLE XIV
REGISTRATION RIGHTS
Section 14.1 Registration Rights Agreement.
The Holders of the Capital Securities, the Debentures and the Capital
Securities Guarantee (collectively, the "Registrable Securities") are entitled
to the benefits of a Registration Rights Agreement. In certain limited
circumstances set forth in the Registration Rights Agreement, the Debenture
Issuer shall be required to pay Liquidated Damages with respect to the
Debentures. Unless otherwise stated, the term "Distribution", as used in this
Trust Agreement, includes such Liquidated Damages.
ARTICLE XV
MISCELLANEOUS
Section 15.1 Notices.
All notices provided for in this Trust Agreement shall be in writing, duly
signed by the party giving such notice, and shall be delivered, telecopied or
mailed by first class mail, as follows:
(a) if given to the Trust, in care of the Administrative Trustees at the
Trust's mailing address set forth below (or such other address as the Trust may
give notice of to the Holders):
PBI Capital Trust
379 North Main Street
Doylestown, Pennsylvania 18901
Attention: Administrative Trustee
(b) if given to the Delaware Trustee, at the mailing address set forth
below (or such other address as Delaware Trustee may give notice of to the
Holders):
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First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(c) if given to the Property Trustee, at the Property Trustee's mailing
address set forth below (or such other address as the Property Trustee may give
notice of to the Holders):
First Union Trust Company, National Association
One Rodney Square
920 King Street
1st Floor
Wilmington, Delaware 19801
Attention: Corporate Trust Department
(d) if given to the Holder of the Common Securities, at the mailing address
of the Sponsor set forth below (or such other address as the Holder of the
Common Securities may give notice to the Trust):
Premier Bancorp, Inc.
379 North Main Street
Doylestown, Pennsylvania 18901
Attention: Chief Executive Officer
(e) if given to any other Holder, at the address set forth on the books and
records of the Trust.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document
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is refused delivery or cannot be delivered because of a changed address of which
no notice was given, such notice or other document shall be deemed to have been
delivered on the date of such refusal or inability to deliver.
Section 15.2 Governing Law.
This Trust Agreement and the rights of the parties hereunder shall be
governed by and interpreted in accordance with the laws of the State of Delaware
and all rights and remedies shall be governed by such laws without regard to
principles of conflict of laws.
Section 15.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be classified for
United States federal income tax purposes as a grantor trust. The provisions of
this Trust Agreement shall be interpreted to further this intention of the
parties.
Section 15.4 Headings.
Headings contained in this Trust Agreement are inserted for convenience of
reference only and do not affect the interpretation of this Trust Agreement or
any provision hereof.
Section 15.5 Successors and Assigns.
Whenever in this Trust Agreement any of the parties hereto is named or
referred to, the successors and assigns of such party shall be deemed to be
included, and all covenants and agreements in this Trust Agreement by the
Sponsor and the Trustees shall bind and inure to the benefit of their respective
successors and assigns, whether so expressed.
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Section 15.6 Partial Enforceability.
If any provision of this Trust Agreement, or the application of such
provision to any Person or circumstance, shall be held invalid, the remainder of
this Trust Agreement, or the application of such provision to persons or
circumstances other than those to which it is held invalid, shall not be
affected thereby.
Section 15.7 Counterparts.
This Trust Agreement may contain more than one counterpart of the signature
page and this Trust Agreement may be executed by the affixing of the signature
of each of the Trustees to one of such counterpart signature pages. All of such
counterpart signature pages shall be read as though one, and they shall have the
same force and effect as though all of the signers had signed a single signature
page.
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IN WITNESS WHEREOF, the undersigned has caused these presents to be
executed as of the day and year first above written.
/s/ John C. Soffronooff
------------------------------------
John C. Soffronoff, as
Administrative Trustee
/s/ Bruce E. Sickel
------------------------------------
Bruce E. Sickel, as
Administrative Trustee
FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION as Delaware Trustee and
Property Trustee
By: /s/ Doris J. Krick
------------------------------------
Name: Doris J. Krick
Title: Vice President
PREMIER BANCORP, INC. as Sponsor and Debenture Issuer
By:/s/ John C. Soffronoff
------------------------------------
Name: John C. Soffronoff
Title: President and Chief
Executive Officer
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ANNEX I
TERMS OF
8.57% SERIES A/SERIES B CAPITAL SECURITIES
8.57% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated Declaration of Trust,
dated as of August 11, 1998 (as amended from time to time, the "Trust
Agreement"), the designation, rights, privileges, restrictions, preferences and
other terms and provisions of the Securities are set out below (each capitalized
term used but not defined herein has the meaning set forth in the Trust
Agreement or, if not defined in such Trust Agreement, as defined in the Offering
Memorandum referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
(a) Capital Securities. 10,000 Series A Capital Securities of the Trust and
10,000 Series B Capital Securities of the Trust, each series with an aggregate
liquidation amount with respect to the assets of the Trust of Ten Million
Dollars ($10,000,000), and each with a liquidation amount with respect to the
assets of the Trust of $1,000 per security, are hereby designated for the
purposes of identification only as "8.57% Series A Capital Securities" and
"8.57% Series B Capital Securities", respectively (collectively, the "Capital
Securities"). The certificates evidencing the Capital Securities shall be
substantially in the form of Exhibit A-1 to the Trust Agreement, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any exchange or
quotation system on or in which the Capital Securities are listed, traded or
quoted.
(b) Common Securities. 310 Common Securities of the Trust with an aggregate
liquidation amount with respect to the assets of the Trust of Three Hundred Ten
Thousand Dollars ($310,000) and a liquidation amount with respect to the assets
of the Trust of $1,000 per security, are hereby designated for the purposes of
identification only as "8.57% Common Securities" (collectively, the "Common
Securities"). The certificates evidencing the Common Securities shall be
substantially in the form of Exhibit A-2 to the Trust Agreement, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice.
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2. Distributions.
(a) Distributions payable on each Security will be fixed at a rate per
annum of 8.57% (the "Coupon Rate") of the liquidation amount of $1,000 per
Security (the "Liquidation Amount"), such rate being the rate of interest
payable on the Debentures to be held by the Property Trustee. Distributions in
arrears for more than one semi-annual period will bear additional distributions
thereon compounded semi-annually at the Coupon Rate (to the extent permitted by
applicable law). Pursuant to the Registration Rights Agreement, in certain
limited circumstances the Debenture Issuer will be required to pay Liquidated
Damages (as defined in the Registration Rights Agreement) with respect to the
Debentures. The term "Distributions", as used herein, includes distributions of
any such interest and Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
(b) Distributions on the Securities will be cumulative, will accumulate
from August 11, 1998, and will be payable semi-annually in arrears on February
15 and August 15 of each year, commencing on February 15, 1999 (each, a
"Distribution Date"), except as otherwise described below. Distributions will be
computed on the basis of a 360-day year consisting of twelve 30-day months and
for any period less than a full calendar month on the basis of the actual number
of days elapsed in such month. As long as no Event of Default has occurred and
is continuing under the Indenture, the Debenture Issuer has the right under the
Indenture to defer payments of interest by extending the interest payment period
at any time and from time to time on the Debentures for a period not exceeding
10 consecutive semi-annual periods, including the first such semi-annual period
during such period (each an "Extension Period"), during which Extension Period
no interest shall be due and payable on the Debentures, provided that no
Extension Period shall end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures. As a
consequence of such deferral, Distributions will also be deferred. Despite such
deferral, Distributions will continue to accumulate with additional
Distributions thereon (to the extent permitted by applicable law but not at a
rate greater than the rate at which interest is then accruing on the Debentures)
at the Coupon Rate compounded semi-annually during any such Extension Period.
Prior to the termination of any such Extension Period, the Debenture Issuer may
further defer payments of interest by further extending such Extension Period;
provided that such Extension Period, together with all such previous and further
extensions within such
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Extension Period, may not exceed 10 consecutive semi-annual periods, including
the first semi-annual period during such Extension Period, or extend beyond the
Maturity Date of the Debentures. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
(c) Distributions on the Securities will be payable to the Holders thereof
as they appear on the books and records of the Trust on the fifteenth day
preceding the relevant Distribution Date, which Distribution Dates correspond to
the interest payment dates on the Debentures. Subject to any applicable laws and
regulations and the provisions of the Trust Agreement, each such payment in
respect of the Capital Securities will be made as described under the heading
"Description of Capital Securities -- Form, Denomination, Book-Entry Procedures
and Transfer" in the Offering Memorandum dated August 6, 1998, of the Debenture
Issuer and the Trust relating to the Securities and the Debentures. The relevant
record dates for the Common Securities shall be the same as the record dates for
the Capital Securities. Distributions payable on any Securities that are not
punctually paid on any Distribution Date, as a result of the Debenture Issuer
having failed to make a payment under the Debentures, will cease to be payable
to the Holder on the relevant record date, and such defaulted Distribution will
instead be payable to the Person in whose name such Securities are registered on
the special record date or other specified date determined in accordance with
the Indenture. If any date on which Distributions are payable on the Securities
is not a Business Day, then payment of the Distribution payable on such date
will be made on the next succeeding day that is a Business Day (and without any
interest or other payment in respect of any such delay), except that if such
next succeeding Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day with the same
force and effect as if made on such date.
(d) In the event that there is any money or other property held by or for
the Trust that is not accounted for hereunder, such property shall be
distributed Pro Rata (as defined herein) among the Holders.
3. Liquidation Distribution Upon Dissolution.
In the event of any termination of the Trust or the Sponsor otherwise gives
notice of its election to liquidate the Trust pursuant to Section 8.1(a)(iii) of
the Trust Agreement, the Trust shall be liquidated
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by the Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the liquidation amount of $1,000 per Security plus accumulated and
unpaid Distributions thereon to the date of payment (such amount being the
"Liquidation Distribution").
"Like Amount" means (i) with respect to a redemption of the Securities,
Securities having a Liquidation Amount equal to the principal amount of
Debentures to be paid in accordance with their terms and (ii) with respect to a
distribution of Debentures upon the liquidation of the Trust, Debentures having
a principal amount equal to the Liquidation Amount of the Securities of the
Holder to whom such Debentures are distributed.
If, upon any such liquidation, the Liquidation Distribution can be paid
only in part because the Trust has insufficient assets on hand legally available
to pay in full the aggregate Liquidation Distribution, then the amounts payable
directly by the Trust on the Securities shall be paid on a Pro Rata basis.
4. Redemption and Distribution.
(a) Upon the repayment of the Debentures in whole or in part, at maturity
or upon early redemption (either at the option of the Debenture Issuer or
pursuant to a Special Event, as described below), the proceeds from such
repayment shall be simultaneously applied by the Property Trustee (subject to
the Property Trustee having received notice no less than 30 nor more than 60
days prior to such repayment) to redeem a Like Amount of the Securities at a
redemption price equal to (i) in the case of the repayment of the Debentures at
maturity, the Maturity Redemption Price (as defined below), (ii) in the case of
the optional prepayment of the Debentures prior to August 15, 2008 upon the
occurrence and continuation of a Special Event, the Special Event Prepayment
Price (as defined below) and (iii) in the case of the optional prepayment of the
Debentures on or after August 15, 2008, the Optional Prepayment Price (as
defined below). The Maturity Redemption Price, the Special Event Prepayment
Price and the
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Optional Prepayment Price are referred to collectively as the "Redemption
Price". Holders will be given not less than 30 nor more than 60 days notice of
such redemption.
(b) (i) The "Maturity Redemption Price", with respect to a redemption of
Securities, shall mean an amount equal to the principal of and accrued and
unpaid interest on the Debentures as of the maturity date thereof.
(ii) In the case of an optional prepayment, if fewer than all the
outstanding Securities are to be so prepaid, the Securities will be prepaid Pro
Rata or by lot or by any other method utilized by the Property Trustee and the
Capital Securities to be prepaid will be determined as described in Section
4(f)(ii) below. Upon the entry of an order for the dissolution of the Trust by a
court of competent jurisdiction, the Debentures thereafter will be subject to
optional repayment, in whole, but not in part, on or after August 15, 2008 (the
"Initial Optional Prepayment Date").
The Debenture Issuer shall have the right (subject to the conditions in the
Indenture) to elect to prepay the Debentures in whole or in part at any time on
or after the Initial Optional Prepayment Date, upon not less than 30 days and
not more than 60 days notice, at the Optional Prepayment Price and, simultaneous
with such redemption, to cause a Like Amount of the Securities to be redeemed by
the Trust at the Optional Prepayment Price on a Pro Rata basis. "Optional
Prepayment Price" shall mean a price equal to the percentage of the liquidation
amount of Securities to be redeemed plus accumulated and unpaid Distributions
thereon, if any, to the date of such redemption if redeemed during the 12-month
period beginning August 15, of the years indicated below:
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Year Percentage
---- ----------
2008 104.285%
2009 103.857
2010 103.428
2011 103.000
2012 102.571
2013 102.143
2014 101.714
2015 101.286
2016 100.857
2017 100.429
2018 and thereafter 100.000%
(c) If at any time a Tax Event or a Regulatory Capital Event (each as
defined below, and each a "Special Event") occurs, the Debenture Issuer shall
have the right (subject to the conditions set forth in the Indenture) at any
time prior to the Initial Optional Prepayment Date, upon not less than 30 nor
more than 60 days notice, to prepay the Debentures in whole, but not in part,
within the 90 days following the occurrence of such Special Event (the "90 Day
Period"), and, simultaneous with such prepayment, to cause a Like Amount of the
Securities to be prepaid by the Trust at the Special Event Prepayment Price on a
Pro Rata basis.
"Tax Event" shall occur upon receipt by the Debenture Issuer and the Trust
of an Opinion of Counsel experienced in such matters to the effect that, as a
result of any amendment to, or change (including any announced prospective
change) in, the laws or any regulations thereunder of the United States or any
political subdivision or taxing authority thereof or therein, or as a result of
any official administrative pronouncement or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
which pronouncement or decision is announced on or after August 11, 1998, there
is more than an insubstantial risk that (i) the Trust is, or will be within 90
days of the date of such opinion, subject to United States federal income tax
with respect to income received or accrued on the Debentures, (ii) interest
payable by the Debenture Issuer on the Debentures is not, or
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within 90 days of the date of such opinion, will not be, deductible by the
Debenture Issuer, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Regulatory Capital Event" means the receipt by the Sponsor of an opinion
of independent bank regulatory counsel experienced in such matters to the effect
that, as a result of (i) any amendment to, or change (including any announced
prospective change) in, the laws (or any regulations thereunder) of the United
States or any rules, guidelines or policies of an applicable regulatory agency
or (ii) 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 August 11,
1998, the Capital Securities do not constitute, or within 90 days of such
opinion will not constitute, Tier 1 Capital (or its then equivalent if the
Sponsor were subject to such capital requirement), applied as if the Sponsor (or
its successors) were a bank holding company, except as otherwise restricted
under the 25% Capital Limitation, for purposes of the capital adequacy
guidelines of the Federal Reserve Board (or any successor regulatory authority
with jurisdiction over bank holding companies), or any capital adequacy
guidelines as then in effect and applicable to the Sponsor; provided, however,
that the distribution of the Debentures in connection with the liquidation of
the Trust by the Sponsor shall not in and of itself constitute a Regulatory
Capital Event, unless such liquidation shall have occurred in connection with a
Tax Event.
"Special Event Prepayment Price" shall mean, with respect to a prepayment
of Securities, a price equal to the Make-Whole Amount. The "Make-Whole Amount"
shall be equal to the greater of: (a) 100% of the principal amount of the
Debentures; or (b) the sum, as determined by a Quotation Agent, of the present
values of the remaining scheduled payments of principal and interest on the
Debentures from the prepayment date to the Maturity Date, discounted to the
prepayment date on a semi-annual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in the case of each
of clauses (a) and (b), accrued and unpaid interest thereon and Liquidated
Damages, if any, to the date of prepayment.
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(d) On and from the date fixed by the Administrative Trustees for any
distribution of Debentures and liquidation of the Trust: (i) the Securities will
no longer be deemed to be outstanding, (ii) the Clearing Agency or its nominee
(or any successor Clearing Agency or its nominee), as the Holder of the Global
Capital Security, will receive a registered global certificate or certificates
representing the Debentures to be delivered upon such distribution and any
certificates representing Securities not held by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) will be deemed to
represent beneficial interests in a Like Amount of Debentures until such
certificates are presented to the Debenture Issuer or its agent for transfer or
reissue.
(e) The Trust may not redeem fewer than all the outstanding Securities
unless all accumulated and unpaid Distributions have been paid on all Securities
for all semiannual Distribution periods terminating on or before the date of
redemption.
(f) The procedure with respect to prepayments or distributions of
Securities shall be as follows:
(i) Notice of any prepayment of, or notice of distribution of
Debentures in exchange for, the Securities (a "Prepayment/Distribution
Notice") will be given by the Trust by mail to each Holder to be prepaid or
exchanged not fewer than 30 nor more than 60 days before the date fixed for
prepayment or exchange thereof which, in the case of a prepayment, will be
the date fixed for prepayment of the Debentures. For purposes of the
calculation of the date of prepayment or exchange and the dates on which
notices are given pursuant to this Section 4(f)(i), a
Prepayment/Distribution Notice shall be deemed to be given on the day such
notice is first mailed by first-class mail, postage prepaid, to Holders.
Each Prepayment/Distribution Notice shall be addressed to the Holders at
the address of each such Holder appearing in the books and records of the
Trust. No defect in the Prepayment/Distribution Notice or in the mailing of
either thereof with respect to any Holder shall affect the validity of the
prepayment or exchange proceedings with respect to any other Holder.
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(ii) In the event that fewer than all the outstanding Securities are
to be prepaid, the Securities to be prepaid shall be prepaid Pro Rata from
each Holder, it being understood that, in respect of Capital Securities
registered in the name of and held of record by the Clearing Agency or its
nominee (or any successor Clearing Agency or its nominee) or any nominee,
the distribution of the proceeds of such redemption will be made to the
Clearing Agency and disbursed by such Clearing Agency in accordance with
the procedures applied by such agency or nominee.
(iii) If Securities are to be prepaid and the Trust gives a
Prepayment/ Distribution Notice, (which notice will be irrevocable), then
(A) with respect to Capital Securities issued in book-entry form, by 12:00
noon, New York City time, on the prepayment date, provided that the
Debenture Issuer has paid the Property Trustee a sufficient amount of cash
in connection with the related redemption or maturity of the Debentures by
10:00 a.m., New York City time, on the maturity date or the date of
prepayment, as the case requires, the Property Trustee will deposit
irrevocably with the Clearing Agency or its nominee (or successor Clearing
Agency or its nominee) funds sufficient to pay the applicable Redemption
Price with respect to such Capital Securities and will give the Clearing
Agency irrevocable instructions and authority to pay the Redemption Price
to the relevant Clearing Agency Participants, and (B) with respect to
Capital Securities issued in certificated form and Common Securities,
provided that the Debenture Issuer has paid the Property Trustee a
sufficient amount of cash in connection with the related prepayment or
maturity of the Debentures, the Property Trustee will pay the relevant
Redemption Price to the Holders by check mailed to the address of the
relevant Holder appearing on the books and records of the Trust on the
prepayment date. If a Prepayment/Distribution Notice shall have been given
and funds deposited as required, if applicable, then immediately prior to
the close of business on the date of such deposit, or on the redemption
date, as applicable, Distributions will cease to accumulate on the
Securities so called for prepayment and all rights of Holders so called for
prepayment will cease, except the right of the Holders of such Securities
to receive the Redemption Price, but without interest on such Redemption
Price, and such Securities shall cease to be outstanding.
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(iv) Payment of accumulated and unpaid Distributions on the Redemption
Date of the Securities will be subject to the rights of Holder's on the
close of business on a regular record date in respect of a Distribution
Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust shall be required to
register or cause to be registered the transfer of (i) any Securities
beginning on the opening of 15 Business Days before the day of mailing of a
notice of prepayment or any notice of selection of Securities for
prepayment or (ii) any Securities selected for prepayment except the
unredeemed portion of any Security being prepaid. If any date fixed for
prepayment of Securities is not a Business Day, then payment of the
Redemption Price payable on such date will be made on the next succeeding
day that is a Business Day (and without any interest or other payment in
respect of any such delay) except that, if such next succeeding Business
Day falls in the next calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and
effect as if made on such date fixed for prepayment. If payment of the
Redemption Price in respect of any Securities is improperly withheld or
refused and not paid either by the Property Trustee or by the Sponsor as
guarantor pursuant to the relevant Securities Guarantee, Distributions on
such Securities will continue to accumulate from the original prepayment
date to the actual date of payment, in which case the actual payment date
will be considered the date fixed for prepayment for purposes of
calculating the Redemption Price.
(v) Prepayment/Distribution Notices shall be sent by the Property
Trustee on behalf of the Trust to (A) in respect of the Capital Securities,
the Clearing Agency or its nominee (or any successor Clearing Agency or its
nominee) if the Global Certificates have been issued or, if Definitive
Capital Security Certificates have been issued, to the Holder thereof, and
(B) in respect of the Common Securities, the Holder thereof.
(vi) Subject to the foregoing and applicable law (including, without
limitation, United States federal securities laws and banking laws),
provided the acquiror is not the Holder of the Common Securities or the
obligor under the Indenture, the Sponsor or any
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of its subsidiaries may at any time and from time to time purchase
outstanding Capital Securities by tender, in the open market or by private
agreement.
5. Voting Rights - Capital Securities.
(a) Except as provided under Sections 5(b) and 7 and as otherwise required
by law and the Trust Agreement, the Holders of the Capital Securities will have
no voting rights.
(b) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or (iv) consent
to any amendment, modification or termination of the Indenture or the
Debentures, where such consent shall be required, without, in each case,
obtaining the prior approval of the Holders of a majority in liquidation amount
of all outstanding Capital Securities; provided, however, that where a consent
under the Indenture would require the consent of each holder of Debentures
affected thereby, no such consent shall be given by the Property Trustee without
the prior approval of each Holder of the Capital Securities. The Trustees shall
not revoke any action previously authorized or approved by a vote of the Holders
of the Capital Securities except by subsequent vote of such Holders. The
Property Trustee shall notify each Holder of Capital Securities of any notice of
default with respect to the Debentures. In addition to obtaining the foregoing
approvals of such Holders of the Capital Securities, prior to taking any of the
foregoing actions, the Trustees shall obtain an opinion of counsel experienced
in such matters to the effect that the Trust will not be classified as an
association taxable as a corporation for United States federal income tax
purposes on account of such action.
If an Event of Default under the Trust Agreement has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of prepayment, on the redemption date), then a Holder of
Capital Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or premium, if any, or interest on a
Like Amount of Debentures (a "Direct Action") on or after the respective due
date specified in the Debentures. In connection with such Direct Action, the
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<PAGE>
rights of the Common Securities Holder will be subrogated to the rights of such
Holder of Capital Securities to the extent of any payment made by the Debenture
Issuer to such Holder of Capital Securities in such Direct Action. Except as
provided in the second preceding sentence, the Holders of Capital Securities
will not be able to exercise directly any other remedy available to the holders
of the Debentures.
Any approval or direction of Holders of Capital Securities may be given at
a separate meeting of Holders of Capital Securities convened for such purpose,
at a meeting of all of the Holders of Securities in the Trust or pursuant to
written consent. The Property Trustees will cause a notice of any meeting at
which Holders of Capital Securities are entitled to vote, or of any matter upon
which action by written consent of such Holders is to be taken, to be mailed to
each Holder of record of Capital Securities. Each such notice will include a
statement setting forth (i) the date of such meeting or the date by which such
action is to be taken, (ii) a description of any resolution proposed for
adoption at such meeting on which such Holders are entitled to vote or of such
matter upon which written consent is sought and (iii) instructions for the
delivery of proxies or consents.
No vote or consent of the Holders of the Capital Securities will be
required for the Trust to redeem and cancel Capital Securities or to distribute
the Debentures in accordance with the Trust Agreement and the terms of the
Securities.
Notwithstanding that Holders of Capital Securities are entitled to vote or
consent under any of the circumstances described above, any of the Capital
Securities that are owned by the Sponsor or any Affiliate of the Sponsor shall
not be entitled to vote or consent and shall, for purposes of such vote or
consent, be treated as if they were not outstanding.
6. Voting Rights - Common Securities.
(a) Except as provided under Sections 6(b), 6(c), and 7 and as otherwise
required by law and the Trust Agreement, the Holders of the Common Securities
will have no voting rights.
(b) Unless an Event of Default shall have occurred and be continuing, any
Trustee may be removed at any time by the holder of the Common Securities. If an
Event of Default has occurred
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and is continuing, the Property Trustee and the Delaware Trustee may be removed
at such time by the holders of a Majority in liquidation amount of the
outstanding Capital Securities. In no event will the holders of the Capital
Securities have the right to vote to appoint, remove or replace the
Administrative Trustees, which voting rights are vested exclusively in the
Sponsor as the holder of the Common Securities. No resignation or removal of a
Trustee and no appointment of a successor trustee shall be effective until the
acceptance of appointment by the successor trustee in accordance with the
provisions of the Trust Agreement.
(c) So long as any Debentures are held by the Property Trustee, the
Trustees shall not (i) direct the time, method and place of conducting any
proceeding for any remedy available to the Debenture Trustee, or executing any
trust or power conferred on such Debenture Trustee with respect to the
Debentures, (ii) waive any past default that is waivable under Section 5.07 of
the Indenture, (iii) exercise any right to rescind or annul a declaration of
acceleration of the maturity of the principal of the Debentures or to consent to
any amendment, modification or termination of the Indenture or the Debentures,
where such consent shall be required, without, in each case, obtaining the prior
approval of the Holders of a Majority in liquidation amount of all outstanding
Common Securities; provided, however, that where a consent under the Indenture
would require the consent of each holder of Debentures affected thereby, no such
consent shall be given by the Property Trustee without the prior approval of
each Holder of the Common Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. The Property Trustee shall
notify each Holder of Common Securities of any notice of default with respect to
the Debentures. In addition to obtaining the foregoing approvals of such Holders
of the Common Securities, prior to taking any of the foregoing actions, the
Trustees shall obtain ah opinion of counsel experienced in such matters to the
effect that the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes on account of such
action.
If an Event of Default under the Trust Agreement has occurred and is
continuing and such event is attributable to the failure of the Debenture Issuer
to pay principal of or premium, if any, or interest on the Debentures on the due
date (or in the case of prepayment, on the redemption date), then a Holder of
Common Securities may institute a Direct Action for enforcement of payment to
such Holder of the principal of or premium, if any, or interest on a Like Amount
of Debentures on or after the respective due
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<PAGE>
date specified in the Debentures. In connection with such Direct Action, the
rights of the Common Securities Holder will be subordinated to the rights of
such Holder of Capital Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Common Securities in such Direct Action.
Except as provided in the second preceding sentence, the Holders of Common
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
Any approval or direction of Holders of Common Securities may be given at a
separate meeting of Holders of Common Securities convened for such purpose, at a
meeting of all of the Holders of Securities in the Trust or pursuant to written
consent. The Administrative Trustees will cause a notice of any meeting at which
Holders of Common Securities are entitled to vote, or of any matter upon which
action by written consent of such Holders is to be taken, to be mailed to each
Holder of record of Common Securities. Each such notice will include a statement
setting forth (i) the date of such meeting or the date by which such action is
to be taken, (ii) a description of any resolution proposed for adoption at such
meeting on which such Holders are entitled to vote or of such matter upon which
written consent is sought and (iii) instructions for the delivery of proxies or
consents.
No vote or consent of the Holders of the Common Securities will be required
for the Trust to redeem and cancel Common Securities or to distribute the
Debentures in accordance with the Trust Agreement and the terms of the
Securities.
7. Amendments to Trust Agreement and Indenture.
In addition to the requirements set out in Section 12.1 of the Trust
Agreement, the Trust Agreement may be amended from time to time by the Sponsor,
the Property Trustee and the Administrative Trustees, without the consent of the
Holders (i) to cure any ambiguity, correct or supplement any provisions in the
Trust Agreement that may be inconsistent with any other provisions, or to make
any other provisions with respect to matters or questions arising under the
Trust Agreement which shall not be inconsistent with the other provisions of the
Trust Agreement, or (ii) to modify, eliminate or add to any provisions of the
Trust Agreement to such extent as shall be necessary to ensure that the Trust
will be classified for United States federal income tax purposes as a grantor
trust at all times that any Securities are outstanding or to ensure that the
Trust will not be required to register as an "Investment Company" under the
Investment Company Act; provided, however, that in the case of clause
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(i), such action shall not adversely affect in any material respect the
interests of any Holder, any amendments of the Trust Agreement shall become
effective when notice thereof is given to the Holders. The Trust Agreement may
also be amended by the Trustees and the Sponsor with (i) the consent of Holders
representing a Majority in liquidation amount of all outstanding Securities, and
(ii) receipt by the Trustees of an Opinion of Counsel to the effect that such
amendment or the exercise of any power granted to the Trustees in accordance
with such amendment will not affect the Trust's status as a grantor trust for
United States federal income tax purposes or the Trust's exemption from status
as an Investment Company under the Investment Company Act, provided that,
without the consent of each Holder of Trust Securities, the Trust Agreement may
not be amended to (i) change the amount or timing of any Distribution on the
Trust Securities or otherwise adversely affect the amount of any Distribution
required to be made in respect of the Trust Securities as of a specified date or
(ii) restrict the right of a holder of Trust Securities to institute suit for
the enforcement of any such payment on or after such date.
8. Pro Rata.
A reference in these terms of the Securities to any payment, distribution
or treatment as being "Pro Rata" shall mean pro rata to each Holder according to
the aggregate liquidation amount of the Securities held by the relevant Holder
in relation to the aggregate liquidation amount of all Securities outstanding
unless, in relation to a payment, an Event of Default under the Trust Agreement
has occurred and is continuing, in which case any funds available to make such
payment shall be paid first to each Holder of the Capital Securities pro rata
according to the aggregate liquidation amount of Capital Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Capital
Securities outstanding, and only after satisfaction of all amounts owed to the
Holders of the Capital Securities, to each Holder of Common Securities pro rata
according to the aggregate liquidation amount of Common Securities held by the
relevant Holder relative to the aggregate liquidation amount of all Common
Securities outstanding.
9. Ranking.
The Capital Securities rank pari passu with the Common Securities and
payment thereon shall be
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made Pro Rata with the Common Securities, except that, if an Event of Default
under the Trust Agreement occurs and is continuing, no payments in respect of
Distributions on, or payments upon liquidation, redemption or otherwise with
respect to, the Common Securities shall be made until the Holders of the Capital
Securities shall be paid in full the Distributions, Redemption Price,
Liquidation Distribution and other payments to which they are entitled at such
time.
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Capital Securities and Common Securities, by the acceptance
thereof, agrees to the provisions of the Capital Securities Guarantee and the
Common Securities Guarantee, respectively, including the subordination
provisions therein and to the provisions of the Indenture.
11. No Preemptive Rights.
The Holders shall have no preemptive rights to subscribe for any additional
securities.
12. Miscellaneous.
These terms constitute a part of the Trust Agreement.
The Sponsor will provide a copy of the Trust Agreement, the Capital
Securities Guarantee, the Common Securities Guarantee (as may be appropriate),
or the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Sponsor at its principal place of business.
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EXHIBIT A-1
FORM OF CAPITAL SECURITY CERTIFICATE
FACE OF SECURITY
THIS CAPITAL SECURITY IS A GLOBAL CAPITAL SECURITY WITHIN THE MEANING OF
THE TRUST AGREEMENT HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY TRUST COMPANY (THE "CLEARING AGENCY") OR A NOMINEE OF THE CLEARING
AGENCY. THIS CAPITAL SECURITY IS EXCHANGEABLE FOR CAPITAL SECURITIES REGISTERED
IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE ONLY IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE TRUST AGREEMENT AND NO TRANSFER OF
THIS CAPITAL SECURITY (OTHER THAN A TRANSFER OF THIS CAPITAL SECURITY AS A WHOLE
BY THE CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF
THE CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING
AGENCY) MAY BE REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES.
UNLESS THIS CAPITAL SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CAPITAL SECURITY ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER
NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THE CAPITAL SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS CAPITAL
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
1
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DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS CAPITAL SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) SO LONG AS THIS CAPITAL SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO
RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY
BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT
PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL
BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, (D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR
OUTSIDE THE UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE
SECURITIES ACT, (E) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING
OF SUBPARAGRAPH (A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT
THAT IS ACQUIRING THIS CAPITAL SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT
OF SUCH AN INSTITUTIONAL ACCREDITED INVESTOR, FOR INVESTMENT PURPOSES AND NOT
WITH A VIEW TO, OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN
VIOLATION OF THE SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT, SUBJECT
TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY SUCH OFFER, SALE OR
TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE THE DELIVERY OF AN
OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION SATISFACTORY TO EACH
OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS CAPITAL SECURITY IS
COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER FURTHER
AGREES THAT IT WILL DELIVER
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<PAGE>
TO EACH PERSON TO WHOM THIS CAPITAL SECURITY IS TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
THE CAPITAL SECURITIES WILL BE ISSUED AND MAY BE TRANSFERRED ONLY IN BLOCKS
HAVING A LIQUIDATION AMOUNT OF NOT LESS THAN $100,000 (100 CAPITAL SECURITIES).
ANY SUCH TRANSFER OF CAPITAL SECURITIES IN A BLOCK HAVING A LIQUIDATION AMOUNT
OF LESS THAN $100,000 SHALL BE DEEMED TO BE VOID AND OF NO LEGAL EFFECT
WHATSOEVER. ANY SUCH TRANSFEREE SHALL BE DEEMED NOT TO BE THE HOLDER OF SUCH
CAPITAL SECURITIES FOR ANY PURPOSE, INCLUDING BUT NOT LIMITED TO THE RECEIPT OF
DISTRIBUTIONS OF SUCH CAPITAL SECURITIES, AND SUCH TRANSFEREE SHALL BE DEEMED TO
HAVE NO INTEREST WHATSOEVER IN SUCH CAPITAL SECURITIES.
THE HOLDER OF THIS CAPITAL SECURITY BY ITS ACCEPTANCE HEREOF ALSO AGREES,
REPRESENTS AND WARRANTS THAT EITHER (i) IT IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
("ERISA") OR (ii) THE ACQUISITION AND HOLDING OF THIS CAPITAL SECURITY BY IT IS
NOT PROHIBITED BY EITHER SECTION 406 OF ERISA OR SECTION 4975 OF THE U.S.
INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR EXEMPT FROM ANY SUCH PROHIBITION.
3
<PAGE>
Certificate Number Aggregate Liquidation Amount
CS-1 $9,000,000
CUSIP NO. 69316U A A 5
Certificate Evidencing Capital Securities
of
PBI Capital Trust
8.57% Capital Securities
(liquidation amount $1,000 per Capital Security)
PBI Capital Trust, a statutory business trust created under the laws of the
State of Delaware (the "Trust"), hereby certifies that Cede & Co. (the "Holder")
is the registered owner of $9,000,000 in aggregate liquidation amount of Capital
Securities of the Trust representing undivided beneficial interests in the
assets of the Trust designated the 8.57% Series A Capital Securities
(liquidation amount $1,000 per Capital Security) (the "Capital Securities"). The
Capital Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Capital
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of August 11, 1998, as the same may be amended from time to time (the
"Trust Agreement"), including the designation of the terms of the Capital
Securities as set forth in Annex I to the Trust Agreement. Capitalized terms
used but not defined herein shall have the meaning given them in the Trust
Agreement. The Sponsor will provide a copy of the Trust Agreement, the Capital
Securities Guarantee, the Common Securities Guarantee (as may be appropriate),
and the Indenture (including any supplemental indenture) to a Holder without
charge upon written request to the Trust at its principal place of business.
4
<PAGE>
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder and to the benefits of the
Capital Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal
income tax purposes, the Debentures as indebtedness and the Capital Securities
as evidence of indirect beneficial ownership in the Trust.
5
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 11th day
of August, 1998.
PBI CAPITAL TRUST
By:_________________________________
Name: John C. Soffronoff
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Capital Securities referred to in the within-mentioned
Trust Agreement.
Dated: August 11, 1998
FIRST UNION TRUST COMPANY,
NATIONAL ASSOCIATION,
As Property Trustee
By:_________________________________
Authorized Signatory
6
<PAGE>
REVERSE OF SECURITY
Distributions payable on each Capital Security will be fixed at a rate per
annum of 8.57% (the "Coupon Rate") of the liquidation amount of $1,000 per
Capital Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions" as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds on hand legally available therefor.
Distributions on the Capital Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from August 11, 1998 and will be payable
semi-annually in arrears, on February 15 and August 15 of each year, commencing
on February 15, 1999, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period less than a full calendar month, the number of days elapsed in
such month. As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), provided that no Extension Period
shall end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
semi-annual Distributions will continue to accumulate with interest thereon (to
the extent permitted by applicable law, but not at a rate exceeding the rate of
interest then accruing on the Debentures) at the Coupon Rate compounded
semi-annually during any such Extension Period. Prior to the termination of any
such Extension Period, the Debenture Issuer may further defer payments of
interest by further extending such Extension Period; provided that such
Extension Period, together with all such previous and further extensions within
such Extension Period, may not exceed 10 consecutive semi-annual periods,
including the first semi-annual period during such Extension Period, end on a
date
<PAGE>
other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. Payments of accumulated Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first termination of any Extension Period and the payment of all amounts then
due, the Debenture Issuer may commence a new Extension Period, subject to the
above requirements.
Subject to receipt by the Sponsor of any required regulatory approval and
to certain other conditions set forth in the Trust Agreement and the Indenture,
the Property Trustee may, at the direction of the Sponsor, at any time liquidate
the Trust and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.
The Capital Securities shall be redeemable as provided in the Trust
Agreement.
<PAGE>
__________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Capital Security
Certificate to:
______________________________________
______________________________________
______________________________________
(Insert assignee's social security or tax identification number)
______________________________________
______________________________________
______________________________________
(Insert address and zip code of assignee)
and irrevocably appoints
______________________________________
______________________________________
_________________________________ agent
to transfer this Capital Security Certificate on the books of the
Trust. The agent may substitute another to act for him or her.
Date:_________________
Signature:_______________
(Sign exactly as your name appears on the other side of this Capital Security
Certificate)
Signature Guarantee***:________________________
_______________
<PAGE>
*** Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities and
Exchange Act of 1934, as amended.
<PAGE>
In connection with any transfer of any of the Capital Securities evidenced by
this certificate, the undersigned confirms that such Capital Securities are
being:
CHECK ONE BOX BELOW
(1) / / exchanged for the undersigned's own account without transfer; or
(2) / / transferred pursuant to and in compliance with Rule 144A under
the Securities Act of 1933; or
(3) / / transferred pursuant to and in compliance with Regulation S under
the Securities Act of 1933; or
(4) / / transferred to an institutional "accredited investor" within the
meaning of subparagraph (a)(1), (2), (3) or (7) of Rule 501 under
the Securities Act of 1933 that is acquiring the Capital
Securities for its own account, or for the account of such an
institutional "accredited investor", for investment purposes and
not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act of 1933; or
(5) / / transferred pursuant to another available exemption from the
registration requirements of the Securities Act of 1933; or
(6) / / transferred pursuant to an effective Registration Statement.
<PAGE>
Unless one of the boxes is checked, the Registrar will refuse to register any of
the Capital Securities evidenced by this certificate in the name of any Person
other than the registered Holder thereof; provided, however, that if box (3),
(4) or (5) is checked, the Registrar may require, prior to registering any such
transfer of the Capital Securities, such legal opinions, certifications and
other information as the Trust has reasonably requested to confirm that such
transfer is being made pursuant to an exemption from, or in a transaction not
subject to, the registration requirements of the Securities Act of 1933, such as
the exemption provided by Rule 144 under such Act; provided, further, that if
box (2) is checked, the transferee must also certify that it is a qualified
institutional buyer as defined in Rule 144A or (ii) if box (4) is checked, the
transferee must also provide to the Registrar a Transferee Letter of
Representation in the form attached to the Offering Memorandum of the Trust
dated August 6, 1998; provided, further, that after the date that a Registration
Statement has been filed and so long as such Registration Statement continues to
be effective, the Registrar may only permit transfers for which box (6) has been
checked.
_________________
Signature
<PAGE>
EXHIBIT A-2
COMMON SECURITY CERTIFICATE
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS OR ANY
OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON SECURITY NOR ANY INTEREST
OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR
UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE DATE (THE
"RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE LATER OF THE
ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH THE COMPANY OR ANY
"AFFILIATE" OF THE COMPANY WAS THE OWNER OF THIS CAPITAL SECURITY (OR ANY
PREDECESSOR OF THIS CAPITAL SECURITY) ONLY (A) TO THE COMPANY, (B) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES
ACT, (C) SO LONG AS THIS COMMON SECURITY IS ELIGIBLE FOR RESALE PURSUANT TO RULE
144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON IT REASONABLY BELIEVES
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A) THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO
WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A,
(D) PURSUANT TO OFFERS AND SALES TO NON-U.S. PERSONS THAT OCCUR OUTSIDE THE
UNITED STATES WITHIN THE MEANING OF REGULATION S UNDER THE SECURITIES ACT, (E)
TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(A)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT THAT IS ACQUIRING
THIS COMMON SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
INSTITUTIONAL ACCREDITED INVESTOR" FOR INVESTMENT PURPOSES AND NOT WITH A VIEW
TO OR FOR OFFER OR SALE IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE
SECURITIES ACT, OR (F) PURSUANT TO ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS UNDER THE
<PAGE>
SECURITIES ACT, SUBJECT TO THE RIGHT OF THE TRUST AND THE COMPANY PRIOR TO ANY
SUCH OFFER, SALE OR TRANSFER (i) PURSUANT TO CLAUSE (D), (E) OR (F) TO REQUIRE
THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (E), TO REQUIRE THAT A
CERTIFICATE OF TRANSFER IN THE FORM APPEARING ON THE REVERSE OF THIS COMMON
SECURITY IS COMPLETED AND DELIVERED BY THE TRANSFEREE TO THE TRUST. SUCH HOLDER
FURTHER AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THIS COMMON SECURITY
IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
<PAGE>
Certificate Evidencing Common Securities
of
PBI Capital Trust
8.57% Common Securities
(liquidation amount $1,000 per Common Security)
PBI Capital Trust, a statutory business trust formed under the laws of the
State of Delaware (the "Trust") hereby certifies that Premier Bancorp, Inc. (the
"Holder") is the registered owner of 310 common securities of the Trust
representing undivided beneficial interests in the assets of the Trust
designated the 8.57% Common Securities (liquidation amount $1,000 per Common
Security) (the "Common Securities") . The Common Securities are transferable on
the books and records of the Trust, in person or by a duly authorized attorney,
upon surrender of this certificate duly endorsed and in proper form or transfer.
The designation, rights, privileges, restrictions preferences and other terms
and provisions of the Common Securities represented hereby are issued and shall
in all respects be subject to the provisions of the Amended and Restated
Declaration of Trust of the Trust dated August 11, 1998, as the same may be
amended from time to time (the "Trust Agreement"), including the designation of
the terms of the Common Securities as set forth in Annex I to the Trust
Agreement. Capitalized terms used but not defined herein shall have the meaning
given them in the Trust Agreement. The Sponsor will provide a copy of the Trust
Agreement, the Common Securities Guarantee the Capital Securities Guarantee (as
may be appropriate) and the Indenture (including any supplemental indenture) to
a Holder without charge upon written request to the Sponsor at its principal
place of business.
Upon receipt of this certificate, the Holder is bound by the Trust
Agreement and is entitled to the benefits thereunder and to the benefits of the
Common Securities Guarantee to the extent provided therein.
By acceptance, the Holder agrees to treat, for United States federal income
tax purposes, the Debentures as indebtedness and the Common Securities as
evidence of indirect beneficial ownership in the Trust.
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate this 11th day
of August, 1998.
PBI Capital Trust
By: _______________________
Name: John C. Soffronoff
Administrative Trustee
<PAGE>
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Common Securities referred to in the within-mentioned Trust
Agreement.
Date: August 11, 1998 FIRST UNION TRUST COMPANY, NATIONAL
ASSOCIATION, as Property Trustee
By:________________________
Authorized Signatory
<PAGE>
REVERSE OF SECURITY
Distributions payable on each Common Security will be fixed at a rate per
annum of 8.57% (the "Coupon Rate") of the liquidation amount of $1,000 per
Common Security, such rate being the rate of interest payable on the Debentures
to be held by the Property Trustee. Distributions in arrears for more than one
semi-annual period will bear interest thereon compounded semi-annually at the
Coupon Rate (to the extent permitted by applicable law). Pursuant to the
Registration Rights Agreement, in certain limited circumstances the Debenture
Issuer will be required to pay Liquidated Damages (as defined in the
Registration Rights Agreement) with respect to the Debentures. The term
"Distributions", as used herein, includes such cash distributions and any such
interest and such Liquidated Damages payable unless otherwise stated. A
Distribution is payable only to the extent that payments are made in respect of
the Debentures held by the Property Trustee and to the extent the Property
Trustee has funds available therefor.
Distributions on the Common Securities will be cumulative, will accumulate
from the most recent date to which Distributions have been paid or, if no
Distributions have been paid, from August 11, 1998 and will be payable
semi-annually in arrears, on February 15 and August 15 of each year, commencing
on February 15, 1999, except as otherwise described below. Distributions will be
computed on the basis of a 360-day year consisting of twelve 30-day months and,
for any period less than a full calendar month, the number of days elapsed in
such month. As long as no Event of Default has occurred and is continuing under
the Indenture, the Debenture Issuer has the right under the Indenture to defer
payments of interest by extending the interest payment period at any time and
from time to time on the Debentures for a period not exceeding 10 consecutive
semi-annual periods, including the first such semi-annual period during such
extension period (each an "Extension Period"), provided that no Extension Period
shall end on a date other than an Interest Payment Date for the Debentures or
extend beyond the Maturity Date of the Debentures. As a consequence of such
deferral, Distributions will also be deferred. Despite such deferral,
Distributions will continue to accumulate with interest thereon (to the extent
permitted by applicable law, but not at a rate exceeding the rate of interest
then accruing on the Debentures) at the Coupon Rate compounded semi-annually
during any such Extension Period. Prior to the termination of any such Extension
Period, the Debenture Issuer may further defer payments of interest by further
extending such Extension Period; provided that such Extension Period, together
with all such previous and further extensions within such Extension Period, may
not exceed 10 consecutive semi-annual periods, including the first semiannual
period during such Extension Period, or end on a date
<PAGE>
other than an Interest Payment Date for the Debentures or extend beyond the
Maturity Date of the Debentures. Payments of accrued Distributions will be
payable to Holders as they appear on the books and records of the Trust on the
first record date after the end of the Extension Period. Upon the termination of
any Extension Period and the payment of all amounts then due, the Debentures
Issuer may commence a new Extension Period, subject to the above requirements.
Subject to receipt by the Sponsor of any required regulatory approval and
to certain other conditions set forth in the Trust Agreement and the Indenture,
the Property Trustee may, at the direction of the Sponsor, at any time liquidate
the Trust and cause the Debentures to be distributed to the holders of the
Securities in liquidation of the Trust or, simultaneous with any redemption of
the Debentures, cause a Like Amount of the Securities to be redeemed by the
Trust.
Under certain circumstances, the rights of the holders of the Common
Securities shall be subordinate to the rights of the holders of the Capital
Securities (as defined in the Trust Agreement), as provided in the Declaration.
The Common Securities shall be redeemable as provided in the Trust
Agreement.
EXHIBIT 4.8
================================================================================
REGISTRATION RIGHTS AGREEMENT
Dated August 11, 1998
among
PREMIER BANCORP, INC.
PBI CAPITAL TRUST
and
SANDLER O'NEILL & PARTNERS, L.P.
as Initial Purchaser
================================================================================
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into as of August 6, 1998 among PREMIER BANCORP, INC., a Pennsylvania
corporation (the "Corporation"), PBI CAPITAL TRUST, a business trust formed
under the laws of the State of Delaware (the "Trust"), and SANDLER O'NEILL &
PARTNERS, L.P. (the "Initial Purchaser").
This Agreement is made pursuant to the Purchase Agreement dated August 6,
1998 (the "Purchase Agreement"), among the Corporation, as issuer of the Series
A 8.57% Junior Subordinated Deferrable Interest Debentures maturing on August
15, 2028 (the "Subordinated Debentures"), the Trust and the Initial Purchaser,
which provides for, among other things, the sale by the Trust to the Initial
Purchaser of $10,000,000 of the Trust's Series A 8.57% Capital Securities,
liquidation amount $1,000 per Capital Security (the "Capital Securities"), the
proceeds of which will be used by the Trust to purchase Subordinated Debentures.
The Capital Securities, together with the Subordinated Debentures and the
Corporation's guarantee of the Capital Securities (the "Capital Securities
Guarantee"), are collectively referred to as the "Securities". In order to
induce the Initial Purchaser to enter into the Purchase Agreement, the
Corporation and the Trust have agreed to provide to the Initial Purchaser and
their direct and indirect transferees the registration rights set forth in this
Agreement. The execution and delivery of this Agreement is a condition to the
closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree as follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"Additional Distributions" shall have the meaning set forth in Section 2(e)
hereof.
"Advice" shall have the meaning set forth in the last paragraph of Section
3 hereof.
"Affiliate" has the same meaning as given to that term in Rule 405 under
the Securities Act or any successor rule thereunder.
"Applicable Period" shall have the meaning set forth in Section 3(t)
hereof.
"Business Day" means any day other than a Saturday, a Sunday, or a day on
which banking institutions in New York, New York, Wilmington, Delaware or
Doylestown, Pennsylvania are authorized or required by law or executive order to
close.
2
<PAGE>
"Closing Time" shall mean the Closing Time as defined in the Purchase
Agreement.
"Corporation" shall have the meaning set forth in the preamble to this
Agreement and also includes the Corporation's successors and permitted assigns.
"Declaration" or "Declaration of Trust" shall mean the Amended and Restated
Declaration of Trust of PBI Capital Trust, dated as of August 11, 1998, by the
trustees named therein and the Corporation as sponsor.
"Depositary" shall mean The Depository Trust Company, or any other
depositary appointed by the Trust; provided, however, that such depositary must
have an address in the Borough of Manhattan, in The City of New York.
"Effectiveness Period" shall have the meaning set forth in Section 2(b)
hereof.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended
from time to time.
"Exchange Offer" shall mean the offer by the Corporation and the Trust to
the Holders to exchange all of the Registrable Securities (other than Private
Exchange Securities) for a like principal amount of Exchange Securities pursuant
to Section 2(a) hereof.
"Exchange Offer Registration" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"Exchange Offer Registration Statement" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto and
all material incorporated by reference therein.
"Exchange Period" shall have the meaning set forth in Section 2(a) hereof.
"Exchange Securities" shall mean (i) with respect to the Subordinated
Debentures, the Series B 8.57% Junior Subordinated Deferrable Interest
Debentures due August 15, 2028 (the "Exchange Debentures") containing terms
substantially identical to the Subordinated Debentures (except that they will
not contain terms with respect to the transfer restrictions under the Securities
Act (other than requiring minimum transfers thereof to be in blocks of $100,000
aggregate principal amount), and will not provide for any Liquidated Damages
thereon), (ii) with respect to the Capital Securities, the Trust's Series B
8.57% Capital Securities, liquidation amount $1,000 per Capital Security (the
"Exchange Capital Securities") which will have terms substantially identical to
the Capital Securities
3
<PAGE>
(except they will not contain terms with respect to transfer restrictions under
the Securities Act (other than requiring minimum transfers thereof to be in
blocks of $100,000 aggregate liquidation amount), and will not provide for any
increase in Additional Distributions thereon) and (iii) with respect to the
Capital Securities Guarantee, the Corporation's guarantee (the "Exchange Capital
Securities Guarantee") of the Exchange Capital Securities which will have terms
substantially identical to the Capital Securities Guarantee.
"Holder" shall mean the Initial Purchaser, for so long as it owns any
Registrable Securities, and each of its respective successors, assigns and
direct and indirect transferees who become registered owners of Registrable
Securities under the Indenture or Declaration of Trust.
"Indenture" shall mean the Indenture relating to the Subordinated
Debentures and the Exchange Debentures dated as of August 11, 1998 between the
Corporation, as issuer, and First Union Trust Company, National Association, as
trustee, as the same may be amended from time to time in accordance with the
terms thereof.
"Initial Purchaser" shall have the meaning set forth in the preamble to
this Agreement.
"Inspectors" shall have the meaning set forth in Section 3(n) hereof.
"Issue Date" shall mean August 11, 1998, the date of original issuance of
the Securities.
"Liquidated Damages" shall have the meaning set forth in Section 2(e)
hereof.
"Majority Holders" shall mean the Holders of a majority of the aggregate
liquidation amount of outstanding Capital Securities.
"Participating Broker-Dealer" shall have the meaning set forth in Section
3(t) hereof.
"Person" shall mean an individual, partnership, corporation, trust or
unincorporated organization, limited liability corporation, or a government or
agency or political subdivision thereof.
"Private Exchange" shall have the meaning set forth in Section 2(a) hereof.
"Private Exchange Securities" shall have the meaning set forth in Section
2(a) hereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
4
<PAGE>
amendments, and in each case including all material incorporated by reference
therein.
"Purchase Agreement" shall have the meaning set forth in the preamble to
this Agreement.
"Records" shall have the meaning set forth in Section 3(n) hereof.
"Registrable Securities" shall mean the Securities and, if issued, the
Private Exchange Securities; provided, however, that Securities or Private
Exchange Securities, as the case may be, shall cease to be Registrable
Securities when (i) a Registration Statement with respect to such Securities or
Private Exchange Securities for the exchange or resale thereof, as the case may
be, shall have been declared effective under the Securities Act and such
Securities or Private Exchange Securities, as the case may be, shall have been
disposed of pursuant to such Registration State ment, (ii) such Securities or
Private Exchange Securities, as the case may be, shall have been sold to the
public pursuant to Rule 144(k) (or any similar provision then in force, but not
Rule 144A) under the Securities Act or are eligible to be sold without
restriction as contemplated by Rule 144(k), (iii) such Securities or Private
Exchange Securities, as the case may be, shall have ceased to be outstanding or
(iv) with respect to the Securities, such Securities shall have been exchanged
for Exchange Securities upon consummation of the Exchange Offer and are
thereafter freely tradeable by the holder thereof (other than an Affiliate of
the Corporation).
"Registration Expenses" shall mean any and all expenses incident to
performance of or compliance by the Corporation with this Agreement, including
without limitation: (i) all SEC or National Association of Securities Dealers,
Inc. (the "NASD") registration and filing fees, including, if applicable, the
fees and expenses of any "qualified independent underwriter" (and its counsel)
that is required to be retained by any Holder of Registrable Securities in
accordance with the rules and regulations of the NASD, (ii) all fees and
expenses incurred in connection with compliance with state securities or blue
sky laws (including reasonable fees and disbursements of one counsel for all
underwriters or Holders as a group in connection with blue sky qualification of
any of the Exchange Securities or Registrable Securities) and compliance with
the rules of the NASD, (iii) all expenses of any Persons in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, and in preparing or assisting in preparing, printing and distributing
any underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the
Corporation and of the independent certified public accountants of the
Corporation, including the expenses of any "cold comfort" letters required by or
incident to such performance and compliance, (vi) the fees and expenses of the
Trustee and its counsel and any exchange agent or custodian, (vii) all fees and
expenses incurred in connection with the listing, if any, of any of the Exchange
Securities or the Registrable Securities on any securities exchange or
5
<PAGE>
exchanges, and (viii) the reasonable fees and expenses of any special experts
retained by the Corporation in connection with any Registration Statement.
"Registration Statement" shall mean any registration statement of the
Corporation and the Trust which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"Rule 144(k) Period" shall mean the period of two years (or such shorter
period as may hereafter be referred to in Rule 144(k) under the Securities Act
(or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"Securities" shall have the meaning set forth in the preamble to this
Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended from
time to time.
"Shelf Registration" shall mean a registration effected pursuant to Section
2(b) hereof.
"Shelf Registration Event" shall have the meaning set forth in Section 2(b)
hereof.
"Shelf Registration Event Date" shall have the meaning set forth in Section
2(b) hereof.
"Shelf Registration Statement" shall mean a "shelf" registration statement
of the Corporation and the Trust pursuant to the provisions of Section 2(b)
hereof which covers all of the Registrable Securities or all of the Private
Exchange Securities, as the case may be, on an appropriate form under Rule 415
under the Securities Act, or any similar rule that may be adopted by the SEC,
and all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all material incorporated by reference
therein.
"TIA" shall have the meaning set forth in Section 3(k) hereof.
"Trustees" shall mean any and all trustees with respect to (i) the Capital
Securities under the Declaration, (ii) the Subordinated Debentures under the
Indenture and (iii) the Capital Securities Guarantee.
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2. Registration Under the Securities Act.
(a) Exchange Offer. Except as set forth in Section 2(b) below, the
Corporation and the Trust shall, for the benefit of the Holders, use their
reasonable best efforts to (i) cause to be filed with the SEC within 150 days
after the Issue Date an Exchange Offer Registration State ment on an appropriate
form under the Securities Act relating to the Exchange Offer, (ii) cause such
Exchange Offer Registration Statement to be declared effective under the
Securities Act by the SEC not later than the date which is 180 days after the
Issue Date, and (iii) keep such Exchange Offer Registration Statement effective
for not less than 30 calendar days (or longer if required by applicable law)
after the date notice of the Exchange Offer is mailed to the Holders. Upon the
effectiveness of the Exchange Offer Registration Statement, the Corporation and
the Trust shall promptly commence the Exchange Offer, it being the objective of
such Exchange Offer to enable each Holder eligible and electing to exchange
Registrable Securities for a like principal amount of Exchange Debentures or a
like liquidation amount of Exchange Capital Securities, together with the
Exchange Guarantee, as applicable (assuming that such Holder (i) is not an
Affiliate of the Trust or the Corporation, (ii) is not a broker-dealer tendering
Registrable Securities acquired directly from the Corporation for its own
account, (iii) acquires the Exchange Securities in the ordinary course of such
Holder's business and (iv) has no arrangements or understandings with any Person
to participate in the Exchange Offer for the purpose of distributing the
Exchange Securities) to transfer such Exchange Securities from and after their
receipt without any limitations or restrictions under the Securities Act and
under state securities or blue sky laws (other than requiring minimum transfers
in blocks having an aggregate principal or liquidation amount, as the case may
be, of $100,000).
In connection with the Exchange Offer, the Corporation and the Trust shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter
of transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders
(or longer if required by applicable law) (such period referred to herein
as the "Exchange Period");
(iii) utilize the services of the Depositary for the Exchange Offer;
(iv) permit Holders to withdraw tendered Securities at any time prior
to the close of business, New York City time, on the last Business Day of
the Exchange Period, by sending to the institution specified in the notice,
a telegram, telex, facsimile transmission or letter setting forth the name
of such Holder, the principal amount of Securities delivered for exchange,
and a statement that such Holder is withdrawing his election to have such
Securities exchanged;
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(v) notify each Holder that any Security not tendered by such Holder
in the Exchange Offer will remain outstanding and continue to accrue
interest or accumulate distributions, as the case may be, but will not
retain any rights under this Agreement (except in the case of the Initial
Purchaser and Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
If the Initial Purchaser determines upon advice of its outside counsel that
it is not eligible to participate in the Exchange Offer with respect to the
exchange of Securities constituting any portion of an unsold allotment in the
initial distribution, as soon as practicable upon receipt by the Corporation and
the Trust of a written request from the Initial Purchaser, the Corporation and
the Trust, as applicable, shall issue and deliver to the Initial Purchaser in
exchange (the "Private Exchange") for the Securities held by the Initial
Purchaser, a like liquidation amount of Capital Securities of the Trust or, in
the event the Trust is liquidated and Subordinated Debentures are distributed, a
like principal amount of the Subordinated Debentures of the Corporation, togeth
er with the Exchange Guarantee, in each case that are identical (except that
such securities may bear a customary legend with respect to restrictions on
transfer pursuant to the Securities Act) to the Exchange Securities (the
"Private Exchange Securities") and which are issued pursuant to the Indenture,
the Declaration or the Guarantee (which provides that the Exchange Securities
will not be subject to the transfer restrictions set forth in the Indenture or
the Declaration, as applicable (other than requiring minimum transfers in blocks
having an aggregate principal or liquidation amount, as the case may be, of
$100,000), and that the Exchange Securities, the Private Exchange Securities and
the Securities will vote and consent together on all matters as one class and
that neither the Exchange Securities, the Private Exchange Securities nor the
Securities will have the right to vote or consent as a separate class on any
matter). The Private Exchange Securities shall be of the same series as the
Exchange Securities and the Corporation and the Trust will seek to cause the
CUSIP Service Bureau to issue the same CUSIP Numbers for the Private Exchange
Securities as for the Exchange Securities issued pursuant to the Exchange Offer.
As soon as practicable after the close of the Exchange Offer and, if
applicable, the Private Exchange, the Corporation and the Trust, as the case
requires, shall:
(i) accept for exchange all Securities or portions thereof tendered
and not validly withdrawn pursuant to the Exchange Offer or the Private
Exchange;
(ii) deliver, or cause to be delivered, to the applicable Trustee for
cancellation all Securities or portions thereof so accepted for exchange by
the Corporation; and
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<PAGE>
(iii) issue, and cause the applicable Trustee under the Indenture, the
Declaration or the Guarantee, as applicable, to promptly authenticate and
deliver to each Holder, new Exchange Securities or Private Exchange
Securities, as applicable, equal in principal amount to the principal
amount of the Subordinated Debentures or equal in liquidation amount to the
liquidation amount of the Capital Securities (together with the guarantee
thereof) as are surrendered by such Holder.
Distributions on each Exchange Capital Security and interest on each
Exchange Debenture and Private Exchange Security issued pursuant to the Exchange
Offer and in the Private Exchange will accrue from the last date on which a
Distribution or interest was paid on the Capital Security or the Subordinated
Debenture surrendered in exchange therefor or, if no Distribution or interest
has been paid on such Capital Security or Subordinated Debenture, from the Issue
Date. To the extent not prohibited by any law or applicable interpretation of
the staff of the SEC, the Corporation and the Trust shall use their reasonable
best efforts to complete the Exchange Offer as provided above, and shall comply
with the applicable requirements of the Securities Act, the Exchange Act and
other applicable laws in connection with the Exchange Offer. The Exchange Offer
shall not be subject to any conditions, other than that the Exchange Offer does
not violate applicable law or any applicable interpretation of the staff of the
SEC. Each Holder of Registrable Securities who wishes to exchange such
Registrable Securities for Exchange Securities in the Exchange Offer will be
required to make certain customary representations in connection there with,
including, in the case of any Holder of Capital Securities, representations that
(i) it is not an Affiliate of the Trust or the Corporation, (ii) the Exchange
Securities to be received by it were acquired in the ordinary course of its
business and (iii) at the time of the Exchange Offer, it has no arrangement with
any person to participate in the distribution (within the meaning of the
Securities Act) of the Exchange Capital Securities. The Corporation and the
Trust shall inform the Initial Purchaser, after consultation with the applicable
Trustees, of the names and addresses of the Holders to whom the Exchange Offer
is made, and the Initial Purchaser shall have the right to contact such Holders
and otherwise facilitate the tender of Registrable Securities in the Exchange
Offer.
Upon consummation of the Exchange Offer in accordance with this Section
2(a), the provisions of this Agreement shall continue to apply, mutatis
mutandis, solely with respect to Registrable Securities that are Private
Exchange Securities and Exchange Securities held by Participating
Broker-Dealers, and the Corporation and the Trust shall have no further
obligation to register the Registrable Securities (other than Private Exchange
Securities) held by any Holder pursuant to Section 2(b) of this Agreement.
(b) Shelf Registration. In the event that (i) the Corporation, the Trust or
the Majority Holders reasonably determine, after conferring with counsel (which
may be in-house counsel), that the Exchange Offer Registration provided in
Section 2(a) above is not available under applicable law and regulations and
currently prevailing interpretations of the staff of the SEC, (ii) the
Corporation shall determine in good faith that there is a reasonable likelihood
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<PAGE>
that, or a material uncertainty exists as to whether, consummation of the
Exchange Offer would result in (x) the Trust becoming subject to federal income
tax with respect to income received or accrued on the Subordinated Debentures or
the Exchange Debentures (collectively, the "Debentures"), (y) interest payable
by the Corporation on the Debentures not being deductible by the Corporation for
United States federal income tax purposes or (z) the Trust becoming subject to
more than a de minimus amount of other taxes, duties or governmental charges,
(iii) the Exchange Offer Registration Statement is not declared effective
within 180 days of the Issue Date or (iv) upon the request of the Initial
Purchaser with respect to any Registrable Securities held by it, if the Initial
Pur chaser is not permitted, in the opinion of Malizia, Spidi, Sloane & Fisch,
P.C., pursuant to applicable law or applicable interpretations of the staff of
the SEC, to participate in the Exchange Offer and thereby receive securities
that are freely tradeable without restriction under the Securi ties Act and
applicable blue sky or state securities laws (any of the events specified in
(i)-(iv) being a "Shelf Registration Event" and the date of occurrence thereof,
the "Shelf Registration Event Date"), then in addition to or in lieu of
conducting the Exchange Offer contemplated by Section 2(a), as the case may be,
the Corporation and the Trust shall use their reasonable best efforts to cause
to be filed as promptly as practicable after such Shelf Registration Event Date,
as the case may be, and, in any event, within 45 days after such Shelf
Registration Event Date (which shall be no earlier than 75 days after the
Closing Time), a Shelf Registration Statement providing for the sale by the
Holders of all of the Registrable Securities (except in the case of clause (iv)
above in which case the Shelf Registration Statement need cover only the
Registrable Securities held by the Initial Purchaser) and shall use its
reasonable best efforts to have such Shelf Registration Statement declared
effective by the SEC as soon as practicable. No Holder of Registrable
Securities shall be entitled to include any of its Registrable Securities in any
Shelf Registra tion pursuant to this Agreement unless and until such Holder
furnishes to the Corporation and the Trust in writing, within 15 days after
receipt of a request therefor, such information as the Corporation and the Trust
may, after conferring with counsel with regard to information relating to
Holders that would be required by the SEC to be included in such Shelf
Registration Statement or Prospectus included therein, reasonably request for
inclusion in any Shelf Registration Statement or Prospectus included therein.
Each Holder as to which any Shelf Registration is being effected agrees to
furnish to the Corporation and the Trust all information with respect to such
Holder necessary to make the information previously furnished to the Corporation
by such Holder not materially misleading.
The Corporation and the Trust agree to use their reasonable best efforts to
keep the Shelf Registration Statement continuously effective and usable for
resales for (a) the Rule 144(k) Period in the case of a Shelf Registration
Statement filed pursuant to Section 2(b)(i), (ii) or (iii) or (b) 180 days in
the case of a Shelf Registration Statement filed pursuant to Section 2(b)(iv)
(subject in each case to extension pursuant to the last paragraph of Section 3
hereof), or for such shorter period which will terminate when all of the
Registrable Securities covered by the Shelf Registration Statement have been
sold pursuant to the Shelf Registration Statement or cease to be outstanding
(the "Effectiveness Period"). The Corporation and the Trust shall not permit any
securities other than Registrable Securities to be included in the Shelf
Registration. The Corporation and the Trust will, in the event a Shelf
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<PAGE>
Registration Statement is declared effective, provide to each Holder a
reasonable number of copies of the Prospectus which is a part of the Shelf
Registration Statement and notify each such Holder when the Shelf Registration
has become effective. The Corporation and the Trust further agree, if necessary,
to supplement or amend the Shelf Registration Statement, if required by the
rules, regulations or instructions applicable to the registration form used by
the Corporation for such Shelf Registration Statement or by the Securities Act
or by any other rules and regulations thereunder for shelf registrations, and
the Corporation and the Trust agree to furnish to the Holders of Registrable
Securities copies of any such supplement or amendment promptly after its being
used or filed with the SEC.
(c) Expenses. The Corporation, as issuer of the Subordinated Debentures,
shall pay all Registration Expenses in connection with any Registration
Statement filed pursuant to Section 2(a) and/or 2(b) hereof and will reimburse
the Initial Purchaser for the reasonable fees and disbursements of Malizia,
Spidi, Sloane & Fisch, P.C., counsel for the Initial Purchaser, incurred in
connection with the Exchange Offer and, if applicable, the Private Exchange, or
any one other counsel designated in writing by the Majority Holders to act as
counsel for the Holders of the Registrable Securities in connection with a Shelf
Registration Statement, which other counsel shall be reasonably satisfactory to
the Corporation. Except as provided herein, each Holder shall pay all expenses
of its counsel and any of its other advisors or experts, underwriting discounts
and commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Regis trable Securities pursuant to the Shelf Registration
Statement.
(d) Effective Registration Statement. An Exchange Offer Registration
Statement pursuant to Section 2(a) hereof or a Shelf Registration Statement
pursuant to Section 2(b) hereof will not be deemed to have become effective
unless it has been declared effective by the SEC; provided, however, that if,
after it has been declared effective, the offering of Registrable Securities
pursuant to such Exchange Offer Registration Statement or Shelf Registration
Statement is interfered with by any stop order, injunction or other order or
requirement of the SEC or any other governmental agency or court, such
Registration Statement will be deemed not to have been effective during the
period of such interference, until the offering of Registrable Securities
pursuant to such Registration Statement may legally resume. The Corporation and
the Trust will be deemed not to have used their reasonable best efforts to cause
the Exchange Offer Registration Statement or the Shelf Registration Statement,
as the case may be, to become, or to remain, effective during the requisite
period if either of them voluntarily takes any action that would result in any
such Registration Statement not being declared effective or that would result in
the Holders of Registrable Securities covered thereby not being able to exchange
or offer and sell such Regis trable Securities during that period unless such
action is required by applicable law.
(e) Liquidated Damages. In the event that:
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<PAGE>
(i) neither the Exchange Offer Registration Statement is filed with
the SEC on or prior to the 150th day after the Issue Date nor a Shelf
Registration Statement is filed with the SEC on or prior to the 45th day
after the Shelf Registration Event Date in respect of a Shelf Registration
Event attributable to any of the events set forth in Sections 2(b)(i), (ii)
and (iii) (provided that in no event shall such date be earlier than 75
days after the Issue Date), then commencing on the day after the
applicable required filing date, liquidated damages ("Liquidated Damages")
shall accrue on the principal amount of the Subordinated Debentures, and
additional distributions ("Additional Distributions") shall accumulate on
the liquidation amount of the Trust Securities (as such term is defined in
the Declaration), each at a rate of .25% per annum; or
(ii) neither the Exchange Offer Registration Statement nor a Shelf
Registration Statement is declared effective by the SEC on or prior to the
180th day after the Issue Date (in the case of an Exchange Offer
Registration Statement) or on or prior to the later of (A) the 30th day
after the date such Shelf Registration Statement was required to be filed
and (B) the 180th day after the Issue Date (in the case of a Shelf
Registration Statement, in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii)), then, commencing on the 181st day after the Issue Date (in the case
of an Exchange Offer Registration Statement) or the later of (A) the 31st
day after the day such Shelf Registration State ment was required to be
filed and (B) the 181st day after the Issue Date (in the case of a Shelf
Registration Statement, in respect of a Shelf Registration Event
attributable to any of the events set forth in Sections 2(b)(i), (ii) and
(iii)), Liquidated Damages shall accrue on the principal amount of the
Subordinated Debentures, and Additional Distributions shall accumulate on
the liquidation amount of the Trust Securities, each at a rate of .25% per
annum;
(iii) (A) the Trust has not exchanged Exchange Capital Securities or
the Corporation has not exchanged Exchange Guarantees or Exchange
Subordinated Debentures for all Capital Securities, Guarantees or
Subordinated Debentures, as the case may be, validly tendered, in
accordance with the terms of the Exchange Offer on or prior to the 45th day
after the date on which the Exchange Offer Registration Statement was
declared effective or (B) if applicable, the Shelf Registration Statement
in respect of a Shelf Registration Event attributable to any of the events
set forth in Sections 2(b)(i), (ii) and (iii) has been declared effective
and such Shelf Registration Statement ceases to be effective or usable for
resales (whether as a result of an event contemplated by Section 3(e) or
otherwise) at any time prior to the expiration of the Rule 144(k) Period
(other than after such time as all Securities have been disposed of
thereunder or otherwise cease to be Registrable Securities), then
Liquidated Damages shall accrue on the principal amount of Subordinated
Debentures, and Additional Distributions shall accumulate on the
liquidation amount of the Trust Securities, each at a rate of .25% per
annum commencing on (x) the 46th day after such effective date, in the case
of (A) above, or (y) the day such Shelf Registration Statement ceases to
be effective or usable for resales in the case of (B) above;
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<PAGE>
provided, however, that neither the Liquidated Damages rate on the Subordinated
Debentures, nor the Additional Distribution rate on the liquidation amount of
the Trust Securities, may exceed in the aggregate .25% per annum; provided,
further, however, that (1) upon the filing of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of clause (i) above),
(2) upon the effectiveness of the Exchange Offer Registration Statement or a
Shelf Registration Statement (in the case of clause (ii) above), or (3) upon the
exchange of Exchange Capital Securities, Exchange Guarantees and Exchange
Debentures for all Capital Securities, Guarantees and Subordinated Debentures
validly tendered (in the case of clause (iii)(A) above), or at such time as the
Shelf Registration Statement which had ceased to remain effective or usable for
resales again becomes effective and usable for resales (in the case of clause
(iii)(B) above), Liquidated Damages on the principal amount of the Subordinated
Debentures and Additional Distributions on the liquidation amount of the Trust
Securities as a result of such clause (or the relevant subclause thereof) shall
cease to accrue and accumulate.
Any amounts of Liquidated Damages and Additional Distributions due pursuant
to Section 2(e)(i), (ii) or (iii) above will be payable in cash on the next
succeeding February 15 and August 15, as the case may be, to Holders on the
relevant record dates for the payment of interest and distributions pursuant to
the Indenture and the Declaration, respectively.
(f) Specific Enforcement. Without limiting the remedies available to
the Holders, the Corporation and the Trust acknowledge that any failure by
the Corporation or the Trust to comply with its obligations under Section
2(a) and Section 2(b) hereof may result in material irreparable injury to
the Holders for which there is no adequate remedy at law, that it would not
be possible to measure damages for such injuries precisely and that, in the
event of any such failure, any Holder may obtain such relief as may be
required to specifically enforce the Corporation's and the Trust's
obligations under Section 2(a) and Section 2(b) hereof.
(g) Distribution of Subordinated Debentures. Notwithstanding any other
provisions of this Agreement, in the event that Subordinated Debentures are
distributed to holders of Capital Securities in liquidation of the Trust
pursuant to the Declaration, (i) all references in this Section 2 and in Section
3 to Securities, Registrable Securities and Exchange Securities shall not
include the Capital Securities and Capital Securities Guarantee or Exchange
Capital Securities and Exchange Capital Securities Guarantee issued or to be
issued in exchange therefor in the Exchange Offer and (ii) all requirements for
action to be taken by the Trust in this Section 2 and in Section 3 shall cease
to apply and all requirements for action to be taken by the Corporation in this
Section 2 and in Section 3 shall apply to the Subordinated Debentures and
Exchange Debentures issued or to be issued in exchange therefor in the Exchange
Offer.
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3. Registration Procedures. In connection with the obligations of the
Corporation and the Trust with respect to the Registration Statements pursuant
to Sections 2(a) and 2(b) hereof, the Corporation and the Trust shall:
(a) prepare and file with the SEC a Registration Statement or Registration
Statements as prescribed by Sections 2(a) and 2(b) hereof within the relevant
time period specified in Section 2 hereof on the appropriate form under the
Securities Act, which form (i) shall be selected by the Corporation and the
Trust, (ii) shall, in the case of a Shelf Registration, be available for the
sale of the Registrable Securities by the selling Holders thereof and, in the
case of an Exchange Offer, be available for the exchange of Registrable
Securities, and (iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; and use its best efforts to cause
such Registration Statement to become effective and remain effective (and, in
the case of a Shelf Registration Statement, usable for resales) in accordance
with Section 2 hereof; provided, however, that if (1) such filing is pursuant to
Section 2(b), or (2) a Prospectus contained in an Exchange Offer Registration
Statement filed pursuant to Section 2(a) is required to be delivered under the
Securities Act by any Participating Broker-Dealer who seeks to sell Exchange
Securities, before filing any Regis tration Statement or Prospectus or any
amendments or supplements thereto, the Corporation and the Trust shall furnish
to and afford the Holders of the Registrable Securities and each such
Participating Broker-Dealer, as the case may be, covered by such Registration
Statement, their counsel and the managing underwriters, if any, a reasonable
opportunity to review copies of all such documents (including copies of any
documents to be incorporated by reference therein and all exhibits thereto)
proposed to be filed. The Corporation and the Trust shall not file any
Registration Statement or Prospectus or any amendments or supplements thereto in
respect of which the Holders must be afforded an opportunity to review prior to
the filing of such document if the Majority Holders or such Participating
Broker-Dealer, as the case may be, their counsel or the managing underwrit ers,
if any, shall reasonably object;
(b) prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the Effectiveness Period or the Applicable
Period, as the case may be; and cause each Prospectus to be supplemented, if so
determined by the Corporation or the Trust or requested by the SEC, by any
required prospectus supplement and as so supple mented to be filed pursuant to
Rule 424 (or any similar provision then in force) under the Securities Act, and
comply with the provisions of the Securities Act, the Exchange Act and the rules
and regulations promulgated thereunder applicable to it with respect to the
disposition of all securities covered by each Registration Statement during the
Effectiveness Period or the
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Applicable Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders thereof described in
this Agreement (including sales by any Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each Holder of
Registrable Securities included in the Shelf Registration Statement, at least
three Business Days prior to filing, that a Shelf Registration Statement with
respect to the Registrable Securities is being filed and advising such Holder
that the distribution of Registrable Securities will be made in accordance with
the method selected by the Majority Holders; and (ii) furnish to each Holder of
Registrable Securities included in the Shelf Registration Statement and to each
underwriter of an underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including each preliminary
Prospectus, and any amendment or supplement thereto and such other documents as
such Holder or underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities; and (iii)
consent to the use of the Prospectus or any amendment or supplement thereto by
each of the selling Holders of Registrable Securities included in the Shelf
Registration Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any amendment or supplement
thereto;
(d) in the case of a Shelf Registration, use its reasonable best efforts to
register or qualify the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the time the applicable
Registration Statement is declared effective by the SEC as any Holder of
Registrable Securities covered by a Registration Statement and each underwriter
of an underwritten offering of Registrable Securities shall reasonably request
in writing in advance of such date of effectiveness, and do any and all other
acts and things which may be reasonably necessary or advisable to enable such
Holder and underwriter to consummate the disposition in each such jurisdiction
of such Registrable Securities owned by such Holder; provided, however, that the
Corporation and the Trust shall not be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(d), (ii) file any
general consent to service of process in any jurisdiction where it would not
otherwise be subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so subject;
(e) (1) in the case of a Shelf Registration or (2) if Participating
Broker-Dealers from whom the Corporation or the Trust has received prior written
notice that they will be utilizing the Prospectus contained in the Exchange
Offer Registration Statement as provided in Section 3(t) hereof, are seeking to
sell Exchange Securities and are required to deliver Prospectuses, promptly
notify each Holder of Registrable Securities, or such Participating
Broker-Dealers, as the case may be, their counsel and the managing underwriters,
if any, and promptly confirm such notice in writing (i) when a Registration
Statement has become effective and when any
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post-effective amendments and supplements thereto become effective, (ii) of
any request by the SEC or any state securities authority for amendments and
supplements to a Registration Statement or Prospectus or for additional
information after the Registration Statement has become effective, (iii) of the
issuance by the SEC or any state securities authority of any stop order
suspending the effectiveness of a Registration Statement or the qualification of
the Registrable Securities or the Exchange Securities to be offered or sold by
any Participating Broker-Dealer in any jurisdiction described in paragraph 3(d)
hereof or the initiation of any proceedings for that purpose, (iv) in the case
of a Shelf Registration, if, between the effective date of a Registration
Statement and the closing of any sale of Registrable Securities covered there
by, the representations and warranties of the Corporation and the Trust
contained in any purchase agreement, securities sales agreement or other similar
agreement cease to be true and correct in all material respects, (v) of the
happening of any event or the failure of any event to occur or the discovery of
any facts or otherwise, during the Effectiveness Period which makes any
statement made in such Registration Statement or the related Prospectus untrue
in any material respect or which causes such Registration Statement or
Prospectus to omit to state a material fact necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading, and (vi) the Corporation and the Trust's reasonable determination
that a post-effective amendment to the Registration Statement would be
appropriate;
(f) make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement at the earliest
possible moment;
(g) in the case of a Shelf Registration, furnish to each Holder of
Registrable Securities included within the coverage of such Shelf Registration
Statement, without charge, one conformed copy of each Registration Statement
relating to such Shelf Registration and any post-effective amendment thereto
(without documents incorporated therein by reference or exhibits thereto, unless
requested);
(h) in the case of a Shelf Registration, cooperate with the selling Holders
of Registrable Securities to facilitate the timely preparation and delivery of
certificates representing Registrable Securities to be sold and not bearing any
restrictive legends (other than with respect to restrictions requiring minimum
transfers in blocks having an aggregate principal or liquidation amount, as the
case may be, of $100,000) and in such denomina tions (consistent with the
provisions of the Indenture and the Declaration) and registered in such names as
the selling Holders or the underwriters may reasonably request at least two
Business Days prior to the closing of any sale of Registrable Securities
pursuant to such Shelf Registration Statement;
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(i) in the case of a Shelf Registration or an Exchange Offer Registration,
upon the occurrence of any circumstance contemplated by Section 3(e)(ii),
3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, use its reasonable best efforts to
prepare a supplement or post-effective amendment to such Registration Statement
or the related Prospectus or any document incorporated therein by reference or
file any other required document so that, as thereafter delivered to the
purchasers of the Registrable Securities, such Prospectus will not contain any
untrue statement of a material fact or omit to state a material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; and to notify each Holder to suspend use of the
Prospectus as promptly as practicable after the occurrence of such an event, and
each Holder hereby agrees to suspend use of the Prospectus until the Corporation
has amended or supplemented the Prospectus to correct such misstatement or
omission and has delivered copies of the amended or supplemented Prospectus to
such Holder (or Participating Broker-Dealer, as the case may be) or the Company
has given notice that the sale of the Registrable Securities may be resumed, as
the case may be, such delivery and notice to be given or made promptly;
(j) obtain a CUSIP number for all Exchange Capital Securities and the
Capital Securities (and if the Trust has made a distribution of the Subordinated
Debentures to the Holders of the Capital Securities, the Subordinated Debentures
or the Exchange Debentures) as the case may be, not later than the effective
date of a Registration Statement, and provide the Trustee with printed
certificates for the Exchange Securities or the Registrable Securities, as the
case may be, in a form eligible for deposit with the Depositary;
(k) cause the Indenture, the Declaration, the Guarantee and the Exchange
Guarantee to be qualified under the Trust Indenture Act of 1939, as amended from
time to time (the "TIA") in connection with the registration of the Exchange
Securities or Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so qualified in
accordance with the terms of the TIA and execute, and use its best efforts to
cause the relevant trustee to execute, all documents as may be required to
effect such changes, and all other forms and documents required to be filed with
the SEC to enable such documents to be so qualified in a timely manner;
(l) in the case of a Shelf Registration, enter into such agreements
(including underwriting agreements) as are customary in underwritten offerings
and take all such other appropriate actions in connection therewith as are
reasonably requested by the holders of at least 25% in aggregate principal or
liquidation amount, as the case may be, of the Registrable Securities in order
to expedite or facilitate the registration or the disposition of the Registrable
Securities;
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(m) in the case of a Shelf Registration, whether or not an underwriting
agreement is entered into and whether or not the registration is an underwritten
registration, if requested by (x) the Initial Purchaser, in the case where the
Initial Purchaser holds Securities acquired by it as part of its initial
allotment and (y) Holders of at least 25% in aggregate principal or liquidation
amount, as the case may be, of the Registrable Securities covered thereby: (i)
make such representations and warranties to Holders of such Registrable
Securities and the underwriters (if any), with respect to the business of the
Trust, the Corporation and its subsidiaries as then conducted in the
Registration Statement, Prospectus and documents, if any, incorporated or deemed
to be incorporated by reference therein, in each case, as are customarily made
by issuers of debt securities to underwriters in underwritten offerings, and
confirm the same if and when requested; (ii) obtain opinions of counsel to the
Corporation and the Trust and updates thereof (which may be in the form of a
reliance letter) in form and substance reasonably satisfactory to the managing
underwriters (if any) and the Holders of a majority in principal amount of the
Registrable Securities being sold, addressed to each selling Holder and the
underwriters (if any) cover ing the matters customarily covered in opinions
requested in underwritten offerings and such other matters as may be reasonably
requested by such underwriters (it being agreed that the matters to be covered
by such opinion may be subject to customary qualifications and exceptions);
(iii) obtain "cold comfort" letters and updates thereof in form and sub stance
reasonably satisfactory to the managing underwriters from the independent
certified public accountants of the Corporation and the Trust (and, if
necessary, any other indepen dent certified public accountants of any subsidiary
of the Corporation and the Trust or of any business acquired by the Corporation
and the Trust for which financial statements and financial data are, or are
required to be, included in the Registration Statement), addressed to each of
the underwriters, such letters to be in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
underwritten offerings and such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing Standards No. 72; and (iv)
if an underwriting agreement is entered into, the same shall contain
indemnification provisions and procedures no less favorable than those set forth
in Section 4 hereof (or such other provisions and procedures acceptable to
Holders of a majority in aggregate principal amount or liquidation amount, as
the case may be, of Registrable Securities covered by such Registration
Statement and the managing underwriters and agents) customary for such
agreements with respect to all parties to be indemnified pursuant to said
Section (including, without limitation, such underwriters and selling Holders).
The above shall be done at each closing under such underwriting agreement, or as
and to the extent required thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section 2(b) or (2) a
Prospectus contained in an Exchange Offer Registration Statement filed pursuant
to Section 2(a) is required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange Securities during the
Applicable Period, make reasonably available
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for inspection by any selling Holder of such Registrable Securities or
Participating Broker-Dealer, as applicable, who certifies to the Corporation and
the Trust that it has a current intention to sell Registrable Securities
pursuant to the Shelf Registration, any underwriter participating in any such
disposition of Registrable Securities, if any, and any attorney, accountant or
other agent retained by any such selling Holder or each such Participating
Broker-Dealer, as the case may be, or underwriter (collectively, the
"Inspectors"), at the offices where normally kept, during the Corporation's
normal business hours, all financial and other records, pertinent corporate
documents and properties of the Trust, the Corporation and its subsidiaries
(collectively, the "Records") as shall be reasonably necessary to enable them to
exercise any applicable due diligence responsibilities, and cause the officers,
directors and employees of the Trust, the Corporation and its subsidiaries to
supply all relevant information in each case reasonably requested by any such
Inspector in connection with such Registration Statement. Records which the
Corporation and the Trust determine, in good faith, to be confidential and any
Records which it notifies the Inspectors are confidential shall not be disclosed
by the Inspectors unless (i) the disclosure of such Records is necessary to
avoid or correct a material misstatement or omission in such Registration
Statement, (ii) subject to the last sentence of this Section 3(n), the re lease
of such Records is ordered pursuant to a subpoena or other order from a court of
competent jurisdiction or is necessary in connection with any action, suit or
proceeding or (iii) the Information in such Records has been made generally
available to the public (other than by an Inspector or a selling Holder in
breach of its obligations hereunder). Each selling Holder of such Registrable
Securities and each such Participating Broker-Dealer will be required to agree
in writing that information obtained by it as a result of such inspec tions
shall be deemed confidential and shall not be used by it as the basis for any
market transactions in the securities of the Trust or the Corporation unless and
until such is made generally available to the public through no fault of an
Inspector or a selling Holder or Participating Broker-Dealer. Each selling
Holder of such Registrable Securities and each such Participating Broker-Dealer
will be required to further agree in writing that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, or in
connection with any action, suit or proceeding give notice to the Corporation
and allow the Corporation at its expense to undertake appropriate action to
prevent disclo sure of the Records deemed confidential;
(o) comply with all applicable rules and regulations of the SEC so long as
any provision of this Agreement shall be applicable and make generally available
to its securityholders earnings statements satisfying the provisions of Section
11(a) of the Securities Act and Rule 158 thereunder (or any similar rule
promulgated under the Securities Act) no later than 45 days after the end of any
12-month period (or 90 days after the end of any 12-month period if such period
is a fiscal year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm commitment or best
efforts underwritten offering and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Corporation
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after the effective date of a Registration Statement, which statements shall
cover said 12-month periods;
(p) upon consummation of an Exchange Offer or a Private Exchange, if
requested by a Trustee, obtain an opinion of counsel to the Corporation
addressed to the Trustee for the benefit of all Holders of Registrable
Securities participating in the Exchange Offer or the Private Exchange, as the
case may be, substantially to the effect that (i) the Corporation and the Trust,
as the case requires, has duly authorized, executed and delivered the Exchange
Securities and Private Exchange Securities, and (ii) each of the Exchange
Securities or the Private Exchange Securities, as the case may be, constitutes a
legal, valid and binding obligation of the Corporation or the Trust, as the case
requires, enforceable against the Corporation or the Trust, as the case
requires, in accordance with its respective terms (in each case, with customary
exceptions);
(q) if an Exchange Offer or a Private Exchange is to be consummated, upon
delivery of the Registrable Securities by Holders to the Corporation or the
Trust, as applicable (or to such other Person as directed by the Corporation or
the Trust, respectively), in exchange for the Exchange Securities or the
Private Exchange Securities, as the case may be, the Corporation or the Trust,
as applicable, shall mark, or cause to be marked, on such Registrable Securities
delivered by such Holders that such Registrable Securities are being canceled in
exchange for the Exchange Securities or the Private Exchange Securities, as the
case may be; in no event shall such Registrable Securities be marked as paid or
otherwise satisfied;
(r) cooperate with each seller of Registrable Securities covered by any
Registration Statement and each underwriter, if any, participating in the
disposition of such Registrable Securities and their respective counsel in
connection with any filings required to be made with the NASD;
(s) take all other steps reasonably necessary to effect the registration of
the Registrable Securities covered by a Registration Statement contemplated
hereby;
(t) (A) in the case of the Exchange Offer Registration Statement (i)
include in the Exchange Offer Registration Statement a section entitled "Plan of
Distribution," which section shall be reasonably acceptable to the Initial
Purchaser or another representative of the Participating Broker-Dealers, and
which shall contain a summary statement of the positions taken or policies made
by the staff of the SEC with respect to the potential "underwriter" status of
any broker-dealer (a "Participating Broker-Dealer") that holds Registrable
Securities acquired for its own account as a result of market-making activities
or other trading activities and that will be the beneficial owner (as defined in
Rule 13d-3 under the Exchange Act) of Exchange Securities to be received by such
broker-dealer in the Exchange Offer, whether such positions or policies have
been
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publicly disseminated by the staff of the SEC or such positions or policies, in
the reasonable judgment of the Initial Purchaser or such other representative,
represent the prevailing views of the staff of the SEC, including a statement
that any such broker-dealer who receives Exchange Securities for Registrable
Securities pursuant to the Exchange Offer may be deemed a statutory underwriter
and must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Corporation the notice
referred to in Section 3(e), without charge, as many copies of each Prospectus
included in the Exchange Offer Registration Statement, including any preliminary
prospectus, and any amendment or supplement thereto, as such Participating
Broker-Dealer may reasonably request (each of the Corporation and the Trust
hereby consents to the use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto by any Person
subject to the prospectus delivery requirements of the Securities Act, including
all Participating Broker-Dealers, in connection with the sale or transfer of the
Exchange Securities covered by the Prospectus or any amendment or supplement
thereto), (iii) use its reasonable best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the Prospectus
contained therein in order to permit such Prospectus to be lawfully delivered by
all Persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such Persons must comply with such requirements
under the Securities Act and applicable rules and regulations in order to resell
the Exchange Securities; provided, however, that such period shall not be
required to exceed 90 days (or such longer period if extended pursuant to the
last sentence of Section 3 hereof) (the "Applicable Period"), and (iv) in clude
in the transmittal letter or similar documentation to be executed by an exchange
offeree in order to participate in the Exchange Offer (x) the following
provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer making the
acknowledgment described in clause (x) and by delivering a Prospectus in
connection with the exchange of Registrable Securities, the broker-dealer will
not be deemed to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration Statement, the
Corporation and the Trust agree to deliver to the Initial Purchaser or to
another representative of the Participating Broker-Dealers, if requested by
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the Initial Purchaser or such other representative of Participating
Broker-Dealers, on behalf of the Participating Broker-Dealers upon consummation
of the Exchange Offer (i) an opinion of counsel in form and substance reasonably
satisfactory to the Initial Purchaser or such other representative of the
Participating Broker-Dealers, covering the matters customarily covered in
opinions requested in connection with Exchange Offer Registration Statements and
such other matters as may be reasonably requested (it being agreed that the
matters to be covered by such opinion may be subject to customary qualifications
and exceptions), (ii) an officers' certifi cate containing certifications
substantially similar to those set forth in Section 5(e) of the Purchase
Agreement and such additional certifications as are customarily delivered in a
public offering of debt securities and (iii) as well as upon the effectiveness
of the Exchange Offer Registration Statement, a comfort letter, in each case, in
customary form if permit ted by Statement on Auditing Standards No. 72.
The Corporation or the Trust may require each seller of Registrable
Securities as to which any registration is being effected to furnish to the
Corporation or the Trust, as applicable, such information regarding such seller
as may be required by the staff of the SEC to be included in a Registration
Statement. The Corporation or the Trust may exclude from such registration the
Registrable Securities of any seller who fails to furnish such information
within a reasonable time after receiving such request. The Corporation shall
have no obligation to register under the Securities Act the Registrable
Securities of a seller who so fails to furnish such information.
In the case of (1) a Shelf Registration Statement, or (2) Participating
Broker-Dealers who have notified the Corporation and the Trust that they will be
utilizing the Prospectus contained in the Exchange Offer Registration Statement
as provided in Section 3(t) hereof, are seeking to sell Exchange Securities and
are required to deliver Prospectuses, each Holder agrees that, upon receipt of
any notice from the Corporation or the Trust of the happening of any event of
the kind described in Section 3(e)(ii), 3(e)(iii), 3(e)(v) or 3(e)(vi) hereof,
such Holder will forthwith discontinue disposition of Registrable Securities
pursuant to a Registration Statement until such Holder's receipt of the copies
of the supplemented or amended Prospectus contemplated by Section 3(i) hereof or
until it is advised in writing (the "Advice") by the Corporation and the Trust
that the use of the applicable Prospectus may be resumed, and, if so directed by
the Corporation and the Trust, such Holder will deliver to the Corporation or
the Trust (at the Corporation's or the Trust's expense, as the case requires)
all copies in such Holder's possession, other than permanent file copies then in
such Holder's possession, of the Prospectus covering such Registrable Securities
or Exchange Securities, as the case may be, current at the time of receipt of
such notice. If the Corporation or the Trust shall give any such notice to
suspend the disposition of Registrable Securities or Exchange Securities, as the
case may be, pursuant to a Registration Statement, the Corporation and the Trust
shall use their reasonable best efforts to file and have declared effective (if
an amendment) as soon as practicable an amendment or supplement to the
Registration Statement and shall extend the period during which such
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Registration Statement is required to be maintained effective and usable for
resales pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date when
the Corporation and the Trust shall have made available to the Holders (x)
copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. Indemnification and Contribution. (a) In connection with any
Registration Statement, the Corporation and the Trust shall, jointly and
severally, indemnify and hold harmless the Initial Purchaser, each Holder, each
underwriter who participates in an offering of the Registrable Securities, each
Participating Broker-Dealer, each Person, if any, who controls any of such
parties within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act and each of their respective partners, directors, officers,
employees and agents, as follows:
(i) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, arising out of any
untrue statement or alleged untrue statement of a material fact contained
in any Registration Statement (or any amendment thereto), covering
Registrable Securities or Exchange Securities, including all documents
incorporated therein by reference, or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary to
make the statements therein not misleading or arising out of any untrue
statement or alleged untrue statement of a material fact contained in any
Prospectus (or any amendment or supplement thereto) or the omission or
alleged omission therefrom of a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they
were made, not misleading;
(ii) from and against any and all loss, liability, claim, damage and
expense whatsoever, joint or several, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any investigation
or proceeding by any court or governmental agency or body, commenced or
threatened, or of any claim whatsoever based upon any such untrue statement
or omission, or any such alleged untrue statement or omission, if such
settlement is effected with the prior written consent (which consent shall
not be unreasonably withheld) of the Corporation; and
(iii) from and against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by such
Holder, such Participating Broker-Dealer, or any underwriter (except to the
extent otherwise expressly provided in Section 4(c) hereof)), reasonably
incurred in investigating, preparing or defending against any litigation,
or any investigation or proceeding by any court or governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not paid under
subparagraph (i) or (ii) of this Section 4(a);
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provided, however, that (i) this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished in writing to the
Corporation or the Trust by such Holder, such Participating Broker-Dealer or any
underwriter with respect to such Holder, Participating Broker-Dealer or any
underwriter, as the case may be, expressly for use in a Registration Statement
(or any amendment thereto) or any Prospectus (or any amendment or supplement
thereto) and (ii) the Company and the Trust shall not be liable to any such
Holder, Participating Broker-Dealer, any underwriter or controlling person, with
respect to any untrue statement or alleged untrue statement or omission or
alleged omission in any preliminary Prospectus to the extent that any such loss,
liability, claim, damage or expense of any Holder, Participating Broker-Dealer,
any underwriter or controlling person results from the fact that such Holder,
any underwriter or Participating Broker-Dealer sold Securities to a person to
whom there was not sent or given, at or prior to the written confirmation of
such sale, a copy of the final Prospectus as then amended or supplemented if the
Corporation had previously furnished copies thereof to such Holder, underwriter
or Participating Broker-Dealer and the loss, liability, claim, damage or expense
of such Holder, underwriter, Participating Broker-Dealer or controlling person
results from an untrue statement or omission of a material fact contained in the
preliminary Prospectus which was corrected in the final Prospectus. Any amounts
advanced by the Company or the Trust to an indemnified party pursuant to this
Section 4 as a result of such losses shall be promptly returned to the
Corporation or the Trust if it shall be finally determined by such a court in a
judgment not subject to appeal or final review that such indemnified party was
not entitled to indemnification by the Corporation or the Trust.
(b) Each Holder agrees, severally and not jointly, to indemnify and hold
harmless the Corporation, the Trust, the Trustee, any underwriter and the other
selling Holders and each of their respective directors, officers (including each
officer of the Corporation and the Trust who signed the Registration Statement),
employees and agents and each Person, if any, who controls the Corporation, the
Trust, any underwriter or any other selling Holder within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act, from and against any
and all loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with respect
to untrue statements or omissions, or alleged untrue statements or omissions,
made in a Registration Statement (or any amendment thereto) or any Prospectus
(or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Corporation or the Trust by or on behalf of
such selling Holder with respect to such Holder expressly for use in such
Registration Statement (or any amendment thereto), or any such Prospectus (or
any amendment or supplement thereto); provided, however, that in the case of a
Shelf Registration Statement, no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder from
the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
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(c) Each indemnified party shall give prompt notice to each indemnifying
party of any action commenced against it in respect of which indemnity may be
sought hereunder, enclosing a copy of all papers properly served on such
indemnified party, but failure to so notify an indemnifying party shall not
relieve such indemnifying party from any liability which it may have under this
Section 4, except to the extent that it is materially prejudiced by such
failure. An indemnifying party may participate at its own expense in the defense
of such action, or, if it so elects within a reasonable time after receipt of
such notice, assume the defense of any suit brought to enforce any such claim;
but if it so elects to assume the defense, such defense shall be conducted by
counsel chosen by it and approved by the indemnified party or parties which
approval shall not be unreasonably withheld. In the event that an indemnifying
party elects to assume the defense of any such suit and retain such counsel, the
indemnified party or parties shall bear the fees and expenses of any additional
counsel thereafter retained by such indemnified party or parties; provided,
however, that the indemnified party or parties shall have the right to employ
counsel (in addition to local counsel) to represent the indemnified party or
parties who may be subject to liability arising out of any action in respect of
which indemnity may be sought against the indemnifying party if, in the
reasonable judgment of counsel for the indemnified party or parties, there may
be legal defenses available to such indemnified party or parties which are
different from or in addition to those available to the indemnifying party, in
which event the fees and expenses of appropriate separate counsel shall be borne
by the indemnifying party. In no event shall the indemnifying parties be liable
for the fees and expenses of more than one counsel (in addition to local
counsel), separate from its own counsel, for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall (i) without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Section 4 (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent (x)
includes an unconditional written release in form and substance satisfactory to
the indemnified parties of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (y) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party or (ii) be liable for any settlement of
any such action effected without its written consent (which consent shall not be
unreasonably withheld), but if settled with the consent of the indemnifying
party of if there be a final judgment of the plaintiff in any such action, the
indemnifying party agrees to indemnify and hold harmless any indemnified party
from and against any loss or liability by reason of such settlement or judgment.
(d) In order to provide for just and equitable contribution in
circumstances under which any of the indemnity provisions set forth in this
Section 4 is for any reason held to be unavailable to the indemnified parties
although applicable in accordance with its terms, the Corporation,
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the Trust, and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Corporation, the Trust, and the Holders, as
incurred; provided that no Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person that was not guilty of such fraudulent
misrepresentation. As between the Corporation, the Trust, and the Holders, such
parties shall contribute to such aggregate losses, liabilities, claims, damages
and expenses of the nature contemplated by such indemnity agreement in such
proportion as shall be appropriate to reflect the relative fault of the
Corporation and Trust, on the one hand, and the Holders, on the other hand, with
respect to the statements or omissions which resulted in such loss, liability,
claim, damage or expense, or action in respect thereof, as well as any other
relevant equitable considerations. The relative fault of the Corporation and the
Trust, on the one hand, and of the Holders, on the other hand, shall be deter
mined by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Corporation or the Trust,
on the one hand, or by or on behalf of the Holders, on the other, and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The Corporation, the Trust and
the Holders of the Registrable Securities agree that it would not be just and
equitable if contribution pursuant to this Section 4 were to be determined by
pro rata allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section 4,
each Affiliate of a Holder, and each director, officer, employee, agent and
Person, if any, who controls a Holder or such Affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder, and each director of each of the
Corporation or the Trust, each officer of each of the Corporation or the Trust
who signed the Registration Statement, and each Person, if any, who controls
each of the Corporation and the Trust within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act shall have the same rights to
contribution as each of the Corporation or the Trust.
5. Participation in an Underwritten Registration. No Holder may participate
in an underwritten registration hereunder unless such Holder (a) agrees to sell
such Holder's Registrable Securities on the basis provided in the underwriting
arrangement approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all reasonable questionnaires,
powers of attorney, indemnities, underwriting agreements, lock-up letters and
other documents reasonably required under the terms of such underwriting
arrangements.
6. Selection of Underwriters. The Holders of Registrable Securities covered
by the Shelf Registration Statement who desire to do so may sell the securities
covered by such Shelf Registration in an underwritten offering, subject to the
provisions of section 3(l) hereof. In any such underwritten offering, the
underwriter or underwriters and manager or managers that will administer the
offering will be selected by the Holders of a majority in aggregate principal
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amount or liquidation amount, as applicable, of the Registrable Securities
included in such offering; provided, however, that such underwriters and
managers must be reasonably satisfactory to the Corporation and the Trust.
7. Miscellaneous.
(a) Rule 144 and Rule 144A. For so long as the Corporation or the Trust is
subject to the reporting requirements of Section 13 or 15 of the Exchange Act
and any Registrable Securities remain outstanding, each of the Corporation and
the Trust, as the case may be, will file the reports required to be filed by it
under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and the
rules and regulations adopted by the SEC thereunder, provided that if it ceases
to be so required to file such reports, it will, upon the request of any Holder
of Registrable Securities (a) make publicly available such information as is
necessary to permit sales of its securi ties pursuant to Rule 144 under the
Securities Act, (b) deliver such information to a prospective purchaser as is
necessary to permit sales of its securities pursuant to Rule 144A under the
Securities Act, and (c) take such further action that is reasonable in the
circumstances, in each case, to the extent required from time to time to enable
such Holder to sell its Registrable Securities without registration under the
Securities Act within the limitation of the exemptions provided by (i) Rule 144
under the Securities Act, as such rule may be amended from time to time, (ii)
Rule 144A under the Securities Act, as such rule may be amended from time to
time, or (iii) any similar rules or regulations hereafter adopted by the SEC.
Upon the request of any Holder of Registrable Securities, the Corporation and
the Trust will deliver to such Holder a written state ment as to whether it has
complied with such requirements.
(b) No Inconsistent Agreements. The Corporation or the Trust has not
entered into, nor will the Corporation or the Trust on or after the date of this
Agreement enter into, any agreement which is inconsistent with the rights
granted to the Holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. The rights granted to the Holders
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Corporation's or the Trust's other issued
and outstanding securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the Corporation and the Trust has obtained the written consent of Holders
of at least a majority in aggregate principal amount of the outstanding
Registrable Securities affected by such amendment, modification, supplement,
waiver or departure; provided that no amendment, modification or supplement or
waiver or consent to the departure with respect to the provisions of Section 4
hereof shall be effective as against any Holder of Registrable Securities unless
consented to in writing by such Holder of Registrable Securities.
Notwithstanding the foregoing sentence, (i) this Agreement may be amended,
without the consent of any
27
<PAGE>
Holder of Registrable Securities, by written agreement signed by the
Corporation, the Trust and the Initial Purchaser, to cure any ambiguity, correct
or supplement any provision of this Agreement that may be inconsistent with any
other provision of this Agreement or to make any other provisions with respect
to matters or questions arising under this Agreement which shall not be
inconsistent with other provisions of this Agreement, (ii) this Agreement may be
amended, modified or supplemented, and waivers and consents to departures from
the provisions hereof may be given by written agreement signed by the
Corporation, the Trust and the Initial Purchaser to the extent that any such
amendment, modification, supplement, waiver or consent is, in its reasonable
judgment, necessary or appropriate to comply with applicable law (including any
interpretation of the Staff of the SEC) or any change therein and (iii) to the
extent any provision of this Agreement relates to the Initial Purchaser, such
provision may be amended, modified or supplemented, and waivers or consents to
departures from such provisions may be given, by written agreement signed by the
Initial Purchaser, the Corporation and the Trust.
(d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand-delivery, registered first-class
mail, telex, telecopier, or any courier guaranteeing overnight delivery (i) if
to a Holder, at the most current address given by such Holder to the Corporation
or the Trust by means of a notice given in accordance with the provisions of
this Section 7(d), which address initially is, with respect to the Initial
Purchaser, the address set forth in the Purchase Agreement; and (ii) if to the
Corporation or the Trust, initially at the Corporation's address set forth in
the Purchase Agreement and thereafter at such other address, notice of which is
given in accordance with the provisions of this Section 7(d).
All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt is acknowledged, if telecopied; and on
the next Business Day, if timely delivered to an air courier guaranteeing
overnight delivery.
Copies of all such notices, demands, or other communications shall be
concurrently delivered by the Person giving the same to the Trustee, at the
address specified in the Indenture.
(e) Successors and Assigns. This Agreement shall inure to the benefit of
and be binding upon the successors, assigns and transferees of the Corporation,
the Trust and the Initial Purchaser, including, without limitation and without
the need for an express assignment, subsequent Holders; provided, however, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire
Registrable Securities, in any manner, whether by operation of law or otherwise,
such Registrable Securities shall be held subject to all of the terms of this
Agreement, and by taking and holding such Registrable Securities, such Person
28
<PAGE>
shall be conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement and such Person shall be entitled to
receive the benefits hereof.
(f) Third Party Beneficiary. The Initial Purchaser and any Participating
Broker- Dealer shall be a third party beneficiary of the agreements made
hereunder between the Corporation and the Trust, on the one hand, and the
Holders, on the other hand, and shall have the right to enforce such agreements
directly to the extent it deems such enforcement necessary or advisable to
protect its rights or the rights of Holders hereunder.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN MADE IN THE
STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS AGREEMENT, AND THE
TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
PROVISIONS RELATING TO CONFLICTS OF LAWS. EACH OF THE PARTIES HERETO AGREES TO
SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE MATTERS
CONTEMPLATED HEREBY, IRREVOCABLY WAIVES ANY DEFENSE OF LACK OF PERSONAL
JURISDICTION AND IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUIT,
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT. THE COMPANY,
ON BEHALF OF ITSELF AND THE SUBSIDIARIES (INCLUDING, WITHOUT LIMITATION, THE
TRUST), IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFEC TIVELY DO SO
UNDER APPLICABLE LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
PREMIER BANCORP, INC.
29
<PAGE>
By: /s/ John C. Soffronoff
-----------------------------------
Name: John C. Soffronoff
Title: President
PBI CAPITAL TRUST
By: /s/ John C. Soffronoff
-----------------------------------
Name: John C. Soffronoff
Title: Administrative Trustee
By: /s/ Bruce E. Sickel
-----------------------------------
Name: Bruce E. Sickel
Title: Administrative Trustee
Confirmed and accepted as of
the date first above
written:
SANDLER O'NEILL & PARTNERS L.P.
By: Sandler O'Neill & Partners Corp.,
the sole general partner
By: /s/ Catherine A. Lawton
- ---------------------------
Catherine A. Lawton
Vice President
30
EXHIBIT 23.1
------------
KPMG
1600 Market Street
Philadelphia, PA 19103-7212
The Board of Directors
Premier Bancorp, Inc.:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
January 6, 1999
Philadelphia, Pennsylvania
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John C. Soffronoff and Bruce E. Sickel and each
of them, his or her true and lawful attorneys-in-fact and as agents, with full
power of substitution and resubstitution, for him or her in his or her name,
place and stead, in any and all capacities, to sign any or all amendments to
this Registration Statement, and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully and to all intents and purposes as
he or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or either of them, or their of his
substitutes, may lawfully do or cause to be done by virtue hereof.
Signatures Title Date
---------- ----- ----
/s/ John C. Soffronoff Director, President January 7, 1999
- ------------------------------ and CEO (Principal
John C. Soffronoff Executive Officer)
/s/ Clark S. Frame Director and January 7, 1999
- ------------------------------ Chairman of the Board
Clark S. Frame
/s/ Bruce E. Sickel Director and CFO January 7, 1999
- ------------------------------ (Principal Financial
Bruce E. Sickel Officer)
/s/ Barry J. Miles, Sr. Director and Vice January 7, 1999
- ------------------------------ Chairman of the Board
Barry J. Miles, Sr.
/s/ Daniel E. Cohen Director January 7, 1999
- ------------------------------
Daniel E. Cohen
<PAGE>
/s/ Peter A. Cooper Director January 7, 1999
- ------------------------------
Peter A. Cooper
/s/ Helen Beth Garofalo-Vilcek Director January 7, 1999
- ------------------------------
Helen Beth Garofalo-Vilcek
/s/ Dr. Thomas E. Mackell Director January 7, 1999
- ------------------------------
Dr. Thomas E. Mackell
Director
- ------------------------------
Dr. Daniel A. Nesi
/s/ Neil Norton Director January 7, 1999
- ------------------------------
Neil Norton
Director
- ------------------------------
Thomas M. O'Mara
Director
- ------------------------------
Michael Perrucci
/s/ Brian R. Rich Director January 7, 1999
- ------------------------------
Brian R. Rich
/s/ Ezio U. Rossi Director January 7, 1999
- ------------------------------
Ezio U. Rossi
/s/ Richard F. Ryan Director January 7, 1999
- ------------------------------
Richard F. Ryan
/s/ Gerald Schatz Director January 7, 1999
- ------------------------------
Gerald Schatz
<PAGE>
/s/ Irving N. Stein Director January 7, 1999
- ------------------------------
Irving N. Stein
/s/ Thomas P. Stitt Director January 7, 1999
- ------------------------------
Thomas P. Stitt
Director
- ------------------------------
George H. Wetherill
Director
- ------------------------------
John A. Zebrowski
