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As filed with the Securities and Exchange Commission on August 25, 1999 Registration No. 333-_______
333-_____________-01
================================================================================
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form S-3
Registration Statement under the Securities Act of 1933
-----------------
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LOCAL FINANCIAL CORPORATION LOCAL FINANCIAL CAPITAL TRUST I
(Exact name of Registrant as specified in its (Exact name of Registrant as specified
charter) in its trust agreement)
DELAWARE DELAWARE
(State or other jurisdiction of (State or other jurisdiction of
incorporation or organization) incorporation or organization)
--------- ---------
6719
6711 (Primary Standard Industrial
(Primary Standard Industrial Classification Code Number)
Classification Code Number)
73-6316302
65-0424192 (I.R.S. Employer
(I.R.S. Employer Identification No.)
Identification No.)
</TABLE>
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Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
(405) 841-2100
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
-----------------
Alan L. Pollock
Senior Vice President,
Secretary and
General Counsel
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
(405) 841-2100
(Name, address, including zip code, and telephone number, including area code,
of agents for service)
-----------------
Copies to:
Norman B. Antin, Esq. Edward S. Best, Esq.
Jeffrey D. Haas, Esq. Brian W. Smith, Esq.
Elias, Matz, Tiernan & Herrick L.L.P. Mayer, Brown & Platt
734 15th Street, N.W. 190 South LaSalle Street
Washington, D.C. 20005 Chicago, IL 60603
(202) 347-0300 (312) 782-0600
Fax: (202) 347-2172 Fax: (312) 701-7711
-----------------
Approximate Date of Commencement of Proposed Sale to the Public:
As soon as practicable after this Registration Statement becomes effective.
If the only securities being registered on this form are being offered
pursuant to dividend interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ ]
If this form is filed to register additional securities for an offering
pursuant to Rule 462 under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ] _______________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier registration statement for the same
offering. [ ] __________________
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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` Amount Proposed Maximum Amount of
Title of Each Class of Securities to be Proposed Maximum Aggregate Registration
to be Registered Registered Offering Price (1) Offering Price (1) Fee (2)
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Cumulative Trust Preferred Securities of Local
Financial Capital Trust I $30,000,000 100% $30,000,000 $8,340
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Junior Subordinated Deferrable Interest Debentures of
Local Financial Corporation (2) $30,000,000 100% $30,000,000 N/A
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Local Financial Corporation Guarantee with respect
to the Trust Preferred Securities (3) N/A N/A N/A N/A
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Total $30,000,000 (4) 100% $30,000,000 (4) $8,340
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(1) Estimated solely for the purpose of computing the registration fee.
(2) No separate consideration will be received for the Junior Subordinated
Deferrable Interest Debentures of Local Financial Corporation (the
"Junior Subordinated Debentures") which may be distributed upon a
liquidation of Local Financial Capital Trust I.
(3) No separate consideration will be received for the Local Financial
Corporation Guarantee.
(4) Such amount represents the liquidation amount of the Local Financial
Capital Trust I Trust Preferred Securities and the principal amount of
Junior Subordinated Debentures that may be distributed to holders of
such Trust Preferred Securities upon a liquidation of Local Financial
Capital Trust I.
-----------------
The Registrants hereby amend this registration statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the Securities and Exchange Commission declares
our registration statement effective. This prospectus is not an offer to sell
these securities and is not soliciting an offer to buy these securities in any
state where the offer or sale is not permitted.
Subject to completion, dated August 25, 1999
1,044,000 Trust Preferred Securities
LOCAL FINANCIAL CAPITAL TRUST I
% Cumulative Trust Preferred Securities
(Liquidation Amount $25 per Trust Preferred Security)
[LOGO]
Fully and Unconditionally Guaranteed, as Described Herein, by
Local Financial Corporation
--------------------------------------------
o For each Trust Preferred Security that you own, you will receive
cumulative cash distributions at an annual rate of % on March 31,
June 30, September 30 and December 31 of each year, beginning , 1999.
Distribution payments to you may be deferred for up to 20 consecutive
calendar quarters.
o The Trust Preferred Securities mature on , 2029.
o The Trust may redeem the Trust Preferred Securities, at a redemption
price of $__ per Trust Preferred Security on or after , 2004,
declining ratably each year to a redemption price of $25 per Trust
Preferred Security on or after _______ __, 2009, in each case plus
accrued and unpaid distributions, and under certain other circumstances.
o A brief description of the Trust Preferred Securities can be found under
"Summary" in this prospectus.
o We intend to apply for listing of the Trust Preferred Securities on the
Nasdaq National Market under the symbol "LFINP."
--------------------------------------------
There are certain risks you should consider before investing in the
Trust Preferred Securities. See "Risk Factors" beginning on page __.
--------------------------------------------
Per Security Total
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Public Offering Price....................... $25.00 $26,100,000
Proceeds to the Trust....................... $25.00 $26,100,000
In view of the fact that the proceeds of the sale of the Trust
Preferred Securities will be invested in the Junior Subordinated Debentures, we,
Local Financial Corporation, as issuer of the Junior Subordinated Debentures,
have agreed to pay the underwriters $ per Trust Preferred Security
(or $ ($ if the underwriters' over-allotment option is
exercised in full) in the aggregate) as compensation.
We and the Trust have granted the underwriters a 30-day option to
purchase up to 156,000 additional Trust Preferred Securities on the same terms
and conditions discussed above solely to cover over-allotments, if any. If this
option is exercised in full, the total Public Offering Price and Proceeds to the
Trust will be $30,000,000.
Neither the Securities and Exchange Commission nor any state securities
commission has approved of anyone's investment in these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary
is a criminal offense.
These securities are not savings accounts, deposits or obligations of
any bank and are not insured by the Federal Deposit Insurance Corporation or any
other governmental agency.
The Trust Preferred Securities will be ready for delivery in book-entry
form through the Depository Trust Company on or about , 1999.
--------------------------------------------
A.G. Edwards & Sons, Inc.
Friedman Billings Ramsey
Keefe, Bruyette & Woods, Inc.
Prospectus dated , 1999
<PAGE>
TABLE OF CONTENTS
Page
----
Forward Looking Statements...............................................
Where You Can Find More Information......................................
Summary..................................................................
Summary Consolidated Financial and Other Data............................
Risk Factors.............................................................
Ratios of Earnings to Fixed Charges......................................
Use of Proceeds..........................................................
Capitalization...........................................................
Local Financial Capital Trust I..........................................
Description of Trust Preferred Securities................................
Description of Junior Subordinated Debentures............................
Description of Guarantee.................................................
Book-Entry Issuance......................................................
Relationship Among the Trust Preferred
Securities, the Junior Subordinated
Debentures and the Guarantee............................................
Certain Federal Income Tax Consequences..................................
ERISA Considerations.....................................................
Underwriting.............................................................
Legal Matters............................................................
Experts .................................................................
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FORWARD LOOKING STATEMENTS
This document contains and incorporates by reference certain forward
looking statements regarding our financial condition, results of operations and
business. These statements are not historical facts and include statements about
our
o confidence,
o strategies about earnings,
o new and existing programs and products,
o relationships,
o opportunities,
o technology and
<PAGE>
o market conditions.
You may identify these statements by looking for
o forward-looking terminology, like "expect," "believe" or
"anticipate;" or
o expressions of confidence like "strong" or "on-going;" or
o similar statements or variations of those terms.
These forward-looking statements involve certain risks and uncertainties. Actual
results may differ materially from the results the forward-looking statements
contemplate because of, among others, the following possibilities:
o competitive pressure in the banking and financial services industry
increases significantly;
o changes occur in the interest rate environment;
o our Year 2000 compliance program does not effectively address Year
2000 computer problems; and
o general economic conditions, either nationally or in the state of
Oklahoma, are less favorable than expected.
--------------------------------------------
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission (the "SEC"). Our
SEC filings are available to the public over the Internet at the SEC's web site
at http://www.sec.gov. You may also read and copy any documents we file with the
SEC at its public reference facilities at 450 Fifth Street, NW, Washington, DC
20549, 7 World Trade Center, Suite 1300, New York, New York 10048 and Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. You
can also obtain copies of the documents at prescribed rates by writing to the
Public Reference Section of the SEC at 450 Fifth Street, NW, Washington, DC
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the public reference facilities. Our SEC filings are also available
at the office of the Nasdaq National Market. For further information on
obtaining copies of our public filings at the Nasdaq National Market, you should
call (212) 656-5060.
The Trust is not currently subject to the information reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). The Trust will become
<PAGE>
subject to such requirements upon the effectiveness of the registration
statement that contains this prospectus, although it intends to seek and expects
to receive an exemption therefrom.
We and the Trust have filed with the SEC a registration statement on
Form S-3 (together with all amendments thereto, the "registration statement"),
of which this prospectus is a part, under the Securities Act of 1933, as amended
(the "Securities Act") with respect to the Trust Preferred Securities, the
Junior Subordinated Debentures and the Guarantee. This prospectus does not
contain all of the information set forth in the registration statement, certain
portions of which have been omitted as permitted by the rules and regulations of
the SEC. For further information with respect to us, the Trust, the Trust
Preferred Securities, the Junior Subordinated Debentures and the Guarantee,
reference is made to the registration statement, including its exhibits. The
registration statement may be inspected without charge at the principal office
of the SEC in Washington, D.C., and copies of all or part of it may be obtained
from the SEC upon payment of the prescribed fees.
We "incorporate by reference" into this prospectus the information we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is an important part of this prospectus and information that we file
subsequently with the SEC will automatically update this prospectus. We
incorporate by reference the documents listed below and any filings we make with
the SEC under Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act, after the
initial filing of the registration statement that contains this prospectus and
prior to the time that we sell all the securities offered by this prospectus:
o Annual Report on Form 10-K for the year ended December 31, 1998.
o Quarterly Reports on Form 10-Q for the quarters ended March 31, 1999
and June 30, 1999.
o Current Reports on Form 8-K filed with the SEC on February 19, 1999,
April 1, 1999, April 28, 1999, May 18, 1999, May 28, 1999, July 9,
1999 and July 29, 1999.
You may request a copy of these filings (other than an exhibit to a
filing unless that exhibit is specifically incorporated by reference into that
filing) at no cost, by writing to or telephoning us at the following address:
3601 N.W. 63rd Street, Oklahoma City, Oklahoma 73116, Attention: Corporate
Secretary, telephone (405) 841-2100.
--------------------------------------------
We have not, and the underwriters have not, authorized any other person
to provide you with different information. This prospectus is not an offer to
sell, nor is it seeking an offer to buy, these Trust Preferred Securities in any
state where the offer or sale is not permitted. The information in this
prospectus is complete and accurate as of the date on the front cover, but the
information may have changed since that date.
<PAGE>
SUMMARY
The items in the following summary are described in more detail later
in this prospectus. This summary provides an overview of selected information
and does not contain all the information you should consider. Therefore, you
should also read the more detailed information set out in this prospectus or
incorporated herein by reference. Unless we indicate otherwise, the information
in this prospectus assumes that the underwriters' over-allotment option will not
be exercised.
Our Company
General. We are the bank holding company for Local Oklahoma Bank,
National Association ("Local" or the "Bank"), a national banking association
headquartered in Oklahoma City, Oklahoma which operates 50 branches across the
state of Oklahoma, with concentrations in Oklahoma City, Tulsa and Lawton.
Founded in 1908 as Local Building and Loan Association, the Bank is evolving its
business platform from its savings and loan origin into that of a full service
commercial bank.
At June 30, 1999, we had consolidated assets of $2.2 billion,
substantially all of which is comprised of our 100% ownership interest in the
Bank, consolidated liabilities of $2.1 billion, including consolidated deposits
of $1.6 billion and consolidated stockholders' equity of $125.8 million. Ranked
by in-market deposits, Local was the fifth largest bank in Oklahoma at June 30,
1999.
New Management's Initiatives. In August 1997, a group led by Mr. Edward
A. Townsend, our present Chairman of the Board and Chief Executive Officer,
negotiated a purchase of the Company from its prior owners. Following the
purchase of the Company, management undertook a series of initiatives to
establish the foundation of our business strategy. Management reduced total
assets by over $1 billion through the sale of the bulk of the Bank's investments
in floating-rate collateralized mortgage obligations tied to the Eleventh
District Cost of Funds Index, the elimination of the sub-prime automobile loan
portfolio and the discontinuation of the practice of buying portfolios of
residential mortgages. In addition, management eliminated all swap and hedge
contracts outstanding at the time of the purchase. While these measures resulted
in planned substantial losses on the sale and write-down of assets and
disposition of hedge positions, we believe we have strengthened our financial
position and better positioned ourselves for future growth. During the year
ended December 31, 1998, the first full year of operations following our
restructuring initiatives, we had net income of $18.4 million. During the six
months ended June 30, 1999, we had net income of $10.7 million and grew assets
and stockholders' equity by an additional $75.4 million and $7.0 million,
respectively.
<PAGE>
Strategy for Growth. Our business strategy is to provide our customers
with the range of banking products and services of a regional bank while
retaining the appeal and level of individualized service of a community bank. In
pursuit of this strategy, we are shifting our activities from those of a
traditional savings institution to those generally associated with a commercial
bank. Our management believes the ongoing consolidation among financial
institutions in Oklahoma has created significant gaps in the ability of large
regional and nationwide banks to serve certain customers, primarily our targeted
customer base of small and medium-sized businesses (up to $100 million in annual
sales), professionals and other individuals. Our management believes that as a
result of our strong commitment to highly personalized relationship-oriented
customer service, our varied products, our strategic branch locations and the
long-standing community presence of our managers, lending officers and branch
personnel, we are well positioned to attract new customers and to increase our
market share of loans and deposits.
Specific milestones achieved by management towards the realization of
our strategic goals are:
o Conversion of the Bank to a national bank charter in May 1999;
o Creation of a corporate lending unit, which had 45 commercial
lenders and staff at June 30, 1999;
o Issued commitments for the origination of $307.8 million in
commercial real estate and commercial business loans during the six
months ended June 30, 1999;
o Increased transaction accounts from $319.2 million or 19.9% of total
deposits at December 31, 1997 to $449.5 million or 27.9% of total
deposits at June 30, 1999; and
o Improvement in our generation of non-interest income from $6.6
million during the six months ended June 30, 1998 to $9.1 million
during the six months ended June 30, 1999, an increase of 37.2%.
We have also grown through strategic acquisitions. In February 1998, we
acquired Green Country Bank which had three branch offices in northeastern
Oklahoma. In October 1998, we acquired Citizens Bank, with five offices in
Lawton and one in Norman. These two acquisitions contributed $281.5 million in
assets and $270.2 million in liabilities as of the respective acquisition dates.
These institutions now operate under our Local Oklahoma Bank name. In May 1999,
we entered into an agreement to acquire Guthrie Savings Bank with one office in
north central Oklahoma holding $36.0 million in deposits at June 30, 1999. We
intend to continue to evaluate financial information about companies which may
lead to the acquisition of such companies. We currently have no agreements or
understandings, however, to acquire all or part of any other company.
2
<PAGE>
Our principal executive office is located at 3601 N.W. 63rd Street,
Oklahoma City, Oklahoma 73116. Our telephone number is (405) 841-2100.
Local Financial Capital Trust I
Local Financial Capital Trust I (the "Trust"), the issuer of the Trust
Preferred Securities, is a statutory business trust formed by us under the
Delaware Business Trust Act. The Trust exists for the sole purpose of (i)
issuing common securities of the trust (the "Common Securities") to us and the
Trust Preferred Securities (the Trust Preferred Securities and the Common
Securities are referred to in this prospectus as the "Trust Securities") for
cash and investing the proceeds in an equivalent amount of % Junior
Subordinated Deferrable Interest Debentures due , 2029 (the "Junior
Subordinated Debentures") issued by us and (ii) engaging in other activities
that are necessary or incidental to the issuance of the Trust Securities and the
investment in the Junior Subordinated Debentures.
The Trust has no separate financial statements. We do not believe that
the statements would be significant to you because the Trust is a direct
wholly-owned subsidiary of the Company, has no independent operations and exists
solely for the reasons summarized above.
The Trust's principal office is located at 3601 N.W. 63rd Street,
Oklahoma City, Oklahoma 73116. The Trust's telephone number is (405) 841-2100.
Risk Factors
Prior to making an investment decision, you should carefully consider
all of the information in this prospectus, and, in particular, you should
evaluate the risk factors set forth under the caption "Risk Factors," which are
described immediately following this Summary.
3
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The Offering
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Issuer of the Trust Preferred
Securities.................Local Financial Capital Trust I, a Delaware statutory business trust.
Securities offered..................1,044,000 % Trust Preferred Securities (1,200,000 Trust
Preferred Securities if the underwriters' over-allotment option is
exercised in full). The Trust Preferred Securities represent
preferred undivided beneficial interests in the Trust's assets, which
will consist solely of the Junior Subordinated Debentures and
payments under the Junior Subordinated Debentures.
The Trust will sell the Trust Preferred Securities to the public and the
Common Securities to us. The Trust will use the proceeds from the sale of
the Trust Securities to buy the Junior Subordinated Debentures from us.
Distributions.......................If you purchase the Trust Preferred Securities, you will be entitled to
receive cumulative cash distributions at a ___% annual rate.
Distributions will accumulate from the date the Trust issues the Trust
Preferred Securities, and will be paid quarterly in arrears on March
31, June 30, September 30 and December 31 of each year, beginning
on , 1999. Distributions on the Trust Preferred Securities
may be deferred, as described below. The initial cash distribution
payable on , 1999 will equal $ for each Trust Preferred
Security. Subsequent cash distributions will equal $ for each
Trust Preferred Security.
The record date for distributions on the Trust Preferred Securities will
be the fifteenth day of the month in which the distributions are made.
Maturity of Junior The Junior Subordinated Debentures will mature on , 2029
Subordinated unless we shorten the maturity date to a date not earlier than ,
Debentures.................2004. We will not shorten the maturity date unless we have received prior
regulatory approval if such approval is then required under applicable
requirements. The Trust must redeem the Trust Preferred Securities when the
Junior Subordinated Debentures are paid on the maturity date, or following
any earlier redemption of the Junior Subordinated Debentures at the same
redemption price.
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4
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Redemption..........................We may redeem all or a part of the Junior Subordinated Debentures
on or after , 2004 at a redemption price of $
per Trust Preferred Security, declining ratably each year to a
redemption price of $25 per Trust Preferred Security on or after
, 2009, in each case plus accrued and unpaid distributions.
In addition, we may redeem all of the Junior Subordinated Debentures
at our option:
o if certain tax events occur;
o if there is a change in the Investment Company
Act of 1940 that requires the Trust to register
under that law; or
o if there is a change in, among other things, the
regulatory capital adequacy guidelines that
apply to us.
These circumstances are collectively referred to as "Special Events."
We will not redeem the Junior Subordinated Debentures before they mature
without approval by the regulatory agencies which supervise us if such
approval is then required under applicable requirements.
Upon any redemption of the Junior Subordinated Debentures, the Trust will
use the cash proceeds of such redemption to pay you a liquidation amount
for the Trust Preferred Securities. The liquidation amount you will
receive will be equal to the redemption price described above.
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5
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Deferral of distributions..........The Trust relies solely on payments made by us on the Junior
Subordinated Debentures to pay distributions on the Trust
Preferred Securities. If no event of default under the Junior
Subordinated Debentures has occurred or is continuing, we have
the right, at one or more times, to defer interest payments on the
Junior Subordinated Debentures for up to 20 consecutive calendar
quarters, but not beyond the maturity date of the Junior
Subordinated Debentures. If we defer interest payments on the
Junior Subordinated Debentures:
o the Trust will also defer distributions on the
Trust Preferred Securities;
o your distributions will continue to accrue at an
annual rate of ___% of the liquidation amount of
$25 per Trust Preferred Security; and
o you will accumulate additional distributions at
the same rate, compounded quarterly, on any unpaid
distributions (to the extent permitted by law).
When a deferral period ends, we will be required to pay to the Trust all
accumulated and unpaid interest due on the Junior Subordinated Debentures
and, when the Trust receives this payment, it will be required to pay all
accumulated and unpaid distributions on the Trust Securities.
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6
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If we defer payments of interest on the Junior Subordinated Debentures,
the Trust Preferred Securities will be treated as being issued with
original issue discount for United States federal income tax purposes.
This means that you will still be required to include income in your gross
income for United States federal income tax purposes before you receive
any corresponding cash distribution, even if you are a cash basis
taxpayer.
We have agreed to certain restrictions if we exercise our right to defer
interest payments. During any period in which we defer interest payments
on the Junior Subordinated Debentures, we will not be permitted to (with
limited exceptions described under "Description of Junior Subordinated
Debentures--Option to Extend Interest Payment Date"):
o declare or pay dividends or make other
distributions on, redeem, purchase or acquire, or
make liquidation payments with respect to, our
capital stock;
o pay interest, principal or premium on, or repay,
repurchase or redeem any of our debt securities
that rank equal with or junior to the Junior
Subordinated Debentures; or
o make guarantee payments with respect to the
foregoing.
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7
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Guarantee...........................We will fully and unconditionally guarantee the Trust Preferred
Securities based on:
o our obligations to make payments on the Junior
Subordinated Debentures;
o our obligations under a guarantee executed for
your benefit (the "Guarantee"); and
o our obligations under the Trust Agreement,
which sets forth the terms of the Trust
Securities.
If we do not make payments on the Junior Subordinated Debentures, the
Trust will not have sufficient funds to make payments on the Trust
Preferred Securities. The Guarantee does not cover payments when the Trust
does not have sufficient funds. Instead, you or the property trustee may
enforce the Trust's rights under the Junior Subordinated Debentures
directly against us.
Distribution of the
Junior Subordinated
Debentures.................We may dissolve the Trust at any time and distribute the Junior
Subordinated Debentures to you, subject to any required approval by the
regulatory agencies which supervise us. If the Junior Subordinated
Debentures are distributed, we will use our best efforts to list them on a
national securities exchange or comparable automated quotation system.
Ranking.............................Our obligations under the Junior Subordinated Debentures are unsecured and
will rank junior in priority of payment to our current and any future
senior and subordinated indebtedness and will be effectively subordinated
to all existing and future liabilities and obligations of our
subsidiaries, including the Bank. As of June 30, 1999, the aggregate
amount of our liabilities that would have effectively ranked senior to the
Junior Subordinated Debentures was $80.0 million, comprised of our senior
notes.
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8
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Our obligations under the Guarantee are unsecured and will rank in
priority of payment:
o junior to all of our indebtedness, except for those
liabilities made equal or subordinate to the Junior
Subordinated Debentures by their terms;
o equal to any senior preferred stock which may
be issued in the future; and
o senior to our capital stock.
Voting rights.......................Except in limited circumstances, you as a holder of the Trust
Preferred Securities will have no voting rights.
Listing.............................We intend to apply for listing of the Trust Preferred Securities on the
Nasdaq National Market under the symbol "LFINP."
Book-entry..........................The Trust Preferred Securities will be represented by a global
security that will be deposited with and registered in the name
of The Depository Trust Company, New York, New York or its
nominee. This means that you will not receive a certificate for
your Trust Preferred Securities.
Use of proceeds.....................The Trust plans to use the proceeds from the sale of the Trust
Securities to purchase the Junior Subordinated Debentures from us.
We intend to use the net proceeds from the sale of the Junior
Subordinated Debentures for general corporate purposes, which
may include:
o capital contributions to the Bank to support its
growth strategy and for working capital; and
o acquisitions by either us or the Bank, although
neither we nor the Bank presently have any
understandings that have not been announced with
respect to any such acquisitions.
Initially, we may use the net proceeds to make short-term investments.
</TABLE>
9
<PAGE>
SUMMARY CONSOLIDATED FINANCIAL AND OTHER DATA
(Dollars in Thousands, Except Per Share Data)
Our summary consolidated financial data set forth below should be read
in conjunction with, and is qualified in its entirety by, our Consolidated
Financial Statements, including the related Notes, incorporated by reference
herein. In June 1998, we changed our fiscal year end from June 30 to December
31.
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<CAPTION>
December 31, June 30,
--------------------------- ---------------------------------------------
June 30,
1999 1998 1997 1997 1996 1995
----------- ---------- ---------- ---------- ---------- ----------
(unaudited)
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet and Other Data:
Total assets $2,204,366 $2,128,979 $1,881,365 $2,625,181 $3,278,511 $3,264,850
Cash and due from banks 31,125 27,180 34,152 15,904 13,640 14,497
Loans receivable, net 1,553,306 1,362,272 953,470 1,013,824 1,018,135 804,610
Securities available for sale 504,163 570,964 518,107 985,565 1,741,725 361,402
Securities and other investments
held to maturity -- -- -- 408,207 392,324 1,983,756
Equity securities available for sale -- -- -- -- 11,604 12,287
Non-performing assets(1) 8,073 4,270 921 12,570 16,185 10,889
Deposits 1,608,625 1,668,074 1,602,533 1,644,356 1,602,460 1,577,821
Securities sold under agreements to
repurchase -- -- -- 310,801 1,079,194 779,626
Promissory note payable -- -- -- 7,010 14,020 21,030
Senior notes payable 80,000 80,000 80,000 -- -- --
FHLB advances 350,518 220,033 80,136 531,161 439,011 703,202
Total liabilities 2,078,569 2,010,173 1,798,740 2,522,552 3,170,452 3,121,631
Stockholders' equity 125,797 118,806 82,625 102,629 108,059 143,219
Number of full service customer
facilities 50 50 41 41 41 41
Approximate number of full-time
equivalent employees 773 694 525 546 536 471
</TABLE>
10
<PAGE>
<TABLE>
<CAPTION>
Six Months
Six Months Ended June 30, Years Ended December 31, Ended December 31,
---------------------------- ---------------------------- ------------------
1999 1998 1998 1997 1997
------------ ------------ ------------ ------------ ------------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Operations Data:
Interest and dividend income $ 79,667 $ 70,516 $ 147,204 $ 188,768 $ 85,204
Interest expense 44,489 46,227 92,438 137,022 59,823
------------ ------------ ------------ ------------ ------------
Net interest income 35,178 24,289 54,766 51,746 25,381
Provision for loan losses (1,000) (450) (1,450) (44,272)(2) (25,578)(2)
------------ ------------ ------------ ------------ ------------
Net interest income (loss) after
provision for loan losses 34,178 23,839 53,316 7,474 (197)
Noninterest income (loss) 9,062 6,607 14,782 (126,458) (107,149)(3)
Noninterest expense 26,477 16,914 39,407 42,569 22,685
------------ ------------ ------------ ------------ ------------
Income (loss) before provision
(benefit) for income taxes 16,763 13,532 28,691 (161,553) (130,031)
Provision (benefit) for income
taxes 6,077 4,758 10,254 (52,362) (44,075)
------------ ------------ ------------ ------------ ------------
Net income (loss) $ 10,686 $ 8,774 $ 18,437 $ (109,191) $ (85,956)
============ ============ ============ ============ ============
Basic net income (loss) per
share (4) $ 0.52 $ 0.43 $ 0.90 $ (6.52) $ (4.76)
------------ ------------ ============ ============ ============
Weighted average shares
outstanding-basic 20,537,209 20,324,438 20,431,698 16,754,795 18,066,000
============ ============ ============ ============ ============
Diluted net income (loss) per
share (4) $ 0.52 $ 0.42 $ 0.89 $ (6.52) $ (4.76)
============ ============ ============ ============ ============
Weighted average shares
outstanding-diluted 20,537,209 20,649,630 20,607,119 16,754,795 18,066,000
============ ============ ============ ============ ============
Dividends declared per
share(4) $ -- $ -- $ -- $ -- $ --
============ ============ ============ ============ ============
<CAPTION>
Years Ended June 30,
--------------------------------------------------
1997 1996 1995
------------ ------------ ------------
<S> <C> <C> <C>
Operations Data:
Interest and dividend income $ 222,664 $ 236,156 $ 214,558
Interest expense 169,761 187,488 162,590
------------ ------------ ------------
Net interest income 52,903 48,668 51,968
Provision for loan losses (28,428)(2) (5,117) (1,157)
------------ ------------ ------------
Net interest income (loss) after
provision for loan losses 24,475 43,551 50,811
Noninterest income (loss) (17,124)(3) 10,316 16,632
Noninterest expense 49,256 35,427 46,460
------------ ------------ ------------
Income (loss) before provision
(benefit) for income taxes (41,905) (18,440) 20,983
Provision (benefit) for income
taxes (11,860) 4,872 6,568
------------ ------------ ------------
Net income (loss) $ (30,045) $ 13,568 $ 14,415
============ ============ ============
Basic net income (loss) per
share (4) $ (1.95) $ 0.88 $ 0.94
============ ============ ============
Weighted average shares
outstanding-basic 15,400,000 15,400,000 15,400,000
============ ============ ============
Diluted net income (loss) per
share (4) $ (1.95) $ 0.88 $ 0.94
============ ============ ============
Weighted average shares
outstanding-diluted 15,400,000 15,400,000 15,400,000
============ ============ ============
Dividends declared per
share(4) $ 0.03 $ 0.69 $ 1.28
============ ============ ============
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
At or For the Six
At or For the Six Months Ended At or For the Years Ended Months Ended
June 30, December 31, December 31,
------------------------------ --------------------------- ------------
1999 1998 1998 1997 1997
------------ ----------- ---------- ----------- ------------
(unaudited) (unaudited)
<S> <C> <C> <C> <C> <C>
Performance Ratios(5):
Return on assets 1.01% 0.92% 0.93% (4.35)% (3.84)%
Return on common equity 17.52 18.39 17.73 (117.17) (101.45)
Dividend payout ratio(6) -- -- -- -- --
Net interest spread(7) 2.96 2.40 2.57 1.91 2.13
Net interest margin(8) 3.46 2.70 2.91 2.13 2.34
Noninterest expense to
average assets(9) 2.41 1.73 1.90 1.64 0.99
Efficiency ratio(10)(11) 58.24 53.96 54.61 64.46 N/A
Capital Ratios of the Bank(12):
Leverage or tangible capital 8.09 8.09 7.61 6.89 6.89
Core capital 11.37 8.13 7.63 6.98 6.98
Total or risk-based capital 12.64 15.24 13.08 14.14 14.14
Asset Quality Ratios:
Nonperforming assets to total
assets at end of period(1) 0.37 0.11 0.20 0.05 0.05
Nonperforming loans to total
loans at end of period(1) 0.45 0.12 0.26 0.06 0.06
Allowance for loan losses to
total loans at end of period 1.79 2.15 2.00 2.09 2.09
Allowance for loan losses to
nonperforming loans at
end of period(1) 3.93x 17.45x 7.80x 32.72x 32.72x
<CAPTION>
At or For the Years Ended June 30,
-----------------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
Performance Ratios(5):
Return on assets (0.98)% 0.41% 0.43%
Return on common equity (28.77) 10.00 10.59
Dividend payout ratio(6) -- 77.98 137.38
Net interest spread(7) 1.57 1.36 1.32
Net interest margin(8) 1.78 1.52 1.59
Noninterest expense to
average assets(9) 1.56 1.04 1.36
Efficiency ratio(10)(11) 56.14 57.07 72.75
Capital Ratios of the Bank(12):
Leverage or tangible capital 5.17 4.94 4.89
Core capital 5.25 5.04 5.03
Total or risk-based capital 12.34 12.71 13.22
Asset Quality Ratios:
Nonperforming assets to total
assets at end of period(1) 0.48 0.49 0.33
Nonperforming loans to total
loans at end of period(1) 0.38 0.51 0.38
Allowance for loan losses to
total loans at end of period 1.10 0.31 0.56
Allowance for loan losses to
nonperforming loans at
end of period(1) 2.91x 0.60x 1.48x
</TABLE>
12
<PAGE>
- ----------
(1) Nonperforming loans consist of nonaccrual loans and loans delinquent 90
days or more but still accruing interest, and nonperforming assets consist
of nonperforming loans, real estate acquired through foreclosure or
deed-in-lieu thereof and repossessions, net of writedowns and reserves.
(2) Primarily reflects provisions established by management to cover realized
and inherent losses with respect to the Company's portfolio of indirect
automobile receivables which were sold as of December 31, 1997. See
"Prospectus Summary--Our Company--Strategy for Growth."
(3) Primarily reflects losses incurred by the Company relating to the
liquidation or disposition of certain hedging contracts and the
disposition of investment securities and adjustments to reflect market
values. See "Prospectus Summary--Our Company--Strategy for Growth."
(4) Net income (loss) per share and dividends per share are based upon the
weighted average number of shares outstanding during the period.
(5) With the exception of end of period ratios, all ratios are based on
average monthly balances during the periods presented. All ratios are
annualized where appropriate.
(6) The dividend payout ratio represents dividends declared per share divided
by net income per share.
(7) Net interest spread represents the difference between the weighted average
yield on interest-earning assets and the weighted average cost of
interest-bearing liabilities.
(8) Net interest margin represents net interest income as a percent of average
interest-earning assets.
(9) Noninterest expense excludes the amortization of intangibles.
(10) Represents noninterest expense (exclusive of amortization of intangibles)
divided by the aggregate of net interest income before provision for loan
losses and noninterest income (exclusive of gains and losses on sales of
assets).
(11) For the year ended June 30, 1997 and the six months ended December 31,
1996, the efficiency ratio excludes the $10.3 million one-time special
assessment (before applicable tax benefits) to recapitalize the Savings
Association Insurance Fund of the Federal Deposit Insurance Corporation.
(12) The Bank became subject to Office of the Comptroller of the Currency
("OCC") regulatory authority in May 1999. Data presented as of June 30,
1999 is based on OCC regulatory requirements while data as of prior
periods is based on Office of Thrift Supervision ("OTS") regulatory
requirements. In calculating leverage capital, the OCC uses total average
assets while the OTS uses tangible assets. In calculating core capital,
the OCC uses risk-weighted assets while the OTS uses adjusted tangible
assets. As of June 30, 1999, the Company had leverage, core, and total
capital ratios of 4.8%, 6.7%, and 8.0%, respectively.
13
<PAGE>
RISK FACTORS
You should carefully read the following risk factors before you decide
to buy any Trust Preferred Securities. You should also consider the other
information in this prospectus.
Risks Related to an Investment in the Trust Preferred Securities
Payments on the Trust Preferred Securities are entirely dependent on our making
payments on the Junior Subordinated Debentures; the Guarantee covers payments
only if the Trust has cash available.
The Trust's ability to timely pay distributions (including the $25 per
Trust Preferred Security liquidation distribution) is entirely dependent on our
making the related payments on the Junior Subordinated Debentures when due. If
we do not make payments on the Junior Subordinated Debentures, the Trust will
not have sufficient funds to pay distributions or the $25 per Trust Preferred
Security liquidation amount. Because the Guarantee does not cover payments when
the Trust does not have sufficient funds, you will not be able to rely upon the
Guarantee for payment of these amounts. Instead, you may directly sue us or seek
other remedies to collect your pro rata share of payments owed or rely on the
property trustee to enforce the Trust's rights under the Junior Subordinated
Debentures directly against us.
The Trust's ability to make payments on the Trust Preferred Securities depends
on our ability to make payments on the Junior Subordinated Debentures.
The Junior Subordinated Debentures and the Guarantee will be
exclusively our obligations. We are a bank holding company regulated by the
Board of Governors of the Federal Reserve System and substantially all of our
assets are held by our subsidiaries. Our ability to make payments on the Junior
Subordinated Debentures depends primarily on the results of operations of our
subsidiaries and their ability to provide funds to us. Our subsidiaries are
separate and distinct legal entities and have no obligations to pay any amounts
due under the Junior Subordinated Debentures or to make funds available, whether
by dividend, loan or otherwise, for such purpose. In addition, there are various
legal limitations on the extent to which certain of our subsidiaries may extend
credit, pay dividends or otherwise supply funds to, or engage in transactions
with, us or some of our subsidiaries. The Trust will be unable to make payments
to you if we do not receive funds from our subsidiaries which allow us to pay
interest on or principal of the Junior Subordinated Debentures. In addition, our
senior notes, issued in 1997, constitute senior indebtedness under the Indenture
and will be prior in right of payment to our obligations under the Junior
Subordinated Debentures.
Our right to participate in any distribution of the assets of any
subsidiary, including the Bank, upon a subsidiary's liquidation or
reorganization or otherwise, is subject to the prior claims of creditors of that
subsidiary, except to the extent that we may be recognized as a creditor of that
subsidiary. As a consequence, the Junior Subordinated Debentures and the
Guarantee will be effectively subordinated to all existing and future
liabilities of our subsidiaries. As of June 30, 1999, our subsidiaries had total
liabilities (excluding liabilities owed to us) of $2.0 billion. Holders
14
<PAGE>
of the Junior Subordinated Debentures and beneficiaries of the Guarantee should
look only to our assets for payments on the Junior Subordinated Debentures or
under the Guarantee, as the case may be. There is no limit under the Trust
Preferred Securities, the Junior Subordinated Debentures or the Guarantee as to
our subsidiaries' ability to incur additional indebtedness.
Our obligations under the Guarantee and the Junior Subordinated Debentures will
be subordinated in right of payment to our current and future senior and
subordinated indebtedness.
Our obligations under the Guarantee are unsecured and will rank in
priority of payment:
o junior to all of our indebtedness, except for those liabilities made
equal or subordinate to the Guarantee by their terms;
o equal to any senior preferred stock which may be
issued in the future; and
o senior to our capital stock.
This means that we cannot make any payments on the Guarantee if we
default on a payment of any of our other liabilities, except those liabilities
made equal with or subordinate to the Guarantee by their terms. In the event of
our bankruptcy, liquidation or dissolution, our assets would be available to pay
obligations under the Guarantee only after all payments have been made on our
other liabilities, except those liabilities made equal with or subordinate to
the Guarantee by their terms.
Our obligations under the Junior Subordinated Debentures are unsecured
and will rank junior in priority of payment to our current and future senior and
subordinated indebtedness. This means that we cannot make any payments of
principal (including redemption payments) or interest on the Junior Subordinated
Debentures if we default on a payment on any of our senior indebtedness or
subordinated indebtedness. In the event of our bankruptcy, liquidation or
distribution, our assets would be available to pay obligations under the Junior
Subordinated Debentures only after all payments have been made on our senior
indebtedness and our subordinated indebtedness. As of June 30, 1999, the
aggregate amount of our senior indebtedness (comprised of our senior notes
issued in 1997) was $80.0 million. There is no limit under the Trust Preferred
Securities, the Junior Subordinated Debentures or the Guarantee as to our
ability to incur additional indebtedness, including indebtedness that ranks
senior in priority of payment to the Junior Subordinated Debentures and the
Guarantee.
Our ability to defer interest payments has adverse tax consequences for you and
may affect the trading price for the Trust Preferred Securities.
So long as no event of default under the Junior Subordinated Debentures
has occurred and is continuing, we may defer interest payments one or more times
on the Junior Subordinated Debentures for up to 20 consecutive calendar
quarters, but not beyond the maturity date of the Junior Subordinated
Debentures.
15
<PAGE>
If we defer interest payments on the Junior Subordinated Debentures,
the Trust will also defer distributions on the Trust Preferred Securities.
During a deferral period, you will be required to accrue income (in the form of
original issue discount) for United States federal income tax purposes equal to
the interest that accrues on your pro-rata share of the Junior Subordinated
Debentures held by the Trust. As a result, you must include the accrued but
unpaid income in your gross income for United States federal income tax purposes
before you receive cash, even if you are a cash basis taxpayer. You will also
not receive the cash related to any accrued and unpaid interest from the Trust
if you sell the Trust Preferred Securities before the end of any deferral
period. The Trust Preferred Securities may trade at a price that does not fully
reflect the value of accrued but unpaid interest on the Junior Subordinated
Debentures.
During a deferral period, your tax basis in the Trust Preferred
Securities will increase by the amount of accrued but unpaid distributions. If
you sell the Trust Preferred Securities during a deferral period, your increased
tax basis will decrease the amount of any capital gain or increase the amount of
any capital loss that you may have otherwise realized on the sale. A capital
loss, except in certain limited circumstances, cannot be applied to offset
ordinary income. As a result, deferral of distributions could result in ordinary
income, and a related tax liability for the holder, and a capital loss that may
only be used to offset a capital gain.
We do not currently intend to exercise our right to defer interest
payments on the Junior Subordinated Debentures. However, if we exercise our
right in the future, we expect that the market price of the Trust Preferred
Securities would be adversely affected. If you sell the Trust Preferred
Securities during a deferral period, you may not receive the same return on your
investment as someone who continues to hold the Trust Preferred Securities.
We may redeem the Trust Preferred Securities at any time upon the occurrence of
a Special Event.
At any time that a Special Event occurs and continues, we may redeem
all of the Junior Subordinated Debentures. A Special Event means a Tax Event, an
Investment Company Event or a Regulatory Capital Event and is more fully
described under "Description of Trust Preferred Securities--Redemption" and
defined under "Description of Trust Preferred Securities Definitions." If there
is a Special Event and we redeem the Junior Subordinated Debentures, the Trust
must redeem the Trust Preferred Securities within 90 days at a redemption price
equal to the liquidation amount of $25 per Trust Preferred Security, plus
accrued and unpaid distributions. We may exercise this right only if we receive
any required approval by the regulatory agencies which supervise us.
We may shorten the stated maturity of the Junior Subordinated Debentures to
___________, 2004 or redeem some or all of the Junior Subordinated Debentures
on or after , 2004, which will cause the Trust to redeem some or all of
the Trust Preferred Securities.
We may shorten the maturity of the Junior Subordinated Debentures to a
date not earlier than , 2004 or redeem some or all of the Junior
Subordinated Debentures on or after , 2004, which will cause the Trust
Preferred Securities to be redeemed on that date. You should
16
<PAGE>
assume that we will shorten the maturity of the Junior Subordinated Debentures
or exercise our redemption option if we are able to refinance our obligations at
a lower interest rate or if it is otherwise in our interest to redeem the Junior
Subordinated Debentures. If less than all of the Junior Subordinated Debentures
are redeemed, the Trust must redeem an amount of Trust Preferred Securities
having an aggregate liquidation value equal to the principal amount of the
Junior Subordinated Debentures that have been redeemed. We can exercise this
right only if we receive any required approval by the regulatory agencies which
supervise us.
Distribution of the Junior Subordinated Debentures could adversely affect the
market price for the Trust Preferred Securities and have tax consequences for
you.
We may dissolve the Trust at any time before the maturity of the Junior
Subordinated Debentures on , 2029. As a result, and subject to the terms of
the Trust Agreement, the Trustees may distribute the Junior Subordinated
Debentures to the holders of Trust Preferred Securities. Although we have agreed
to use our best efforts to list the Junior Subordinated Debentures on a national
securities exchange or comparable automated quotation system if this occurs,
there can be no assurance that the Junior Subordinated Debentures will be
approved for listing or that a trading market will exist for the Junior
Subordinated Debentures.
We cannot predict the market prices for the Junior Subordinated
Debentures that may be distributed. Accordingly, the Junior Subordinated
Debentures that you receive upon a distribution, or the Trust Preferred
Securities you hold pending such a distribution, may trade at a price that is
less than the price you paid to purchase the Trust Preferred Securities. Because
you may receive Junior Subordinated Debentures, you must also make an investment
decision with regard to the Junior Subordinated Debentures. You should carefully
review all the information regarding the Junior Subordinated Debentures
contained in this prospectus.
Under current United States federal income tax laws, a distribution of
the Junior Subordinated Debentures to you upon the dissolution of the Trust
would not be a taxable event to you. Nevertheless, if the Trust is classified
for United States federal income tax purposes as an association taxable as a
corporation at the time it is dissolved, the distribution of the Junior
Subordinated Debentures would be a taxable event to you. In addition, if there
is a change in law, a distribution of the Junior Subordinated Debentures upon
the dissolution of the Trust could be a taxable event to you.
The holders of the Trust Preferred Securities and the Junior Subordinated
Debentures are not protected by covenants in the Indenture or the Trust
Agreement.
Neither the Indenture, which sets forth the terms of the Junior
Subordinated Debentures, nor the Trust Agreement, which sets forth the terms of
the Trust Securities, protects holders of Junior Subordinated Debentures, or
Trust Preferred Securities, respectively, in the event we experience significant
adverse changes in our financial condition or results of operations. In
addition, neither the Indenture nor the Trust Agreement limits our ability or
the ability of our subsidiaries to incur additional indebtedness, including
indebtedness that ranks senior to the Junior Subordinated Debentures and the
Guarantee. Therefore, the provisions of these governing instruments should not
17
<PAGE>
be considered a significant factor in evaluating whether we will be able to
comply with our obligations under the Junior Subordinated Debentures or the
Guarantee.
You will have limited voting rights.
As a holder of Trust Preferred Securities, you will have limited voting
rights. Your voting rights will relate only to the modification of the Trust
Preferred Securities and the exercise of the Trust's rights as holder of the
Junior Subordinated Debentures. In general, only we can replace or remove any of
the Trustees. The property trustee, the administrative trustees and we may amend
the Trust Agreement without your consent to ensure that the Trust will be
classified for United States federal income tax purposes as a grantor trust. You
also will have no voting rights on matters submitted to a vote of our
stockholders. However, if an event of default under the Trust Agreement occurs
and is continuing, the holders of at least a majority in aggregate liquidation
amount of the Trust Preferred Securities may replace the property trustee and
the Delaware trustee.
Potential tax law changes could require us to redeem the Trust Preferred
Securities.
From time to time, certain tax law changes have been proposed that
would deny interest deductions to corporate issuers of debt instruments with
terms that include certain of the terms of the Junior Subordinated Debentures.
In addition, the Internal Revenue Service ("IRS") has challenged taxpayers'
treatment as indebtedness of securities issued with characteristics similar to
the Junior Subordinated Debentures. To date, such tax law change proposals have
not been enacted and the only known challenge that has advanced as far as
litigation was settled short of trial, with resolution favorable to the
taxpayer's position. However, if any similar tax law change were enacted or any
such challenge by the IRS were upheld, such event could give rise to a Tax Event
(as defined under "Description of Trust Preferred Securities--Redemption") which
could result in an early redemption of the Trust Preferred Securities.
There may be no active or liquid market for the Trust Preferred Securities.
Before this offering, there has been no market for the Trust Preferred
Securities. We plan to list the Trust Preferred Securities on the Nasdaq
National Market. We cannot predict whether an active and liquid trading market
for the Trust Preferred Securities will develop or whether a continued listing
of the Trust Preferred Securities will be available on the Nasdaq National
Market. Although the underwriters (as defined under "Underwriting") have
informed the Trust and us that they intend to make a market in the Trust
Preferred Securities, they are not obligated to do so and any such market-making
activity may be terminated at any time without notice. Future trading prices of
the Trust Preferred Securities will depend on many factors including, among
other things, prevailing interest rates, our operating results and financial
condition, and the market for similar securities.
18
<PAGE>
Risks Relating to Our Company
Our exposure to credit risk is increasing as a consequence of the increase in
our commercial banking activities.
We have significantly shifted our emphasis from lending on
single-family residential properties to commercial real estate lending
(including loans secured by multi-family residential properties) and lending for
commercial business and consumer purposes. Commercial real estate loans,
commercial business loans and consumer loans amounted to $754.4 million, $338.2
million and $129.4 million at June 30, 1999, respectively, compared to $694.8
million, $232.9 million and $101.7 million at December 31, 1998, respectively,
and $646.5 million, zero and $38.7 million at December 31, 1997, respectively.
As we increase our focus on commercial banking and increase our net interest
margin, a gradual increase in our consolidated credit risk is likely to occur.
We generally charge higher interest rates on commercial and consumer loans than
we do on single-family residential mortgage loans, because we expect higher loan
losses. Generally, commercial real estate loans are considered to be riskier
than single-family residential loans because they have larger balances to a
single borrower or group of related borrowers. In addition, the borrower's
ability to repay a commercial loan depends on the successful operation of the
business or the property securing the loan. Consumer lending collections are
dependent on the borrower's continuing financial stability, and are more likely
to be adversely affected by job loss, divorce, illness and personal bankruptcy.
If we experience loan losses that are higher than our allowance for loan losses,
our profits and financial condition could be adversely affected.
Changes in interest rates could negatively impact our financial condition and
results of operations.
Our ability to make a profit, like that of most financial institutions,
substantially depends upon our net interest income, which is the difference
between the interest income we earn on our interest-earning assets (such as
loans and investment securities) and the interest expense we pay on our
interest-bearing liabilities (such as deposits and borrowings). Certain assets
and liabilities, however, may react in different degrees to changes in market
interest rates. Further, interest rates on some types of assets and liabilities
may fluctuate prior to changes in broader market interest rates, while rates on
other types may lag behind. Additionally, some of our assets, such as
adjustable-rate mortgages, have features, including payment and rate caps, which
restrict changes in their interest rates.
Factors such as inflation, recession, unemployment, money supply,
international disorders, instability in domestic and foreign financial markets,
and other factors beyond our control may affect interest rates. Changes in
market interest rates will also affect the level of voluntary prepayments on our
loans and the receipt of payments on our mortgage-backed securities resulting in
the receipt of proceeds that may be reinvested at a lower rate than the loan or
mortgage-backed security being prepaid. Although we pursue an asset-liability
management strategy designed to control our risk from changes in market interest
rates, changes in interest rates can still have a material adverse effect on our
profitability.
19
<PAGE>
Our allowance for loan losses may be inadequate to cover losses actually
incurred, which could affect our ability to make payments on the Junior
Subordinated Debentures.
We maintain an allowance for loan losses in an amount we believe is
sufficient to provide for known and inherent risks in our loan portfolio. If the
Bank incurs actual losses on its loans in excess of its allowance for loan
losses, it may have insufficient income to extend credit, pay dividends or
otherwise supply funds to us. If this occurs, we may be unable to make payments
of interest and principal on the Junior Subordinated Debentures, and the Trust
may be unable to make payments of interest and principal to you.
A significant amount of our mortgage loans are concentrated in Oklahoma, and
adverse conditions in Oklahoma could negatively impact our operations.
Although we previously purchased and currently hold in our loan
portfolio a substantial amount of loans secured by properties located outside of
Oklahoma, more recently, substantially all of the loans we originate are secured
by properties located in or are made to businesses which operate in Oklahoma.
Because of the current concentration of our loan origination activities in
Oklahoma, in the event of adverse economic conditions in Oklahoma, we would
likely experience higher rates of loss and delinquency on our mortgage loans
than if our loans were more geographically diversified. Additionally, our
mortgage loans may be subject to a greater risk of default than other comparable
mortgage loans in the event of adverse economic, political or business
developments or natural hazards that may affect Oklahoma and the ability of
property owners in Oklahoma to make payments of principal and interest on the
underlying mortgages, which could have an adverse effect on our results of
operations or financial condition.
We have outstanding significant litigation with the FDIC and the former
stockholders of our Company.
We and the Bank are involved in two significant legal proceedings. The
first, between the Bank and the Federal Deposit Insurance Corporation ("FDIC"),
concerns claims and liabilities arising out of an Assistance Agreement which was
entered into by the Bank in conjunction with its acquisition of a predecessor
institution during 1989 (the "FDIC Case"). The second, between us and the two
individuals who were formerly our sole stockholders (the "Selling
Stockholders"), concerns certain disputes and claims which have arisen with
regard to the terms and conditions of the Redemption Agreement we entered into
with them in September 1997 in connection with our redemption of their shares of
our common stock (the "Redemption Agreement Case").
FDIC Case. In the FDIC Case, the Bank in 1996 filed a lawsuit against
the United States in which it asserted that the United States had breached the
terms of the Assistance Agreement and other related agreements by, among other
things, changing certain federal income tax laws that had provided financial
assistance and incentives to the Bank in connection with the Assistance
Agreement (and possibly certain related agreements). In the lawsuit, the Bank
seeks to recover for the loss of these tax benefits and for certain other claims
(the "FDIC Claim").
Under the Assistance Agreement, the FDIC is entitled to receive
payments from the Bank for certain portions of tax benefits attributable to the
acquired net operating loss carry forwards and
20
<PAGE>
other tax benefits which were realized by the Bank from certain items for which
assistance was provided to the Bank under the Assistance Agreement. The FDIC has
filed a counterclaim against the Bank in the FDIC Case (the "FDIC Counterclaim")
claiming that the Bank owes the FDIC a substantial amount of money with regard
to the tax benefits realized by the Bank for which is has failed to make payment
to the FDIC pursuant to the terms of the Assistance Agreement (the "Tax Benefits
Payment"). Our management, after consultation with legal counsel and based on
available proceedings to date, has determined that the Bank will have some
significant liability to the FDIC with respect to the FDIC Counterclaim. At
December 31, 1998, we estimated this liability to be approximately $13 million,
which has been reserved and is included in other liabilities in our Consolidated
Statements of Financial Condition.
We believe that as of December 31, 1998, the FDIC's estimate of this
liability was approximately $23.0 million. Pursuant to the Redemption Agreement,
the Selling Stockholders have agreed to indemnify us with respect to the
Assistance Agreement to the extent we are found to be liable to the FDIC on the
FDIC Counterclaim for the Tax Benefits Payment in an amount in excess of $13
million. We deposited $10 million of the purchase price to be paid to the
Selling Stockholders for the redemption of their stock into an escrow account to
be available for such payment by the Selling Stockholders of the FDIC
Counterclaim, if necessary.
Since the Selling Stockholders could have liability on the FDIC
Counterclaim for the Tax Benefits Payment, the Redemption Agreement requires
that all actions taken by us with regard to the litigation of the FDIC Case be
consented to by the Selling Stockholders and that any settlement of the FDIC
Case and/or of the FDIC Counterclaim be mutually agreed to by us and the Selling
Stockholders. Because of the ongoing litigation between us and the Selling
Stockholders with regard to the Redemption Agreement and certain positions which
have been taken by the Selling Stockholders concerning the resolution of the
FDIC Counterclaim, this requirement for mutual consent has made it unfeasible
for a settlement of the FDIC Case to be obtained, to date.
Redemption Agreement Case. We filed a lawsuit against the Selling
Stockholders pertaining to certain disputes and issues which have arisen under
the Redemption Agreement. Initially, the lawsuit was filed by us in order to
collect amounts which the Selling Stockholders owe to us pursuant to the
Redemption Agreement with regard to excess losses experienced by us in the
liquidation of our hedging contracts which the Selling Stockholders are required
to pay for under the Redemption Agreement. Subsequently, we asked the court to
appoint an arbitrator to resolve disagreements between the Selling Stockholders
and us as to our final closing date balance sheet, which is needed in order to
be able to calculate certain purchase price adjustments under the Redemption
Agreement.
The Selling Stockholders and we have been unable to agree on the
closing date balance sheet prepared by us and, in accordance with the procedures
set forth in the Redemption Agreement, those disagreements were referred to
binding arbitration before an independent certified public accountant who was
ultimately designated for that purpose by the judge presiding over the
Redemption Agreement Case. The arbitrator rendered his decision to the court and
the parties in September 1998. If, upon final determination by the court, the
arbitrator's determination is upheld, we would be obligated to pay an amount of
less than $400,000 to the Selling Stockholders as additional purchase price
under the Redemption Agreement. However, because of
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<PAGE>
various other disputes we have with the Selling Shareholders under the
Redemption Agreement, we have sought to amend our complaint in the Redemption
Agreement Case to, among other things, request the court to only make the final
determination of this issue after all of the interrelated disputes under the
Redemption Agreement are fully resolved. As of this date, the judge has not
ruled upon our motions or the Selling Stockholder's responding motion for
partial summary judgement. We can provide no assurance as to the outcome of
either lawsuit.
Competition with other financial institutions could adversely affect our
profitability.
We face substantial competition in originating loans and in attracting
deposits. This competition in originating loans comes principally from other
banks, other savings institutions, mortgage banking companies, consumer finance
companies, insurance companies and other institutional lenders and purchasers of
loans. In attracting deposits, we compete with insured depository institutions
such as savings institutions, credit unions and banks, as well as institutions
offering uninsured investment alternatives including money market funds. These
competitors may offer higher interest rates than we do, which could result in
either our attracting fewer deposits or in our being required to increase our
rates in order to attract deposits. Increased deposit competition could increase
our cost of funds and adversely affect our ability to generate the funds
necessary for our lending operations, thereby adversely affecting our results of
operations. A number of institutions with which we compete have significantly
greater assets, capital and other resources. In addition, many of our
competitors are not subject to the same extensive federal regulation that
governs our business. As a result, many of our competitors have advantages over
us in conducting certain businesses and providing certain services.
If our computer systems do not properly work on January 1, 2000, our business
operations will be disrupted.
The Year 2000 issue is the result of computer programs being able to
use only two digits rather than four to define the applicable year. Thus,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in system failures or miscalculations,
causing disruptions of operations, including, among others, a temporary
inability to process deposit and loan transactions, effect financings or engage
in normal business activities. We have established an enterprise-wide program to
prepare our computer systems and applications for the Year 2000 and we are
utilizing both internal and external resources to identify, correct and test our
systems for Year 2000 compliance. We had substantially completed our
reprogramming as of December 31, 1998 and testing efforts were completed June
30, 1999. Further validation through testing will be continued throughout
calendar year 1999.
We do not rely on in-house data processing or computer programming for
our main-frame banking applications. Our primary data processing vendor, AllTel,
Inc., has a history of producing high quality banking applications and has
assured us that its core applications will be capable of handling the Year 2000
issue. We continued to test these applications in their own environment to
validate these assurances.
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<PAGE>
Because third party failures could have a material impact on our
ability to conduct business, questionnaires have been sent to business-critical
vendors and large commercial borrowers to certify that plans are being developed
to address the Year 2000 issue. We are currently assessing the returned
questionnaires which we are categorizing based upon readiness for the Year 2000
issues and prioritizing based upon significance to our business. To the extent
that business-critical vendors do not provide us with satisfactory evidence of
their readiness to handle Year 2000 issues, contingency plans have been
developed. Furthermore, information has been provided to large commercial
borrowers regarding the potential business risks associated with the Year 2000
issue. We intend to make every reasonable effort to assess the Year 2000
readiness of these critical business partners and to create action plans to
address the identified risks.
We have completed an assessment of the Year 2000 compliance status of
all of our information technology and non-information equipment and will
continue to address the Year 2000 compliance of such equipment.
Testing and remediation of all of our systems and applications is
expected to incrementally cost approximately $500,000 in 1999, excluding cost of
our employees involved in Year 2000 compliance activities. All estimated costs
have been budgeted and are expected to be funded by cash flows from operations.
We do not believe the costs and efforts related to the Year 2000
compliance project will be material to our financial position or results of
operations. However, we cannot give assurances that we will discover and
remediate all Year 2000 problems or that our third-party vendors and customers
will have satisfactorily resolved all of their Year 2000 issues, and the failure
to do so could have a material adverse effect on our results of operations and
financial condition.
Changes in statutes and regulations could adversely affect us.
We are subject to extensive regulation and supervision by federal and
state authorities. Such supervision and regulation establish a comprehensive
framework of activities in which an institution may engage, and are intended
primarily for the protection of the federal deposit insurance fund and the
Bank's depositors. This regulatory structure also provides our regulators with
significant discretion in the performance of their supervisory and enforcement
duties. Any change in such regulation, whether by our regulators or as a result
of legislation subsequently enacted by the Congress of the United States, could
have a substantial impact on the Bank and its operations. Additional legislation
and regulations may be enacted or adopted in the future that could significantly
affect our powers, authority and operations, which could have a material adverse
effect on our operations.
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RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods indicated.
<TABLE>
<CAPTION>
Six Months Years Ended December 31, Six Months Ended
Ended June 30, ----------------------------- December 31,
1999 1998 1997 1997
---------------- ---------- ---------- ------------------
<S> <C> <C> <C> <C>
Ratios of earnings to fixed charges:
Including interest on deposits........ 1.38x 1.31x N/A N/A
Excluding interest on deposits........ 5.79x 6.85x N/A N/A
Dollar amount of excess (deficiency)
of earnings to fixed charges:
Including interest on deposits........ $16,763 $ 28,691 $(161,553) $(130,031)
======= ======== ========= =========
Excluding interest on deposits........ $50,676 $103,434 $ (79,009) $ (89,359)
======= ======== ========= =========
<CAPTION>
Years Ended June 30,
------------------------------------------------------------
1997 1996 1995 1994
------------ ---------- ----------- ----------
<S> <C> <C> <C> <C>
Ratios of earnings to fixed charges:
Including interest on deposits........ N/A 1.10x 1.13x 1.71x
Excluding interest on deposits........... 1.48x 1.94x 1.95x 3.63x
Dollar amount of excess (deficiency)
of earnings to fixed charges:
Including interest on deposits........ $(41,905) $18,440 $20,983 $ 73,710
======== ======= ======= ========
Excluding interest on deposits........ $ 41,186 $99,613 $89,218 $129,057
======== ======= ======= ========
</TABLE>
For purposes of computing the ratios of earnings to fixed charges,
earnings represent income (loss) before cumulative effect of change in
accounting principles and income taxes plus fixed charges. Fixed charges,
excluding interest on deposits, includes gross interest expense less interest on
deposits. Fixed charges, including interest on deposits, includes all gross
interest expense.
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<PAGE>
USE OF PROCEEDS
All of the proceeds from the sale of the Trust Preferred Securities
together with proceeds of the Common Securities will be invested by the Trust in
the Junior Subordinated Debentures to be issued by us. We intend to use the
estimated net proceeds from the sale of the Junior Subordinated Debentures of
approximately $ million ($ million if the underwriters' over-allotment
option is exercised in full) for general corporate purposes, including capital
contributions to the Bank to support its growth strategy and for working
capital. We may also use a portion of the net proceeds for acquisitions by
either us or the Bank, although neither we nor the Bank presently have any
understandings that have not been announced with respect to any such
acquisition. Initially, the net proceeds may be used to make short-term
investments.
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<PAGE>
CAPITALIZATION
The following table sets forth our unaudited consolidated
capitalization as of June 30, 1999 and such capitalization as adjusted, to
reflect the sale of the Trust Preferred Securities, the issuance of the Junior
Subordinated Debentures and the application of the estimated net proceeds as
described in "Use of Proceeds." You should also read the more detailed
information included or incorporated by reference in this prospectus, including
the financial statements and related notes.
<TABLE>
<CAPTION>
June 30, 1999
-------------------------------
Actual As Adjusted
------------ ---------------
(Dollars in thousands)
<S> <C> <C>
Total deposits ........................................................ $1,608,625 $1,608,625
Borrowings:
Advances from the Federal Home Loan Bank of Topeka.................. 350,518 350,518
Senior Notes(1) ..................................................... 80,000 80,000
Other liabilities.................................................... 39,426 39,426
---------- ----------
Total borrowings.................................................. 469,944 469,944
---------- ----------
Company-obligated mandatorily redeemable trust preferred
securities of subsidiary trust holding
solely junior subordinated debentures of the
Company (2).......................................................... --
---------- ----------
Stockholders' equity:
Preferred stock, $0.01 par value, 5,000,000
shares authorized; none outstanding............................. -- --
Common stock, par value $0.01, 25,000,000 shares authorized,
20,537,269 shares issued and 20,537,209 shares outstanding...... 205 205
Additional paid-in capital........................................... 206,758 206,758
Retained earnings ................................................... 60,883 60,883
Treasury stock, 60 shares, at cost .................................. (149,436) (149,436)
Accumulated other comprehensive income .............................. 7,387 7,387
---------- ----------
Total stockholders' equity........................................... 125,797 125,797
---------- ----------
Total capitalization.............................................. $2,204,366 $
========== ==========
</TABLE>
- ----------
(1) Subsequent to June 30, 1999, we repurchased and retired $3,250,000 of
senior notes.
(2) Reflects the issuance of Trust Preferred Securities at their issue price
of $25 per Trust Preferred Security. The sole assets of the Trust, which
is our subsidiary, will be the Junior Subordinated Debentures which will
mature on , 2029. We will own all of the Common Securities
issued by the Trust.
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<PAGE>
LOCAL FINANCIAL CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law upon
the filing of a certificate of trust with the Delaware Secretary of State. The
Trust will be governed by the terms of the Trust Agreement which will be
qualified as an indenture under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"). 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 other activities that are incidental or necessary to these purposes.
The Junior Subordinated Debentures will be the sole assets of the Trust, and,
accordingly, payments under the Junior Subordinated Debentures will be the sole
revenues of the Trust.
All of the Common Securities will be owned by us. We will acquire
Common Securities with a $25 Liquidation Amount, equal to at least 3% of the
total capital of the Trust. While the Common Securities will have terms equal in
priority of payment with the Trust Preferred Securities, if we default on the
Junior Subordinated Debentures, then cash distributions and liquidation,
redemption and other amounts payable on the Common Securities will be
subordinated to the Trust Preferred Securities in priority of payment.
The Trust has a term of approximately 31 years, but may be dissolved
earlier as provided in the Trust Agreement. The Trust's business and affairs are
conducted by the Issuer Trustees, who are appointed by us as holder of the
Common Securities. The trustees for the Trust will be The Bank of New York, as
the Property Trustee (the "Property Trustee"), The Bank of New York (Delaware),
as the Delaware Trustee (the "Delaware Trustee") and three Administrative
Trustees who are our officers (each, an "Administrative Trustee" and
collectively, the "Administrative Trustees"). The Property Trustee, the Delaware
Trustee and the Administrative Trustees are collectively referred to as the
"Issuer Trustees" in this prospectus. The Property Trustee will act as sole
indenture trustee under the Trust Agreement. The Bank of New York will also act
as trustee under the Guarantee and the Indenture. The duties and obligations of
each Issuer Trustee are governed by the Trust Agreement. 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 not less than a
majority in liquidation amount of the Trust Preferred Securities, will be
entitled to appoint, remove or replace the Property Trustee and/or the Delaware
Trustee. In no event will the holders of the Trust Preferred Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, whose
voting rights will be vested exclusively in the holder of the Common Securities.
We will pay all fees, expenses, debts and obligations related to the
Trust and the offering of the Trust Preferred Securities and will pay, directly
or indirectly, all ongoing costs and expenses of the Trust, except the Trust's
obligations with respect to the Trust Preferred Securities and the Common
Securities.
For financial reporting purposes, the Trust will be treated as our
subsidiary and, accordingly, the accounts of the Trust will be included in our
Consolidated Financial Statements. We will present the Trust Preferred
Securities as a separate line item in our consolidated Statement of Financial
Condition entitled "Company-Obligated Mandatorily Redeemable Trust Preferred
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<PAGE>
Securities of Subsidiary Trust Holding Solely Junior Subordinated Debentures of
the Company" and we will include appropriate disclosures about the Trust
Preferred Securities, the Guarantee and the Junior Subordinated Debentures in
the notes to our Consolidated Financial Statements. For financial reporting
purposes, we will record distributions payable on the Trust Preferred Securities
as interest expense in our Consolidated Statements of Operations.
DESCRIPTION OF TRUST PREFERRED SECURITIES
This summary of certain provisions of the Trust Preferred 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, and the Trust Indenture Act. The form of the Trust Agreement has been
filed as an exhibit to the Registration Statement of which this prospectus forms
a part. The Trust Agreement will be qualified under the Trust Indenture Act. The
Property Trustee will act as the indenture trustee (the "Debenture Trustee") for
purposes of complying with the Trust Indenture Act.
General
The Issuer Trustees will issue the Trust Preferred Securities on behalf
of the Trust pursuant to the terms of the Trust Agreement. We will own all of
the Common Securities. The Trust Preferred Securities will represent preferred
undivided beneficial interests in the assets of the Trust and the holders of the
Trust Preferred Securities will be entitled to a preference in certain
circumstances with respect to Distributions (as defined below) and amounts
payable on redemption or liquidation over the Common Securities, as well as
other benefits as described in the Trust Agreement. The Trust Agreement
prohibits the issuance by the Trust of any securities other than the Trust
Securities or the incurrence of any indebtedness by the Trust.
The Trust Preferred Securities will rank equal in priority of payment,
and payments will be made thereon pro rata with the Common Securities except
under certain circumstances. See "--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 Guarantee
will not guarantee payment of Distributions or amounts payable on redemption of
the Trust Preferred Securities or liquidation of the Trust when the Trust does
not have funds on hand legally available for such payments.
Distributions
Payment of Distributions. Distributions on each Trust Preferred
Security will be cumulative, will accrue from , 1999 and will be payable
quarterly in arrears on March 31, June 30, September 30 and December 31 of each
year, commencing , 1999, at the annual rate of % of the stated
Liquidation Amount of $25 per Trust Preferred Security ("Distributions"). The
initial Distribution will equal $ for each Trust Preferred Security.
Subsequent Distributions will equal $ for each Trust Preferred Security.
Distributions in arrears for more than one quarter will (to the extent permitted
by law) accrue interest at the rate per
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<PAGE>
annum of ____% thereof compounded quarterly. Distributions shall be made to the
holders of the Trust Preferred Securities on the relevant record date which will
be the fifteenth day of the month in which the relevant Distribution Date (as
defined below) occurs. The amount of Distributions payable for any period will
be computed on the basis of a 360-day year of twelve 30-day months and, for any
period of less than a full calendar quarter, on the basis of the actual number
of days elapsed in the quarter. In the event that any date on which
Distributions are payable on the Trust Preferred Securities is not a Business
Day (as defined below), payment of the Distribution payable 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 the next succeeding
Business Day falls in the next succeeding calendar year, the 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 Oklahoma City, Oklahoma are
authorized or required by law or executive order to close.
Deferral Period. So long as no Debenture Event of Default shall have
occurred and be continuing, we will have the right under the Indenture to defer
the payment of interest on the Junior Subordinated Debentures at any time or
from time to time for a period not exceeding 20 consecutive calendar quarters
with respect to each deferral period (each, a "Deferral Period"), provided that
no Deferral Period shall end on a date other than an Interest Payment Date (as
defined herein) or extend beyond , 2029, which is the "Stated Maturity
Date." Upon any such election, quarterly Distributions on the Trust Preferred
Securities will be deferred by the Trust during such Deferral Period.
Distributions to which holders of the Trust Preferred Securities are entitled
during any such Deferral Period will accumulate additional Distributions thereon
at the rate per annum of % thereof, compounded quarterly from the relevant
Distribution Date. The term "Distributions," as used herein, shall include any
such additional Distributions.
Prior to the termination of any such Deferral Period, we may further
extend such Deferral Period, provided that such extension will only be permitted
under the Trust Agreement to the extent that such Deferral Period, together with
all other extensions occurring both before and after such extension, does not
exceed 20 consecutive calendar quarters, end on a date other than an Interest
Payment Date or extend beyond the Stated Maturity Date. Upon the termination of
any such Deferral Period and the payment of all amounts then due on any Interest
Payment Date, we may elect to begin a new Deferral Period, subject to the above
requirements. No interest shall be due and payable during a Deferral Period,
except at the end of the period. If Distributions are deferred, the deferred
Distributions and accrued interest will be paid to holders of the Trust
Preferred Securities as they appear on the books and records of the Trust on the
record date for Distributions due at the end of the Deferral Period. We must
give the Property Trustee, the Administrative Trustees and the Debenture Trustee
notice of our election of any such Deferral Period (or an extension thereof) at
least five Business Days prior to the earlier of (i) the date the Distributions
on the Trust Preferred Securities would have been payable except for the
election to begin such Deferral Period and (ii) the date the Administrative
Trustees are required to give notice to any securities exchange or automated
quotation system or to holders of such Trust Preferred Securities of the record
date or the date such Distributions are payable, but in any event not less than
five Business Days prior to such
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<PAGE>
record date. There is no limitation on the number of times that we may elect to
begin a Deferral Period.
During any such Deferral Period, we may not
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to,
any of our capital stock;
o make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any of our debt securities (including
any other debentures ("Other Debentures")) that rank equal with or
junior in right of payment to the Junior Subordinated Debentures; or
o make any guarantee payments with respect to any guarantee made by us
of the debt securities of any of our subsidiaries of (including
other guarantees) if such guarantee ranks equal with or junior in
right of payment to the Junior Subordinated Debentures.
However, we will not violate the first bullet point above if we
o declare or pay dividends or make distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of,
our common stock;
o declare a dividend in connection with the implementation of a
stockholders' rights plan, or issue stock under any such plan in the
future, or redeem or repurchase of any such rights pursuant to any
such plan;
o make payments under the Guarantee;
o purchase any fractional shares as a result of a reclassification of
our capital stock;
o purchase any fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of such capital
stock or the security being converted or exchanged therefor; or
o purchase common stock as a result of the issuance of common stock or
rights under any of our benefit plans for directors, officers or
employees or any of our dividend reinvestment plans.
We do not currently intend to exercise our option to defer payments of
interest on the Junior Subordinated Debentures.
Source of Distribution. The Trust's funds available for distribution to
holders of the Trust Preferred Securities will be limited to payments under the
Junior Subordinated Debentures. If we do not make interest payments on the
Junior Subordinated Debentures, the Property Trustee will
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<PAGE>
not have funds available to pay Distributions on the Trust Preferred 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
us on a limited basis.
Redemption
Mandatory Redemption of the Trust Preferred Securities. Upon the
repayment or redemption at any time, in whole or in part, of any Junior
Subordinated Debentures, the proceeds from such repayment or redemption will 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 a redemption price equal to $25
per Trust Preferred Security plus any accrued and unpaid Distributions thereon
to the Redemption Date. If less than all of the Junior Subordinated Debentures
are to be prepaid on a Redemption Date, then the proceeds of such prepayment
will be allocated pro rata to the Trust Securities.
Optional Redemption of the Junior Subordinated Debentures. On or after
, 2004, we will have the right to redeem the Junior Subordinated Debentures in
whole at any time or in part from time to time at a redemption price equal to
the accrued and unpaid interest on the Junior Subordinated Debentures so
redeemed to the date fixed for redemption, plus ___% of the principal amount
thereof declining ratably each year to 100% of the principal amount thereof at
any time on or after _________ __, 2009. We would redeem the Junior Subordinated
Debentures upon not less than 30 nor more than 60 days written notice, in each
case subject to receipt of prior approval if it is then required under
applicable regulatory requirements. If we redeem the Junior Subordinated
Debentures, the Trust Securities will be redeemed as described in the preceding
paragraph.
Special Event or Distribution of Junior Subordinated Debentures. If a
Special Event (as defined below) occurs and is continuing, we will have the
right upon not less than 30 nor more than 60 days written notice to redeem the
Junior Subordinated Debentures in whole (but not in part) and thereby cause a
mandatory redemption of the Trust Securities in whole (but not in part) at the
redemption price within 90 days following the occurrence of such Special Event,
in each case subject to receipt of prior approval if it is then required under
applicable regulatory requirements. If a Special Event has occurred and is
continuing and we do not elect to redeem the Junior Subordinated Debentures (and
thereby cause a mandatory redemption of the Trust Securities) or to liquidate
the Trust and cause the Junior Subordinated Debentures to be distributed to
holders of the Trust Securities, the Trust Securities will remain outstanding
and Additional Sums (as defined below) may be payable on the Junior Subordinated
Debentures.
Definitions. The terms described in the preceding paragraph have the
following meanings:
"Additional Sums" means the additional amounts as may be necessary to
be paid by us with respect to the Junior Subordinated Debentures in order that
the amount of Distributions then due and payable by the Trust on the outstanding
Trust Securities will not be reduced as a result of any additional taxes, duties
and other governmental charges to which the Trust has become subject.
An "Investment Company Event" means the receipt by us of an opinion of
counsel experienced in such matters to the effect that, as a result of any
change in law or regulation or a
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<PAGE>
change in interpretation or application of law or regulation by any legislative
body, court, governmental agency or regulatory authority, there is more than an
insubstantial risk that the Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940 (the "Investment Company Act"), which change becomes effective on or after
the original issuance of the Trust Preferred Securities.
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount equal to that portion
of the principal amount of Junior Subordinated Debentures to be
contemporaneously redeemed in accordance with the Indenture, allocated to the
Common Securities and to the Trust Preferred Securities based upon the relative
Liquidation Amounts of such classes and the proceeds of which will be used to
pay the redemption price of such Trust Securities, and (ii) with respect to a
distribution of Junior Subordinated Debentures to holders of Trust Securities in
connection with a dissolution or liquidation of the Trust, Junior Subordinated
Debentures having a principal amount equal to the Liquidation Amount of the
Trust Securities of the holders to whom such Junior Subordinated Debentures are
distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
A "Regulatory Capital Event" means that we shall have received an
opinion of independent bank regulatory counsel experienced in such matters to
the effect that, as a result of (a) any amendment to, or change (including any
announced prospective change) in, the laws or any regulations of the United
States or any rules, guidelines or policies of applicable regulatory agencies or
(b) 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 the Trust
Agreement, there is more than an insubstantial risk that the Trust Preferred
Securities do not constitute, or within 90 days of the date thereof, will not
constitute, Tier 1 Capital (or its then equivalent) for purposes of the capital
adequacy guidelines of the Board of Governors 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 us. The
distribution of the Junior Subordinated Debentures in connection with the
termination of the Trust by us will not in and of itself constitute a Regulatory
Capital Event.
A "Special Event" means a Tax Event, an Investment Company Event or a
Regulatory Capital Event, as the case may be.
A "Tax Event" means the receipt by us 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 of the United States or of any political subdivision or
taxing authority, 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 the date of the Trust Agreement, there is more than an insubstantial
risk that (i) the Trust is, or will be within 90 days of the date of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Debentures, (ii) interest payable
by us on the Junior
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Subordinated Debentures is not, or within 90 days of the date of such opinion
will not be, deductible by us, 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 minor amount of other taxes, duties or
other governmental charges.
Distribution of Junior Subordinated Debentures
We will have the right at any time to dissolve the Trust and, after
satisfaction of liabilities to creditors of the Trust as required by applicable
law, to cause the Junior Subordinated Debentures to be distributed to the
holders of the Trust Securities in liquidation of the Trust. This right is
subject to (i) our having received an opinion of counsel to the effect that such
distribution will not be a taxable event to holders of Trust Preferred
Securities and (ii) prior approval by the applicable regulatory authorities if
it is then required under applicable regulatory requirements.
After the 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) the Depository Trust Company ("DTC" or
"Depositary") or its nominee will receive, in respect of each registered global
certificate, if any, representing Trust Securities 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 with an interest rate indentical to
the distribution rate of, and accrued and unpaid interest 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 we will issue to such holder, and the Debenture Trustee
will authenticate, a certificate representing such Junior Subordinated
Debentures.
We can give no assurance as to the market prices for the Trust
Preferred 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 Trust Preferred
Securities that you may purchase, or the Junior Subordinated Debentures that you
may receive on dissolution and liquidation of the Trust, may trade at a discount
to the price that you paid to purchase the Trust Preferred Securities.
If the Junior Subordinated Debentures are distributed to the holders of
Trust Preferred Securities, we will use our best efforts to list the Junior
Subordinated Debentures on a national securities exchange or comparable
automated quotation system.
Redemption Procedures
If applicable, Trust Securities will be redeemed at the redemption
price with the proceeds from the contemporaneous repayment or redemption of the
Junior Subordinated Debentures. Any redemption of Trust Securities will be made
and the 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
redemption price.
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The Trust may not redeem fewer than all of the outstanding Trust
Preferred Securities unless all accrued and unpaid Distributions have been paid
on all Trust Preferred Securities for all quarterly Distribution periods
terminating on or prior to the date of redemption. If a partial redemption of
the Trust Preferred Securities would result in the delisting of the Trust
Preferred Securities by a national securities exchange or other organization on
which the Trust Preferred Securities are listed, then, pursuant to the
Indenture, we may only redeem the Junior Subordinated Debentures in whole and,
as a result, the Trust may only redeem the Trust Preferred Securities in whole.
If the Trust gives a notice of redemption in respect of the Trust
Preferred Securities (which notice will be irrevocable), then, by 12:00 noon,
New York City time, on the Redemption Date, to the extent that we have deposited
with the Property Trustee by 10:00 a.m., New York City time, funds sufficient to
pay the redemption price with respect to the Trust Preferred Securities held by
DTC or its nominees, the Property Trustee will deposit or cause the Paying Agent
(as defined herein) to deposit irrevocably with DTC funds sufficient to pay the
redemption price and will give DTC or its nominees irrevocable instructions and
authority to pay the redemption price to the holders of such Trust Preferred
Securities. See "Book-Entry Issuance." If such Trust Preferred Securities are no
longer in book-entry form, the Property Trustee, to the extent we have deposited
with the Property Trustee funds sufficient to pay the redemption price, will
irrevocably deposit with the Paying Agent for such Trust Preferred Securities
funds sufficient to pay the aggregate redemption price and will give such Paying
Agent irrevocable instructions and authority to pay the redemption price to the
holders thereof upon surrender of their certificates evidencing such Trust
Preferred Securities. Notwithstanding the foregoing, Distributions payable on or
prior to the Redemption Date shall be payable to the holders of such Trust
Preferred 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
Trust Preferred Securities called for redemption will cease, except the right of
the holders of such Trust Preferred Securities to receive the redemption price,
but without interest on such redemption price and such Trust Preferred
Securities will cease to be outstanding. In the event that any Redemption Date
of Trust Preferred Securities is not a Business Day, then the 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 we fail to repay the Junior Subordinated Debentures on maturity
or payment of the redemption price is improperly withheld or refused and not
paid either by the Trust or by us pursuant to the Guarantee as described under
"Description of Guarantee," (i) Distributions on Trust Preferred Securities will
continue to accrue at the then applicable rate from the Redemption Date
originally established by the Trust to the date such redemption price is
actually paid and (ii) the actual payment date will be the Redemption Date for
purposes of calculating the redemption price.
Subject to the Trust Agreement and applicable law (including, without
limitation, United States federal securities law), we or our subsidiaries may at
any time and from time to time purchase outstanding Trust Preferred Securities
by tender, in the open market or by private agreement.
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Payment of the redemption price on the Trust Preferred Securities and
any distribution of Junior Subordinated Debentures to holders of Trust Preferred
Securities will be made on the Redemption Date.
If less than all of the Trust Securities issued by the Trust are to be
redeemed on a Redemption Date, then the aggregate redemption price for such
Trust Securities to be redeemed will be allocated pro rata to the Trust
Preferred Securities and Common Securities based upon the relative Liquidation
Amounts of the Trust Securities or such other method as the Trustee shall deem
appropriate, not more than 60 days prior to the date fixed for redemption. The
particular Trust Preferred Securities to be redeemed will be selected by the
Property Trustee from the outstanding Trust Preferred Securities not previously
called for redemption, by such method as the Property Trustee deems fair and
appropriate and which may provide for the selection for redemption of portions
(equal to $25 or an integral multiple thereof) of the Liquidation Amount of
Trust Preferred Securities. The Property Trustee will promptly notify the
security registrar in writing of the Trust Preferred Securities selected for
redemption and, in the case of any Trust Preferred Securities selected for
partial redemption, the Liquidation Amount thereof to be redeemed. For all
purposes of the Trust Agreement, unless the context otherwise requires, all
provisions relating to the redemption of Trust Preferred Securities shall relate
to the portion of the aggregate Liquidation Amount of Trust Preferred Securities
which has been or is to be redeemed.
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 we default in payment of the redemption price on,
or in the repayment of, the Junior Subordinated Debentures, on and after the
Redemption Date, Distributions will cease to accrue on the Trust Securities
called for redemption.
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. However, if on any Distribution Date or
Redemption Date a Debenture Event of Default (as described in "Description of
Junior Subordinated Debentures--Debenture Events of Default") shall have
occurred and be continuing, no payment of any Distribution on, or applicable
redemption price of, any of the Common Securities, and no other payment on
account of the redemption, liquidation or other acquisition of the Common
Securities, will be made unless payment in full in cash of all accumulated and
unpaid Distributions on all of the outstanding Trust Preferred Securities for
all Distribution periods terminating on or prior to the Debenture Event of
Default, or in the case of payment of the redemption price, the full amount of
such redemption price shall have been made or provided for, and all funds
available to the Property Trustee will first be applied to the payment in full
in cash of all Distributions on, or redemption price of, the Trust Preferred
Securities then due and payable.
In the case of any Event of Default under the Trust Agreement relating
to a Debenture Event of Default (as described in "-- Events of Default;
Notice"), as holder of the Common Securities, we will be deemed to have waived
any right to act with respect to such Event of Default
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until the effect of such Event of Default has been cured, waived or otherwise
eliminated. Until any such Event of Default has been so cured, waived or
otherwise eliminated, the Property Trustee will act solely on behalf of the
holders of the Trust Preferred Securities and not on behalf of us as holder of
the Common Securities, and only the holders of the Trust Preferred Securities
will have the right to direct the Property Trustee to act on their behalf.
Liquidation Distribution Upon Dissolution
We will have the right at any time to dissolve the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Preferred Securities. Our right is subject to (i) our having received an opinion
of an independent tax counsel experienced in such matters to the effect that
such distribution will not be a taxable event to holders of Trust Preferred
Securities for United States federal income tax purposes, and (ii) our having
received prior approval if it is then required under applicable regulatory
requirements. See "--Distribution of Junior Subordinated Debentures."
In addition, the Trust will automatically dissolve upon the first to
occur of: (i) certain events of our bankruptcy, dissolution or liquidation; (ii)
the distribution of a Like Amount of the Junior Subordinated Debentures to the
holders of the Trust Securities, if we have given written direction to the
Property Trustee to dissolve the Trust (which direction is optional and, except
as described above, wholly within our discretion); (iii) redemption of all of
the Trust Securities; (iv) expiration of the term of the Trust; and (v) the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction.
If a dissolution occurs as described in clause (i), (ii), (iv), or (v)
above, the Trust will be liquidated by the Issuer Trustees as expeditiously as
the Issuer Trustees determine to be possible by distributing to the holders of
the Trust Securities, after satisfaction of liabilities to creditors of the
Trust, a Like Amount of the Junior Subordinated Debentures. However, if such a
distribution is determined by the Property Trustee not to be practicable, the
holders will be entitled to receive out of the assets of the Trust legally
available for distribution, after satisfaction of liabilities to creditors of
the Trust, an amount equal to the aggregate of the Liquidation Amount plus
accumulated and unpaid Distributions thereon to the date of payment (such amount
being the "Liquidation Distribution"). If such Liquidation Distribution can be
paid only in part because the Trust has insufficient assets on hand legally
available to pay in full the aggregate Liquidation Distribution, then the
amounts payable directly by the Trust on the Trust Securities shall be paid on a
pro rata basis. However, if a Debenture Event of Default has occurred and is
continuing, the Trust Preferred Securities will have a priority over the Common
Securities. See "--Subordination of Common Securities."
If we elect not to redeem the Junior Subordinated Debentures prior to
maturity in accordance with their terms and either elect not to or are 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.
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If we elect to dissolve the Trust and thereby cause the Junior
Subordinated Debentures to be distributed to holders of the Trust Preferred
Securities in liquidation of the Trust, we shall continue to have the right to
shorten the maturity of the Junior Subordinated Debentures, subject to certain
conditions.
Events of Default; Notice
Any one of the following events that has occurred and is continuing
constitutes an "Event of Default" under the Trust Agreement (an "Event of
Default") with respect to the Trust Preferred Securities, regardless of the
reason for such Event of Default and whether it occurs voluntary or involuntary
or by operation of law or pursuant to any order, rule or regulation:
o the occurrence of a Debenture Event of Default (see "Description of
Junior Subordinated Debentures--Debenture Events of Default");
o default by the Trust in the payment of any Distribution when it
becomes due and payable, and continuation of such default for a
period of 30 days;
o default by the Trust in the payment of the redemption price of any
Trust Security when it becomes due and payable;
o default in the performance, or breach, in any material respect, of
any covenant or warranty of the Issuer Trustees in the Trust
Agreement (other than a default or breach in the performance of a
covenant or warranty which is addressed in the second or third
clause above), and continuation of the default or breach, for a
period of 60 days after there has been given, by registered or
certified mail, to the defaulting Issuer Trustee or Trustees by the
holders of at least 25% in aggregate Liquidation Amount of the
outstanding Trust Preferred Securities, a written notice specifying
the default or breach and requiring it to be remedied and stating
that the notice is a "Notice of Default" under the Trust Agreement;
or
o the occurrence of certain events of bankruptcy or insolvency with
respect to the Property Trustee and the failure by us to appoint a
successor Property Trustee within 60 days of the event.
Within 90 days after the occurrence of any Event of Default known to
the Property Trustee, the Property Trustee will transmit notice of the Event of
Default to the holders of the Trust Preferred Securities, the Administrative
Trustees and us, unless the Event of Default has been cured or waived. We and
the Administrative Trustees are required to file annually with the Property
Trustee a certificate as to whether or not we or 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
Trust Preferred Securities will have a preference over the Common Securities.
See "--Subordination of Common Securities" and "--Liquidation Distribution Upon
Default." Upon a Debenture Event of Default,
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unless the principal of all the Junior Subordinated Debentures has already
become due and payable, either the Property Trustee or the holders of not less
than 25% in aggregate principal amount of the Junior Subordinated Debentures
then outstanding may declare all of the Junior Subordinated Debentures to be due
and payable immediately by giving notice in writing to us (and to the Property
Trustee, if notice is given by holders of the Junior Subordinated Debentures).
If the Property Trustee or the holders of the Junior Subordinated Debentures
fail to declare the principal of all of the Junior Subordinated Debentures due
and payable upon a Debenture Event of Default, the holders of at least 25% in
Liquidation Amount of the Trust Preferred Securities then outstanding will have
the right to declare the Junior Subordinated Debentures immediately due and
payable. In either event, payment of principal and interest on the Junior
Subordinated Debentures will remain subordinated to the extent provided in the
Indenture. In addition, holders of the Trust Preferred Securities have the right
in certain circumstances to bring a direct action ("Direct Action"). See
"Description of Junior Subordinated Debentures--Enforcement of Certain Rights by
Holders of Trust Preferred Securities."
Removal of Issuer Trustees
Unless a Debenture Event of Default has occurred and is 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 by the holders of a
majority in Liquidation Amount of the outstanding Trust Preferred Securities. In
no event will the holders of the Trust Preferred Securities have the right to
vote to appoint, remove or replace the Administrative Trustees, which voting
rights are vested exclusively in us, as the holder of the Common Securities. No
resignation or removal of an Issuer Trustee and no appointment of a successor
trustee shall be effective until the acceptance of appointment by the successor
trustee in accordance with the provisions of the Trust Agreement.
Co-trustees and Separate Property Trustee
Unless an Event of Default has occurred and is continuing, at any time
or times, for the purpose of meeting the legal requirements of the Trust
Indenture Act or of any jurisdiction in which any property of the Trust may at
the time be located, we, as the holder of the Common Securities, and the
Administrative Trustees shall have the right to appoint one or more persons
either to act as a co-trustee, jointly with the Property Trustee, of all or any
part of such 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 the person or persons in such capacity any property,
title, right or power deemed necessary or desirable, subject to the provisions
of the Trust Agreement. In case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone will have power to make the appointment.
Merger or Consolidation of Issuer Trustees
Any Person into which the Property Trustee, the Delaware Trustee or any
Administrative Trustee that is not a natural person may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such
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Issuer Trustee is a party, or any Person succeeding to all or substantially all
the corporate trust business of such Issuer Trustee, will be the successor of
such Issuer Trustee under the Trust Agreement, provided the Person shall be
otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate, or be
replaced by, or convey, transfer or lease its properties and assets as an
entirety or substantially as an entirety to any corporation or other Person,
except as described below or as otherwise described under "--Distribution of
Junior Subordinated Debentures." The Trust may, at our request, with the consent
of the Administrative Trustees but without the consent of the holders of the
Trust Preferred Securities, the Property Trustee or the Delaware Trustee, merge
with or into, consolidate, amalgamate, or be replaced by or convey, transfer or
lease its properties and assets as an entirety or substantially as an entirety
to a trust organized under the laws of any State; provided, that (i) the
successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Trust Securities or (b) substitutes for the Trust
Securities other securities having substantially the same terms as the Trust
Securities (the "Successor Securities"), so long as the Successor Securities
rank the same as the Trust Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) we
expressly appoint 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 Trust Preferred Securities or 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
Trust Preferred Securities are then listed or quoted, if any, (iv) if the Trust
Preferred Securities (including any Successor Securities) are rated by any
nationally recognized statistical rating organization prior to the transaction,
the merger, consolidation, amalgamation, replacement, conveyance, transfer or
lease does not cause the Trust 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) the merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Trust Securities (including any Successor
Securities), (vi) the successor entity has a purpose identical to that of the
Trust, (vii) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, we have received an opinion from independent
counsel to the Trust experienced in such matters to the effect that (a) the
merger, consolidation, amalgamation, replacement, conveyance, transfer or lease
does not adversely affect the rights, preferences and privileges of the holders
of the Trust Securities (including any Successor Securities) in any material
respect (other than any dilution of such holders' interests in the new entity),
(b) following the 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, and (c)
the Trust will continue to be, or the successor entity will be, classified as a
grantor trust for federal income tax purposes, (viii) we 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 and (ix) the
Property Trustee is given an officer's certificate and an opinion of counsel
each to the effect that all conditions precedent in the Trust Agreement to the
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transactions have been satisfied. Notwithstanding the foregoing, the Trust will
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 the 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 or each holder of the Trust Securities not to
be treated as owning an undivided interest in the Junior Subordinated
Debentures.
Voting Rights; Amendment of the Trust Agreement
Except as provided below and under "--Mergers, Consolidations,
Amalgamations or Replacements of the Trust" and "Description of
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Trust Agreement, the holders of the Trust Preferred Securities will have no
voting rights.
The Trust Agreement may be amended from time to time by us, 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. However, the amendment to
the Trust Agreement under these circumstances may not adversely affect the
interests of the holders of the Trust Securities. Any amendments of the Trust
Agreement under these circumstances will become effective when notice is given
to the holders of the Trust Securities. The Trust Agreement may be amended by
the Issuer Trustees and us (i) with the consent of holders representing a
majority (based upon Liquidation Amount) of the outstanding Trust Securities and
(ii) upon receipt by the Issuer Trustees of an opinion of counsel experienced in
such matters 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. However, 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 reduce the amount payable
on redemption thereof 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 payment on or after the specified
date. Notwithstanding the foregoing, no amendments or modification may be made
to the Declaration if such amendment or modification would (i) cause the Trust
to be classified as other than a grantor trust for United States federal income
tax purposes, (ii) reduce or otherwise adversely affect the powers of the
Property Trustee or (iii) cause a Special Event.
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So long as any Junior Subordinated Debentures are held by the Property
Trustee, subject to the requirement of the Property Trustee obtaining a tax
opinion in certain circumstances set forth in the last sentence of this
paragraph, the holders of a majority in Liquidation Amount of the Trust
Preferred Securities have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Debenture Trustee, or
direct the exercise of any trust or power conferred on the Property Trustee with
respect to the Junior Subordinated Debentures, including the right to direct the
Property Trustee, as holder of the Junior Subordinated Debentures, to (i)
exercise the remedies available under the Indenture with respect to the Junior
Subordinated Debentures, (ii) waive any past defaults under the Indenture that
are available 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 the
consent will be required. However, where a consent under the Indenture would
require the consent of each affected holder of Junior Subordinated Debentures,
no consent may be given by the Property Trustee without the prior approval of
each holder of the Trust Preferred Securities. The Issuer Trustees will not
revoke any action previously authorized or approved by a vote of the holders of
the Trust Preferred Securities except by subsequent vote of those holders. The
Property Trustee will notify each holder of Trust Preferred Securities within 90
days of any notice of default with respect to the Junior Subordinated
Debentures. In addition to obtaining the foregoing approvals of the holders of
the Trust Preferred Securities prior to taking any of the foregoing actions, the
Issuer Trustees will 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 Trust Preferred Securities may be
given at a meeting of the holders convened for that purpose or pursuant to
written consent. The Property Trustee will cause a notice of any meeting at
which holders of Trust Preferred Securities are entitled to vote, or of any
matter upon which action by written consent of the holders is to be taken, to be
given to each holder of record of Trust Preferred Securities in the manner set
forth in the Trust Agreement.
No vote or consent of the holders of Trust Preferred Securities will be
required for the Trust to redeem and cancel the Trust Preferred Securities in
accordance with the Trust Agreement.
Notwithstanding that holders of the Trust Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Trust Preferred Securities that are owned by us, the Trustees or any
affiliate of us or any Trustees, will, for purposes of such vote or consent, be
treated as if they were not outstanding.
Global Trust Preferred Securities
The Trust Preferred Securities will be represented by one or more
global certificates registered in the name of DTC or its nominee (a "Global
Trust Preferred Security"). Beneficial interests in the Trust Preferred
Securities will be shown on, and transfer thereof will be effected only through,
records maintained by persons that have accounts with such Depositary
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("Participants"). Except as described below, Trust Preferred Securities in the
certificated form will not be issued in exchange for the global certificates.
See "Book-Entry Issuance."
A global security will be exchangeable for Trust Preferred Securities
registered in the names of persons other than the Depositary or its nominee only
if (i) the Depositary notifies us that it is unwilling or unable to continue as
a depositary for the global security and no successor depositary shall have been
appointed, or if at any time the Depositary ceases to be a clearing agency
registered under the Exchange Act, at a time when the Depository is required to
be so registered to act as such depository, (ii) the Trust in its sole
discretion determines that the global security may be so exchangeable, or (iii)
there shall have occurred and be continuing an Event of Default under the
Indenture. Any global security that is exchangeable as described in the
preceding sentence will be exchangeable for definitive certificates registered
in the names as the Depositary shall direct. We expect that the instructions
will be based upon directions received by the Depositary with respect to
ownership of beneficial interests in the global security. In the event that
Trust Preferred Securities are issued in definitive form, the Trust Preferred
Securities will be in denominations of $25 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Unless and until it is exchanged in whole or in part for individual
Trust Preferred Securities, a Global Trust Preferred Security may not be
transferred except 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 or by the Depositary or any nominee to a successor Depositary or any
nominee of the successor.
Payments on Trust Preferred Securities represented by a global security
will be made to the Depositary, as the depositary for the Trust Preferred
Securities. In the event the Trust Preferred Securities are issued in definitive
form, Distributions will be payable, the transfer of the Trust Preferred
Securities will be registrable, and Trust Preferred Securities will be
exchangeable for Trust Preferred Securities of other denominations of a like
aggregate Liquidation Amount, at the corporate office of the Property Trustee,
or at the offices of any paying agent or transfer agent appointed by the
Administrative Trustees by check mailed to the address of the persons entitled
thereto or by wire transfer. For a description of the terms of the depositary
arrangements relating to payments, transfers, voting rights, redemptions and
other notices and other manners, See "Book-Entry Issuance."
Upon the issuance of a Global Trust Preferred Security, and the deposit
of the Global Trust Preferred Security with or on behalf of the Depositary, the
Depositary for the Global Trust Preferred Security or its nominee will credit,
on its book-entry registration and transfer system, the respective aggregate
Liquidation Amounts of the individual Trust Preferred Securities represented by
the Global Trust Preferred Securities to the accounts of Participants. These
accounts will be designated by the dealers, underwriters or agents with respect
to the Trust Preferred Securities. Ownership of beneficial interests in a Global
Trust Preferred Security will be limited to Participants or persons that may
hold interests through Participants. Ownership of beneficial interests in the
Global Trust Preferred Security will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the applicable
Depositary or its nominee (with respect to interests of Participants) and the
records of Participants (with respect
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to interests of persons who hold through Participants). The laws of some states
require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interest in a Global Trust Preferred Security.
So long as the Depositary for a Global Trust Preferred Security, or its
nominee, is the registered owner of the Global Trust Preferred Security, the
Depositary or the nominee, as the case may be, will be considered the sole owner
or holder of the Trust Preferred Securities represented by the Global Trust
Preferred Security for all purposes under the Trust Agreement governing such
Trust Preferred Securities. Except as provided below, owners of beneficial
interest in a Global Trust Preferred Security will not be entitled to have any
of the individual Trust Preferred Securities represented by such Global Trust
Preferred Security registered in their names, will not receive or be entitled to
receive physical delivery of any such Trust Preferred Securities in definitive
form and will not be considered the owners or holders under the Trust Agreement.
Neither the Property Trustee, any Paying Agent (as defined below), the
Securities Registrar (as defined below) for the Trust Preferred Securities nor
we will have any responsibility or liability for any aspect of the records
relating to or payments made on account of beneficial ownership interests of the
Global Trust Preferred Security representing the Trust Preferred Securities or
for maintaining supervising or reviewing any records relating to the beneficial
ownership interests.
We expect that the Depositary for Trust Preferred Securities or its
nominee, upon receipt of any payment of the Liquidation Amount or Distributions
in respect of a permanent Global Trust Preferred Security, immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the aggregate Liquidation Amount of such
Global Trust Preferred Security as shown on the records of such Depositary or
its nominee. We also expect that payments by Participants to owners of
beneficial interests in such Global Trust Preferred Security held through such
Participants will be governed by standing instructions and customary practices,
as is now the case with securities held for the accounts of customers in bearer
form or registered in "street name." These payments will be the responsibility
of such Participants.
If the Depositary for the Trust Preferred Securities is at any time
unwilling, unable or ineligible to continue as depositary and a successor
depositary is not appointed by us within 90 days, the Trust will issue
individual Trust Preferred Securities in exchange for the Global Trust Preferred
Security. In addition, the Trust may at any time and in its sole discretion,
subject to any limitations described herein relating to the Trust Preferred
Securities, determine not to have any Trust Preferred Securities represented by
one or more Global Trust Preferred Securities and, in that event, will issue
individual Trust Preferred Securities in exchange for the Global Trust Preferred
Security. Further, an owner of a beneficial interest in a Global Trust Preferred
Security representing the Trust Preferred Securities may, on terms acceptable to
the Trust, the Property Trustee and the Depositary for the Global Trust
Preferred Security, receive individual Trust Preferred Securities in exchange
for the beneficial interests, subject to any limitations described herein. In
any such instance, an owner of a beneficial interest in a Global Trust Preferred
Security will be entitled to physical delivery of individual Trust Preferred
Securities represented by the Global Trust Preferred Security equal in
Liquidation Amount to the beneficial interest and to have
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the Trust Preferred Securities registered in its name. Individual Trust
Preferred Securities so issued will be issued in denominations, unless otherwise
specified by us, of $25 and integral multiples thereof.
Payment and Paying Agency
Payments on the Trust Preferred Securities held in global form will be
made to the Depositary, which will credit the relevant accounts at the
Depositary on the applicable Distribution Dates. Payments on the Trust Preferred
Securities that are not held by the Depositary will be made by check mailed to
the address of the holder entitled thereto as the address which appears on the
register. The paying agent (the "Paying Agent") will initially be the Property
Trustee and any co-paying agent chosen by the Property Trustee and acceptable to
the Administrative Trustees and us. The Paying Agent will be permitted to resign
as Paying Agent upon 30 days' written notice to the Property Trustee, the
Administrative Trustees and us. In the event that the Property Trustee will no
longer be the Paying Agent, the Administrative Trustees will appoint a successor
(which will be a bank or trust company acceptable to the Administrative Trustees
and us) to act as Paying Agent.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the
Trust Preferred Securities (the "Securities Registrar"). Registration of
transfers of the Trust Preferred 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 Trust Preferred 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 the duties as are
specifically set forth in the Trust Agreement and, during the existence of an
Event of Default, must exercise the same degree of care and skill as a prudent
person would exercise or use in the conduct of his or her own affairs. Subject
to this provision, the Property Trustee is under no obligation to exercise any
of the powers vested in it by the 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. 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 Trust Securities
are entitled under the Trust Agreement to vote, then the Property Trustee may
take the action as is directed by and, if not so directed, may take 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. The Property Trustee also serves as trustee under the indenture
pursuant to which the Company's senior notes were issued.
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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 the Trust will not be
deemed to be an investment company required to be registered under the
Investment Company Act or classified as other than a grantor trust for United
States federal income tax purposes and so that the Junior Subordinated
Debentures will be treated by us as indebtedness for United States federal
income tax purposes. In this connection, we 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 we and the
Administrative Trustees determine in our discretion to be necessary or desirable
for these purposes, as long as the action does not adversely affect the
interests of the holders of the Trust Securities or vary the terms thereof.
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 JUNIOR SUBORDINATED DEBENTURES
The Junior Subordinated Debentures are to be issued under an Indenture,
as supplemented from time to time (as so supplemented, the "Indenture"), between
the Debenture Trustee and us. The Indenture will be 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
is qualified in its 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. The form of the Indenture has been filed as an exhibit to the Registration
Statement.
Concurrently with the issuance of the Trust Preferred Securities, the
Trust will invest the proceeds, together with the consideration paid by us for
the Common Securities, in Junior Subordinated Debentures issued by us. The
Junior Subordinated Debentures will be issued as unsecured debt under the
Indenture.
We may at any time liquidate the Trust and cause the Junior
Subordinated Debentures to be distributed to the holders of the Trust Securities
in liquidation of the Trust. If the Junior Subordinated Debentures are
distributed to the holders of the Trust Preferred Securities, we will use our
best efforts to list the Junior Subordinated Debentures on a national securities
exchange or comparable automated quotation system.
General
The Junior Subordinated Debentures will bear interest at the annual
rate of % of the principal amount thereof, payable quarterly in arrears on
the last day of March, June, September and December of each year (each, an
"Interest Payment Date"), commencing, 1999, to the person in whose
name each Junior Subordinated Debenture is registered, subject to certain
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exceptions, on the fifteenth day of the month in which the relevant Interest
Payment Date occurs. The amount of each interest payment due with respect to the
Junior Subordinated Debentures will include amounts accrued through the date the
interest payment is due. We anticipate that, until the liquidation, if any, of
the Trust, each Junior Subordinated Debenture will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust Preferred
Securities. The amount of interest payable for any period will be computed on
the basis of a 360-day year of twelve 30-day months and, for any period of less
than a full calendar month, on the basis of the actual number of days elapsed in
the month. In the event that any date on which interest is payable on the Junior
Subordinated Debentures is not a Business Day, then payment of the interest
payable 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 the next succeeding Business Day falls in the next succeeding calendar year,
then the payment will be made on the immediately preceding Business Day, in each
case with the same force and effect as if made on such date. 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 % thereof, compounded quarterly. The term "interest," as used
herein, includes quarterly interest payments, interest on quarterly interest
payments not paid on the applicable Interest Payment Date and Additional Sums
(as defined below), as applicable.
The Junior Subordinated Debentures will mature on , 2029 (such
date, as it may be shortened as hereinafter described (the "Stated Maturity
Date"). The Stated Maturity Date may be shortened once at any time by us to any
date not earlier than , 2004 subject to our having received prior approval
if it is then required under applicable regulatory requirements. In the event
that we elect to shorten the Stated Maturity Date of the Junior Subordinated
Debentures, we will give notice to the Debenture Trustee, and the Debenture
Trustee will give notice of the shortening to the holders of the Junior
Subordinated Debentures no less than 90 days prior to the effectiveness thereof.
The Junior Subordinated Debentures will rank equal with all Other
Debentures and will be unsecured and will rank subordinate and junior in right
of payment to all Senior and Subordinated Indebtedness (as defined under
"Description of Junior Subordinated Debentures--Subordination") to the extent
and in the manner set forth in the Indenture.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is
continuing, we will have the right under the Indenture to defer the payment of
interest on the Junior Subordinated Debentures at any time and from time to time
for a period not exceeding 20 consecutive calendar quarters, provided that no
Deferral Period may end on a date other than an Interest Payment Date or extend
beyond the Stated Maturity Date. At the end of such Deferral Period, we must pay
all interest then accrued and unpaid (together with interest thereon) at the
annual rate of %, compounded quarterly, to the extent permitted by applicable
law. During a Deferral Period, interest will continue to accrue and, if the
Junior Subordinated Debentures have been distributed to holders of the Trust
Preferred Securities, holders of Junior Subordinated Debentures (or holders of
the Trust Preferred Securities while Trust Preferred Securities are outstanding)
will be required to accrue such deferred
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interest income for United States federal income tax purposes prior to the
receipt of cash attributable to such income. See "Certain Federal Income Tax
Consequences--Interest Income and Original Issue Discount."
During a Deferral Period, we will not undertake any of the actions set
forth below under "--Certain Covenants We Have Made."
Prior to the termination of any such Deferral Period, we may further
extend such Deferral Period, provided that such extension does not cause such
Deferral Period together with all previous and further extensions within the
Deferral Period to exceed 20 consecutive calendar quarters, end on a date other
than an Interest Payment Date or extend beyond the Stated Maturity Date. Upon
the termination of any such Deferral Period and the payment of all amounts then
due on any Interest Payment Date, we may elect to begin a new Deferral Period,
subject to the above requirements. No interest will be due and payable during a
Deferral Period, except at the end of that period. We must give the Property
Trustee, the Administrative Trustees and the Debenture Trustee notice of
election of any Deferral Period (or an extension thereof) at least five Business
Days prior to the earlier of (i) the next succeeding date on which Distributions
on the Trust Preferred Securities are payable or (ii) the date the Trust is
required to give notice to any securities exchange or to holders of Trust
Preferred Securities of the record date or the date such Distributions are
payable, but in any event not less than five Business Days prior to the record
date. The Debenture Trustee will give notice of our election to begin or extend
a new Deferral Period to the holders of the Trust Preferred Securities.
Additional Sums
If the Trust or the Property Trustee is required to pay any additional
taxes, duties, assessments or other governmental charges, we will pay Additional
Sums as required so that the Distributions payable by the Trust shall not be
reduced as a result of any such additional taxes, duties, assessments or other
governmental charges.
Redemption
Subject to our having received any prior approval required under
applicable regulatory requirements, the Junior Subordinated Debentures are
redeemable prior to maturity at our option on or after , 2004, in whole
(at any time) or in part (from time to time) at a redemption price equal to the
percentage of the outstanding principal amount of the Junior Subordinated
Debentures specified below, plus in each case, accrued and unpaid interest on
the Junior Subordinated Debentures to the date of redemption if redeemed during
the 12-month period beginning _______ __ of the years indicated below:
Year Percentage
---- ----------
2004 %
2005 %
2006 %
2007 %
2008 %
2009 and thereafter 100.000%
The Junior Subordinated Debentures are also redeemable prior to
maturity at any time in whole (but not in part), within 90 days following the
occurrence of a Special Event, in each case at a redemption price equal to the
accrued and unpaid interest on the Junior Subordinated Debentures so redeemed to
the date fixed for redemption, plus 100% of the principal amount.
If a partial redemption of the Trust Preferred Securities resulting
from a partial redemption of the Junior Subordinated Debentures would result in
a delisting of the Trust Preferred Securities, then we may redeem the Junior
Subordinated Debentures in whole only.
Notice of any redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder of Junior Subordinated
Debentures to be redeemed at the holder's registered address. Unless we default
in payments of the redemption price, on and after the
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redemption date, interest ceases to accrue on the Junior Subordinated Debentures
or portions called for redemption.
The Junior Subordinated Debentures will not be subject to any sinking
fund.
Distribution upon Liquidation
Under certain circumstances involving the dissolution of the Trust, the
Junior Subordinated Debentures may be distributed to the holders of the Trust
Preferred Securities in liquidation of the Trust after satisfaction of
liabilities to creditors of the Trust. See "Description of Trust Preferred
Securities--Liquidation Distribution Upon Dissolution." If distributed to
holders of the Trust Preferred Securities in liquidation, the Junior
Subordinated Debentures will initially be issued in the form of one or more
global securities and the Depositary or any successor depositary for the Trust
Preferred Securities will act as depositary for the Junior Subordinated
Debentures. We anticipate that the depositary arrangements for the Junior
Subordinated Debentures be substantially identical to those in effect for the
Trust Preferred Securities. If the Junior Subordinated Debentures are
distributed to the holders of Trust Preferred Securities upon the liquidation of
the Trust, we will use our best efforts to list the Junior Subordinated
Debentures on the Nasdaq National Market or such other stock exchanges or
automated quotation system, if any, on which the Trust Preferred Securities are
then listed or quoted. We can give no assurance as to the market price of any
Junior Subordinated Debentures that may be distributed to the holders of Trust
Preferred Securities.
Certain Covenants We Have Made
If at any time (1) there shall have occurred any event of which we have
actual knowledge that (a) is, or with the giving of notice or the lapse of time,
or both, would be, a Debenture Event of Default and (b) in respect of which we
shall not have taken reasonable steps to cure, (2) we are in default with
respect to our payment of any obligations under the Guarantee, or (3) we shall
have given notice of our election of a Deferral Period as provided in the
Indenture and shall not have rescinded such notice, and such Deferral Period, or
any extension thereof, shall have commenced and be continuing, then we will not,
o declare or pay any dividends or distributions on, or redeem,
purchase, acquire or make a liquidation payment with respect to, any
of our capital stock;
o make any payment of principal, interest or premium, if any, on or
repay or repurchase or redeem any of our debt securities (including
Other Debentures) that rank equal with or junior in right of payment
to the Junior Subordinated Debentures; or
o make any guarantee payments with respect to any guarantee by us of
the debt securities of any of our subsidiaries (including under
Other Guarantees) if such guarantee ranks equal or junior in right
of payment to the Junior Subordinated Debentures.
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However, we will not violate the first bullet point above if we
o declare or pay dividends or make distributions in shares of, or
options, warrants or rights to subscribe for or purchase shares of
our common stock;
o declare a dividend in connection with the implementation of a
stockholders' rights plan, or issue stock under any plan in the
future, or redeem or repurchase any rights under such a plan;
o make payments under the Guarantee;
o purchase fractional shares as a result of a reclassification of our
capital stock;
o purchase fractional interests in shares of our capital stock
pursuant to the conversion or exchange provisions of our capital
stock or the security being converted or exchanged; or
o purchase common stock as a result of the issuance of common stock or
rights under any of our benefit plans for directors, officers or
employees or any of our dividend reinvestment plan.
So long as the Trust Securities remain outstanding, we also have agreed
(i) to maintain 100% direct or indirect ownership of the Common Securities;
provided, however, that any permitted successor to us under the Indenture may
succeed to our ownership of such Common Securities, (ii) to not voluntarily
dissolve, wind-up or terminate the Trust, except in connection with the
distribution of the Junior Subordinated Debentures or certain mergers,
consolidations or amalgamations, each as permitted by the Trust Agreement, (iii)
to timely perform our duties as sponsor of the Trust, (iv) to use our reasonable
efforts to cause the Trust (a) to remain a business trust, except in connection
with the distribution of 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 and
(v) to use our reasonable efforts to cause each holder of Trust Securities to be
treated as owning an undivided beneficial interest in the Junior Subordinated
Debentures.
Subordination
In the Indenture, we have covenanted and agreed that any Junior
Subordinated Debentures issued thereunder will be subordinate and junior in
right of payment to all Senior and Subordinated 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 which we are the subject
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of, the holders of Senior and Subordinated Indebtedness will first be entitled
to receive payment in full of principal of all Allocable Amounts (as defined
below) on such Senior and Subordinated Indebtedness before the holders of Junior
Subordinated Debentures will be entitled to receive or retain any payment in
respect thereof. As of June 30, 1999, we had $80.0 million of Senior
Indebtedness, comprised of our senior notes, and no Subordinated Indebtedness.
In the event of the acceleration of the maturity of Junior Subordinated
Debentures, the holders of all Senior and Subordinated Indebtedness outstanding
at the time of such acceleration will first be entitled to receive payment in
full of such amounts due thereon (including any amounts due upon acceleration)
before the holders of Junior Subordinated Debentures will be entitled to receive
or retain any payment in respect of the Junior Subordinated Debentures.
No payments on account of principal, or interest, if any, in respect of
the Junior Subordinated Debentures may be made if there shall have occurred and
be continuing a default in any payment with respect to any Senior and
Subordinated Indebtedness, or an event of default with respect to any Senior and
Subordinated Indebtedness resulting in the acceleration of the maturity thereof,
or if any judicial proceeding shall be pending with respect to any default.
We are a holding company and almost all of our operating assets are
owned by our subsidiaries. We are a legal entity separate and distinct from our
subsidiaries. Holders of Junior Subordinated Debentures should look only to us
for payments on the Junior Subordinated Debentures. The principal sources of our
income are dividends, interest and fees from our subsidiaries. We rely primarily
on dividends from the Bank to meet our obligations for payment of principal and
interest on our corporate expenses. There are regulatory limitations on the
payment of dividends directly or indirectly to us from the Bank. As of June 30,
1999, under applicable banking statutes, the total capital available for payment
of dividends by the Bank to us was approximately $10.4 million. However, bank
regulatory authorities have the power to prohibit any act, including the payment
of dividends, if such act would reduce bank capital to a point that, in the
opinion of such regulatory authorities, would render the Bank undercapitalized
and thus constitute an unsafe or unsound banking practice. In addition, the Bank
is subject to certain restrictions imposed by federal law on any extensions of
credit to, and certain other transactions with, us and certain affiliates, and
on investments in stock or other securities. These restrictions prevent us and
our affiliates from borrowing from the Bank unless the loans are secured by
various types of collateral. Further, secured loans, other transactions and
investments by the Bank are generally limited in amount as to us and as to each
of our affiliates to 10% of the Bank's capital and surplus and as to us and all
of our other affiliates to an aggregate of 20% of the Bank's capital and
surplus.
Because we are a holding company, our right to participate in any
distribution of assets of any subsidiary upon such subsidiary's liquidation or
reorganization or otherwise (and thus the ability of holders of the Trust
Preferred Securities 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 we may be recognized as a creditor
of that subsidiary. At June 30, 1999, our subsidiaries had total liabilities
(excluding liabilities owed to us) of $2.0 billion. Accordingly, the Junior
Subordinated Debentures will be effectively subordinated to all existing and
future liabilities of our subsidiaries and all liabilities of any of our future
subsidiaries. The Indenture does
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not limit our or our subsidiaries' ability to incur or issue other secured or
unsecured debt, including Senior and Subordinated Indebtedness.
Definitions. For purposes of the foregoing paragraphs, the following
definitions apply:
"Allocable Amounts," when used with respect to any Senior and
Subordinated Indebtedness, means all amounts due or to become due on the Senior
and Subordinated Indebtedness less, if applicable, any amount which would have
been paid to, and retained by, the holders of the Senior and Subordinated
Indebtedness (whether as a result of the receipt of payments by the holders of
such Senior and Subordinated Indebtedness from us or any other obligated party
or from any holders of, or trustee in respect of, other indebtedness that is
subordinate and junior in right of payment to the Senior and Subordinated
Indebtedness) but for the fact that such Senior and Subordinated Indebtedness is
subordinated or junior in right of payment to (or subject to a requirement that
amounts received on such Senior and Subordinated Indebtedness be paid over to
obligees on) trade accounts payable or accrued liabilities arising in the
ordinary course of business.
"Indebtedness" means with respect to any person, whether recourse is to
all or a portion of the assets of such person and whether or not contingent: (i)
every obligation of any person for money borrowed; (ii) every obligation of the
person evidenced by bonds, debentures, notes or other similar instruments,
including obligations incurred in connection with the acquisition of property,
assets or businesses; (iii) every reimbursement obligation of the person with
respect to letters of credit, banker's acceptances or similar facilities issued
for the account of the person; (iv) every obligation of the person issued or
assumed as the deferred purchase price of property or services (but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business); (v) every capital lease obligation of the person; (vi) all
indebtedness of the person whether incurred on or prior to the date of the
Indenture or thereafter incurred, for claims in respect of derivative products,
including interest rate, foreign exchange rate and commodity forward contracts,
options and swaps and similar arrangements; and (vii) every obligation of the
type referred to in clauses (i) through (vi) of another person and all dividends
of another person the payment of which, in either case, the person has
guaranteed or is responsible or liable, directly or indirectly, as obligor or
otherwise.
"Senior and Subordinated Indebtedness" means the principal of (and
premium, if any) and interest, if any (including interest accruing on or after
the filing of any petition in bankruptcy or for reorganization relating to us
whether or not the claim for post-petition interest is allowed in such
proceeding), on our Indebtedness whether incurred on or prior to the date of the
Indenture or thereafter incurred, unless in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that the obligations are not superior in right of payment to the Junior
Subordinated Debentures or to other Indebtedness which is equal with, or
subordinated to, the Junior Subordinated Debentures. However, Senior and
Subordinated Indebtedness does not include (i) any of our Indebtedness which
when incurred and without respect to any election under section 1111(b) of the
United States Bankruptcy Reform Act of 1978, as amended, was without recourse to
us, (ii) any Indebtedness we have to any of our subsidiaries, (iii) Indebtedness
to any of our employees, and (iv) any other debt securities issued pursuant to
the Indenture.
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Denominations, Registration and Transfer
If the Junior Subordinated Debentures are distributed to the holders of
the Trust Preferred Securities, the Junior Subordinated Debentures will be
represented by global certificates registered in the name of the Depositary or
its nominee (the "Global Subordinated Debenture"). Beneficial interests in the
Junior Subordinated Debentures will be shown on, and transfers thereof will be
effected only through, records maintained by the Depositary. Except as described
below, Junior Subordinated Debentures in certificated form will not be issued in
exchange for the global certificates. See "Book-Entry Issuance."
Unless and until a Global Subordinated Debenture is exchanged in whole
or in part for the individual Junior Subordinated Debentures, it may not be
transferred except as a whole by the Depositary for the Global Subordinated
Debenture to a nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
nominee to a successor Depositary or any nominee of the successor.
A Global Subordinated Debenture will be exchangeable for Junior
Subordinated Debentures registered in the names of persons other than the
Depositary or its nominee only if (i) the Depositary notifies us that it is
unwilling or unable to continue as a depositary for such Global Subordinated
Debenture and no successor shall have been appointed, or if at any time the
Depositary ceases to be a clearing agency registered under the Exchange Act, at
a time when the Depositary is required to be so registered to act as such
depositary, (ii) we in our sole discretion determine that the Global
Subordinated Debenture will be so exchangeable or (iii) there shall have
occurred and be continuing a Debenture Event of Default with respect to the
Global Subordinated Debenture. Any Global Subordinated Debenture that is
exchangeable pursuant to the preceding sentence will be exchangeable for
definitive certificates registered in such names as the Depositary shall direct.
It is expected that the instructions will be based upon directions received by
the Depositary from its Participants with respect to ownership of beneficial
interests in the Global Subordinated Debenture. In the event that Junior
Subordinated Debentures are issued in definitive form, the Junior Subordinated
Debentures will be in denominations of $25 and integral multiples thereof and
may be transferred or exchanged at the offices described below.
Payments on Junior Subordinated Debentures represented by a Global
Subordinated Debenture will be made to the Depositary, as the depositary for the
Junior Subordinated Debentures. In the event Junior Subordinated Debentures will
be registrable, Junior Subordinated Debentures will be exchangeable for Junior
Subordinated Debentures of other denominations of a like aggregate principal
amount, at the corporate office of the Debenture Trustee, or at the offices of
any paying agent or transfer agent appointed by us, provided that payment of
interest may be made at our option by check mailed to the address of the persons
entitled thereto or by wire transfer. In addition, if the Junior Subordinated
Debentures are issued in certificated form, the record dates for payment of
interest will be the first day of the month in which such payment is to be made.
For a description of the Depositary and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Book-Entry Issuance."
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We will appoint the Debenture Trustee as securities registrar under the
Indenture (the "Securities Registrar"). Junior Subordinated Debentures may be
presented for exchange as provided above, and may be presented for registration
of transfer (with the form of transfer endorsed thereon, or a satisfactory
written instrument of transfer, duly executed), at the office of the Securities
Registrar. We may at any time rescind the designation of any transfer agent or
approve a change in the location through which any transfer agent acts, provided
that we maintain a transfer agent in the place of payment. We may at any time
designate additional transfer agents with respect to the Junior Subordinated
Debentures.
In the event of any redemption, neither we nor the Debenture Trustee
shall be required to (i) issue, register the transfer of or exchange Junior
Subordinated Debentures during a period beginning at the opening of business 15
days before the day of selection for redemption of Junior Subordinated
Debentures and ending at the close of business on the day of mailing of the
relevant notice of redemption or (ii) transfer or exchange any Junior
Subordinated Debentures so selected for redemption, except, in the case of any
Junior Subordinated Debentures being redeemed in part, any portion thereof not
to be redeemed.
Global Subordinated Debentures
Upon the issuance of the Global Subordinated Debenture and the deposit
of such Global Subordinated Debenture with or on behalf of the Depositary, the
Depositary for the Global Subordinated Debenture or its nominee will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the individual Junior Subordinated Debentures represented by the
Global Subordinated Debenture to the accounts of persons that have accounts with
such Depositary ("Participants"). Ownership of beneficial interests in a Global
Subordinated Debenture will be limited to Participants or persons that may hold
interests through Participants. Ownership of beneficial interests in such Global
Subordinated Debenture will be shown on, and the transfer of that ownership will
be effected only through, records maintained by the applicable Depositary or its
nominee (with respect to interests of Participants). The laws of some states
require that certain purchasers of securities take physical delivery of the
securities in definitive form. These limits and laws may impair the ability to
transfer beneficial interests in a Global Subordinated Debenture.
So long as the Depositary for a Global Subordinated Debenture, or its
nominee, is the registered owner of the Global Subordinated Debenture, the
Depositary or such nominee, as the case may be, will be considered the sole
owner or holder of the Junior Subordinated Debentures represented by the Global
Subordinated Debenture for all purposes under the Indenture governing the Junior
Subordinated Debentures. Except as provided below, owners of beneficial
interests in a Global Subordinated Debenture will not be entitled to have any of
the individual Junior Subordinated Debentures represented by such Global
Subordinated Debenture registered in their names, will not receive or be
entitled to receive physical delivery of any such Junior Subordinated Debentures
in definitive form and will not be considered the owners or holders under the
Indenture.
Payments of principal of and interest on individual Junior Subordinated
Debentures represented by a Global Subordinated Debenture registered in the name
of the Depositary or its
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nominee will be made to the Depositary or its nominee, as the case may be, as
the registered owner of the Global Subordinated Debenture representing the
Junior Subordinated Debentures. Neither we nor the Debenture Trustee, any Paying
Agent, or the Securities Registrar for such Junior Subordinated Debentures will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests of the Global
Subordinated Debenture representing the Junior Subordinated Debentures or for
maintaining, supervising or reviewing any records relating to the beneficial
ownership interests.
If the Depositary is at any time unwilling, unable or ineligible to
continue as depositary and a successor depositary is not appointed by us within
90 days after we receive notice or otherwise become aware of the situation, we
will issue individual Junior Subordinated Debentures in exchange for the Global
Subordinated Debenture. In addition, we may at any time and in our sole
discretion, determine not to have the Junior Subordinated Debentures represented
by one or more Global Subordinated Debenture and, in such event, we will issue
individual Junior Subordinated Debentures in exchange for the Global
Subordinated Debenture. Further, if we so specify with respect to the Junior
Subordinated Debentures, an owner of a beneficial interest in a Global
Subordinated Debenture representing Junior Subordinated Debentures may, on terms
acceptable to us, the Debenture Trustee and the Depositary for such Global
Subordinated Debenture, receive individual Junior Subordinated Debentures in
exchange for such beneficial interests. In any such instance, an owner of a
beneficial interest in a Global Subordinated Debenture will be entitled to
physical delivery of individual Junior Subordinated Debentures registered in its
name. Individual Junior Subordinated Debentures so issued will be issued in
denominations, unless otherwise specified by us, of $25 and integral multiples
thereof.
Payment and Paying Agents
Payment of principal of and any interest on 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 we may
designate from time to time, except that at our option, payment of any interest
may be made, except in the case of Junior Subordinated Debentures in global
form, (i) by check mailed to the address of the Person entitled thereto as the
address appears in the register for Junior Subordinated Debentures or (ii) by
transfer to an account maintained by the Person as specified in the register,
provided that proper transfer instructions have been received by the relevant
Record Date. Payment of any interest on any Junior Subordinated Debenture will
be made to the Person in whose name such Junior Subordinated Debenture is
registered at the close of business on the Record Date. We may at any time
designate additional Paying Agents or rescind the designation of any Paying
Agent; however we will at all times be required to maintain a Paying Agent in
each place of payment for the Junior Subordinated Debentures.
We expect that the Depositary or its nominee, upon receipt of any
payment of principal or interest in respect of a permanent Global Subordinated
Debenture representing the Junior Subordinated Debentures, immediately will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interest in the principal amount of the Global
Subordinated Debenture as shown on the records of such Depositary or its
nominee. We also expect that payments by Participants to owners of beneficial
interests in such Global Subordinated
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Debenture held through the Participants will be governed by standing
instructions and customary practices, as is now the case with securities held
for the accounts of customers in bearer form or registered in "street name."
These payments will be the responsibility of such Participants.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by us in trust, for the payment of the principal of or interest on any
Junior Subordinated Debenture and remaining unclaimed for two years after such
principal or interest has become due and payable will, at our request, be repaid
to us and the holder of such Junior Subordinated Debenture will thereafter look,
as a general unsecured creditor, only to us for payment thereof.
Modification of Indenture
From time to time we and the Debenture Trustee may, without the consent
of the holders of Junior Subordinated Debentures, amend, waive or supplement the
Indenture for specified purposes, including, among other things, curing
ambiguities, defects or inconsistencies (provided that any action does not
adversely affect the interest of the holders of Junior Subordinated Debentures),
and qualifying, or maintaining the qualification of, the Indenture under the
Trust Indenture Act. The Indenture contains provisions permitting us and the
Debenture Trustee, with the consent of the holders of a majority in principal
amount of Junior Subordinated Debentures, to modify the Indenture in a manner
affecting the rights of the holders of Junior Subordinated Debentures; provided
that no such modification may, without the consent of the holders of each
outstanding Junior Subordinated Debenture so affected, (i) change the Stated
Maturity Date, or reduce the principal amount of the Junior Subordinated
Debentures or reduce the rate or extend the time of payment of interest except
pursuant to our right under the Indenture to defer the payment of interest or
make the principal of, or interest on, the Junior Subordinated Debentures
payable in any coin or currency other than U.S. dollars, or impair or affect the
right of any holder of Junior Subordinated Debentures to institute suit for the
payment thereof, or (ii) reduce the percentage of principal amount of Junior
Subordinated Debentures, the holders of which are required to consent to any
modification of the Indenture; provided that so long as any of the Trust
Preferred Securities remain outstanding, no modification may be made that
adversely affects the holders of such Trust Preferred Securities, and no
termination of the Indenture may occur, and no waiver of any Debenture Event of
Default or compliance with any covenant under the Indenture may be effective,
without the prior consent of the holders of at least a majority of the aggregate
Liquidation Amount of the Trust Preferred Securities unless and until the
principal amount of the Junior Subordinated Debentures and all accrued and
unpaid interest thereon have been paid in full and certain other conditions are
satisfied. If the consent of the Property Trustee, as holder of the Junior
Subordination Debentures, is required under the Indenture with respect to
amendments, waivers or supplements of the Indenture or the Junior Subordinated
Debentures, the Property Trustee shall request the direction of the holders of
the Trust Securities with respect to such amendments, waivers or supplements and
shall vote as directed by a majority in Liquidation Amount of the Trust
Securities voting together as a single class. Where a consent under the
Indenture would require the consent of each holder of Junior Subordinated
Debentures, no such consent shall be given by the Property Trustee without the
prior consent of each holder of Trust Preferred Securities. In addition, we and
the Debenture Trustee may execute, without the consent of any holder of Junior
Subordinated Debentures, any
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supplemental Indenture for the purpose of creating any new series of Junior
Subordinated Debentures.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debentures constitutes a
"Debenture Event of Default," regardless of the reason and whether it is
voluntary or involuntary or effected by operation of law or pursuant to any
judgment, decree, order, rule or regulation:
o failure for 30 days to pay any interest on the Junior
Subordinated Debentures or any Other Debentures, when due
(subject to the deferral of any due date in the case of an
Deferral Period);
o failure to pay any principal on the Junior Subordinated
Debentures or any Other Debentures when due whether at
maturity, upon redemption, by declaration of acceleration of
maturity or otherwise;
o failure to observe or perform certain other covenants
contained in the Indenture for 60 days after written notice to
us from the Debenture Trustee or the holders of at least 25%
in aggregate outstanding principal amount of Junior
Subordinated Debentures;
o certain events of our bankruptcy, insolvency or reorganization.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures have, subject to certain exceptions, the
right to direct the time, method and place of conducting any proceeding for any
remedy available to the Debenture Trustee or exercising any trust or power
conferred on the Debenture Trustee, with respect to the Junior Subordinated
Debentures. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Junior Subordinated Debentures may
declare the principal amount of, and any interest on, the Junior Subordinated
Debentures to be due and payable immediately upon a Debenture Event of Default;
provided that, in the case of certain events of bankruptcy, insolvency or
reorganization, such amounts shall automatically become due and payable. If the
Debenture Trustee or holders of the Junior Subordinated Debentures fail to make
the declaration, the Property Trustee or the holders of at least 25% in the
aggregate Liquidation Amount of the Trust Preferred Securities will have the
right. The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures may annul the declaration and waive the
default if the default (other than the non-payment of the principal of the
Junior Subordinated Debentures which has become due solely by 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. Should the holders of the Junior Subordinated Debentures fail
to annul such declaration and waive the default, the holders of a majority in
aggregate Liquidation Amount of the Trust Preferred Securities shall have the
right.
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The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debentures may, on behalf of the holders of all the
Junior Subordinated Debentures, waive any past default, except a default in the
payment of principal on or interest (unless such default has been cured and a
sum sufficient to pay all matured installments of interest and principal due
otherwise than by acceleration has been deposited with the Debenture Trustee) or
a default 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
Junior Subordinated Debenture.
In case a Debenture Event of Default occurs and is continuing as to
Junior Subordinated Debentures, the Property Trustee will have the right to
declare the principal of and the interest on such Junior Subordinated
Debentures, and any other amounts payable under the Indenture, to be due and
payable and to enforce its other rights as a creditor with respect to such
Junior Subordinated Debentures.
The Indenture requires the annual filing by us with the Debenture
Trustee of a certificate as to the absence of certain defaults under the
Indenture.
Enforcement of Certain Rights by Holders of Trust Preferred Securities
If a Debenture Event of Default has occurred and is continuing and is
attributable to our failure to pay the principal of or interest on the Junior
Subordinated Debentures on the due date, a holder of Trust Preferred Securities
may institute a Direct Action. We may not amend the Indenture to remove the
right to bring a Direct Action without the prior written consent of the holders
of all of the Trust Preferred Securities. If the right to bring a Direct Action
is removed, the Trust may become subject to the reporting obligations under the
Exchange Act and the rules and regulations thereunder. Notwithstanding any
payments made to a holder of Trust Preferred Securities by us in connection with
a Direct Action, we will remain obligated to pay the principal of or interest on
the Junior Subordinated Debentures, and we will be subrogated to the rights of
the holder of such Trust Preferred Securities with respect to payments on the
Trust Preferred Securities to the extent of any payments made by us to such
holder in any Direct Action.
The holders of the Trust Preferred Securities will not be able to
exercise directly any remedies available to the holders of the Junior
Subordinated Debentures, other than those set forth in the preceding paragraph,
unless there shall have been an Event of Default under the Trust Agreement. See
"Description of Trust Preferred Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that we will not consolidate with or merge into
any other Person or convey, transfer or lease its properties as an entirety, or
substantially as an entirety, to any Person, unless: (i) we are the surviving
Person, or the Person formed by or surviving any consolidation or merger (if
other than us) or to which the sale, conveyance, transfer or lease of property
is made is a Person organized and existing under the laws of the United States
or any state thereof or the District of Columbia; (ii) upon any consolidation,
merger, sale, conveyance, transfer or lease, the due and punctual payment of the
principal of and interest on the Junior Subordinated Debentures according
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to their tenor and the due and punctual performance and observance of all the
covenants and conditions of the Indenture to be kept or performed by us will be
expressly assumed, by supple mental indenture (which shall conform to the
provisions of the Trust Indenture Act, as then in effect) satisfactory in form
to the Debenture Trustee executed and delivered to the Debenture Trustee by the
Person formed by the consolidation, or into which we will have been merged, or
by the Person which will have acquired our property, as the case may be; (iii)
after giving effect to the consolidation, merger, sale, conveyance, transfer or
lease, no Default or Event of Default, or any event which, after notice or lapse
of time or both, would become a Default or an Event of Default, will have
occurred and be continuing; (iv) the consolidation, merger, sale, conveyance,
transfer or lease does not cause the Junior Subordinated Debentures to be
downgraded by a nationally recognized statistical rating organization; and (v)
certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debentures protection in the event of a highly leveraged or
other transaction involving us that may adversely affect holders of the Junior
Subordinated Debentures.
Satisfaction and Discharge
The Indenture provides that when, among other things, all 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 or called for redemption within one year, and we deposit or cause 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 Junior
Subordinated Debentures not previously delivered to the Debenture Trustee for
cancellation, for the principal and interest to the Stated Maturity Date, then
the Indenture will cease to be of further effect (except as to our obligations
to pay all other sums due pursuant to the Indenture and to provide the officers'
certificates and opinions of counsel described therein), and we will be deemed
to have satisfied and discharged the Indenture. We will only be permitted to
take such action if, among other things, we deliver to the Debenture Trustee an
opinion of counsel (who may be counsel for us) to the effect that the holders of
the Junior Subordinated Debentures will not recognize income, gain or loss for
federal income tax purposes as a result of our actions and will be subject to
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 deposit and defeasance had not
occurred.
Governing Law
The Indenture and the 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
The Debenture Trustee has and will 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
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at the request of any holder of 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 GUARANTEE
The Guarantee will be executed and delivered by The Bank of New York
(the "Guarantee Trustee") and us concurrently with the issuance by the Trust of
the Trust Preferred Securities for the benefit of the holders from time to time
of the Trust Preferred Securities. The Guarantee will be qualified as an
Indenture under the Trust Indenture Act. This summary of certain provisions of
the 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 Guarantee and the
Trust Indenture Act. The form of the Guarantee has been filed as an exhibit to
the Registration Statement of which this prospectus forms a part.
General
The Guarantee will be an irrevocable guarantee on a subordinated basis
of the Trust's obligations under the Trust Preferred Securities, but will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection.
We will irrevocably agree to pay in full on a subordinated basis, the
Guarantee Payments (as defined below) to the holders of the Trust Preferred
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 Trust Preferred Securities,
to the extent not paid by or on behalf of the Trust (the "Guarantee Payments"),
will be subject to the Guarantee: (i) any accrued and unpaid Distributions
required to be paid on the Trust Preferred 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 the Trust Preferred 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
dissolution, winding-up or liquidation of the Trust (other than in connection
with the distribution of the Junior Subordinated Debentures to holders of the
Trust Preferred Securities or the redemption of all Trust Preferred Securities),
the lesser of (a) the Liquidation Distribution, to the extent the Trust has
funds legally available therefor at the time, and (b) the amount of assets of
the Trust remaining available for distribution to holders of Trust Preferred
Securities after satisfaction of liabilities to creditors of the Trust as
required by applicable law. Our obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by us to the holders of the
Trust Preferred Securities or by causing the Trust to pay such amounts to such
holders.
We will, through the Guarantee, the Trust Agreement, the Junior
Subordinated Debentures and the Indenture, taken together, fully, irrevocably
and unconditionally guarantee all of the Trust's obligations under the Trust
Preferred Securities. No single document standing alone or operating in
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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 Trust Preferred Securities. See "Relationship
Among the Trust Preferred Securities, the Junior Subordinated Debentures and the
Guarantee."
Status of the Guarantee
If we do not make interest payments on the Junior Subordinated
Debentures held by the Trust, the Trust will not be able to pay Distributions on
the Trust Preferred Securities and will not have funds legally available
therefor. The Guarantee will rank subordinate and junior in right of payment to
all Senior and Subordinated Indebtedness. The Guarantee will rank pari passu to
the Junior Subordinated Debentures, Other Debentures, the guarantee on the
Common Securities, any other guarantee on future issuances of trust preferred
securities and any senior preferred stock which may be hereafter issued by the
Company. Because we are a holding company, our right 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 we may be recognized as a creditor of that
subsidiary. Accordingly, our obligations under the Guarantee effectively will be
subordinated to all existing and future liabilities of our subsidiaries and all
liabilities of any of our future subsidiaries. Claimants should look only to our
assets for payments under the Guarantee. For more information, please refer to
"Description of Junior Subordinated Debentures--General."
The Guarantee will constitute a guarantee of payment and not of
collection, which means the guaranteed party may institute a legal proceeding
directly against us to enforce its rights under the Guarantee without first
instituting a legal proceeding against any other person or entity. The Guarantee
will be held for the benefit of the holders of the Trust Preferred Securities.
The 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 Trust Preferred Securities of the Junior Subordinated Debentures. The
Guarantee does not limit our ability to incur or issue other secured or
unsecured debt, including Senior and Subordinated Indebtedness, whether under
the Indenture, any other indenture that we may enter into in the future or
otherwise.
Events of Default
An event of default under the Guarantee will occur upon our failure to
perform any of our payment or other obligations. The holders of a majority in
aggregate Liquidation Amount of the Trust Preferred 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 Guarantee or to
direct the exercise of any trust or power conferred upon the Guarantee Trustee
under the Guarantee. Any holder of the Trust Preferred Securities may institute
a legal proceeding directly against us to enforce the Guarantee Trustee's rights
under the Guarantee without first instituting a legal proceeding against the
Trust, the Guarantee Trustee or any other person or entity. Notwithstanding the
foregoing, if we fail to make a payment under the Guarantee, a holder of Trust
Preferred Securities may directly institute a proceeding against us for
enforcement of the Guarantee for payment to the holder of the Trust Preferred
Securities of the holder's pro rata portion of the principal of or interest on
the Junior Subordinated Debentures on or after the due dates specified in the
Junior Subordinated Debentures.
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We, as guarantor, will be required to file annually with the Guarantee
Trustee a certificate as to whether or not we are in compliance with all the
conditions and covenants applicable to us under the Guarantee.
Amendments and Assignment
Except with respect to any changes that do not adversely affect the
rights of holders of the Trust Preferred Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of the
holders of a majority of the aggregate Liquidation Amount of such outstanding
Trust Preferred Securities. The manner of obtaining any such approval will be as
set forth under "Description of Trust Preferred Securities--Voting Rights;
Amendment of the Trust Agreement." All guarantees and agreements contained in
the Guarantee Agreement shall bind our successors, assigns, receivers, trustees
and representatives and shall inure to the benefit of the holders of the Trust
Preferred Securities then outstanding.
Termination of the Guarantee
The Guarantee will terminate and be of no further force and effect upon
full payment of the redemption price of the Trust Preferred Securities, upon
full payment of the Liquidation Amount payable upon liquidation of the Trust or
upon distribution of Junior Subordinated Debentures to the holders of the Trust
Preferred Securities. The Guarantee will continue to be effective or will be
reinstated, as the case may be, if at any time any holder of the Trust Preferred
Securities must restore payment of any sums paid under the Trust Preferred
Securities or the Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance
of a default by us in performance of the Guarantee, will undertake to perform
only such duties as are specifically set forth in the Guarantee and, in case a
default with respect to the Guarantee has occurred, 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 Trust Preferred Securities
unless it is offered reasonable indemnity against the costs, expenses and
liabilities that might be incurred thereby.
Governing Law
The Guarantee will be governed by and construed in accordance with the
laws of the State of New York.
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BOOK-ENTRY ISSUANCE
The Depositary will act as securities depositary for all of the Trust
Preferred Securities and the Junior Subordinated Debentures. The Trust Preferred
Securities and the Junior Subordinated Debentures will be issued only as
fully-registered securities registered in the name of Cede & Co. (the
Depositary's nominee). One or more fully-registered global certificates will be
issued for the Trust Preferred Securities and the Junior Subordinated Debentures
and will be deposited with the Depositary.
The Depositary is a limited purpose trust company organized under the
New York Banking Law, as a "banking organization" within the meaning of the New
York Banking Law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the New York Uniform Commercial Code, and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. The Depositary holds securities that its Participants deposit with
the Depositary. The Depositary also facilitates the settlement among
Participants of securities transactions, such as transfers and pledges, in
deposited securities through electronic computerized book-entry changes in
Participants' accounts, thereby eliminating the need for physical movement of
securities certificates. "Direct Participants" include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations. The Depositary is owned by a number of its Direct Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and
the National Association of Securities Dealers, Inc. Access to the Depositary
system is also available to others such as securities brokers and dealers, banks
and trust companies that clear through or maintain custodial relationships with
Direct Participants, either directly or indirectly ("Indirect Participants").
The rules applicable to the Depositary and its Participants are on file with the
SEC.
Purchases of Trust Preferred Securities or Junior Subordinated
Debentures within the Depositary system must be made by or through Direct
Participants, which will receive a credit for the Trust Preferred Securities or
Junior Subordinated Debentures on the Depositary's records. The ownership
interest of each actual purchaser of each Trust Preferred Securities and each
Subordinated Debenture ("Beneficial Owner") is in turn to be recorded on the
Direct and Indirect Participants' records. Beneficial Owners will not receive
written confirmation from the Depositary of their purchases, but we expect that
Beneficial Owners will receive written confirmations providing details of the
transactions, as well as periodic statements of their holdings, from the Direct
or Indirect Participants through which the Beneficial Owners purchased Trust
Preferred Securities or Junior Subordinated Debentures. Transfers of ownership
interests in the Trust Preferred Securities or Junior Subordinated Debentures
are to be accomplished by entries made on the books of Participants acting on
behalf of Beneficial Owners. Beneficial Owners will not receive certificates
representing their ownership interests in Trust Preferred Securities or Junior
Subordinated Debentures, except in the event that use of the book-entry system
for the Junior Subordinated Debentures is discontinued.
The Depositary has no knowledge of the actual Beneficial Owners of the
Trust Preferred Securities or Junior Subordinated Debentures; the Depositary's
records reflect only the identity of the Direct Participants to whose accounts
such Trust Preferred Securities or Junior Subordinated
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Debentures are credited, which may or may not be the Beneficial Owners. The
Participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Conveyance of notices and other communications by the Depositary to
Direct Participants, by Direct Participants to Indirect Participants, and by
Direct Participants and Indirect Participants to Beneficial Owners and the
voting rights of Direct Participants, Indirect Participants and Beneficial
Owners will be governed by arrangements among them, subject to any statutory or
regulatory requirements as may be in effect from time to time.
Redemption notices will be sent to Cede & Co. as the registered holder
of the Trust Preferred Securities or Junior Subordinated Debentures. If less
than all of the Trust Preferred Securities or the Junior Subordinated Debentures
are being redeemed, the Depositary will determine by lot or pro rata the amount
of the Trust Preferred Securities of each Direct Participant to be redeemed.
Although voting with respect to the Trust Preferred Securities or the
Junior Subordinated Debentures is limited to the holders of record of the Trust
Preferred Securities or Junior Subordinated Debentures, as applicable, in those
instances in which a vote is required, neither the Depositary nor Cede & Co.
will itself consent or vote with respect to Trust Preferred Securities or Junior
Subordinated Debentures. Under its usual procedures, the Depository would mail
an omnibus proxy (the "Omnibus Proxy") to the relevant Issuer Trustee as soon as
possible after the record date. The Omnibus Proxy assigns Cede & Co.'s
consenting or voting rights to those Direct Participants to whose accounts such
Trust Preferred Securities or Junior Subordinated Debentures are credited on the
record date (identified in a listing attached to the Omnibus Proxy).
Distribution payments on the Trust Preferred Securities or the Junior
Subordinated Debentures will be made by the relevant Issuer Trustee to the
Depositary. The Depositary's practice is to credit Direct Participants' accounts
on the relevant payment date in accordance with their respective holdings shown
on the Depositary's records unless the Depositary has reason to believe that it
will not receive payments on such payment date. Payments by Participants to
Beneficial Owners will be governed by standing instructions and customary
practices and will be the responsibility of such Participant and not of the
Depositary, the relevant Issuer Trustee, the Trust or us, subject to any
statutory or regulatory requirements as may be in effect from time to time.
Payment of Distributions to the Depositary is the responsibility of the relevant
Issuer Trustee, disbursement of such payments to Direct Participants is the
responsibility of the Depositary, and disbursements of such payments to the
Beneficial Owners is the responsibility of Direct and Indirect Participants.
The Depositary may discontinue providing its services as securities
depositary with respect to any of the Trust Preferred Securities or the Junior
Subordinated Debentures at any time by giving reasonable notice to the relevant
Issuer Trustee and us. In the event that a successor securities depositary is
not obtained, definitive Trust Preferred Securities or Junior Subordinated
Debentures certificates representing such Trust Preferred Securities or Junior
Subordinated Debentures are required to be printed and delivered. We, at our
option, may decide to discontinue use the system of book-entry transfers through
the Depositary (or a successor depositary). After a Debenture
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Event of Default, the holders of a majority in liquidation preference of Trust
Preferred Securities or aggregate principal amount of Junior Subordinated
Debentures may determine to discontinue the system of book-entry transfers
through the Depositary. In any such event, definitive certificates for such
Trust Preferred Securities or Junior Subordinated Debentures will be printed and
delivered.
The information in this section concerning the Depositary and the
Depositary's book-entry system has been obtained from sources that the Trust and
we believe to be accurate but neither the Trust nor we assume any responsibility
for the accuracy thereof. Neither the Trust nor we have any responsibility for
the performance by the Depositary or its Participants of their respective
obligations as described herein or under the rules and procedures governing
their respective operations.
RELATIONSHIP AMONG THE TRUST PREFERRED SECURITIES, THE
JUNIOR SUBORDINATED DEBENTURES AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Trust Preferred
Securities (to the extent the Trust has funds on hand legally available for the
payment of such Distributions) will be irrevocably guaranteed by us as and to
the extent set forth under "Description of Guarantee." Taken together, our
obligations under the Junior Subordinated Debentures, the Indenture, the Trust
Agreement and the Guarantee will provide, in the aggregate, a full, irrevocable
and unconditional guarantee of payments of Distributions and other amounts due
on the Trust Preferred 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 Trust Preferred Securities. If and to the extent
that we do not make the required payments on the Junior Subordinated Debentures,
the Trust will not have sufficient funds to make the related payments, including
Distributions, on the Trust Preferred Securities. The Guarantee will 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 Trust Preferred
Securities is to institute a Direct Action. Our obligations under the Guarantee
will be (i) subordinate and junior in right of payment to all Senior and
Subordinated Indebtedness, except for those liabilities made equal or
subordinate to the Guarantee by their terms, (ii) pari passu with any senior
preferred stock which may be hereafter issued, (iii) senior to our capital stock
and (iv) effectively subordinated to the liabilities and obligations of our
subsidiaries.
Sufficiency of Payments
As long as payments of interest and other payments are made when due on
the Junior Subordinated Debentures, such payments will be sufficient to cover
Distributions and other payments due on the Trust Preferred Securities, because:
(i) the aggregate principal amount of the Junior Subordinated Debentures will be
equal to the sum of the aggregate Liquidation Amount of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debentures will match the Distribution rate and Distribution and
other payment dates for the Trust Securities; (iii) we shall pay for all and any
costs, expenses and liabilities of the Trust except the Trust's obligations to
holders of Trust Securities under the Trust Securities; and (iv) the
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Trust Agreement will provide 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 Trust Preferred Securities
A holder of any Trust Preferred Security may institute a legal
proceeding directly against us to enforce its rights under the 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 and Subordinated
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 and Subordinated Indebtedness, the subordination provisions of the
Indenture will provide that no payments may be made in respect of the Junior
Subordinated Debentures until such Senior and Subordinated Indebtedness has been
paid in full or any payment default thereunder has been cured or waived. Failure
to make required payments on Junior Subordinated Debentures would constitute an
Event of Default under the Trust Agreement.
Limited Purpose of the Trust
The Trust Preferred Securities will represent preferred beneficial
interests 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 other
activities that are necessary or incidental thereto. A principal difference
between the rights of a holder of a Trust Preferred Security and a holder of a
Junior Subordinated Debenture is that a holder of a Junior Subordinated
Debenture will be entitled to receive from us the principal amount of and
interest on Junior Subordinated Debentures held, while a holder of Trust
Preferred Securities is entitled to receive Distributions from the Trust (or, in
certain circumstances, from us 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 Junior Subordinated Debentures are distributed to holders of
the Trust Securities, upon any voluntary or involuntary termination, winding-up
or liquidation of the Trust, after satisfaction of the liabilities of creditors
of the Trust as required by applicable law, the holders of the Trust Preferred
Securities will be entitled to receive, out of assets held by the Trust, the
Liquidation Distribution in cash. See "Description of Trust Preferred Securities
- - Distribution of Junior Subordinated Debentures." Upon our voluntary or
involuntary liquidation or bankruptcy, the Property Trustee, as holder of the
Junior Subordinated Debentures, would be a subordinated creditor of ours,
subordinated in right of payment to all Senior and Subordinated Indebtedness as
set forth in the Indenture, but entitled to receive payment in full of principal
and interest, before any of our stockholders receive payments or distributions.
Since we will be the guarantor under the Guarantee and will agree 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 Trust
Preferred
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Securities and a holder of Junior Subordinated Debentures relative to other
creditors and to our stockholders in the event of our liquidation or bankruptcy
will be substantially the same.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
General
In the opinion of Elias, Matz, Tiernan & Herrick L.L.P., special
federal income tax counsel to the Trust and us ("Tax Counsel"), the following is
a summary of certain of the material United States federal income tax
consequences of the purchase, ownership and disposition of Trust Preferred
Securities held as capital assets by a holder who purchases such Trust Preferred
Securities upon initial issuance. It does not deal with special classes of
holders such as banks, thrifts, real estate investment trusts, regulated
investment companies, insurance companies, dealers in securities or currencies,
tax-exempt investors, United States Alien Holders (as defined below) engaged in
a U.S. trade or business or persons that will hold the Trust Preferred
Securities as a position in a "straddle," as part of a "synthetic security" or
"hedge," as part of a "conversion transaction" or other integrated investment,
or as other than a capital asset. This summary also does not address the tax
consequences to persons that have a functional currency other than the U.S.
dollar or the tax consequences to shareholders, partners or beneficiaries of a
holder of Trust Preferred Securities. Further, it does not include any
description of any alternative minimum tax consequences or the tax laws of any
state or local government or of any foreign government that may be applicable to
the Trust Preferred Securities. This summary is based on the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury regulations thereunder and the
administrative and judicial interpretations thereof, as of the date hereof, all
of which are subject to change, possibly on a retroactive basis. An opinion of
Tax Counsel is not binding on the Internal Revenue Service ("IRS") or the
courts. No rulings have been or are expected to be sought from the IRS with
respect to any of the transactions described herein and no assurance can be
given that the IRS will not take contrary positions. Moreover, no assurance can
be given that the opinions expressed herein will not be challenged by the IRS
or, if challenged, that a challenge would not be successful.
The United States federal income tax discussion set forth below is
included for general information only and may not be applicable depending upon a
holder's particular situation. Holders should consult their tax advisors with
respect to the tax consequences to them of the purchase, ownership and
disposition of the Trust Preferred Securities, including the tax consequences
under state, local, foreign and other tax laws and the possible effects of
changes in United States federal or other tax laws.
Classification of the Junior Subordinated Debentures
In connection with the issuance of the Junior Subordinated Debentures,
Tax Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Indenture (and
certain other documents), and based on certain facts and assumptions contained
in such opinion, the Junior Subordinated Debentures will be classified for
United States federal income tax purposes as our indebtedness. We, the Trust and
the holders of the Trust Preferred Securities (by acceptance of a beneficial
interest in a Trust Preferred Security) will
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agree to treat the Junior Subordinated Debentures as our indebtedness for all
United States federal income tax purposes.
Classification of the Trust
In connection with the issuance of the Trust Preferred Securities, Tax
Counsel has rendered its opinion generally to the effect that, under then
current law and assuming full compliance with the terms of the Trust Agreement
and the Indenture (and certain other documents), and based on certain facts and
assumptions contained in such opinion, the Trust will be classified for United
States federal income tax purposes as a grantor trust and not as an association
taxable as a corporation. Accordingly, for United States federal income tax
purposes, each holder of Trust Preferred Securities generally will be considered
the owner of an undivided interest in the Junior Subordinated Debentures, and
each holder will be required to include in its gross income a pro rata share of
any interest (or original issue discount ("OID") accrued) with respect to its
allocable share of those Junior Subordinated Debentures.
Interest Income and Original Issue Discount
Under applicable Treasury regulations (the "Regulations"), if the terms
and conditions of a debt instrument make the likelihood that stated interest
will not be timely paid a "remote" contingency, such contingency will be ignored
in determining whether a debt instrument is issued with OID. We believe that the
likelihood of our exercising our option to defer payments of interest is remote,
because exercising the option would, among other things, prevent us from
declaring dividends on any class of our equity securities. Based upon this
conclusion by us, Tax Counsel has rendered its opinion that the Junior
Subordinated Debentures will not be considered to be issued with OID and,
accordingly, stated interest on the Junior Subordinated Debentures generally
will be taxable to a holder as ordinary income at the time it is paid or accrued
in accordance with such holder's method of tax accounting.
Under the Regulations, if we were to exercise our option to defer
payments of stated interest, the Junior Subordinated Debentures would, at such
time, be treated as redeemed and reissued with OID, and all stated interest on
the Junior Subordinated Debentures would thereafter be treated as OID as long as
the Junior Subordinated Debentures remain outstanding. In such event, all of a
holder's taxable interest income with respect to the Junior Subordinated
Debentures would thereafter be accounted for on an economic accrual basis
regardless of such holder's method of tax accounting, and actual distributions
of stated interest related thereto would not be reported as taxable income.
Consequently, a holder of Trust Preferred Securities would be required to
include in gross income OID even though we would not make actual cash payments
during a Deferral Period.
The Regulations have not yet been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take a
position contrary to the interpretation described herein. If the option to defer
the payment of interest was determined not to be "remote," the Junior
Subordinated Debentures would be treated as having been originally issued with
OID. In that event, all of a holder's taxable interest income with respect to
the Junior Subordinated Debentures would
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be accounted for on an economic accrual basis regardless of the holder's method
of tax accounting, and actual distributions of stated interest would not be
reported as taxable income.
Characterization of Income
Because income on the Trust Preferred Securities will constitute
interest or OID, corporate holders of the Trust Preferred Securities will not be
entitled to a dividends-received deduction with respect to any income recognized
with respect to the Trust Preferred Securities.
Distribution of Junior Subordinated Debentures or Cash Upon Liquidation of the
Trust
We will have the right at any time to liquidate the Trust and cause the
Junior Subordinated Debentures to be distributed to the holders of the Trust
Securities. The distribution, for United States federal income tax purposes,
would be treated as a nontaxable event to each holder, and each holder would
receive an aggregate tax basis in the Junior Subordinated Debentures equal to
the holder's aggregate tax basis in its Trust Preferred Securities. For United
States federal income tax purposes, a holder's holding period in the Junior
Subordinated Debentures so received in liquidation of the Trust would include
the period during which the Trust Preferred Securities were held by the holder.
Under certain circumstances described herein, the Junior Subordinated
Debentures may be redeemed for cash and the proceeds of such redemption
distributed to holders in redemption of their Trust Preferred Securities. Such a
redemption would, for United States federal income tax purposes, constitute a
taxable disposition of the redeemed Trust Preferred Securities, and a holder
could recognize gain or loss as if it sold such redeemed Trust Preferred
Securities for cash.
Sales of Trust Preferred Securities
A holder that sells Trust Preferred Securities (including a redemption
of the Trust Preferred Securities by us) will recognize gain or loss equal to
the difference between its adjusted tax basis in the Trust Preferred Securities
and the amount realized on the sale of such Trust Preferred Securities (other
than with respect to accrued and unpaid interest which has not yet been included
in income, which will be treated as ordinary income). A holder's adjusted tax
basis in the Trust Preferred Securities generally will be its initial purchase
price increased by OID (if any) previously includable in such holder's gross
income to the date of disposition and decreased by payments (if any) received on
the Trust Preferred Securities in respect of OID. The gain or loss generally
will be a capital gain or loss and generally will be a long-term capital gain or
loss if the Trust Preferred Securities have been held for more than one year.
A holder who disposes of the Trust Preferred Securities between record
dates for payments of distributions thereon will be required to include in
income (to the extent not previously included in income) as ordinary income
amounts attributable to accrued and unpaid interest on the Junior Subordinated
Debentures through the date of disposition and the amount realized on
disposition excludes the portion of the sales price treated as interest. To the
extent the selling price is less than the holder's adjusted tax basis, a holder
will recognize a capital loss. Subject to certain limited
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exceptions, capital losses cannot be applied to offset ordinary income for
United States federal income tax purposes.
The Trust Preferred Securities may trade at a price that does not
accurately reflect the value of accrued but unpaid interest with respect to the
underlying Junior Subordinated Debentures. A holder who uses the accrual method
of accounting for tax purposes (and a cash method holder, if the Junior
Subordinated Debenture are deemed to have been issued with OID) who disposes of
his Trust Preferred Securities between record dates for payments of
distributions thereon will be required to include accrued but unpaid interest on
the Junior Subordinated Debentures through the date of disposition in income as
ordinary income (i.e., interest or, if applicable, OID), and to add the amount
to his adjusted tax basis in his pro rata share of the underlying Junior
Subordinated Debentures deemed disposed of. To the extent the selling price is
less than the holder's adjusted tax basis (which will include all accrued but
unpaid interest) a holder will recognize a capital loss. Subject to certain
limited exceptions, capital losses cannot be applied to offset ordinary income
for United States federal income tax purposes.
United States Alien Holders
For purposes of this discussion, a "United States Alien Holder" is any
corporation, individual, partnership, estate or trust that is not a U.S. Holder
for United States federal income tax purposes.
A "U.S. Holder" is a holder of Trust Preferred Securities who or which
is (i) a citizen or individual resident (or is treated as a citizen or
individual resident) of the United States for federal income tax purposes, (ii)
a corporation or partnership created or organized in or under the laws of the
United States or any political subdivision thereof, (iii) an estate the income
of which is includable in its gross income for federal income tax purposes
without regard to its source or (iv) a trust over which (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 persons have the authority to
control all substantial decisions of the trust.
Under present United States federal income tax laws: (i) payments by
the Trust or any of its paying agents to any holder of a Trust Preferred
Security who or which is a United States Alien Holder will not be subject to
United States federal withholding tax; provided that, (a) the beneficial owner
of the Trust Preferred Security does not actually or constructively own 10
percent or more of the total combined voting power of all of our classes of
stock entitled to vote, (b) the beneficial owner of the Trust Preferred Security
is not a controlled foreign corporation that is related to us through stock
ownership, (c) the beneficial owner is not a bank whose receipt of interest is
described in Section 881(c)(3)(A) of the Code, and (d) either (A) the beneficial
owner of the Trust Preferred Security certifies to the Trust or its agent, under
penalties of perjury, that it is not a U.S. Holder and provides its name and
address or (B) a securities clearing organization, bank or other financial
institution that holds customers' securities in the ordinary course of its trade
or business (a "Financial Institution"), and holds the Trust Preferred Security
in such capacity, certifies to the Trust or its agent, under penalties of
perjury, that such statement has been received from the beneficial owner by it
or by a Financial Institution between it and the beneficial owner and
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furnishes the Trust or its agent with a copy thereof; and (ii) a United States
Alien Holder of a Trust Preferred Security will not be subject to United States
federal withholding tax on any gain realized upon the sale or other disposition
of a Trust Preferred Security. Under Treasury regulations finalized in 1997, the
certification requirement referred to in clause (i)(d) above may be satisfied
with other documentary evidence for interest paid after December 31, 2000 with
respect to offshore accounts or through certain foreign intermediaries.
Potential Tax Law Changes
As discussed above, changes in legislation affecting the United States
federal income tax treatment of the Junior Subordinated Debentures are possible,
and could adversely affect our ability to deduct the interest payable on the
Junior Subordinated Debentures. Moreover, any such legislation could adversely
affect United States Alien Holders by characterizing income derived from the
Junior Subordinated Debentures as dividends, generally subject to a 30% income
tax (on a withholding basis) when paid to a United States Alien Holder, rather
than as interest which, as discussed above, is generally exempt from income tax
in the hands of a United States Alien Holder.
Information Reporting to Holders
Generally, income on the Trust Preferred Securities will be reported to
holders on Internal Revenue Form 1099, which forms should be mailed to holders
of Trust Preferred Securities by January 31 following each calendar year.
Backup Withholding
Backup withholding of United States federal income tax at a rate of 31%
may apply to payments made in respect of the Trust Preferred Securities to
registered owners who are not "exempt recipients" and who fail to provide
certain identifying information (such as the registered owner's taxpayer
identification number) in the required manner. Generally, individuals are not
exempt recipients, whereas corporations and certain other entities generally are
exempt recipients. Payments made in respect of the Trust Preferred Securities to
a U.S. Holder must be reported to the IRS, unless the U.S. Holder is an exempt
recipient or establishes an exemption. Compliance with the identification
procedures described in the "United States Alien Holders" section would
establish an exemption from backup withholding for those United States Alien
Holders who are not exempt recipients.
In addition, upon the sale of the Trust Preferred Securities to (or
through) a broker, the broker must withhold 31% of the entire purchase price,
unless either (i) the broker determines that the seller is a corporation or
other exempt recipient or (ii) the seller provides, in the required manner,
certain identifying information and, in the case of a United States Alien
Holder, certifies that such seller is a United States Alien Holder (and certain
other conditions are met). Such a sale must also be reported by the broker to
the IRS, unless either (i) the broker determines that the seller is an exempt
recipient or (ii) the seller certifies its United States Alien Holder status
(and certain other conditions are met). Certification of the registered owner's
United States Alien Holder status
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would be made normally on an Internal Revenue Service Form W-8 under penalties
of perjury, although in certain cases it may be possible to submit other
documentary evidence.
ERISA CONSIDERATIONS
We, as the obligor with respect to the Junior Subordinated Debentures
held by the Trust, and our affiliates and the Property Trustee may be considered
a "party in interest" (within the meaning of the Employment 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 that are subject to ERISA and/or certain employee benefit-related
provisions of the Code ("Plans"). The purchase and/or holding of Trust Preferred
Securities by a Plan that is subject to the fiduciary responsibility provisions
of ERISA or the prohibited transaction provisions of Section 4975 of the Code
(including individual retirement arrangements and other plans described in
Section 4975(e)(1) of the Code) and with respect to which we, 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 Trust Preferred
Securities are acquired pursuant to and in accordance with an applicable
exemption, such as Prohibited Transaction Class Exemption ("PTCE") 84-14 (an
exemption for certain transactions determined by an independent qualified
professional asset manager), PTCE 91-38 (an exemption for certain transactions
involving bank collective investment funds), PTCE 90-1 (an exemption for certain
transactions involving insurance company pooled separate accounts), PTCE 95-60
(an exemption for transactions involving certain insurance company general
accounts) or PTCE 96-23 (an exemption for certain transactions determined by an
in-house asset manager).
In order to avoid prohibited transactions that may result from the
purchase and/or holding of the Trust Preferred Securities, each purchaser of a
Trust Preferred Security shall be deemed to represent to us and the Property
Trustee that either (a) no part of the funds being used to pay the purchase
price of the Trust Preferred Security constitutes "plan assets," or (b) if the
funds being used to pay the purchase price of the Trust Preferred Security
include "plan assets," that its purchase and holding of the Trust Preferred
Security will not result in a prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code (or, in the case of a governmental plan, any
substantially similar Federal, State or local law) for which an exemption is not
available.
The U.S. Department of Labor has promulgated a regulation, 29 C.F.R.
Section 2510.3-101 (the "Plan Asset Regulation"), describing what constitutes
the assets of a Plan with respect to the Plan's investment in an entity for
purposes of certain provisions of ERISA and the Code, including the fiduciary
responsibility provisions of ERISA and the prohibited transaction provisions of
ERISA and Section 4975 of the Code. Under the Plan Asset Regulation, if a Plan
invests in an "equity interest" of an entity that is neither a "publicly offered
security" nor a security issued by an investment company registered under the
Investment Company Act, the Plan's assets include both the equity interest and
an undivided interest in each of the entity's underlying assets, unless it is
established that the entity is an "operating company" or that equity
participation in the entity by "benefit plan investors" is not "significant."
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Because the Trust Preferred Securities will represent beneficial
interests in the Trust, the Trust Preferred Securities are likely to be
considered equity interests in the Trust for purposes of the Plan Asset
Regulation, with the result that the assets of the Trust are likely to be
treated as "plan assets" of the investing plans for purposes of ERISA and
Section 4975 of the Code, unless the Trust Preferred Securities qualify as
"publicly offered securities."
A publicly-offered security is a security that is (a) freely
transferable, (b) part of a class of securities that is owned, immediately
subsequent to the initial offering, by 100 or more investors who were
independent of the issuer and of one another ("Independent Investors") and (c)
either is (i) part of a class of securities registered under section 12(b) or
12(g) of the Exchange Act, or (ii) sold to the plan as part of an offering of
securities to the public pursuant to an effective registration statement under
the Securities Act and the class of securities of which such security is a part
is registered under the Exchange Act within 120 days (or such later time as may
be allowed by the Commission) after the end of the fiscal year of the issuer
during which the offering of such securities to the public occurred. For
purposes of the 100 Independent Investor criterion, the Trust Preferred
Securities should be deemed to be a "class" of securities that would be tested
separately from any other securities that may be issued by the Trust. It is
anticipated that the Trust Preferred Securities will meet the foregoing criteria
for treatment as "publicly-offered securities." No restrictions will be imposed
on the transfer of the Trust Preferred Securities. It is expected that the Trust
Preferred Securities will be held by at least 100 Independent Investors at the
conclusion of the initial public offering although no assurance can be given,
and no monitoring or other measures will be taken to ensure, that such condition
is met. Also, the Trust Preferred Securities will be sold as part of an offering
pursuant to an effective registration statement under the Act and then will be
timely registered under the Exchange Act. As a result the Trust Preferred
Securities should qualify as publicly-offered securities and therefore will be
eligible for purchase by Plans.
In light of the foregoing, fiduciaries or other persons contemplating
purchasing the Trust Preferred Securities on behalf or with "plan assets" of any
Plan should consult their own counsel regarding whether the Trust assets
represented by the Trust Preferred Securities would be considered "plan assets,"
the consequences that would apply if the Trust's assets were considered "plan
assets," and the possibility of exemptive relief from the prohibited transaction
rules. In addition, based on the reasoning of the United States Supreme Court's
decision in John Hancock Mut. Life. Ins. Co. v. Harris Trust and Sav. Bank, 510
U.S. 86 (1993), under certain circumstances assets in the general account of an
insurance company may be deemed to be plan assets for certain purposes, and
under such a reasoning a purchase of the Trust Preferred Securities with assets
of an insurance company's general account may subject the insurance company to
the prohibited transaction and other fiduciary responsibility rules of ERISA
with respect to such assets. Insurance company general account investors should
also consider the effect of the enactment of Section 401(c) of ERISA and any
regulations issued under Section 401(c). Finally, Plan fiduciaries and other
Plan investors should consider whether the investment (i) satisfies the
diversification requirement of ERISA or other applicable law, (ii) is in
accordance with the Plan's governing instruments, and (iii) is prudent in light
of the "Risk Factors" and other factors discussed herein.
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The sale of Trust Preferred Securities to Plans is in no respect a
representation by the Trust, us, the Property Trustee, the underwriters or any
other person associated with the sale of the Trust Preferred Securities that
such securities meet all 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 Trust Preferred Securities with assets of any Plan should consult
with its counsel.
UNDERWRITING
Subject to the terms and conditions set forth in an underwriting
agreement, the Trust has agreed to sell to each of the underwriters named below,
and each of the underwriters has severally agreed to purchase, the number of
Trust Preferred Securities set forth opposite its name below. In the
underwriting agreement, the underwriters have agreed, subject to the terms and
conditions set forth in the underwriting agreement, to purchase all of the Trust
Preferred Securities offered hereby if any of the Trust Preferred Securities are
purchased. In the event of default by an underwriter, the underwriting agreement
provides that, in certain circumstances, the purchase commitments of the
nondefaulting underwriters may be increased or the underwriting agreement may be
terminated.
Number
of Trust
Preferred
Underwriters Securities
- ------------ ----------
A.G. Edwards & Sons, Inc.
Friedman Billings Ramsey
Keefe, Bruyette & Woods, Inc.
----------
Total.....................................................
==========
The underwriters propose to offer the Trust Preferred Securities in
part directly to the public at the public offering price, as set forth on the
cover page of this prospectus, and in part to certain securities dealers at such
price less a concession of $ per Trust Preferred Security. The
underwriters may allow, and such dealers may reallow, a concession not in excess
of $ per Trust Preferred Security to certain brokers and dealers. After the
Trust Preferred Securities are released for sale to the public, the offering
price and other selling terms may from time to time be varied by the
underwriters.
We have granted to the underwriters an option exercisable not later
than 30 days after the date of this prospectus, to purchase up to an additional
156,000 Trust Preferred Securities at the public offering price plus accrued
Distributions, if any, from , 1999. To the extent that the underwriters
exercise this option, we will be obligated, pursuant to the option, to sell such
Trust Preferred Securities to the underwriters. The underwriters may exercise
this option only to cover over-allotments made in connection with the sale of
the Trust Preferred Securities offered by this
73
<PAGE>
prospectus. If purchased, the underwriters will offer such additional Trust
Preferred Securities on the same terms as those on which the 1,044,000 Trust
Preferred Securities are being offered.
During a period beginning on the date of the pricing and ending days
from the date of original issuance of the Trust Preferred Securities, neither
the Trust nor we will, without the prior written consent of the underwriters,
directly or indirectly, sell, offer to sell, contract to sell, grant any option
for the sale of, or otherwise dispose of, any Trust Preferred Securities, any
security convertible into or exchangeable into or exercisable for Trust
Preferred Securities or the Junior Subordinated Debentures or any debentures
substantially similar to the Junior Subordinated Debentures or any equity
securities substantially similar to the Trust Preferred Securities (except for
the Junior Subordinated Debentures and the Trust Preferred Securities offered
hereby).
Application has been made to list the Trust Preferred Securities on the
Nasdaq National Market. The underwriters have advised the Trust that the
underwriters intend to make a market in the Trust Preferred Securities prior to
the commencement of trading on the Nasdaq National Market. The underwriters will
have no obligation to make a market in the Trust Preferred Securities, however,
and may terminate market making activities, if commenced, at any time. Prior to
this offering, there has been no public market for the Trust Preferred
Securities.
The following table summarizes the discounts and commissions to be paid
to the underwriters by the Trust in connection with this offering. These amounts
are shown assuming both no exercise and full exercise of the underwriter's
option to purchase additional shares of Trust Preferred Securities.
Paid By
The Trust
------------------------------------------------
No Full
Exercise Exercise
------------------ --------------------
Per Share..................... $ $
Total......................... $ $
In view of the fact that the proceeds of the sale of the Trust
Preferred Securities will be used to purchase the Junior Subordinated
Debentures, the underwriting agreement provides that we will agree to pay as
compensation to the underwriters for the underwriters' arranging the investment
therein of such proceeds, an amount in immediately available funds of $ per
Trust Preferred Security (or $ ($ if the over-allotment option is
exercised in full) in the aggregate) for the accounts of the underwriters.
The Trust expects to incur expenses of approximately $_____ in
connection with this offering.
74
<PAGE>
Until the distribution of the Trust Preferred Securities is completed,
rules of the SEC may limit the ability of the underwriters and certain
selling group members to bid for and purchase the Trust Preferred Securities. As
an exception to these rules, the underwriters are permitted to engage in certain
transactions that stabilize, maintain or otherwise affect the price of the Trust
Preferred Securities.
If the underwriters create a short position in the Trust Preferred
Securities in connection with the offering, i.e., if they sell a greater
aggregate number of Trust Preferred Securities than is set forth on the cover
page of this prospectus, the underwriters may reduce the short position by
purchasing Trust Preferred Securities in the open market. This is known as a
"syndicate covering transaction." The underwriters may also elect to reduce any
short position by exercising all or part of the over-allotment option described
above.
The underwriters may also impose a penalty bid on certain selling group
members. This means that if the underwriters purchase Trust Preferred Securities
in the open market to reduce the selling group members' short position or to
stabilize the price of the Trust Preferred Securities it may reclaim the amount
of the selling concession from the selling group members who sold those Trust
Preferred Securities as part of the offering.
In general, purchases of a security for the purpose of stabilization or
to reduce a short position could cause the price of the security to be higher
than it might be in the absence of such purchases. The imposition of a penalty
bid might also have an effect on the price of a security to the extent that it
were to discourage resales of the security.
Neither we, the Trust nor any of the underwriters makes any
representation or prediction as to the direction or magnitude of any effect that
the transactions described above may have on the price of the Trust Preferred
Securities. In addition, neither we, the Trust nor any of the underwriters makes
any representation that the underwriters will engage in such transactions or
that such transactions, once commenced, will not be discontinued without notice.
We and the Trust have agreed to indemnify the underwriters against, or
to contribute to payments that the underwriters may be required to make in
respect of, certain liabilities, including liabilities under the Securities Act.
Certain of the underwriters engage in transactions with, and, from time
to time, have performed services for, us and our affiliates in the ordinary
course of business.
LEGAL MATTERS
Certain legal matters will be passed upon for us by Elias, Matz,
Tiernan & Herrick L.L.P., Washington, D.C., and for the underwriters by Mayer,
Brown & Platt, Chicago, Illinois. Certain matters of Delaware law relating to
the validity of the Trust Preferred Securities will be passed upon on behalf of
the Trust by Richards, Layton & Finger, P.A., special Delaware counsel to the
75
<PAGE>
Trust and us. Certain matters relating to United States federal income tax
considerations will be passed upon for us by Elias, Matz, Tiernan & Herrick
L.L.P., Washington, D.C.
EXPERTS
Our consolidated financial statements as of December 31, 1998 and 1997,
and for the year ended December 31, 1998, and for the six month period ended
December 31, 1997, have been incorporated by reference herein and in reliance
upon the report of KPMG LLP, independent certified public accountants,
incorporated by reference herein and upon the authority of said firm as experts
in accounting and auditing.
Our consolidated statements of operations, stockholders' equity and
cash flows for each of the years in the two-year period ended June 30, 1997,
incorporated by reference in this prospectus have been audited by Arthur
Andersen LLP, independent public accountants, as indicated in their report, with
respect thereto, and are included herein in reliance upon the authority of said
firm as experts in giving said report.
76
<PAGE>
================================================================================
Trust Preferred
Securities
Local Financial Capital
Trust I
% Cumulative Trust Preferred Securities fully and unconditionally guaranteed,
as described herein, by
Local Financial Corporation
--------------------------------------------
PROSPECTUS
--------------------------------------------
A.G. Edwards & Sons, Inc.
Friedman Billings Ramsey
Keefe, Bruyette & Woods, Inc.
, 1999
================================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
SEC registration fee $ 8,340
NASD fee 3,500
Nasdaq fees 10,000
Legal fees and expenses 175,000*
Trustees' fees and expenses 10,000*
Accounting fees and expenses 30,000*
Printing expenses 75,000*
Miscellaneous expenses 13,160*
---------
Total $ 325,000
=========
- -----------------
* Estimated.
Item 15. Indemnification of Directors and Officers.
Article IX of the Registrant's Bylaws provides as follows:
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other
Than Those by or in the Right of the Corporation. Subject to Section 3 of this
Article IX, the Corporation shall indemnify any 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, and any appeal therein, whether civil, criminal,
administrative, arbitrative or investigative (other than an action by or in the
right of the Corporation) by reason of the fact that he is or was a director,
officer, trustee or employee of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, trustee, employee or agent of
another corporation, association, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding, and any appeal therein, if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation, 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, and any appeal
therein, by judgment, order, settlement, conviction, or upon a plea of nolo
contendere or its equivalent, shall not, of itself, create a presumption that
the 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 Corporation, and,
with respect to any criminal action or proceeding, had reasonable cause to
believe that his conduct was unlawful.
II-1
<PAGE>
Section 2. Power to Indemnify in Actions, suits or Proceedings by or in
the Right of the Corporation. Subject to Section 3 of this Article IX, the
Corporation shall indemnify any 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 Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, trustee or employee of the
Corporation, or is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against amounts paid in
settlement and expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit, if he acted in good faith and in a manner he reasonably believed to be in
or not opposed to the best interests of the Corporation; provided, however, that
no indemnification shall be made against expenses in respect of any claim, issue
or matter as to which such person shall have been adjudged to be liable to the
Corporation or against amounts paid in settlement unless and only to the extent
that there is a determination (as set forth in Section 3 of this Article IX)
that despite the adjudication of liability or the settlement, but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses or amounts paid in settlement.
Section 3. Authorization of Indemnification. Any indemnification under
this Article IX (unless ordered by a court) shall be made by the Corporation
only as authorized in the specific case upon a determination that
indemnification of the director, officer, trustee, employee or agent is proper
in the circumstances because such director, officer, trustee, employee or agent
has met the applicable standard of conduct set forth in Section 1 or Section 2
of this Article IX and, if applicable, is fairly and reasonably entitled to
indemnity as set forth in the proviso in Section 2 of this Article IX, as the
case may be. Such determination shall be made (i) by the board of directors by a
majority vote of a quorum consisting of directors who were not parties to such
action, suit or proceeding, (ii) if such quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, or (iii) by the stockholders. To the extent,
however, that a director, officer, trustee, employee or agent of the Corporation
has been successful on the merits or otherwise in defense of any action, suit or
proceeding described above, or in defense of any claim, issue or matter therein,
he shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him in connection therewith, without the necessity of
authorization in the specific case. No director, officer, trustee, employee or
agent of the Corporation shall be entitled to indemnification in connection with
any action, suit or proceeding voluntarily initiated by such person unless the
action, suit or proceeding was authorized by a majority of the entire board of
directors.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article IX, a person shall be deemed to have acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the Corporation or
another enterprise, or on information supplied to him by the officers of the
Corporation or another enterprise in the course of their duties, or on the
advice of legal counsel for the Corporation or another enterprise or on
information or records given or reports made to the Corporation or another
enterprise by an
II-2
<PAGE>
independent certified public accountant or by an appraiser or other expert
selected with reasonable care by the Corporation or another enterprise. The term
"another enterprise" as used in this Section 4 shall mean any other corporation
or any association, partnership, joint venture, trust or other enterprise of
which such person is or was serving at the request of the Corporation as a
director, officer, trustee, employee or agent. The provisions of this section 4
shall not be deemed to be exclusive or to limit in any way the circumstances in
which a person may be deemed to have met the applicable standards of conduct set
forth in Sections 1 or 2 of this Article IX, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article IX, and
notwithstanding the absence of any determination thereunder, any director,
officer, trustee, employee or agent may apply to any court of competent
jurisdiction in the State of Delaware for indemnification to the extent
otherwise permissible under Sections 1 and 2 of this Article IX. The basis of
such indemnification by a court shall be a determination by such court that
indemnification of the director, officer, trustee, employee or agent is proper
in the circumstances because he has met the applicable standards of conduct set
forth in Sections 1 and 2 of this Article IX, as the case may be. Notice of any
application for indemnification pursuant to this Section 5 shall be given to the
Corporation promptly upon the filing of such application. Notwithstanding any of
the foregoing, unless otherwise required by law, no director, officer trustee,
employee or agent of the Corporation shall be entitled to indemnification in
connection with any action, suit or proceeding voluntarily initiated by such
person unless the action, suit or proceeding was authorized by a majority of the
entire board of directors.
Section 6. Expense Payable in Advance. Expenses incurred in connection
with a threatened or pending action, suit or proceeding may be paid by the
Corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, trustee, employee or agent to repay such amount if it shall be
determined that he is not entitled to be indemnified by the Corporation as
authorized in this Article IX.
Section 7. Contract, Non-exclusivity and Survival of Indemnification.
The indemnification provided by this Article IX shall de deemed to be a contract
between the Corporation and each director, officer, employee and agent who
serves in such capacity at any time while this Article IX is in effect, and any
repeal or modification thereof shall not affect any rights or obligations then
existing with respect to any state of facts then or theretofore existing or any
action, suit or proceeding theretofore or thereafter brought based in whole or
in part upon any such state of facts. Further, the indemnification and
advancement of expenses provided by this Article IX shall not be deemed
exclusive of any other rights to which those seeking indemnification and
advancement of expenses may be entitled under any Certificate of Incorporation,
bylaw, agreement, contract, vote of stockholders or disinterested directors or
pursuant to the direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, it being the policy of the
Corporation that, subject to the limitation in Section 3 of this Article IX
concerning voluntary initiation of actions, suits or proceedings,
indemnification of the persons specified in Sections 1 and 2 of this Article IX
II-3
<PAGE>
shall be made to the fullest extent permitted by law. The provisions of this
Article IX shall not be deemed to preclude the indemnification of any person who
is not specified in Sections 1 or 2 of this Article IX but whom the Corporation
has the power or obligation to indemnify under the provisions of the law of the
State of Delaware. The indemnification and advancement of expenses provided by,
or granted pursuant to, this Article IX shall, unless otherwise provided when
authorized or ratified, continue as to a person who has ceased to be a director,
officer, trustee, employee or agent and shall inure to the benefit of the heirs,
executors and administrators of such person.
Section 8. Insurance. The Corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, trustee,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, trustee, employee or agent of another
corporation, association, partnership, joint venture, trust or other enterprise
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 Corporation
would have the power or the obligation to indemnify him against such liability
under the provisions of this Article IX.
Section 9. Meaning of "Corporation" for Purposes of Article IX. For
purposes of this Article IX, references to "the Corporation" shall include, in
addition to the resulting corporation, any constituent corporation (including
any constituent of a constituent) absorbed in a consolidation or merger which,
if its separate existence had continued, would have had power and authority to
indemnify its directors, officers and employees or agents, so that any person
who is or was a director, officer, employee or agent of such constituent
corporation, or is or was serving at the request of such constituent corporation
as a director, officer, employee or agent of another corporation, association,
partnership, joint venture, trust or other enterprise, shall stand in the same
position under the provisions of this Article IX with respect to the resulting
or surviving corporation as he would have with respect to such constituent
corporation if its separate existence had continued.
Item 16. Exhibits
Exhibit No. Description
- ----------- -----------
1 Form of Underwriting Agreement
4.1 Form of Indenture of Registrant relating to the Junior
Subordinated Debentures
4.2 Form of Certificate of Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)
4.3 Certificate of Trust of Local Financial Capital Trust I
4.4 Form of Amended and Restated Declaration of Trust of Local
Financial Capital Trust I
4.5 Form of Trust Preferred Security Certificate for Local Financial
Capital Trust I (included as Exhibit A to Exhibit 4.4)
4.6 Form of Guarantee of Registrant relating to the Trust Preferred
Securities
5.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to the
legality of the Junior Subordinated Debentures and the
Guarantee to be issued by Registrant
II-4
<PAGE>
5.2 Opinion of Richards, Layton & Finger, P.A. as to the legality of
the Trust Preferred Securities to be issued by Local Financial
Capital Trust I
8.0 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain
federal income tax matters
23.1 Consent of KPMG LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in
Exhibits 5.1 and 8)
23.4 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2)
24 Power of Attorney of certain officers, directors and trustees of
the Registrant and Local Financial Capital Trust I, respectively
(located on the signature pages hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act
as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act
as trustee under the Declaration of Trust of Local Financial
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Bank of New York under
the Guarantee for the benefit of the holders of the Trust
Preferred Securities
- -------------------
Item 17. Undertakings
Each of the undersigned Registrants hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, as
amended, each filing of a Registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in this Registration Statement shall be deemed to be a new registration
statement relating to the securities offered herein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each undersigned Registrant pursuant to the 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.
For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the Registrants pursuant to Rule 424(b)(1) or
II-5
<PAGE>
(4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of
this registration statement as of the time it was declared effective.
For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Local Financial
Corporation certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Oklahoma City, Oklahoma on the 25th day of August 1999.
LOCAL FINANCIAL CORPORATION
By: /s/ Edward A. Townsend
--------------------------------
Edward A. Townsend
Chairman of the Board, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each of the directors and/or officers of
Local Financial Corporation whose signature appears below hereby appoints Edward
A. Townsend and Richard L. Park, and each of them severally, as his or her
attorney-in-fact to sign in his or her name and behalf, in any and all
capacities stated below and to file with the Securities and Exchange Commission
any and all amendments, including post-effective amendments, to this
Registration Statement on Form S-3, making such changes in the Registration
Statement as appropriate, and generally to do all such things in their behalf in
their capacities as directors and/or officers to enable Local Financial
Corporation to comply with the provisions of the Securities Act of 1933, and all
requirements of the Securities and Exchange Commission.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Edward A. Townsend Chairman of the Board, President and
- ----------------------------- Chief-Executive-Officer August 25, 1999
Edward A. Townsend (Principal Executive Officer)
/s/ Jan A. Norton President and Director August 25, 1999
- -----------------------------
Jan A. Norton
/s/ Richard L. Park Executive Vice President August 25, 1999
- ----------------------------- (Principal-Accounting-Officer)
Richard L. Park
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Robert A. Kotecki Director August 25, 1999
- -----------------------------
Robert A. Kotecki
/s/ Joseph A. Leone Director August 25, 1999
- -----------------------------
Joseph A. Leone
/s/ George Nigh Director August 25, 1999
- -----------------------------
George Nigh
/s/ Kenneth W. Townsend Director August 25, 1999
- -----------------------------
Kenneth W. Townsend
/s/ J. David Rosenberg Director August 25, 1999
- -----------------------------
J. David Rosenberg
</TABLE>
<PAGE>
Pursuant to the requirements of the Securities Act of 1933, Local Financial
Capital Trust I certifies that it has reasonable grounds to believe that it
meets all the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Oklahoma City, Oklahoma, on the 25th day of August 1999.
LOCAL FINANCIAL CAPITAL TRUST I
By: /s/ Edward A. Townsend
--------------------------------
Edward A. Townsend
Administrative Trustee
By: /s/ Jan A. Norton
--------------------------------
Jan A. Norton
Administrative Trustee
By: /s/ Richard L. Park
--------------------------------
Richard L. Park
Administrative Trustee
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
1 Form of Underwriting Agreement
4.1 Form of Indenture of Registrant relating to the Junior
Subordinated Debentures
4.2 Form of Certificate of Junior Subordinated Debenture (included as
Exhibit A to Exhibit 4.1)
4.3 Certificate of Trust of Local Financial Capital Trust I
4.4 Form of Amended and Restated Declaration of Trust of Local
Financial Capital Trust I
4.5 Form of Trust Preferred Security Certificate for Local Financial
Capital Trust I (included as Exhibit A to Exhibit 4.4)
4.6 Form of Guarantee of Registrant relating to the Trust Preferred
Securities
5.1 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to the
legality of the Junior Subordinated Debentures and the
Guarantee to be issued by Registrant
5.2 Opinion of Richards, Layton & Finger, P.A. as to the legality of
the Trust Preferred Securities to be issued by Local Financial
Capital Trust I
8.0 Opinion of Elias, Matz, Tiernan & Herrick L.L.P. as to certain
federal income tax matters
23.1 Consent of KPMG LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of Elias, Matz, Tiernan & Herrick L.L.P. (included in
Exhibits 5.1 and 8)
23.4 Consent of Richards, Layton & Finger, P.A. (included in Exhibit
5.2)
24 Power of Attorney of certain officers, directors and trustees of
the Registrant and Local Financial Capital Trust I, respectively
(located on the signature pages hereto)
25.1 Form T-1 Statement of Eligibility of The Bank of New York to act
as trustee under the Indenture
25.2 Form T-1 Statement of Eligibility of The Bank of New York to act
as trustee under the Declaration of Trust of Local Financial
Capital Trust I
25.3 Form T-1 Statement of Eligibility of The Bank of New York under
the Guarantee for the benefit of the holders of the Trust
Preferred Securities
Exhibit 1
1,044,000 Trust Preferred Securities
LOCAL FINANCIAL CAPITAL TRUST I
(a Delaware Trust)
Fully and Unconditionally Guaranteed by
LOCAL FINANCIAL CORPORATION
(a Delaware corporation)
___ % Cumulative Trust Preferred Securities
(Liquidation Amount of $25 Per Trust Preferred Security)
UNDERWRITING AGREEMENT
September ___, 1999
A.G. EDWARDS & SONS, INC.
FRIEDMAN, BILLINGS, RAMSEY & CO., INC.
KEEFE, BRUYETTE & WOODS, INC.
As Representatives of the Several Underwriters
c/o A.G. Edwards & Sons, Inc.
One North Jefferson Avenue
St. Louis, Missouri 63103
The undersigned, Local Financial Capital Trust I (the "Trust"), a
statutory business trust organized under the Business Trust Act of the State of
Delaware (the "Delaware Act"), and Local Financial Corporation, a Delaware
corporation (the "Company" and, together with the Trust, the "Offerors"), hereby
address you as the representatives (the "Representatives") of each of the
persons, firms and corporations listed on Schedule I hereto (collectively, the
"Underwriters") and hereby confirm their agreement with the several Underwriters
as follows:
1. Description of Trust Preferred Securities. The Trust proposes to
issue and sell to the Underwriters 1,044,000 ___% cumulative trust preferred
securities (liquidation amount of $25 per preferred security) of the Trust (the
"Initial Trust Preferred Securities"). Solely for the purpose of covering
overallotments in the sale of the Initial Trust Preferred Securities, the Trust
further proposes to grant to the Underwriters the right to purchase up to an
additional 156,000 Trust Preferred Securities (the "Option Trust Preferred
Securities and, together with the Initial Trust Preferred Securities, the "Trust
Preferred Securities"), as provided in Section 3 of this Agreement. The Trust
Preferred Securities are more fully described in the Prospectus (as defined
below).
1
<PAGE>
The Trust Preferred Securities will be guaranteed by the Company, to
the extent set forth in the Prospectus, with respect to distributions and
amounts payable upon liquidation or redemption (the "Preferred Securities
Guarantee") pursuant to the Trust Preferred Securities Guarantee Agreement (the
"Preferred Securities Guarantee Agreement"), to be dated as of the Closing Date
(as defined below), executed and delivered by the Company and The Bank of New
York, as trustee (the "Guarantee Trustee"), for the benefit of the holders from
time to time of the Trust Preferred Securities, and will be entitled to the
benefits of certain backup undertakings described in the Prospectus with respect
to the Company's agreement pursuant to the Supplemental Indenture (as defined
below) to pay all expenses relating to the administration of the Trust. The
entire proceeds from the sale of the Trust Preferred Securities will be combined
with the entire proceeds from the sale by the Trust to the Company of its common
securities (the "Trust Common Securities" and, together with the Trust Preferred
Securities, the "Trust Securities") and will be used by the Trust to purchase
$_______ of ___% Junior Subordinated Deferrable Interest Debentures due 2029
(the "Subordinated Debentures" and, together with the Trust Preferred Securities
and the Preferred Securities Guarantee, the "Offered Securities") issued by the
Company. The Trust Common Securities have been guaranteed by the Company, to the
extent set forth in the Prospectus, with respect to distributions and amounts
payable upon liquidation or redemption (the "Common Securities Guarantee" and,
together with the "Preferred Securities Guarantee," the "Guarantees") pursuant
to a Common Securities Guarantee Agreement (the "Common Securities Guarantee
Agreement" and, together with the "Preferred Securities Guarantee Agreement,"
the "Guarantee Agreements"), to be dated as of the Closing Date, executed and
delivered by the Company for the benefit of the holders from time to time of the
Trust Common Securities. The Offerors each understand that the Underwriters
propose to offer the Trust Preferred Securities to the public upon the terms and
conditions set forth in the Registration Statement (as defined below) as soon as
they deem advisable after this Agreement has been executed and delivered, and
the Declaration (as defined below), the Indenture (as defined below) and the
Preferred Securities Guarantee Agreement have each been qualified under the
Trust Indenture Act of 1939, as amended (the "1939 Act").
The Trust Preferred Securities and the Trust Common Securities will be
issued pursuant to the Amended and Restated Declaration of Trust of the Trust,
to be dated as of the Closing Date (such Amended and Restated Declaration,
including Annex I and any exhibits thereto, the "Declaration"), among the
Company, as sponsor, The Bank of New York, as property trustee (the "Property
Trustee"), The Bank of New York (Delaware), as Delaware trustee (the "Delaware
Trustee"), and Edward A. Townsend, Jan A. Norton and Richard L. Park, as
administrative trustees (the "Administrative Trustees" and, together with the
Property Trustee and the Delaware Trustee, the "Trustees"), and the holders,
from time to time, of undivided beneficial interests in the assets of the Trust.
The Subordinated Debentures will be issued pursuant to an indenture, to be dated
as of the Closing Date (the "Indenture"), between the Company and The Bank of
New York, as trustee (the "Debt Trustee").
2. Purchase, Sale and Delivery of Initial Trust Preferred Securities.
On the basis of the representations, warranties and agreements herein contained,
but subject to the terms
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and conditions herein set forth, the Offerors agree to sell to the Underwriters,
and each such Underwriter agrees, severally and not jointly, (a) to purchase
from the Offerors, at a purchase price of $25 per Trust Preferred Security, the
number of Initial Trust Preferred Securities set forth opposite the name of such
Underwriter in Schedule I hereto and (b) to purchase from the Offerors any
additional number of Option Trust Preferred Securities which such Underwriter
may become obligated to purchase pursuant to Section 3 hereof.
The Trust will deliver definitive certificates for the Initial Trust
Preferred Securities at the office of A.G. Edwards & Sons, Inc., 77 Water
Street, New York, New York ("Edwards' Office"), or such other place as you and
the Company may mutually agree upon, for the accounts of the Underwriters
against payment to the Trust of the purchase price for the Initial Trust
Preferred Securities sold by them to the several Underwriters by wire transfer
of immediately available funds payable to the order of the Trust and delivered
to One North Jefferson Avenue, St. Louis, Missouri 63103, or at such other place
as may be agreed upon between you and the Company (the "Place of Closing"), at
10:00 a.m., New York time, on ____________, 1999, or at such other time and date
not later than five full business days thereafter as you and the Company may
agree, such time and date of payment and delivery being herein called the
"Closing Date."
The certificates for the Initial Trust Preferred Securities to be so
delivered will be made available to you for inspection at Edwards' Office (or
such other place as you and the Company may mutually agree upon) at least one
full business day prior to the Closing Date and will be in such names and
denominations as you may request at least forty-eight hours prior to the Closing
Date.
It is understood that an Underwriter, individually, may (but shall not
be obligated to) make payment on behalf of the other Underwriters whose funds
shall not have been received prior to the Closing Date for Initial Trust
Preferred Securities to be purchased by such Underwriter. Any such payment by an
Underwriter shall not relieve the other Underwriters of any of their obligations
hereunder.
As compensation to the Underwriters for their commitments hereunder and
in view of the fact that the proceeds of the sale of the Offered Securities will
ultimately be used to purchase the Subordinated Debentures of the Company, the
Company hereby agrees to pay at Closing Time to A.G. Edwards & Sons, Inc., for
the accounts of the several Underwriters, a commission per Trust Preferred
Security set forth on Schedule II hereto. At the Closing Time, the Company will
pay, or cause to be paid, the commission payable at such time to the
Underwriters under this Section 2 by wire transfer of immediately available
funds to a bank account designated by A.G. Edwards & Sons, Inc. for the account
of the Underwriters.
3. Purchase, Sale and Delivery of the Option Trust Preferred
Securities. The Offerors hereby grant options to the Underwriters to purchase
from them up to 156,000 Trust Preferred Securities on the same terms and
conditions as the Initial Trust Preferred Securities; provided, however, that
such options may be exercised only for the purpose of covering any over
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<PAGE>
allotments which may be made by them in the sale of the Initial Trust Preferred
Securities. No Option Trust Preferred Securities shall be sold or delivered
unless the Initial Trust Preferred Securities previously have been, or
simultaneously are, sold and delivered.
The options are exercisable on behalf of the several Underwriters by
you, as Representatives, at any time, and from time to time, before the
expiration of 30 days from the date of the Prospectus (or, if such 30th day
shall be a Saturday or Sunday or a holiday, on the next day thereunder when the
Nasdaq National Market is open for trading), for the purchase of all or part of
the Option Trust Preferred Securities covered thereby, by notice given by you to
the Company and the Trust in the manner provided in Section 12 hereof, setting
forth the number of Option Trust Preferred Securities as to which the
Underwriters are exercising the options, and the date of delivery of said Option
Trust Preferred Securities, which date shall not be more than five business days
after such notice unless otherwise agreed to by the parties. You may terminate
the options at any time, as to any unexercised portion thereof, by giving
written notice to the Company and the Trust to such effect.
You, as Representatives, shall make such allocation of the Option Trust
Preferred Securities among the Underwriters as may be required to eliminate
purchases of fractional Trust Preferred Securities.
Delivery of the Option Trust Preferred Securities with respect to which
the options shall have been exercised shall be made to or upon your order at
Edwards' Office (or at such other place as you and the Company may mutually
agree upon), against payment by you of the per Trust Preferred Security purchase
price to the Trust by wire transfer of immediately available funds. Such payment
and delivery shall be made at 10:00 a.m., New York time, on the date designated
in the notice given by you as above provided for (which may be the same as the
Closing Date), unless some other date and time are agreed upon, which date and
time of payment and delivery are called the "Option Closing Date." The
certificates for the Option Trust Preferred Securities to be so delivered will
be made available to you for inspection at Edwards' Office at least one full
business day prior to the Option Closing Date and will be in such names and
denominations as you may request at least forty-eight hours prior to the Option
Closing Date. On the Option Closing Date, the Company and the Trust shall
provide the Underwriters such representations, warranties, agreements, opinions,
letters, certificates and covenants with respect to the Option Trust Preferred
Securities as are required to be delivered on the Closing Date with respect to
the Initial Trust Preferred Securities.
As compensation to the Underwriters for their commitments hereunder and
in view of the fact that the proceeds of the sale of the Offered Securities will
ultimately be used to purchase the Subordinated Debentures of the Company, the
Company hereby agrees to pay at Closing Time to A.G. Edwards & Sons, Inc., for
the accounts of the several Underwriters, a commission per Trust Preferred
Security set forth on Schedule II hereto. At the Closing Time, the Company will
pay, or cause to be paid, the commission payable at such time to the
Underwriters under this Section 3
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by wire transfer of immediately available funds to a bank account designated by
A.G. Edwards & Sons, Inc. for the account of the Underwriters.
4. Representations, Warranties and Agreements of the Offerors. (a) Each
Offeror, jointly and severally, represents and warrants to and agrees with each
Underwriter that:
(i) A registration statement (Registration No. ______-_____)
on Form S-3 for the registration of up to $30,000,000 of (i) Trust
Preferred Securities, (ii) Preferred Securities Guarantees and (iii)
Subordinated Debentures, including a preliminary prospectus, and such
amendments to such registration statement as may have been required to
the date of this Agreement, has been carefully prepared by the Offerors
pursuant to and in conformity with the requirements of the Securities
Act of 1933, as amended (the "1933 Act") and the rules and regulations
of the Securities and Exchange Commission (the "SEC") under the 1933
Act (the "1933 Act Rules and Regulations") and has been filed with the
SEC under the 1933 Act. Each of the Offerors meets the requirements for
use of Form S-3 under the 1933 Act. Copies of such registration
statement, including any amendments thereto, each related preliminary
prospectus (meeting the requirements of Rule 430 or 430A of the 1933
Act Rules and Regulations) contained therein, and the exhibits,
financial statements and schedules thereto have heretofore been
delivered by the Offerors to you. If such registration statement has
not become effective under the 1933 Act, a further amendment to such
registration statement, including a form of final prospectus, necessary
to permit such registration statement to become effective will be filed
promptly by the Offerors with the SEC. If such registration statement
has become effective under the 1933 Act, a final prospectus containing
information permitted to be omitted at the time of effectiveness by
Rule 430A of the 1933 Act Rules and Regulations will be filed promptly
by the Offerors with the SEC in accordance with Rule 424(b) of the 1933
Act Rules and Regulations. The term "Registration Statement" as used
herein means the registration statement as amended at the time it
becomes effective under the 1933 Act (the "Effective Date"), including
financial statements and all exhibits and all documents incorporated by
reference therein pursuant to Item 12 of Form S-3 under the 1933 Act
and, if applicable, the information deemed to be included by Rule 430A
of the 1933 Act Rules and Regulations. If it is contemplated, at the
time this Agreement is executed, that a post-effective amendment to
such registration statement will be filed and must be declared
effective before the offering of the Offered Securities may commence,
the term "Registration Statement" as used herein means the registration
statement as amended by said post-effective amendment. If an
abbreviated registration statement is prepared and filed with the SEC
in accordance with Rule 462(b) under the 1933 Act (an "Abbreviated
Registration Statement"), the term "Registration Statement" as used in
this Agreement includes the Abbreviated Registration Statement. The
term "Prospectus" as used herein means (i) the prospectus as first
filed with the SEC pursuant to Rule 424(b) of the 1933 Act Rules and
Regulations, or (ii) if no such filing is required, the form of final
prospectus included in the Registration Statement at the Effective Date
or (iii) if a Term Sheet or abbreviated Term Sheet (as such terms are
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<PAGE>
defined in Rule 434(b) and 434(c), respectively, of the 1933 Act Rules
and Regulations) is filed with the SEC pursuant to Rule 424(b)(7) of
the 1933 Act Rules and Regulations, the Term Sheet or Abbreviated Term
Sheet and the last Preliminary Prospectus filed with the SEC prior to
the time the Registration Statement became effective, taken together,
including, in each case, the documents incorporated by reference
therein pursuant to Item 12 of Form S-3 under the 1933 Act. The term
"Preliminary Prospectus" as used herein shall mean a preliminary
prospectus as contemplated by Rule 430 or 430A of the 1933 Act Rules
and Regulations included at any time in the Registration Statement. For
purposes of this Agreement, the words "amend," "amendment," "amended,"
"supplement" or "supplemented" with respect to the Registration
Statement or the Prospectus shall mean amendments or supplements to the
Registration Statement or the Prospectus, as the case may be; as well
as documents filed after the date of this Agreement and prior to the
completion of the distribution of the Trust Preferred Securities and
incorporated by reference therein as described above.
(ii) Neither the SEC nor any state or other jurisdiction or
other regulatory body has issued, and neither is, to the knowledge of
the Offerors, threatening to issue, any stop order under the 1933 Act
or other order suspending the effectiveness of the Registration
Statement (as amended or supplemented) or preventing or suspending the
use of any Preliminary Prospectus or the Prospectus or suspending the
qualification or registration of the Offered Securities for offering or
sale in any jurisdiction nor instituted or, to the knowledge of the
Offerors, threatened to institute proceedings for any such purpose.
Each Preliminary Prospectus at its date of issue, the Registration
Statement and the Prospectus and any amendments or supplements thereto
contain or will contain, as the case may be, all statements which are
required to be stated therein, and in all material respects conform or
will conform, as the case may be, to the requirements of, the 1933 Act
and the 1933 Act Rules and Regulations and the 1939 Act and the rules
and regulations of the SEC under the rules and regulations of the SEC
under the 1939 Act (the "1939 Act Rules and Regulations"). Neither the
Registration Statement nor any amendment thereto, as of the applicable
effective date, contains or will contain, as the case may be, any
untrue statement of a material fact or omits or will omit to state any
material fact required to be stated therein or necessary to make the
statements therein, not misleading, and neither any Preliminary
Prospectus, the Prospectus nor any supplement thereto contains or will
contain, as the case may be, any untrue statement of a material fact or
omits or will omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading; provided,
however, that the Offerors make no representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus, or any such amendment or supplement, in reliance upon,
and in conformity with, written information furnished to the Offerors
relating to the Underwriters by or on behalf of the Underwriters
expressly for use in the preparation thereof (as provided in Section 13
hereof). There is no contract or document required to be described in
the Registration Statement or Prospectus or to be filed as an exhibit
to the
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<PAGE>
Registration Statement which is not described or filed as required. The
documents incorporated by reference in the Prospectus pursuant to Item
12 of Form S-3 under the 1933 Act, at the time they were filed with the
SEC, complied in all material respects with the requirements of the
Securities Exchange Act of 1934, as amended (the "1934 Act"), and the
rules and regulations adopted by the SEC thereunder (the "1934 Act
Rules and Regulations"); any future documents incorporated by reference
so filed, when they are filed, will comply in all material respects
with the requirements of the 1934 Act and the 1934 Act Rules and
Regulations; no such incorporated document contained or will contain
any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading; and, when read together and with the other
information in the Prospectus, at the time the Registration Statement
became effective and at the Closing Date (and the Option Closing Date,
if applicable), each such incorporated document did not or will not, as
the case may be, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Each preliminary prospectus
and the Prospectus delivered to the Underwriters for use in connection
with the offering of the Offered Securities was identical to the
electronically transmitted copies thereof filed with the SEC pursuant
to EDGAR, except to the extent permitted by Regulation S-T under the
1933 Act Rules and Regulations.
(iii) This Agreement has been duly authorized, executed and
delivered by each of the Offerors and constitutes a valid and legally
binding obligation of each of the Offerors enforceable against each of
the Offerors in accordance with its terms, except to the extent that
enforcement thereof may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally and by
general principles of equity (the "Bankruptcy Exceptions").
(iv) The Company and its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the
laws of the states or other jurisdictions in which they are
incorporated, with full power and authority (corporate and other) to
own, lease and operate their properties and conduct their businesses as
described in the Prospectus and, with respect to the Company, to
execute and deliver, and perform the Company's obligations under, this
Agreement, the Guarantee Agreements, the Guarantees, the Indenture and
the Subordinated Debentures; the Company and its subsidiaries are duly
qualified to do business as foreign corporations in good standing in
each state or other jurisdiction in which their ownership or leasing of
property or conduct of business legally requires such qualification,
except where the failure to be so qualified, individually or in the
aggregate, would not have a Material Adverse Effect. The term "Material
Adverse Effect" as used herein means any material adverse effect on the
condition (financial or other), net worth, business, affairs,
management, prospects, results of operations or cash flow of the
Company and its subsidiaries, taken as a whole.
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<PAGE>
(v) The Trust has been duly created and is validly existing as
a statutory business trust in good standing under the laws of the State
of Delaware, with power and authority to own its properties and conduct
its business as described in the Registration Statement and Prospectus
and to enter into and perform its obligations under this Agreement, the
Trust Securities and the Declaration and to own and hold the
Subordinated Debentures; the Trust has conducted and will conduct no
business other than the transactions contemplated by this Agreement and
described in the Prospectus; the Trust has no liabilities or
obligations other than those arising out of the transactions
contemplated by this Agreement and the Declaration and described in the
Prospectus and is not a party to or otherwise bound by any agreement
other than those described in the Prospectus; the Trust is duly
qualified to transact business as a foreign Company and is in good
standing under the laws of each jurisdiction in which such
qualification is necessary, except to the extent that the failure to so
qualify would not have a material adverse effect on the Trust; the
Trust is and will be classified for United States federal income tax
purposes as a grantor trust and not as an association taxable as a
corporation; the Trust is and will be treated as a consolidated
subsidiary of the Company pursuant to generally accepted accounting
principles; and the Trust has no subsidiaries.
(vi) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree otherwise than
as set forth in the Prospectus and, since the respective dates as of
which information is given in the Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity
or results of operations of the Company and its subsidiaries taken as a
whole, otherwise than as set forth in the Prospectus.
(vii) The execution, delivery and performance of this
Agreement, the Guarantee Agreements, the Guarantees, the Indenture, the
Subordinated Debentures and the Trust Securities and the consummation
of the transactions contemplated herein and therein, including, without
limitation, the issuance by the Company of the Subordinated Debentures
and the Guarantees, the compliance by the Company with all of the
provisions of this Agreement, the use of the proceeds from the sale of
the Offered Securities as described in the Prospectus under the caption
"Use of Proceeds" and the distribution by the Company of the
Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Declaration and described in the
Prospectus, have been duly authorized by all necessary corporate action
of the Company, will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any properties or assets of the Company or any of its
subsidiaries
8
<PAGE>
under any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which the Company or any of its subsidiaries is bound
or to which any of the properties or assets of the Company or any of
its subsidiaries is subject, except to such extent as, individually or
in the aggregate, does not have a Material Adverse Effect; nor will
such action result in any violation of the provisions of the articles
of incorporation or by-laws of the Company or any of its subsidiaries
or any statute, rule, regulation or other law, or any order or judgment
of any court or governmental agency or body having jurisdiction over
the Company or any of its subsidiaries or any of their properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the execution, delivery and performance by the Offerors
of their obligations under this Agreement, the Declaration, the
Guarantee Agreements, the Guarantees, the Indenture, the Subordinated
Debentures or the Trust Securities, the issuance and sale of the
Offered Securities or the consummation of the transactions contemplated
by this Agreement or any of the foregoing, except such as have been, or
will be prior to the Closing Date, obtained under the 1933 Act or as
may be required by the National Association of Securities Dealers, Inc.
(the "NASD") and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or blue sky laws in connection with the purchase and
distribution of the Trust Preferred Securities by the Underwriters.
(viii) The execution, delivery and performance of this
Agreement, the Declaration and the Trust Securities and the
consummation of the transactions contemplated herein and therein,
including, without limitation, the issuance and sale of the Trust
Securities by the Trust, the compliance by the Trust with all of the
provisions of this Agreement and the Declaration, the purchase of the
Subordinated Debentures by the Trust from the Company, the distribution
of the Subordinated Debentures upon the liquidation of the Trust in the
circumstances contemplated by the Declaration and described in the
Prospectus, have been duly authorized by all necessary action
(corporate or otherwise) on the part of the Trust, will not conflict
with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, or result in the creation
or imposition of any lien, charge or encumbrance upon any properties or
assets of the Trust under any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust is a
party or by which the Trust is bound or to which any of the properties
or assets of the Trust is subject, except to such extent as,
individually or in the aggregate, does not have a material adverse
effect on the Trust; nor will such action result in any violation of
the provisions of the Declaration or the Trust's certificate of trust
(the "Certificate of Trust") or any statute, rule, regulation or other
law, or any order or judgment, of any court or governmental agency or
body having jurisdiction over the Trust or any of its properties; and
no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body
is required for the execution, delivery and performance by the Trust of
its obligations under this
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Agreement, the Declaration, the Certificate of Trust or the Trust
Securities, the issuance and sale of the Trust Securities or the
consummation of the transactions contemplated by this Agreement or any
of the foregoing, except such as have been, or will be prior to the
Closing Date, obtained under the 1933 Act or as may be required by the
NASD and such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or blue sky
laws in connection with the purchase and distribution of the Trust
Preferred Securities by the Underwriters.
(ix) The Declaration has been duly authorized by each of the
Offerors; each of the Administrative Trustees of the Trust is an
employee of the Company and has been duly authorized by the Company to
execute and deliver the Declaration; on the Closing Date, the
Declaration will have been duly executed and delivered by the Company
and the Administrative Trustees, and assuming due authorization,
execution and delivery of the Declaration by the Property Trustee and
the Delaware Trustee, the Declaration will be a valid and binding
obligation of the Company and the Administrative Trustees, enforceable
against the Company and the Administrative Trustees in accordance with
its terms, except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions; the Declaration has been duly qualified
under the 1939 Act; and the Declaration conforms to all statements
relating thereto contained in the Prospectus.
(x) The Trust Common Securities have been duly authorized by
the Declaration and, when issued and delivered by the Trust to the
Company in accordance with the terms of the Declaration and against
payment therefor as described in the Registration Statement and
Prospectus, will be validly issued and (subject to the terms of the
Declaration) fully paid and nonassessable undivided beneficial
interests in the assets of the Trust; the issuance of the Trust Common
Securities is not subject to preemptive or other similar rights; no
holder of Trust Common Securities will be subject to personal liability
by reason of being such a holder; on the Closing Date, all of the
issued and outstanding Trust Common Securities will be directly owned
by the Company, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity; and the Trust Common
Securities conform to all statements relating thereto contained in the
Prospectus.
(xi) The Trust Preferred Securities have been duly and validly
authorized and, when issued and delivered pursuant to this Agreement
against payment therefor as provided herein, will be validly issued and
(subject to the terms of the Declaration) fully paid and nonassessable
undivided beneficial interests in the assets of the Trust and will be
entitled to the benefits of the Declaration; the issuance of the Trust
Preferred Securities is not subject to preemptive or other similar
rights; holders of the Trust Preferred Securities will be entitled to
the same limitation of personal liability extended to stockholders of
private corporations for profit incorporated under the General
Corporation Law of the State of Delaware; and the Trust Preferred
Securities conform to all statements relating
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thereto contained in the Prospectus and such description conforms to
the provisions of the Declaration.
(xii) The Indenture has been duly authorized by the Company;
on the Closing Date, the Indenture will have been duly executed and
delivered by the Company, and, assuming the due authorization,
execution and delivery of the Indenture by the Debt Trustee, will
constitute a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms except to the extent
that enforcement thereof may be limited by the Bankruptcy Exceptions;
the Indenture has been duly qualified under the 1939 Act; and the
Indenture conforms to all statements relating thereto contained in the
Prospectus.
(xiii) The Subordinated Debentures have been duly authorized
by the Company; on the Closing Date, the Subordinated Debentures will
have been duly executed and delivered by the Company, and, when
authenticated in the manner provided for in the Indenture and delivered
against payment therefor as described in the Prospectus, will
constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except to the
extent that enforcement thereof may be limited by the Bankruptcy
Exceptions; the Subordinated Debentures are subordinate and junior in
right of payment to all "senior indebtedness" and "subordinated
indebtedness" (as such terms are defined in the Indenture); the
Subordinated Debentures will be in the form contemplated by, and will
be entitled to the benefits of, the Indenture; and the Subordinated
Debentures conform to all statements relating thereto contained in the
Prospectus.
(xiv) Each of the Guarantee Agreements has been duly
authorized by the Company and, on the Closing Date, will have been duly
executed and delivered by the Company, and, in the case of the
Preferred Securities Guarantee Agreement, assuming due authorization,
execution and delivery by the Guarantee Trustee, will constitute a
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except to the extent that
enforcement thereof may be limited by the Bankruptcy Exceptions; the
Preferred Securities Guarantee Agreement has been duly qualified under
the 1939 Act; the Company's obligations under the Preferred Securities
Guarantee will be subordinate and junior in right of payment to all
liabilities of the Company and will be pari passu with [the most senior
preferred stock of the Company and] with any guarantees of the Company
entered into with respect to any preferred securities of an affiliate
of the Company; and each of the Guarantees and the Guarantee Agreements
conform to the statements relating thereto contained in the Prospectus.
(xv) The Company has duly and validly authorized capital stock
as set forth in the Prospectus; all outstanding shares of common stock
of the Company have been duly authorized, validly issued, fully paid
and non-assessable. Except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
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convertible securities, commitments of sale or rights related to or
entitling any person to purchase or otherwise to acquire any shares of,
or any security convertible into or exchangeable or exercisable for,
the capital stock of, or other ownership interest in, the Company. The
outstanding shares of capital stock of the Company's subsidiaries have
been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company free and clear of any
mortgage, pledge, lien, encumbrance, charge or adverse claim and are
not the subject of any agreement or understanding with any person and
were not issued in violation of any preemptive or similar rights; and
there are no outstanding subscriptions, rights, warrants, options,
calls, convertible securities, commitments of sale or instruments
related to or entitling any person to purchase or otherwise acquire any
shares of, or any security convertible into or exchangeable or
exercisable for, the capital stock of, or other ownership interest in
any of the subsidiaries. Other than the subsidiaries listed on Schedule
III, the Company has no subsidiaries which, either individually or
considered in the aggregate as a single subsidiary, constitute a
"significant subsidiary" as defined in Rule 1-02 of Regulation S-X.
(xvi) The statements set forth in the Prospectus describing
the Trust Preferred Securities, the Junior Subordinated Debentures, the
Guarantees, this Agreement, the Declaration of Trust, the Guarantee
Agreements, the Indenture, federal tax laws and ERISA, insofar as they
purport to describe the provisions of the laws and documents referred
to therein, are accurate, complete and fair.
(xvii) Each of the Company and each of its subsidiaries is in
possession of and is operating in compliance with all franchises,
grants, authorizations, licenses, certificates, permits, easements,
consents, orders and approvals ("Permits") from all state, federal,
foreign and other regulatory authorities, and has satisfied the
requirements imposed by regulatory bodies, administrative agencies or
other governmental bodies, agencies or officials, that are required for
the Company and each of its subsidiaries lawfully to own, lease and
operate their properties and conduct their businesses as described in
the Prospectus, and, each of the Company and each of its subsidiaries
is conducting its business in compliance with all of the laws, rules
and regulations of each jurisdiction in which it conducts its business,
in each case with such exceptions, individually or in the aggregate, as
would not have a Material Adverse Effect; each of the Company and each
of its subsidiaries has filed all notices, reports, documents or other
information ("Notices") required to be filed under applicable laws,
rules and regulations, in each case, with such exceptions, individually
or in the aggregate, as would not have a Material Adverse Effect; and,
except as otherwise specifically described in the Prospectus, neither
the Company nor any of its subsidiaries has received any notification
from any court or governmental body, authority or agency, relating to
the revocation or modification of any such Permit or, to the effect
that any additional authorization, approval, order, consent, license,
certificate, permit, registration or qualification ("Approvals") from
such regulatory authority is needed to be obtained by any of them, in
any case where it could be
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reasonably expected that obtaining such Approvals or the failure to
obtain such Approvals, individually or in the aggregate, would have a
Material Adverse Effect.
(xviii) Neither the Company nor Local Oklahoma Bank (the
"Bank") is in violation of any rule or regulation of the Board of
Governors of the Federal Reserve, the Office of the Comptroller of the
Currency or the Federal Deposit Insurance Corporation that could
reasonably be expected to result in any enforcement action against the
Company, the Bank or their officers or directors or to have a Material
Adverse Effect.
(xix) The Company and each of its subsidiaries have filed all
necessary federal, state and foreign income and franchise tax returns
and paid all taxes shown as due thereon; all such tax returns are
complete and correct in all material respects; all tax liabilities are
adequately provided for on the books of the Company and each of its
subsidiaries except to such extent as would not have a Material Adverse
Effect; the Company and each of its subsidiaries have made all
necessary payroll tax payments and are current and up-to-date; and the
Company and each of its subsidiaries have no knowledge of any tax
proceeding or action pending or threatened against the Company, any of
its subsidiaries or the Trust which, individually or in the aggregate,
might have a Material Adverse Effect.
(xx) Except as described in the Prospectus, the Company and
each of its subsidiaries own or possess, or can acquire on reasonable
terms, adequate patents, patent licenses, trademarks, service marks and
trade names necessary to conduct the business now operated by them, and
neither the Company nor any of its subsidiaries has received any notice
of infringement of or conflict with asserted rights of others with
respect to any patents, patent licenses, trademarks, service marks or
trade names which, individually or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, would have a Material
Adverse Effect.
(xxi) The Company and each of its subsidiaries have good and
marketable title in fee simple to all items of real property and good
and marketable title to all personal property owned by them, in each
case free and clear of all liens, encumbrances, restrictions and
defects except such as are described in the Prospectus or do not
materially affect the value of such property and do not interfere with
the use made and proposed to be made of such property; and any property
held under lease or sublease by the Company or any of its subsidiaries
is held under valid, subsisting and enforceable leases or subleases
with such exceptions as are not material and do not interfere with the
use made and proposed to be made of such property by the Company and
its subsidiaries; and neither the Company nor any of its subsidiaries
has any notice or knowledge of any material claim of any sort which has
been, or may be, asserted by anyone adverse to the Company's or any of
its subsidiaries rights as lessee or sublessee under any lease or
sublease described above, or affecting or questioning the Company's or
any of its
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subsidiaries' rights to the continued possession of the leased or
subleased premises under any such lease or sublease in conflict with
the terms thereof.
(xxii) Except as described in the Prospectus, there is no
factual basis for any action, suit or other proceeding involving the
Company or any of its subsidiaries or any of their material assets for
any failure of the Company or any of its subsidiaries, or any
predecessor thereof, to comply with any requirements of federal, state
or local regulation relating to air, water, solid waste management,
hazardous or toxic substances, or the protection of health or the
environment. Except as described in the Prospectus, none of the
property owned or leased by the Company or any of its subsidiaries is,
to the best knowledge of the Company, contaminated with any waste or
hazardous substances, and neither the Company nor any of its
subsidiaries may be deemed an "owner or operator" of a "facility" or
"vessel" which owns, possesses, transports, generates or disposes of a
"hazardous substance" as those terms are defined in ss.9601 of the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, 42 U.S.C. ss.9601 et seq.
(xxiii) No labor disturbance exists with the employees of the
Company or any of its subsidiaries or is imminent which, individually
or in the aggregate, would have a Material Adverse Effect. None of the
employees of the Company or any of its subsidiaries is represented by a
union and, to the best knowledge of the Company and its subsidiaries,
no union organizing activities are taking place. Neither the Company
nor any of its subsidiaries has violated any federal, state or local
law or foreign law relating to discrimination in hiring, promotion or
pay of employees, nor any applicable wage or hour laws, or the rules
and regulations thereunder, or analogous foreign laws and regulations,
which might, individually or in the aggregate, result in a Material
Adverse Effect.
(xxiv) The Company and its subsidiaries are in compliance in
all material respects with all presently applicable provisions of the
Employee Retirement Income Security Act of 1974, as amended, including
the regulations and published interpretations thereunder ("ERISA"); no
"reportable event" (as defined in ERISA) has occurred with respect to
any "pension plan" (as defined in ERISA) for which the Company and its
subsidiaries would have any liability; the Company and its subsidiaries
have not incurred and do not expect to incur liability under (i) Title
IV of ERISA with respect to termination of, or withdrawal from, any
"pension plan" or (ii) Sections 412 or 4971 of the Internal Revenue
Code of 1986, as amended, including the regulations and published
interpretations thereunder (the "Code"); and each "pension plan" for
which the Company or any of its subsidiaries would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects, and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.
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(xxv) The Company and its subsidiaries maintain insurance of
the types and in the amounts generally deemed adequate for its
business, including, but not limited to, directors' and officers'
insurance, insurance covering real and personal property owned or
leased by the Company and its subsidiaries against theft, damage,
destruction, acts of vandalism and all other risks customarily insured
against, all of which insurance is in full force and effect. Neither
the Company nor any of its subsidiaries has been refused any insurance
coverage sought or applied for, and the Company has no reason to
believe that it and its subsidiaries will not be able to renew their
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not have a Material Adverse
Effect.
(xxvi) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in default
or violation with respect to its certificate of incorporation or
by-laws. Neither the Company nor any of its subsidiaries is, or with
the giving of notice or lapse of time or both would be, in default in
the performance or observance of any obligation, agreement, covenant or
condition contained in any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company
or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the properties or assets
of the Company or any of its subsidiaries is subject, or in violation
of any statutes, laws, ordinances or governmental rules or regulations
or any orders or decrees to which it is subject, including, without
limitation, Section 13 of the 1934 Act, which default or violation,
individually or in the aggregate, would have a Material Adverse Effect.
Neither the Company nor any of its subsidiaries has, at any time during
the past five years, (A) made any unlawful contributions to any
candidate for any political office, or failed fully to disclose any
contribution in violation of law, or (B) made any payment to any state,
federal or foreign government official, or other person charged with
similar public or quasi-public duty (other than payment required or
permitted by applicable law).
(xxvii) The Trust is not in violation of its Declaration or
the Certificate of Trust; the Trust is not in default in the
performance or observance of any material obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage,
loan agreement, note, lease or other instrument to which the Trust is a
party or by which it may be bound, or to which any of the property or
assets of the Trust is subject or in violation of any statutes, laws,
ordinances or governmental rules or regulations or any orders of
decrees to which it is subject, which default or violation,
individually or in the aggregate would have a material adverse effect
on the Trust.
(xxviii) Other than as set forth in the Prospectus, there are
no legal or governmental proceedings pending to which the Company, any
of its subsidiaries or the Trust is a party or of which any property of
the Company, any of its subsidiaries or the Trust is the subject that,
if determined adversely to the Company, any of its subsidiaries or the
Trust, would individually or in the aggregate have a Material Adverse
Effect or
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<PAGE>
which would materially and adversely affect the consummation of the
transactions contemplated hereby or which is required to be disclosed
in the Prospectus; to the best of the Company's and the Trust's
knowledge, no such proceedings are threatened or contemplated.
(xxix) Neither the Company nor the Trust is or, after giving
effect to the issuance and sale of the Offered Securities as herein
contemplated and the application of the net proceeds therefrom as
described in the Prospectus, will be, an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the Investment Company Act of 1940, as amended (the "1940
Act").
(xxx) KPMG, the accounting firm which has certified certain of
the financial statements filed with or incorporated by reference in and
as a part of the Registration Statement, is an independent public
accounting firm within the meaning of the 1933 Act and the 1933 Act
Rules and Regulations. The Company and each of its subsidiaries
maintains a system of internal accounting controls sufficient to
provide reasonable assurance that: (1) transactions are executed in
accordance with management's general or specific authorizations; (2)
transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting
principles and to maintain accountability for assets; (3) access to
assets is permitted only in accordance with management's general or
specific authorization; and (4) the recorded accounts for assets is
compared with the existing assets at reasonable intervals and
appropriate action is taken with respect thereto. The consolidated
financial statements and schedules of the Company, including the notes
thereto, filed with (or incorporated by reference) and as a part of the
Registration Statement or Prospectus, are accurate in all material
respects and present fairly the financial condition of the Company and
its subsidiaries as of the respective dates thereof and the
consolidated results of operations and changes in financial position
and consolidated statements of cash flow for the respective periods
covered thereby, all in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods
involved except as otherwise disclosed therein. All adjustments
necessary for a fair presentation of results for such periods have been
made. The selected financial data included or incorporated by reference
in the Registration Statement and Prospectus present fairly the
information shown therein and have been compiled on a basis consistent
with that of the audited financial statements. Any operating or other
statistical data included or incorporated by reference in the
Registration Statement and Prospectus comply in all material respects
with the 1933 Act and the 1933 Act Rules and Regulations and present
fairly the information shown therein. The supporting schedules, if any,
included in the Registration Statement present fairly, in accordance
with generally accepted accounting principles, the information required
to be stated therein.
(xxxi) Except as disclosed in the Prospectus, no holder of any
security of the Company has any right to require registration of shares
of common stock or any other
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<PAGE>
security of the Company because of the filing of the Registration
Statement or the consummation of the transactions contemplated hereby
and, except as disclosed in the Prospectus, no person has the right to
require registration under the 1933 Act of any shares of common stock
or other securities of the Company. No person has the right,
contractual or otherwise, to cause the Company to permit such person to
underwrite the sale of any of the Offered Securities. Except for this
Agreement, there are no contracts, agreements or understandings between
the Company, any of its subsidiaries or the Trust and any person that
would give rise to a valid claim against the Company, its subsidiaries,
the Trust or any Underwriter for a brokerage commission, finder's fee
or like payment in connection with the issuance, purchase and sale of
the Offered Securities.
(xxxii) The Company has not distributed and, prior to the
later to occur of (i) the Closing Date or the Option Closing Date, if
any, and (ii) completion of the distribution of the Offered Securities,
will not distribute any offering material in connection with the
offering and sale of the Offered Securities other than the Registration
Statement, the Preliminary Prospectus or the Prospectus.
(xxxiii) Each of the Company and each of its subsidiaries has
statutory authority, franchises, and consents free from burdensome
restrictions and adequate for the conduct of the business in which it
is engaged.
(b) Any certificate signed by any officer of the Company or by a
Trustee of the Trust and delivered to you or to counsel for the Underwriters
shall be deemed a representation and warranty by the Company or the Trust, as
the case may be, to each Underwriter as to the matters covered thereby.
5. Additional Covenants. Each of the Offerors, jointly and severally,
covenants and agrees with the several Underwriters that:
(a) The Offerors will timely transmit copies of the Prospectus, and any
amendments or supplements thereto, or a Term Sheet or Abbreviated Term Sheet, as
applicable, to the SEC for filing pursuant to Rule 424(b) of the 1933 Act Rules
and Regulations.
(b) The Offerors will deliver to each of the Representatives, and to
counsel for the Underwriters (i) five signed copies of the Registration
Statement as originally filed, including copies of exhibits thereto (other than
any exhibits incorporated by reference therein), of any amendments and
supplements to the Registration Statement (including all documents incorporated
by reference therein) and (ii) a signed copy of each consent and certificate
included or incorporated by reference in, or filed as an exhibit to, the
Registration Statement as so amended or supplemented; the Offerors will deliver
to the Underwriters through the Representatives as soon as practicable after the
date of this Agreement as many copies of the Prospectus (including all documents
incorporated by reference therein) as the Representatives may reasonably request
for the purposes contemplated by the 1933 Act; if the Registration
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<PAGE>
Statement is not effective under the 1933 Act, the Offerors will use their best
efforts to cause the Registration Statement to become effective as promptly as
possible, and they will notify you, promptly after they shall receive notice
thereof, of the time when the Registration Statement has become effective; the
Offerors will promptly advise the Representatives of any request of the SEC for
amendment of the Registration Statement or for supplement to the Prospectus or
for any additional information, and of the issuance by the SEC or any state or
other jurisdiction or other regulatory body of any stop order under the 1933 Act
or other order suspending the effectiveness of the Registration Statement (as
amended or supplemented) or preventing or suspending the use of any Preliminary
Prospectus or the Prospectus or suspending the qualification or registration of
the Offered Securities for offering or sale in any jurisdiction, and of the
institution or threat of any proceedings therefor, of which the Offerors shall
have received notice or otherwise have knowledge prior to the completion of the
distribution of the Offered Securities; and the Offerors will use their best
efforts to prevent the issuance of any such stop order or other order and, if
issued, to secure the prompt removal thereof.
(c) The Offerors will not file any amendment or supplement to the
Registration Statement, the Prospectus (or any other prospectus relating to the
Offered Securities filed pursuant to Rule 424(b) of the 1933 Act Rules and
Regulations that differs from the Prospectus as filed pursuant to such Rule
424(b)) and will not file any document under the 1934 Act before the termination
of the offering of the Offered Securities by the Underwriters if the document
would be deemed to be incorporated by reference into the Registration Statement
or the Prospectus, of which the Underwriters shall not previously have been
advised and furnished with a copy or to which the Underwriters shall have
reasonably objected or which is not in compliance with the 1933 Act Rules and
Regulations; and the Offerors will promptly notify you after they shall have
received notice thereof of the time when any amendment to the Registration
Statement becomes effective or when any supplement to the Prospectus has been
filed.
(d) During the period when a prospectus relating to any of the Offered
Securities is required to be delivered under the 1933 Act by any Underwriter or
dealer, the Offerors will comply, at their own expense, with all requirements
imposed by the 1933 Act and the 1933 Act Rules and Regulations, as now and
hereafter amended, and by the rules and regulations of the SEC thereunder, as
from time to time in force, so far as necessary to permit the continuance of
sales of or dealing in the Offered Securities during such period in accordance
with the provisions hereof and as contemplated by the Prospectus.
(e) If, during the period when a prospectus relating to any of the
Offered Securities is required to be delivered under the 1933 Act by any
Underwriter or dealer, (i) any event relating to or affecting the Offerors or of
which the Offerors shall be advised in writing by the Representatives shall
occur as a result of which, in the opinion of the Offerors or the
Representatives, the Prospectus as then amended or supplemented would include
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading or (ii) it shall be
necessary to amend or supplement the Registration Statement or the Prospectus
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<PAGE>
to comply with the 1933 Act, the 1933 Act Rules and Regulations, the 1934 Act,
the 1934 Act Rules and Regulations, the 1939 Act or the 1939 Act Rules and
Regulations, the Offerors will forthwith at their expense prepare and file with
the SEC, and furnish to the Representatives a reasonable number of copies of,
such amendment or supplement or other filing that will correct such statement or
omission or effect such compliance.
(f) During the period when a prospectus relating to any of the Offered
Securities is required to be delivered under the 1933 Act by any Underwriter or
dealer, the Offerors will furnish such proper information as may be lawfully
required and otherwise cooperate in qualifying the Offered Securities for offer
and sale under the securities or blue sky laws of such jurisdictions as the
Representatives may reasonably designate and will file and make in each year
such statements or reports as are or may be reasonably required by the laws of
such jurisdictions; provided, however, that the Offerors shall not be required
to qualify as a foreign corporation or shall be required to qualify as a dealer
in securities or to file a general consent to service of process under the laws
of any jurisdiction.
(g) In accordance with Section 11(a) of the 1933 Act and Rule 158 of
the 1933 Act Rules and Regulations, the Trust will make generally available to
its security holders and to holders of the Offered Securities, as soon as
practicable, an earning statement (which need not be audited) in reasonable
detail covering the 12 months beginning not later than the first day of the
month next succeeding the month in which occurred the effective date (within the
meaning of Rule 158) of the Registration Statement.
(h) During the period when a prospectus relating to any of the Offered
Securities is required to be delivered under the 1933 Act by any Underwriter or
dealer, the Offerors will file promptly all documents required to be filed with
the SEC pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934 Act. The
Company will furnish to its security holders annual reports containing financial
statements audited by independent public accountants and quarterly reports
containing financial statements and financial information which may be
unaudited. The Company will, for a period of five years from the Closing Date,
deliver to the Underwriters at their principal executive offices a reasonable
number of copies of annual reports, quarterly reports, current reports and
copies of all other documents, reports and information furnished by the Company
to its shareholders or filed with any securities exchange or market pursuant to
the requirements of such exchange or market or with the SEC pursuant to the 1933
Act or the 1934 Act. The Company will deliver to the Underwriters similar
reports with respect to any significant subsidiaries, as that term is defined in
the 1933 Act Rules and Regulations, which are not consolidated in the Company's
financial statements. Any report, document or other information required to be
furnished under this paragraph (h) shall be furnished as soon as practicable
after such report, document or information becomes available.
(i) During the period beginning from the date of this Agreement and
continuing to and including the earlier of (i) the termination of trading
restrictions on the Securities, as determined by the Underwriters, and (ii) 30
days after the Closing Date, none of the Company,
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<PAGE>
the Trust or any of the Company's subsidiaries will, without the prior written
consent of the Representatives, offer for sale, sell or enter into any agreement
to sell, or otherwise dispose of, any Trust Preferred Securities, any
Subordinated Debentures, any security convertible into or exchangeable into or
exercisable for Trust Preferred Securities or the Subordinated Debentures or any
securities substantially similar to any of the foregoing or file any
registration statement under the 1933 Act with respect to any of the foregoing
(except for the Subordinated Debentures and the Trust Preferred Securities
issued pursuant to this Agreement).
(j) The Trust will use the proceeds received by it from the sale of the
Offered Securities as set forth in the description under "Use of Proceeds" in
the Prospectus, which description complies in all respects with the requirements
of Item 504 of Regulation S-K. The Company will apply the proceeds from the sale
of the Offered Securities as set forth in the description under "Use of
Proceeds" in the Prospectus, which description complies in all respects with the
requirements of Item 504 of Regulation S-K.
(k) The Company will promptly provide you with copies of all
correspondence to and from, and all documents issued to and by, the SEC in
connection with the registration of the Offered Securities under the 1933 Act or
relating to any documents incorporated by reference into the Registration
Statement or the Prospectus.
(l) Prior to the Closing Date (and, if applicable, the Option Closing
Date), the Company will furnish to you, as soon as they have been prepared,
copies of any unaudited interim consolidated financial statements of the Company
and its subsidiaries for any periods subsequent to the periods covered by the
financial statements appearing in the Registration Statement and the Prospectus.
(m) Prior to the Closing Date (and, if applicable, the Option Closing
Date), neither the Company nor the Trust will issue any press releases or other
communications directly or indirectly and will hold no press conferences with
respect to the Company or any of its subsidiaries, the financial condition,
results of operations, business, properties, assets or liabilities of the
Company or any of its subsidiaries, or the offering of the Offered Securities,
without your prior written consent.
(n) The Company will use its best efforts to obtain approval for, and
maintain the quotation of the Trust Preferred Securities on the Nasdaq National
Market.
(o) So long as any Trust Preferred Securities are outstanding, the
Trust will continue its existence in good standing as a business trust under the
Delaware Act with power and authority to own its property and conduct its
business as described in the Prospectus, and the Trust will remain duly
qualified to transact business as a foreign corporation in good standing in each
jurisdiction in which such qualification is necessary, except to the extent that
the failure to so qualify would not, individually or in the aggregate, have a
material adverse effect on the Trust.
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(p) The Company and its subsidiaries will maintain and keep accurate
books and records reflecting their assets and maintain internal accounting
controls which provide reasonable assurance that (1) transactions are executed
in accordance with management's authorization, (2) transactions are recorded as
necessary to permit the preparation of the Company's consolidated financial
statements and to maintain accountability for the assets of the Company and its
subsidiaries, (3) access to the assets of the Company and its subsidiaries is
permitted only in accordance with management's authorization, and (4) the
recorded accounts of the assets of the Company and its subsidiaries are compared
with existing assets at reasonable intervals.
(q) During any period in which a prospectus is required by law to be
delivered by an Underwriter or dealer, the Offerors will promptly file all
documents required to be filed with the SEC pursuant to Sections 13, 14 or 15(d)
of the 1934 Act.
(r) If the Offerors elect to rely on Rule 462(b) under the 1933 Act,
the Offerors shall both file an Abbreviated Registration Statement with the SEC
in compliance with Rule 462(b) and pay the applicable fees in accordance with
Rule 111 of the 1933 Act by the earlier of (i) 9:00 p.m., New York time, on the
date of this Agreement, and (ii) the time that confirmations are given or sent,
as specified by Rule 462(b)(2).
(s) The Company shall issue the Guarantees and the Subordinated
Debentures concurrently with the issuance and sale of the Trust Preferred
Securities as contemplated herein.
(t) The Offerors will file all documents and notices and take such
further actions as may be required to continue to quote the Trust Preferred
Securities on the Nasdaq National Market. If the Trust Preferred Securities are
exchanged for Subordinated Debentures, the Company will use its best efforts to
effect the quotation of the Subordinated Debentures on the Nasdaq National
Market.
6. Conditions of Underwriters' Obligations. The several obligations of
the Underwriters to purchase and pay for the Trust Preferred Securities, as
provided herein, shall be subject to the accuracy, as of the date hereof and as
of the Closing Date (and, if applicable, the Option Closing Date), of the
representations and warranties of the Offerors contained herein, to the
performance by the Offerors of their covenants and obligations hereunder, and to
the following additional conditions:
(a) The Registration Statement and all post-effective amendments
thereto shall have become effective not later than 1:00 p.m., New York time, on
the date hereof, or, with your consent, at a later date and time, not later than
_____ p.m., New York time, on the first business day following the date hereof,
or at such later date and time as may be approved by the Representatives; if the
Offerors have elected to rely on Rule 462(b) under the 1933 Act, the Abbreviated
Registration Statement shall have become effective not later than the earlier of
(x) 10:00 p.m. New York time, on the date hereof, or (y) at such later date and
time as may be
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<PAGE>
approved by the Representatives. All filings required by Rule 424 and Rule 430A
of the 1933 Act Rules and Regulations shall have been made. No stop order
suspending the effectiveness of the Registration Statement, as amended from time
to time, shall have been issued and no proceeding for that purpose shall have
been initiated or, to the knowledge of the Company, the Trust or any
Underwriter, threatened or contemplated by the SEC, and any request of the SEC
for additional information (to be included in the Registration Statement or the
Prospectus or otherwise) shall have been complied with to the reasonable
satisfaction of the Underwriters.
(b) No Underwriter shall have advised the Company or the Trust on or
prior to the Closing Date (and, if applicable, the Option Closing Date), that
the Registration Statement or Prospectus or any amendment or supplement thereto
contains an untrue statement of fact which, in the opinion of counsel to the
Underwriters, is material, or omits to state a fact which, in the opinion of
such counsel, is material and is required to be stated therein or is necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
(c) On the Closing Date (and, if applicable, the Option Closing Date),
you shall have received the opinion of Elais, Matz, Tiernan & Herrick L.L.P.,
counsel for the Company, addressed to you and dated the Closing Date (and, if
applicable, the Option Closing Date), to the effect that:
(i) The Registration Statement and all post-effective
amendments thereto and the Abbreviated Registration Statement, if any,
have become effective under the 1933 Act; any required filing of the
Prospectus or any supplement thereto pursuant to Rule 424(b) or
otherwise has been made in the manner and within the time period
required thereby; and, to the knowledge of such counsel after due
inquiry, no stop or other order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or are pending or contemplated under the
1933 Act or under the securities laws of any jurisdiction.
(ii) The Registration Statement and the Prospectus, and each
amendment or supplement thereto (including any document incorporated by
reference into the Prospectus), as of their respective effective or
issue date, comply as to form and appear on their face to be
appropriately responsive in all material respects to the requirements
of Form S-3 under the 1933 Act and the applicable 1933 Act Rules and
Regulations (except that such counsel need express no opinion as to the
financial statements or other financial data); the Company and the
Trust are entitled to use Form S-3 for the registration of the Offered
Securities; and, as of the date they were filed with the SEC, the
documents incorporated by reference in the Prospectus appear on their
face to comply as to form and be appropriately responsive in all
material respects with the requirements of the 1934 Act and the
applicable 1934 Act Rules and Regulations (except that such counsel
need express no opinion as to the financial statements or other
financial data).
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(iii) The information in the Prospectus under "Risk Factors,"
"Local Financial Capital Trust I," "Description of Trust Preferred
Securities," "Description of Junior Subordinated Debentures,"
"Description of Guarantees," "Relationship Among the Trust Preferred
Securities, the Junior Subordinated Debentures and the Guarantee,"
"Certain Federal Income Tax Consequences," "ERISA Considerations" and
the information contained in the Registration Statement pursuant to
Item 15, to the extent that such information constitutes summaries of
statutes, laws, ordinances, rules, regulations, legal or governmental
proceedings, contracts and other documents, the Company's Restated
Certificate of Incorporation or by-laws or the Declaration, has been
reviewed by such counsel and is accurate and fairly presents the
information required to be shown under the 1933 Act and the 1933 Act
Rules and Regulations.
(iv) The Underwriting Agreement has been duly authorized,
executed and delivered each of the Company and the Trust and
constitutes a valid and legally binding obligation of the Company and
the Trust enforceable against the Company and the Trust in accordance
with its terms, except to the extent that enforceability may be limited
by the Bankruptcy Exceptions and except to the extent that the
enforceability of the indemnification and contribution provisions of
Section 7 of the Underwriting Agreement may be limited by public policy
considerations as expressed in the 1933 Act as construed by courts of
competent jurisdiction.
(v) The Company and its subsidiaries have been duly organized
and are validly existing as corporations in good standing under the
laws of the states or other jurisdictions in which they are
incorporated, with full power and authority (corporate and other) to
own, lease and operate their properties and conduct their businesses as
described in the Prospectus and, with respect to the Company, to
execute and deliver, and perform the Company's obligations under, this
Agreement, the Indenture, the Guarantee Agreements, the Guarantees and
the Subordinated Debentures; the Company and its subsidiaries are duly
qualified to do business as foreign corporations in good standing in
each state or other jurisdiction in which their ownership or leasing of
property or conduct of business legally requires such qualification,
except where the failure to be so qualified, individually or in the
aggregate, would not have a Material Adverse Effect.
(vi) The entities listed on Schedule III are the only
subsidiaries, direct or indirect, of the Company. The Company owns,
directly or indirectly through other subsidiaries, the percentage
indicated on Schedule III of the outstanding shares of capital stock or
other securities evidencing equity ownership of such subsidiaries, and
all such securities have been duly authorized and validly issued, are
fully paid and non-assessable and, to the knowledge of such counsel,
are owned by the Company free and clear of any mortgage, pledge, lien,
encumbrance, charge or adverse claim and are not the subject of any
agreement or understanding with any person, and were not issued in
violation of any preemptive or similar rights; and, to the knowledge of
such counsel, except as disclosed in the Prospectus, there are no
outstanding subscriptions, rights, warrants, options, calls,
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convertible securities, commitments of sale, or instruments related to
or entitling any person to purchase or otherwise acquire any shares of,
or any security convertible into or exercisable or exchangeable for,
any such shares of capital stock or other ownership interest of any of
such subsidiaries.
(vii) The execution, delivery and performance of the
Underwriting Agreement, the Declaration, the Indenture, the Trust
Securities, the Subordinated Debentures, the Guarantees and the
Guarantee Agreements, the consummation by the Company and the Trust of
the transactions contemplated thereby and in the Registration Statement
(including the issuance and sale of the Offered Securities), the filing
of the Certificate of Trust with the Secretary of State of the State of
Delaware, and compliance by the Company and the Trust with the terms of
the foregoing do not and will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a
default under, or result in the creation or imposition of any lien,
charge or encumbrance upon any properties or assets of the Company, any
of its subsidiaries or the Trust under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument known to such
counsel after due inquiry to which the Company, any of its subsidiaries
or the Trust is a party or by which the Company, any of its
subsidiaries or the Trust is bound or to which any of the properties or
assets of the Company, any of its subsidiaries or the Trust is subject,
except to such extent as, individually or in the aggregate, does not
have a Material Adverse Effect, nor will such action result in any
violation of the provisions of the charter or bylaws of the Company or
any of its subsidiaries, the Certificate of Trust or the Declaration or
any statute, rule, regulation or other law, or any order or judgment
known to such counsel after due inquiry, of any court or governmental
agency or body having jurisdiction over the Company, any of its
subsidiaries or the Trust or any of their properties.
(viii) No consent, approval, authorization, order,
registration or qualification of or with any court or governmental
agency or body is required in connection with the execution, delivery
and performance by the Offerors of this Agreement, the Declaration, the
Indenture, the Guarantee Agreements, the Guarantees, the Subordinated
Debentures or the Trust Securities and the issuance and sale of the
Offered Securities or the consummation of the transactions contemplated
by any of the foregoing, except such as may be required under the 1933
Act or the 1933 Act Rules and Regulations and have been obtained, or as
may be required by the NASD or under state securities or blue sky laws
in connection with the purchase and distribution of the Trust Preferred
Securities by the Underwriters. Each of the Company and its
subsidiaries has filed all Notices pursuant to, and has obtained all
Approvals required to be obtained under, and has otherwise complied
with all requirements of, all applicable laws and regulations in
connection with the issuance and sale of the Offered Securities, in
each case with such exceptions, individually or in the aggregate, as
would not affect the validity of the Offered Securities, their issuance
or the transactions contemplated by any of the foregoing or have a
Material Adverse Effect; and no such Notices or Approvals are required
to be filed or obtained by
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the Company or any of its subsidiaries in connection with the
execution, delivery and performance of this Agreement, the Declaration,
the Indenture, the Guarantee Agreements, the Guarantees, the
Subordinated Debentures or the Trust Securities, the issuance and sale
of the Offered Securities or the transactions contemplated by any of
the foregoing, in each case with such exceptions, individually or in
the aggregate, as would not affect the validity of the Offered
Securities, their issuance or the transactions contemplated hereby or
have a Material Adverse Effect.
(ix) To the knowledge of such counsel after due inquiry and
other than as set forth in the Prospectus, there are no legal or
governmental proceedings pending to which the Company or any of its
subsidiaries is a party or of which any property of the Company or any
of its subsidiaries is the subject that, if determined adversely to the
Company or any of its subsidiaries, would individually or in the
aggregate have a material adverse effect on the current or future
consolidated financial position, stockholders' equity or results of
operations of the Company and its subsidiaries taken as a whole; and,
to the knowledge of such counsel after due inquiry, no such proceedings
are threatened or contemplated by governmental authorities or
threatened by others.
(x) The Company has duly and validly authorized capital stock
as set forth under the caption "Capitalization" in the Prospectus; all
outstanding shares of Common Stock of the Company have been duly
authorized, validly issued, and are fully paid and non-assessable.
(xi) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrative Trustees, and
constitutes a valid and binding obligation of the Company and each of
the Administrative Trustees, enforceable against the Company and each
of the Administrative Trustees in accordance with its terms, except as
enforcement thereof may be limited by the Bankruptcy Exceptions; the
Declaration conforms as to legal matters to the description thereof in
the Prospectus; and the Declaration has been duly qualified under the
1939 Act.
(xii) The Trust Common Securities have been duly authorized
and, when issued, delivered and paid for in accordance with the
Declaration and as described in the Prospectus, will be validly issued,
fully paid and non-assessable undivided beneficial interests in the
assets of the Trust; the issuance of the Trust Common Securities is not
subject to preemptive or other similar rights; the Trust Common
Securities conform as to legal matters to the description thereof in
the Prospectus; and, to the best of such counsel's knowledge, the Trust
Common Securities are directly owned by the Company free and clear of
any lien, encumbrance, equity or claim.
(xiii) The Trust Preferred Securities have been duly
authorized, and when issued, delivered and paid for by the Underwriters
pursuant to the Underwriting Agreement, will be validly issued, fully
paid and non-assessable undivided beneficial
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interests in the assets of the Trust; the issuance of the Trust
Preferred Securities is not subject to preemptive or other similar
rights; the Trust Preferred Securities conform as to legal matters to
the descriptions thereof in the Prospectus.
(xiv) The Indenture has been duly authorized, executed and
delivered by the Company and, assuming due authorization, execution and
delivery thereof by the Debt Trustee, constitutes a valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions; the Indenture has
been duly qualified under the 1939 Act; and the Indenture conforms as
to legal matters to the description thereof in the Prospectus.
(xv) The Subordinated Debentures have been duly authorized,
executed and delivered by the Company, and, when authenticated by the
Debt Trustee in the manner provided in the Indenture and delivered
against payment therefor, will constitute valid and binding obligations
of the Company, enforceable against the Company in accordance with
their terms, except to the extent that enforcement thereof may be
limited by the Bankruptcy Exceptions; the Subordinated Debentures
conform as to legal matters to the description thereof in the
Prospectus; the Subordinated Debentures are in the form established
pursuant to the Indenture; and the Subordinated Debentures are entitled
to the benefits of the Indenture.
(xvi) Each of the Guarantee Agreements has been duly
authorized, executed and delivered by the Company, and, assuming the
Preferred Securities Guarantee Agreement
is duly authorized, executed and delivered by the Guarantee Trustee,
each of the Guarantee Agreements constitutes a valid and legally
binding obligation of the Company, enforceable against the Company in
accordance with its terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions: the Preferred
Securities Guarantee Agreement has been duly qualified under the 1939
Act; and the Guarantees and the Guarantee Agreements conform as to
legal matters to the descriptions thereof in the Prospectus.
(xvii) To the knowledge of such counsel after due inquiry, the
Company and each of its subsidiaries hold all licenses, certificates,
permits and approvals from all state, federal and other regulatory
authorities, and have satisfied in all material respects the
requirements imposed by regulatory bodies, administrative agencies or
other governmental bodies, agencies or officials, that are required for
the Company and its subsidiaries lawfully to own, lease and operate its
properties and conduct its business as described in the Prospectus,
and, to the knowledge of such counsel after due inquiry, each of the
Company and its subsidiaries is conducting its business in compliance
in all material respects with all of the laws, rules and regulations of
each jurisdiction in which it conducts its business.
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(xviii) Neither the Company nor any of its subsidiaries is, or
with the giving of notice or lapse of time or both would be, in default
or violation with respect to its charter or by-laws. The Trust is not,
and with the giving of notice or lapse of time or both would not be, in
default or violation with respect to the Declaration. Neither the
Company nor any of its subsidiaries is, or with the giving of notice or
lapse of time or both would be, in default in the performance or
observance of any material obligation, agreement, covenant or condition
contained in any indenture, mortgage, deed of trust, loan agreement,
lease or other agreement or instrument to which the Company or any of
its subsidiaries is a party or by which the Company or any of its
subsidiaries is bound or to which any of the properties or assets of
the Company or any of its subsidiaries is subject, or in violation of
any statutes, laws, ordinances or governmental rules or regulations or
any orders or decrees to which it is subject, including, without
limitation, Section 13 of the 1934 Act, and neither the Company nor any
of its subsidiaries has failed to obtain any other license, permit,
franchise, easement, consent, or other governmental authorization
necessary to the ownership, leasing and operation of its properties or
to the conduct of its business, which default, violation or failure,
individually or in the aggregate, would have a Material Adverse Effect.
(xix) To the knowledge of such counsel after due inquiry, (A)
there are no material (individually or in the aggregate) legal,
governmental or regulatory proceedings pending or threatened to which
the Company or any of its subsidiaries is a party or of which the
business or properties of the Company or any of its subsidiaries is the
subject which are not disclosed in the Registration Statement and
Prospectus; (B) there are no contracts or documents of a character
required to be described in the Registration Statement or the
Prospectus or to be filed as an exhibit to the Registration Statement
which are not described or filed as required; and (C) there are no
statutes, ordinances, laws, rules or regulations required to be
described in the Registration Statement or Prospectus which are not
described as required.
(xx) Neither the Company nor the Trust is, and after giving
effect to the issuance and sale of the Trust Securities and the
issuance of the Subordinated Debentures as herein contemplated and the
application of the net proceeds therefrom as described in the
Prospectus, neither the Company nor the Trust will be, an "investment
company" or an entity "controlled" by an "investment company," as such
terms are defined in the 1940 Act.
(xxi) Each of the Company and each of its subsidiaries has
statutory authority, franchises, and consents free from burdensome
restrictions and adequate for the conduct of the business in which it
is engaged as of the date hereof, as described in the Prospectus,
except to the extent that the absence of such statutory authority or
the failure to obtain such franchises or consents would not have a
Material Adverse Effect.
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(xxii) To the knowledge of such counsel after due inquiry and
except as disclosed in the Prospectus, no holder of any security of the
Company has any right to require registration of shares of common stock
or any other security of the Company because of the filing of the
Registration Statement or the consummation of the transactions
contemplated hereby and, except as disclosed in the Prospectus, no
person has the right to require registration under the 1933 Act of any
shares of Common Stock or other securities of the Company.
Such opinion shall also include such federal tax, ERISA and other
related matters of the type ordinarily included in similar transactions or
reasonably requested by counsel for the Underwriters.
Such counsel shall confirm that during the preparation of the
Registration Statement and Prospectus, such counsel participated in conferences
with the Representatives and their counsel and with officers and representatives
of the Company and its independent accountants, at which conferences the
contents of the Registration Statement and the Prospectus (including all
documents filed under the 1934 Act and deemed incorporated by reference therein)
were discussed, reviewed and revised. On the basis of the information which was
developed in the course thereof, considered in light of such counsel's
understanding of applicable law and the experience gained by such counsel
through their practice thereunder, without such counsel assuming responsibility
for the accuracy and completeness of such statements except to the extent
expressly provided above, such counsel shall confirm that nothing came to their
attention that would lead them to believe that either the Registration Statement
(including any document filed under the 1934 Act and deemed incorporated by
reference therein), as of the Effective Date, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or the Prospectus or any amendment
or supplement thereto (including any document filed under the 1934 Act and
deemed incorporated by reference therein) as of its respective issue date and as
of the Closing Date, or, if applicable, the Option Closing Date, contained or
contains any untrue statement of a material fact or omitted or omits to state a
material fact required to be stated therein or necessary to make the statements
therein, in the light of the circumstances under which they were made, not
misleading (other than the financial statements or other financial data as to
which such counsel need express no opinion).
In rendering the foregoing opinion, such counsel may rely, as to all
matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company, provided, in either case, that
such counsel shall state in their opinion that they and the Underwriters are
justified in relying thereon.
(d) On the Closing Date (and, if applicable, the Option Closing Date),
you shall have received the opinion of Richards, Layton & Finger, P.A., special
Delaware counsel for the Offerors, addressed to you, dated the Closing Date
(and, if applicable, the Option Closing Date) and in form and substance
satisfactory to counsel for the Underwriters, to the effect that:
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(i) The Trust has been duly created and is validly existing in
good standing as a business trust under the Delaware Act, and all
filings required under the laws of the State of Delaware with respect
to the creation and valid existence of the Trust as a business trust
have been made.
(ii) Under the Delaware Act and the Declaration, the Trust has
the trust power and authority to (A) own property and conduct its
business as described in the Prospectus, (B) execute and deliver, and
to perform its obligations under, the Underwriting Agreement, (C) to
issue and perform its obligations under the Trust Securities and (D) to
purchase and hold the Subordinated Debentures.
(iii) Under the Delaware Act and the Declaration, the
execution and delivery by the Trust of the Underwriting Agreement and
the performance by the Trust of its obligations thereunder have been
duly authorized by all necessary trust action on the part of the Trust.
(iv) The Declaration constitutes a valid and binding
obligation of the Company and the Trustees, and is enforceable against
the Company and the Trustees, in accordance with its terms, subject, as
to enforcement, to the effect upon the Declaration of (A) applicable
bankruptcy, insolvency, reorganization, liquidation, moratorium,
receivership, fraudulent conveyance or transfer and other similar laws
relating to or affecting the rights and remedies of creditors
generally, (B) principles of equity, including applicable law relating
to fiduciary duties (regardless of whether considered and applied in a
proceeding in equity or at law), and (C) the effect of applicable
public policy on the enforceability of provisions relating to
indemnification or contribution.
(v) The Trust Preferred Securities have been duly authorized
by the Declaration, and are duly and validly issued, fully paid and
non-assessable undivided beneficial interests in the assets of the
Trust and are entitled to the benefits of the Declaration; the holders
of the Trust Preferred Securities, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended
to stockholders of private corporations for profit organized under the
General Corporation Law of the State of Delaware; provided that such
counsel may note that the holders of the Trust Preferred Securities
will be required to make certain payments described in the Declaration;
and, under the Delaware Act, the certificate attached to the
Declaration as Exhibit A-1 is an appropriate form of certificate to
evidence ownership of the Trust Preferred Securities.
(vi) The Trust Common Securities have been duly authorized by
the Declaration and are duly and validly issued and fully paid
undivided beneficial interests in the assets of the Trust.
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(vii) Under the Delaware Act and the Declaration, the issuance
of the Trust Securities is not subject to preemptive or other similar
rights.
(viii) The issuance and sale by the Trust of the Trust
Securities, the purchase by the Trust of the Subordinated Debentures,
the execution, delivery and performance by the Trust of the
Underwriting Agreement, the consummation by the Trust of the
transactions contemplated thereby and the compliance by the Trust with
its obligations thereunder do not violate (i) any of the provisions of
the Certificate of Trust or the Declaration or (ii) any applicable
Delaware law, rule or regulation.
(ix) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any Delaware
court or any Delaware governmental authority or Delaware agency is
required to be obtained by the Trust solely in connection with the due
authorization, execution or delivery of the Underwriting Agreement or
for the performance of the transactions contemplated under the
Prospectus, the Underwriting Agreement, the Declaration, the Trust
Preferred Securities or the Trust Common Securities.
In rendering the foregoing opinion, such counsel may rely, as to all
matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company, provided, in either case, that
such counsel shall state in their opinion that they and the Underwriters are
justified in relying thereon.
(e) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date) from Emmit, Marvin & Martin, counsel for the Property
Trustee, the Debt Trustee and the Guarantee Trustee, addressed to you, dated the
Closing Date (and, if applicable, the Option Closing Date) and in form and
substance satisfactory to counsel for the Underwriters, to the effect that:
(i) The Bank of New York is a _____________, duly organized,
validly existing and in good standing under the laws of the State of
_______________, with all necessary power and authority to execute and
deliver, and to carry out and perform its obligations under the terms
of the Declaration, the Preferred Securities Guarantee Agreement and
the Indenture.
(ii) The execution, delivery and performance by the Property
Trustee of the Declaration, the execution, delivery and performance by
the Guarantee Trustee of the Preferred Securities Guarantee Agreement
and the execution, delivery and performance by the Debt Trustee of the
Indenture have been duly authorized by all necessary corporate action
on the part of the Property Trustee, the Guarantee Trustee and the Debt
Trustee, respectively. The Declaration, the Preferred Securities
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Guarantee Agreement and the Indenture have been duly executed and
delivered by the Property Trustee, the Guarantee Trustee and the Debt
Trustee, respectively, and the Declaration, the Preferred Securities
Guarantee Agreement and the Indenture constitute legal, valid and
binding obligations of the Property Trustee, the Guarantee Trustee, and
the Debt Trustee, respectively, enforceable against the Property
Trustee, the Guarantee Trustee and the Debt Trustee, respectively, in
accordance with their terms, except to the extent that enforcement
thereof may be limited by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration, the Preferred Securities Guarantee Agreement and the
Indenture by the Property Trustee, the Guarantee Trustee and the Debt
Trustee, respectively, do not conflict with or constitute a breach of
the charter or bylaws of the Property Trustee, the Guarantee Trustee or
the Debt Trustee, respectively.
(iv) No consent, approval or authorization of, or registration
with or notice to, any federal or state banking authority is required
for the execution, delivery or performance by the Property Trustee, the
Guarantee Trustee or the Debt Trustee of the Declaration, the Preferred
Securities Guarantee Agreement or the Indenture, respectively.
(v) The Statement of Eligibility on Form T-1 with respect to
each of the Property Trustee, the Debt Trustee and the Guarantee
Trustee filed with the SEC as part of the Registration Statement
complied as to form in all material respects with the requirements of
the 1939 Act and the 1939 Act Rules and Regulations.
In rendering the foregoing opinion, such counsel may rely, as to all
matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company, provided, in either case, that
such counsel shall state in their opinion that they and the Underwriters are
justified in relying thereon.
(f) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date) from Emmit, Marvin & Martin, counsel for the Delaware
Trustee, addressed to you, dated the Closing Date (and, if applicable, the
Option Closing Date) and in form and substance satisfactory to counsel for the
Underwriters, to the effect that:
(i) The Bank of New York (Delaware) is a _______________, with
its principal place of business in the State of Delaware, and is duly
incorporated, validly existing and in good standing under the laws of
the United States with all necessary power and authority to execute and
deliver, and to carry out and perform its obligations under, the terms
of the Declaration.
(ii) The execution, delivery and performance by the Delaware
Trustee of the Declaration have been duly authorized by all necessary
corporate action on the part of the Delaware Trustee. The Declaration
has been duly executed and delivered by the Delaware Trustee and
constitutes the legal, valid and binding obligation of the Delaware
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Trustee, enforceable against the Delaware Trustee in accordance with
its terms, except to the extent that enforcement thereof may be limited
by the Bankruptcy Exceptions.
(iii) The execution, delivery and performance of the
Declaration by the Delaware Trustee do not conflict with or constitute
a breach of the charter or bylaws of the Delaware Trustee.
(iv) No consent, approval or authorization of, or registration
with or notice to, any federal or Delaware banking authority is
required for the execution, delivery or performance of the Declaration
by the Delaware Trustee, other than the filing of the Certificate of
Trust with the Delaware Secretary of State.
In rendering the foregoing opinion, such counsel may rely, as to all
matters of fact, upon certificates and written statements of the executive
officers of, and accountants for, the Company, provided, in either case, that
such counsel shall state in their opinion that they and the Underwriters are
justified in relying thereon.
(g) You shall have received on the Closing Date (and, if applicable,
the Option Closing Date), from Mayer, Brown & Platt, counsel to the
Underwriters, such opinion or opinions, dated the Closing Date (and, if
applicable, the Option Closing Date) with respect to such matters as you may
reasonably require; and the Company and the Trust shall have furnished to such
counsel such documents as they reasonably request for the purposes of enabling
them to review or pass on the matters referred to in this Section 6 and in order
to evidence the accuracy, completeness and satisfaction of the representations,
warranties and conditions herein contained.
(h) You shall have received at or prior to the Closing Date from Mayer,
Brown & Platt a memorandum or memoranda, in form and substance satisfactory to
you, with respect to the qualification for offering and sale by the Underwriters
of the Offered Securities under state securities or Blue Sky laws of such
jurisdictions as the Underwriters may have designated to the Company.
(i) On the business day immediately preceding the date of this
Agreement and on the Closing Date (and, if applicable, the Option Closing Date),
you shall have received from KPMG, a letter or letters, dated the date of this
Agreement and the Closing Date (and, if applicable, the Option Closing Date),
respectively, in form and substance satisfactory to you, confirming that they
are independent public accountants with respect to the Company within the
meaning of the 1933 Act and the published Rules and Regulations, and stating to
the effect set forth in Schedule IV hereto.
(j) Except as contemplated in the Prospectus, (i) neither the Company
nor any of its subsidiaries shall have sustained since the date of the latest
audited financial statements included or incorporated by reference in the
Prospectus any loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from any labor
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dispute or court or governmental action, order or decree; and (ii) subsequent to
the respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its subsidiaries
shall have incurred any liability or obligation, direct or contingent, or
entered into any transactions, and there shall not have been any change in the
capital stock or short-term or long-term debt of the Company and its
subsidiaries or any change, or any development involving or which might
reasonably be expected to involve a prospective change in the condition
(financial or other), net worth, business, affairs, management, prospects,
results of operations or cash flow of the Company or its subsidiaries, the
effect of which, in any such case described in clause (i) or (ii), is in your
judgment so material or adverse as to make it impracticable or inadvisable to
proceed with the public offering or the delivery of the Offered Securities being
delivered on such Closing Date (and, if applicable, the Option Closing Date) on
the terms and in the manner contemplated in the Prospectus.
(k) On or after the date hereof (i) no downgrading shall have occurred
in the rating accorded the Company's debt securities by any "nationally
recognized statistical rating organization," as that term is defined by the SEC
for purposes of Rule 436(g)(2) under the 1933 Act, and (ii) no such organization
shall have publicly announced that it has under surveillance or review, with
possible negative implications, its rating of any of the Company's debt
securities.
(l) There shall not have occurred any of the following: (i) a
suspension or material limitation in trading in securities generally on the New
York Stock Exchange or the American Stock Exchange or The Nasdaq National Market
or the establishing on such exchanges or market by the SEC or by such exchanges
or markets of minimum or maximum prices which are not in force and effect on the
date hereof; (ii) a suspension or material limitation in trading in the
Company's securities (including, without limitation, the Trust Preferred
Securities) on The Nasdaq National Market or the establishing on such market by
the SEC or by such market of minimum or maximum prices which are not in force
and effect on the date hereof; (iii) a general moratorium on commercial banking
activities declared by either federal or any state authorities; (iv) the
outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, which in your
judgment makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Offered Securities in the manner contemplated in
the Prospectus; or (v) any calamity or crisis, change in national,
international or world affairs, act of God, change in the international or
domestic markets, or change in the existing financial, political or economic
conditions in the United States or elsewhere, which in your judgment makes it
impracticable or inadvisable to proceed with the public offering or the delivery
of the Offered Securities in the manner contemplated in the Prospectus.
(m) You shall have received certificates, dated the Closing Date (and,
if applicable, the Option Closing Date) and signed by the President and the
Chief Financial Officer of the Company, in their capacities as such, stating
that:
(i) the condition set forth in Section 6(a) has been fully
satisfied;
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(ii) they have carefully examined the Registration Statement
and the Prospectus as amended or supplemented and all documents
incorporated by reference therein and nothing has come to their
attention that would lead them to believe that either the Registration
Statement or the Prospectus, or any amendment or supplement thereto or
any documents incorporated by reference therein as of their respective
effective, issue or filing dates, contained, and the Prospectus as
amended or supplemented and all documents incorporated by reference
therein when read together with the documents incorporated by reference
therein, at such Closing Date, contains any untrue statement of a
material fact, or omits to state a material fact required to be stated
therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made, not misleading;
(iii) since the Effective Date, there has occurred no event
required to be set forth in an amendment or supplement to the
Registration Statement or the Prospectus which has not been so set
forth and there has been no document required to be filed under the
1934 Act and the 1934 Act Rules and Regulations that upon such filing
would be deemed to be incorporated by reference into the Prospectus
that has not been so filed;
(iv) all representations and warranties made herein by the
Company and the Trust are true and correct at such Closing Date, with
the same effect as if made on and as of such Closing Date, and all
agreements herein to be performed or complied with by the Company or
the Trust on or prior to such Closing Date have been duly performed and
complied with by the Company or the Trust, as the case may be;
(v) neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any material
loss or interference with its business from fire, explosion, flood or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree;
(vi) except as disclosed in the Prospectus, subsequent to the
respective dates as of which information is given in the Registration
Statement and the Prospectus, neither the Company nor any of its
subsidiaries has incurred any liabilities or obligations, direct or
contingent, other than in the ordinary course of business, or entered
into any transactions not in the ordinary course of business, which in
either case are material to the Company or such subsidiary; and there
has not been any change in the capital stock or material increase in
the short-term debt or long-term debt of the Company or any of its
subsidiaries or any material adverse change or any development
involving or which may reasonably be expected to involve a prospective
material adverse change, in the condition (financial or other), net
worth, business, affairs, management, prospects, results of operations
or cash flow of the Company and its subsidiaries taken as a whole; and
there
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<PAGE>
has been no dividend or distribution of any kind, paid or made by the
Company on any class of its capital stock;
(vii) there has not been any change or decrease specified in
paragraph [5(a)] of the letter or letters delivered to the Underwriters
referred to in Section 6(i) above, except those changes and decreases
that are disclosed therein; and
(viii) covering such other matters as you may reasonably
request.
(n) Each of the Company and the Trust shall not have failed, refused,
or been unable, at or prior to the Closing Date (and, if applicable, the Option
Closing Date) to have performed any agreement on their part to be performed or
any of the conditions herein contained and required to be performed or satisfied
by them at or prior to such Closing Date.
(o) The Trust Preferred Securities shall have been approved for
quotation upon official notice of issuance on The Nasdaq National Market.
(p) If the Registration Statement or an offering of Offered Securities
is required to be and has been filed with the NASD for review, the NASD shall
not have raised any objection that remains unresolved on the Closing Date with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(q) Each of the Company and the Trust shall have furnished to you at
the Closing Date (and, if applicable, the Option Closing Date) such further
information, opinions, certificates, letters and documents as you may have
reasonably requested.
The Declaration, the Preferred Securities Guarantee, the Preferred
Securities Guarantee Agreement and the Indenture shall have been executed and
delivered, in each case in a form reasonably satisfactory to the Underwriters.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are satisfactory in form and
substance to you and to Mayer, Brown & Platt, counsel for the several
Underwriters. The Company and the Trust will furnish you with such signed and
conformed copies of such opinions, certificates, letters and documents as you
may request.
If any of the conditions specified above in this Section 6 shall not
have been satisfied at or prior to the Closing Date (and, if applicable, the
Option Closing Date) or waived by you in writing, this Agreement may be
terminated by you on notice to the Company.
7. Indemnification and Contribution. (a) The Offerors, jointly and
severally, will indemnify and hold harmless each Underwriter for and against any
losses, damages or liabilities, joint or several, to which such Underwriter may
become subject, under the 1933 Act or
35
<PAGE>
otherwise, insofar as such losses, damages or liabilities (or actions or claims
in respect thereof) arise out of or are based upon (i) an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Offered Securities, or any amendment or supplement thereto, or
in any blue sky application or other document executed by the Company or based
on any information furnished in writing by the Company, filed in any state or
other jurisdiction in order to qualify any or all of the Offered Securities
under the securities laws thereof (the "Blue Sky Application"), or (ii) the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
will reimburse each Underwriter for any legal or other expenses incurred by such
Underwriter in connection with investigating, preparing, pursuing or defending
against or appearing as a third party witness in connection with any such loss,
damage, liability or action or claim, including, without limitation, any
investigation or proceeding by any governmental agency or body, commenced or
threatened, including the reasonable fees and expenses of counsel to the
indemnified party, as such expenses are incurred (including such losses,
damages, liabilities or expenses to the extent of the aggregate amount paid in
settlement of any such action or claim, provided that (subject to Section 7(d)
hereof) any such settlement is effected with the written consent of the
Company).
(b) Each Underwriter, severally and not jointly, will indemnify and
hold harmless the Company and the Trust for and against any losses, damages or
liabilities to which the Company or the Trust may become subject, under the 1933
Act or otherwise, insofar as such losses, damages or liabilities (or actions or
claims in respect thereof) arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Offered Securities, or any amendment or supplement thereto, or
any Blue Sky Application, or arise out of are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in any Preliminary
Prospectus, the Registration Statement, the Prospectus or any other prospectus
relating to the Offered Securities, or any such amendment or supplement, or any
Blue Sky Application, in reliance upon and in conformity with written
information relating to the Underwriter furnished to the Company by you or by
any Underwriter through you, expressly for use in the preparation thereof (as
provided in Section 14 hereof), and will reimburse the Company or the Trust for
any legal or other expenses incurred by the Company or the Trust, as the case
may be, in connection with investigating or defending any such action or claim
as such expenses are incurred (including such losses, damages, liabilities or
expenses to the extent of the aggregate amount paid in settlement of any such
action or claim, provided that (subject to Section 7(d) hereof) any such
settlement is effected with the written consent of the Underwriters).
(c) Promptly after receipt by an indemnified party under Section 7(a),
7(b) or 7(c) hereof of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under Section 7(a), 7(b) or 7(c)
36
<PAGE>
hereof, notify each such indemnifying party in writing of the commencement
thereof, but the failure so to notify such indemnifying party shall not relieve
such indemnifying party from any liability except to the extent that it has been
prejudiced in any material respect by such failure or from any liability that it
may have to any such indemnified party otherwise than under Section 7(a), 7(b)
or 7(c) hereof. In case any such action shall be brought against any such
indemnified party and it shall notify each indemnifying party of the
commencement thereof, each such indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party under Section 7(a), 7(b) or 7(c) hereof similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of such indemnified
party, be counsel to such indemnifying party), and, after notice from such
indemnifying party to such indemnified party of its election so to assume the
defense thereof, such indemnifying party shall not be liable to such indemnified
party under Section 7(a), 7(b) or 7(c) hereof for any legal expenses of other
counsel or any other expenses, in each case subsequently incurred by such
indemnified party, in connection with the defense thereof other than reasonable
costs of investigation. The indemnified party shall have the right to employ its
own counsel in any such action, but the fees and expenses of such counsel shall
be at the expense of such indemnified party unless (i) the employment of counsel
by such indemnified party at the expense of the indemnifying party has been
authorized by the indemnifying party, (ii) the indemnified party shall have been
advised by such counsel that there may be a conflict of interest between the
indemnifying party and the indemnified party in the conduct of the defense, or
certain aspects of the defense, of such action (in which case the indemnifying
party shall not have the right to direct the defense of such action with respect
to those matters or aspects of the defense on which a conflict exists or may
exist on behalf of the indemnified party) or (iii) the indemnifying party shall
not in fact have employed counsel reasonably satisfactory to such indemnified
party to assume the defense of such action, in any of which events such fees and
expenses to the extent applicable shall be borne, and shall be paid as incurred,
by the indemnifying party. If at any time such indemnified party shall have
requested such indemnifying party under Section 7(a), 7(b) or 7(c) hereof to
reimburse such indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of the
nature contemplated by Section 7(a), 7(b) or 7(c) hereof effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of such request for reimbursement, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request for reimbursement prior to the date of such
settlement. No such indemnifying party shall, without the written consent of
such indemnified party, effect the settlement or compromise of, or consent to
the entry of any judgment with respect to, any pending or threatened action or
claim in respect of which indemnification or contribution may be sought
hereunder (whether or not such indemnified party is an actual or potential party
to such action or claim) unless such settlement, compromise or judgment (A)
includes an unconditional release of such indemnified party from all liability
arising out of such action or claim and (B) does not include a statement as to
or an admission of fault, culpability or a failure to act, by or on behalf of
any such indemnified party. In no event shall such indemnifying parties be
liable for
37
<PAGE>
the fees and expenses of more than one counsel, including any local counsel, for
all such 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.
(d) If the indemnification provided for in this Section 7 is
unavailable to or insufficient to indemnify or hold harmless an indemnified
party under Section 7(a), 7(b) or 7(c) hereof in respect of any losses, damages
or liabilities (or actions or claims in respect thereof) referred to therein,
then each indemnifying party under Section 7(a), 7(b) or 7(c) hereof shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, damages or liabilities (or actions or claims in respect thereof)
in such proportion as is appropriate to reflect the relative benefits received
by the Company and the Trust, on the one hand, and the Underwriters, on the
other hand, from the offering of the Offered Securities. If, however, the
allocation provided by the immediately preceding sentence is not permitted by
applicable law or if the indemnified party failed to give the notice required
under Section 7(d) hereof and such indemnifying party was prejudiced in a
material respect by such failure, then each such indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault, as applicable, of the Company and the Trust, on the one
hand, and the Underwriters, on the other hand, in connection with the statements
or omissions that resulted in such losses, damages or liabilities (or actions or
claims in respect thereof), as well as any other relevant equitable
considerations. The relative benefits received by, as applicable, the Company
and the Trust, on the one hand, and the Underwriters, on the other hand, shall
be deemed to be in the same proportion as the total net proceeds from such
offering (before deducting expenses) received by the Company and the Trust bear
to the total underwriting discounts and commissions received by the
Underwriters. The relative fault, as applicable, of the Company or the Trust, on
the one hand, and the Underwriters, on the other hand, shall be determined 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 Company or the Trust, on the one hand, or
the Underwriters, on the other hand, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Trust and the Underwriters agree that it
would not be just and equitable if contribution pursuant to this Section 7(e)
were determined by pro rata allocation (even if the Underwriters were treated as
one entity for such purpose) or by any other method of allocation that does not
take account of the equitable considerations referred to above in this Section
7(e). The amount paid or payable by such an indemnified party as a result of the
losses, damages or liabilities (or actions or claims in respect thereof)
referred to above in this Section 7(e) shall be deemed to include any legal or
other expenses incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 7(e), no Underwriter shall be required to contribute
any amount in excess of the amount by which the total price at which the Offered
Securities underwritten by it and distributed to the public were offered to the
public exceeds the amount of any damages that such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of
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Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The obligations of the
Underwriters in this Section 7(e) to contribute are several in proportion to
their respective underwriting obligations with respect to the Offered Securities
and not joint.
(e) The obligations of the Company and the Trust under this Section 7
shall be in addition to any liability that the Company and the Trust may
otherwise have and shall extend, upon the same terms and conditions, to each
officer, director, employee, agent or other representative and to each person,
if any, who controls any Underwriter within the meaning of the 1933 Act; and the
obligations of the Underwriters under this Section 7 shall be in addition to any
liability that the respective Underwriters may otherwise have and shall extend,
upon the same terms and conditions, to each officer and director of the Company
and each Trustee of the Trust who signed the Registration Statement and to each
person, if any, who controls the Company within the meaning of the 1933 Act and
to each person, if any, who controls the Trust within the meaning of the 1933
Act.
(f) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during the
negotiations regarding the provisions hereof, including, without limitation, the
provisions of this Section 7, and are fully informed regarding such provisions.
They further acknowledge that the provisions of this Section 7 fairly allocate
the risks in light of the ability of the parties to investigate the Company and
its business in order to assure that adequate disclosure is made in the
Registration Statement, any Preliminary Prospectus, the Prospectus, and any
supplement or amendment thereof, as required by the 1933 Act.
8. Representations and Agreements to Survive Delivery. The respective
representations, warranties, agreements and statements of the Company and the
Trust and the Underwriters, as set forth in this Agreement or made by or on
behalf of them, respectively, pursuant to this Agreement, shall remain operative
and in full force and effect regardless of any investigation (or any statement
as to the results thereof) made by or on behalf of any Underwriter or any
controlling person of any Underwriter, the Company or any of its officers,
directors or any controlling persons, or the Trust or any of its Trustees, and
shall survive delivery of and payment for the Offered Securities hereunder.
9. Substitution of Underwriters. (a) If any Underwriter shall default
in its obligation to purchase the Offered Securities which it has agreed to
purchase hereunder, you may in your discretion arrange for you or another party
or other parties to purchase such Offered Securities on the terms contained
herein. If within thirty six hours after such default by any Underwriter you do
not arrange for the purchase of such Offered Securities, then the Company and
the Trust shall be entitled to a further period of thirty six hours within which
to procure another party or parties reasonably satisfactory to you to purchase
such Offered Securities on such terms. In the event that, within the respective
prescribed periods, you notify the Company and the Trust that you have so
arranged for the purchase of such Offered Securities, or the
39
<PAGE>
Company and the Trust notify you that they have so arranged for the purchase of
such Offered Securities, you or the Company and the Trust shall have the right
to postpone the Closing Date for a period of not more than seven days, in order
to effect whatever changes may thereby be made necessary in the Registration
Statement or the Prospectus, or in any other documents or arrangements, and the
Company and the Trust agree to file promptly any amendments to the Registration
Statement or the Prospectus which in your opinion may thereby be made necessary.
The term "Underwriter" as used in this Agreement shall include any persons
substituted under this Section 9 with like effect as if such person had
originally been a party to this Agreement with respect to such Offered
Securities.
(b) If, after giving effect to any arrangements for the purchase of the
Offered Securities of a defaulting Underwriter or Underwriters made by you and
the Company and the Trust as provided in subsection (a) above, the aggregate
number of Offered Securities which remains unpurchased does not exceed
one-eleventh of the total Offered Securities to be sold on the Closing Date,
then the Company and the Trust shall have the right to require each
nondefaulting Underwriter to purchase the Offered Securities which such
Underwriter agreed to purchase hereunder and, in addition, to require each
nondefaulting Underwriter to purchase its pro rata share (based on the number of
Offered Securities which such Underwriter agreed to purchase hereunder) of the
Offered Securities of such defaulting Underwriter or Underwriters for which such
arrangements have not been made; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of the
Offered Securities of a defaulting Underwriter or Underwriters made by you and
the Company and the Trust as provided in subsection (a) above, the number of
Offered Securities which remains unpurchased exceeds one-eleventh of the total
Offered Securities to be sold on the Closing Date, or if the Company and the
Trust shall not exercise the right described in subsection (b) above to require
the nondefaulting Underwriters to purchase Offered Securities of the defaulting
Underwriter or Underwriters, then this Agreement (or, with respect to the Option
Closing Date, the obligations of the Underwriters to purchase and of the Company
and the Trust to sell the Option Offered Securities) shall thereupon terminate,
without liability on the part of any nondefaulting Underwriter or the Company
and the Trust except for the expenses to be borne by the Company and the
Underwriters as provided in Section 11 hereof and the indemnity and contribution
agreements in Section 7 hereof; but nothing herein shall relieve a defaulting
Underwriter from liability for its default.
10. Effective Date and Termination. (a) This Agreement shall become
effective at 1:00 p.m., New York time, on the first business day following the
effective date of the Registration Statement, or at such earlier time after the
effective date of the Registration Statement as you in your discretion shall
first release the Offered Securities for offering to the public; provided,
however, that the provisions of Section 7 and 11 shall at all times be
effective. For the purposes of this Section 10(a), the Offered Securities shall
be deemed to have been released to the public upon release by you of the
publication of a newspaper advertisement
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<PAGE>
relating to the Offered Securities or upon release of telegrams, facsimile
transmissions or letters offering the Offered Securities for sale to securities
dealers, whichever shall first occur.
(b) This Agreement may be terminated by you at any time before it
becomes effective in accordance with Section 10(a) by notice to the Company;
provided, however, that the provisions of this Section 10 and of Section 7 and
Section 11 hereof shall at all times be effective. In the event of any
termination of this Agreement pursuant to Section 9 or this Section 10(b)
hereof, the Company shall not then be under any liability to any Underwriter
except as provided in Section 7 or Section 11 hereof.
(c) This Agreement may be terminated by you at any time at or prior to
the Closing Date by notice to the Company if any condition specified in Section
6 hereof shall not have been satisfied on or prior to the Closing Date. Any such
termination shall be without liability of any party to any other party except as
provided in Sections 7 and 11 hereof.
(d) This Agreement also may be terminated by you, by notice to the
Company, as to any obligation of the Underwriters to purchase the Option Trust
Preferred Securities, if any condition specified in Section 6 hereof shall not
have been satisfied at or prior to the Option Closing Date or as provided in
Section 9 of this Agreement.
If you terminate this Agreement as provided in Sections 10(b), 10(c) or
10(d), you shall notify the Company by telephone or telegram, confirmed by
letter.
11. Costs and Expenses. The Company, whether or not the transactions
contemplated hereby are consummated or this Agreement is prevented from becoming
effective under Section 10 hereof or is terminated, will bear and pay the costs
and expenses incident to the registration of the Offered Securities and public
offering thereof, including, without limitation, (a) all expenses (including
stock transfer taxes) incurred in connection with the delivery to the several
Underwriters of the Offered Securities, the filing fees of the SEC, the fees and
expenses of the Company's and the Trust's counsel and accountants and the fees
and expenses of counsel for the Company and the Trust, (b) the preparation,
printing, filing, delivery and shipping of the Registration Statement, each
Preliminary Prospectus, the Prospectus and any amendments or supplements thereto
(except as otherwise expressly provided in Section 5(d) hereof) and the
printing, delivery and shipping of this Agreement, other underwriting documents,
including the Agreement Among Underwriters, the Selected Dealer Agreement,
Underwriters' Questionnaires and Powers of Attorney and Blue Sky Memoranda, the
Indenture, the Declaration, the Trust Securities, the Subordinated Debentures,
the Guarantee Agreements, the Guarantees and any instruments or documents
related to any of the foregoing, (c) the furnishing of copies of such documents
(except as otherwise expressly provided in Section 5(d) hereof) to the
Underwriters, (d) the registration or qualification of the Offered Securities
for offering and sale under the securities laws of the various states and other
jurisdictions, including the fees and disbursements of counsel to the
Underwriters relating to such registration or qualification and in connection
with preparing any Blue Sky Memoranda or related analysis, (e) the filing fees
of the NASD (if
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<PAGE>
any) and fees and disbursements of counsel to the Underwriters relating to any
review of the offering by the NASD, (f) all printing and engraving costs related
to preparation of the certificates for the Offered Securities, including
transfer agent and registrar fees, (g) all fees and expenses relating to the
authorization of the Offered Securities for quotation on The Nasdaq National
Market, (h) all travel expenses, including air fare and accommodation expenses,
of representatives of the Company in connection with the offering of the Offered
Securities, (i) the fees and expenses of any transfer agent or registrar for the
Offered Securities, (j) the fees and expenses of the Debt Trustee, the Property
Trustee, the Delaware Trustee and the Guarantee Trustee, including the fees and
disbursements of their respective counsel, (k) the cost of qualifying the
Offered Securities with The Depository Trust Corporation, and (l) all of the
other costs and expenses incident to the performance by the Company and the
Trust of the registration and offering of the Offered Securities; provided, that
the Underwriters will bear and pay the fees and expenses of the Underwriters'
counsel (except as provided in this Section 11), the Underwriters' out-of-pocket
expenses, and any advertising costs and expenses incurred by the Underwriters
incident to the public offering of the Offered Securities.
If this Agreement is terminated by you in accordance with the
provisions of Section 10(c), the Company shall reimburse the Underwriters for
all of their out-of-pocket expenses, including the fees and disbursements of
counsel to the Underwriters.
12. Notices. All notices or communications hereunder, except as herein
otherwise specifically provided, shall be in writing and if sent to the
Underwriters shall be mailed, delivered, sent by facsimile transmission, or
telegraphed and confirmed c/o A.G. Edwards & Sons, Inc. at One North Jefferson
Avenue, St. Louis, Missouri 63103, Attention: Director, Corporate Finance,
facsimile number [(314) ___-____], with a copy to ___________________,
Attention: General Counsel, facsimile number [(314) ___-____], or if sent to the
Company or the Trust shall be mailed, delivered, sent by facsimile transmission,
or telegraphed and confirmed to the Company at 3601 NW 63rd Street, Oklahoma
City, Oklahoma 73116, facsimile number (405) 841-2289. Notice to any Underwriter
pursuant to Section 7 shall be mailed, delivered, sent by facsimile
transmission, or telegraphed and confirmed to such Underwriter's address as it
appears in the Underwriters' Questionnaire furnished in connection with the
offering of the Offered Securities or as otherwise furnished to the Company.
13. Information Furnished by Underwriters. The statements in the
second, eighth and ninth paragraphs and the table under the first paragraph
under the caption "Underwriting" in the Prospectus constitute the only
information furnished by or on behalf of the Underwriters through you as such
information is referred to in Section 4(a)(ii) and Section 7 hereof.
14. Parties. This Agreement shall inure to the benefit of and be
binding upon the Underwriters, the Company, the Trust and, to the extent
provided in Sections 7 and 8, the officers and directors of the Company and each
person who controls the Company, the Trustees of the Trust and each person who
controls the Trust or any Underwriter and their respective heirs, executors,
administrators, successors and assigns. Nothing expressed or mentioned in this
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Agreement is intended or shall be construed to give any person, corporation or
other entity any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision herein contained; this Agreement and all
conditions and provisions hereof being intended to be and being for the sole and
exclusive benefit of the parties hereto and their respective successors and
assigns and said controlling persons and said officers and directors, and for
the benefit of no other person, corporation or other entity. No purchaser of any
of the Offered Securities from any Underwriter shall be construed a successor or
assign by reason merely of such purchase.
In all dealings hereunder, you shall act on behalf of each of the
several Underwriters, and the parties hereto shall be entitled to act and rely
upon any statement, request, notice or agreement on behalf of the Underwriters,
made or given by you jointly or by A.G. Edwards & Sons, Inc. on behalf of you as
the representatives, as if the same shall have been made or given in writing by
the Underwriters.
15. Counterparts. This Agreement may be executed by any one or more of
the parties hereto in any number of counterparts, each of which shall be deemed
to be an original, but all such counterparts shall together constitute one and
the same instrument.
16. Pronouns. Whenever a pronoun of any gender or number is used
herein, it shall, where appropriate, be deemed to include any other gender and
number.
17. Time of Essence. Time shall be of the essence of this Agreement.
18. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Missouri, without giving effect to
the choice of law or conflict of laws principles thereof.
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If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Company and the Trust a counterpart
hereof, whereupon this instrument, along with all counterparts, will become a
binding agreement among the Underwriters, the Company and the Trust in
accordance with its terms.
Very truly yours,
LOCAL FINANCIAL CORPORATION
By:
------------------------------
Name:
Title:
LOCAL FINANCIAL CAPITAL TRUST I
By: Local Financial Corporation, as sponsor
By:
------------------------------
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
A.G. EDWARDS & SONS, INC.
FRIEDMAN BILLINGS RAMSEY
KEEFE BRUYETTE & WOODS
By: A.G. EDWARDS & SONS, INC.
By:
---------------------------------
Authorized Signatory
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SCHEDULE I
List of Underwriters
Name of Underwriter Number of Trust Preferred Securities
- ------------------- ------------------------------------
A.G. Edwards & Sons, Inc. ----------------------
Friedman, Billings, Ramsey & Co. Inc. ----------------------
Keefe, Bruyette & Woods, Inc. ----------------------
TOTAL ----------------------
<PAGE>
SCHEDULE II
Commissions Payable Per Trust Preferred Security
<PAGE>
SCHEDULE III
List of Subsidiaries
<PAGE>
SCHEDULE IV
Pursuant to Section 6(i) of the Underwriting Agreement, KPMG LLP shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with
respect to the Company and its subsidiaries within the meaning of the 1933 Act
and the applicable Rules and Regulations thereunder.
(ii) In their opinion, the financial statements and any
supplementary financial information and schedules audited (and, if applicable,
prospective financial statements and/or pro forma financial information
examined) by them and included or incorporated by reference in the Prospectus or
the Registration Statement comply as to form in all material respects with the
applicable accounting requirements of the 1933 Act and the applicable Rules and
Regulations with respect to registration statements on Form S-3; and, if
applicable, they have made a review in accordance with standards established by
the American Institute of Certified Public Accountants of the unaudited
consolidated interim financial statements, selected financial data, pro forma
financial information, prospective financial statements and/or condensed
financial statements derived from audited financial statements of the Company
for the periods specified in such letter, as indicated in their reports thereon,
copies of which have been furnished to the Representatives of the Underwriters
(the "Representatives").
(iii) On the basis of limited procedures, not constituting an
audit in accordance with generally accepted auditing standards, consisting of a
reading of the unaudited financial statements and other information referred to
below, performing the procedures specified by the AICPA for a review of interim
financial information as discussed in SAS No. 71, Interim Financial Information,
on the latest available interim financial statements of the Company and its
subsidiaries, inspection of the minute books of the Company and its subsidiaries
since the date of the latest audited financial statements included in the
Prospectus, inquiries of officials of the Company and its subsidiaries
responsible for financial and accounting matters and such other inquiries and
procedures as may be specified in such letter, nothing came to their attention
that caused them to believe that:
(A) any material modifications should be made to the
unaudited statements of consolidated income, statements of
consolidated financial position and statements of consolidated
cash flows included or incorporated by reference in the
Prospectus for them to be in conformity with generally accepted
accounting principles, or the unaudited statements of
consolidated income, statements of consolidated financial
position and statements of consolidated cash flows included in
the Prospectus do not comply as to form in all material respects
with the applicable accounting requirements of the 1933 Act and
the related published Rules and Regulations thereunder.
<PAGE>
(B) any other unaudited income statement data and balance
sheet items included or incorporated by reference in the
Prospectus do not agree with the corresponding items in the
unaudited consolidated financial statements from which such data
and items were derived, and any such unaudited data and items
were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Prospectus.
(C) the unaudited financial statements which were not
included or incorporated by reference in the Prospectus but from
which were derived any unaudited condensed financial statements
referred to in Clause (A) and any unaudited income statement data
and balance sheet items included in the Prospectus and referred
to in Clause (B) were not determined on a basis substantially
consistent with the basis for the audited consolidated financial
statements included or incorporated by reference in the
Prospectus.
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the
Prospectus do not comply as to form in all material respects with
the applicable accounting requirements of the 1933 Act and the
published rules and regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements.
(E) as of a specified date not more than five days prior to
the date of such letter, there have been any changes in the
consolidated capital stock or any increase in the consolidated
long-term debt of the Company and its subsidiaries, or any
decreases in consolidated working capital, net current assets or
net assets, or any changes in any other items specified by the
Representatives, in each case as compared with amounts shown in
the latest balance sheet included or incorporated by reference in
the Prospectus, except in each case for changes, increases or
decreases which the Prospectus discloses have occurred or may
occur or which are described in such letter.
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the
Prospectus to the specified date referred to in Clause (E) there
were any decreases in consolidated net revenues or operating
profit or the total or per share amounts of consolidated net
income or any changes in any other items specified by the
Representatives, in each case as compared with the comparable
period of the preceding year and with any other period of
corresponding length specified by the Representatives, except in
each case for changes, decreases or increases which the
Prospectus discloses have occurred or may occur or which are
described in such letter.
<PAGE>
(iv) In addition to the audit referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures referred
to in paragraph (iii) above, they have carried out certain specified procedures,
not constituting an audit in accordance with generally accepted auditing
standards, with respect to certain amounts, percentages and financial
information specified by the Representatives, which are derived from the general
accounting records of the Company and its subsidiaries for the periods covered
by their reports and any interim or other periods since the latest period
covered by their reports, which appear or are incorporated by reference in the
Prospectus, or in Part II of, or in exhibits and schedules to, the Registration
Statement specified by the Representatives, and have compared certain of such
amounts, percentages and financial information with the accounting records of
the Company and its subsidiaries and have found them to be in agreement.
Exhibit 4.1
================================================================================
LOCAL FINANCIAL CORPORATION
---------------------------
---------------------------
INDENTURE
Dated as of _______ __, 1999
-----------------------------
THE BANK OF NEW YORK
as Trustee
----------------------------
JUNIOR SUBORDINATED DEFERRABLE INTEREST DEBENTURES
================================================================================
<PAGE>
TIE-SHEET
of provisions of Trust Indenture Act of 1939 with Indenture dated as of
______ __, 1999 between Local Financial Corporation and The Bank of New York,
Trustee:
<TABLE>
<CAPTION>
ACT SECTION INDENTURE SECTION
<S> <C>
310(a)(1)......................................................................................................6.09
310(a)(2) .....................................................................................................6.09
310(a)(3).......................................................................................................N/A
310(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
</TABLE>
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THIS TIE-SHEET IS NOT PART OF THE INDENTURE AS EXECUTED.
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS*
Page
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<S> <C>
ARTICLE I DEFINITIONS
SECTION 1.01. Definitions........................................................... 1
Additional Sums.................................................................................. 1
Affiliate........................................................................................ 1
Allocable Amounts................................................................................ 2
Authenticating Agent............................................................................. 2
Bankruptcy Law................................................................................... 2
Board of Directors............................................................................... 2
Board Resolution................................................................................. 2
Business Day..................................................................................... 2
Commission....................................................................................... 2
Common Securities................................................................................ 2
Common Securities Guarantee...................................................................... 3
Common Stock..................................................................................... 3
Company.......................................................................................... 3
Company Request.................................................................................. 3
Compounded Interest.............................................................................. 3
Custodian........................................................................................ 3
Declaration...................................................................................... 3
Default.......................................................................................... 3
Defaulted Interest............................................................................... 3
Deferred Interest................................................................................ 3
Definitive Securities............................................................................ 3
Depositary....................................................................................... 3
Dissolution Event................................................................................ 3
Event of Default................................................................................. 4
Exchange Act..................................................................................... 4
Extended Interest Payment Period................................................................. 4
Global Security.................................................................................. 4
Indebtedness..................................................................................... 4
Indenture........................................................................................ 4
Interest Payment Date............................................................................ 4
Investment Company Event......................................................................... 4
Local Financial Capital Trust or the Trust....................................................... 5
</TABLE>
- ----------
* THIS TABLE OF CONTENTS SHALL NOT, FOR ANY PURPOSE, BE DEEMED TO
BE A PART OF THE INDENTURE.
i
<PAGE>
<TABLE>
<CAPTION>
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<S> <C>
Maturity Date.................................................................................... 5
Mortgage......................................................................................... 5
Non Book-Entry Preferred Securities.............................................................. 5
Officers......................................................................................... 5
Officers' Certificate............................................................................ 5
Opinion of Counsel............................................................................... 5
Optional Redemption Price........................................................................ 5
Other Debentures................................................................................. 5
Other Guarantees................................................................................. 5
Outstanding...................................................................................... 5
Person........................................................................................... 6
Predecessor Security............................................................................. 6
Preferred Securities............................................................................. 6
Preferred Securities Guarantee................................................................... 7
Principal Office of the Trustee.................................................................. 7
Property Trustee................................................................................. 7
Redemption Date.................................................................................. 7
Redemption Price................................................................................. 7
Regulatory Capital Event......................................................................... 7
Responsible Officer.............................................................................. 7
Securities or Security........................................................................... 7
Securities Act................................................................................... 7
Securityholder or holder of Securities........................................................... 8
Security Register................................................................................ 8
Senior and Subordinated Indebtedness............................................................. 8
Special Event.................................................................................... 8
Subsidiary....................................................................................... 8
Tax Event........................................................................................ 9
Trust Indenture Act of 1939...................................................................... 9
Trustee.......................................................................................... 9
Trust Securities................................................................................. 9
Underwriting Agreement........................................................................... 9
U.S. Government Obligations...................................................................... 9
ARTICLE II SECURITIES
SECTION 2.01. Forms Generally....................................................... 10
SECTION 2.02. Execution and Authentication.......................................... 10
SECTION 2.03. Form and Payment...................................................... 10
SECTION 2.04. Global Security....................................................... 11
SECTION 2.05 Interest.............................................................. 12
SECTION 2.06. Transfer and Exchange................................................. 13
SECTION 2.07. Replacement Securities................................................ 14
</TABLE>
ii
<PAGE>
<TABLE>
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<S> <C>
SECTION 2.08. Temporary Securities.................................................. 14
SECTION 2.09. Cancellation.......................................................... 15
SECTION 2.10. Defaulted Interest.................................................... 15
SECTION 2.11. CUSIP Numbers......................................................... 16
ARTICLE III PARTICULAR COVENANTS OF THE COMPANY
SECTION 3.01. Payment of Principal and Interest..................................... 16
SECTION 3.02. Offices for Notices and Payments, etc................................. 17
SECTION 3.03. Appointments to Fill Vacancies in Trustee's Office.................... 17
SECTION 3.04. Provision as to Paying Agent.......................................... 17
SECTION 3.05. Certificate to Trustee................................................ 19
SECTION 3.06. Compliance with Consolidation Provisions.............................. 19
SECTION 3.07. Limitation on Dividends............................................... 19
SECTION 3.08. Covenants as to Local Financial Capital Trust......................... 20
SECTION 3.09. Payment of Expenses................................................... 20
SECTION 3.10. Payment Upon Resignation or Removal................................... 21
SECTION 3.11. Corporate Existence................................................... 21
SECTION 3.12. Notice of Default..................................................... 21
SECTION 3.13. Listing on an Exchange................................................ 21
ARTICLE IV SECURITYHOLDERS' LISTS AND REPORTS BY THE
COMPANY AND THE TRUSTEE
SECTION 4.01. Securityholders' Lists................................................ 22
SECTION 4.02. Preservation and Disclosure of Lists.................................. 22
SECTION 4.03. Reports by Company.................................................... 24
SECTION 4.04. Reports by the Trustee................................................ 25
ARTICLE V REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
ON EVENT OF DEFAULT
SECTION 5.01. Events of Default..................................................... 25
SECTION 5.02. Payment of Securities on Default; Suit Therefor....................... 27
SECTION 5.03. Application of Moneys Collected by Trustee............................ 29
SECTION 5.04. Proceedings by Securityholders........................................ 29
SECTION 5.05. Proceedings by Trustee................................................ 30
SECTION 5.06. Remedies Cumulative and Continuing.................................... 30
SECTION 5.07. Direction of Proceedings and Waiver of Defaults by
Majority of Securityholders........................................... 30
SECTION 5.08. Notice of Defaults.................................................... 31
</TABLE>
iii
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<TABLE>
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<S> <C>
SECTION 5.09. Undertaking to Pay Costs.............................................. 32
SECTION 5.10. Waiver of Stay, Extension or Usury Laws............................... 32
ARTICLE VI CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of Trustee................................ 32
SECTION 6.02. Reliance on Documents, Opinions, etc.................................. 34
SECTION 6.03. No Responsibility for Recitals, etc................................... 36
SECTION 6.04. Trustee, Authenticating Agent, Paying Agents, Transfer
Agents or Registrar May Own Securities................................ 36
SECTION 6.05. Moneys 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..................................... 38
SECTION 6.11. Acceptance by Successor Trustee....................................... 40
SECTION 6.12. Succession by Merger, etc............................................. 40
SECTION 6.13. Limitation on Rights of Trustee as a Creditor......................... 41
SECTION 6.14. Authenticating Agents................................................. 41
ARTICLE VII CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Action by Securityholders............................................. 42
SECTION 7.02. Proof of Execution by Securityholders................................. 43
SECTION 7.03. Who Are Deemed Absolute Owners........................................ 43
SECTION 7.04. Securities Owned by Company Deemed Not Outstanding.................... 44
SECTION 7.05. Revocation of Consents; Future Holders Bound.......................... 44
ARTICLE VIII SECURITYHOLDERS' MEETINGS
SECTION 8.01. Purposes of Meetings.................................................. 44
SECTION 8.02. Call of Meetings by Trustee........................................... 45
SECTION 8.03. Call of Meetings by Company or Securityholders........................ 45
SECTION 8.04. Qualifications for Voting............................................. 45
SECTION 8.05. Regulations........................................................... 46
SECTION 8.06. Voting................................................................ 46
ARTICLE IX AMENDMENTS
SECTION 9.01. Without Consent of Securityholders.................................... 47
</TABLE>
iv
<PAGE>
<TABLE>
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<S> <C>
SECTION 9.02. With Consent of Securityholders....................................... 48
SECTION 9.03. Compliance with Trust Indenture Act; Effect of
Supplemental Indentures............................................... 49
SECTION 9.04. Notation on Securities................................................ 49
SECTION 9.05. Evidence of Compliance of Supplemental Indenture to
be Furnished Trustee.................................................. 50
ARTICLE X CONSOLIDATION, MERGER, SALE, CONVEYANCE AND LEASE
SECTION 10.01. Company May Consolidate, etc., on Certain Terms....................... 50
SECTION 10.02. Successor Corporation to be Substituted for Company................... 50
SECTION 10.03. Opinion of Counsel to be Given Trustee................................ 51
ARTICLE XI SATISFACTION AND DISCHARGE OF INDENTURE
SECTION 11.01. Discharge of Indenture................................................ 51
SECTION 11.02. Deposited Moneys and U.S. Government Obligations to
be Held in Trust by Trustee........................................... 52
SECTION 11.03. Paying Agent to Repay Moneys Held..................................... 52
SECTION 11.04. Return of Unclaimed Moneys............................................ 52
SECTION 11.05. Defeasance Upon Deposit of Moneys or U.S. Government
Obligations........................................................... 53
ARTICLE XII IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate Obligation.................. 55
ARTICLE XIII MISCELLANEOUS PROVISIONS
SECTION 13.01. Successors............................................................ 55
SECTION 13.02. Official Acts by Successor Corporation................................ 55
SECTION 13.03. Surrender of Company Powers........................................... 55
SECTION 13.04. Addresses for Notices, etc............................................ 55
SECTION 13.05. Governing Law......................................................... 56
SECTION 13.06. Evidence of Compliance with Conditions Precedent...................... 56
SECTION 13.07. Business Days ........................................................ 56
SECTION 13.08. Trust Indenture Act to Control........................................ 57
SECTION 13.09. Table of Contents, Headings, etc...................................... 57
SECTION 13.10. Execution in Counterparts............................................. 57
SECTION 13.11. Separability.......................................................... 57
SECTION 13.12. Assignment............................................................ 57
SECTION 13.13. Acknowledgement of Rights............................................. 58
</TABLE>
v
<PAGE>
<TABLE>
<CAPTION>
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<S> <C>
ARTICLE XIV REDEMPTION OF SECURITIES
SECTION 14.01. Special Event Redemption.............................................. 58
SECTION 14.02. Optional Redemption by Company........................................ 58
SECTION 14.03. No Sinking Fund....................................................... 59
SECTION 14.04. Notice of Redemption; Selection of Securities......................... 59
SECTION 14.05. Payment of Securities Called for Redemption........................... 60
ARTICLE XV SUBORDINATION OF SECURITIES
SECTION 15.01. Agreement to Subordinate.............................................. 60
SECTION 15.02. Default on Senior and Subordinated Indebtedness....................... 61
SECTION 15.03. Liquidation; Dissolution; Bankruptcy.................................. 62
SECTION 15.04. Subrogation........................................................... 63
SECTION 15.05. Trustee to Effectuate Subordination................................... 64
SECTION 15.06. Notice by the Company................................................. 64
SECTION 15.07. Rights of the Trustee; Holders of Senior
and Subordinated Indebtedness......................................... 65
SECTION 15.08. Subordination May Not Be Impaired..................................... 66
ARTICLE XVI EXTENSION OF INTEREST PAYMENT PERIOD
SECTION 16.01. Extension of Interest Payment Period.................................. 66
SECTION 16.02. Notice of Extension................................................... 67
EXHIBIT A................................................................................................A-1
Testimonium
Signatures
Acknowledgements
</TABLE>
vi
<PAGE>
THIS INDENTURE, dated as of _________ __, 1999, between Local
Financial Corporation, a Delaware corporation (hereinafter sometimes called the
"Company"), and The Bank of New York, a New York banking corporation, 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 (the "Trust Indenture Act"), or which
are by reference therein defined in the Securities Act, 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 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 Declaration: (i)
Clearing Agency; (ii) Delaware Trustee; (iii) Property Trustee; (iv)
Administrative Trustees; (v) Direct Action; and (vi) 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 inter pretation. The singular includes the plural and vice versa.
"Additional Sums" shall have the meaning set forth in Section
2.05(c).
"Affiliate" shall have the meaning given to that term in Rule
405 under the Securities Act or any successor rule thereunder.
"Allocable Amounts" when used with respect to any Senior and
Subordinated Indebtedness, means all amounts due or to become due on such Senior
and Subordinated Indebtedness less, if applicable, any amount which would have
been paid to, and retained by, the
<PAGE>
holders of such Senior and Subordinated Indebtedness (whether as a result of the
receipt of payments by the holders of such Senior and Subordinated Indebtedness
from the Company or any other obligor thereon or from any holders of, or trustee
in respect of, other indebtedness that is subordinate and junior in right of
payment to such Senior and Subordinated Indebtedness pursuant to any provision
of such indebtedness for the payment over of amounts received on account of such
indebtedness to the holders of such Senior and Subordinated Indebtedness or
otherwise) but for the fact that such Senior and Subordinated Indebtedness is
subordinated or junior in right of payment to (or subject to a requirement that
amounts received on such Senior and Subordinated Indebtedness be paid over to
obligees on) trade accounts payable or accrued liabilities arising in the
ordinary course of business.
"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.
"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 cities of New York or Oklahoma City, Oklahoma are authorized
or required by law or executive order to close.
"Commission" shall mean the Securities and Exchange
Commission, as from time to time constituted or created under the Exchange Act,
or if at any time after the execution of this Indenture such Commission is not
existing and performing the duties now assigned to it under the Trust Indenture
Act, then the body performing such duties at such time.
"Common Securities" shall mean undivided beneficial interests
in the assets of Local Financial Capital Trust which rank pari passu with
Preferred Securities issued by Local Financial 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, redemption or
otherwise with respect to, the Common Securities shall be made until the holders
of the Preferred Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
2
<PAGE>
"Common Securities Guarantee" shall mean any guarantee that
the Company may enter into with any Person or Persons that operates directly or
indirectly for the benefit of holders of Common Securities of Local Financial
Capital Trust.
"Common Stock" shall mean the Common Stock, par value $.01 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 Local Financial Corporation, a Delaware
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 an Officer of the Company,
and delivered to the Trustee.
"Compounded Interest" shall have the meaning set forth in
Section 16.01.
"Custodian" shall mean any receiver, trustee, assignee,
liquidator, or similar official under any Bankruptcy Law.
"Declaration" means the Amended and Restated Declaration of
Trust of Local Financial Capital Trust, dated as of _________ __, 1999, as
amended from time to time.
"Default" means any event, act or condition that with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulted Interest" shall have the same meaning set forth in
Section 2.10.
"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, 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 2.04(d).
"Dissolution Event" means the liquidation of Local Financial
Capital Trust pursuant to the Declaration, and the distribution of the
Securities held by the Property Trustee to the holders of the Trust Securities
issued by Local Financial Capital Trust pro rata in accordance with the
Declaration.
3
<PAGE>
"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,
as amended.
"Extended Interest Payment Period" shall have the meaning set
forth in Section 16.01.
"Global Security" means, 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" shall mean with respect to any Person, whether
recourse is to all or a portion of the assets of such Person and whether or not
contingent, (i) every obligation of such Person for money borrowed; (ii) every
obligation of such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations incurred in connection with the acquisition
of property, assets or businesses; (iii) every reimbursement obligation of such
Person with respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person; (iv) every obligation of such
Person issued or assumed as the deferred purchase price of property or services
(but excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business); (v) every capital lease obligation of such Person;
(vi) all indebtedness of such Person whether incurred on or prior to the date of
the Indenture or thereafter incurred, for claims in respect of derivative
products, including interest rate, foreign exchange rate and commodity forward
contracts, options and swaps and similar arrangements; and (vii) every
obligation of the type referred to in clauses (i) through (vi) of another Person
and all dividends of another Person the payment of which, in either case, such
Person has guaranteed or is responsible or liable, directly or indirectly, as
obligor or otherwise.
"Indenture" shall mean this instrument as originally executed
or, if amended as herein provided, as so amended.
"Interest Payment Date" shall have the meaning set forth in
Section 2.05(a).
"Investment Company Event" means the receipt by Local
Financial Capital Trust and the Company of an Opinion of Counsel, rendered by a
law firm experienced in such matters, to the effect that, as a result of change
in law or regulation or a change in interpretation or application of law or
regulation by any legislative body, court, governmental agency or regulatory
authority, Local Financial Capital Trust is or will be considered an "investment
company" that is required to be registered under the Investment Company Act of
1940, as amended, which change becomes effective on or after the date of
original issuance of the Preferred Securities of Local Financial Capital Trust.
4
<PAGE>
"Local Financial Capital Trust" or the "Trust" shall mean
Local Financial 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.
"Maturity Date" shall mean __________ __, 2029, or such
shorter period if the Company receives prior regulatory approval if then
required under applicable capital guidelines or regulatory policies.
"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 Preferred Securities" shall have the meaning
set forth in Section 2.04(a)(ii).
"Officer" shall mean any of the Chairman, a Vice Chairman, the
Chief Executive Officer, the President, the Chief Financial Officer, a Vice
President, 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.
"Opinion of Counsel" shall mean a written opinion of counsel,
who may be an employee of the Company unless otherwise provided herein, and who
shall be acceptable to the Trustee.
"Optional Redemption Price" shall have the meaning set forth
in Section 14.02(a).
"Other Debentures" means 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" means all guarantees to be issued by the
Company with respect to preferred securities (if any) and issued to other trusts
to be established by the Company (if any), in each case similar to the Trust.
"Outstanding", when used with reference to Securities, shall,
subject to the provisions of Section 7.04, 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 cancelled by the Trustee or
the Authenticating Agent or delivered to the Trustee
for cancellation;
(b) Securities, or portions thereof, for the payment or
redemption of which moneys 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
5
<PAGE>
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 redeemed prior to maturity
thereof, notice of such redemption 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;
provided, however, that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor upon the Securities or any Affiliate of the
Company or such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee actually knows to be so
owned shall be so disregarded. Securities so owned which have been pledged in
good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor. Upon the
written request of the Trustee, the Company shall furnish to the Trustee
promptly an Officers' Certificate listing and identifying all Securities, if
any, known by the Company to be owned or held by or for the account of the
Company, or any other obligor on the Securities or any Affiliate of the Company
or such obligor, and, subject to the provisions of Section 6.01, the Trustee
shall be entitled to accept such Officers' Certificate as conclusive evidence of
the facts therein set forth and of the fact that all Securities not listed
therein are Outstanding for the purpose of any such determination.
"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 means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 2.07 in lieu of a lost,
destroyed or stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
"Preferred Securities" shall mean undivided beneficial
interests in the assets of Local Financial Capital Trust which rank pari passu
with the Common Securities issued by Local Financial Capital Trust; provided,
however, that if an Event of Default has occurred and is continu ing, no
payments in respect of Distributions on, or payments upon liquidation,
redemption or
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otherwise with respect to, the Common Securities shall be made until the holders
of the Preferred Securities shall be paid in full the Distributions and the
liquidation, redemption and other payments to which they are entitled.
"Preferred Securities Guarantee" shall mean any guarantee that
the Company may enter into with The Bank of New York as trustee or other Persons
that operates directly or indirectly for the benefit of holders of Preferred
Securities.
"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 principally administered.
"Property Trustee" shall have the same meaning as set forth in
the Declaration.
"Redemption Date" when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture including, where applicable, the Optional Redemption Price.
"Redemption Price" when used with respect to any Security to
be redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regulatory Capital Event" means that the Company shall have
received an opinion of independent bank regulatory counsel experienced in such
matters to the effect that, as a result of (a) 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
applicable regulatory agencies or (b) any official administrative pronouncement
or judicial decision interpreting or applying such laws or regulations, which
amendment or change is effective or such pronounce ment or decision is announced
on or after the date of this Indenture, the Preferred Securities do not
constitute, or within 90 days of the date thereof, will not constitute, Tier I
Capital (or its then equiva lent) for purposes of the capital adequacy
guidelines of the Board of Governors 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 Junior Subordinated Debentures
in connection with a termination of the Trust by the Company shall not in and of
itself constitute a Regulatory Capital Event.
"Responsible Officer" shall mean any officer of the Trustee
with direct responsibility for the administration of the Indenture 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.
"Securities" or "Security" mean, any debt securities or debt
security, as the case may be, authenticated and delivered under this Indenture.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
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"Securityholder", "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 have the meaning specified in
Section 2.06.
"Senior and Subordinated Indebtedness" means the principal of
(and premium, if any) and interest, if any (including interest accruing on or
after the filing of any petition in bankruptcy or for reorganization relating to
the Company whether or not such claim for post-petition interest is allowed in
such proceeding), on Indebtedness of the Company, whether incurred on or prior
to the date of this Indenture or thereafter incurred, unless, in the instrument
creating or evidencing the same or pursuant to which the same is outstanding it
is provided that such obligations are not superior in right of payment to the
Securities or other Indebtedness which is pari passu with, or subordinated to,
the Securities, provided, however, that Senior and Subordinated Indebtedness
shall not be deemed to include (a) any Indebtedness of the Company which, when
incurred and without respect to any election under Section 1111(b) of the
Bankruptcy Reform Act of 1978, as amended, was without recourse to the Company,
(b) any Indebtedness of the Company to any of its Subsidiaries, (c) Indebtedness
to any employee of the Company, and (d) any Securities.
"Special Event" means either an Investment Company Event, a
Regulatory Capital Event or a Tax Event.
"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 partner ship 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" means shares, interests, participation 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, participation or other
equivalents having such power only by reason of the occurrence of a contingency.
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"Tax Event" shall mean the receipt by Local Financial 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 which pronouncement or decision is announced on or after
the date of this Indenture, there is more than an insubstantial risk that (i)
Local Financial 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) Local Financial 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 govern mental charges.
"Trust Indenture Act of 1939" shall mean the Trust Indenture
Act of 1939 as in force at the date of execution of this Indenture; provided,
however, that, in the event the Trust Indenture Act of 1939 is amended after
such date, "Trust Indenture Act of 1939" shall mean, to the extent required by
any such amendment, the Trust Indenture Act of 1939 as so amended.
"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 Securities" shall mean the Preferred Securities and the
Common Securities, collectively.
"Underwriting Agreement" shall mean the Underwriting Agreement
dated ________ __, 1999 among the Company, Local Financial Capital Trust and the
underwriters named therein.
"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
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U.S. Government Obligation or the specific payment of interest on or principal
of the U.S. Government Obligation evidenced by such depository receipt.
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, agree
ments to which the Company is subject or usage. Each Security shall be dated the
date of its authen tication. The Securities shall be issued in denominations of
$25 and integral multiples thereof.
SECTION 2.02. Execution and Authentication.
The Securities shall be executed on behalf of the Company by a
duly authorized Officer and attested by a Secretary or an Assistant Secretary.
The signature of any such person on the Securities may be manual or facsimile.
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 $__________ aggregate principal amount of
the Securities, except as provided in Sections 2.06, 2.07, 2.08 and 14.05.
SECTION 2.03. Form and Payment.
Except as provided in Section 2.04, the Securities shall be
issued in fully registered certificated form without interest coupons. Principal
of and interest on the Securities issued in certificated form will be payable,
the transfer of such Securities will be registrable and such Securi ties 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.
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SECTION 2.04. Global Security.
(a) In connection with a Dissolution Event,
(i) if any Preferred 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 2.06) 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 Preferred Securities are held in
certificated form, the related Definitive Securities may be presented
to the Trustee by the Property Trustee and any Preferred Security
certificate which represents Preferred Securities other than Preferred
Secu rities in book-entry form ("Non Book-Entry Preferred 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 Preferred Securities until such Preferred Security
certificates are presented to the Security Registrar for transfer or
reissuance, at which time such Preferred Security certifi cates will be
cancelled and a Security, registered in the name of the holder of the
Preferred Security certificate or the transferee of the holder of such
Preferred Security certificate, as the case may be, with an aggregate
principal amount equal to the aggregate liquidation amount of the
Preferred Security certificate cancelled, 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 cancelled.
(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 2.04.
(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.
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(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 2.06, 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 autho rized 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 cancelled 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 in structions 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 2.05 Interest.
(a) Each Security will bear interest at the rate of ____% per
annum (the "Coupon Rate") from the most recent date to which interest has been
paid or duly provided for or, if no inter est has been paid or duly provided
for, from _____ __, 1999, until the principal thereof becomes due and payable on
the next succeeding Interest Payment Date (as defined below), and at the Coupon
Rate on any overdue principal and (to the extent that payment of such interest
is enforceable under applicable law) on any overdue installment of interest,
compounded quarterly payable (subject to the provisions of Article XVI)
quarterly in arrears on the last day of March, June, September and December of
each year (each, an "Interest Payment Date") commencing on _____ _____, 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 fifteenth day of the month in which
such payment is due.
(b) Interest will be computed on the basis of a 360-day year
consisting of twelve 30-day months and, for any period of less than a full
calendar month, the number of days lapsed in such month based upon a 30-day
month. 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
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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 Local Financial Capital Trust on the outstanding Trust Securities
shall not be reduced as a result of any additional taxes, duties, assignments
and other governmental charges to which Local Financial Capital Trust or the
Property Trustee has become subject as a result of a Tax Event ("Additional
Sums"). Whenever in this Indenture or the Securities there is a reference in any
context to the payment of principal of or interest on the Securities, such
mention shall be deemed to include mention of the payments of the Additional
Sums provided for in this paragraph to the extent that, in such context,
Additional Sums are, were or would be payable in respect thereof pursuant to the
provisions of this paragraph and express mention of the payment of Additional
Sums (if applicable) in any provisions hereof shall not be construed as
excluding Additional Sums in those provisions hereof where such express mention
is not made; provided, however, that the deferral of the payment of interest
pursuant to Section 16.01 or the Securities shall not defer the payment of any
Additional Sums that may be due and payable.
SECTION 2.06. Transfer and Exchange.
The Company shall cause to be kept at the Principal Office of
the Trustee a register in which, subject to such reasonable regulations as it
may prescribe, the Company shall provide for the registration of Securities and
of transfers of Securities. Such register is herein sometimes referred to as the
"Securities Register."
To permit registrations of transfers, the Company shall
execute and the Trustee shall authenticate Definitive Securities and Global
Securities at the Security Registrar'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.
Upon surrender for registration of transfer of any Security at
the office or agency of the Company designated for that purpose the Company
shall execute, and the Trustee shall authenticate and deliver, in the name of
the designated transferee or transferees, one or more new Securities of the same
series of any authorized denominations, of a like aggregate principal amount, of
the same original issue date and Stated Maturity Date and having the same terms.
At the option of the holder, Securities may be exchanged for
other Securities of the same series of any authorized denominations, of a like
aggregate principal amount, of the same original issue date and Stated Maturity
Date and having the same terms, upon surrender of the Securities to be exchanged
at such office or agency. Whenever any securities are so surrendered for
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exchange, the Company shall execute, and the Trustee shall authenticate and
deliver, the Securities which the holder making the exchange is entitled to
receive.
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 redemption or any
notice of selection of Securities for redemption 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 redemption 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, the Company and any agent of the Trustee or 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 interest on such Securities, neither the Trustee, nor the
Company nor any agent of the Trustee or the Company shall be affected by notice
to the contrary.
SECTION 2.07. 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.
SECTION 2.08. 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
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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 ex change 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 2.09. 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 dispose of cancelled 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 Secur ities to replace Securities that have been redeemed or
paid or that have been delivered to the Trustee for cancellation.
SECTION 2.10. 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
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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 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 2.11. 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 redemption 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 redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption 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 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 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 Security
entitled thereto as they appear in the Security Register. The Company further
covenants to pay any and all amounts, including, without limitation,
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Additional Sums, as may be required pursuant to Section 2.05(c), and Compounded
Interest, as may be required pursuant to Section 16.01.
By 10:00 a.m. New York time on the date specified herein for
the payment of principal and interest, the Company will deposit with the Trustee
or with one or more paying agents an amount of money sufficient to cover the
required payment with respect to the Securities.
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 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
Principal Office of the Trustee. 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
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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 or interest (including Additional Sums
and Com pounded Interest, if any) on the
Securities (whether such sums have been paid
to it by the Company or by any other obligor
on the Secu rities) 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 or interest
(including Additional Sums and Compounded
Interest, if any) on the Securities when the
same shall be due and pay able.
(b) If the Company shall act as its own paying agent, it
will, on or before each due date of the principal of
or interest (including Additional Sums and Compounded
Interest, if any) 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 or interest (including Additional Sums and
Compounded Interest, if any) 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 or interest (including Additional
Sums and Compounded Interest, if any) on the
Securities when the same shall become due and payable.
Whenever the Company shall have one or more paying
agents for the Securities, it will, on or prior to
each due date of the principal of or interest
(including Additional Sums and Compounded Interest, if
any) on the Securities, deposit with the paying agent
a sum sufficient to pay the principal or interest
(including Additional Sums and Compounded Interest, if
any) so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal
or interest (including Additional Sums and Compounded
Interest, if any) and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee
of this action or failure so to act.
(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.
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(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 (which includes common and
preferred stock), (ii) make any payment of principal, premium, if any, or
interest on or repay or 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 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 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 stockholder's rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Preferred
Securities Guarantee, (d) the purchase of fractional shares resulting from a
reclassification 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 that would constitute an Event
of Default, (2) if such Securities are held by the Property Trustee, the Company
shall be in default with respect to its payment obligations under the Preferred
Securities Guarantee or (3) the
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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 Local Financial Capital
Trust
In the event Securities are issued to Local Financial Capital
Trust or a trustee of such trust in connection with the issuance of Trust
Securities by Local Financial 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 Local Financial 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 voluntarily dissolve, wind-up or terminate the Trust, except in
connection with the distribution of the Junior Subordinated Debentures or
certain mergers, consolidations or amalgamation, each as permitted by the
Declaration, (iii) will timely perform its duties as sponsor of the Trust, (iv)
will use its reasonable efforts to cause Local Financial 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 Local Financial Capital Trust or certain
mergers, consolidations or amalgamations, each as permitted by the Declaration
of Local Financial 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 and (v) will use its reasonable efforts to
cause each holder of Trust Securities to be treated as owning an undivided
beneficial interest in the Securities.
SECTION 3.09. Payment of Expenses.
In connection with the offering, sale and issuance of the
Securities to Local Financial Capital Trust and in connection with the sale of
the Trust Securities by Local Financial 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 underwriters
payable pursuant to the Underwriting Agree ment 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 Local
Financial Capital Trust, the offering, sale and issuance of the Trust Securities
(including commissions to the underwriters in connection therewith), the fees
and expenses of the Property Trustee and the Delaware Trustee, the costs and
expenses relating to the operation of Local Financial 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 Local Financial Capital Trust;
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(c) be primarily and fully liable for any indemnification
obligations arising with respect to the Declaration;
(d) pay any and all taxes (other than United States
withholding taxes attributable to Local Financial Capital Trust or its assets)
and all liabilities, costs and expenses with respect to such taxes of the Trust;
and
(e) pay all other fees, expenses, debts and obligations (other
than in respect of principal and interest on the Trust Securities) related to
Local Financial 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 Declaration 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 Declaration, 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. Corporate Existence.
The Company will, subject to the provisions of Article X, at
all times maintain its corporate existence and right to carry on business and
will duly procure all renewals and extensions thereof, and , to the extent
necessary or desirable in the operation of its business, will use its best
efforts to maintain, preserve and renew all of its rights, powers, privileges
and franchises.
SECTION 3.12. Notice of Default.
The Company shall file with the Trustee written notice of any
Event of Default within 30 days of its becoming aware of such Event of Default.
SECTION 3.13. Listing on an Exchange.
If the Securities are to be distributed to the holders of the
Preferred Securities in connection with a Dissolution Event, the Company will,
if the Securities are not already so listed, use its best efforts to list such
Securities on the NASDAQ National Market or on such other exchange or other
organizations as the Preferred Securities are then listed.
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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 quarterly 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.
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 hold ers 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 five Business Days after the
receipt of such application, at its election, either:
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(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 informa tion 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
prompt ness 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.
(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
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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 Commis sion, 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).
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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 May 15 following the
date of this Indenture, commencing May 15, 2000,
deliver to Securityholders a brief re port, dated as
of such May 15, which complies with the provisions of
such Section 313(a).
(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
Compounded Interest or Additional Sums, 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
consti tute 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 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
(other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this
Section specifically
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dealt with), and continuance of such default or
breach for a period of 60 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 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 60 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 gener ally 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 Securi ties 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 moneys 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 Compounded
Interest and Additional Sums, if any) upon all the Securities and the principal
of any and all Securities which shall have become due otherwise than by
acceleration (with interest upon such principal 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 compensation due to the Trustee and each predecessor
Trustee, their respective agents, attorneys and counsel, pursuant to Section
6.06, and (ii) any and all Events of Default under the Indenture, other than the
non-payment of the principal of the Securities
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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.
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 Compounded Interest and
Additional Sums, 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 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 or
interest (including Compounded Interest and Additional Sums, if any) or both, as
the case may be, with interest upon the overdue principal and (to the extent
that payment of such interest is enforce able under applicable law and, if the
Securities are held by Local Financial Capital Trust or a trustee of such trust,
without duplication of any other amounts paid by Local Financial Capital Trust
or a trustee in respect thereof) upon the overdue installments of interest
(including Compounded Interest and Additional Sums, 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 other
amount due to the Trustee pursuant to Section 6.06.
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 moneys adjudged or decreed to be payable.
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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 amounts due to the Trustee pursuant to
6.06) and of the Securityholders allowed in such judicial pro ceedings 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
moneys or other property payable or deliverable on any such claims, and to
distribute the same after the 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
amounts due to the Trustee pursuant to Section 6.06.
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, arrange ment, 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.
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SECTION 5.03. Application of Moneys Collected by Trustee.
Any moneys 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 moneys, upon presentation of the Securities in respect of which moneys
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 all other amounts due to the Trustee under
Section 6.06;
Second: To the payment of all Senior and Subordinate
Indebtedness of the Company if and to the extent required by Article XV;
Third: To the payment of the amounts then due and unpaid upon
Securities for principal of and interest (including Compounded Interest and
Additional Sums, if any) on the Securi ties, in respect of which or for the
benefit of which money has been collected, ratably, without preference of
priority of any kind, according to the amounts due on such Securities for
principal and interest, respectively; and
Fourth: To the Company.
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.
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Notwithstanding any other provisions in this Indenture,
however, the right of any holder of any Security to receive payment of the
principal of and interest (including Compounded Interest and Additional Sums, 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. 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
Declaration, the holders of Preferred 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.
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;
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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 interest (including Compounded Interest and Additional Sums, 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 consent ed 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 Securi ties and this Indenture be deemed
to have been cured and to be not continuing.
SECTION 5.08. Notice of Defaults.
The Trustee shall, within 90 days after the occurrence of a
Default with respect to the Securities known to a Responsible Officer of the
Trustee, 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; and
provided that, except in the case of default in the payment of the principal of
or interest (including Compounded Interest or Additional Sums, if any) on any of
the Securities, the Trustee shall be pro tected 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.
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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
interest (including Compounded Interest and Additional Sums, if any) on any
Security against the Company on or after the same shall have become due and
payable.
SECTION 5.10. Waiver of Stay, Extension or Usury Laws.
The Company covenants (to the extent that it may lawfully do
so) that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension law
or any usury or other law wherever enacted, now or at any time hereafter in
force, which would prohibit or forgive the Company from paying all or any
portion of the principal or any interest on (including Additional Sums and
Compounded Interest, if any) any such amounts, as contemplated herein, or which
may affect the covenants or the performance of this Indenture; and the Company
(to the extent that it may lawfully do so) hereby expressly waives all benefit
or advantage of any such laws and covenants that will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE 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.
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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
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 (but need not confirm or
investigate the accuracy of mathematical
calculations or other facts stated therein);
(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.
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SECTION 6.02. Reliance on Documents, Opinions, etc.
Except as otherwise provided in Section 6.01:
(a) the Trustee may conclusively 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;
(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 and sufficient
security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an
Event of Default with respect to the Securities (that
has not been cured or waived) to exercise with
respect to the Securities 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.
(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;
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(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 Inden ture, the
Trustee may require reasonable indemnity against such
expense or liability as a condition to so proceeding;
(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;
(h) the Trustee shall not be charged with knowledge of
any Default or Event of Default with respect to the
Securities unless (1) such default is a default under
Sections 5.01(a) (other than a default with respect
to the payment of Compounded Interest or Additional
Sums) and 5.01(b) of the Indenture and the Trustee is
the paying agent hereunder, (2) a Responsible Officer
shall have actual knowledge of such Default or Event
of Default or (3) written notice of such Default or
Event of Default shall have been given to the Trustee
at the Principal Office of the Trustee by the Company
or any other obligor on the Securities or by any
holder of the Securities and such notice references
the Securities and this Indenture;
(i) the Trustee shall not be liable for any action taken,
suffered or omitted by it in good faith, without
negligence or willful misconduct and believed by it
to be authorized or within the discretion or rights
or powers conferred upon it by this Indenture; and
(j) the rights, privileges, protections, immunities and
benefits given to the Trustee, including, without
limitation, its right to be indemnified, are extended
to, and shall be enforceable by, the Trustee in each
of its capacities hereunder, and to each agent,
custodian and other Person employed to act hereunder.
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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.
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. Moneys to be Held in Trust.
Subject to the provisions of Section 11.04, all moneys
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 moneys 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, a Vice President, 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, liability or expense including taxes (other than
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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 the trust or trusts hereunder, 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 resignation
or removal of the Trustee and the defeasance or other termination of this
Indenture.
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.
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
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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 ac cepted 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
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 provi sions of Section
6.09 and shall fail to resign after written
request therefor by the Company or by any
such Securityholder, or
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(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 rehabili tation,
conservation or liquidation, or
(4) the Trustee shall commence a voluntary case
under the Federal bankruptcy laws, as now or
hereafter constituted, or any other
applicable Federal or state bankruptcy,
insolvency or similar law or shall consent
to the appointment of or taking possession
by a receiver, custodian, liquidator,
assignee, trustee, sequestrator (or similar
official) of the Trustee or its property or
affairs, or shall make an assignment for the
benefit of creditors, or shall admit in
writing its inability to pay its debts
generally as they become due, or shall take
corporate action in furtherance of any such
action.
then, in any such case, the Company may remove the
Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which in
strument 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. If a successor trustee shall not have
accepted appointment within 30 days after the removal
of the Trustee, the Trustee may petition any court of
competent jurisdiction for the 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
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effective upon acceptance of appointment by the
successor trustee as provided in Section 6.11.
(e) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the
Securities and each appointment of a successor
Trustee with respect to the Securities to all holders
of Securities. Each notice shall include the name of
the successor Trustee and the address of its
Corporate Trust Office.
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 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
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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.
SECTION 6.14. Authenticating Agents.
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 authentica tion 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
$50,000,000 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 Authenticat ing 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
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the corporate trust business of any Authenticating Agent, shall be the successor
of such Authenticat ing 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 Authenticat ing 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.
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
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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 (subject to Section 2.05) interest on such Security 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 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 moneys payable upon any such Security.
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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 a
Responsible Officer of 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 corporate trust
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:
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(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;
(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
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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 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
$25 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
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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.
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, when authorized by a Board Resolution, 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
Direc tors 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 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 pro vide for a particular period of
grace after default (which period may be short er 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 cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental
indenture which may be defective or incon sistent
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 adversely affect the interests of the
holders of the Securities;
(d) to evidence and provide for the acceptance of
appointment hereunder by a successor trustee with
respect to the Securities;
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(e) to make provision for transfer procedures,
certification, book-entry provisions and all other
matters required pursuant to Section 2.06 or
otherwise nec essary, desirable or appropriate in
connection with the issuance of Securities to holders
of Preferred Securities in the event of a
distribution of Securities by Local Financial Capital
Trust following a Dissolution Event;
(f) to qualify or maintain qualification of this
Indenture under the Trust Indenture Act; and
(g) to make any change that does not adversely affect the
rights of any Securityholder.
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 autho rized 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 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
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 Local Financial
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
amend ment; 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.
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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 supple mental 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 discre tion, 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. 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 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.
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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 and rely upon, in addition to the document required by Section
13.06, an Officers' Certificate and an Opinion of Counsel as conclusive evidence
that any 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 laws of the
United States or any State thereof or the District of Columbia, and (b) upon any
such consol idation, merger, sale, conveyance, transfer or lease, the due and
punctual payment of the principal of 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)
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, (c) after giving effect to such consolidation, merger, sale, conveyance,
transfer or lease, no Default or Event of Default, or any event which, after
notice or lapse of time or both, would become a Default or an Event of Default,
shall have occurred and be continuing and (d) such consolidation, merger, sale,
conveyance, transfer or lease does not cause the Securities to be downgraded by
a nationally recognized statistical rating organization.
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
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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 Local Financial Capital Trust,
any or all of the Securities issuable 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 2.07) and not theretofore cancelled, or (b) all
the Securities not theretofore cancelled 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 2.07) not theretofore
cancelled or delivered to the Trustee for cancellation, including principal and
interest (including Compounded Interest and Additional Sums, if any) due or to
become due to the Maturity Date or redemption date, as the case may be, but
excluding,
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however, the amount of any moneys for the payment of principal of or interest
(including Compounded Interest and Additional Sums, 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 unclaimed property or similar laws, and if 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, 2.06, 2.07, 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 Moneys and U.S. Government
Obligations to be Held in Trust by Trustee.
Subject to the provisions of Section 11.04, all moneys 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 moneys or U.S. Government Obligations have been deposited with the
Trustee, of all sums due and to become due thereon for principal and interest
(including Additional Sums and Compounded Interest, if any).
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 Moneys Held.
Upon the satisfaction and discharge of this Indenture all
moneys 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 moneys.
SECTION 11.04. Return of Unclaimed Moneys.
Any moneys deposited with or paid to the Trustee or any paying
agent for payment of the principal of 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 interest (including Compounded Interest and
Additional Sums, if any) on such Securities, as the case may be, shall have
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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 moneys shall thereupon cease.
SECTION 11.05. Defeasance Upon Deposit of Moneys 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 combina tion 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 on the
outstanding Securities on the dates such installments
of princi pal and interest 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;
(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
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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;
(5) the Trustee will not have a conflicting interest
within the meaning of the Trust Indenture Act;
(6) a breach or violation of, or default under, any other
agreement or intrument to which the Company is a
party or by which it is bound will not result;
(7) a trust arising from such deposit will not result
which constitutes an investment company within the
meaning of the Investment Company Act of 1940, as
amended, unless such trust shall be qualified or
exempt from regulation thereunder; and
(8) the Company shall have delivered to the Trustee an
Officer's Certificate and an Opinion of Counsel, each
stating that all conditions precedent with respect to
such Discharge have been complied with.
"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 on the Securities
when such payments are due; (B) the Company's obligations with respect to the
Securities under Sections 2.06, 2.07, 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 obligations
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:
(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 acknowledg ing receipt of sufficient
money and/or U. S. Government Obligations to meet the
applicable conditions set forth in this Section
11.05.
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ARTICLE XII
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Indenture and Securities Solely Corporate
Obligations.
No recourse for the payment of the principal of 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,
stockholder, 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.
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.
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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 first class mail, registered or certified mail, overnight courier
service or conformed telecopy addressed (until another address is filed by the
Company with the Trustee for the purpose) to the Company at 3601 NW 63rd Street,
Oklahoma City, Oklahoma 73116, Attention: Jan A. Norton, President. 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, 101 Barclay Street, 21st Floor
West, New York, New York 10286, Attention: Corporate Trust Trustee
Administration (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. Failure to mail a notice or communication to a
Securityholder or any defect in it shall not affect its sufficiency with respect
to other Securityholders.
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
interest on the Securities will not be a Business Day, the payment of such
principal of or interest on the Securities need not be made on such date but may
be made on the next succeeding Business Day, with the same force and effect as
if made on the date of payment and no interest shall accrue for the period from
and after such date, 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.
SECTION 13.08. Trust Indenture Act to Control.
This Indenture is subject to and shall be governed by the
provisions of the Trust Indenture Act that are required to be a part of this
Indenture. If any provision hereof limits, qualifies or conflicts with a
provision of the Trust Indenture Act that is required under such act to be a
part of and govern this Indenture, the Trust Indenture Act provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
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,
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provided that, in the event of any such assignment, the Company will remain
primarily 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 Local Financial 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 Local Financial Capital
Trust, any holder of Preferred Securities may institute legal proceedings
directly against the Company to enforce such Property Trustee's rights under
this Indenture without first instituting any legal proceedings against such
Property Trustee or any other person or entity. Notwithstanding the foregoing,
if an Event of Default has occurred and is continuing and such event is
attributable to the failure of the Company to pay principal of or interest on
the Securities when due, the Company acknowledges that a holder of Preferred
Securities may directly institute a proceeding for enforce ment of payment to
such holder of the principal of or interest on the Securities having a principal
amount equal to the aggregate liquidation amount of the Preferred Securities of
such holder on or after the respective due date specified in the Securities.
ARTICLE XIV
REDEMPTION OF SECURITIES
SECTION 14.01. Special Event Redemption.
If 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
Redemption Price. The Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Redemption Price by 10:00 a.m., New York time, on the date
such Redemption Price is to be paid.
SECTION 14.02. Optional Redemption by Company.
(a) Subject to the provisions of this Article XIV, the Company
shall have the right to redeem the Securities, in whole or in part, from time to
time, on or after _______ __, 2004, at the redemption prices set forth below
(expressed as percentages of principal) plus, in each case, accrued and unpaid
interest thereon (including Compounded Interest and Additional Sums, if any), to
the applicable date of redemption (the "Optional Redemption Price") if redeemed
during the 12-month period beginning _______ __, of the years indicated below.
Year Percentage
---- ----------
2004 %
2005 %
2006 %
2007 %
2008 %
2009 and thereafter 100.000%
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If the Securities are only partially redeemed pursuant to this
Section 14.02, the Securities to be redeemed shall be selected on a pro rata
basis, by lot or by such other method that the Trustee shall deem appropriate
not more than 60 days prior to the date fixed for redemption from the
outstanding Securities not previously called for redemption, provided, however,
that any such method of selection may be made on the basis of the aggregate
principal amount of Securities held by each Securityholder and may be made by
making such adjustments as the Company deems fair and appropriate in order that
only Securities in denominations of $25 or integral multiples thereof shall be
redeemed. The Optional Redemption Price shall be paid prior to 12:00 noon, New
York time, on the date of such redemption or at such earlier time as the Company
determines, provided that the Company shall deposit with the Trustee an amount
sufficient to pay the Optional Redemp tion Price by 10:00 a.m., New York time,
on the date such Optional Redemption Price is to be paid.
(b) Notwithstanding the first sentence of Section 14.02, upon
the entry of an order for dissolution of the Local Financial Capital Trust by a
court of competent jurisdiction, the Securi ties thereafter will be subject to
optional redemption, in whole only, but not in part, on or after _________ __,
2004, at the Redemption Price, and otherwise in accordance with this Article
XIV.
(c) Any redemption of Securities pursuant to Section 14.01 or
Section 14.02 shall be subject to the receipt by the Company of 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 Redemption; Selection of
Securities.
In case the Company shall desire to exercise the right to
redeem all, or, as the case may be, any part of the Securities in accordance
with their terms, it shall fix a date for redemption and shall mail a notice of
such redemption at least 30 and not more than 60 days prior to the date fixed
for redemption to the holders of Securities so to be redeemed 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
redemption as a whole or in part shall not affect the validity of the
proceedings for the redemption of any other Security.
Each such notice of redemption shall specify the CUSIP number
of the Securities to be redeemed, the date fixed for redemption, the redemption
price at which the Securities are to be redeemed (or the method by which such
redemption 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 redemption will be paid as specified in
said notice, and that on and after said date interest thereon or on the portions
thereof to be redeemed will cease to accrue. If less than all the Securities are
to be redeemed the notice of redemption shall specify the numbers of the
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Securities to be redeemed. In case any Security is to be redeemed in part only,
the notice of redemp tion shall state the portion of the principal amount
thereof to be redeemed and shall state that on and after the date fixed for
redemption, 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 redemption date specified
in the notice of redemption 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 redeem on the redemption date all the Securities so called for
redemption at the appropriate Redemption Price, together with accrued interest
to the date fixed for redemption.
The Company will give the Trustee notice not less than 45 days
prior to the redemption date as to the aggregate principal amount of Securities
to be redeemed 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 $25, except as otherwise set forth in the
applicable form of Security) to be redeemed.
SECTION 14.05. Payment of Securities Called for Redemption.
If notice of redemption 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 Redemption Price, together with interest
accrued to the date fixed for redemption (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 redemption date), and on and
after said date (unless the Company shall default in the payment of such
Securities at the Redemption Price, together with interest accrued to said date)
interest (including Compounded Interest and Additional Sums, if any) on the
Securities or portions of Securities so called for redemption 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 redeemed by the Company at the Redemption Price, together with
interest (including Compounded Interest and Additional Sums, if any) accrued
thereon to the date fixed for redemption (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 redemption date).
Upon presentation of any Security redeemed 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 assign ment thereof,
accepts and agrees to be bound by such provisions.
The payment by the Company of the principal of and interest
(including Compounded Interest and Additional Sums, 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 in full of principal of all
Allocable Amounts on such Senior and Subordinated 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 and Subordinated
Indebtedness.
In the event and during the continuation of any default by the
Company in the payment of principal, interest or any other payment due on any
Senior and Subordinated Indebted ness (after any grace period with respect to
such default has expired and such default has not been cured or waived or ceased
to exist), or in the event that the maturity of any Senior and Subordinated
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
redemption payments) of 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 redemption payments) of or interest on the Securities until
the holders of all Senior and Subordinated Indebtedness outstanding at the time
of such acceleration shall receive payment in full of such Senior and
Subordinated Indebt edness (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 and Subordinated Indebtedness or their respective representatives, or to
the trustee or trust ees under any indenture pursuant to which any of such
Senior and Subordinated Indebtedness may have been issued, as their respective
interests may appear, but only to the extent that the holders of the Senior and
Subordinated Indebtedness (or their representative or representatives or a
trustee)
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notify the Trustee in writing, within 90 days of such payment of the amounts
then due and owing on such Senior and Subordinated Indebtedness and only the
amounts specified in such notice to the Trustee shall be paid to the holders of
such Senior and Subordinated 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 and Subordinated 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 Company on
account of the princi pal or interest (including Compounded Interest and
Additional Sums, if any) on the Securities; and upon any such dissolution or
winding-up or liquidation or reorganization, any payment by the Com pany, 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 and Subordinated Indebtedness of
the Company (pro rata to such holders on the basis of the respective amounts of
Senior and Subordinated 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 and Subordinated Indebtedness may have been issued, as their respective
interests may appear, to the extent necessary to pay all such Senior and
Subordinated 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 and Subordinated 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 and Subordinated 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 and Subordinated
Indebtedness or their representative or representatives, or to the trustee or
trustees under any indenture pursuant to which any instruments evidencing such
Senior and Subordinated Indebtedness may have been issued, as their respective
interests may appear, as calculated by the Company, for application to the
payment of all Senior and Subordinated Indebtedness remaining unpaid to the
extent necessary to pay all such Senior and Subordinated 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 and
Subordinated Indebtedness.
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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 and Subordinated Indebtedness that
may at the time be out standing, provided that (i) such Senior and Subordinated
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 and Subordinated 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.
SECTION 15.04. Subrogation.
Subject to the payment in full of all Senior and Subordinated
Indebtedness, the rights of the Securityholders shall be subrogated to the
rights of the holders of such Senior and Su bordinated Indebtedness to receive
payments or distributions of cash, property or securities of the Company, as the
case may be, applicable to such Senior and Subordinated Indebtedness until the
principal of 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 and Subordinated 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 pursuant to the provisions of this
Article XV to or for the benefit of the holders of such Senior and Subordinated
Indebtedness by Securityholders or the Trustee, shall, as between the Company,
its creditors other than holders of Senior and Subordinated 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 and Subordinated 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 and Subordinated
Indebtedness on the other hand.
Nothing contained in this Article XV or elsewhere in this
Indenture or in the Securi ties is intended to or shall impair, as between the
Company, its creditors other than the holders of Senior and Subordinated
Indebtedness of the Company, and the holders of the Securities, the obliga tion
of the Company, which is absolute and unconditional, to pay to the holders of
the Securities the principal of and interest (including Compounded Interest and
Additional Sums, if any) on the Securi ties 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
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Company, as the case may be, other than the holders of Senior and Subordinated
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 and Subordinated 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 and Subordinated 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 ap propriate 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.
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. Not withstanding 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 and
Subordinated 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
interest (including Compounded Interest and Additional Sums, if any) on any
Secur ity), 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
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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 and
Subordinated 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 and Subordinated 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 and Subordinated 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 and Subordinated 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 and
Subordinated 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 and
Subordinated 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 and
Subordinated Indebtedness at any time held by it, to the same extent as any
other holder of Senior and Subordinated Indebtedness, and nothing in this
Indenture shall deprive the Trustee of any of its rights as such holder.
With respect to the holders of Senior and Subordinated
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 and Subordinated 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 and Subordinated Indebtedness and, subject to the
provisions of Article VI of this Indenture, the Trustee shall not be liable to
any holder of such Senior and Subordinated Indebtedness if it shall pay
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over or deliver to Securityholders, the Company or any other Person money or
assets to which any holder of such Senior and Subordinated 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 and
Subordinated Indebtedness of the Company to enforce subordination as herein
provided shall at any time in any way be preju diced 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 and Subordinated 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 responsi bility 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 and Subordinated 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 and Subo rdinated
Indebtedness, or otherwise amend or supplement in any manner such Senior and
Subo rdinated Indebtedness or any instrument evidencing the same or any
agreement under which such Senior and Subordinated Indebtedness is outstanding;
(ii) sell, exchange, release or otherwise deal with any property pledged,
mortgaged or otherwise securing such Senior and Subordinated Indebtedness; (iii)
release any Person liable in any manner for the collection of such Senior and
Subordinated 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 20 consecutive
quarterly periods, including the first such quarterly 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
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<PAGE>
permitted by applicable law, interest, the payment of which has been deferred
because of the exten sion of the interest payment period pursuant to this
Section 16.01, will bear interest thereon at the Coupon Rate compounded
quarterly for each quarterly period of the Extended Interest Payment Period
("Compounded Interest"). At the end of the Extended Interest Payment Period, the
Company shall pay all interest accrued and unpaid on the 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 exten sions within such Extended Interest
Payment Period, shall not exceed 20 consecutive quarterly periods, including the
first such quarterly 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 the 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 Preferred 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 five
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 quarterly 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 20
quarterly periods permitted in the maximum Extended Interest Payment Period
permitted under Section 16.01.
The Bank of New York 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 thereunto duly
authorized, as of the day and year first above written.
LOCAL FINANCIAL CORPORATION
By ______________________________
Name: Jan A. Norton
Title: President
THE BANK OF NEW YORK,
as Trustee
By ______________________________
Name:
Title:
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EXHIBIT A
---------
(FORM OF 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 EX CHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY
IN THE LIMITED CIRCUM STANCES DESCRIBED IN THE INDENTURE AND MAY NOT BE
TRANSFERRED EXCEPT 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.]
UNLESS THIS DEBENTURE IS PRESENTED BY AN AUTHORIZED REPRESENTA TIVE OF
THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT, AND ANY PREFERRED SECURITY CERTIFI CATE ISSUED IS REGISTERED IN THE
NAME OF THE CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS
AN INTEREST HEREIN.
Principal Amount: $__________
No. 1 CUSIP No. ___________
Local Financial Capital Trust I
____% JUNIOR SUBORDINATED DEFERRABLE INTEREST
DEBENTURE DUE ________ __, 2029
Local Financial Corporation, a Delaware corporation (the
"Company", which term includes any successor Person under the Indenture
hereinafter referred to), for value received, hereby promises to pay to The Bank
of New York, as Property Trustee for Local Financial Capital Trust I or
registered assigns, the principal sum of $__________, on ______ __, 2029;
provided that the Company may shorten the Maturity Date of the principal of this
Security to a date not earlier than _________ __, 2004 (the "Maturity Date"),
and to pay interest on the outstanding principal amount hereof from ________ __,
1999, or from the most recent interest payment date (each such date, an
"Interest Payment Date") to which interest has been paid or duly provided for,
quarterly (subject to deferral as set forth herein) in arrears on the last day
of March, June, September and December of each year, commencing ______ ____,
1999, at the rate of ____% per annum until the principal
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hereof shall have become due and payable, and on any overdue principal and
(without duplication and to the extent that payment of such interest is
enforceable under applicable law) on any overdue installment of interest at the
same rate per annum compounded quarterly. The amount of 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 based upon a 30-day month. In the event that any date
on which the principal of 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 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, 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.
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 fifteenth day of the month in which such payment is due. Any
such interest installment not punctually paid or duly provided for shall
forthwith cease to be payable to the holders on such regular record date and may
be paid to the Person in whose name this Security (or one or more Predecessor
Securities) is registered at the close of business on a special record date to
be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the holders of Securities not less than 10 days prior
to such special record date, or may be paid at any time in any other lawful
manner not inconsistent with the requirements of any securities exchange on
which the Securities may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture.
The principal of and interest (including Compounded Interest
and Additional Sums, 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.
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 and Subordinated 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
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provisions contained herein and in the Indenture by each holder of Senior and
Subordinated 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.
The provisions of this Security are continued on the reverse
side hereof and such provisions shall for all purposes have the same effect as
though fully set forth at this place.
IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed and sealed.
Dated: _________ __, 1999
LOCAL FINANCIAL CORPORATION
By: ____________________________
Name: Jan A. Norton
Title: President
Attest:
By: _______________________
Name:
Title:
(FORM OF CERTIFICATE OF AUTHENTICATION)
CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the
within-mentioned Indenture.
THE BANK OF NEW YORK,
as Trustee
By____________________ Dated: _________ __, 1999
Authorized Signatory
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<PAGE>
(FORM OF REVERSE OF SECURITY)
This Security is one of the Securities of the Company (herein
sometimes referred to as the "Securities"), specified in the Indenture, all
issued or to be issued under and pursuant to an Indenture, dated as of ________
__, 1999 (the "Indenture"), duly executed and delivered between the Company and
The Bank of New York, as Trustee (the "Trustee"), to which Indenture reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities.
Upon the occurrence and continuation of a Special Event, as
defined in the Indenture, the Company shall have the right, at any time within
90 days following the occurrence of such Special Event, to redeem this Security
in whole (but not in part), a redemption price equal to the accrued and unpaid
interest on the Security to be so redeemed to the date fixed for redemption,
plus 100% of the principal amount thereof (the "Redemption Price").
In addition, subject to the Company having received the prior
approval of the applicable regulatory agencies, if it is then required under
applicable regulatory requirements, the Company shall have the right to redeem
this Security, in whole or in part, at any time on or after _________ __, 2004
at the redemption prices set forth below (expressed as percentages of principal)
plus, in each case, accrued and unpaid interest thereon (including Compounded
Interest and Additional Sums, if any), to the applicable date of redemption (the
"Optional Redemption Price") if redeemed during the 12-month period beginning
_______ __, of the years indicated below.
Year Percentage
---- ----------
2004 %
2005 %
2006 %
2007 %
2008 %
2009 and thereafter 100.000%
The Redemption Price or the Optional Redemption Price shall be
paid prior to 12:00 noon, New York City time on the date of such redemption or
at such earlier time as the Company determines, provided, that the Company shall
deposit with the Trustee an amount sufficient to pay the applicable Redemption
Price by 10:00 a.m., New York City time, on the date such Redemption Price is to
be paid. Any re demption pursuant to this paragraph will be made upon not less
than 30 days or more than 60 days notice. If the Securities are only partially
redeemed by the Company, the particular Securities to be redeemed shall be
selected on a pro rata basis, by lot or such other method that the Trustee shall
deem appropriate not more than 60 days prior to the date fixed for redemption
from the outstanding Securities not previously called for redemption, provided,
however, that any such selection may be made on the basis of the aggregate
principal amount of Securities held by each Securityholder thereof and may be
made by making such adjustments as the Company deems fair and appropriate in
order that only Securities in denominations of $25 or integral multiples thereof
shall be redeemed.
In the event of redemption of this Security in part only, a
new Security or Securities for the unredeemed portion hereof will be issued in
the name of the holder hereof upon the cancellation hereof.
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 out-
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<PAGE>
standing, 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 prin cipal amount thereof, or reduce any amount
payable on redemption thereof, or reduce the rate or extend the time of payment
of interest thereon (subject to Article XVI of the Indenture), or make the
principal of, or interest 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 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, 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
interest (including Compounded Interest and Additional Sums, if any) on this
Security at the time and place and at the rate and in the money herein
prescribed.
So long as no Event of Default shall have occurred and be
continuing, the Company shall have the right, at any time and from time to time
during the term of the Securities, to defer payments of interest by extending
the interest payment period of such Securities for a period not exceeding 20
consecutive quarterly periods, including the first such quarterly period during
such extension period, and not extending beyond the Maturity Date of the
Securities (an "Extended Interest Payment Period") or ending on a date other
than an Interest Payment Date, at the end of which period the Company shall pay
all interest then accrued and unpaid (together with interest thereon at the rate
specified for the Securities to the extent that payment of such interest is
enforceable under applicable law). Before the termination of any such Extended
Interest Payment Period, the Company may further defer payments of interest by
further 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 20
consecutive quarterly periods, including the first quarterly 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
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<PAGE>
amounts then due, the Company may commence a new Extended Interest Payment
Period, subject to the foregoing requirements.
The Company has agreed that it will not (i) declare or pay any
dividends or distributions on, or redeem, purchase, acquire, or make a
liquidation payment with respect to, any of the Company's capital stock (which
includes common and preferred stock), (ii) make any payment of principal,
interest or premium, if any, on or repay or repurchase or redeem 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 of any Subsidiary of the
Company 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 stockholder's rights plan, or the issuance of stock under any such plan in
the future, or the redemption or repurchase of any such rights pursuant thereto,
(c) payments under the Preferred Securities Guarantee, (d) the purchase of
fractional shares resulting from a reclassification 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 (1) there shall have occurred any
event would constitute an Event of Default, (2) if the Securities are held by
the Property Trustee, the Company shall be in default with respect to its
payment obligations under the Preferred Securities Guarantee or (3) 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 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 Preferred
Securities, the Company will have the right at any time to liquidate the Local
Financial Capital Trust I and cause the Securities to be distributed to the
holders of the Trust Securi ties in liquidation of the Trust.
The Indenture contains provisions for satisfaction and discharge of the
entire indebtedness of this Security upon compliance by the Company with certain
conditions set forth in the Indenture.
The Securities are issuable only in registered form without
coupons in denominations of $25.00 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
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<PAGE>
service charge will be made for any such registration of transfer, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Security, the Company, the Trustee, any authenticating agent, any paying agent,
any transfer agent and the registrar may deem and treat the holder hereof as the
absolute owner hereof (whether or not this Security shall be overdue and
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 (subject to the Indenture) interest due
hereon and for all other purposes, and neither the Compa ny 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 interest on this Security, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, stockholder, officer or director, past, present or future, as
such, of the Company or of any predecessor or successor Person, whether by
virtue of any constitu tion, 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, ex
pressly 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.
A-7
Exhibit 4.3
CERTIFICATE OF TRUST
OF
LOCAL FINANCIAL CAPITAL TRUST I
This Certificate of Trust is being executed as of August 17, 1999 for
the purposes of organizing a business trust pursuant to the Delaware Business
Trust Act, 12 Del. C. ss.ss. 3801 et seq. (the "Act").
The undersigned hereby certifies as follows:
1. Name. The name of the business trust is "Local Financial Capital
Trust I" (the "Trust").
2. Delaware Trustee. The name and business address of the Delaware
trustee of the Trust meeting the requirements of Section 3807 of the Act are as
follows:
The Bank of New York (Delaware)
23 White Clay Center
Route 273
Newark, Delaware 19711
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.
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By: /s/ Walter N. Gitlin
---------------------------
Name: Walter N. Gitlin
Title: Authorized Signatory
ADMINISTRATIVE TRUSTEE
/s/ Edward A. Townsend
--------------------------------
Name: Edward A. Townsend
ADMINISTRATIVE TRUSTEE
/s/ Jan A. Norton
--------------------------------
Name: Jan A. Norton
ADMINISTRATIVE TRUSTEE
/s/ Richard L. Park
--------------------------------
Name: Richard L. Park
Exhibit 4.4
================================
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LOCAL FINANCIAL CAPITAL TRUST I
Dated as of _________ __, 1999
================================
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<CAPTION>
TABLE OF CONTENTS
Page
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ARTICLE I
INTERPRETATION AND DEFINITIONS
<S> <C> <C>
SECTION 1.1 Definitions.......................................................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................................... 8
SECTION 2.2 Lists of Holders of Securities....................................................... 9
SECTION 2.3 Reports by the Property Trustee...................................................... 9
SECTION 2.4 Periodic Reports to Property Trustee................................................. 9
SECTION 2.5 Evidence of Compliance with Conditions Precedent..................................... 10
SECTION 2.6 Events of Default; Waiver............................................................ 10
SECTION 2.7 Event of Default; Notice............................................................. 11
ARTICLE III
ORGANIZATION
SECTION 3.1 Name................................................................................. 12
SECTION 3.2 Office............................................................................... 12
SECTION 3.3 Purpose.............................................................................. 12
SECTION 3.4 Authority............................................................................ 13
SECTION 3.5 Title to Property of the Trust....................................................... 13
SECTION 3.6 Powers and Duties of the Administrative Trustees..................................... 13
SECTION 3.7 Prohibition of Actions by the Trust and the Trustees................................. 16
SECTION 3.8 Powers and Duties of the Property Trustee............................................ 17
SECTION 3.9 Certain Duties and Responsibilities of the Property Trustee.......................... 19
SECTION 3.10 Certain Rights of Property Trustee................................................... 21
SECTION 3.11 Delaware Trustee..................................................................... 23
SECTION 3.12 Execution of Documents............................................................... 24
SECTION 3.13 Not Responsible for Recitals or Issuance of Securities............................... 24
SECTION 3.14 Duration of Trust.................................................................... 24
SECTION 3.15 Mergers.............................................................................. 24
SECTION 3.16 Property Trustee May File Proofs of Claims........................................... 26
ARTICLE IV
SPONSOR
SECTION 4.1 Sponsor's Purchase of Common Securities.............................................. 27
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SECTION 4.2 Responsibilities of the Sponsor...................................................... 27
SECTION 4.3 Right to Proceed..................................................................... 28
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee........................................ 28
SECTION 5.2 Delaware Trustee..................................................................... 28
SECTION 5.3 Property Trustee; Eligibility........................................................ 29
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware Trustee
Generally............................................................................ 30
SECTION 5.5 Administrative Trustees.............................................................. 30
SECTION 5.6 Delaware Trustee..................................................................... 31
SECTION 5.7 Appointment, Removal and Resignation of Trustees..................................... 31
SECTION 5.8 Vacancies among Trustees............................................................. 33
SECTION 5.9 Effect of Vacancies.................................................................. 33
SECTION 5.10 Meetings............................................................................. 33
SECTION 5.11 Delegation of Power.................................................................. 34
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business........................ 34
ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions........................................................................ 35
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.............................................. 35
SECTION 7.2 Execution and Authentication......................................................... 35
SECTION 7.3 Form and Dating...................................................................... 36
SECTION 7.4 Registrar and Paying Agent........................................................... 38
SECTION 7.5 Paying Agent to Hold Money in Trust.................................................. 38
SECTION 7.6 Replacement Securities............................................................... 38
SECTION 7.7 Outstanding Preferred Securities..................................................... 39
SECTION 7.8 Preferred Securities in Treasury..................................................... 39
SECTION 7.9 Temporary Securities................................................................. 39
SECTION 7.10 Cancellation......................................................................... 40
SECTION 7.11 CUSIP Numbers........................................................................ 40
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ARTICLE VIII
TERMINATION OF TRUST
<S> <C> <C>
SECTION 8.1 Dissolution and Termination of Trust................................................. 41
ARTICLE IX
TRANSFER OF INTERESTS
SECTION 9.1 Transfer of Securities............................................................... 42
SECTION 9.2 Transfer Procedures and Restrictions................................................. 43
SECTION 9.3 Deemed Security Holders.............................................................. 46
SECTION 9.4 Book Entry Interests................................................................. 46
SECTION 9.5 Notices to Clearing Agency........................................................... 47
SECTION 9.6 Appointment of Successor Clearing Agency............................................. 47
ARTICLE X
LIMITATION OF LIABILITY OF
HOLDERS OF SECURITIES, TRUSTEES OR OTHERS
SECTION 10.1 Liability............................................................................ 48
SECTION 10.2 Exculpation.......................................................................... 48
SECTION 10.3 Fiduciary Duty....................................................................... 49
SECTION 10.4 Indemnification...................................................................... 50
SECTION 10.5 Outside Businesses................................................................... 52
SECTION 10.6 Compensation; Fees................................................................... 53
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.......................................................................... 53
SECTION 11.2 Certain Accounting Matters........................................................... 53
SECTION 11.3 Banking.............................................................................. 54
SECTION 11.4 Withholding.......................................................................... 54
ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments........................................................................... 55
SECTION 12.2 Meetings of the Holders; Action by Written Consent................................... 57
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ARTICLE XIII
REPRESENTATIONS OF PROPERTY TRUSTEE
AND DELAWARE TRUSTEE
<S> <C> <C>
SECTION 13.1 Representations and Warranties of Property Trustee................................... 58
SECTION 13.2 Representations and Warranties of Delaware Trustee................................... 59
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.............................................................................. 60
SECTION 14.2 Governing Law........................................................................ 61
SECTION 14.3 Intention of the Parties............................................................. 61
SECTION 14.4 Headings............................................................................. 61
SECTION 14.5 Successors and Assigns............................................................... 61
SECTION 14.6 Partial Enforceability............................................................... 62
SECTION 14.7 Counterparts......................................................................... 62
ANNEX I TERMS OF SECURITIES................................................................. I-1
EXHIBIT A-1 FORM OF PREFERRED SECURITY CERTIFICATE.............................................. A1-1
EXHIBIT A-2 FORM OF COMMON SECURITY CERTIFICATE................................................. A2-1
EXHIBIT B SPECIMEN OF DEBENTURE............................................................... B-1
EXHIBIT C UNDERWRITING AGREEMENT ............................................................. C-1
</TABLE>
iv
<PAGE>
CROSS-REFERENCE TABLE*
Section of
Trust Indenture Act Section of
of 1939, as amended Declaration
- ------------------- -----------
310(a)......................................................... 5.3
310(b)......................................................... 5.3(c), 5.3(d)
311(a)......................................................... 2.2(b)
311(b)......................................................... 2.2(b)
312(a)......................................................... 2.2(a)
312(b)......................................................... 2.2(b)
313............................................................ 2.3
314(a)......................................................... 2.4; 3.6(j)
314(c)......................................................... 2.5
315(a)......................................................... 3.9
315(b)......................................................... 2.7(a)
315(c)......................................................... 3.9(a)
315(d)......................................................... 3.9(b)
316(a)......................................................... 2.6
316(c)......................................................... 3.6(e)
317(a)......................................................... 3.8(e); 3.8(h)
317(b)......................................................... 3.8(i); 7.5
- ---------------
* This Cross-Reference Table does not constitute part of the Declaration
and shall not affect the interpretation of any of its terms or
provisions.
v
<PAGE>
AMENDED AND RESTATED
DECLARATION OF TRUST
OF
LOCAL FINANCIAL CAPITAL TRUST I
_________ __, 1999
AMENDED AND RESTATED DECLARATION OF TRUST, including Annex I
and all exhibits attached hereto ("Declaration"), dated and effective as of
_________ __, 1999, 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 assets of the Trust to be issued pursuant to this Declaration;
WHEREAS, the Trustees (other than the Property Trustee (as
defined herein)) and the Sponsor established Local Financial Capital Trust I
(the "Trust"), a trust formed under the Delaware Business Trust Act pursuant to
a Declaration of Trust dated as of August __, 1999 (the "Original
Declaration"), and a Certificate of Trust filed with the Secretary of State of
the State of Delaware on August __, 1999 (the "Certificate of Trust"), 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 that are necessary or
incidental thereto; and
WHEREAS, as of the date hereof, no interests in the Trust have
been issued; and
WHEREAS, all of the Trustees and the Sponsor, by this
Declaration, amend and restate each and every term and provision of the Original
Declaration;
NOW, THEREFORE, it being the intention of the parties hereto
to continue the Trust as a statutory business trust under the Business Trust Act
and that this Declaration 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 (as defined herein), from time to
time, of the securities representing undivided beneficial interests in the
assets of the Trust issued hereunder, subject to the provisions of this
Declaration.
<PAGE>
ARTICLE I
INTERPRETATION AND 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 as modified, supplemented or amended from time
to time;
(d) all references in this Declaration to Articles and
Sections and Annexes and Exhibits are to Articles and Sections of and
Annexes and Exhibits to this Declaration unless otherwise specified;
(e) a term defined in the Trust Indenture Act has the same
meaning when used in this Declaration unless otherwise defined in this
Declaration 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(b).
"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 or Registrar.
"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 or the City of
Oklahoma City, Oklahoma are authorized or required by law or executive order to
close.
2
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"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.
"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 Preferred 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 Preferred
Securities.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time the
Clearing Agency effects book entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Time" means the "Closing Time" under the Underwriting
Agreement.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, or any successor legislation. A reference to a specific
section of the Code refers not only to such specific section but also to any
corresponding provision of any federal tax statute enacted after the date of
this Declaration, as such specific section or corresponding provision is in
effect on the date of application of the provisions of this Declaration
containing such reference.
"Commission" means the United States Securities and Exchange
Commission as from time to time constituted, or if any time after the execution
of this Declaration 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 _________ __, 1999 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 101 Barclay Street, 21st Floor West,
New York, New York 10286.
"Covered Person" means: (a) any officer, director,
shareholder, partner, member, representative, employee or agent of (i) the Trust
or (ii) the Trust's Affiliates; and (b) any Holder of Securities.
3
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"Debentures" means the ____% Junior Subordinated Deferrable
Interest Debentures due _________ __, 2029 of the Debenture Issuer issued
pursuant to the Indenture.
"Debenture Issuer" means Local Financial Corporation, a
Delaware 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 The Bank of New York, a New York
banking corporation, as trustee under the Indenture until a successor is
appointed thereunder, and thereafter means such successor trustee.
"Default" means an event, act or condition that with notice or
lapse of time, or both, would constitute an Event of Default.
"Definitive Preferred 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.
"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 Preferred 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; provided, however, that in determining whether the Holders
of the requisite liquidation amount of Preferred Securities have voted on any
matter provided for in this Declaration, then for the purpose of such
determination only (and not for any other purpose hereunder), if the Preferred
Securities remain in the form of one or
4
<PAGE>
more Global Certificates, the term "Holders" shall mean the holder of the Global
Certificate acting at the direction of the Preferred Security Beneficial Owners.
"Indemnified Person" means a Company Indemnified Person or a
Fiduciary Indemnified Person.
"Indenture" means the Indenture dated as of _________ __,
1999, among the Debenture Issuer and the Debenture Trustee, as amended or
supplemented 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.
"Investment Company Event" has the meaning set forth in Annex
I.
"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 Preferred Securities or
by the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred 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 of all outstanding Securities of the relevant
class.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by any two of the following: the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, the Chief Financial Officer, a Vice
President, the Comptroller, the Secretary or an Assistant Secretary of such
Person. Any Officers' Certificate delivered by the Trust shall be signed by at
least one Administrative Trustee. Any Officers' Certificate delivered with
respect to compliance with a condition or covenant provided for in this
Declaration shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a brief statement of the nature and scope of the
examination or investigation undertaken by each officer in rendering
the Officers' Certificate;
5
<PAGE>
(c) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Opinion of Counsel" means a written opinion of counsel, who
may be an employee of the Sponsor, and who shall be acceptable to the Property
Trustee.
"Paying Agent" has the meaning specified in Section 7.4.
"Payment Amount" has the meaning specified in Section 6.1.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Preferred 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).
"Preferred Securities" means the ____% Cumulative Trust
Preferred Securities.
"Preferred Securities Guarantee" means the guarantee agreement
dated as of _________ __, 1999 of the sponsor in respect of the Preferred
Securities.
"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)(i).
"Prospectus" has the meaning set forth in Section 3.6(b)(i).
"Quorum" means a majority of the Administrative Trustees or,
if there are only two Administrative Trustees, both of them.
"Registrar" has the meaning set forth in Section 7.4.
"Registration Statement" has the meaning set forth in Section
3.6(b)(i).
6
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"Regulatory Capital Event" has the meaning set forth in Annex
I.
"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 with direct responsibility for the
administration of this Declaration and also means, with respect to a particular
corporate trust matter, any other officer to whom such matter is referred
because of that officer's knowledge of and familiarity with the particular
subject.
"Rule 3a-5" means Rule 3a-5 under the Investment Company Act,
or any successor rule or regulation.
"Securities" or "Trust Securities" means the Common Securities
and the Preferred Securities.
"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 Preferred Securities Guarantee.
"Special Event" has the meaning set forth in Section 4(c) of
Annex I hereto.
"Sponsor" means Local Financial Corporation, a Delaware
corporation, or any successor entity resulting from any merger, consolidation,
amalgamation or other business combination, in its capacity as sponsor of the
Trust.
"Successor Delaware Trustee" has the meaning set forth in
Section 5.7(b)(ii).
"Successor Entity" has the meaning set forth in Section
3.15(b)(i).
"Successor Property Trustee" has the meaning set forth in
Section 3.8(f)(ii).
"Super Majority" has the meaning set forth in Section
2.6(a)(ii).
"Tax Event" has the meaning set forth in Annex I.
"10% in liquidation amount" means, with respect to the Trust
Securities, except as provided in the terms of the Preferred Securities or by
the Trust Indenture Act, Holder(s) of outstanding Trust Securities voting
together as a single class or, as the context may require, Holders of
outstanding Preferred Securities or Holders of outstanding Common Securities
voting separately as a
7
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class, who are the record owners of 10% or more of the aggregate liquidation
amount 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).
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trustee" or "Trustees" means each Person who has signed this
Declaration as a trustee, so long as such Person shall continue as a trustee 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.
"Underwriting Agreement" means the Underwriting Agreement for
the initial offering and sale of Preferred Securities in the form of Exhibit C.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application.
(a) This Declaration is subject to the provisions of the Trust
Indenture Act that are required to be part of this Declaration in order for this
Declaration to be qualified under the Trust Indenture Act and shall, to the
extent applicable, be governed by such provisions.
(b) The Property Trustee shall be the only Trustee which is a
"trustee" for the purposes of the Trust Indenture Act.
(c) If and to the extent that any provision of this
Declaration 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.
(d) The application of the Trust Indenture Act to this
Declaration shall not affect the Trust's classification as a grantor trust for
United States federal income tax purposes or the nature of the Securities as
equity securities representing undivided beneficial interests in the assets of
the Trust.
8
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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 10 Business 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 that 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.
SECTION 2.3 Reports by the Property Trustee.
Within 60 days after May 15 of each year, commencing May 15,
2000, the Property Trustee shall provide to the Holders of the Preferred
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. The Property Trustee shall also comply with the requirements of ss. 313(d)
of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Property Trustee.
Each of the Sponsor and the Administrative Trustees on behalf
of the Trust shall provide to the Property Trustee such documents, reports and
information as are required by ss. 314 of the Trust Indenture Act (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(a)(4) of the Trust
Indenture Act, such compliance certificate to be delivered annually on or before
120 days after the end of each fiscal year of the Sponsor. Delivery of such
documents, reports and information to the Property Trustee is for informational
purposes only and the Property Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Sponsor's compliance with any of
its covenants hereunder (as to which the Property Trustee is entitled to rely
exclusively on Officers' Certificates).
9
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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 Declaration that relate to
any of the matters set forth in ss. 314(c) of the Trust Indenture Act. 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
Preferred Securities may, by vote, on behalf of the Holders of all of the
Preferred Securities, waive any past Event of Default in respect of the
Preferred Securities and its consequences, provided that, if the underlying
Event of Default under the Indenture:
(i) is not waivable under the Indenture, the Event of Default
under the Declaration 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 Declaration may only be waived by the vote of the
Holders of at least the proportion in aggregate liquidation amount of
the Preferred 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 Declaration and the
Securities, as permitted by the Trust Indenture Act. Upon such waiver, any such
default shall cease to exist, and any Event of Default with respect to the
Preferred Securities arising therefrom shall be deemed to have been cured, for
every purpose of this Declaration, but no such waiver shall extend to any
subsequent or other default or an Event of Default with respect to the Preferred
Securities or impair any right consequent thereon. Any waiver by the Holders of
the Preferred Securities of an Event of Default with respect to the Preferred
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 Declaration 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:
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(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 Declaration as provided below in this Section
2.6(b), the Event of Default under the Declaration shall also not be
waivable; or
(ii) requires the consent or vote of a Super Majority to be
waived under the Indenture, except where the Holders of the Common
Securities are deemed to have waived such Event of Default under the
Declaration as provided below in this Section 2.6(b), the Event of
Default under the Declaration 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, each Holder 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 their consequences until Events of Default with respect to the
Preferred 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 Preferred Securities and only the Holders of the Preferred 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 Declaration and the Securities, as permitted by the
Trust Indenture Act. Subject to the foregoing provisions of this Section 2.6(b),
upon such waiver, any such default shall cease to exist and any Event of Default
with respect to the Common Securities arising therefrom shall be deemed to have
been cured for every purpose of this Declaration, 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 Preferred Securities,
constitutes a waiver of the corresponding Event of Default under this
Declaration. 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 Declaration and the
Securities, as permitted by the Trust Indenture Act.
SECTION 2.7 Event of Default; Notice.
(a) The Property Trustee shall, within 90 days after the
occurrence of a Default (as such term is defined in the Indenture) actually
known to a Responsible Officer, transmit by mail, first class postage prepaid,
to the Holders of the Preferred Securities, the Administrative Trustees and the
Sponsor, 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; provided
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that, except for a default in the payment of principal of or interest (including
Compounded Interest and Additional Sums (as such terms are defined in the
Indenture) if any, 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. 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
Declaration.
(b) The Property Trustee shall not be deemed to have knowledge
of any default except:
(i) a default under Sections 5.01(a) (other than the payment
of Compounded Interest and Additional Sums) 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 Declaration shall have actual knowledge.
ARTICLE III
ORGANIZATION
SECTION 3.1 Name.
The Trust is named "Local Financial Capital Trust I" as such
name may be modified from time to time by the Administrative Trustees following
written notice to the Delaware Trustee, the Property Trustee and 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 Local
Financial Corporation, 3601 NW 63rd Street, Oklahoma City, Oklahoma 73116. On
ten Business Days written notice to the Delaware Trustee, the Property Trustee
and 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 the 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 that are 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 undertak-
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en) any activity that would cause the Trust not to be classified for United
States federal income tax purposes as a grantor trust.
The Trust will be classified as a grantor trust for United
States federal income tax purposes under Subpart E of Subchapter J of the Code,
pursuant to which the owners of the Preferred Securities and the Common
Securities will be the owners of the Trust for United States federal income tax
purposes, and such owners will include directly in their gross income the
income, gain, deduction or loss of the Trust as if the Trust did not exist. By
the acceptance of this Trust, none of the Trustees, the Sponsor or the Holders
of the Securities will take any position which is contrary to the classification
of the Trust as a grantor trust for United States federal income tax purposes.
SECTION 3.4 Authority.
Subject to the limitations provided in this Declaration and to
the specific duties of the Property Trustee, the Administrative Trustees shall
have exclusive and complete authority to carry out the purposes of the Trust. An
action taken by the Administrative Trustees in accordance with their powers
shall constitute the act of and serve to bind the Trust and an action taken by
the Property Trustee on behalf of the Trust in accordance with its powers shall
constitute the act of and serve to bind the Trust. In dealing with the Trustees
acting on behalf of the Trust, no Person shall be required to inquire into the
authority of the Trustees to bind the Trust. Persons dealing with the Trust are
entitled to rely conclusively on the power and authority of the Trustees as set
forth in this Declaration.
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
Declaration, legal title to all assets of the Trust shall be vested in the
Property Trustee for the benefit of the Trust and the Holders. 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
Declaration and pursuant to the Underwriting Agreement; provided, however, that
except as contemplated in Section 7.1(a), (i) the Trust may issue no more than
one series of Preferred 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 Preferred Securities and Common Securities at
the Closing Time;
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(b) in connection with the issuance and sale of the Preferred
Securities at the direction of the Sponsor, to:
(i) prepare and execute a Prospectus (the "Prospectus") in
preliminary and final form prepared by the Sponsor, in relation to the
offering and sale of the Preferred Securities and to execute and file
with the Commission a registration statement on Form S-3(the
"Registration Statement"), including any amendments thereto, for the
offering and sale of the Preferred Securities;
(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 Preferred Securities in any
State in which the Sponsor has determined to qualify or register such
Preferred Securities for sale;
(iii) execute and file an application, prepared by the
Sponsor, to permit the Preferred Securities to trade or be quoted or
listed in or on the Nasdaq National Market or any other securities
exchange or quotation system.
(iv) execute and deliver letters, documents or instruments
with DTC and other Clearing Agencies relating to the Preferred
Securities;
(v) 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 Preferred Securities
under Section 12(b) or (g) of the Exchange Act; and
(vi) execute and enter into the Underwriting Agreement
providing for the sale of the Preferred Securities;
(c) to acquire the Debentures with the proceeds of the sale of
the Preferred Securities and the Common Securities; provided, however, that the
Administrative Trustees shall cause legal title to the Debentures to be held of
record in the name of the Property Trustee for the benefit of the Holders;
(d) to give the Sponsor and the Property Trustee prompt
written notice of the occurrence of a Special Event;
(e) to establish a record date with respect to all actions to
be taken hereunder that require a record date be established, including and with
respect to, for the purposes of ss. 316(c) of the Trust Indenture Act,
Distributions, voting rights, redemptions and exchanges, and to issue relevant
notices to the Holders of Preferred Securities and Holders of Common Securities
as to such actions and applicable record dates;
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(f) to take all actions and perform such duties as may be
required of the Administrative Trustees pursuant to the terms of this
Declaration and 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 to conduct the services that the Administrative Trustees have
authority to conduct directly and pay reasonable compensation for such services;
(i) to cause the Trust to comply with the Trust's obligations
under the Trust Indenture Act;
(j) to give the certificate required by ss. 314(a)(4) of the
Trust Indenture Act to the Property Trustee, which certificate may be executed
by any Administrative Trustee;
(k) to incur expenses that are necessary or incidental to
carry out any of the purposes of the Trust;
(l) to act as, or appoint another Person to act as, Registrar
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 Declaration
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;
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(ii) causing the Trust to be classified for United States
federal income tax purposes as a grantor trust or causing each Holder
to be treated as owning an undivided beneficial interest in the
Debentures; 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;
provided that such action does not materially adversely affect the interest of
the Holders;
(p) 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
(q) 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.
The Administrative Trustees may take all actions on behalf of
the Trust that are not specifically required by this Declaration to be taken by
any other Trustee.
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 Declaration. 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 Declaration and of the Securities;
(ii) acquire any assets other than as expressly provided
herein;
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(iii) possess Trust property for other than a Trust purpose;
(iv) make any loans or incur any indebtedness other than loans
represented by the Debentures;
(v) possess any power or otherwise act in such a way as to
vary the Trust assets or the terms of the Securities in any way
whatsoever, except as otherwise expressly provided herein;
(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 Declaration 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 (A) an opinion of 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, and (B) an Opinion of Counsel
from a firm recognized to be experts in such matters, to the effect
that the amendment, modification or termination will not cause more
than an insubstantial risk that the Trust will be deemed to be an
investment company required to be registered under the Investment
Company Act of 1940, as amended.
SECTION 3.8 Powers and Duties of the Property Trustee.
(a) The legal title to the Debentures shall be owned by and
held of record in the name of the Property Trustee in trust for the benefit of
the Holders. The right, title and interest of the Property Trustee to the
Debentures shall vest automatically in each Person who may hereafter be
appointed as Property Trustee in accordance with Section 5.7. Such vesting and
cessation of title shall be effective whether or not conveyancing documents with
regard to the Debentures have been executed and delivered.
(b) The Property Trustee shall not transfer its right, title
and interest in the Debentures to the Administrative Trustees or to the Delaware
Trustee (if the Property Trustee does not also act as Delaware Trustee).
(c) The Property Trustee shall:
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(i) establish and maintain a segregated non-interest bearing
trust account (the "Property Trustee Account") in the name of and under
the exclusive control of the Property Trustee on behalf of the Holders
and, upon the receipt of payments of funds made in respect of the
Debentures held by the Property Trustee, deposit such funds into the
Property Trustee Account and make payments or cause the Paying Agent to
make payments to the Holders from the Property Trustee Account in
accordance with Section 6.1. Funds in the Property Trustee Account
shall be held uninvested until disbursed in accordance with this
Declaration. The Property Trustee Account shall be an account that is
maintained with a banking institution the rating on whose long-term
unsecured indebtedness is rated in one of four highest rating
categories by a "nationally recognized statistical rating
organization", as that term is defined for purposes of Rule 436(g)(2)
under the Securities Act;
(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 set forth in Sections 2.7 and 8.1
hereof.
(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 this Declaration and 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 Declaration or the Trust Indenture Act. 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 interest
(including Compounded Interest and Additional Sums (each as defined in
Indenture), if any) on the Debentures on the date such principal or interest
(including Compounded Interest and Additional Sums, if any) is otherwise payable
(or in the case of redemption, on the redemption date), then a Holder of
Preferred Securities may directly institute a proceeding for enforcement of
payment to such Holder of the principal of or interest (including Compounded
Interest and Additional Sums, if any), if any, on the Debentures having a
principal amount equal to the aggregate liquidation amount of the Preferred
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 Preferred Securities to the extent of any payment made by the
Debenture Issuer to such Holder of Preferred Securities in such Direct Action.
Except as provided in the preceding sentence, the Holders of Preferred
Securities will not be able to exercise directly any other remedy available to
the holders of the Debentures.
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(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, including without limitation, its rights under the
Indenture as holder of the Debentures and its rights under the Preferred
Securities Guarantee in accordance with the terms of the Preferred Securities
Guaratnee, subject to the rights of the Holders pursuant to the terms of such
Securities.
(h) The Property Trustee shall be authorized to undertake any
actions set forth in ss. 317(a) of the Trust Indenture Act.
(i) For such time as the Property Trustee is the Paying Agent,
the Property Trustee may authorize one or more Persons to act as additional
Paying Agents and to pay Distributions, redemption payments or liquidation
payments on behalf of the Trust with respect to all Securities and any such
Paying Agent shall comply with ss. 317(b) of the Trust Indenture Act. Any such
additional Paying Agent may be removed by the Property Trustee at any time the
Property Trustee remains as Paying Agent and a successor Paying Agent or
additional Paying Agents may be (but are not required to be) appointed at any
time by the Property Trustee while the Property Trustee is so acting as Paying
Agent.
(j) Subject to this Section 3.8, the Property Trustee shall
have none of the duties, liabilities, powers or the authority of the
Administrative Trustees set forth in Section 3.6.
Notwithstanding anything expressed or implied to the contrary
in this Declaration 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 Declaration and in the Securities and no implied covenants shall be read
into this Declaration against the Property Trustee. In case an Event of Default
has oc-
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curred (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 Declaration, and use the same
degree of care and skill in their exercise, as a prudent person would exercise
or use under the circumstances in the conduct of his or her own affairs.
(b) No provision of this Declaration 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 Declaration 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
Declaration and in the Securities, and no implied covenants or
obligations shall be read into this Declaration or the
Securities 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 Declaration; 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 Declaration (but need not
confirm or investigate the accuracy of mathematical
calculations or other facts stated therein);
(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 upon which such judgement was made;
(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 Declaration;
(iv) no provision of this Declaration shall require the
Property Trustee to expend or risk its own funds or otherwise incur
personal financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that the repayment of such funds or
liability is not reasonably assured
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to it under the terms of this Declaration 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 Declaration and
the Trust Indenture Act;
(vi) the Property Trustee shall have no duty or liability for
or with respect to the value, genuineness, existence or sufficiency of
the Debentures or the payment of any taxes or assessments levied
thereon or in connection therewith;
(vii) the Property Trustee shall not be liable for any
interest on any money received by it except as it may otherwise agree
in writing with the Sponsor. Money held by the Property Trustee need
not be segregated from other funds held by it except in relation to the
Property Trustee Account maintained by the Property Trustee pursuant to
Section 3.8(c)(i) and except to the extent otherwise required by law;
(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 Declaration, nor shall the
Property Trustee be liable for any act, omission, default or misconduct
of the Administrative Trustees or the Sponsor; and
(ix) the Property Trustee shall not be deemed to have notice
of any Event of Default unless a Responsible Officer of the Property
Trustee has actual knowledge thereof or unless written notice of any
event which is in fact such a default is received by the Property
Trustee at the Corporate Trust Office of the Property Trustee.
SECTION 3.10 Certain Rights of Property Trustee.
(a) Subject to the provisions of Section 3.9:
(i) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document believed by
it to be genuine and to have been signed, sent or presented by the
proper party or parties;
(ii) any direction or act of the Sponsor or the Administrative
Trustees contemplated by this Declaration may be sufficiently evidenced
by an Officers' Certificate;
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(iii) whenever in the administration of this Declaration, 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 Declaration 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 Declaration
at the request or direction of any Holder, unless such Holder shall
have provided to the Property Trustee security or 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 Declaration;
(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, and, if the Trustee shall
determine to make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of the Trust,
personally or by agent or attorney at the sole cost of the Sponsor and
shall incur no liability or additional liability of any kind by reason
of such inquiry or investigation;
(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
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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 Declaration, 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 Declaration 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
Declaration, the Property Trustee shall not be under any obligation to
take any action that is discretionary under the provisions of this
Declaration;
(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
Declaration; and
(xiii) the rights, privileges, protections, immunities and
benefits given to the Property Trustee, including, without limitation,
its right to be indemnified, are extended to, and shall be enforceable
by, the Property Trustee in each of its capacities hereunder, and to
each agent, custodian and other Person employed to act hereunder.
(b) No provision of this Declaration 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.
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SECTION 3.11 Delaware Trustee.
Notwithstanding any other provision of this Declaration 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 Declaration, or any other duties or responsibilities except as
expressly stated in this Section 3.11. 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; provided that,
the Delaware Trustee shall have the power and authority and is hereby authorized
to execute and file with the Secretary of State of the State of Delaware any
certificate required to be filed under the Business Trust Act. In the event the
Delaware Trustee shall at any time be required to take any action or perform any
duty hereunder, the Delaware Trustee shall be entitled to the benefits of
Section 3.9(b)(ii)-(viii) and Section 3.10. No implied covenants or obligations
shall be read into this Declaration against the Delaware Trustee.
SECTION 3.12 Execution of Documents.
Unless otherwise determined by the Administrative Trustees,
and except as otherwise required by the Business Trust Act or this Declaration,
any 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 Statement,
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 Declaration and the Securities
shall be taken as the statements of the Sponsor, and the Trustees do not assume
any responsibility for their correctness. The Trustees make no representations
as to the value or condition of the property of the Trust or any part thereof.
The Trustees make no representations as to the validity or sufficiency of this
Declaration, the Debentures or the Securities.
SECTION 3.14 Duration of Trust.
The Trust, unless dissolved pursuant to the provisions of
Article VIII hereof, shall continue without dissolution until _________ __,
2030.
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) of this Declaration or Section 3 of Annex I.
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(b) The Trust may, at the request of the Sponsor, with the
consent of the Administrative Trustees or, if there are more than two, a
majority of the Administrative Trustees and without the consent of the Holders,
the Delaware Trustee or the Property Trustee, merge with or into, consolidate,
amalgamate or be replaced by, or convey, transfer or lease its properties and
assets as an entirety or substantially as an entirety to, a trust organized as
such under the laws of any State; provided that:
(i) such successor entity (the "Successor Entity") either:
(A) expressly assumes all of the obligations of the
Trust under the Securities; or
(B) substitutes for the Securities other securities
having substantially the same terms as the Securities (the
"Successor Securities") so long as the Successor Securities
rank the same as the Securities rank with respect to
Distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Sponsor expressly appoints a trustee of the Successor
Entity that possesses the same powers and duties as the Property
Trustee as the holder of the Debentures;
(iii) the Preferred Securities or 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 Preferred Securities are then listed or
quoted, if any;
(iv) if the Preferred 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 Preferred 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 substantially
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:
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(A) such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease does not adversely
affect the rights, preferences and privileges of the Holders
(including the holders of any Successor Securities) in any
material respect (other than with respect to any dilution of
the Holders' interest in the new entity); and
(B) following such merger, consolidation,
amalgamation, replacement, conveyance, transfer or lease,
neither the Trust nor the Successor Entity will be required to
register as an Investment Company;
(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 Preferred Securities Guarantee
and the Common Securities Guarantee; and
(ix) there shall have been furnished to the Property Trustee
an Officer's Certificate and an Opinion of Counsel, each to the effect
that all conditions precedent in this Declaration to such transaction
have been satisfied.
(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.
SECTION 3.16 Property Trustee May File Proofs of Claim
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or
other similar judicial proceeding relative to the Trust or any other obligor
upon the Securities or the property of the Trust or of such other obligor or
their creditors, the Property Trustee (irrespective of whether any Distributions
on the Securities shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Property Trustee shall
have made any demand on the Trust for the payment of any past due Distributions)
shall be entitled and empowered, to the fullest extent permitted by law, by
intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount
of any Distributions owing and unpaid in respect of the
Securities (or, if the Securities are original issue discount
Securities, such portion of the liquidation amount as may be
specified in the terms of such Securities) and to file such
other papers or documents as may be necessary or advisable in
order to have the claims of the Property Trustee (including
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any claim for the reasonable compensation, expenses,
disbursements and advances of the Property Trustee, its agents
and counsel) and of the Holders allowed in such judicial
proceeding; and
(b) to collect and receive any moneys or other
property payable or deliverable on any such claims and to
distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Property Trustee and, in the event the
Property Trustee shall consent to the making of such payments directly to the
Holders, to pay to the Property Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the Property Trustee, its
agents and counsel, and any other amounts due the Property Trustee.
Nothing herein contained shall be deemed to authorize the Property
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement adjustment or compensation affecting the
Securities or the rights of any Holder thereof or to authorize the Property
Trustee to vote in respect of the claim of any Holder in any such proceeding.
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 equal to at least 3% of
the total capital of the Trust, at the same time as the Preferred Securities are
issued and sold.
SECTION 4.2 Responsibilities of the Sponsor.
In connection with the issue and sale of the Preferred
Securities, the Sponsor shall have the exclusive right and responsibility to
engage in the following activities:
(a) to prepare the Prospectus and to prepare and file the
Registration Statement with the Commission, including any amendments thereto and
to pay any registration fees in connection therewith;
(b) to determine the States in which to take appropriate
action to qualify or register for sale all or part of the Preferred 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;
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(c) if deemed necessary or advisable by the Sponsor, to
prepare for filing by the Trust an application to permit the Preferred
Securities to trade or be quoted or listed in or on the National Market System
or any other securities exchange or quotation system;
(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 Preferred Securities under Section 12(b) or (g) of
the Exchange Act; and
(e) to negotiate the terms of, and execute and deliver, the
Underwriting Agreement providing for the sale of the Preferred Securities.
SECTION 4.3 Right to Proceed.
The Sponsor acknowledges the rights of the Holders of
Preferred Securities, in the event that a failure of the Trust to pay
Distributions on the Preferred Securities is attributable to the failure of the
Debenture Issuer 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 and the Sponsor irrevocably waives any right or
remedy to require that any such Holder take any action against the Trust or any
other Person before proceeding against the Sponsor.
ARTICLE V
TRUSTEES
SECTION 5.1 Number of Trustees: Appointment of Co-Trustee.
The number of Trustees initially shall be five (5), 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 shall satisfy the requirements of the Delaware Trustee pursuant to
Section 5.2; (2) there shall be at least one Trustee who is an officer of the
Sponsor (an "Administrative Trustee"); and (3) one Trustee shall be the Property
Trustee for so long as this Declaration is required to qualify as an indenture
under the Trust Indenture Act, and such Trustee may also serve as Delaware
Trustee if it meets the applicable requirements. Notwithstanding the above,
unless an Event of Default shall have occurred and be continuing, at any time or
times, for the purpose of meeting the legal requirements of the Trust Indenture
Act or of any jurisdiction in which any part of the Trust's property may at the
time be located, the Holders of a Majority in liquidation amount of the Common
Securities acting as a class at a meeting of the Holders of the Common
Securities, and the Administrative
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Trustees shall have power to appoint one or more Persons either to act as a
co-trustee, jointly with the Property Trustee, of all or any part of the Trust's
property, or to act as separate trustee of any such property, in either case
with such powers as may be provided in the instrument of appointment, and to
vest in such Person or Persons in such capacity any property, title, right or
power deemed necessary or desirable, subject to the provisions of this
Declaration. 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 Section 3807(a) of the Business Trust Act and any other 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, the Person
theretofore serving as Delaware Trustee (if other than the Property Trustee)
automatically shall cease to be a Trustee, the Property Trustee promptly shall
provide to the Person theretofore serving as Delaware Trustee written notice of
the same (in relying on which the Person theretofore serving as Delaware Trustee
shall be fully justified and protected), the number of Trustees automatically
shall be reduced by one (1), the Property Trustee promptly shall cause the
certificate of trust of the Trust to be amended as necessary, and Section 3.11
shall have no application.
SECTION 5.3 Property Trustee; Eligibility.
(a) There shall at all times be one Trustee (the "Property
Trustee") which shall act as Property Trustee which shall:
(i) not be an Affiliate of the Sponsor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Commission to act as an institutional trustee under the Trust
Indenture Act, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination
by Federal, State, Territorial or District of Columbia authority. If
such corporation publishes reports of condition at least annually,
pursuant to law or to the requirements of the supervising or examining
authority referred to above, then for the purposes of this Section
5.3(a)(ii), the combined capital and surplus of such corporation shall
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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, 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.
(d) The Preferred Securities Guarantee and the Indenture shall
be deemed to be specifically described in this Declaration for purposes of
clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
(e) The initial Property Trustee shall be:
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
SECTION 5.4 Certain Qualifications of Administrative Trustees and Delaware
Trustee Generally.
Each Administrative Trustee and the Delaware Trustee (unless
the Property Trustee also acts as Delaware Trustee) shall be either a natural
person who is at least 21 years of age or a legal entity that shall act through
one or more Authorized Officers.
SECTION 5.5 Administrative Trustees.
The initial Administrative Trustees shall be:
Edward A. Townsend
Jan A. Norton
Richard L. Park
(a) Except as expressly set forth in this Declaration 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.
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(b) An Administrative Trustee shall have the authority set
forth in Section 3.12 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,
including any amendment thereto, shall be signed by all of the Administrative
Trustees.
(c) An Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purposes of signing any documents which the
Administrative Trustees have power and authority to cause the Trust to execute
pursuant to Section 3.6.
SECTION 5.6 Delaware Trustee.
The initial Delaware Trustee shall be:
The Bank of New York (Delaware)
White Clay Center
Route 273
Newark, Delaware 19711
Attention: Corporate Trust Department
SECTION 5.7 Appointment, Removal and Resignation of Trustees.
(a) Subject to Section 5.7(b) of this Declaration 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 Preferred Securities voting as a
class at a meeting of Holders of the Preferred 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 has
been appointed and has accepted such ap-
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pointment by written instrument executed by such Successor Property Trustee and
delivered to the Administrative Trustees and the Sponsor; and
(ii) the Trustee that acts as Delaware Trustee shall not be
removed in accordance with this Section 5.7(a) until a successor
Trustee possessing the qualifications to act as Delaware Trustee under
Sections 5.2 and 5.4 (a "Successor Delaware Trustee") has been
appointed and has accepted such appointment by written instrument
executed by such Successor Delaware Trustee and delivered to the
Administrative Trustees and the Sponsor.
(c) A Trustee appointed to office shall hold office until or
its his successor shall have been appointed or until his death or its
dissolution, or until his or its 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 Preferred Securities shall use their best efforts
to promptly appoint a Successor Delaware Trustee or Successor Property Trustee,
as the case may be, if the Property Trustee or the Delaware Trustee delivers an
instrument of resignation in accordance with this Section 5.7.
(e) If no Successor Property Trustee or Successor Delaware
Trustee shall have been appointed and accepted appointment as provided in this
Section 5.7 within 60 days after delivery of an instrument of resignation or
removal, the Property Trustee or Delaware Trustee resigning or being removed, as
applicable, may petition any court of competent jurisdiction for appointment of
a Successor Property Trustee or Successor Delaware Trustee, as applicable. Such
court may
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thereupon, after prescribing such notice, if any, as it may deem proper, and
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) At the time of resignation or removal of the Property
Trustee or the Delaware Trustee, the Debenture Issuer shall pay to such Trustee
any amounts that may be owed to such Trustee pursuant to Section 10.4.
(h) Any successor to an Administrative Trustee shall be an
officer, director, employee or affiliate of the Sponsor.
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 Section 5.2, or if
the number of Trustees is increased pursuant to Section 5.1, a vacancy shall
occur. A resolution certifying the existence of such vacancy by the
Administrative Trustees or, if there are more than two, a majority of the
Administrative Trustees shall be conclusive evidence of the existence of such
vacancy. The vacancy shall be filled with a Trustee appointed in accordance with
Section 5.7.
SECTION 5.9 Effect of Vacancies.
The death, resignation, retirement, removal, bankruptcy,
dissolution, liquidation, incompetence or incapacity to perform the duties of a
Trustee shall not operate to dissolve, terminate or annul the Trust. Whenever a
vacancy in the number of Administrative Trustees shall occur, until such vacancy
is filled by the appointment of an Administrative Trustee in accordance with
Section 5.7, the Administrative Trustees in office, regardless of their number,
shall have all the powers granted to the Administrative Trustees and shall
discharge all the duties imposed upon the Administrative Trustees by this
Declaration.
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,
provided, however, that meetings of the Administrative Trustees shall not be
held in any jurisdiction which would subject the Trust to taxation under the
laws of such jurisdiction. 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
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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 Declaration, any action of
the Administrative Trustees may be taken at a meeting by vote of a majority of
the Administrative Trustees present (whether in person or by telephone) and
eligible to vote with respect to such matter, provided that a Quorum is present,
or without a meeting by the unanimous written consent of the Administrative
Trustees. In the event there is only one Administrative Trustee, any and all
action of such Administrative Trustee shall be evidenced by a written consent of
such Administrative Trustee.
SECTION 5.11 Delegation of Power.
(a) Any Administrative Trustee may, by power of attorney
consistent with applicable law, delegate to any other natural person over the
age of 21 his or her power for the purpose of executing any documents
contemplated in Section 3.6, including any registration statement or amendment
thereto filed with the Commission, or making any other governmental filing; and
(b) the Administrative Trustees shall have power to delegate
from time to time to such of their number or to officers of the Trust the doing
of such things and the execution of such instruments either in the name of the
Trust or the names of the Administrative Trustees or otherwise as the
Administrative Trustees may deem expedient, to the extent such delegation is not
prohibited by applicable law or contrary to the provisions of the Trust, as set
forth herein.
SECTION 5.12 Merger, Conversion, Consolidation or Succession to Business.
Any Person into which the Property Trustee or the Delaware Trustee 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.
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ARTICLE VI
DISTRIBUTIONS
SECTION 6.1 Distributions.
Holders shall receive Distributions in accordance with the
applicable terms of the relevant Holder's Securities. Distributions shall be
made on the Preferred Securities and the Common Securities in accordance with
the preferences set forth in their respective terms. If and to the extent that
the Debenture Issuer makes a payment of interest (including Compounded Interest
and Additional Sums) or principal on the Debentures held by the Property Trustee
or any other payments with respect to the Debentures held by the Property
Trustee (the amount of any such payment being a "Payment Amount"), the Property
Trustee shall and is directed, to the extent funds are available for that
purpose, to make a distribution (a "Distribution") of the Payment Amount to
Holders.
ARTICLE VII
ISSUANCE OF SECURITIES
SECTION 7.1 General Provisions Regarding Securities.
(a) The Administrative Trustees shall on behalf of the Trust
issue one class of capital securities representing undivided beneficial
interests in the assets of the Trust having such terms as are set forth in Annex
I (the "Preferred 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 Trust shall issue no
securities or other interests in the assets of the Trust other than the Trust
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
Declaration, the Securities so issued shall be deemed to be validly issued,
fully paid and non-assessable undivided beneficial interests in the assets of
the Trust.
(d) Every Person, by virtue of having become a Holder or a
Preferred Security Beneficial Owner in accordance with the terms of this
Declaration, shall be deemed to have expressly assented and agreed to the terms
of, and shall be bound by, this Declaration and the terms of the Securities, the
Preferred Securities Guarantee, the Indenture and the Debentures.
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
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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 Declaration any such
person was not such an Administrative Trustee.
(b) One Administrative Trustee shall sign the Preferred
Securities for the Trust by manual or facsimile signature. Unless otherwise
determined by the Trust, such signature shall, in the case of Common Securities,
be a manual signature.
A Preferred 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 Preferred Security has been
authenticated under this Declaration.
Upon a written order of the Trust signed by one Administrative
Trustee, the Property Trustee shall authenticate the Preferred Securities for
original issue. The aggregate number of Preferred 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 Preferred Securities. An authenticating
agent may authenticate Preferred Securities whenever the Property Trustee may do
so. Each reference in this Declaration to authentication by the Property Trustee
includes authentication by such agent. An authenticating agent has the same
rights as the Property Trustee to deal with the Sponsor or an Affiliate.
SECTION 7.3 Form and Dating.
The Preferred Securities and the Property Trustee's
certificate of authentication shall be substantially in the form of Exhibit A-1
and the Common Securities shall be substantially in the form of Exhibit A-2,
each of which is hereby incorporated in and expressly made a part of this
Declaration. Certificates 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 to the Property Trustee in writing. Each Preferred
Security shall be dated the date of its authentication. The terms and provisions
of the Securities set forth in Annex I and the forms of Securities set forth in
Exhibits A-1 and A-2 are part of the terms of this Declaration and to the extent
applicable, the Property Trustee and the Sponsor, by their execution and
delivery of this Declaration, expressly agree to such terms and provisions and
to be bound thereby.
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(a) Global Securities. The Preferred Securities shall be
issued in the form of one or more permanent global Securities in definitive,
fully registered form without distribution coupons as set forth in Exhibit A-1
hereto (a "Global Preferred Security"), which shall be deposited on behalf of
the purchasers of the Preferred Securities represented thereby with the Property
Trustee, 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
Preferred Securities represented by a Global Preferred Security may from time to
time be increased or decreased by adjustments made on the records of the
Property Trustee and the Clearing Agency or its nominee as hereinafter provided.
(b) Book-Entry Provisions. This Section 7.3(b) shall apply
only to the Global Preferred Securities and such other Preferred 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 Preferred 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 Declaration with respect to any
Global Preferred 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
Preferred 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 Preferred 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 Preferred Security.
(c) Definitive Preferred Securities. Except as provided in
Section 7.9 or 9.2(d)(i), owners of beneficial interests in a Global Preferred
Security will not be entitled to receive physical delivery of certificated
Preferred Securities ("Definitive Preferred Securities").
(d) Authorized Denominations. The Preferred Securities are
issuable only in denominations of $25 and any integral multiple thereof.
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SECTION 7.4 Registrar and Paying Agent.
The Trust shall maintain in the Borough of Manhattan, The City
of New York, (i) an office or agency where Preferred Securities may be presented
for registration of transfer ("Registrar") and (ii) an office or agency where
Preferred Securities may be presented for payment ("Paying Agent"). The
Registrar shall keep a register of the Preferred Securities and of their
transfer. The Trust may appoint the Registrar and the Paying Agent and may
appoint one or more co-registrars and one or more additional paying agents in
such other locations as it shall determine. The term "Registrar" includes any
additional registrar and "Paying Agent" includes any additional paying agent.
The Trust may change any Paying Agent, Registrar or co-registrar 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 Declaration. If the Trust fails to appoint or maintain another
entity as Registrar or Paying Agent, the Property Trustee shall act as such. The
Trust or any of its Affiliates may act as Paying Agent or Registrar. The Trust
shall act as Paying Agent and Registrar for the Common Securities.
The Trust initially appoints the Property Trustee as Registrar
and Paying Agent for the Preferred Securities.
SECTION 7.5 Paying Agent to Hold Money in Trust.
The Trust shall require each Paying Agent other than the
Property Trustee to agree in writing that the Paying Agent will hold in trust
for the benefit of Holders or the Property Trustee all money held by the Paying
Agent for the payment of liquidation amounts or Distributions, and will notify
the Property Trustee if there are insufficient funds for such purpose. While any
such insufficiency continues, the Property Trustee may require a Paying Agent to
pay all money held by it to the Property Trustee. The Trust at any time may
require a Paying Agent to pay all money held by it to the Property Trustee and
to account for any money disbursed by it. Upon payment over to the Property
Trustee, the Paying Agent (if other than the Trust or an Affiliate of the Trust)
shall have no further liability for the monies previously held by it. 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 Preferred 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
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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 Preferred Securities.
The Preferred Securities outstanding at any time are all the
Preferred 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 Preferred 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
Preferred Security is held by a bona fide purchaser.
If Preferred Securities are considered paid in accordance with
the terms of this Declaration, they cease to be outstanding and Distributions on
them shall cease to accumulate.
Except as provided in Section 7.8, a Preferred 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 Preferred Securities in Treasury.
In determining whether the Holders of the required amount of
Securities have concurred in any direction, waiver or consent, Preferred
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 a Responsible Officer of the Property Trustee actually knows are so owned
shall be so disregarded.
SECTION 7.9 Temporary Securities.
(a) Until Definitive Preferred Securities are ready for delivery, the
Trust may prepare and, in the case of the Preferred Securities, the Property
Trustee shall authenticate temporary Securities. Temporary Securities shall be
substantially in the form of Definitive Preferred 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
Preferred Securities, the Property Trustee shall authenticate Definitive
Preferred Securities in exchange for temporary Securities.
(b) A Global Preferred 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 Definitive Preferred Securities only if such transfer complies with
Section 9.2 and (i) the Clearing Agency notifies the Sponsor that it is
unwilling or
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unable to continue as Clearing Agency for such Global Preferred Security or if
at any time such Clearing Agency ceases to be a "clearing agency" registered
under the Exchange Act and a clearing agency is not appointed by the Sponsor
within 90 days of such notice, (ii) a Default or an Event of Default has
occurred and is continuing or (iii) the Trust at its sole discretion elects to
cause the issuance of Definitive Preferred Securities.
(c) Any Global Preferred Security that is transferable to the
beneficial owners thereof in the form of Definitive Preferred 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 Preferred Security, an equal
aggregate liquidation amount of Securities of authorized denominations in the
form of certificated Preferred Securities. Any portion of a Global Preferred
Security in transferred pursuant to this Section shall be registered in such
names as the Clearing Agency shall direct.
(d) Subject to the provisions of Section 7.9(c), the Holder of
a Global Preferred 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 Declaration 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 Preferred Securities in
fully registered form without distribution coupons.
SECTION 7.10 Cancellation.
The Trust at any time may deliver Preferred Securities to the
Property Trustee for cancellation. The Registrar and Paying Agent shall forward
to the Property Trustee any Preferred Securities surrendered to them for
registration of transfer, redemption, or payment. The Property Trustee shall
promptly cancel all Preferred Securities, surrendered for registration of
transfer, redemption, payment, replacement or cancellation and shall dispose of
canceled Preferred Securities in accordance with its customary procedures unless
the Trust otherwise directs. The Trust may not issue new Preferred Securities to
replace Preferred Securities that it has paid or that have been delivered to the
Property Trustee for cancellation.
SECTION 7.11 CUSIP Numbers.
The Trust in issuing the Preferred 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
Preferred 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 Preferred Securities or as contained in any notice of a redemption and
that reliance may be placed only on the
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other identification numbers printed on the Preferred 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
DISSOLUTION AND TERMINATION OF TRUST
SECTION 8.1 Dissolution and Termination of Trust.
(a) The Trust shall automatically dissolve and be wound up in
accordance with applicable law:
(i) upon the occurrence of an Event of Default with respect to
the Sponsor as described in Section 501(d) or (e) of the Indenture;
(ii) upon the filing of a certificate of dissolution or
liquidation or its equivalent with respect to the Sponsor; the filing
of a certificate of cancellation with respect to the Trust; 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 the Debentures from the
Trust to the Holders in exchange for all of the Securities and in
liquidation of the Trust;.
(iv) upon the entry of a decree of judicial dissolution of the
Sponsor or 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; or
(vi) 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), but within 30 days of such event, notice of such
dissolution shall be given to the Holders and upon completion of the winding up
of Trust, the Administrative Trustees shall file a certificate of cancellation
with the Secretary of State of the State of Delaware and the Trust shall
terminate.
(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 Declaration and in
the terms of the Securities. To the fullest extent permitted by applicable law,
any transfer or purported transfer of any Security not made in accordance with
this Declaration shall be null and void.
(b) The Administrative Trustees shall provide for the
registration of Preferred Securities and of the transfer of Preferred
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 Preferred Securities, the
Administrative Trustees shall cause one or more new Preferred Securities to be
issued in the name of the designated transferee or transferees. Every Preferred
Security surrendered for registration of transfer shall be accompanied by a
written instrument of transfer in form satisfactory to the Administrative
Trustees and the Sponsor duly executed by the Holder or such Holder's attorney
duly authorized in writing. Each Preferred Security surrendered for registration
of transfer shall be canceled by the Property Trustee. A transferee of a
Preferred Security shall be entitled to the rights and subject to the
obligations of a Holder hereunder upon the receipt by such transferee of a
Preferred Security. By acceptance of a Preferred Security, each transferee shall
be bound by this Declaration.
(c) The Holder of the Common Securities may not transfer the
Common Securities except (a) in connection with transactions permitted under
Section 10.01 of the Indenture, or (b) to the Sponsor or an Affiliate thereof in
compliance with applicable law (including the Securities Act and applicable
state securities and blue sky laws); provided that, any such transfer is subject
to the condition precedent that the transferor obtain the written opinion of
qualified independent counsel experienced in such matters that such transfer
would not cause more than an insubstantial risk that:
(i) the Trust would not be classified for United States
federal income tax purposes as a grantor trust and each Holder of
Securities would not be treated as owning an undivided beneficial
interest in the Debentures; and
(ii) the Trustee would be an Investment Company or the
transferee would become an Investment Company.
To the fullest extent permitted by law, any attempted transfer of the Common
Securities other than as set forth in the immediately preceding sentence shall
be void. 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
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successor of the Sponsor under the Indenture may succeed to the Sponsor's
ownership of such Common Securities, (ii) 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 Declaration, and (b)
to otherwise continue to be classified as a grantor trust for United States
federal income tax purposes and (iii) to use its reasonable efforts to cause
each holder of Trust Securities to be treated as owning an undivided beneficial
interest in the Debentures.
SECTION 9.2 Transfer Procedures and Restrictions.
(a) Transfer and Exchange of Definitive Preferred Securities.
When Definitive Preferred Securities are presented to the Registrar or
co-registrar
(x) to register the transfer of such Definitive Preferred
Securities; or
(y) to exchange such Definitive Preferred Securities which
became mutilated, destroyed, defaced, stolen or lost, for an equal
number of Definitive Preferred Securities,
the Registrar or co-registrar shall register the transfer or make the exchange
as requested if its reasonable requirements for such transaction are met;
provided, however, that the Definitive Preferred Securities surrendered for
registration of transfer or exchange shall be duly endorsed or accompanied by a
written instrument of transfer in form reasonably satisfactory to the
Administrative Trustees and the Registrar or co-registrar, duly executed by the
Holder thereof or his attorney duly authorized in writing;
(b) Restrictions on Transfer of a Definitive Preferred
Security for a Beneficial Interest in a Global Preferred Security. A Definitive
Preferred Security may not be exchanged for a beneficial interest in a Global
Preferred Security except upon satisfaction of the requirements set forth below.
Upon receipt by the Property Trustee of a Definitive Preferred Security, duly
endorsed or accompanied by appropriate instruments of transfer, in form
satisfactory to the Property Trustee and the Administrative Trustees, together
with written instructions directing the Property Trustee to make, or to direct
the Clearing Agency to make, an adjustment on its books and records with respect
to the appropriate Global Preferred Security to reflect an increase in the
number of the Preferred Securities represented by such Global Preferred
Security, then the Property Trustee shall cancel such Definitive Preferred
Security and cause, or direct the Clearing Agency to cause, the aggregate number
of Preferred Securities represented by the appropriate Global Preferred Security
to be increased accordingly. If no Global Preferred 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
Preferred Securities in global form.
(c) Transfer and Exchange of Global Preferred Securities.
Subject to Section 9.2(d), the transfer and exchange of Global Preferred
Securities or beneficial interests therein shall
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be effected through the Clearing Agency, in accordance with this Declaration
(including applicable restrictions on transfer set forth herein, if any) and the
procedures of the Clearing Agency therefor.
(d) Transfer of a Beneficial Interest in a Global Preferred
Security for a Definitive Preferred Security.
(i) Any Person having a beneficial interest in a Global
Preferred 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
Preferred Security representing the same number of Preferred
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 Preferred 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 Global Preferred 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 Preferred Securities represented by Global
Preferred 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 Preferred Security.
(ii) Definitive Preferred Securities issued in exchange for a
beneficial interest in a Global Preferred Security pursuant to this
Section 9.2(d) 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 Preferred
Securities to the Persons in whose names such Preferred Securities are
so registered in accordance with such instructions of the Clearing
Agency.
(e) Restrictions on Transfer and Exchange of Global Preferred
Securities. Notwithstanding any other provisions of this Declaration (other than
the provisions set forth in subsection (e) of this Section 9.2 and subsection
(b) of Section 7.9), a Global Preferred 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.
(f) Authentication of Definitive Preferred 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
Preferred Securities under this Declaration,
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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 Preferred Securities to the Persons
designated by the Trust, will authenticate and make available for delivery
Definitive Preferred Securities, equal in number to the number of Preferred
Securities represented by the Global Preferred Securities, in exchange for such
Global Preferred Securities.
(g) Cancellation or Adjustment of Global Preferred Security.
At such time as all beneficial interests in a Global Preferred Security have
either been exchanged for Definitive Preferred Securities to the extent
permitted by this Declaration or redeemed, repurchased or canceled in accordance
with the terms of this Declaration, such Global Preferred Security shall be
canceled by the Property Trustee. At any time prior to such cancellation, if any
beneficial interest in a Global Preferred Security is exchanged for Definitive
Preferred Securities, Preferred Securities represented by such Global Preferred
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.
(h) Obligations with Respect to Transfers of Preferred
Securities.
(i) To permit registrations of transfers, the Trust shall
execute and the Property Trustee shall authenticate Definitive
Preferred Securities and Global Preferred Securities at the Registrar's
or co-registrar's request in accordance with the terms of this
Declaration.
(ii) Registrations of transfers 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 (a) Preferred 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 Preferred
Securities for redemption and ending at the close of business on the
day of such mailing; or (b) any Preferred Security so selected for
redemption in whole or in part, except the unredeemed portion of any
Preferred Security being redeemed in part.
(iv) Prior to the due presentation for registration of
transfer of any Preferred Security, the Trust, the Property Trustee,
the Paying Agent, the Registrar or any co-registrar may deem and treat
the Person in whose name a Preferred Security is registered as the
absolute owner of such Preferred Security for the purpose of receiving
Distributions on such Preferred Security (subject to Section 2(c) of
Annex I) and for all other purposes whatsoever, and none of the Trust,
the Property Trustee, the Paying Agent, the Registrar or any
co-registrar shall be affected by notice to the contrary.
(v) All Preferred Securities issued upon any registration of
transfer pursuant to the terms of this Declaration shall evidence the
same security and shall be entitled to the
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same benefits under this Declaration as the Preferred Securities
surrendered upon such registration of transfer.
(i) No Obligation of the Property Trustee.
(i) The Property Trustee shall have no responsibility or
obligation to any beneficial owner of a Global Preferred 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 Preferred 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 Preferred Securities. All notices and communications to
be given to the Holders and all payments to be made to Holders under
the Preferred 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 Preferred Security). The rights of
beneficial owners in any Global Preferred 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 Declaration or
under applicable law with respect to any transfer of any interest in
any Preferred Security (including any transfers between or among
Clearing Agency Participants or beneficial owners in any Global
Preferred 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
Declaration, and to examine the same to determine substantial
compliance as to form with the express requirements hereof.
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 Preferred 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 Preferred Security
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Beneficial Owner will receive a definitive Preferred Security Certificate
representing such Preferred Security Beneficial Owner's interests in such Global
Preferred Securities, except as provided in Section 7.9 and Section 9.2. Unless
and until definitive, fully registered Preferred Securities certificates have
been issued to the Preferred Security Beneficial Owners pursuant to Section 7.9
or Section 9.2:
(a) the provisions of this Section 9.4 shall be in full force
and effect;
(b) the Trust and the Trustees shall be entitled to deal with
the Clearing Agency for all purposes of this Declaration (including the
payment of Distributions on the Global Preferred Securities and
receiving approvals, votes or consents hereunder) as the Holder of the
Preferred Securities and the sole holder of the Global Certificates and
shall have no obligation to the Preferred Security Beneficial Owners;
(c) to the extent that the provisions of this Section 9.4
conflict with any other provisions of this Declaration, the provisions
of this Section 9.4 shall control; and
(d) the rights of the Preferred Security Beneficial Owners
shall be exercised only through the Clearing Agency and shall be
limited to those established by law and agreements between such
Preferred Security Beneficial Owners and the Clearing Agency and/or the
Clearing Agency Participants and the Clearing Agency shall 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 Preferred
Security Holders is required under this Declaration, unless and until
definitive, fully registered Preferred Securities certificates have been issued
to the Preferred Security Beneficial Owners pursuant to Section 7.9 or Section
9.2, the Trustees shall give all such notices and communications specified
herein to be given to the Holders of Global Preferred Securities to the Clearing
Agency, and shall have no notice obligations to the Preferred 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 Preferred Securities or if the
Administrative Trustees elect to have another Clearing Agency serve as
Securities depositary with respect to the Preferred Securities, the
Administrative Trustees may, in their sole discretion, appoint a successor
Clearing Agency with respect to such Preferred 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 Declaration, 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 or termination 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 payment of principal
and interest on 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 stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware.
SECTION 10.2 Exculpation.
(a) No Indemnified Person shall be liable, responsible or
accountable in damages or otherwise to the Trust or any Covered Person for any
loss, damage or claim incurred by reason of any act or omission performed or
omitted by such Indemnified Person in good faith on behalf of the Trust and in a
manner such Indemnified Person reasonably believed to be within the scope of the
authority conferred on such Indemnified Person by this Declaration or by law,
except that an Indemnified Person shall be liable for any such loss, damage or
claim incurred by reason of such Indemnified Person's negligence or willful
misconduct with respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying
in good faith upon the records of the Trust and upon such information, opinions,
reports or statements presented to the Trust by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and, if selected by such Indemnified Person,
has been selected by such Indemnified Person with reasonable care on behalf of
the Trust, including information, opinions, reports or statements as to the
value and amount of the assets, liabilities, profits, losses, or any other facts
pertinent to the existence and amount of assets from which Distributions to
Holders might properly be paid.
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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 Declaration shall not be liable to the Trust or to any other Covered Person
for its good faith reliance on the provisions of this Declaration. The
provisions of this Declaration, to the extent that they restrict the duties and
liabilities of an Indemnified Person otherwise existing at law or in equity
(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 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 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 Declaration 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 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.
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SECTION 10.4 Indemnification.
(a) (i) The Debenture Issuer shall indemnify, to the full
extent permitted by law, any Company Indemnified Person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the
right of the Trust) by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall
not, of itself, create a presumption that the Company Indemnified
Person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interests of the Trust,
and, with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.
(ii) The Debenture Issuer shall indemnify, to the full extent
permitted by law, any Company Indemnified Person who was or is a party
or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Trust to procure a
judgment in its favor by reason of the fact that he is or was a Company
Indemnified Person against expenses (including attorneys' fees and
expenses) actually and reasonably incurred by him in connection with
the defense or settlement of such action or suit if he acted in good
faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Trust and except that no such indemnification
shall be made in respect of any claim, issue or matter as to which such
Company Indemnified Person shall have been adjudged to be liable to the
Trust unless and only to the extent that the Court of Chancery of
Delaware or the court in which such action or suit was brought shall
determine upon application that, despite the adjudication of liability
but in view of all the circumstances of the case, such Person is fairly
and reasonably entitled to indemnity for such expenses which such Court
of Chancery or such other court shall deem proper.
(iii) To the extent that a Company Indemnified Person shall be
successful on the merits or otherwise (including dismissal of an action
without prejudice or the settlement of an action without admission of
liability) in defense of any action, suit or proceeding referred to in
paragraphs (i) and (ii) of this Section 10.4(a), or in defense of any
claim, issue or matter therein, he shall be indemnified, to the full
extent permitted by law, against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection therewith.
(iv) Any indemnification under paragraphs (i) and (ii) of this
Section 10.4(a) (unless ordered by a court) shall be made by the
Debenture Issuer only as authorized in the specific case upon a
determination that indemnification of the Company Indemnified Person
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is proper in the circumstances because he has met the applicable
standard of conduct set forth in paragraphs (i) and (ii). Such
determination shall be made (1) by the Administrative Trustees by a
majority vote of a Quorum consisting of such Administrative Trustees
who were not parties to such action, suit or proceeding, (2) if such a
Quorum is not obtainable, or, even if obtainable, if a Quorum of
disinterested Administrative Trustees so directs, by independent legal
counsel in a written opinion, or (3) by the Common Security Holder of
the Trust.
(v) Expenses (including attorneys' fees and expenses) incurred
by a Company Indemnified Person in defending a civil, criminal,
administrative or investigative action, suit or proceeding referred to
in paragraphs (i) and (ii) of this Section 10.4(a) shall be paid by the
Debenture Issuer in advance of the final disposition of such action,
suit or proceeding upon receipt of an undertaking by or on behalf of
such Company Indemnified Person to repay such amount if it shall
ultimately be determined that he is not entitled to be indemnified by
the Debenture Issuer as authorized in this Section 10.4(a).
Notwithstanding the foregoing, no advance shall be made by the
Debenture Issuer if a determination is reasonably and promptly made (i)
by the Administrative Trustees by a majority vote of a Quorum of
disinterested Administrative Trustees, (ii) if such a Quorum is not
obtainable, or, even if obtainable, if a Quorum of disinterested
Administrative Trustees so directs, by independent legal counsel in a
written opinion or (iii) the Common Security Holder of the Trust, that,
based upon the facts known to the Administrative Trustees, counsel or
the Common Security Holder at the time such determination is made, such
Company Indemnified Person acted in bad faith or in a manner that such
person did not believe to be in or not opposed to the best interests of
the Trust, or, with respect to any criminal proceeding, that such
Company Indemnified Person believed or had reasonable cause to believe
his conduct was unlawful. In no event shall any advance be made in
instances where the Administrative Trustees, independent legal counsel
or Common Security Holder reasonably determine that such person
deliberately breached his duty to the Trust or its Common or Preferred
Security Holders.
(vi) The indemnification and advancement of expenses provided
by, or granted pursuant to, the other paragraphs of this Section
10.4(a) shall not be deemed exclusive of any other rights to which
those seeking indemnification and advancement of expenses may be
entitled under any agreement, vote of stockholders or disinterested
directors of the Debenture Issuer or Preferred Security Holders of the
Trust or otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office. All rights to
indemnification under this Section 10.4(a) shall be deemed to be
provided by a contract between the Debenture Issuer and each Company
Indemnified Person who serves in such capacity at any time while this
Section 10.4(a) is in effect. Any repeal or modification of this
Section 10.4(a) shall not affect any rights or obligations then
existing.
(vii) The Debenture Issuer or the Trust may purchase and
maintain insurance on behalf of any person who is or was a Company
Indemnified Person against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as
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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
or the Delaware Trustee, and (iv) any officers, directors, shareholders,
members, partners, employees, representatives, custodians, nominees or agents of
the Property Trustee or the Delaware Trustee (each of the Persons in (i) through
(iv) being referred to as a "Fiduciary Indemnified Person") for, and to hold
each Fiduciary Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense including taxes (other than taxes based on the income
of such Fiduciary Indemnified Person) incurred without negligence or bad faith
on its part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against or investigating any claim or liability in connection with the exercise
or performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 10.4(b) shall survive the resignation or
removal of the Property Trustee or the Delaware Trustee and the satisfaction and
discharge of this Declaration.
SECTION 10.5 Outside Businesses.
Any Covered Person, the Sponsor, the Delaware Trustee and the
Property Trustee (subject to Section 5.3(c)) 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 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, 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
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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.
SECTION 10.6 Compensation; Fees.
The Debenture Issuer agrees:
(a) to pay to the Trustees from time to time such compensation
for all services rendered by them hereunder as the parties shall agree in
writing from time to time (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust); and
(b) except as otherwise expressly provided herein, to
reimburse the Trustees upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustees in accordance with any provision
of this Declaration (including the reasonable compensation and the expenses and
disbursements of their respective agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad faith.
The provisions of this Section 10.6 shall survive the
dissolution of the Trust and the termination of this Declaration and the removal
or resignation of any Trustee.
No Trustee may claim any lien or charge on any property of the
Trust as a result of any amount due pursuant to this Section 10.6.
ARTICLE XI
ACCOUNTING
SECTION 11.1 Fiscal Year.
The fiscal year ("Fiscal Year") of the Trust shall be the
calendar year, or such other year as is required by the Code.
SECTION 11.2 Certain Accounting Matters.
(a) At all times during the existence of the Trust, the
Administrative Trustees shall keep, or cause to be kept, full books of account,
records and supporting documents, which shall reflect in reasonable detail, each
transaction of the Trust. The books of account shall be maintained on the
accrual method of accounting, in accordance with generally accepted accounting
principles, consistently applied. The books of account and the records of the
Trust shall be examined by and
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reported upon as of the end of each Fiscal Year of the Trust by a firm of
independent certified public accountants selected by the Administrative
Trustees.
(b) The Administrative Trustees shall cause to be duly
prepared and delivered to each of the Holders, any annual United States federal
income tax information statement, required by the Code, containing such
information with regard to the Securities held by each Holder as is required by
the Code and the Treasury Regulations. Notwithstanding any right under the Code
to deliver any such statement at a later date, the Administrative Trustees shall
endeavor to deliver all such information statements within 30 days after the end
of each Fiscal Year of the Trust.
(c) The Administrative Trustees shall cause to be duly
prepared and filed with the appropriate taxing authority, an annual United
States federal income tax return, on a Form 1041 or such other form required by
United States federal income tax law, and any other annual income tax returns
required to be filed by the Administrative Trustees on behalf of the Trust with
any state or local taxing authority.
SECTION 11.3 Banking.
The Trust may maintain one or more bank accounts in the name
and for the sole benefit of the Trust; provided, however, that all payments of
funds in respect of the Debentures held by the Property Trustee shall be made
directly to the Property Trustee Account and no other funds of the Trust shall
be deposited in the Property Trustee Account. The sole signatories for such
accounts shall be designated by the Administrative Trustees; provided, however,
that the Property Trustee shall designate the signatories for the Property
Trustee Account.
SECTION 11.4 Withholding.
The Trust and the Administrative Trustees shall comply with
all withholding requirements under United States federal, state and local law.
The Trust shall request, and the Holders shall provide to the Trust, such forms
or certificates as are necessary to establish an exemption from withholding with
respect to each Holder, and any representations and forms as shall reasonably be
requested by the Trust to assist it in determining the extent of, and in
fulfilling, its withholding obligations. The Administrative Trustees shall file
required forms with applicable jurisdictions and, unless an exemption from
withholding is properly established by a Holder, shall remit amounts withheld
with respect to the Holder to applicable jurisdictions. To the extent that the
Trust is required to withhold and pay over any amounts to any authority with
respect to Distributions or allocations to any Holder, the amount withheld shall
be deemed to be a Distribution in the amount of the withholding to the Holder.
In the event of any claimed over withholding, Holders shall be limited to an
action against the applicable jurisdiction. If the amount required to be
withheld was not withheld from actual Distributions made, the Trust may reduce
subsequent Distributions by the amount of such withholding.
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ARTICLE XII
AMENDMENTS AND MEETINGS
SECTION 12.1 Amendments.
(a) Except as otherwise provided in this Declaration
(including Section 7 of Annex I hereto) or by any applicable terms of the
Securities, this Declaration may only be amended by a written instrument
approved and executed by:
(i) the Administrative Trustees (or if there are more than two
Administrative Trustees a majority of the Administrative Trustees);
(ii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Property Trustee, the Property
Trustee; and
(iii) if the amendment affects the rights, powers, duties,
obligations or immunities of the Delaware Trustee, the Delaware
Trustee.
(b) No amendment shall be made, and any such purported
amendment shall be void and ineffective:
(i) unless 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 Declaration (including the
terms of the Securities) and that the interests of any Holder
of Securities will not be materially affected by such
amendment; and
(B) an Opinion of Counsel (who may be counsel to
the Sponsor or the Trust) that such amendment is permitted by,
and conforms to, the terms of this Declaration (including the
terms of the Securities) and that all conditions precedent, if
any, in this Declaration 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 which affects the rights, powers, duties, obligations or
immunities of the Property Trustee; and
(ii) 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;
(C) cause the Trust to be deemed to be an
Investment Company required to be registered under the
Investment Company Act; or
(D) cause a Tax Event.
(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 Declaration may be
amended without the consent of the Holders to:
(i) cure any ambiguity, correct or supplement any provision in
this Declaration that may be inconsistent with any other provision of
this Declaration or to make any other provisions with respect to
matters or questions arising under this Declaration which shall not be
inconsistent with the other provisions of the Declaration; and
(ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the
Trust will be classified for United States federal income tax purposes
as a grantor trust at all times that any 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 each case such action shall not adversely affect the
interests of the Holders, and any amendments of this Declaration shall become
effective when notice thereof is given to the Holders.
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SECTION 12.2 Meetings of the Holders; Action by Written Consent.
(a) Meetings of the Holders of any class of Securities may be
called at any time by the Administrative Trustees (or as provided in the terms
of the Securities) to consider and act on any matter on which Holders of such
class of Securities are entitled to act under the terms of this Declaration, the
terms of the Securities or the rules of any stock exchange on which the
Preferred 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 Securities 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 there 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
Declaration or the rules of any stock exchange on which the Preferred
Securities are listed or admitted for trading, such vote, consent or
approval may be given at a meeting of the Holders. Any action that may
be taken at a meeting of the Holders may be taken without a meeting if
a consent in writing setting forth the action so taken is signed by the
Holders owning not less than the minimum amount of Securities in
liquidation amount that would be necessary to authorize or take such
action at a meeting at which all Holders having a right to vote thereon
were present and voting. Prompt notice of the taking of any action
without a meeting shall be given to Holders entitled to vote who have
not consented to such action in writing. The Administrative Trustees
may specify that any written ballot submitted to the Holder of
Securities 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;
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(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 Declaration, the
terms of the Securities, the Trust Indenture Act or the listing rules
of any stock exchange on which the Preferred 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, provided, however, the meetings of Holders shall
not be held in any jurisdiction which would subject the Trust to
taxation under the laws of such jurisdiction.
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, to the Holders of Securities and to the Sponsor at
the date of this Declaration, and each Successor Property Trustee represents and
warrants to the Trust, to the Holders of Securities, and to the Sponsor at the
time of the Successor Property Trustee's acceptance of its appointment as
Property Trustee that:
(a) The Property Trustee is a New York banking corporation, a
national banking association or a bank or trust company organized under the laws
of any State of the United States or the District of Columbia, in any case with
trust powers and authority to execute and deliver, and to carry out and perform
its obligations under the terms of, this Declaration;
(b) the Property Trustee satisfies the requirements set forth
in Section 5.3(a);
(c) The execution, delivery and performance by the Property
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Property Trustee. This Declaration 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);
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(d) The execution, delivery and performance of this
Declaration by the Property Trustee does not conflict with or constitute a
breach of the charter or by-laws of the Property Trustee; and
(e) No consent, approval or authorization of, or registration
with or notice to, any New York State or federal banking authority is required
for the execution, delivery or performance by the Property Trustee of this
Declaration.
SECTION 13.2 Representations and Warranties of Delaware Trustee.
The Trustee that acts as initial Delaware Trustee represents
and warrants to the Trust, to the Holders of Securities and to the Sponsor at
the date of this Declaration, and each Successor Delaware Trustee represents and
warrants to the Trust, to the Holders of Securities, and to the Sponsor at the
time of the Successor Delaware Trustee's acceptance of its appointment as
Delaware Trustee that:
(a) The Delaware Trustee satisfies the requirements set forth
in Section 5.2 and, if it is not a natural person, is duly organized, validly
existing and in good standing under the laws of the State of Delaware or the
United States, with trust power and authority to execute and deliver, and to
carry out and perform its obligations under the terms of, this Declaration;
(b) The execution, delivery and performance by the Delaware
Trustee of this Declaration has been duly authorized by all necessary corporate
action on the part of the Delaware Trustee. This Declaration has been duly
executed and delivered by the Delaware Trustee and constitutes a legal, valid
and binding obligation of the Delaware Trustee, enforceable against it in
accordance with its terms, subject to applicable bankruptcy, reorganization,
moratorium, insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the court
(regardless of whether the enforcement of such remedies is considered in a
proceeding in equity or at law);
(c) No consent, approval or authorization of, or registration
with or notice to, any federal banking authority is required for the execution,
delivery or performance by the Delaware Trustee of this Declaration; 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
MISCELLANEOUS
SECTION 14.1 Notices.
All notices provided for in this Declaration shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, overnight courier service or confirmed
telecopy, 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 Property Trustee, the Delaware Trustee
and the Holders):
Local Financial Capital Trust I
c/o Administrative Trustees
3601 NW 63rd Street
Oklahoma City, Oklahoma 73116
Attention: Richard L. Park
Administrative Trustee
Telecopy: (405) 841-2289
(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 Administrative Trustees, the Property Trustee and the Holders):
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5917
(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 Administrative Trustees, the Delaware Trustee
and the Holders):
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5917
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(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 Property Trustee and the
Trust):
Local Financial Corporation
3601 NW 63rd Street
Oklahoma City, Oklahoma 73116
Attention: Jan A. Norton
President
Telecopy: (405) 841-2289
(e) if given to any other Holder, at the address set forth on
the books and records of the Trust.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be delivered because of a changed address of which no notice
was given, such notice or other document shall be deemed to have been delivered
on the date of such refusal or inability to deliver.
SECTION 14.2 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 principles of conflict of laws.
SECTION 14.3 Intention of the Parties.
It is the intention of the parties hereto that the Trust be
classified for United States federal income tax purposes as a grantor trust. The
provisions of this Declaration shall be interpreted to further this intention of
the parties.
SECTION 14.4 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 14.5 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
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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 14.6 Partial Enforceability.
If any provision of this Declaration, or the application of
such provision to any Person or circumstance, shall be held invalid, the
remainder of this Declaration, or the application of such provision to persons
or circumstances other than those to which it is held invalid, shall not be
affected thereby.
SECTION 14.7 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.
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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.
<TABLE>
<S> <C>
LOCAL FINANCIAL CAPITAL TRUST I
___________________________________________________
Edward A. Townsend, as Administrative Trustee
___________________________________________________
Jan A. Norton, as Administrative Trustee
___________________________________________________
Richard L. Park, as Administrative Trustee
THE BANK OF NEW YORK (DELAWARE),
as Delaware Trustee
By:________________________________________________
Name:
Title:
THE BANK OF NEW YORK,
as Property Trustee
By:________________________________________________
Name:
Title:
LOCAL FINANCIAL CORPORATION,
as Sponsor and Debenture Issuer
By:________________________________________________
Jan A. Norton
President
</TABLE>
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ANNEX I
TERMS OF
____% CUMULATIVE TRUST PREFERRED SECURITIES
____% COMMON SECURITIES
Pursuant to Section 7.1 of the Amended and Restated
Declaration of Trust, dated as of _______ __, 1999 (as amended from time to
time, the "Declaration"), 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 Declaration or, if not defined in such Declaration, as defined in the
Prospectus referred to below in Section 2(c) of this Annex I):
1. Designation and Number.
(a) Preferred Securities. ________ __% Cumulative Trust
Preferred Securities of the Trust with an aggregate liquidation amount with
respect to the assets of the Trust of ____________ dollars ($_______) and each
with a liquidation amount with respect to the assets of the Trust of $25 per
security, are hereby designated for the purposes of identification only as
Preferred Securities. The certificates evidencing the Preferred Securities shall
be substantially in the form of Exhibit A-1 to the Declaration, with such
changes and additions thereto or deletions therefrom as may be required by
ordinary usage, custom or practice or to conform to the rules of any exchange or
quotation system on or in which the Preferred Securities are listed, traded or
quoted.
(b) Common Securities. ______ Common Securities of the Trust
with an aggregate liquidation amount with respect to the assets of the Trust of
______________ dollars ($_______), and a liquidation amount with respect to the
assets of the Trust of $25 per security, are hereby designated for the purposes
of identification only as Common Securities. The certificates evidencing the
Common Securities shall be substantially in the form of Exhibit A-2 to the
Declaration, with such changes and additions thereto or deletions therefrom as
may be required by ordinary usage, custom or practice.
2. Distributions.
(a) Distributions payable on each Security will be fixed at a
rate per annum of ____% (the "Coupon Rate") of the liquidation amount of $25 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 quarterly period will bear additional distributions
thereon compounded quarterly at the Coupon Rate (to the extent permitted by
applicable law). A Distribution is payable only to the extent that payments are
made in respect of the Debentures held
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by the Property Trustee and to the extent the Property Trustee has funds on hand
legally available therefor.
(b) Distributions on the Securities will be cumulative, will
accumulate from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from ______ __, 1999, and will be payable quarterly in arrears on the last day
of March, June, September and December of each year, commencing on _______ __,
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 based on a 30-day
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 on the Debentures by extending the interest payment period
at any time and from time to time for a period not exceeding 20 consecutive
quarterly periods, including the first such quarterly 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 accrue with interest thereon (to the extent permitted by applicable
law) at the Coupon Rate compounded quarterly 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 further deferment shall only be permitted to the extent that
such Extension Period, together with all extensions occurring both before and
after such deferment, does not exceed 20 consecutive quarterly periods,
including the first quarterly period during such Extension Period, or extend
beyond the Maturity Date of the Debentures. Payments of deferred Distributions
will be payable to Holders of record as they appear on the books and records of
the Trust on the record date for Distributions due at the end of such Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
(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
close of business on the 15th day of the month in which the relevant
Distribution Date occurs, which Distribution Dates correspond to the interest
payment dates on the Debentures. Subject to any applicable laws and regulations
and the provisions of the Declaration, each such payment in respect of the
Global Preferred Securities will be made as described under the heading
"Description of Trust Preferred Securities -- Global Trust Preferred Securities"
and "Book-Entry Issuance" in the Prospectus dated _______ __, 1999, of the
Debenture Issuer and the Trust relating to the Securities and the Debentures.
Payments in respect of Preferred Securities held in certificated form will be
made by check mailed to the Holder entitled thereto. The relevant record dates
for the Common Securities shall be the same as the record dates for the
Preferred 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
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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 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 voluntary or involuntary liquidation,
dissolution, winding up or termination of the Trust or the Sponsor otherwise
gives notice of its election to dissolve the Trust pursuant to Section
8.1(a)(iii) of the Declaration, the Trust shall be liquidated by the
Administrative Trustees as expeditiously as the Administrative Trustees
determine to be possible by distributing, after satisfaction of liabilities to
creditors of the Trust as provided by applicable law, to the Holders a Like
Amount (as defined below) of the Debentures, unless such distribution is
determined by the Property Trustee not to be practicable, in which event such
Holders will be entitled to receive Pro Rata out of the assets of the Trust
legally available for distribution to Holders, after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the liquidation amount of $25 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 that portion of
principal amount of Debentures to be contemporaneously redeemed in accordance
with their terms and (ii) with respect to a distribution of Debentures upon the
dissolution or 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 (such redemption being either at the option
of the Debenture Issuer on or after __________ ___, 2004 or pursuant to a
Special Event, as described below), or otherwise, the
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proceeds from such repayment or redemption shall be simultaneously applied by
the Property Trustee to redeem a Like Amount of the Securities at the redemption
price as described below (the "Redemption Price").
(b) (i) The "Redemption Price", with respect to a redemption
of Securities other than an optional redemption, shall mean an amount equal to
the principal of and accrued and unpaid interest on the Debentures as of the
maturity date thereof.
(ii) In the case of an optional redemption, if fewer than
all the outstanding Securities are to be so redeemed, the Securities to be
redeemed will be determined as described in Section 4(f)(ii) below. Upon the
entry of an order for the dissolution of the Trust by a court of competent
jurisdiction, the Debentures thereafter will be subject to optional repayment,
in whole, but not in part, on or after ________ __, 2004 (the "Initial Optional
Redemption Date").
The Debenture Issuer shall have the right (subject to the
conditions in the Indenture) to elect to redeem the Debentures in whole or in
part at any time on or after the Initial Optional Redemption Date, upon not less
than 30 days and not more than 60 days notice, at the Optional Redemption Price
and, simultaneous with such redemption, to cause a Like Amount of the Securities
to be redeemed by the Trust at the Optional Redemption Price on a Pro Rata basis
or such other method as the Property Trustee shall deem appropriate, subject to
the receipt of prior approval of any applicable regulatory agency if it is then
required under applicable regulatory requirements. "Optional Redemption Price"
shall mean a price equal to the percentage of the liquidation amount of
Securities to be redeemed plus accrued and unpaid interest thereon, if any, to
the date of such redemption if redeemed during the 12-month period beginning
_____ __ of the years indicated below:
Year Percentage
---- ----------
2004 %
2005 %
2006 %
2007 %
2008 %
2009 and thereafter 100.000%
The Common Securities will be redeemed pro rata with the
Preferred Securities, except that if an Event of Default has occurred and is
continuing, the Preferred Securities will have priority over the Common
Securities with respect to the payment of the Redemption Price.
(c) If at any time an Investment Company Event, a Tax Event or
a Regulatory Capital Event (each as defined below, and each a "Special Event")
occurs and shall be continuing, the Debenture Issuer shall have the right
(subject to the conditions set forth in the Indenture) upon not less than 30 nor
more than 60 days written notice, to redeem the Debentures in whole, but not in
part, within the 90 days following the occurrence of such Special Event (the "90
Day Period"), and, simultaneous with such redemption, to cause a Like Amount of
the Securities to be redeemed by the Trust at the Redemption Price on a Pro Rata
basis or such other method as the Property Trustee shall deem appropriate, in
each case subject to the receipt of prior approval of any applicable regulatory
agency if it is then required under applicable regulatory requirements.
"Investment Company Event" means the receipt by the Sponsor of
an Opinion of Counsel, rendered by a law firm experienced in such matters, to
the effect that, as a result of change in law or regulation or a change in
interpretation or application of law or regulation by any legislative body,
court, governmental agency or regulatory authority, the Trust is or will be
considered an "investment company" that is required to be registered under the
Investment Company Act of 1940, as amended, which change becomes effective on or
after the date of original issuance of the Preferred Securities of Local
Financial Capital Trust I.
A "Regulatory Capital Event" shall occur at any time that the
Sponsor shall have received an opinion of independent bank regulatory counsel
experienced in such matters to the effect that, as a result of (a) 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 applicable regulatory agencies or (b) any official administrative
pronouncement or judicial deci-
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sion interpreting or applying such laws or regulations, which amendment or
change is effective or such pronouncement or decision is announced on or after
the date of Declaration, the Preferred Securities do not constitute, or within
90 days of the date thereof, will not constitute, Tier I Capital (or its then
equivalent) for purposes of the capital adequacy guidelines of the Board of
Governors 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 Sponsor; provided, however, that the
distribution of the Junior Subordinated Debentures in connection with a
termination of the Trust by the Sponsor shall not in and of itself constitute a
Regulatory Capital Event.
"Tax Event" shall occur upon receipt by the Sponsor and the
Trust of an Opinion of Counsel from counsel experienced in such matters to the
effect that, as a result of any amendment to, or change (including any announced
prospective change) in, the laws or any regulations thereunder of the United
States or any political subdivision or taxing authority thereof or therein, or
as a result of any official administrative pronouncement or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of the Declaration, there is more than an insubstantial risk that (i) the Trust
is, or will be within 90 days of the date of such opinion, subject to United
States federal income tax with respect to income received or accrued on the
Debentures, (ii) interest payable by the Debenture Issuer on the Debentures is
not, or within 90 days of the date of such opinion, will not be, deductible by
the Debenture Issuer, in whole or in part, for United States federal income tax
purposes, or (iii) the Trust is, or will be within 90 days of the date of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
(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 Preferred Securities, will receive a registered global certificate or
certificates representing the Debentures to be delivered upon such distribution
and (iii) 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 quarterly Distribution periods terminating on or before the
date of redemption.
(f) The procedure with respect to redemptions or distributions
of Securities shall be as follows:
(i) Notice of any redemption of, or notice of distribution of
Debentures in exchange for, the Securities (a "Redemption/Distribution
Notice") will be given by the Trust by mail to each Holder to be
redeemed or exchanged not fewer than 30 nor more than 60 days before
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<PAGE>
the date fixed for redemption or exchange thereof which, in the case of
a redemption, will be the date fixed for redemption of the Debentures.
For purposes of the calculation of the date of redemption or exchange
and the dates on which notices are given pursuant to this Section
4(f)(i), a Redemption/Distribution Notice shall be deemed to be given
on the day such notice is first mailed by first-class mail, postage
prepaid, to Holders. Each Redemption/Distribution Notice shall be
addressed to the Holders at the address of each such Holder appearing
in the books and records of the Trust. No defect in the
Redemption/Distribution Notice or in the mailing of either thereof with
respect to any Holder shall affect the validity of the redemption or
exchange proceedings with respect to any other Holder.
(ii) In the event that fewer than all the outstanding
Securities are to be redeemed, the particular Securities to be redeemed
shall be selected on a Pro Rata basis (based upon Liquidation Amounts),
or such other method as the Property Trustee shall deem appropriate,
not more than 60 days prior to the date fixed for redemption from the
outstanding Preferred Securities not previously called for redemption,
provided, however, that with respect to Holders that would be required
to hold less than 100 but more than zero Securities as a result of such
pro rata redemption, the Trust shall redeem Securities of each such
Holder so that after such redemption such Holder shall hold either 100
Securities or such Holder no longer holds any Securities and shall use
such method (including, without limitation, by lot) as the Trust shall
deem fair and appropriate, provided, further, that any such proration
may be made on the basis of the aggregate Liquidation Amount of
Securities held by each Holder thereof and may be made by making such
adjustments as the Trust deems fair and appropriate in order that only
Securities in denominations of $25 or integral multiples thereof shall
be redeemed. In respect of Preferred Securities registered in the name
of and held of record by the Clearing Agency or its nominee (or any
successor Clearing Agency or its nominee) or any nominee, the
distribution of the proceeds of such redemption will be made to the
Clearing Agency and disbursed by such Clearing Agency in accordance
with the procedures applied by such agency or nominee.
(iii) If Securities are to be redeemed and the Trust gives a
Redemption/Distribution Notice (which notice will be irrevocable), then
(A) with respect to Preferred Securities issued in book-entry form, by
12:00 noon, New York City time, on the redemption date, provided that
the Debenture Issuer has paid the Property Trustee a sufficient amount
of cash in connection with the related redemption or maturity of the
Debentures by 10:00 a.m., New York City time, on the maturity date or
the date of redemption, as applicable, 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
Redemption Price with respect to such Preferred 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 Preferred Securities issued in certificated form
and Common Securities, provided that the Debenture Issuer has paid the
Property Trustee a sufficient amount of cash in connection with the
related redemption or maturity of the Debentures, the Property Trustee
will pay the Redemption Price to the Holders by check mailed to the
address of the relevant
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Holder appearing on the books and records of the Trust on the
redemption date. If a Redemption/Distribution Notice shall have been
given and funds deposited as required, if applicable, then immediately
prior to the close of business on the date of such deposit, or on the
redemption date, as applicable, Distributions will cease to accumulate
on the Securities so called for redemption and all rights of Holders so
called for redemption will cease, except the right of the Holders of
such Securities to receive the Redemption Price, but without interest
on such Redemption Price.
(iv) Payment of accumulated and unpaid Distributions on the
Redemption Date of the Securities will be subject to the rights of
Holders on the close of business on a regular record date in respect of
a Distribution Date occurring on or prior to such Redemption Date.
Neither the Administrative Trustees nor the Trust
shall be required to register or cause to be registered the transfer of
(i) any Securities beginning on the opening of business 15 days before
the day of mailing of a notice of redemption and ending at the close of
business on the day of such mailing or (ii) any Securities selected for
redemption except the unredeemed portion of any Security being
redeemed. If any date fixed for redemption of Securities is not a
Business Day, then payment of the Redemption Price payable on such date
will be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay)
except that, if such next succeeding Business Day falls in the next
calendar year, such payment shall be made on the immediately preceding
Business Day, with the same force and effect as if made on such date
fixed for redemption. If the Debenture Issuer fails to repay the
Debentures on the date of redemption or on maturity or 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 accrue at the then
applicable rate from the original redemption date to the actual date of
payment, in which case the actual payment date will be considered the
date fixed for redemption for purposes of calculating the Redemption
Price.
(v) Redemption/Distribution Notices shall be sent by the
Property Trustee on behalf of the Trust to (A) in respect of the
Preferred 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 Preferred Security Certificates have
been issued, to the Holders thereof, and (B) in respect of the Common
Securities to the Holder thereof.
(vi) Subject to the foregoing and applicable law (including,
without limitation, United States federal securities laws and banking
laws), provided the acquiror is not the Holder of the Common Securities
or the obligor under the Indenture, the Sponsor or any of its
subsidiaries may at any time and from time to time purchase outstanding
Preferred Securities by tender, in the open market or by private
agreement.
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5. Voting Rights - Preferred Securities.
(a) Except as provided under Sections 5(b), 6(b) and 7 and as
otherwise required by law and the Declaration, the Holders of the Preferred
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 Preferred 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 Preferred Securities. The Trustees
shall not revoke any action previously authorized or approved by a vote of the
Holders of the Preferred Securities except by subsequent vote of such Holders.
Subject to Section 2.7 of the Declaration, the Property Trustee shall notify
each Holder of Preferred Securities of any notice of default with respect to the
Debentures. In addition to obtaining the foregoing approvals of such Holders of
the Preferred Securities, prior to taking any of the foregoing actions (other
than with respect to directing the time, method and place of conducting a
proceeding for any remedy available to a Trustee as directed by the Holders of
Preferred Securities), 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 Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or interest on the Debentures on the due date (or in
the case of redemption, on the redemption date), then a Holder of Preferred
Securities may directly institute a proceeding for enforcement of payment to
such Holder of the principal of or interest on a Like Amount of Debentures (a
"Direct Action") on or after the respective due date specified in the
Debentures, and the amount of the payment will be based on the Holder's pro rata
share of the amount due and owing on all Preferred Securities. In connection
with such Direct Action, the Common Securities Holder will be subrogated to the
rights of such Holder of Preferred Securities to the extent of any payment made
by the Debenture Issuer to such Holder of Preferred Securities in such Direct
Action. Except as provided in the second preceding sentence, the Holders of
Preferred 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 Preferred Securities
may be given at a separate meeting of Holders of Preferred 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 Preferred Securities are entitled to vote, or
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of any matter upon which action by written consent of such Holder is taken, to
be mailed to each Holder of record of Preferred 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 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 Preferred Securities
will be required for the Trust to redeem and cancel Preferred Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
Notwithstanding that Holders of Preferred Securities are
entitled to vote or consent under any of the circumstances described above, any
of the Preferred Securities that are owned by the Sponsor or any Affiliate of
the Sponsor shall not be entitled to vote or consent and shall, for pur poses 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 Declaration, the Holders of the Common
Securities will have no voting rights.
(b) Unless an Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by the holder of the Common
Securities. If an Event of Default has occurred and is continuing, the Property
Trustee and the Delaware Trustee may be removed at such time by the holders of a
Majority in liquidation amount of the outstanding Preferred Securities. In no
event will the holders of the Preferred Securities have the right to vote to
appoint, remove or replace, or increase or decrease the number of, 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 Declaration.
(c) So long as any Debentures are held by the Property
Trustee, subject to Section 2.6 of the Declaration and only after any Event of
Default with respect to the Preferred Securities has been cured, waived or
otherwise eliminated, the Trustees shall not (i) direct the time, method and
place of conducting any proceeding for any remedy available to the Debenture
Trustee, or executing any trust or power conferred on such Debenture Trustee
with respect to the Debentures, (ii) waive any past default that is waivable
under Section 5.07 of the Indenture, (iii) exercise any right to rescind or
annul a declaration of acceleration of the maturity of the principal of the
Debentures or (iv) consent to any amendment, modification or termination of the
Indenture or the Debentures, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of a Majority in
liquidation amount of all outstanding Common Securities; provided, however, that
where a consent under the Indenture would require the consent of each holder of
Debentures affected thereby, no such consent shall be given by the Property
Trustee without the prior approval of each Holder of the Common Securities. The
Trustees shall not revoke any action
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previously authorized or approved by a vote of the Holders of the Common
Securities except by subsequent vote of such Holders. Subject to Section 2.7 of
the Declaration, the Property Trustee shall notify each Holder of Common
Securities of any notice of default with respect to the Debentures. In addition
to obtaining the foregoing approvals of such Holders of the Common Securities,
prior to taking any of the foregoing actions, the Trustees shall obtain an
opinion of counsel experienced in such matters to the effect that the Trust will
not be classified as an association taxable as a corporation for United States
federal income tax purposes on account of such action.
If an Event of Default under the Declaration has occurred and
is continuing and such event is attributable to the failure of the Debenture
Issuer to pay principal of or interest on the Debentures on the due date (or in
the case of redemption, on the redemption date), then a Holder of Common
Securities may institute a Direct Action for enforcement of payment to such
Holder of the principal of or interest on a Like Amount of Debentures on or
after the respective due date specified in the Debentures. In connection with
Direct Action, the rights of the Common Securities Holder will be subordinated
to the rights of such Holder of Preferred 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 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, (ii) a
description of any resolution proposed for adoption at such meeting on which
such Holders are entitled to vote and (iii) instructions for the delivery of
proxies.
No vote or consent of the Holders of the Common Securities
will be required for the Trust to redeem and cancel Common Securities or to
distribute the Debentures in accordance with the Declaration and the terms of
the Securities.
7. Amendments to Declaration and Indenture.
In addition to the requirements set out in Section 12.1 of the
Declaration, the Declaration 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
Declaration that may be inconsistent with any other provisions, or to make any
other provisions with respect to matters or questions arising under the
Declaration which shall not be inconsistent with the other provisions of the
Declaration or (ii) to modify, eliminate or add to any provisions of the
Declaration to such extent as shall be necessary to ensure that the Trust will
be classified for United States federal income tax purposes as a grantor trust
at all times that any Securities are outstanding or to ensure that the Trust
will not be required to register as an
I-10
<PAGE>
"Investment Company" under the Investment Company Act provided, however, that in
each case such action shall not adversely affect the interests of any Holder.
Any amendments of the Declaration pursuant to the immediately preceding sentence
shall become effective when notice thereof is given to the Holders. Under the
circumstances referred to in Section 12.1(c) of the Declaration, the Declaration
also may 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
Declaration may not be amended to (i) change the amount or timing of any
Distribution on the Trust Securities or otherwise adversely affect the amount of
any Distribution required to be made in respect of the Trust Securities as of a
specified date or (ii) restrict the right of a holder of Trust Securities to
institute suit for the enforcement of any such payment on or after such date.
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 Declaration has occurred and is continuing, in which case any funds
available to make such payment shall be paid first to each Holder of the
Preferred Securities pro rata according to the aggregate liquidation amount of
Preferred Securities held by the relevant Holder relative to the aggregate
liquidation amount of all Preferred Securities outstanding, and only after
satisfaction of all amounts owed to the Holders of the Preferred 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. In any such
proration, the Trust may make such adjustments as may be appropriate in order
that only securities in authorized denominations shall be redeemed (subject to
the minimum block requirements of Section 9.2(n) of the Declaration).
9. Ranking.
The Preferred Securities rank pari passu with the Common
Securities and payment thereon shall be made Pro Rata with the Common
Securities, except that, if an Event of Default under the Declaration 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 Preferred Securities shall be paid in
full the Distributions, Redemption Price, Liquidation Distribution and other
payments to which they are entitled at such time.
I-11
<PAGE>
10. Acceptance of Securities Guarantee and Indenture.
Each Holder of Preferred Securities and Common Securities, by
the acceptance thereof, agrees to the provisions of the Preferred 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 or similar rights to
subscribe for any additional securities.
12. Miscellaneous.
These terms constitute a part of the Declaration.
The Sponsor will provide a copy of the Declaration, the
Preferred 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 Sponsor at its principal place
of business.
I-12
<PAGE>
EXHIBIT A-1
FORM OF ____% CUMULATIVE TRUST PREFERRED SECURITY CERTIFICATE
[FACE OF SECURITY]
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
DECLARATION HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITARY OR A NOMINEE OF A DEPOSITARY. THIS SECURITY IS EXCHANGE ABLE FOR
SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE DECLARATION AND MAY
NOT BE TRANSFERRED EXCEPT 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.
UNLESS THIS PREFERRED SECURITY CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE TRUST OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY PREFERRED SECURITY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT
HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE
HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSONS IS WRONGFUL SINCE THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
A1-1
<PAGE>
Number of
Preferred Securities:________ CUSIP NO. ___________
Certificate Evidencing ____% Cumulative Trust Preferred Securities
of
Local Capital Trust I
____% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security)
Local Financial Capital Trust I, a statutory business trust
created under the laws of the State of Delaware (the "Trust"), hereby certifies
that Cede & Co. (the "Holder") is the registered owner of __________ Preferred
Securities ($____________ in aggregate liquidation amount of Preferred
Securities) of the Trust representing undivided beneficial interests in the
assets of the Trust designated the ____% Cumulative Trust Preferred Securities
(liquidation amount $25 per Preferred Security) (the "Preferred Securities").
Subject to the Declaration (as defined below), the Preferred 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 Preferred 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 ________ __, 1999, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Preferred
Securities as set forth in Annex I to the Declaration. Capitalized terms used
but not defined herein shall have the meaning given them in the Declaration. The
Sponsor will provide a copy of the Declaration, the Preferred 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 Sponsor at its principal place of business.
Upon receipt of this certificate, the Holder is bound by the
Declaration and is entitled to the benefits thereunder and to the benefits of
the Preferred 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 Preferred
Securities as evidence of indirect beneficial ownership in the Debentures.
This Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of laws.
A1-2
<PAGE>
IN WITNESS WHEREOF, the Trust has duly executed this
certificate this _________ day of ___________ 1999.
LOCAL FINANCIAL CAPITAL TRUST I
By:_________________________________________
Richard L. Park
Administrative Trustee
PROPERTY TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Preferred Securities referred to in the
within-mentioned Declaration.
THE BANK OF NEW YORK
as Property Trustee
Dated: _____ __, 1999
By:____________________________________
Authorized Signatory
A1-3
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Preferred Security will be fixed
at a rate per annum of ____% (the "Coupon Rate") of the liquidation amount of
$25 per Preferred 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 quarterly period will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). 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 Preferred Securities will be cumulative,
will accumulate from the most recent date to which Distributions have been paid
or duly provided for, if no Distributions have been paid or duly provided for,
from _______ __, 1999 and will be payable quarterly in arrears, on the last day
of March, June, September and December of each year, commencing on _____ __,
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 based
on a 30-day 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 20
consecutive calendar quarterly periods, including the first such quarterly
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 also will be deferred. Despite such
deferral, quarterly Distributions will continue to accumulate with interest
thereon (to the extent permitted by applicable law) at the Coupon Rate
compounded quarterly 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 further
deferment shall only be permitted to the extent that such Extension Period,
together with all extensions occurring both before and after such deferment,
does not exceed 20 consecutive quarterly periods, including the first quarterly
period during such Extension Period, end on a date other than an Interest
Payment Date for the Debentures or extend beyond the Maturity Date of the
Debentures. Payments of accumulated Distributions will be payable to Holders as
they appear on the books and records of the Trust on the first record date after
the end of the Extension Period. Upon the termination of any Extension Period
and the payment of all amounts then due, the Debenture Issuer may commence a new
Extension Period, subject to the above requirements.
Subject to the receipt of any required regulatory approval and
to certain other conditions set forth in the Declaration 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 Preferred Securities shall be redeemable as provided in
the Declaration.
A1-4
<PAGE>
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Preferred
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 Preferred 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 Preferred Security
Certificate)
Signature Guarantee*: ___________________________________
- ----------
* Signature must be guaranteed by an "eligible guarantor institution"
that is a bank, stockbroker, savings and loan association or credit
union meeting the requirements of the Registrar, which requirements
include membership or participation in the Securities Transfer Agents
Medallion Program ("STAMP") or such other "signature guarantee program"
as may be determined by the Registrar in addition to, or in
substitution for, STAMP, all in accordance with the Securities Exchange
Act of 1934, as amended.
A1-5
<PAGE>
Schedule A ***
The initial number of Preferred Securities evidenced by the Certificate
to which this Schedule is attached is _______ (having an aggregate liquidation
amount of $______). The notations in the following table evidence decreases and
increases in the number of Preferred Securities evidenced by such Certificate.
<TABLE>
<CAPTION>
Number of Preferred
Decrease in Number Increase in Number Securities Remaining
of Preferred Securi- of Preferred Securi- after such Decrease or Notation by
ties ties Increase Registrar
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
* Append to Global Preferred Securities only.
</TABLE>
A1-6
<PAGE>
EXHIBIT A-2
[FORM OF COMMON SECURITY CERTIFICATE]
THIS COMMON SECURITY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE
SECURITIES LAWS OR ANY OTHER APPLICABLE SECURITIES LAW. NEITHER THIS COMMON
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, REGISTRATION.
THE HOLDER OF THIS COMMON SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR OTHERWISE TRANSFER THIS COMMON SECURITY, PRIOR TO THE
DATE (THE "RESALE RESTRICTION TERMINATION DATE") WHICH IS TWO YEARS AFTER THE
LATER OF THE ORIGINAL ISSUANCE DATE HEREOF AND THE LAST DATE ON WHICH LOCAL
FINANCIAL CORPORATION (THE "COMPANY") OR ANY "AFFILIATE" OF THE COMPANY WAS THE
OWNER OF THIS PREFERRED SECURITY (OR ANY PREDECESSOR OF THIS PREFERRED 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) 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 (E) 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) OR (E) TO REQUIRE THE
DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS AND/OR OTHER INFORMATION
SATISFACTORY TO EACH OF THEM, AND (ii) PURSUANT TO CLAUSE (D), 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.
A2-1
<PAGE>
THIS COMMON SECURITY IS NOT TRANSFERABLE EXCEPT AS SET FORTH IN SECTION
9.1(c) OF THE AMENDED AND RESTATED DECLARATION OF TRUST OF LOCAL FINANCIAL
CAPITAL TRUST I, DATED AS OF _______ __, 1999, AS THE SAME MAY BE AMENDED FROM
TIME TO TIME.
A2-2
<PAGE>
Certificate No. 1
Certificate Evidencing Common Securities
of
Local Financial Capital Trust I
____% Common Securities
(liquidation amount $25 per Common Security)
Local Financial Capital Trust I, a statutory business trust
formed under the laws of the State of Delaware (the "Trust"), hereby certifies
that Local Financial Corporation (the "Holder") is the registered owner of
______ common securities of the Trust representing undivided beneficial
interests in the assets of the Trust designated the ____% Common Securities
(liquidation amount $25 per Common Security) (the "Common Securities"). Subject
to the limitations in Section 9.1(c) of the Declaration (as defined below), the
Common Securities are transferable on the books and records of the Trust, in
person or by a duly authorized attorney, upon surrender of this certificate duly
endorsed and in proper form for transfer. The designation, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities represented hereby are issued and shall in all respects be subject to
the provisions of the Amended and Restated Declaration of Trust of the Trust
dated as of ________ __, 1999, as the same may be amended from time to time (the
"Declaration"), including the designation of the terms of the Common Securities
as set forth in Annex I to the Declaration. Capitalized terms used but not
defined herein shall have the meaning given them in the Declaration. The Sponsor
will provide a copy of the Declaration, the Common Securities Guarantee, the
Preferred 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
Declaration 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 Debentures.
This Certificate shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to principles
of conflicts of laws.
A2-3
<PAGE>
IN WITNESS WHEREOF, the Trust has executed this certificate
this ____ day of _________, 1999.
LOCAL FINANCIAL CAPITAL TRUST I
By:______________________________________
Richard L. Park
Administrative Trustee
A2-4
<PAGE>
[FORM OF REVERSE OF SECURITY]
Distributions payable on each Common Security will be fixed at
a rate per annum of ______% (the "Coupon Rate") of the liquidation amount of $25
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 quarterly period will bear interest thereon compounded quarterly at the
Coupon Rate (to the extent permitted by applicable law). 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 accrue from the most recent date to which Distributions have been paid or
duly provided for or, if no Distributions have been paid or duly provided for,
from ______ __, 1999 and will be payable quarterly in arrears, on the last day
of March, June, September and December of each year, commencing on _____ __,
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 20 consecutive calendar
quarterly periods, including the first such quarterly 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 also will be deferred. Despite such
deferral, Distributions will continue to accumulate with interest there on (to
the extent permitted by applicable law) at the Coupon Rate compounded quarterly
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 further deferment shall only
be permitted to the extent that such Extension Period, together with all
extensions occurring both before and after such deferment, does not exceed 20
consecutive quarterly periods, including the first quarterly period during such
Extension Period, or end on a date other than an Interest Payment Date for the
Debentures or extend beyond the Maturity Date of the Debentures. Payments of
accrued Distributions will be payable to Holders as they appear on the books and
records of the Trust on the first record date after the end of the Extension
Period. Upon the termination of any Extension Period and the payment of all
amounts then due, the Debenture Issuer may commence a new Extension Period,
subject to the above requirements.
Subject to the receipt of any required regulatory approval and
to certain other conditions set forth in the Declaration 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 to 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.
A2-5
<PAGE>
Under certain circumstances, the right of the holders of the
Common Securities shall be subordinate to the rights of the holders of the
Preferred Securities (as defined in the Declaration), as provided in the
Declaration.
The Common Securities shall be redeemable as provided in the
Declaration.
---------------------
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this Common 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 Common 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 Common Security
Certificate)
A2-6
<PAGE>
EXHIBIT B
SPECIMEN OF DEBENTURE
B-1
<PAGE>
EXHIBIT C
UNDERWRITING AGREEMENT
C-1
Exhibit 4.6
====================================
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
LOCAL FINANCIAL CORPORATION
Dated as of ______ __, 1999
====================================
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS AND INTERPRETATION
<S> <C> <C> <C>
SECTION 1.1 Definitions and Interpretation....................................................... 2
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application..................................................... 5
SECTION 2.2 Lists of Holders of Trust Preferred Securities....................................... 6
SECTION 2.3 Reports by the Trust Preferred Securities Guarantee Trustee.......................... 6
SECTION 2.4 Periodic Reports to Trust Preferred Securities Guarantee
Trustee......................................................................... 6
SECTION 2.5 Evidence of Compliance with Conditions Precedent...................................... 6
SECTION 2.6 Guarantee Events of Default; Waiver.................................................. 7
SECTION 2.7 Guarantee Event of Default; Notice................................................... 7
SECTION 2.8 Conflicting Interests................................................................ 7
ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Securities Guarantee
Trustee......................................................................... 8
SECTION 3.2 Certain Rights of Trust Preferred Securities Guarantee Trustee...................... 10
SECTION 3.3 Not Responsible for Recitals or Issuance of Trust Preferred Securities
Guarantee....................................................................... 12
ARTICLE IV
TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Securities Guarantee Trustee; Eligibility............................ 12
SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred Securities
Guarantee Trustee.................................................................... 13
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
ARTICLE V
GUARANTEE
<S> <C> <C> <C>
SECTION 5.1 Guarantee............................................................................ 14
SECTION 5.2 Waiver of Notice and Demand.......................................................... 14
SECTION 5.3 Obligations Not Affected............................................................. 14
SECTION 5.4 Rights of Holders.................................................................... 15
SECTION 5.5 Guarantee of Payment................................................................. 16
SECTION 5.6 Subrogation.......................................................................... 16
SECTION 5.7 Independent Obligations.............................................................. 16
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions........................................................... 16
SECTION 6.2 Ranking.............................................................................. 17
ARTICLE VII
TERMINATION
SECTION 7.1 Termination.......................................................................... 17
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation.......................................................................... 18
SECTION 8.2 Indemnification...................................................................... 18
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns............................................................... 18
SECTION 9.2 Amendments........................................................................... 19
SECTION 9.3 Notices.............................................................................. 19
SECTION 9.4 Benefit.............................................................................. 20
SECTION 9.5 Governing Law........................................................................ 20
</TABLE>
ii
<PAGE>
TRUST PREFERRED SECURITIES GUARANTEE AGREEMENT
This Trust Preferred Securities Guarantee Agreement (the
"Trust Preferred Securities Guarantee"), dated as of _________ __, 1999, is
executed and delivered by Local Financial Corporation, a Delaware corporation
(the "Guarantor"), and The Bank of New York, a New York banking corporation, as
trustee, for the benefit of the Holders (as defined herein) from time to time of
the Trust Preferred Securities (as defined herein) of Local Financial Capital
Trust I, a Delaware statutory business trust (the "Issuer").
WHEREAS, pursuant to an Amended and Restated Declaration of
Trust (the "Declaration"), dated as of _______ __, 1999, among the trustees of
the Issuer named therein, the Guarantor, as sponsor, and the Holders from time
to time of undivided beneficial interests in the assets of the Issuer, the
Issuer is issuing on the date hereof, _______ trust preferred securities, having
an aggregate liquidation amount of $__________, such trust preferred securities
being designated the ___% Cumulative Trust Preferred Securities (collectively
the "Trust Preferred Securities"); and
WHEREAS, as incentive for the Holders to purchase the Trust
Preferred Securities, the Guarantor desires irrevocably and unconditionally to
agree, to the extent set forth in this Trust Preferred Securities Guarantee, to
pay to the Holders the Guarantee Payments (as defined herein) and to make
certain other payments on the terms and conditions set forth herein; and
WHEREAS, the Guarantor is executing and delivering a guarantee
agreement (the "Common Securities Guarantee"), with substantially identical
terms to this Trust Preferred Securities Guarantee, for the benefit of the
holders of the Common Securities (as defined herein), except that if an Event of
Default (as defined in the Declaration) has occurred and is continuing, the
rights of holders of the Common Securities to receive Guarantee Payments under
the Common Securities Guarantee are subordinated, to the extent and in the
manner set forth in the Common Securities Guarantee, to the rights of holders of
Trust Preferred Securities to receive Guarantee Payments under this Trust
Preferred Securities Guarantee;
NOW, THEREFORE, in consideration of the purchase by each
Holder, which purchase the Guarantor hereby acknowledges shall benefit the
Guarantor, the Guarantor executes and delivers this Trust Preferred Securities
Guarantee for the benefit of the Holders.
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ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Trust Preferred Securities Guarantee, unless the
context otherwise requires:
(a) capitalized terms used in this Trust Preferred
Securities Guarantee but not defined in the preamble
above have the respective meanings assigned to them
in this Section 1.1;
(b) a term defined in the Declaration as at the date of
execution of this Trust Preferred Securities
Guarantee have the same meaning when used in this
Trust Preferred Securities Guarantee unless otherwise
defined in this Trust Preferred Securities Guarantee;
(c) a term defined anywhere in this Trust Preferred
Securities Guarantee has the same meaning throughout;
(d) all references to "the Trust Preferred Securities
Guarantee" or "this Trust Preferred Securities
Guarantee" are to this Trust Preferred Securities
Guarantee as modified, supplemented or amended from
time to time;
(e) all references in this Trust Preferred Securities
Guarantee to Articles and Sections are to Articles
and Sections of this Trust Preferred Securities
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the
same meaning when used in this Trust Preferred
Securities Guarantee, unless otherwise defined in
this Trust Preferred Securities Guarantee or unless
the context otherwise requires; and
(g) a reference to the singular includes the plural and
vice versa.
"Affiliate" has the same meaning as given to that term in Rule
405 under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a Saturday or a
Sunday, or a day on which banking institutions in The City of New York or
Oklahoma City, Oklahoma are authorized or required by law or executive order to
close.
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"Common Securities" means the securities representing common
undivided beneficial interests in the assets of the Issuer.
"Corporate Trust Office" means the office of the Trust
Preferred Securities Guarantee Trustee at which the corporate trust business of
the Trust Preferred Securities Guarantee Trustee shall, at any particular time,
be principally administered, which office at the date of execution of this Trust
Preferred Securities Guarantee is located at 101 Barclay Street, New York, New
York 10286.
"Covered Person" means any Holder or beneficial owner of Trust
Preferred Securities.
"Debentures" means the series of subordinated deferrable
interest debentures of the Guarantor designated the ____% Junior Subordinated
Deferrable Interest Debentures due ______ __, 2029 held by the Property Trustee
(as defined in the Declaration) of the Issuer.
"Guarantee Event of Default" means a default by the Guarantor
on any of its payment or other obligations under this Trust Preferred Securities
Guarantee; provided, however, that except with respect to a default in payment
of any Guarantee Payment, the Guarantor shall have received notice of default
and shall not have cured such default within 60 days after receipt of such
notice.
"Guarantee Payments" means the following payments or
distributions, without duplication, with respect to the Trust Preferred
Securities, to the extent not paid or made by the Issuer: (i) any accumulated
and unpaid Distributions (as defined in the Declaration) that are required to be
paid on such Trust Preferred Securities to the extent the Issuer has funds on
hand legally avail able therefor at such time; (ii) the redemption price,
including all accumulated and unpaid Distributions to the date of redemption
(the "Redemption Price") to the extent the Issuer has funds on hand legally
available therefor at such time, with respect to any Trust Preferred Securities
called for redemption by the Issuer; and (iii) upon a voluntary or involuntary
termination and liquidation of the Issuer (other than in connection with the
distribution of Debentures to the Holders in exchange for Trust Preferred
Securities as provided in the Declaration), the lesser of (a) the aggregate of
the liquidation amount and all accumulated and unpaid Distributions on the Trust
Preferred Securities to the date of payment, to the extent the Issuer has funds
on hand legally available therefor, and (b) the amount of assets of the Issuer
remaining available for distribution to Holders in liquidation of the Issuer (in
either case, the "Liquidation Distribution"). If an Event of Default has
occurred and is continuing, no Guarantee Payments under the Common Securities
Guarantee with respect to the Common Securities or any guarantee payment under
any Other Common Securities Guarantees shall be made until the Holders shall be
paid in full the Guarantee Payments to which they are entitled under this Trust
Preferred Securities Guarantee.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer, of any Trust Preferred Securities; provided, however,
that, in determining whether the holders of the requisite percentage of Trust
Preferred Securities have given any request, notice, consent or waiver
hereunder, "Holder" shall not include the Guarantor or any Affiliate of the
Guarantor.
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"Indemnified Person" means the Trust Preferred Securities
Guarantee Trustee, any Affiliate of the Trust Preferred Securities Guarantee
Trustee, or any officers, directors, shareholders, members, partners, employees,
representatives, nominees, custodians or agents of the Trust Preferred
Securities Guarantee Trustee.
"Indenture" means the Indenture dated as of _____ __, 1999,
among the Guarantor (the "Debenture Issuer") and The Bank of New York, as
trustee (the "Indenture Trustee"), pursuant to which the Debentures are to be
issued to the Property Trustee of the Issuer.
"Indenture Event of Default" shall mean any event specified in
Section 5.01 of the Indenture.
"Majority in liquidation amount of the Trust Preferred
Securities" means, except as provided by the Declaration, the terms of the
Preferred Securities or by the Trust Indenture Act, a vote by Holder(s) of more
than 50% of the aggregate liquidation amount of all Trust Preferred Securities.
In determining whether the Holders of the requisite amount of Trust Preferred
Securities have voted, Trust Preferred Securities which are owned by the
Guarantor or any Affiliate of the Guarantor or any other obligor on the Trust
Preferred Securities shall be disregarded for the purpose of any such
determination.
"Officers' Certificate" means, with respect to the Guarantor,
a certificate signed by any two of the following: the Chairman, a Vice Chairman,
the Chief Executive Officer, the President, a Vice President, the Comptroller,
the Secretary or an Assistant Secretary of the Guarantor. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Trust Preferred Securities Guarantee (other than pursuant
to Section 314(d)(4) of the Trust Indenture Act) shall include:
(a) a statement that each officer signing the Officers'
Certificate has read the covenant or condition and the definitions
relating thereto;
(b) a statement that each such officer has made such
examination or investigation as, in such officer's opinion, is
necessary to enable such officer to express an informed opinion as to
whether or not such covenant or condition has been complied with; and
(c) a statement as to whether, in the opinion of each such
officer, such condition or covenant has been complied with.
"Other Common Securities Guarantees" shall have the same
meaning as "Other Guarantees" as defined in the Common Securities Guarantee.
"Other Debentures" means all junior subordinated debentures
issued by the Guarantor from time to time and sold to trusts to be established
by the Guarantor (if any), in each case similar to the Issuer.
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"Other Guarantees" means all guarantees to be issued by the
Guarantor with respect to trust preferred securities (if any) similar to the
Trust Preferred Securities issued by other trusts to be established by the
Guarantor (if any), in each case similar to the Issuer.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other entity
of whatever nature.
"Responsible Officer" means, with respect to the Trust
Preferred Securities Guarantee Trustee, any officer within the Corporate Trust
Office of the Trust Preferred Securities Guarantee Trustee with direct
responsibility for the administration of this Trust Preferred Securities
Guarantee and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of that officer's
knowledge of and familiarity with the particular subject.
"Successor Trust Preferred Securities Guarantee Trustee" means
a successor Trust Preferred Securities Guarantee Trustee possessing the
qualifications to act as Trust Preferred Securities Guarantee Trustee under
Section 4.1.
"Trust Preferred Securities Guarantee Trustee" means The Bank
of New York, a New York banking corporation, until a Successor Trust Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment pursuant to the terms of this Trust Preferred Securities Guarantee
and thereafter means each such Successor Trust Preferred Securities Guarantee
Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended from time to time, or any successor legislation.
"Trust Securities" means the Common Securities and the Trust
Preferred Securities, collectively.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Trust Preferred Securities Guarantee is subject to
the provisions of the Trust Indenture Act that are required to be part of this
Trust Preferred Securities Guarantee and shall, to the extent applicable, be
governed by such provisions; and
(b) if and to the extent that any provision of this Trust
Preferred Securities Guarantee limits, qualifies or conflicts with the duties
imposed by Section 310 to 317, inclusive, of the Trust Indenture Act, such
imposed duties shall control.
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SECTION 2.2 Lists of Holders of Trust Preferred Securities
(a) The Guarantor shall provide the Trust Preferred Securities
Guarantee Trustee (unless the Trust Preferred Securities Guarantee Trustee is
otherwise the registrar of the Trust Preferred Securities) with a list, in such
form as the Trust Preferred Securities Guarantee Trustee may reasonably require,
of the names and addresses of the Holders of the Trust Preferred Securities
("List of Holders") as of such date, (i) within 14 days after each record date
for payment of Distributions, as defined in the Declaration, and (ii) at any
other time within 30 days of receipt by the Guarantor of a written request for a
List of Holders as of a date no more than 14 days before such List of Holders is
given to the Trust Preferred Securities Guarantee Trustee, provided, that the
Guarantor shall not be obligated to provide such List of Holders at any time the
List of Holders does not differ from the most recent List of Holders given to
the Trust Preferred Securities Guarantee Trustee by the Guarantor. The Trust
Preferred Securities Guarantee Trustee shall preserve, in as current a form as
is reasonably practicable, all information contained in a List of Holders given
to it, provided that it may destroy any List of Holders previously given to it
on receipt of a new List of Holders.
(b) The Trust Preferred Securities Guarantee Trustee shall
comply with its obligations under Sections 311(a), 311(b) and Section 312(b) of
the Trust Indenture Act.
SECTION 2.3 Reports by the Trust Preferred Securities Guarantee Trustee
Within 60 days after May 15 of each year, commencing May 15,
2000, the Trust Preferred Securities Guarantee Trustee shall provide to the
Holders such reports as are required by Section 313 of the Trust Indenture Act,
if any, in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Trust Preferred Securities Guarantee Trustee shall also
comply with the other requirements of Section 313 of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Trust Preferred Securities Guarantee
Trustee
The Guarantor shall provide to the Trust Preferred Securities
Guarantee Trustee such documents, reports and information as required by Section
314 of the Trust Indenture Act (if any) and the compliance certificate required
by Section 314 of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act, provided that such
compliance certificate shall be delivered on or before 120 days after the end of
each fiscal year of the Guarantor.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Trust Preferred Securities
Guarantee Trustee such evidence of compliance with any conditions precedent, if
any, provided for in this Trust Preferred Securities Guarantee that relate to
any of the matters set forth in Section 314(c) of the Trust Inden-
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ture Act. Any certificate or opinion required to be given by an officer pursuant
to Section 314(c)(1) may be given in the form of an Officers' Certificate.
SECTION 2.6 Guarantee Events of Default; Waiver
The Holders of a Majority in liquidation amount of Trust
Preferred Securities may, by vote or by written consent, on behalf of all
Holders, waive any past Guarantee Event of Default and its consequences. Upon
such waiver, any such Guarantee Event of Default shall cease to exist, and any
Guarantee Event of Default arising therefrom shall be deemed to have been cured,
for every purpose of this Trust Preferred Securities Guarantee, but no such
waiver shall extend to any subsequent or other default or Guarantee Event of
Default or impair any right consequent thereon.
SECTION 2.7 Guarantee Event of Default; Notice
(a) The Trust Preferred Securities Guarantee Trustee shall,
within 90 days after the occurrence of a Guarantee Event of Default, mail by
first class postage prepaid, to all Holders, notices of all Guarantee Events of
Default actually known to a Responsible Officer, unless such de faults have been
cured before the giving of such notice; provided, that, except in the case of a
Guarantee Event of Default in the timing or payment of any Guarantee Payment,
the Trust Preferred Securities Guarantee Trustee shall be protected in
withholding such notice if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or a Responsible Officer of the
Trust Preferred Securities Guarantee Trustee in good faith determines that the
withholding of such notice is in the interests of the Holders.
(b) The Trust Preferred Securities Guarantee Trustee shall not
be deemed to have knowledge of any Guarantee Event of Default unless the Trust
Preferred Securities Guarantee Trustee shall have received written notice from
the Guarantor, or a Responsible Officer charged with the administration of this
Trust Preferred Securities Guarantee shall have obtained actual knowledge, of
such Guarantee Event of Default.
SECTION 2.8 Conflicting Interests
The Declaration shall be deemed to be specifically described
in this Trust Preferred Securities Guarantee for the purposes of clause (i) of
the first proviso contained in Section 310(b) of the Trust Indenture Act.
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ARTICLE III
POWERS, DUTIES AND RIGHTS OF
TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Trust Preferred Securities Guarantee
Trustee
(a) This Trust Preferred Securities Guarantee shall be held by
the Trust Preferred Securities Guarantee Trustee for the benefit of the Holders,
and the Trust Preferred Securities Guarantee Trustee shall not transfer this
Trust Preferred Securities Guarantee to any Person except a Holder exercising
his, her or its rights pursuant to Section 5.4(b) or to a Successor Trust
Preferred Securities Guarantee Trustee on acceptance by such Successor Trust
Preferred Securities Guarantee Trustee of its appointment to act as Successor
Trust Preferred Securities Guarantee Trustee. The right, title and interest of
the Trust Preferred Securities Guarantee Trustee shall automatically vest in any
Successor Trust Preferred Securities Guarantee Trustee, and such vesting and
succession of title shall be effective whether or not conveyancing documents
have been executed and delivered pursuant to the appointment of such Successor
Trust Preferred Securities Guarantee Trustee.
(b) If a Guarantee Event of Default actually known to a
Responsible Officer has occurred and is continuing, the Trust Preferred
Securities Guarantee Trustee shall enforce this Trust Preferred Securities
Guarantee for the benefit of the Holders.
(c) The Trust Preferred Securities Guarantee Trustee, before
the occurrence of any Guarantee Event of Default and after the curing of all
Guarantee Events of Default that may have occurred, shall undertake to perform
only such duties as are specifically set forth in this Trust Preferred
Securities Guarantee, and no implied covenants shall be read into this Trust
Preferred Securities Guarantee against the Trust Preferred Securities Guarantee
Trustee. In case a Guarantee Event of Default has occurred (that has not been
cured or waived pursuant to Section 2.6) and is actually known to a Responsible
Officer, the Trust Preferred Securities Guarantee Trustee shall exercise such of
the rights and powers vested in it by this Trust Preferred Securities Guarantee,
and use the same degree of care and skill in its exercise thereof, as a prudent
person would exercise or use under the circumstances in the conduct of his or
her own affairs.
(d) No provision of this Trust Preferred Securities Guarantee
shall be construed to relieve the Trust Preferred Securities Guarantee Trustee
from liability for its own negligent action, its own negligent failure to act,
or its own willful misconduct, except that:
(i) prior to the occurrence of any Guarantee Event of Default
and after the curing or waiving of all such Guarantee Events of Default
that may have occurred:
(A) the duties and obligations of the Trust Preferred
Securities Guarantee Trustee shall be determined solely by the
express provisions of this Trust Preferred Securities
Guarantee, and the Trust Preferred Securities Guarantee
Trustee shall not be liable except for the performance of such
duties and obligations as are specifically
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set forth in this Trust Preferred Securities Guarantee, and no
implied covenants or obligations shall be read into this Trust
Preferred Securities Guarantee against the Trust Preferred
Securities Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Trust Preferred Securities Guarantee Trustee, the Trust
Preferred Securities Guarantee Trustee may conclusively rely,
as to the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or opinions
furnished to the Trust Preferred Securities Guarantee Trustee
and conforming to the requirements of this Trust Preferred
Securities Guarantee; but in the case of any such certificates
or opinions that by any provision hereof are specifically
required to be furnished to the Trust Preferred Securities
Guarantee Trustee, the Trust Preferred Securities Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this Trust
Preferred Securities Guarantee (but need not confirm or
investigate the accuracy of mathematical calculations or other
facts stated therein);
(ii) the Trust Preferred Securities Guarantee Trustee shall
not be liable for any error of judgment made in good faith by a
Responsible Officer, unless it shall be proved that the Trust Preferred
Securities Guarantee Trustee was negligent in ascertaining the
pertinent facts upon which such judgment was made;
(iii) the Trust Preferred Securities Guarantee Trustee shall
not be liable with respect to any action taken or omitted to be taken
by it in good faith in accordance with the direction of the Holders of
a Majority in liquidation amount of the Trust Preferred Securities
relating to the time, method and place of conducting any proceeding for
any remedy available to the Trust Preferred Securities Guarantee
Trustee, or exercising any trust or power conferred upon the Trust
Preferred Securities Guarantee Trustee under this Trust Preferred
Securities Guarantee; and
(iv) no provision of this Trust Preferred Securities Guarantee
shall require the Trust Preferred Securities Guarantee Trustee to
expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of
any of its rights or powers, if the Trust Preferred Securities
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it
under the terms of this Trust Preferred Securities Guarantee or
indemnity, reasonably satisfactory to the Trust Preferred Securities
Guarantee Trustee, against such risk or liability is not reasonably
assured to it.
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SECTION 3.2 Certain Rights of Trust Preferred Securities Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Trust Preferred Securities Guarantee Trustee may
conclusively rely, and shall be fully protected in acting or refraining
from acting, upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond,
debenture, note, other evidence of indebtedness or other paper or
document believed by it to be genuine and to have been signed, sent or
presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by
this Trust Preferred Securities Guarantee may be sufficiently evidenced
by an Officers' Certificate.
(iii) Whenever, in the administration of this Trust Preferred
Securities Guarantee, the Trust Preferred Securities Guarantee Trustee
shall deem it desirable that a matter be proved or established before
taking, suffering or omitting any action hereunder, the Trust Preferred
Securities Guarantee Trustee (unless other evidence is herein
specifically prescribed) may, in the absence of bad faith on its part,
request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the
Guarantor.
(iv) The Trust Preferred Securities Guarantee Trustee shall
have no duty to see to any recording, filing or registration of any
instrument (or any rerecording, refiling or registration thereof).
(v) The Trust Preferred Securities Guarantee Trustee may
consult with counsel of its selection, and the written advice or
opinion of such counsel with respect to legal matters shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in accordance
with such advice or opinion. Such counsel may be counsel to the
Guarantor or any of its Affiliates and may include any of its
employees. The Trust Preferred Securities Guarantee Trustee shall have
the right at any time to seek instructions concerning the
administration of this Trust Preferred Securities Guarantee from any
court of competent jurisdiction.
(vi) The Trust Preferred Securities Guarantee Trustee shall be
under no obligation to exercise any of the rights or powers vested in
it by this Trust Preferred Securities Guarantee at the request or
direction of any Holder, unless such Holder shall have provided to the
Trust Preferred Securities Guarantee Trustee such security and
indemnity, reasonably satisfactory to the Trust Preferred Securities
Guarantee Trustee, against the costs, expenses (including attorneys'
fees and expenses and the expenses of the Trust Preferred Securities
Guarantee Trustee's agents, nominees or custodians) and liabilities
that might be incurred by it in complying with such request or
direction, including such reasonable advances as may be requested by
the Trust Preferred Securities Guarantee Trustee; provided that,
nothing contained in this Section 3.2(a)(vi) shall be taken to relieve
the Trust Preferred Securities
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Guarantee Trustee, upon the occurrence of a Guarantee Event of Default,
of its obligation to exercise the rights and powers vested in it by
this Trust Preferred Securities Guarantee.
(vii) The Trust Preferred Securities Guarantee Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, certificate, statement, instrument, opinion, report,
notice, request, direction, consent, order, bond, debenture, note,
other evidence of indebtedness or other paper or document, but the
Trust Preferred Securities Guarantee Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters
as it may see fit.
(viii) The Trust Preferred Securities Guarantee Trustee may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents, nominees, custodians
or attorneys, and the Trust Preferred Securities Guarantee Trustee
shall not be responsible for any misconduct or negligence on the part
of any agent or attorney appointed with due care by it hereunder.
(ix) Any action taken by the Trust Preferred Securities
Guarantee Trustee or its agents hereunder shall bind the Holders, and
the signature of the Trust Preferred Securities Guarantee Trustee or
its agents alone shall be sufficient and effective to perform any such
action. No third party shall be required to inquire as to the authority
of the Trust Preferred Securities Guarantee Trustee to so act or as to
its compliance with any of the terms and provisions of this Trust
Preferred Securities Guarantee, both of which shall be conclusively
evidenced by the Trust Preferred Securities Guarantee Trustee's or its
agent's taking such action.
(x) Whenever in the administration of this Trust Preferred
Securities Guarantee the Trust Preferred Securities Guarantee Trustee
shall deem it desirable to receive instructions with respect to
enforcing any remedy or right or taking any other action hereunder, the
Trust Preferred Securities Guarantee Trustee (i) may request
instructions from the Holders of a Majority in liquidation amount of
the Trust Preferred Securities, (ii) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received and (iii) shall be protected in conclusively relying on or
acting in accordance with such instructions.
(xi) The Trust Preferred Securities Guarantee Trustee shall
not be liable for any action taken, suffered, or omitted to be taken by
it in good faith, without negligence, and reasonably believed by it to
be authorized or within the discretion or rights or powers conferred
upon it by this Trust Preferred Securities Guarantee.
(b) No provision of this Trust Preferred Securities Guarantee
shall be deemed to impose any duty or obligation on the Trust Preferred
Securities Guarantee Trustee to perform any act or acts or exercise any right,
power, duty or obligation conferred or imposed on it in any jurisdiction in
which it shall be illegal, or in which the Trust Preferred Securities Guarantee
Trustee
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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 Trust Preferred
Securities Guarantee Trustee shall be construed to be a duty.
SECTION 3.3. Not Responsible for Recitals or Issuance of Trust Preferred
Securities Guarantee
The recitals contained in this Trust Preferred Securities
Guarantee shall be taken as the statements of the Guarantor, and the Trust
Preferred Securities Guarantee Trustee does not assume any responsibility for
their correctness. The Trust Preferred Securities Guarantee Trustee makes no
representation as to the validity or sufficiency of this Trust Preferred
Securities Guarantee.
ARTICLE IV
TRUST PREFERRED SECURITIES GUARANTEE TRUSTEE
SECTION 4.1 Trust Preferred Securities Guarantee Trustee; Eligibility
(a) There shall at all times be a Trust Preferred Securities
Guarantee Trustee which shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the
laws of the United States of America or any State or Territory thereof
or of the District of Columbia, or a corporation or Person permitted by
the Securities and Exchange Commission to act as an institutional
trustee under the Trust Indenture Act, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus
of at least 50 million U.S. dollars ($50,000,000), and subject to
supervision or examination by Federal, State, Territorial or District
of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority referred to above, then, for the
purposes of this Section 4.1(a)(ii), the combined capital and surplus
of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so
published.
(b) If at any time the Trust Preferred Securities Guarantee
Trustee shall cease to be eligible to so act under Section 4.1(a), the Trust
Preferred Securities Guarantee Trustee shall immediately resign in the manner
and with the effect set out in Section 4.2(c).
(c) If the Trust Preferred Securities Guarantee Trustee has or
shall acquire any "conflicting interest" within the meaning of Section 310(b) of
the Trust Indenture Act, the Trust Preferred Securities Guarantee Trustee and
Guarantor shall in all respects comply with the provisions of Section 310(b) of
the Trust Indenture Act.
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SECTION 4.2 Appointment, Removal and Resignation of Trust Preferred
Securities Guarantee Trustee
(a) Subject to Section 4.2(b), the Trust Preferred Securities
Guarantee Trustee may be appointed or removed without cause at any time by the
Guarantor except during a Guarantee Event of Default.
(b) The Trust Preferred Securities Guarantee Trustee shall not
be removed in accordance with Section 4.2(a) until a Successor Trust Preferred
Securities Guarantee Trustee has been appointed and has accepted such
appointment by written instrument executed by such Successor Trust Preferred
Securities Guarantee Trustee and delivered to the Guarantor.
(c) The Trust Preferred Securities Guarantee Trustee shall
hold office until a Successor Trust Preferred Securities Guarantee Trustee shall
have been appointed or until its removal or resignation. The Trust Preferred
Securities Guarantee Trustee may resign from office (without need for prior or
subsequent accounting) by an instrument in writing executed by the Trust
Preferred Securities Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Trust Preferred Securities
Guarantee Trustee has been appointed and has accepted such appointment by
instrument in writing executed by such Successor Trust Preferred Securities
Guarantee Trustee and delivered to the Guarantor and the resigning Trust
Preferred Securities Guarantee Trustee.
(d) If no Successor Trust Preferred Securities Guarantee
Trustee shall have been appointed and accepted appointment as provided in this
Section 4.2 within 60 days after delivery of an instrument of removal or
resignation, the Trust Preferred Securities Guarantee Trustee resigning or being
removed may petition any court of competent jurisdiction for appointment of a
Successor Trust Preferred Securities Guarantee Trustee. Such court may
thereupon, after prescribing such notice, if any, as it may deem proper, appoint
a Successor Trust Preferred Securities Guarantee Trustee.
(e) No Trust Preferred Securities Guarantee Trustee shall be
liable for the acts or omissions to act of any Successor Trust Preferred
Securities Guarantee Trustee.
(f) Upon termination of this Trust Preferred Securities
Guarantee or removal or resignation of the Trust Preferred Securities Guarantee
Trustee pursuant to this Section 4.2, the Guarantor shall pay to the Trust
Preferred Securities Guarantee Trustee all amounts due to the Trust Preferred
Securities Guarantee Trustee for fees and reimbursement of expenses which have
accrued to the date of such termination, removal or resignation.
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ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in
full to the Holders the Guarantee Payments (without duplication of amounts
theretofore paid by the Issuer), as and when due, regardless of any defense,
right of set-off or counterclaim that the Issuer may have or assert. The
Guarantor's obligation to make a Guarantee Payment may be satisfied by direct
payment of the required amounts by the Guarantor to the Holders or by causing
the Issuer to pay such amounts to the Holders.
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Trust
Preferred Securities Guarantee and of any liability to which it applies or may
apply, presentment, demand for payment, any right to require a proceeding first
against the Issuer or any other Person before proceeding against the Guarantor,
protest, notice of nonpayment, notice of dishonor, notice of redemption and all
other notices and demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the
Guarantor under this Trust Preferred Securities Guarantee shall be absolute and
unconditional and shall remain in full force and effect until the entire
liquidation amount of all Trust Preferred Securities shall have been paid and
such obligations, covenants, agreements and duties in no way be affected or
impaired by reason of the happening from time to time of any event, including
without limitation the following, whether or not with notice to, or the consent
of, the Guarantor:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or implied
agreement, covenant, term or condition relating to the Trust Preferred
Securities to be performed or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all
or any portion of the Distributions, Redemption Price, Liquidation Distribution
(as defined in the Declaration) or any other sums payable under the terms of the
Trust Preferred Securities or the extension of time for the performance of any
other obligation under, arising out of, or in connection with, the Trust
Preferred Securities (other than an extension of time for payment of
Distributions, Redemption Price, Liquidation Distribution or other sum payable
that results from the extension of any interest payment period on the Debentures
permitted by the Indenture);
(c) any failure, omission, delay or lack of diligence on the
part of the Property Trustee or the Holders to enforce, assert or exercise any
right, privilege, power or remedy conferred
14
<PAGE>
on the Property Trustee or the Holders pursuant to the terms of the Trust
Preferred Securities, or any action on the part of the Issuer granting
indulgence or extension of any kind;
(d) the voluntary or involuntary liquidation, dissolution,
sale of any collateral, receivership, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of debt of, or other similar proceedings affecting, the Issuer or any of the
assets of the Issuer;
(e) any invalidity of, or defect or deficiency in, the Trust
Preferred Securities;
(f) the settlement or compromise of any obligation guaranteed
hereby or hereby incurred;
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it being
the intent of this Section 5.3 that the obligations of the Guarantor with
respect to the Guarantee Payments shall be absolute and unconditional under any
and all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain consent of, the Guarantor with respect to the happening of any of the
foregoing. No set-off, counterclaim, reduction or diminution of any obligation,
or any defense of any kind or nature that the Guarantor has or may have against
any Holder shall be available hereunder to the Guarantor against such Holder to
reduce the payments to it under this Trust Preferred Securities Guarantee.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in liquidation amount of the
Trust Preferred Securities have the right to direct the time, method and place
of conducting any proceeding for any remedy available to the Trust Preferred
Securities Guarantee Trustee in respect of this Trust Preferred Securities
Guarantee or exercising any trust or power conferred upon the Trust Preferred
Securities Guarantee Trustee under this Trust Preferred Securities Guarantee.
(b) If the Trust Preferred Securities Guarantee Trustee fails
to enforce such Trust Preferred Securities Guarantee, any Holder may institute a
legal proceeding directly against the Guarantor to enforce the Trust Preferred
Securities Guarantee Trustee's rights under this Trust Preferred Securities
Guarantee, without first instituting a legal proceeding against the Issuer, the
Trust Preferred Securities Guarantee Trustee or any other Person or entity.
Notwithstanding the foregoing, if the Guarantor has failed to make a Guarantee
Payment, a Holder may directly institute a proceeding against the Guarantor for
enforcement of the Trust Preferred Securities Guarantee for such payment to the
Holder of the principal of or interest on the Debentures on or after the
respective due dates specified in the Debentures, and the amount of the payment
will be based on the Holder's pro rata share of the amount due and owing on all
of the Trust Preferred Securities. The Guarantor
15
<PAGE>
waives any right or remedy to require that any action be brought first against
the Issuer or any other Person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Trust Preferred Securities Guarantee creates a guarantee
of payment and not of collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of
the Holders against the Issuer in respect of any amounts paid to such Holders by
the Guarantor under this Trust Preferred Securities Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of payment under this Trust Preferred
Securities Guarantee, if, at the time of any such payment, any amounts are due
and unpaid under this Trust Preferred Securities Guarantee. If any amount shall
be paid to the Guarantor in violation of the preceding sentence, the Guarantor
agrees to hold such amount in trust for the Holders and to pay over such amount
to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Trust Preferred
Securities, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Trust
Preferred Securities Guarantee notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
LIMITATION OF TRANSACTIONS; SUBORDINATION
SECTION 6.1 Limitation of Transactions
So long as any Trust Preferred Securities remain outstanding,
if there shall have occurred a Guarantee Event of Default or an Event of
Default, or an event that, with the giving of notice or the lapse of time, or
both, would be a Guarantee Event of Default or an Event of Default then, prior
to the payment of all accrued interest on outstanding Debentures, the Guarantor
shall not (i) declare or pay any dividends or distributions on, or redeem,
purchase, acquire, or make a liquidation payment with respect to, any of the
Guarantor's capital stock (which includes common and preferred stock), (ii) make
any payment of principal, interest or premium, if any, on or repay or repurchase
or redeem any debt securities of the Guarantor (including any Other Debentures)
that rank pari passu with or junior in right of payment to the Debentures or
(iii) make any guarantee pay-
16
<PAGE>
ments with respect to any of the foregoing (other than (a) dividends or
distributions in shares of, or options, warrants, rights to subscribe for or
purchase shares of, common stock of the Guarantor, (b) any declaration of a
dividend in connection with the implementation of a stockholders' rights plan,
or the issuance of stock under any such plan in the future, or the redemption or
repurchase of any such rights pursuant thereto, (c) payments under the Trust
Preferred Securities Guarantee, (d) the purchase of fractional shares resulting
from a reclassification of the Guarantor's capital stock, (e) the purchase of
fractional interests in shares of the Guarantor's capital stock pursuant to the
conversion or exchange provisions of such capital stock or the security being
converted or exchanged and (f) purchases of common stock related to the issuance
of common stock or rights under any of the Guarantor's benefit plans for its
directors, officers or employees or any of the Guarantor's dividend reinvestment
plans).
SECTION 6.2 Ranking
This Trust Preferred Securities Guarantee will constitute an
unsecured obligation of the Guarantor and will rank (i) subordinate and junior
in right of payment to Senior and Subordinated Indebtedness (as defined in the
Indenture), to the same extent and in the same manner that the Debentures are
subordinated to Senior and Subordinated Indebtedness pursuant to the Indenture,
(ii) pari passu with the Debentures, the Other Debentures, the Common Securities
Guarantee, any Other Guarantee, any Other Common Securities Guarantee and the
most Senior Preferred Stock now or hereafter issued by the Guarantor, and (iii)
senior to the Guarantor's capital stock. If an Event of Default has occurred and
is continuing, the rights of the holders of the Common Securities to receive any
payments shall be subordinated to the rights of the Holders to receive Guarantee
Payments hereunder.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Trust Preferred Securities Guarantee shall terminate (i)
upon full payment of the Redemption Price (as defined in the Declaration) of all
Trust Preferred Securities or (ii) upon liquidation of the Issuer and the full
payment of the amounts payable in accordance with the Declaration or the
distribution of the Debentures to the Holders and the holders of Common
Securities. Notwithstanding the foregoing, this Trust Preferred Securities
Guarantee will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must restore payment of any sums paid under the
Trust Preferred Securities or under this Trust Preferred Securities Guarantee.
17
<PAGE>
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Trust Preferred
Securities Guarantee and in a manner that such Indemnified Person reasonably
believed to be within the scope of the authority conferred on such Indemnified
Person by this Trust Preferred Securities Guarantee or by law, except that an
Indemnified Person shall be liable for any such loss, damage or claim incurred
by reason of such Indemnified Person's negligence or willful misconduct with
respect to such acts or omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which Distributions to Holders might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for,
and to hold each Indemnified Person harmless against, any and all loss,
liability, damage, claim or expense incurred without negligence or bad faith on
its part, arising out of or in connection with the acceptance or administration
of the trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Trust Preferred Securities Guarantee.
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Trust
Preferred Securities Guarantee shall bind the successors, assigns, receivers,
trustees and representatives of the Guarantor and shall inure to the benefit of
the Holders then outstanding.
18
<PAGE>
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely
affect the rights of Holders (in which case no consent of Holders will be
required), this Trust Preferred Securities Guarantee may only be amended with
the prior approval of the Holders of a Majority in liquidation amount of the
Trust Preferred Securities (including the stated amount that would be paid on
redemption, liquidation or otherwise, plus accrued and unpaid Distributions to
the date upon which the voting percentages are determined). The provisions of
the Declaration with respect to consents to amendments thereof (whether at a
meeting or otherwise) shall apply to the giving of such approval.
Prior to executing any amendment hereto, the Trust Preferred
Securities Guarantee Trustee shall be entitled to receive and rely upon an
Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Trust Preferred Securities Guarantee Agreement.
SECTION 9.3 Notices
All notices provided for in this Trust Preferred Securities
Guarantee shall be in writing, duly signed by the party giving such notice, and
shall be delivered, telecopied or mailed by first class mail, as follows:
(a) If given to the Issuer, in care of the Administrative
Trustee at the Issuer's mailing address set forth below (or such other address
as the Issuer may give notice of to the Holders and the Trust Preferred
Securities Guarantee Trustee):
Local Financial Capital Trust I
3601 NW 63rd Strteet
Oklahoma City, Oklahoma 73116
Attention: Richard L. Park
Administrative Trustee
Telecopy: (405) 841-2289
(b) If given to the Trust Preferred Securities Guarantee
Trustee, at the Trust Preferred Securities Guarantee Trustee's mailing address
set forth below (or such other address as the Trust Preferred Securities
Guarantee Trustee may give notice of to the Holders, the Guarantor and the
Issuer):
The Bank of New York
101 Barclay Street
21st Floor West
New York, New York 10286
Attention: Corporate Trust Trustee Administration
Telecopy: (212) 815-5917
19
<PAGE>
(c) If given to the Guarantor, at the Guarantor's mailing
address set forth below (or such other address as the Guarantor may give notice
of to the Holders and the Trust Preferred Securities Guarantee Trustee):
Local Financial Corporation
3601 NW 63rd Street
Oklahoma City, Oklahoma 73116
Attention: Jan A. Norton
President
Telecopy: (405) 841-2289
(d) If given to any Holder, at the address set forth on the
books and records of the Issuer.
All such notices shall be deemed to have been given when
received in person, telecopied with receipt confirmed, or mailed by first class
mail, postage prepaid except that if a notice or other document is refused
delivery or cannot be 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 9.4 Benefit
This Trust Preferred Securities Guarantee is solely for the
benefit of the Holders and, subject to Section 3.1(a), is not separately
transferable from the Trust Preferred Securities.
SECTION 9.5 Governing Law
THIS TRUST PREFERRED SECURITIES GUARANTEE SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
20
<PAGE>
THIS TRUST PREFERRED SECURITIES GUARANTEE is executed as of
the day and year first above written.
LOCAL FINANCIAL CORPORATION, as Guarantor
By:_______________________________________
Jan A. Norton
President
THE BANK OF NEW YORK, as Trust Preferred
Securities Guarantee Trustee
By:__________________________
Name:
Title:
21
Exhibit 5.1
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone (202) 347-0300
August 25, 1999
Board of Directors
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the registration under the Securities Act of 1933, as
amended (the "Act"), of up to $30,000,000 aggregate principal amount of Junior
Subordinated Deferrable Interest Debentures (the "Junior Subordinated
Debentures") of Local Financial Corporation, a Delaware corporation (the
"Corporation"), up to $30,000,000 aggregate liquidation amount of Cumulative
Trust Preferred Securities (the "Trust Preferred Securities") of Local Financial
Capital Trust I, a business trust created under the laws of the State of
Delaware (the "Issuer"), and the Guarantee with respect to the Trust Preferred
Securities (the "Guarantee") to be executed and delivered by the Corporation for
the benefit of the holders from time to time of the Trust Preferred Securities,
we, as your counsel, have examined such corporate records, certificates and
other documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion.
Upon the basis of such examination, we advise you that, when:
(i) the Registration Statement relating to the Junior
Subordinated Debentures, the Trust Preferred Securities and the
Guarantee has become effective under the Act;
(ii) the Guarantee Agreement relating to the Guarantee with
respect to the Trust Preferred Securities of the Issuer has been duly
executed and delivered;
(iii) the Junior Subordinated Debentures have been duly executed
and authenticated in accordance with the Indenture and issued and
delivered as contemplated in the Registration Statement; and
<PAGE>
Board of Directors
August 25, 1999
Page 2
(iv) the Trust Preferred Securities have been duly executed in
accordance with the Amended and Restated Declaration of Trust of the
Issuer and issued and delivered as contemplated in the Registration
Statement,
the Junior Subordinated Debentures and the Guarantee relating to the Trust
Preferred Securities of the Issuer will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
We understand that you have received an opinion regarding the Trust
Preferred Securities from Richards, Layton & Finger, P.A., special Delaware
counsel for the Corporation and the Issuer. We are expressing no opinion with
respect to the matters contained in such opinion.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation and other sources believed by us
to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Legal
Matters" in the Prospectus. In giving such consent, we do not thereby admit that
we are in the category of persons whose consent is required under Section 7 of
the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Norman B. Antin
--------------------------
Norman B. Antin, a Partner
Exhibit 5.2
[Letterhead of Richards, Layton & Finger, P.A.]
August 25, 1999
Local Financial Capital Trust I
c/o Local Financial Corporation
3601 NW 63rd Street
Oklahoma City, Oklahoma 73116
Re: Local Financial Capital Trust I
-------------------------------
Ladies and Gentlemen:
We have acted as special Delaware counsel for Local Financial
Corporation, a Delaware corporation (the "Company"), and Local Financial Capital
Trust I, a Delaware business trust (the "Trust"), in connection with the matters
set forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust, dated as of August
17, 1999 (the "Certificate"), as filed in the office of the Secretary of State
of the State of Delaware (the "Secretary of State") on August 17, 1999;
(b) The Declaration of Trust of the Trust, dated as of August
17, 1999, among the Company and the trustees of the Trust named therein;
(c) A form of Amended and Restated Declaration of Trust of the
Trust (including Annex I and Exhibits A-1 and A-2) (the "Declaration"), to be
entered into among the Company, as sponsor, the trustees of the Trust named
therein, and the holders, from time to time, of undivided beneficial interests
in the assets of the Trust, attached as an exhibit to the Registration Statement
(as defined below);
<PAGE>
Local Financial Capital Trust I
August 25, 1999
Page 2
(d) The Registration Statement on Form S-3 (the "Registration
Statement"), including a prospectus (the "Prospectus"), relating to the trust
preferred securities of the Trust representing undivided beneficial interests in
the assets of the Trust (each, a "Preferred Security" and collectively, the
"Preferred Securities"), as proposed to be filed by the Company and the Trust
with the Securities and Exchange Commission on or about August 25, 1999; and
(e) A Certificate of Good Standing for the Trust, dated August
25, 1999, obtained from the Secretary of State.
Capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any
documents other than the documents listed in paragraphs (a) through (e) above.
In particular, we have not reviewed any document (other than the documents
listed in paragraphs (a) through (e) above) that is referred to in or
incorporated by reference into the documents reviewed by us. We have assumed
that there exists no provision in any document that we have not reviewed that is
inconsistent with the opinions stated herein. We have conducted no independent
factual investigation of our own but rather have relied solely upon the
foregoing documents, the statements and information set forth therein and the
additional matters recited or assumed herein, all of which we have assumed to be
true, complete and accurate in all material respects.
With respect to all documents examined by us, we have assumed
(i) the authenticity of all documents submitted to us as authentic originals,
(ii) the conformity with the originals of all documents submitted to us as
copies or forms, and (iii) the genuineness of all signatures.
For purposes of this opinion, we have assumed (i) that the
Declaration and the Certificate are in full force and effect and have not been
amended, (ii) except to the extent provided in paragraph 1 below, the due
creation or due organization or due formation, as the case may be, and valid
existence in good standing of each party to the documents examined by us under
the laws of the jurisdiction governing its creation, organization or formation,
(iii) the legal capacity of natural persons who are parties to the documents
examined by us, (iv) that each of the parties to the documents examined by us
has the power and authority to execute and deliver, and to perform its
obligations under, such documents, (v) the due authorization, execution and
delivery by all parties thereto of all documents examined by us, (vi) the
receipt by each Person to whom a Preferred Security is to be issued by the Trust
(collectively, the "Preferred Security Holders") of a preferred security
certificate for such Preferred Security and the payment for the Preferred
Security acquired by it, in accordance with the Declaration and the Registration
Statement, and (vii) that the Preferred Securities are issued and sold to the
<PAGE>
Local Financial Capital Trust I
August 25, 1999
Page 3
Preferred Security Holders in accordance with the Declaration and the
Registration Statement. We have not participated in the preparation of the
Registration Statement and assume no responsibility for its contents.
This opinion is limited to the laws of the State of Delaware
(excluding the securities laws of the State of Delaware), and we have not
considered and express no opinion on the laws of any other jurisdiction,
including federal laws and rules and regulations relating thereto. Our opinions
are rendered only with respect to Delaware laws and rules, regulations and
orders thereunder that are currently in effect.
Based upon the foregoing, and upon our examination of such
questions of law and statutes of the State of Delaware as we have considered
necessary or appropriate, and subject to the assumptions, qualifications,
limitations and exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in
good standing as a business trust under the Business Trust Act.
2. The Preferred Securities will represent valid and, subject
to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Preferred Security Holders, as beneficial owners of the
Trust, will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Preferred Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement. In
addition, we hereby consent to the use of our name under the heading "Legal
Matters" in the Prospectus. In giving the foregoing consents, we do not thereby
admit that we come within the category of Persons whose consent is required
under Section 7 of the Securities Act of 1933, as amended, or the rules and
regulations of the Securities and Exchange Commission thereunder. Except as
stated above, without our prior written consent, this opinion may not be
furnished or quoted to, or relied upon by, any other Person for any purpose.
Very truly yours,
/s/ Richards, Layton & Finger, P.A.
BJK/MKS
Exhibit 8.0
Law Offices
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
12th Floor
734 15th Street, N.W.
Washington, D.C. 20005
Telephone (202) 347-0300
August 25, 1999
Board of Directors
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
Re: Registration Statement on Form S-3
Ladies and Gentlemen:
As special federal tax counsel to Local Financial Capital Trust I (the
"Issuer") and Local Financial Corporation in connection with the issuance by the
Issuer of up to $30,000,000 of its Cumulative Trust Preferred Securities
pursuant to the prospectus (the "Prospectus") contained in the Registration
Statement, and assuming the operative documents described in the Prospectus will
be performed in accordance with the terms described therein, we hereby confirm
to you our opinion as set forth under the heading "Certain Federal Income Tax
Consequences" in the Prospectus, subject to the limitations set forth therein.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Certain
Federal Income Tax Consequences" in the Prospectus. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
ELIAS, MATZ, TIERNAN & HERRICK L.L.P.
By: /s/ Norman B. Antin
---------------------------
Norman B. Antin, a Partner
Exhibit 23.1
Independent Auditor's Consent
The Board of Directors
Local Financial Corporation:
We consent to the incorporation by reference in the registration statement on
Form S-3 of our report dated February 4, 1999, relating to the consolidated
statements of financial condition of Local Financial Corporation and
subsidiaries as of December 31, 1998 and 1997, and the related consolidated
statements of operations, stockholders' equity, and cash flows for the year
ended December 31, 1998 and for the six months ended December 31, 1997, which
report appears in the December 31, 1998 annual report on Form 10-K of Local
Financial Corporation and to the reference to our firm under the heading
"Experts" in the Prospectus.
Oklahoma City, Oklahoma /s/ KPMG LLP
August 25, 1999
Exhibit 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the use of our reports
(and to all references to our Firm) included in or made a part of this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Oklahoma City, Oklahoma
August 20, 1999
Exhibit 25.1
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
LOCAL FINANCIAL CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Delaware 73-6316302
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
(Address of principal executive offices) (Zip code)
---------------------------
Cumulative Trust Preferred Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------- --------------------------------------------
Name Address
- ---------------------------------------------------------------- --------------------------------------------
<S> <C>
Superintendent of Banks of the State of New York 2 Rector Street, New York, N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-----------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
-3-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $5,597,807
Interest-bearing balances........................... 4,075,775
Securities:
Held-to-maturity securities......................... 785,167
Available-for-sale securities....................... 4,159,891
Federal funds sold and Securities purchased under
agreements to resell................................ 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned
income............................................ 38,028,772
LESS: Allowance for loan and
lease losses...................................... 568,617
LESS: Allocated transfer risk
reserve........................................... 16,352
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,443,803
Trading Assets......................................... 1,563,671
Premises and fixed assets (including capitalized
leases)............................................. 683,587
Other real estate owned................................ 10,995
Investments in unconsolidated subsidiaries and
associated companies................................ 184,661
Customers' liability to this bank on acceptances
outstanding......................................... 812,015
Intangible assets...................................... 1,135,572
Other assets........................................... 5,607,019
-----------
Total assets........................................... $64,536,926
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $26,488,980
Noninterest-bearing................................. 10,626,811
Interest-bearing.................................... 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 20,655,414
Noninterest-bearing................................. 156,471
Interest-bearing.................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase............................ 3,729,439
Demand notes issued to the U.S.Treasury................ 257,860
Trading liabilities.................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less......... 496,235
With remaining maturity of more than one year
through three years............................... 465
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 822,455
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,846,649
-----------
Total liabilities...................................... 58,624,027
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities....................... ( 7,956)
Cumulative foreign currency translation adjustments.... ( 31,510)
-----------
Total equity capital................................... 5,912,899
-----------
Total liabilities and equity capital................... $64,536,926
===========
</TABLE>
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell __|
Exhibit 25.2
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
LOCAL FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 65-0424192
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
(Address of principal executive offices) (Zip code)
---------------------------
Junior Subordinated Deferrable Interest Debentures
(Title of the indenture securities)
================================================================================
<PAGE>
1. General information. Furnish the following information as to the
Trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------- --------------------------------------------
Name Address
- ---------------------------------------------------------------- --------------------------------------------
<S> <C>
Superintendent of Banks of the State of New York 2 Rector Street, New York, N.Y. 10006,
and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission,
are incorporated herein by reference as an exhibit hereto, pursuant to
Rule 7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17
C.F.R. 229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which
contains the authority to commence business and a grant of
powers to exercise corporate trust powers. (Exhibit 1 to
Amendment No. 1 to Form T-1 filed with Registration Statement
No. 33-6215, Exhibits 1a and 1b to Form T-1 filed with
Registration Statement No. 33-21672 and Exhibit 1 to Form T-1
filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to
Form T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the
Act. (Exhibit 6 to Form T-1 filed with Registration Statement
No. 33-44051.)
7. A copy of the latest report of condition of the Trustee
published pursuant to law or to the requirements of its
supervising or examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
-----------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
-3-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $5,597,807
Interest-bearing balances........................... 4,075,775
Securities:
Held-to-maturity securities......................... 785,167
Available-for-sale securities....................... 4,159,891
Federal funds sold and Securities purchased under
agreements to resell................................ 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned
income............................................ 38,028,772
LESS: Allowance for loan and
lease losses...................................... 568,617
LESS: Allocated transfer risk
reserve........................................... 16,352
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,443,803
Trading Assets......................................... 1,563,671
Premises and fixed assets (including capitalized
leases)............................................. 683,587
Other real estate owned................................ 10,995
Investments in unconsolidated subsidiaries and
associated companies................................ 184,661
Customers' liability to this bank on acceptances
outstanding......................................... 812,015
Intangible assets...................................... 1,135,572
Other assets........................................... 5,607,019
-----------
Total assets........................................... $64,536,926
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $26,488,980
Noninterest-bearing................................. 10,626,811
Interest-bearing.................................... 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 20,655,414
Noninterest-bearing................................. 156,471
Interest-bearing.................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase............................ 3,729,439
Demand notes issued to the U.S.Treasury................ 257,860
Trading liabilities.................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less......... 496,235
With remaining maturity of more than one year
through three years............................... 465
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 822,455
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,846,649
-----------
Total liabilities...................................... 58,624,027
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities....................... ( 7,956)
Cumulative foreign currency translation adjustments.... ( 31,510)
-----------
Total equity capital................................... 5,912,899
-----------
Total liabilities and equity capital................... $64,536,926
===========
</TABLE>
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell __|
Exhibit 25.3
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
---------------------------
THE BANK OF NEW YORK
---------------------------------------------------
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
One Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
---------------------------
LOCAL FINANCIAL CORPORATION
(Exact name of obligor as specified in its charter)
Delaware 65-0424192
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Local Financial Corporation
3601 N.W. 63rd Street
Oklahoma City, Oklahoma 73116
(Address of principal executive offices) (Zip code)
---------------------------
Guarantee of Cumulative Trust Preferred Securities
of Local Financial Capital Trust I
(Title of the indenture securities)
= = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = = =
<PAGE>
1. General information. Furnish the following information as to the Trustee:
(a) Name and address of each examining or supervising authority to which
it is subject.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York, N.Y.
State of New York 10006, and Albany, N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York, N.Y.
10045
Federal Deposit Insurance Corporation Washington, D.C.20429
New York Clearing House Association New York, New York 10005
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
16. List of Exhibits.
Exhibits identified in parentheses below, on file with the Commission, are
incorporated herein by reference as an exhibit hereto, pursuant to Rule
7a-29 under the Trust Indenture Act of 1939 (the "Act") and 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 24th day of August, 1999.
THE BANK OF NEW YORK
By: /s/ REMO J. REALE
----------------------
Name: REMO J. REALE
Title: VICE PRESIDENT
-3-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of One Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1999,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
In Thousands
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.. $5,597,807
Interest-bearing balances........................... 4,075,775
Securities:
Held-to-maturity securities......................... 785,167
Available-for-sale securities....................... 4,159,891
Federal funds sold and Securities purchased under
agreements to resell................................ 2,476,963
Loans and lease financing receivables:
Loans and leases, net of unearned
income............................................ 38,028,772
LESS: Allowance for loan and
lease losses...................................... 568,617
LESS: Allocated transfer risk
reserve........................................... 16,352
Loans and leases, net of unearned income,
allowance, and reserve............................ 37,443,803
Trading Assets......................................... 1,563,671
Premises and fixed assets (including capitalized
leases)............................................. 683,587
Other real estate owned................................ 10,995
Investments in unconsolidated subsidiaries and
associated companies................................ 184,661
Customers' liability to this bank on acceptances
outstanding......................................... 812,015
Intangible assets...................................... 1,135,572
Other assets........................................... 5,607,019
-----------
Total assets........................................... $64,536,926
===========
<PAGE>
LIABILITIES
Deposits:
In domestic offices................................. $26,488,980
Noninterest-bearing................................. 10,626,811
Interest-bearing.................................... 15,862,169
In foreign offices, Edge and Agreement
subsidiaries, and IBFs............................ 20,655,414
Noninterest-bearing................................. 156,471
Interest-bearing.................................... 20,498,943
Federal funds purchased and Securities sold under
agreements to repurchase............................ 3,729,439
Demand notes issued to the U.S.Treasury................ 257,860
Trading liabilities.................................... 1,987,450
Other borrowed money:
With remaining maturity of one year or less......... 496,235
With remaining maturity of more than one year
through three years............................... 465
With remaining maturity of more than three years.... 31,080
Bank's liability on acceptances executed and
outstanding......................................... 822,455
Subordinated notes and debentures...................... 1,308,000
Other liabilities...................................... 2,846,649
-----------
Total liabilities...................................... 58,624,027
===========
EQUITY CAPITAL
Common stock........................................... 1,135,284
Surplus................................................ 815,314
Undivided profits and capital reserves................. 4,001,767
Net unrealized holding gains (losses) on
available-for-sale securities....................... ( 7,956)
Cumulative foreign currency translation adjustments.... ( 31,510)
-----------
Total equity capital................................... 5,912,899
-----------
Total liabilities and equity capital................... $64,536,926
===========
</TABLE>
<PAGE>
I, Thomas J. Mastro, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Thomas J. Mastro
We, the undersigned directors, attest to the correctness of this Report
of Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
__
Thomas A. Reyni |
Alan R. Griffith | Directors
Gerald L. Hassell __|
