As filed with the Securities and Exchange Commission on January 8, 1999.
Registration No. 33-_________ and Registration No. 33-_________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-2
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
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RESOURCE BANKSHARES CORPORATION RESOURCE CAPITAL TRUST I
(Exact name of registrant as specified in its charter) (Exact name of registrant as specified in its charter)
Virginia Delaware
(State or other jurisdiction of incorporation or organization) (State or other jurisdiction of incorporation or organization)
54-1904386
(I.R.S. Employer Identification Number) (I.R.S. Employer Identification Number)
3720 Virginia Beach Boulevard c/o Resource Bankshares Corporation
Virginia Beach, VA 23452 3720 Virginia Beach Boulevard
(757) 463-2265 Virginia Beach, VA 23452
(757) 463-2265
(Address, including zip code, and telephone number, including (Address, including zip code, and telephone number, including
area code,of registrant's principal executive offices) area code,of registrant's principal executive offices)
</TABLE>
Lawrence N. Smith
3720 Virginia Beach Boulevard
Virginia Beach, VA 23452
(Name, address, including zip code, and telephone number, including
area code, of agent for service)
Copies of Communications to:
R. Brian Ball, Esquire
Wayne A. Whitham, Jr., Esquire
Williams, Mullen, Christian & Dobbins
1021 East Cary Street, 16th Floor
Richmond, VA 23219
(804) 643-1991
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the Registration Statement becomes effective.
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, check the following box. |_|
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this form, check the following box. |X|
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. |_|_________
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|__________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box. |_|
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CALCULATION OF REGISTRATION FEE
========================================== ===================== ===================== ===================== ==================
Title of Shares Amount of Shares Proposed Maximum Proposed Maximum Amount of
to be Registered to be Registered Offering Price Per Aggregate Offering Registration Fee
Unit Price
- ------------------------------------------ --------------------- --------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
Junior Subordinated Debt Securities of $9,200,000 $25.00 $9,200,000 N/A
Resource Bankshares Corporation (1)(2)
- ------------------------------------------ --------------------- --------------------- --------------------- ------------------
Capital Securities of Resource Capital 368,000 $25.00 $9,200,000 $2,558
Trust I (2)
- ------------------------------------------ --------------------- --------------------- --------------------- ------------------
Guarantee of Resource Bankshares N/A N/A N/A N/A
Corporation as to the Capital
Securities (2)(3)
- ------------------------------------------ --------------------- --------------------- --------------------- ------------------
TOTAL $9,200,000(4) 100% $9,200,000 $2,558
========================================== ===================== ===================== ===================== ==================
</TABLE>
(1) Junior Subordinated Debt Securities to be purchased by Resource Capital
Trust I with the proceeds of the sale of the Capital Securities. No
separate consideration will be received from purchasers of Capital
Securities for the Junior Subordinated Debt Securities.
(2) This Registration Statement is deemed to cover $9,200,000 aggregate
principal amount of Junior Subordinated Debt Securities the rights of
holders of such debt securities under the related Indenture, the rights of
holders of the Capital Securities under the Amended and Restated
Declaration of Trust of Resource Capital Trust I, and the rights of holders
of the Capital Securities under the Guarantee of Resource Bankshares
Corporation, which taken together fully and unconditionally guarantee the
obligations of Resource Capital Trust I under the Capital Securities.
(3) No separate consideration will be received for the guarantee of Resource
Bankshares Corporation.
(4) Such amounts represent the aggregate liquidation amount of Capital
Securities to be issued hereunder and $9,200,000 aggregate principal amount
of Junior Subordinated Debt Securities to be issued hereunder.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED JANUARY __, 1999
PROSPECTUS
RESOURCE CAPITAL TRUST I
$8,000,000
[logo]
$___________ CAPITAL SECURITIES
(LIQUIDATION AMOUNT $25 PER CAPITAL SECURITY)
FULLY AND UNCONDITIONALLY GUARANTEED, TO THE EXTENT DESCRIBED HEREIN, BY
RESOURCE BANKSHARES CORPORATION
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THE TRUST
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NOTICE TO INVESTORS -- WE URGE YOU TO o The Trust is offering capital securities
READ CAREFULLY THE "RISK FACTORS" representing preferred beneficial interests
SECTION OF THIS PROSPECTUS BEGINNING in the assets of the Trust.
ON PAGE 12, WHERE WE DESCRIBE
SPECIFIC RISKS ASSOCIATED WITH THE o The common securities representing common
SECURITIES OFFERED BY THIS beneficial interests in the assets of the
PROSPECTUS, AND THE OTHER INFORMATION Trust will be owned by Resource Bankshares
CONTAINED IN THIS PROSPECTUS, BEFORE Corporation.
YOU MAKE YOUR INVESTMENT DECISION.
o The sole assets of the Trust are the ___%
THESE SECURITIES ARE NOT DEPOSITS OR junior subordinated debt securities of
OTHER OBLIGATIONS OF A BANK AND ARE Resource Bankshares Corporation, which
NOT INSURED BY THE FEDERAL DEPOSIT mature on ________, 2029.
INSURANCE CORPORATION OR ANY OTHER
GOVERNMENTAL AGENCY. o Distributions on the capital securities will
be paid quarterly on March 15, June 15,
September 15 and December 15 of each year,
commencing on ________, 1999.
We plan to have the capital securities approved
for quotation on the Nasdaq OTC Bulletin Board
under the trading symbol "RBKVP."
</TABLE>
THE OFFERING
PER SECURITY TOTAL
Public price......................... $25.00 $8,000,000
Underwriting discounts (1)(2)........ $ (2) $ (2)
Proceeds to the Trust(3)(4).......... $25.00 $8,000,000
(1) Resource Capital Trust I and Resource Bankshares Corporation have agreed
to indemnify the Underwriter against certain liabilities, including
liabilities under the Securities Act of 1933, as amended. See
"Underwriting."
(2) Because the proceeds of the sale of the securities will be used by the
Trust to purchase the ___% junior subordinated debt securities of
Resource Bankshares Corporation, Resource Bankshares Corporation will pay
the Underwriters as compensation $_____ per Capital Security, or $_____
in the aggregate.
(3) All expenses of this offering will be paid by Resource Bankshares
Corporation.
(4) Assumes the sale of the entire 320,000 Capital Securities offered hereby.
If the Trust exercises its right to increase the aggregate liquidation
amount of the Capital Securities by $1.2 million, total proceeds to the
Trust will be $9.2 million and the total compensation to the Underwriter
will increase to $_________.
The Capital Securities are offered by the Underwriter, as Selling Agent for the
Trust, on a best efforts basis, which means that the Underwriter is not required
to sell any specific number or dollar amount of Capital Securities, but will use
its best efforts to sell the Capital Securities offered. The Capital Securities
are offered subject to prior sale, and subject to certain conditions, including
the right to reject any order in whole or in part. This Offering will close on
or about January __, 1999. Funds received by the Underwriter will be deposited
at, and held by, Wilmington Trust Company in a noninterest-bearing escrow
account in Wilmington, Delaware. It is expected that such funds will be released
from the escrow account and delivery of the Capital Securities will be made on
or about ____________, 1999.
___________________________________________________
Neither the Securities and Exchange Commission nor any State Securities
Commission has approved these securities or determined that this Prospectus is
accurate or complete. Any representation to the contrary is a criminal offense.
___________________________________________________
McKINNON & COMPANY, INC.
The date of this Prospectus is January __, 1999
The Information in this Prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This Prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
Resource Bankshares Corporation (the "Corporation," "we," "us" or
"our") is subject to the information requirements of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), and accordingly, files annual,
quarterly and current reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). You may read and copy any
document that the Corporation files at the Commission's public reference room
facility located at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
Commission's regional offices at 7 World Trade Center, 13th Floor, Suite 1300,
New York, New York 10048 and Suite 1400, Citicorp Center, 500 West Madison
Street, Chicago, Illinois 60661. Please call the Commission at 1-800-SEC-0330
for further information on the public reference room. The Commission maintains
an Internet site at http://www.sec.gov that contains reports, proxy and
information statements and other information regarding issuers (including the
Corporation) that file documents with the Commission electronically through the
Commission's electronic data gathering, analysis and retrieval system ("EDGAR").
The Corporation's common stock is traded on the American Stock Exchange under
the symbol "RBV." The Corporation's reports, proxy and information statements
may also be reviewed at the offices of the National Association of Securities
Dealers, Inc., 1735 K Street, N.W., Washington D.C. 20006.
This Prospectus is part of a registration statement filed by the Trust
and the Corporation with the Commission. Because the rules and regulations of
the Commission allow the Trust and the Corporation to omit certain portions of
the registration statement from this Prospectus, this Prospectus does not
contain all the information set forth in the registration statement. You should
review the registration statement and the exhibits filed with such registration
statement for further information regarding the Corporation, the Trust and the
Capital Securities being sold by this Prospectus. The registration statement and
its exhibits may be inspected at the public reference facilities of the
Commission at the addresses set forth above.
INCORPORATION OF INFORMATION THAT WE FILE WITH THE SEC
The Commission allows the Corporation to "incorporate by reference" the
information the Corporation filed with it, which means that the Corporation can
disclose important information to you by referring to those documents. The
information incorporated by reference is considered to be part of this
Prospectus.
o Annual Report on Form 10-KSB for the year ended December 31, 1997
of Resource Bank, the predecessor of the Corporation.
o Quarterly Report on Form 10-QSB of Resource Bank, the predecessor
of the Corporation, for the three months ended March 31, 1998 and
Quarterly Reports on Form 10-QSB of the Corporation for the three
month periods ended June 30, 1998 and September 30, 1998.
Copies of the Annual Report on Form 10-KSB for the year ended December
31, 1997, the Quarterly Report on Form 10-QSB for the nine months ended
September 30, 1998 and Resource Bank's Proxy Statement for the 1998 Annual
Meeting of Shareholders are being delivered to you with this Prospectus.
You should rely only on the information incorporated by reference or
provided in this Prospectus or any supplement. The Corporation has not
authorized anyone else to provide you with different information. Neither the
Corporation nor the Trust is making an offer of the Capital Securities in any
state where the offer is not permitted. You should not assume that the
information in this Prospectus or any supplement is accurate as of any date
other than the date on the front of those documents.
-2-
<PAGE>
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us orally or in writing at the following
address:
Lu Ann Klevecz
Assistant Vice President
Resource Bank
3720 Virginia Beach Blvd.
Virginia Beach, Virginia 23452
(757) 463-2265
FORWARD-LOOKING STATEMENTS
Information contained (or incorporated by reference) in this Prospectus
may constitute "forward-looking statements." Statements used (or incorporated by
reference) in this Prospectus which use words such as "believes," "expects,"
"may," "will," "should," "projected," "contemplates" or "anticipates" or the
negative of such terms or other variations may constitute forward-looking
statements. Forward-looking statements are inherently uncertain. There is also
no assurance that such forward-looking statements will be accurate. Such
forward-looking statements include the Corporation's expectations and estimates
as to its business operations, including growth in net interest income and net
income, as well as its expectations and beliefs as to the projected costs and
anticipated timetable to address Year 2000 compliance issues, the adequacy of
its plans to address such issues and the impact on the Corporation's operations
in the event that certain or all of its plans or the plans of third parties in
respect of Year 2000 compliance issues prove to be inadequate. The statements in
the "Risk Factors" section contained in this Prospectus, as well as other
statements described elsewhere herein or incorporated by reference in the
Prospectus, constitute cautionary statements identifying important factors with
respect to such forward-looking statements, including certain risks and
uncertainties, that could cause actual results to vary materially from the
future results covered in such forward-looking statements.
Please refer to page 66 for an index of significant terms used in this
Prospectus.
-3-
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information appearing elsewhere in this Prospectus and in the documents
incorporated by reference. See "Incorporation of Information we file with the
SEC."
RESOURCE BANKSHARES CORPORATION
Resource Bankshares Corporation, a Virginia corporation, is a bank
holding company that was formed in 1998 and is headquartered in Virginia Beach,
Virginia. The Corporation's only subsidiary is Resource Bank (the "Bank"), a
Virginia-chartered commercial bank. The Bank opened for business in September,
1988. In December, 1992, after four years of losses, the Bank was recapitalized
under a new management team headed by Lawrence N. Smith and a new board. The
Bank operates a banking office in Virginia Beach, Virginia and one each in the
towns of Herndon and Reston, which are in Fairfax County, Virginia. Virginia
Beach, and Fairfax County are among the highest per capita income, largest and
fastest growing areas of Virginia. The Bank's mortgage division currently has
two offices in Richmond, Virginia, one each in Chesapeake, Reston and Virginia
Beach, Virginia and one in Bowie, Maryland.
On December 1, 1997, the Bank acquired Eastern American Bank, FSB
("Eastern American") in a business combination accounted for as a purchase. All
of the issued and outstanding shares of Eastern American were converted into
shares of Resource Bank common stock, amounting to a purchase price of $5.0
million. As a result of the acquisition, the Bank acquired $66.5 million in
assets (including the Herndon and Reston branch offices), $48.1 million in net
loans, and assumed $52.8 million in deposit liabilities. The fair value of the
assets acquired, net of liabilities assumed, exceeded the purchase price by
$547,000.
At September 30, 1998, the Corporation had total assets of $231.5
million, total deposits of $201.2 million, and stockholders' equity of $17.4
million.
The Corporation employs a seasoned management team, hiring experienced
lenders and credit officers with a strong commercial loan following from large
regional banks. Since 1992 the Corporation has hired ten senior loan and credit
officers each with at least ten years of experience at large regional banks. The
Bank recently hired T. A. Grell, Jr., as President. For the past 14 years Mr.
Grell served as the senior loan and credit officer in eastern Virginia with a
state-wide bank that was acquired by a large regional bank in late 1997. In the
six years since the current management team assumed control, this strategy and
the Eastern American acquisition have helped the Corporation achieve compound
annual growth rates in assets, loans and deposits of over 50%. Net income
increased from $351,000 in 1993 to $1.8 million in 1997. For the first nine
months of 1998, net income was $2.3 million. The Corporation's return on average
equity was 18.58% in the nine months ended September 30, 1998 and was 18.59%,
20.46 % and 17.93% in 1997, 1996 and 1995, respectively. The Corporation's net
overhead ratio was 1.46% in the first nine months of 1998, and 1.55%, 1.68% and
1.74% in 1997, 1996 and 1995, respectively.
Despite its high growth rate in assets, loans and deposits, the
Corporation has experienced a relatively low level of net charge-offs. Twice
since 1992 the Corporation has significantly reduced the ratio of non-performing
assets to loans and foreclosed properties. From December 31, 1992 to year-end
1993, the first year under new management, the ratio declined from 5.6% to
0.66%. At year-end 1997, non-performing assets
-4-
<PAGE>
increased significantly as a result of the Eastern American acquisition.
However, the ratio of non-performing assets to loans and foreclosed properties,
which was 3.36% at December 31, 1997 had declined to 1.36% at September 30,
1998. Net charge-offs to average loans have ranged from 0.02% to 0.31% since
1993 and were 0.11% in the first nine months of 1998.
Management expects to open two to four loan production offices during
1999, each staffed with two or three senior commercial loan and credit officers
who gained their experience with large banks and who each has the potential to
bring a portfolio of commercial loans and small business loans of $10 million to
the Corporation.
The Bank's mortgage division had loan production of approximately
$290.0 million in 1997 and, for the first nine months of 1998, $501 million.
Business loans and construction loans make up approximately 50% of the Bank's
total loan portfolio. The Bank is an SBA Preferred Lender in the Richmond and
Washington, D.C. markets and is an active asset-based lender in eastern and
northern Virginia through an accounts receivable financing program licensed from
Private Business, Inc.
The Corporation is a legal entity separate and distinct from the Bank
and its non-banking subsidiaries. Accordingly, the right of the Corporation, and
thus the right of the Corporation's creditors, to participate in any
distribution of the assets or earnings of the Bank or any other subsidiary is
necessarily subject to the prior claims of creditors of the Bank or such
subsidiary, except to the extent that claims of the Corporation in its capacity
as a creditor may be recognized. The principal sources of the Corporation's
revenues are dividends from the Bank.
The Corporation is a bank holding company registered with the Board of
Governors of the Federal Reserve System under the Bank Holding Company Act of
1956, as amended (the "BHCA"). The Corporation's executive offices are located
at 3720 Virginia Beach Boulevard, Virginia Beach, Virginia 23452. Its mailing
address is P.O. Box 61009, Virginia Beach, Virginia 23466 and its telephone
number is (757) 463-2265.
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<PAGE>
RESOURCE CAPITAL TRUST I
Resource Capital Trust I (the "Trust") is a statutory business trust
formed by the Corporation under Delaware law on December 23, 1998. The
Corporation and the trustees will enter into an amended and restated declaration
of trust (the "Declaration"), in the form filed as an exhibit to the
registration statement relating to this offering of the Capital Securities,
which will state the terms and conditions for the Trust to issue and sell its
Capital Securities, as well as its Common Securities.
The Trust exists solely to:
o issue and sell the Capital Securities and the Common Securities;
o use the proceeds from the sale of the Capital Securities and
Common Securities to purchase Junior Subordinated Debt Securities
of the Corporation, which will be the only assets of the Trust;
and
o engage in other activities that are necessary or incidental to
these purposes.
The Corporation will purchase all of the Common Securities of the Trust. The
Common Securities will represent an aggregate liquidation amount equal to 3% of
the Trust's total capitalization. The Capital Securities will represent the
remaining 97% of the total capitalization of the Trust. The Common Securities
will have terms substantially identical to, and will rank equal in priority of
payment with, the Capital Securities. However, if the Corporation defaults on
the Junior Subordinated Debt Securities, cash distributions and liquidation,
redemption and other amounts payable with respect to the Common Securities will
be subordinate to the Capital Securities in priority of payment.
The Trust has a term of approximately 40 years, but may be dissolved
earlier as provided in the Declaration. The Corporation has appointed the
following trustees (collectively, the "Trustees") to conduct the Trust's
business and affairs:
o Wilmington Trust Company ("Property Trustee");
o Wilmington Trust Company ("Delaware Trustee"); and
o Two individuals who are employees and officers of the Corporation,
T. A. Grell, Jr. and Harvard R. Birdsong ("Administrative
Trustees").
As the sole holder of the Common Securities, the Corporation can replace or
remove any of the Trustees. However, if an event of default occurs and is
continuing under the Declaration, the Property Trustee and the Delaware Trustee
can only be replaced and removed by the holders of at least a majority of the
Capital Securities. Only the Corporation, as owner of all of the Trust's Common
Securities, can remove or replace the Administrative Trustees.
The duties and obligations of each Trustee are governed by the Declaration.
The Trust has no separate financial statements. The statements would
not be material to you because the Trust has no independent operations. The
Trust exists solely for the reasons summarized above.
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<PAGE>
THE OFFERING
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Securities Offered............. 320,000 Capital Securities are being offered for sale. The Trust
has the right to increase the number of Capital Securities
offered for sale to 368,000.
Offering Price................. The offering price is $25.00 for each Capital Security.
Distributions.................. You will be entitled to receive cumulative cash distributions at
the rate of $_____ per year on each Capital Security, accruing
from the original date of issuance. Distributions will be payable
quarterly, in arrears, on the 15th day of March, June, September
and December of each year, beginning on ___________ 15, 1999.
Deferral of Interest
Payments....................... The Corporation has the right, at one or more times, to defer
interest payments on the Junior Subordinated Debt Securities for
up to 20 consecutive quarters (an "Extension Period"). No
Extension Period may last beyond the stated maturity date of the
Junior Subordinated Debt Securities. The Corporation may not
defer interest payments if it has defaulted on the Junior
Subordinated Debt Securities. However, electing to defer interest
payments, by itself, is not a default. See "Description of Junior
Subordinated Debt Securities-Option to Extend Interest Payment
Date".
Deferral of
Distributions.................. If the Corporation elects to defer interest payments on the
Junior Subordinated Debt Securities, the Trust will also defer
distributions on your Capital Securities. During an Extension
Period, you will still accumulate distributions at an annual rate
of __% of the liquidation amount of $25 per Capital Security. You
also will accumulate additional distributions at the same rate,
compounded quarterly, on any unpaid distributions. You will also
be required to continue to accrue interest income and include it
in your gross income for U.S. federal income tax purposes, even
if you are a cash basis taxpayer. See "Certain United States
Federal Income Tax Consequences--Interest Income and Original
Issue Discount."
Corporation's
Obligations.................... The Corporation is fully, irrevocably and unconditionally
obligated on a subordinate basis, to pay distributions and all
other amounts on the Capital Securities. However, this does not
mean that the Corporation may not exercise its right, as
described above, to defer interest payments on the Junior
Subordinated Debt Securities. See "Relationship Among the Capital
Securities, the Junior Subordinated Debt Securities and the
Guarantee-Full and Unconditional Guarantee."
-7-
<PAGE>
Ranking of Capital
Securities..................... As long as the Corporation has not defaulted on the Junior
Subordinated Debt Securities, the Capital Securities will rank
equal in priority, and payments thereon will be made pro rata,
with the Common Securities. If there is such a default, the
Capital Securities will be senior to, and payments thereon will
be made prior to, any payments on the Common Securities.
Ranking of Junior
Subordinated Debt
Securities..................... The Junior Subordinated Debt Securities will constitute unsecured
obligations of the Corporation and will rank subordinate and
junior in right of payment to all Senior Indebtedness. Although
the Corporation currently has no Senior Indebtedness, any
indebtedness the Corporation incurs in the future is likely to be
Senior Indebtedness. There is no limit on the amount of Senior
Indebtedness that the Corporation may incur. The Guarantee also
will be an unsecured obligation of the Corporation and will rank
subordinate and junior in right of payment to all Senior
Indebtedness. In addition, because the Corporation is a bank
holding company, the Junior Subordinated Debt Securities and the
Guarantee will be effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, including
the Bank's deposit liabilities. See "Description of Junior
Subordinated Debt Securities--Subordination."
Redemption..................... The Trust must redeem the Capital Securities when the Junior
Subordinated Debt Securities are paid at maturity on or after
___________, 2029, or upon earlier redemption. Subject to the
Corporation having received any required approval of regulatory
agencies, the Corporation has the option at any time on or after
_______, 2004 to redeem the Junior Subordinated Debt Securities,
in whole or in part. The Corporation has the option at any time
prior to _______, 2004 to redeem the Junior Subordinated Debt
Securities, in whole but not in part, if certain regulatory or
tax events occur or if there is a change in the Investment
Company Act of 1940 that requires the Trust to register under
that law.
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<PAGE>
Limited Voting Rights.......... You will have no voting rights with respect to the Capital
Securities, except in limited circumstances. See "Description of
Capital Securities--Voting Rights; Amendment of the Declaration."
No Rating...................... The Capital Securities are not expected to be rated by any rating
service, nor is any other security issued by the Corporation so
rated.
ERISA Considerations......... Prospective purchasers must carefully consider the information
set forth in "Certain ERISA Considerations."
Use of Proceeds................ All of the proceeds from the sale of the Trust Securities will be
used by the Trust to purchase the Junior Subordinated Debt
Securities from the Corporation. The Corporation intends to use
the net proceeds from the sale of the Junior Subordinated Debt
Securities for general corporate purposes, including making
advances to the Bank to support its continued growth. Pending any
such application by the Corporation, the net proceeds may be
invested in interest-bearing assets.
Proposed Nasdaq OTC
Bulletin Board Symbol.......... Application has been made to have the Capital Securities approved
for quotation on the Nasdaq OTC Bulletin Board under the symbol
"RBKVP".
Risk Factors................... An investment in the Capital Securities involves a number of
risks. Some of these risks relate to the Capital Securities and
other risks relate to the Corporation. We urge you to carefully
consider the information contained in "Risk Factors" set forth on
page 12 of this Prospectus, as well as the other information
contained in this Prospectus and in the documents which are
incorporated by reference in this Prospectus, before you buy any
Capital Securities.
</TABLE>
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<PAGE>
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the consolidated ratios of earnings to
fixed charges for the Corporation for each of the years in the five-year period
ended December 31, 1997 and for the nine months ended September 30, 1998. For
purposes of computing these ratios, earnings represent net income, plus total
taxes based on income, plus fixed charges. Fixed charges include interest
expense (ratios are presented both excluding and including interest on
deposits), the estimated interest component of net rental expense and
amortization of debt expense.
<TABLE>
<CAPTION>
Nine
Months
Ended
Sept. 30 Years Ended December 31
--------- -----------------------------------------------------
1998 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges
Excluding interest on deposits 5.01x 10.32x 17.52x 4.16x 5.57x 25.33x
Including interest on deposits 1.41x 1.46x 1.34x 1.30x 1.25x 1.19x
</TABLE>
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<PAGE>
SUMMARY FINANCIAL INFORMATION
The following consolidated summary sets forth selected financial data
for the Corporation and its subsidiaries for the periods and at the dates
indicated. The following summary is qualified in its entirety by the detailed
information and the financial statements included in the documents incorporated
herein by reference. See "Incorporation of Information that We File with the
SEC."
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30 Years Ended December 31
-------------------------- -----------------------------------------------------------
(unaudited)
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
Income Statement Data: (Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Gross interest income............... $15,002 $7,592 $10,937 $8,295 $6,046 $3,988 $2,471
Gross interest expense.............. 8,660 4,133 5,983 4,690 3,500 1,905 1,145
Net interest income................. 6,342 3,459 4,954 3,605 2,546 2,083 1,326
Provision for possible loan losses.. 150 113 155 290 512 50 286
Net interest income after
provision for loan losses......... 6,192 3,346 4,799 3,315 2,034 2,033 1,040
Non-interest income................. 6,349 3,049 4,520 2,755 2,012 1,341 1,293
Non-interest expense................ 9,002 4,419 6,533 4,451 3,285 2,904 2,114
Income before income taxes.......... 3,539 1,976 2,786 1,619 761 471 219
Income taxes........................ 1,239 672 965 153 (144) (180) (132)
Net income.......................... 2,300 1,304 1,821 1,466 905 651 351
Per Share Data: (1)
Net income, basic................... $0.93 $0.67 $0.92 $0.79 $0.54 $0.39 $0.21
Net Income, diluted 0.85 0.61 0.84 0.76 0.54 0.39 0.21
Cash dividends...................... 0.18 0.125 0.125 0.05 - - -
Book value at period end............ 7.00 5.12 6.36 4.47 3.44 2.68 1.66
Tangible book value at period end... 7.00 5.12 6.36 4.47 3.44 2.68 1.66
Period-End Balance Sheet Data:
Total assets........................ $231,474 $142,935 $209,330 $115,836 $87,352 $63,735 $51,475
Total loans (net of unearned income) 176,790 93,411 150,590 81,975 58,464 41,034 31,166
Total deposits...................... 201,176 117,218 169,508 99,179 80,905 54,918 47,024
Long-term debt...................... 7,300 5,000 7,300 - - - -
Shareholders' equity................ 17,351 9,909 15,602 8,655 5,810 4,525 4,208
Performance Ratios: (2)
Return on average assets............ 1.27% 1.44% 1.40% 1.45% 1.24% 1.18% 0.93%
Return on average shareholders'
equity............................ 18.58% 18.94% 18.59% 20.46% 17.93% 14.38% 8.33%
Average shareholders' equity to
average total assets.............. 6.80% 7.61% 7.54% 7.10% 6.90% 8.16% 5.91%
Net Overhead Ratio (3).............. 1.46% 1.33% 1.55% 1.68% 1.74% 2.84% 2.18%
Net interest margin (4)............. 3.60% 3.95% 3.90% 3.70% 3.62% 4.00% 3.81%
Asset Quality Ratios
Net charge-offs to average loans.... 0.11% 0.01% 0.02% 0.15% 0.31% 0.20% 0.72%
Allowance to period-end loans....... 1.44% 1.22% 1.71% 1.27% 1.46% 1.20% 1.64%
Allowance to nonperforming loans.... 132.65% 138.55% 58.50% 247.03% 1220.00% 793.55% 441.38%
Nonaccrual loans to loans........... 0.40% 0.36% 2.03% 0.06% 0.10% 0.13% 0.36%
Nonperforming assets to loans and
foreclosed properties............. 1.36% 0.94% 3.36% 0.57% 0.24% 0.37% 0.66%
Capital Ratios:
Risk-based capital ratios
Tier 1 capital.................... 8.24% 8.79% 9.69% 10.22% 9.61% 10.23% 10.88%
Total capital..................... 9.45% 9.83% 10.93% 11.45% 10.86% 11.28% 12.13%
Leverage capital ratio.............. 7.12% 7.44% 9.67% 7.04% 6.25% 7.22% 7.60%
Total equity to total assets........ 7.50% 6.93% 7.45% 7.47% 6.65% 7.10% 8.17%
____________________
</TABLE>
(1) All per share figures have been adjusted to reflect a two-for-one stock
split on July 1, 1998.
(2) Annualized for the nine months ended September 30, 1998 and 1997.
(3) Computed by dividing the difference between noninterest expense and
noninterest income by average total assets.
(4) Net interest margin is calculated as tax-equivalent net interest income
divided by average earning assets and represents the Corporation's net
yield on its earning assets.
-11-
<PAGE>
RISK FACTORS
An investment in the Capital Securities involves a number of risks. Some of
these risks relate to the Capital Securities and others relate to the
Corporation. We urge you to carefully consider the following information,
together with the other information in this prospectus and in the documents that
are incorporated by reference in this prospectus before you buy any Capital
Securities.
RISKS RELATED TO THE CAPITAL SECURITIES
The Corporation's Obligations Are Unsecured and Subordinated.
General
The Corporation's obligations under the Junior Subordinated Debt
Securities and the Guarantee are unsecured and rank subordinate and junior in
right of payment to all of the Corporation's present and future Senior
Indebtedness. As of September 30, 1998, the Corporation had no Senior
Indebtedness. However, any indebtedness the Corporation incurs in the future is
likely to be Senior Indebtedness. There is no limit to the Corporation's or the
Bank's ability to incur additional indebtedness, including Senior Indebtedness.
See "Description of Guarantee--Status of the Guarantee" and "Description of
Junior Subordinated Debt Securities--General" and "--Subordination."
The ability of the Trust to make payments on the Capital Securities
depends solely upon the Corporation making payments on the Junior Subordinated
Debt Securities as and when required. If the Corporation defaults on its
obligations to pay principal, premium or interest on the Junior Subordinated
Debt Securities, the Trust will not have sufficient funds to make distributions
or to pay the liquidation amount of $25 per Capital Security. You will not be
able to rely upon the Guarantee for payment of these amounts. Instead, you or
the Property Trustee may enforce the rights of the Trust under the Junior
Subordinated Debt Securities against the Corporation.
The Corporation is a bank holding company. Its right to participate in
any distribution of assets from the Bank (and your ability to benefit indirectly
from such distribution) is subject to the prior claims of creditors, including
depositors of the Bank. At September 30, 1998, the Corporation's sole
subsidiary, the Bank, had total liabilities, including deposits, of $214.1
million. Because the Junior Subordinated Debt Securities effectively will be
subordinated to all existing and future liabilities of the Corporation's
subsidiaries, including the Bank's deposit liabilities, you should look only to
the assets of the Corporation, and not its subsidiaries, for payments on the
Junior Subordinated Debt Securities.
Limits on Source of Funds
As a bank holding company, the Corporation is regulated by the Board of
Governors of the Federal Reserve System (the "Federal Reserve"). The Federal
Reserve also regulates the Bank. Almost all of the consolidated assets of the
Corporation are owned by the Bank. The Corporation will rely almost entirely on
dividends from the Bank to satisfy its obligations to pay principal and interest
on the Junior Subordinated Debt Securities. There are legal limits on the amount
of dividends that a Virginia-chartered, Federal Reserve member bank such as the
Bank is permitted to pay. A Virginia-chartered bank may pay dividends only from
net undivided profits. In addition, prior approval of the Federal Reserve is
required if the total of all dividends declared by a member bank in any calendar
year will exceed the sum of that bank's net profits for that year and its
retained net profits for the preceding two calendar years. At September 30,
1998, the Bank could have paid approximately $2.7 million in dividends to the
Corporation without prior regulatory approval. The Bank's ability to pay
dividends may also be affected by other factors, such as the requirement to
maintain adequate capital. In addition, the Federal Reserve is authorized to
determine, under certain circumstances relating to the financial condition of a
member bank, whether the payment of dividends would be an unsafe or unsound
banking practice
-12-
<PAGE>
and to prohibit payment thereof. We cannot assure you that the Bank will be able
to pay dividends at past levels, or at all, in the future.
Possible Deferral of Distributions--Adverse Tax and Market Price Consequences.
General
So long as no event of default under the Junior Subordinated Debt
Securities has occurred and is continuing, the Corporation has the right, at one
or more times, to defer interest payments on the Junior Subordinated Debt
Securities for up to 20 consecutive quarters, but not beyond their maturity
date. The Trust will defer distributions on the Capital Securities during any
such Extension Period. During any Extension Period, the Corporation generally
will be prohibited from, among other things, declaring or paying dividends on
its capital stock or from making any payments on or repaying, repurchasing or
redeeming any indebtedness that ranks equal to or junior in right of payment
with the Junior Subordinated Debt Securities. See "Description of Capital
Securities--Distributions."
Upon the termination of any Extension Period and the payment of all
interest then accrued and unpaid on the Junior Subordinated Debt Securities, the
Corporation may elect to begin a new Extension Period, subject to certain
requirements. There is no limit on the number of times that the Corporation may
elect to begin an Extension Period. See "Description of Capital
Securities--Distributions" and "Description of Junior Subordinated Debt
Securities--Option to Extend Interest Payment Date."
Tax Consequences
During an Extension Period, you will be required to continue to accrue
interest income for U.S. federal income tax purposes in respect of your pro rata
share of the Junior Subordinated Debt Securities held by the Trust, even if you
are a cash basis taxpayer. As a result, you must include the accrued interest in
your gross income for U.S. federal income tax purposes prior to your receiving
cash. You will not receive the cash related to any accrued and unpaid interest
from the Trust if you sell your Capital Securities before the termination of any
Extension Period. During an Extension Period, accrued and unpaid distributions
that are included in your gross income will increase your tax basis in the
Capital Securities. If you sell your Capital Securities during an Extension
Period, your increased tax basis will decrease the amount of any capital gain or
will create a capital loss or increase the amount of any capital loss that you
realize on the sale. A capital loss, except in certain limited circumstances,
cannot be applied to offset ordinary income.
Market Price Consequences
The Corporation has no current intention of exercising its right to
defer interest payments on the Junior Subordinated Debt Securities. However, if
it exercises this right in the future, the market price of the Capital
Securities is likely to be adversely affected. If you sell your Capital
Securities during an Extension Period, you may not receive the same return on
your investment as someone else who continues to hold the Capital Securities.
You Have Limited Rights Against the Corporation
If the Corporation defaults on its obligation to pay amounts under the
Junior Subordinated Debt Securities, the Trust would not have sufficient funds
to pay distributions on the Capital Securities or amounts payable on redemption
of the Capital Securities and you would not be able to rely on the Guarantee for
payment of such amounts. Instead, if the Corporation defaults in the payment of
the principal or interest under the Junior Subordinated Debt Securities, then
you may institute a legal proceeding directly against the Corporation to enforce
such payment. Except as described herein, you will not be able to exercise
directly any other remedy available to holders of Junior Subordinated Debt
Securities or to assert directly any other right in respect of the Junior
Subordinated Debt Securities. See "Description of Junior Subordinated Debt
Securities -- Enforcement of Certain Rights by Holders of Capital Securities, "
"--Debenture Events of Default" and "Description of Guarantee." The Declaration
will provide that each holder of Capital Securities, by acceptance of such
securities, agrees to the provisions of the Indenture.
-13-
<PAGE>
We May Cause an Early Redemption of the Capital Securities In Certain Events
At any time that certain special events occur (an Investment Company
Event, a Capital Treatment Event or a Tax Event, in each case as defined under
"Description of Capital Securities--Mandatory Redemption") and are continuing,
the Corporation has the right to redeem the Junior Subordinated Debt Securities,
in whole but not in part. The redemption of the Junior Subordinated Debt
Securities will cause a mandatory redemption of the Capital Securities and the
Common Securities within 90 days of such event. The Corporation may have to
obtain any required regulatory approval before it redeems the Junior
Subordinated Debt Securities under these provisions.
You should be aware that the Internal Revenue Service ("IRS") has
disallowed a deduction for interest paid by Enron Corporation ("Enron") in 1993
and 1994 on securities issued by Enron that are similar to the Junior
Subordinated Debt Securities. Enron has filed a petition in the U.S. Tax Court
challenging the disallowance of its deductions. Although Enron's debt
obligations differ in certain respects from the Junior Subordinated Debt
Securities, the arguments of the IRS that interest on those obligations is not
deductible are not entirely focused on those different terms and thus could
apply to the Junior Subordinated Debt Securities. Thus, if the Tax Court decides
in favor of the IRS in Enron's case, although its decision might be
distinguishable from the Junior Subordinated Debt Securities, it is also
possible that its decision would result in the receipt by the Corporation or the
Trust of an opinion of counsel that there is more than an insubstantial risk
that interest payable on the Junior Subordinated Debt Securities is not or will
not be deductible. The receipt of such an opinion would constitute a Tax Event,
which would permit the Corporation to cause a redemption of the Capital
Securities and the Common Securities. See "Description of Capital
Securities--Redemption."
We Can Liquidate the Trust and Distribute the Junior Subordinated Debt
Securities to You
We will have the right at any time to terminate the Trust and cause the
Junior Subordinated Debt Securities to be distributed to you. Under current
United States federal income tax law, a distribution of Junior Subordinated Debt
Securities would not be a taxable event to you. If, however, the Trust is
characterized for United States federal income tax purposes as an association
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debt Securities may constitute a taxable
event to you. See "Certain United States Federal Income Tax
Consequences--Distribution of the Junior Subordinated Debt Securities to Holders
of Capital Securities."
We give no assurance as to the market prices for Capital Securities or
Junior Subordinated Debt Securities that may be distributed in exchange for
Capital Securities if a liquidation of the Trust occurs. Accordingly, the
Capital Securities or the Junior Subordinated Debt Securities may trade at a
discount to the price that the investor paid to purchase the Capital Securities
offered hereby. Because holders of Capital Securities may receive Junior
Subordinated Debt Securities on termination of the Trust, prospective purchasers
of Capital Securities are also making an investment decision with regard to the
Junior Subordinated Debt Securities and should carefully review all the
information regarding the Junior Subordinated Debt Securities contained herein.
See "Description of Capital Securities--Liquidation of the Trust and
Distribution of the Junior Subordinated Debt Securities" and "Description of
Junior Subordinated Debt Securities--General."
You Have Limited Voting Rights
As a holder of Capital Securities, you will have limited voting rights.
These voting rights will relate only to the modification of the Capital
Securities, the dissolution, winding-up or liquidation of the Trust, and the
exercise of the Trust's rights as a holder of the Junior Subordinated Debt
Securities. In general, only the Corporation can replace or remove any of the
Trustees. The Property Trustee, the Administrative Trustees and the Corporation
may amend the Trust Agreement without your consent in order to ensure that the
Trust will not be classified as an association taxable as a corporation or to
enable the Trust to qualify as a grantor trust, in each case for federal income
tax purposes, or to ensure that the Trust will not be required to register as an
"investment company" under the Investment Company Act of 1940, as amended, even
if such action adversely affects your interests. You will have no voting rights
with respect to any matters submitted to a vote of the stockholders of the
Corporation. See "Description of Capital Securities -- Voting Rights; Amendment
of the Trust Agreement" and "-- Removal of Trustees."
-14-
<PAGE>
You will generally have limited voting rights relating only to the
modification of the Capital Securities, the dissolution, winding-up or
liquidation of the Trust, and the exercise of the Trust's rights as holder of
Junior Subordinated Debt Securities. The right to vote to appoint, remove or
replace the Property Trustee, the Delaware Trustee or the Administrative
Trustees is exclusively ours except, with respect to the Property Trustee and
the Delaware Trustee, upon the occurrence of certain events described herein.
The Property Trustee, the Administrative Trustees and the Corporation may amend
the Declaration without your consent to ensure that the Trust will not be
classified for United States Federal income tax purposes as an association
taxable as a corporation or as other than a grantor trust, even if such action
adversely affects the interests of such holders. See "Description of Capital
Securities--Removal of Trustees" and "Voting Rights; Amendment of the
Declaration."
Regulatory Capital Requirements
The Corporation and the Bank are subject to regulatory capital
guidelines. At September 30, 1998, the Bank was in compliance with applicable
regulatory capital requirements. The Corporation, at that date, had a total
capital to risk-weighted assets ratio of 9.45% and a Tier I Capital to
risk-weighted assets ratio of 8.24%, both above the minimum requirements of 8.0%
and 4.0%, respectively. The Corporation's leverage ratio at that date was 7.12%.
Although the minimum leverage ratio requirement is 3.0%, most bank
holding companies, including the Corporation, are expected to maintain an
additional cushion of at least 100 to 200 basis points above the minimum.
However, the Federal Reserve may assign a specific capital ratio to an
individual bank holding company, including the Corporation, based on its
assessment of asset quality, earnings performance, interest-rate risk and
liquidity. As of the date of this Prospectus, the Federal Reserve has not
advised the Corporation of a specific leverage ratio requirement.
There can be no assurance that either the Corporation or the Bank will
continue to be able to meet their respective minimum capital ratios. In the
event that the Corporation or the Bank falls below the minimum capital
requirements described above, agencies may take regulatory action including, in
the case of the Bank, "prompt corrective action." Such actions could impair the
Corporation's ability to make principal and interest payments on the Junior
Subordinated Debt Securities.
Absence of Public Market
There is no existing market for the Capital Securities and there can be
no assurance as to the liquidity of any markets that may develop for the Capital
Securities, the ability of the holders to sell their Capital Securities or at
what price holders of the Capital Securities will be able to sell their Capital
Securities. Future trading prices of the Capital Securities will depend on many
factors including, among other things, prevailing interest rates, the
Corporation's operating results and the market for similar securities. The
Underwriter has informed the Trust and the Corporation that it intends to make a
market in the Capital Securities offered hereby; however, the Underwriter is not
obligated to do so and any such market making activity may be terminated at any
time without notice to the holders of the Capital Securities.
RISKS RELATED TO THE CORPORATION
Rapid Growth
It is the intention of the Corporation's management to expand its asset
base. In particular, the Corporation hopes to utilize the capital raised in the
Offering to support anticipated increases in its deposit base and loans.
Additional capital also would increase the Corporation's legal lending limit
under federal law, which in turn would allow it to compete more actively in its
market area for larger loans. The Corporation's ability to manage growth
successfully will depend on its ability to maintain cost controls and asset
quality while attracting additional loans and deposits, as well as on factors
beyond its control, such as economic conditions and interest rate trends. If the
Corporation grows too quickly and is not able to control costs and maintain
asset quality, its growth could materially adversely affect its financial
performance.
-15-
<PAGE>
Dependence on Senior Management
The Corporation's future performance will depend largely on the
contributions of certain of the senior executive officers of the Bank, including
Lawrence N. Smith, the Chief Executive Officer, T.A. Grell, Jr., the President,
and Chief Operating Officer and the Bank's four senior lending officers. The
loss of the services of one or more of such individuals could have a material
adverse effect on the Corporation's business and development.
Credit Risk; Adequacy of Allowance for Loan Losses
There are certain risks inherent in making all loans, including risks
with respect to the period of time over which loans may be repaid, risks
resulting from changes in economic and industry conditions, risks inherent in
dealing with individual borrowers, and, in the case of a collateralized loan,
risks resulting from uncertainties about the future value of the collateral. The
Bank maintains an allowance for loan losses based on, among other things,
historical experience, an evaluation of economic conditions, and regular reviews
of delinquencies and loan portfolio quality. Management's judgment as to the
adequacy of the allowance is based upon a number of assumptions about future
events that it believes to be reasonable but that may or may not be valid. Thus,
there can be no assurance that charge-offs in future periods will not exceed the
allowance for loan losses or that additional increases in the allowance for loan
losses will not be required. Additions to the allowance for loan losses would
result in a decrease of the Corporation's net income and, possibly, its capital.
Potential Adverse Impact of Changes in Interest Rates
The Corporation's profitability is dependent to a large extent on the
net interest income of the Bank, which is the difference between the Bank's
interest income on interest-earning assets and the Bank's interest expense on
interest-bearing liabilities. The Corporation's net interest income will tend to
decrease in a climate of declining interest rates. Conversely, the Corporation's
mortgage banking revenue will tend to decline in a climate of rising interest
rates. The Corporation, like most financial institution holding companies, will
continue to be affected by changes in general interest rate levels and other
economic factors beyond the Corporation's control.
Year 2000 Compliance
The ability of computers, software and other equipment utilizing
microprocessors to recognize and properly process data fields containing a
2-digit year after 1999 is commonly referred to as the "Year 2000" compliance
issue. The Year 2000 issue is the result of computer programs and equipment
which are dependent on "embedded chip technology" using two digits rather than
four to define the applicable year. Any of the Corporation's computer programs
or equipment that are date dependent may recognize a date using "00" as the year
1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, or a temporary inability to
process transactions, send invoices or engage in similar normal business
activities.
The Corporation began the process of assessing and preparing its
computer systems and applications to be functional on January 1, 2000 in July
1996. The Corporation has also been communicating with third parties, such as
customers, counter parties, payment systems, vendors and others to determine
whether they will be functional on or before January 1, 2000. The Corporation
has provided compliance certification questionnaires to its customers in order
to determine their ability to be Year 2000 compliant. If a customer does not
respond to the questionnaire or if its response does not provide the Corporation
with adequate assurance that such customer's failure to be Year 2000 compliant
would not have a material adverse effect on the Corporation, the Corporation, in
its sole discretion, may demand that all amounts owed to it by such customer be
satisfied in full prior to December 31, 1999, unless the Corporation is assured
that such customer is or will be Year 2000 compliant in the near future, or
otherwise is satisfied that the customer's failure to be Year 2000 compliant
will not, either individually or in the aggregate, have a material adverse
effect on the Corporation. There can be no assurance that any of these parties
will become Year 2000 compliant on a timely basis.
-16-
<PAGE>
We believe that the process of modifying all mission critical
applications of the Corporation will continue as planned and expect to have
substantially all of the testing and changes completed by March 31, 1999. In
addition, non-mission critical applications are scheduled to have substantially
all the testing and updates completed by June 30, 1999.
We believe the total costs to be Year 2000 compliant will not be
material to the Corporation's financial position or results or operations. To
date, the Corporation has incurred approximately $20,000 of these estimated
expenses. Any purchased hardware or software in connection with this process
will be capitalized in accordance with normal policy. Personnel and all other
costs are being expensed as incurred.
The costs and dates on which the Corporation plans to complete the Year
2000 process are based on our best estimates. However, there can be no assurance
that these estimates will be achieved and actual results could differ.
USE OF PROCEEDS
All of the proceeds from the sale of the Trust Securities will be used
by the Trust to purchase Junior Subordinated Debt Securities. The Corporation
intends to apply the net proceeds from the sale of the Junior Subordinated Debt
Securities to its general funds to be used for general corporate purposes,
including, from time to time, making advances to the Bank to support its
continued growth. Pending any such application by the Corporation, the net
proceeds may be invested in interest-bearing assets.
RESOURCE CAPITAL TRUST I
The Trust is a statutory business trust formed under Delaware law on
December 23, 1998. Wilmington Trust Company is the Delaware Trustee and the
Property Trustee. T. A. Grell, Jr. and Harvard R. Birdsong, officers of the
Corporation, are the Administrative Trustees.
The Trust exists for the exclusive purposes of:
o issuing and selling the Trust Securities;
o using the proceeds from the sale of the Trust Securities to
purchase the Junior Subordinated Debt Securities; and
o engaging in only those other activities necessary or incidental
thereto.
The Junior Subordinated Debt Securities will be the sole assets of the
Trust, and payments under the Junior Subordinated Debt Securities will be the
sole revenues of the Trust. All of the Common Securities will be owned by the
Corporation. The Common Securities will rank equally, and payments will be made
thereon pro rata, with the Capital Securities, except that upon the occurrence
and continuance of any Debenture Event of Default (or an event that, with notice
or the passage of time, would become such an Event of Default) or an Event of
Default under the Declaration, the rights of the Corporation as holder of the
Common Securities to payment in respect of Distributions and payments upon
liquidation, redemption or otherwise will be subordinated to the rights of the
holders of the Capital Securities. See "Description of Capital
Securities--Subordination of Common Securities."
The Corporation will acquire Common Securities in an aggregate
Liquidation Amount equal to 3% of the total capital of the Trust. The Trust has
a term of approximately 40 years, but may terminate earlier as provided in the
Declaration. The Trust's business and affairs are conducted by its trustees,
each appointed by the Corporation as holder of the Common Securities.
Wilmington Trust Company, as Property Trustee, will act as sole
indenture trustee under the Declaration. Wilmington Trust Company will also act
as trustee under the Guarantee Agreement and the Indenture. See "Description of
Junior Subordinated Debt Securities" and "Description of Guarantee." The holder
of the Common Securities, or the holders of a majority in Liquidation Amount of
the Capital Securities if an Event of Default under the Declaration
-17-
<PAGE>
resulting from a Debenture Event of Default has occurred and is continuing, will
be entitled to appoint, remove or replace the Property Trustee and/or Delaware
Trustee. In no event will the holders of the Capital Securities have the right
to vote to appoint, remove or replace the Administrative Trustees; such voting
rights are vested exclusively in the holder of the Common Securities. The duties
and obligations of each Trustee are governed by the Declaration. Pursuant to the
expense provisions under the Indenture, the Corporation, as obligor on the
Junior Subordinated Debt Securities, will pay all fees and expenses related to
the Trust and the offering of the Capital Securities and will pay, directly or
indirectly, all ongoing costs, expenses and liabilities of the Trust. See
"Description of Capital Securities--Expenses and Taxes." The address and
telephone number of the principal executive office of the Trust is c/o:
Resource Bankshares Corporation
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
Attention: Lu Ann Klevecz
(757) 463-2265
-18-
<PAGE>
SELECTED HISTORICAL FINANCIAL INFORMATION
The following consolidated summary sets forth selected financial data
for the Corporation and its subsidiaries for the periods and at the dates
indicated. The following summary is qualified in its entirety by the detailed
information and the financial statements included in the documents incorporated
herein by reference. See "Incorporation of Information that We File with the
SEC."
<TABLE>
<CAPTION>
Nine Months Ended Sept. 30 Years Ended December 31
-------------------------- -----------------------------------------------------------
(unaudited)
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
Income Statement Data: (Dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Gross interest income............... $15,002 $7,592 $10,937 $8,295 $6,046 $3,988 $2,471
Gross interest expense.............. 8,660 4,133 5,983 4,690 3,500 1,905 1,145
Net interest income................. 6,342 3,459 4,954 3,605 2,546 2,083 1,326
Provision for possible loan losses.. 150 113 155 290 512 50 286
Net interest income after
provision for loan losses......... 6,192 3,346 4,799 3,315 2,034 2,033 1,040
Non-interest income................. 6,349 3,049 4,520 2,755 2,012 1,341 1,293
Non-interest expense................ 9,002 4,419 6,533 4,451 3,285 2,904 2,114
Income before income taxes.......... 3,539 1,976 2,786 1,619 761 471 219
Income taxes........................ 1,239 672 965 153 (144) (180) (132)
Net income.......................... 2,300 1,304 1,821 1,466 905 651 351
Per Share Data: (1)
Net income, basic................... $0.93 $0.67 $0.92 $0.79 $0.54 $0.39 $0.21
Net Income, diluted 0.85 0.61 0.84 0.76 0.54 0.39 0.21
Cash dividends...................... 0.18 0.125 0.125 0.05 - - -
Book value at period end............ 7.00 5.12 6.36 4.47 3.44 2.68 1.66
Tangible book value at period end... 7.00 5.12 6.36 4.47 3.44 2.68 1.66
Period-End Balance Sheet Data:
Total assets........................ $231,474 $142,935 $209,330 $115,836 $87,352 $63,735 $51,475
Total loans (net of unearned income) 176,790 93,411 150,590 81,975 58,464 41,034 31,166
Total deposits...................... 201,176 117,218 169,508 99,179 80,905 54,918 47,024
Long-term debt...................... 7,300 5,000 7,300 - - - -
Shareholders' equity................ 17,351 9,909 15,602 8,655 5,810 4,525 4,208
Performance Ratios: (2)
Return on average assets............ 1.27% 1.44% 1.40% 1.45% 1.24% 1.18% 0.93%
Return on average shareholders'
equity............................ 18.58% 18.94% 18.59% 20.46% 17.93% 14.38% 8.33%
Average shareholders' equity to
average total assets.............. 6.80% 7.61% 7.54% 7.10% 6.90% 8.16% 5.91%
Net Overhead Ratio (3).............. 1.46% 1.33% 1.55% 1.68% 1.74% 2.84% 2.18%
Net interest margin (4)............. 3.60% 3.95% 3.90% 3.70% 3.62% 4.00% 3.81%
Earnings to Fixed Charges
Excluding interest on deposits...... 5.01 12.69 10.32 17.52 4.16 5.57 25.33
Including interest on deposits...... 1.41 1.48 1.46 1.34 1.30 1.25 1.19
Asset Quality Ratios
Net charge-offs to average loans.... 0.11% 0.01% 0.02% 0.15% 0.31% 0.20% 0.72%
Allowance to period-end loans....... 1.44% 1.22% 1.71% 1.27% 1.46% 1.20% 1.64%
Allowance to nonperforming loans.... 132.65% 138.55% 58.50% 247.03% 1220.00% 793.55% 441.38%
Nonaccrual loans to loans........... 0.40% 0.36% 2.03% 0.06% 0.10% 0.13% 0.36%
Nonperforming assets to loans and
foreclosed properties............. 1.36% 0.94% 3.36% 0.57% 0.24% 0.37% 0.66%
Capital Ratios:
Risk-based capital ratios
Tier 1 capital................. 8.24% 8.79% 9.69% 10.22% 9.61% 10.23% 10.88%
Total capital.................. 9.45% 9.83% 10.93% 11.45% 10.86% 11.28% 12.13%
Leverage capital ratio........... 7.12% 7.44% 9.67% 7.04% 6.25% 7.22% 7.60%
Total equity to total assets..... 7.50% 6.93% 7.45% 7.47% 6.65% 7.10% 8.17%
</TABLE>
___________________
(1) All per share figures have been adjusted to reflect a two-for-one stock
split on July 1, 1998.
(2) Annualized for the nine months ended September 30, 1998 and 1997.
(3) Computed by dividing the difference between noninterest expense and
noninterest income by average total assets.
(4) Net interest margin is calculated as tax-equivalent net interest income
divided by average earning assets and represents the Corporation's net
yield on its earning assets.
-19-
<PAGE>
THE CORPORATION
The following discussion includes selected financial and other data for
the Corporation and its subsidiaries and is qualified in its entirety by the
detailed information, and should be read in conjunction with the financial
statements and other information, included in the documents incorporated herein
by reference. See "Incorporation of Certain Documents by Reference."
The Corporation is a bank holding company that was formed in 1998 and
is headquartered in Virginia Beach, Virginia. The Corporation's only subsidiary
is the Bank, a Virginia-chartered commercial bank, which opened for business in
September, 1988. In December, 1992 after four years of losses, the Bank was
recapitalized under a new board and management. Currently the Bank operates a
banking office in Virginia Beach, Virginia, and one each in the towns of Herndon
and Reston, which are in Fairfax County, Virginia. The Herndon and Reston
offices, including certain loans and deposits, were acquired December 1, 1997
from Eastern American.
From December 31, 1992 through December 31, 1997 the Corporation's
assets, loans, and deposits increased at compound annual growth rates of:
53..9%; 56.6%; and 53.5%, respectively. Net income increased from a loss of
$351,000 in 1992 to $351,000 in 1993, $651,000 in 1994, $905,000 in 1995, $1.466
million in 1996 and, having used up a $4 million tax loss carryforward from 1992
to 1996, $1.821 million in 1997. At September 30, 1998 total assets of the
Corporation were $231.5 million, total deposits $201.2 million, and
stockholders' equity $17.4 million. Net income in the nine months ended
September 30, 1998 increased 76.4% to $2.3 million, up from $1.3 million in the
first nine months of 1997, while diluted earnings per share increased 39.3% from
the comparable period of fiscal 1997 to $.85.
Virginia Beach and Fairfax County are among the highest per capita,
largest and fastest growing areas of Virginia. The Corporation's growth has been
accomplished by hiring experienced bank officers, particularly loan and credit
officers, from large state-wide banks, and achieving significant increases in
loan volume. Since 1992 the Corporation has hired ten senior loan and credit
officers each with at least ten years of experience at large banks. The Banks'
mortgage division had loan production of approximately $290.0 million in 1997
and, for the first nine months of 1998, $501 million. Business loans and
construction loans make up approximately 50% of the Bank's total loan portfolio.
The Bank is an SBA Preferred Lender in the Richmond and Washington, D.C. markets
and is an active asset-based lender in Eastern and Northern Virginia through an
account receivable financing program licensed from Private Business, Inc.
The Corporation's return on average equity increased from 8.33% in 1993
to 14.38% in 1994, 17.93% in 1995, and 20.46% in 1996 and, with the acquisition
of Eastern American, on a purchase basis, was 18.59% in 1997. For the nine
months ended September 30, 1998, on an annualized basis, the return on average
equity was 18.58%.
The Corporation is a legal entity separate and distinct from the Bank
and its non-banking subsidiaries. Accordingly, the right of the Corporation, and
thus the right of the Corporation's creditors, to participate in any
distribution of the assets or earnings of the Bank or any other subsidiary is
necessarily subject to the prior claims of creditors of the Bank or such
subsidiary, except to the extent that claims of the Corporation in its capacity
as a creditor may be recognized. The principal sources of the Corporation's
revenues are dividends from the Bank.
The Corporation is a bank holding company registered with the Board of
Governors of the Federal Reserve under the Bank Holding Company Act of 1956, as
amended (the "BHCA"). The Corporation's executive offices are located at 3720
Virginia Beach Boulevard, Virginia Beach, Virginia 23452. Its mailing address is
P. O. Box 61009, Virginia Beach, Virginia 23466 , and its telephone number is
(757) 463-2265.
-20-
<PAGE>
The following table sets forth average balances of total interest
earning assets and total interest bearing liabilities for the periods indicated,
showing the average distribution of assets, liabilities, stockholders' equity
and the related income, expense and corresponding weighted-average yields and
costs.
Average Balances, Interest Income and Expenses, and Average Yields and Rates
<TABLE>
<CAPTION>
Nine months ended Sept. 30 Year ended December 31
---------------------------- -----------------------------------------------------------
1998 1997 1996
---------------------------- ---------------------------- ----------------------------
Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance(1) Expense Rate(2) Balance(1) Expense Rate(2) Balance(1) Expense Rate(2)
---------- ------- ------- ---------- ------- ------- ---------- ------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Interest Earning Assets:
Securities......................... $13,061 $563 5.75% $15,935 $1,009 6.33% $16,885 $1,185 7.02%
Loans(3)........................... 163,435 11,268 9.19% 93,839 8,316 8.86% 69,488 6,268 9.02%
Interest bearing deposits in
other banks...................... 13,684 546 5.32% 4,127 232 5.62% 4,411 137 3.11%
Other earning assets (4) 44,902 2,625 7.79% 13,153 1,380 10.49% 6,688 705 10.54%
---------- ------- ------- ---------- ------- ------- ---------- ------- -------
Total interest earning
assets......................... 235,082 15,002 8.51% 127,054 10,937 8.61% 97,472 8,295 8.51%
Noninterest earning assets:
Cash and due from banks............ 2,994 1,700 1,760
Premises and equipment............. 3,290 965 614
Other assets....................... 4,318 1,480 2,027
Less: Allowance for loan
losses........................... (2,612) (1,252) (993)
---------- ---------- ----------
Total noninterest earning
assets......................... 7,990 2,893 3,408
---------- ---------- ----------
Total Assets................. $243,072 $129,947 $100,880
========== ========== ==========
Liabilities and Stockholders'
Equity
Interest Bearing Liabilities:
Interest bearing deposits:
Demand/MMDA accounts............. $11,715 287 3.27% $8,543 285 3.34% 7,787 261 3.35%
Savings.......................... 19,919 682 4.57% 2,289 93 4.06% 779 23 2.95%
Certificates of deposit.......... 158,046 6,827 5.76% 96,370 5,318 5.52% 76,932 4,317 5.61%
---------- ------- ------- ---------- ------- ------- ---------- ------- -------
Total interest bearing
deposits..................... 189,680 7,796 5.48% 107,202 5,696 5.31% 85,498 4,601 5.38%
FHLB advances and other
borrowings..................... 20,108 864 5.73% 4,959 287 5.79% 1,617 89 5.50%
Total interest bearing
liabilities.................. 209,788 8,660 5.50% 112,161 5,983 5.33% 87,115 4,690 5.38%
Noninterest bearing liabilities:
Demand deposits.................. 13,870 6,898 5,800
Other liabilities................ 2,906 1,090 799
---------- ---------- ----------
Total liabilities.............. 16,776 7,988 6,599
Stockholders' equity................. 16,508 9,798 7,166
Total liabilities and
stockholders' equity......... $243,072 $129,947 $100,880
========== ========== ==========
Interest spread (5).................. 3.01% 3.28% 3.13%
Net interest income/net
interest margin (6)................ $6,342 3.60% $4,954 3.90% $3,605 3.70%
======== ======= =======
</TABLE>
----------------------------
1995
----------------------------
Average Income/ Yield/
Balance(1) Expense Rate(2)
---------- ------- -------
Assets
Interest Earning Assets:
Securities......................... $12,826 $871 6.79%
Loans(3)........................... 48,465 4,446 9.17%
Interest bearing deposits in
other banks...................... 5,742 335 5.83%
Other earning assets (4) 3,277 394 12.02%
---------- ------- ------
Total interest earning
assets......................... 70,310 6,046 8.60%
Noninterest earning assets:
Cash and due from banks............ 1,485
Premises and equipment............. 606
Other assets....................... 1,320
Less: Allowance for loan
losses........................... (593)
----------
Total noninterest earning
assets......................... 2,818
----------
Total Assets................. $73,128
==========
Liabilities and Stockholders'
Equity
Interest Bearing Liabilities:
Interest bearing deposits:
Demand/MMDA accounts............. 7,108 229 3.22%
Savings.......................... 955 28 2.93%
Certificates of deposit.......... 50,679 2,999 5.92%
---------- ------- -----
Total interest bearing
deposits..................... 58,742 3,256 5.54%
FHLB advances and other
borrowings..................... 3,809 244 6.41%
Total interest bearing
liabilities.................. 62,551 3,500 5.60%
Noninterest bearing liabilities:
Demand deposits.................. 5,081
Other liabilities................ 449
----------
Total liabilities.............. 5,530
Stockholders' equity................. 5,047
Total liabilities and
stockholders' equity......... $73,128
==========
Interest spread (5).................. 3.00%
Net interest income/net
interest margin (6)................ $2,546 3.62%
=======
_________________________
(1) Average balances are computed on daily balances.
(2) Yield and rate percentages are all computed through the annualization of
interest income and expenses versus the average balances of their
respective accounts.
(3) Non-accrual loans are included in the average loan balances, and income on
such loans is recognized on a cash basis.
(4) Consists of funds advanced in settlement of loans.
(5) Interest spread is the average yield earned on earning assets, less the
average rate incurred on interest bearing liabilities.
(6) Net interest margin is net interest income, expressed as a percentage of
average earning assets.
-21-
<PAGE>
As the largest component of income, net interest income represents the
amount that interest and fees earned on loans and investments exceeds the
interest costs of funds used to support these earning assets. Net interest
income is determined by the relative levels, rates and mix of earning assets and
interest-bearing liabilities.
For the nine months ended September 30, 1998, net interest income was
$6.3 million, compared to $3.5 million for the same period in 1997. Net interest
income for the year-ended December 31, 1997 increased 37.5%, or approximately
$1.35 million over 1996. Average interest earning assets increased $29.6 million
from 1996 to 1997 while average interest-bearing liabilities increased $25.0
million. The yield on average interest-earning assets for the year ended
December 31, 1997 was 8.61% compared with 8.51% for the comparable 1996 period.
The 1997 yield on loans was 8.86%, compared to 9.02% in 1996. The cost on
average interest-bearing liabilities decreased seven basis points during 1997 to
5.31%, compared to 5.38% during 1996.
The Corporation's net interest margin is sensitive to the volume of
mortgage banking division loan originations. All loans originated by the
mortgage banking division are sold, servicing released, in the secondary
mortgage market. Each mortgage loan originated is sold when the borrower
locks-in the interest rate on the loan. When the volume of mortgage loan
originations increases, typically in a declining interest rate environment,
"funds advanced in settlement of mortgage loans" increases. This balance sheet
item represents funds advanced to close mortgage loans, pending delivery of the
loans to the loan purchaser. Until a mortgage loan is transferred to the
purchaser, the Corporation receives interest on the loan at the note rate. Funds
advanced in settlement of mortgage loans are financed to a large extent with
short term Federal Home Loan Bank borrowings. While such funds advanced
contribute to net interest income, the interest rate spread on this item is not
as great as the spread on the Bank's loan portfolio, which normally carries a
higher interest yield and is financed with lower cost deposits. Thus, as funds
advanced in settlement of mortgage loans increase, the interest spread and the
net interest margin decrease. The average balance of funds advanced in
settlement of mortgage loans was $44.9 in the nine months ended September 30,
1998, compared to $13.2 million in the year ended December 31, 1998.
Net interest income is affected by changes in both average interest
rates and average volumes of interest earning assets and interest bearing
liabilities. The following table sets forth the amounts of the total change in
interest income that can be attributed to changes in the volume of interest -
bearing assets and liabilities and the amount of the change that can be
attributed to changes in interest rates. The amount of the change not solely due
to rate or volume changes was allocated between the change due to rate and the
change due to volume based on the relative size of the rate and volume changes.
<TABLE>
<CAPTION>
Year Ended December 31
Nine Months Ended Sept. 30 --------------------------------------------------------
1998 compared to 1997 1997 compared to 1996 1996 compared to 1995
--------------------- --------------------- ---------------------
Increase (Decrease) Increase (Decrease) Increase (Decrease)
Due to Changes In: Due to Changes In: Due to Changes In:
Volume Rate Net Volume Rate Net Volume Rate Net
------ ---- --- ------ ---- --- ------ ---- ---
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income:
Securities $(206) $(110) $(316) $(64) $(112) $(176) $284 $30 $314
Loans (1) 7,392 (172) 7,220 2,792 (69) 2,723 2,234 (101) 2,133
Interest bearing
deposits in other
banks 507 (1) 506 (8) 103 95 (66) (132) (198)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total $7,693 $(283) $7,410 $2,720 $(78) $2,642 $2,452 $(203) $2,249
------ ------ ------ ------ ------ ------ ------ ------ ------
Interest Expense:
Interest bearing
deposits $3,661 $162 $3,823 $1,152 $(57) $1,095 $1,437 $(92) $1,345
FHLB advances and
other borrowings 704 0 704 193 5 198 (125) (30) (155)
------ ------ ------ ------ ------ ------ ------ ------ ------
Total $4,365 162 $4,527 $1,345 $(52) $1,293 $1,312 $(122) $1,190
------ ------ ------ ------ ------ ------ ------ ------ ------
Increase
(decrease) in
net interest income $3,328 $(445) $2,883 $1,375 $(26) $1,349 $1,140 $(81) $1,059
====== ====== ====== ====== ====== ====== ======= ====== ======
</TABLE>
(1) Loans includes funds advanced in settlement of loans.
-22-
<PAGE>
Interest Rate Sensitivity Analysis
Management evaluates interest sensitivity through the use of an
asset/liability management reporting gap model on a quarterly basis and then
formulates strategies regarding asset generation and pricing, funding sources
and pricing, and off-balance sheet commitments in order to decrease sensitivity
risk. These strategies are based on management's outlook regarding interest rate
movements, the state of the regional and national economies and other financial
and business risk factors. In addition, the Corporation establishes prices for
deposits and loans based on local market conditions and manages its securities
portfolio with policies set by itself.
The following table presents the amounts of the Corporation's interest
sensitive assets and liabilities that mature or reprice in the periods
indicated.
<TABLE>
<CAPTION>
September 30, 1998
Maturing
----------------------------------------------------------------
Within 4-12 1-5 Over
3 Months Months Years 5 Years Total
-------- ------ ----- ------- -----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Interest-Earning Assets:
Investment securities $8,195 $939 $1,127 $585 $10,846
Loans 95,048 20,155 37,207 24,380 176,790
Other interest-earning assets 35,232 - - - 35,232
------- ------- ------- ------- -------
Total interest-earning assets 138,475 21,094 38,334 24,965 222,868
------- ------- ------- ------- -------
Interest-Bearing Liabilities:
Deposits
Demand and savings (1) - 29,271 - 29,271
Time deposits, $100,000 and over 3,032 5,011 629 - 8,672
Other time deposits 41,880 98,030 5,746 5 145,661
Other interest-bearing liabilities 2,000 - 7,300 - 9,300
------- ------- ------- ------- -------
Total interest-bearing liabilities 46,912 103,041 42,946 5 192,904
------- ------- ------- ------- -------
Period Gap $91,563 $(81,947) $(4,612) $24,960 $29,964
------- ------- ------- ------- -------
Cumulative Gap $91,563 $9,616 $5,004 $29,964
------- ------- ------- -------
Ratio cumulative gap to total
interest-earning assets 41.08% 4.31% 2.25% 13.44%
</TABLE>
(1) Management has determined that interest checking, money market and savings
accounts are not sensitive to changes in related market ratio and,
therefore, the Corporation has placed them in the 1-5 years category.
The September 30, 1998 results of the rate sensitivity analysis show
the Corporation had $91.6 million more in assets than liabilities subject to
repricing within three months or less and was, therefore, in an asset sensitive
position. The cumulative gap at the end of one year was a positive $9.6 million,
an asset-sensitive position. Approximately $115.2 million, or 65.2% of the total
loan portfolio, matures or reprices within one year or less. An asset-sensitive
institution's net interest margin and net interest income generally will be
impacted favorably by rising interest rates, while that of a liability sensitive
institution generally will be impacted favorably by declining rates.
Increases and decreases in the Corporation's mortgage banking income
(which consists primarily of gains on sales of mortgage loans) tend to offset
decreases and increases in the net interest margin. In a climate of lower or
-23-
<PAGE>
declining interest rates, the Corporation's net interest margin will tend to
decrease as the yield on interest earning assets decreases faster than the cost
of interest bearing liabilities. Mortgage banking income, in contrast, tends to
increase in times of lower or declining interest rates, as refinancing activity
leads to an increase in mortgage loan originations. In a climate of rising or
higher interest rates, the net interest margin will tend to increase, while a
decrease in mortgage loan originations leads to a decrease in mortgage banking
income.
Loan Portfolio
The table below classifies loans, net of unearned income, by major
category and percentage distribution at the dates indicated:
<TABLE>
<CAPTION>
September 30, December 31,
---------------------------------------------- -------------------------------------------------------------------
1998 1997 1997 1996 1995
----------------------- ---------------------- ---------------------- ---------------------- ---------------------
Description Amount Percentage Amount Percentage Amount Percentage Amount Percentage Amount Percentage
------ ---------- ------ ---------- ------ ---------- ------ ---------- ------ ----------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial $75,116 42.49% $43,336 46.39% $50,713 33.68% $34,021 41.50% $25,005 42.77%
Real Estate 96,683 54.69 45,752 48.98 96,058 63.79 43,195 52.69 28,214 48.26
Consumer 4,991 2.82 4,323 4.63 3,819 2.53 4,759 5.81 5,245 8.97
------- ----- ------- ------ -------- ------ ------- ------ ------- ------
Total $176,790 100.00% $93,411 100.00% $150,590 100.00% $81,975 100.00% $58,464 100.00%
======== ====== ======= ====== ======== ====== ======= ====== ======= ======
</TABLE>
December 31,
------------------------------------------------
1994 1993
---------------------- ----------------------
Description Amount Percentage Amount Percentage
------ ---------- ------ ----------
(Dollars in thousands)
Commercial $3,444 8.39% $2,631 8.44%
Real Estate 21,730 52.96% 13,354 42.85%
Consumer 15,860 38.65% 15,181 48.71%
------ ------
Total $41,034 100.00% $31,166 100.00%
======= ====== ======= ======
Securities Portfolio
The following tables present certain information on the Corporation's
investment securities portfolio:
Securities Available for Sale(1)
<TABLE>
<CAPTION>
September 30, December 31
------------- --------------------------------------------
1998 1997 1996 1995
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
U.S. Government Agencies $7,700 $9,802 $15,799 $10,011
Federal Reserve Bank Stock 434 297 246 165
Federal Home Loan Bank Stock 1,162 2,233 747 316
Other 155 100 100 55
------ ------- ------- -------
$9,451 $12,432 $16,893 $10,547
====== ======= ======= =======
</TABLE>
_________
(1) Carried at fair value
Securities Held to Maturity(1)
<TABLE>
<CAPTION>
September 30, December 31
------------- ----------------------------------------------
1998 1997 1996 1995
---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C>
U.S. Government and Agencies $649 $1,996 - -
State and Municipal 746 746 - -
------ ------ ------ ------
$1,395 $2,742 - -
====== ======
</TABLE>
______________
(1) Carried at cost, adjusted for amortization of premium or accretion of
discount using the interest method.
-24-
<PAGE>
At September 30, 1998 and December 31, 1997 there were no unrealized
losses on securities available for sale and gross unrealized gains were $97,000
and $449,000, respectively. At December 31, 1996 gross unrealized gains and
losses on securities available for sale were $90,000 and $125,000, respectively.
At December 31, 1995 gross unrealized gains and losses on securities available
for sale were $42,000 and $3,000, respectively.
At September 30, 1998 and December 31, 1997 gross unrealized gains on
securities held to maturity were $26,000 and $11,000, respectively. At December
31, 1997 there were $37,000 of gross unrealized losses on securities held to
maturity. The Corporation had no securities held to maturity at December 31,
1996 or December 31, 1995.
The following table presents information on the maturities of the
Corporation's investment securities at December 31, 1997.
<TABLE>
<CAPTION>
Held to Maturity Available for Sale
---------------- ------------------
Amortized Amortized
Cost Fair Value Cost Fair Value
---- ---------- ---- ----------
<S> <C> <C> <C> <C>
Due in:
One year or less $938 $919 $ - $ -
One to five years 1,210 1,192 - -
Five to ten years 415 415 - -
After ten years 179 190 9,352 9,801
Federal Reserve Bank Stock - - 297 297
Federal Home Loan Bank Stock - - 2,234 2,234
Other - - 100 100
------ ------ ------- -------
$2,742 $2,716 $11,983 $12,432
====== ====== ======= =======
</TABLE>
In 1997 the average yield on investment securities was 6.33%, compared
to 5.75% for the nine months ended September 30, 1998. At September 30, 1998 and
December 31, 1997, all securities with a maturity of over 10 years carried
variable interest rates. The maturity characteristics of the Corporation's
investment securities portfolio did not change materially from December 31, 1997
to September 30, 1998.
Nonperforming Assets
Unless well secured and in the process of collection, the Corporation
places loans on non-accrual status after being delinquent greater than ninety
days, or earlier in situations in which the loans have developed inherent
problems that indicated payment of principal and interest may not be made in
full. Whenever the accrual of interest is stopped, previously accrued but
uncollected income is reversed. Thereafter, interest is recognized only as cash
is received. The loan is reinstated to an accrual basis after it has been
brought current as to principal and interest under the contractual terms of the
loan. At September 30, 1998, nonaccrual loans were $711,000, compared to $3.1
million at December 31, 1997 and $50,000 at December 31, 1996. The increase in
non-accrual loans from year end 1996 to 1997 was primarily the result of the
Eastern American acquisition. At the time of the acquisition, Eastern American
had $3.04 million of nonaccrual loans, while the Bank had nonaccrual loans of
$12,000. During 1998 the Bank implemented its plan to substantially reduce the
level of nonaccrual loans acquired from Eastern American. Of the Corporation's
$711,000 of nonaccrual loans at September 30, 1998, $322,000 were acquired from
Eastern American. All of the non-accrual loans at September 30, 1998 were
secured by real estate. When the Corporation acquired Eastern American, it also
acquired a $1.4 million allowance for loan losses.
-25-
<PAGE>
<TABLE>
<CAPTION>
September 30, December 31,
------------------ ------------------------------------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Nonaccrual loans $711 $340 $3,059 $50 $57 $52 $113
Loans contractually past due 90 days or
more and still accruing(1) 1,203 485 1,339 371 13 10 3
Troubled debt restructuring - - - - - - -
------ ---- ------ ---- ---- ---- ----
Total nonperforming loans 1,914 825 4,398 421 70 62 116
Other real estate owned 488 52 684 50 71 91 91
------ ---- ------ ---- ---- ---- ----
Total nonperforming assets $2,402 $877 $5,082 $471 $141 $153 $207
====== ==== ====== ==== ==== ==== ====
Nonperforming assets to period-end total
loans and other real estate 1.36% 0.94% 3.36% 0.57% 0.24% 0.37% 0.66%
</TABLE>
___________
(1) At September 30, 1998, consisted of vehicle loans purchased from dealers
with recourse to the dealer after the loan is 120 days past due and loans
secured by single family residences.
Summary of Loan Loss Experience
The allowance for loan losses is increased by the provision for loan
losses and reduced by loans charged off net of recoveries. The allowance for
loan losses is established and maintained at a level judged by management to be
adequate to cover any anticipated loan losses to be incurred in the collection
of outstanding loans. In determining the adequate level of the allowance for
loan losses, management considers the following factors: (a) loan loss
experience; (b) problem loans, including loans judged to exhibit potential
charge-off characteristics, loans on which interest is no longer being accrued,
loans which are past due and loans which have been classified in the most recent
regulatory examination; and (c) anticipated economic conditions and the
potential impact these conditions may have on individual classifications of
borrowers.
-26-
<PAGE>
The following table presents the Corporation's loan loss experience for
the periods indicated:
<TABLE>
<CAPTION>
Nine Months Ended Year Ended December 31,
September 30, -------------------------------------------------------
--------------------
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Allowance for loan losses at
beginning of period $2,573 $1,040 $1,040 $854 $492 $512 $403
Loans charged off:
Commercial 89 2 2 5 21 124 123
Real Estate 141 42 56 109 148 11 36
Consumer 13 5 7 6 17 63 75
------ ------ ------ ------ ------ ------ ------
Total 243 49 65 120 186 198 234
Recoveries of loans previously charged
off:
Commercial 1 33 34 6 23 116 24
Real Estate 35 - - - - - 27
Consumer 23 6 9 10 13 12 5
------ ------ ------ ------ ------ ------ ------
Total 59 39 43 16 36 128 56
------ ------ ------ ------ ------ ------ ------
Net loans charged off 184 10 22 104 150 70 178
Provision for loan losses 150 113 155 290 512 50 287
------ ------ ------ ------ ------ ------ ------
Allowance acquired through business
combination - - 1,400 - - - -
------ ------ ------ ------ ------ ------ ------
Allowance for loan losses end of
period $2,539 $1,143 $2,573 $1,040 $854 $492 $512
====== ====== ====== ====== ====== ====== ======
Average total loans (net of unearned
income) $163,435 $86,097 $93,839 $69,488 $48,465 $35,714 $24,530
Total loans (net of unearned income)
at period-end $176,790 $93,411 $150,590 $81,975 $58,464 $41,034 $31,166
Ratio of net charge-offs to average
loans 0.11% 0.01% 0.02% 0.15% 0.31% 0.20% 0.72%
Ratio of provision for loan losses to
average loans 0.09% 0.13% 0.17% 0.42% 1.06% 0.14% 1.17%
Ratio of provision for loan losses to
net charge-offs 81.52% 1130.00% 704.55% 278.85% 341.33% 71.43% 161.24%
Allowance for loan losses to
period-end loans 1.44% 1.22% 1.71% 1.27% 1.46% 1.20% 1.64%
</TABLE>
In establishing the allowance for loan losses, in addition to the
factors described above, management considers the following risk elements in the
loan portfolio.
Construction lending often involves larger loan balances with single
borrowers. Construction loans involve risks attributable to the fact that loan
funds are advanced upon the security of the home under construction, which is of
uncertain value prior to the completion of construction. If there is a default,
the corporation may be required to complete and sell the home.
Commercial real estate loans typically involve larger loan balances
concentrated with single borrowers or groups of related borrowers. Additionally,
the payment experience on loans secured by income producing properties is
typically dependent on the successful operation of a business or a real estate
project and thus may be subject to a greater extent, to adverse conditions in
the real estate market or in the economy generally.
Consumer loans entail risks, particularly in the case of consumer loans
which are unsecured, such as lines of credit, or secured by rapidly depreciable
assets such as automobiles. In such cases, any repossessed collateral for a
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<PAGE>
defaulted consumer loan may not provide an adequate source of repayment of the
outstanding loan balance as a result of the greater likelihood of damage, loss
or depreciation. The remaining deficiency often does not warrant further
substantial collection efforts against the borrower. In addition, consumer loan
collections are dependent on the borrower's continuing financial stability, thus
are more likely to be adversely affected by job loss, divorce, illness or
personal bankruptcy. Furthermore, the application of various federal and state
laws, including federal and state bankruptcy and involves laws, may limit the
amount which can be recovered on such loans. Such loans may also give rise to
claims and defenses by a consumer loan borrower against an assignee of such loan
such as the Corporation, and a borrower may be able to assert against such
assignee claims and defenses which it has against the seller of the underlying
collateral.
Commercial business loans typically are made on the basis of the
borrower's ability to make repayment from cash flow from its business and are
secured by business assets, such as commercial real estate, accounts receivable,
equipment and inventory. As a result, the availability of funds for the
repayment of commercial business loans may be substantially dependent on the
success of the business itself. Further, the collateral for commercial business
loans may depreciate over time and cannot be appraised with as much precision as
residential real estate.
Sources of Funds
The Corporation's primary source of funds is deposit accounts, which
include demand deposits, savings and money market accounts and other time
deposits. The following table is a summary of average deposits and average rates
paid.
Average Deposits and Average Rates Paid
<TABLE>
<CAPTION>
Nine Months Ended
September 30, Year Ended December 31,
------------- ---------------------------------------------------
1998 1997 1996 1995
---- ---- ---- ----
Average Average Average Average Average Average Average Average
Balance Rate Balance Rate Balance Rate Balance Rate
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Non-interest bearing
demand deposits $13,870 - $6,898 - $5,800 - $5,081 -
Demand/MMDA accounts
11,715 3.27% 8,543 3.34% 7,787 3.35% 7,108 3.22%
Savings 19,919 4.57% 2,289 4.06% 779 2.95% 955 2.93%
Certificates of deposit 158,046 5.76% 96,370 5.52% 76,932 5.61% 50,679 5.92%
------- ------ ------ ------
Total (weighted average
rate) $203,550 3.83% $114,100 4.99% $91,298 5.04% $63,823 5.10%
======== ======== ======= =======
</TABLE>
The following table is a summary of time deposits of $100,000 or more
by remaining maturities at September 30, 1998.
At September 30, 1998
-----------------------------------------
Amount Percent
(Dollars in Thousands)
Three months or less $3,033 34.97%
Three to twelve months 5,011 57.78%
Over twelve 629 7.25%
------ ------
Total $8,673 100.00%
====== ======
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Certain information on short term borrowings is presented in the
following table. All such borrowings represent advances to the Bank by the
Federal Home Loan Bank of Atlanta and are secured by Federal Home Loan Bank
stock, investment securities and first mortgage loans.
<TABLE>
<CAPTION>
Year Ended December 31,
Nine Months Ended ---------------------------------------------------
September 30, 1998 1997 1996 1995
------------------ ---- ---- ----
<S> <C> <C> <C> <C>
Balance at period end $2,000 $13,650 $7,237 $ -
Average balance during period $12,044 $4,959 $1,617 $3,809
Average rate 5.72% 5.79% 5.50% 6.41%
Maximum outstanding during period $39,137 $13,650 $7,237 $6,300
</TABLE>
CAPITALIZATION
The following table sets forth the consolidated capitalization of the
Corporation at September 30, 1998. See "Use of Proceeds." This table is based
on, and is qualified in its entirety by, the historical consolidated financial
statements of the Corporation, including the related notes thereto, which are
included in documents incorporated by reference herein, and should be read in
conjunction therewith.
<TABLE>
<CAPTION>
Sept. 30, 1998
--------------
(Dollars in Thousands)
<S> <C>
Long-term debt (1) $7,300
Capitalized lease obligations -
Shareholders' Equity
Common Stock, par value $1.50 per share, authorized 6,666,666
shares, shares outstanding - 2,479,446 3,719
Capital surplus 10,855
Retained earnings 2,713
Accumulated other comprehensive income 64
-------
Total shareholders' equity 17,351
-------
Total capitalization $24,651
=======
___________
(1) Federal Home Loan Bank advances
Consolidated Capital Ratios
Equity to assets 7.50%
Tier 1 Capital 8.24%
Total Capital 9.45%
</TABLE>
ACCOUNTING TREATMENT
The financial statements of the Trust will be consolidated into the
Corporation's consolidated financial statements, with the Capital Securities
treated as minority interest and shown in the Corporation's consolidated balance
sheet as "Corporation-Obligated Mandatorily Redeemable Capital Securities of
Subsidiary Trust." The financial statement footnotes of the Corporation will
reflect that the sole asset of the Trust will be the amount of the Junior
Subordinated Debt Securities maturing on January __, 2029. All future reports
filed by the Corporation under the Exchange Act will present information
regarding the Trust and any other similar trusts in the manner described above.
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REGULATORY TREATMENT
As a registered bank holding company, the Corporation is required by
the Federal Reserve to maintain certain levels of capital for bank regulatory
purposes. The Corporation expects that the Capital Securities will be treated as
"Tier I Capital" of the Corporation for such purposes; provided that the Capital
Securities can only comprise 25% of the Corporation's Tier I Capital. Based on
the Corporation's Tier I Capital at September 30, 1998, approximately $5.8
million of the Capital Securities would be initially included in the
Corporation's Tier I Capital.
DESCRIPTION OF CAPITAL SECURITIES
Under the Declaration, the Trust will issue the Capital Securities and
the Common Securities, which will represent beneficial ownership interests in
the Trust. The Declaration will be qualified under the Trust Indenture Act of
1939 (the "Trust Indenture Act"). This summary of certain provisions of the
Capital Securities, the Common Securities and the Declaration does not purport
to be complete and is subject to, and is qualified in its entirety by reference
to, all the provisions of the Declaration, including the definitions therein of
certain terms. The form of the Declaration is available upon request from the
Trustees.
General
The Capital Securities will be limited to $8.0 million aggregate
Liquidation Amount at any one time outstanding. The Trust reserves the right to
increase the aggregate Liquidation Amount by not more than $1.2 million. The
Capital Securities will rank equally, and payments will be made thereon pro
rata, with the Common Securities except as described under "Subordination of
Common Securities." Legal title to the Junior Subordinated Debt Securities will
be held by the Property Trustee on behalf of the Trust in trust for the benefit
of the holders of the Capital Securities and Common Securities. The Guarantee
Agreement executed by the Corporation for the benefit of the holders of the
Capital Securities (the "Guarantee Agreement") will provide for the Guarantee on
a subordinated basis with respect to the Capital Securities but will not
guarantee payment of Distributions or amounts payable on redemption of the
Capital Securities or on liquidation of the Trust when the Trust does not have
funds on hand available to make such payments. See "Description of Guarantee."
Distributions
The Capital Securities represent beneficial ownership interests in the
Trust. Distributions on each Capital Security will be payable at ____% per annum
of the stated Liquidation Amount of $25. Distributions will be payable quarterly
in arrears on the 15th day of March, June, September and December of each year
to the holders of the Capital Securities at the close of business on the
Business Day immediately preceding such Distribution Date (each, a "record
date"). A "Business Day" shall mean any day other than a Saturday or a Sunday,
or a day on which banking institutions in Richmond, Virginia are authorized or
required by law or executive order to remain closed, or a day on which the
corporate trust office of the Property Trustee or the Debenture Trustee is
closed for business.
Distributions on the Capital Securities will be cumulative.
Distributions will accumulate from the Issue Date. The first Distribution Date
for the Capital Securities will be____ 15, 1999. The amount of Distributions
payable for any period will be computed on the actual number of days elapsed in
a year of twelve 30-day months. If any date on which Distributions are payable
on the Capital Securities is not a Business Day, payment of the Distributions
payable on such date will be made on the next succeeding day that is a Business
Day (and without any additional Distributions or other payments in respect to
any such delay) with the same force and effect as if made on the date such
payment was originally payable (each date on which Distributions are payable in
accordance with the foregoing. a "Distribution Date").
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debt Securities at any time or
from time to time for
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<PAGE>
a period not exceeding 20 consecutive quarterly periods with respect to each
Extension Period. However, no Extension Period may extend beyond the Stated
Maturity of the Junior Subordinated Debt Securities. As a consequence of any
such election, quarterly Distributions on the Capital Securities by the Trust
will be deferred during any such Extension Period. Distributions to which
holders of the Capital Securities are entitled will accumulate additional
Distributions thereon at ____% per annum thereof, compounded quarterly from the
relevant payment date for such Distributions during any Extension Period, to the
extent permitted by applicable law. The term "Distributions" as used herein
shall include any such additional Distributions.
During any Extension Period, the Corporation 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 the Corporation's capital stock (which includes common and
preferred stock);
o make any payment of principal, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Corporation
that rank equally with or junior in interest to the Junior
Subordinated Debt Securities; or
o make any guarantee payments with respect to any guarantee by the
Corporation of the debt securities of any subsidiary of the
Corporation if such guarantee ranks equally with or junior in
interest to the Junior Subordinated Debt Securities.
However, during an Extension Period, the Corporation may:
o pay dividends or make distributions in common stock of the
Corporation;
o declare a dividend in connection with the implementation of a
stockholders' rights plan, issue stock under any such plan in the
future, or redeem or repurchase any such rights pursuant thereto;
o make payments under the Guarantee;
o purchase or acquire shares of the Corporation's Common Stock in
connection with the satisfaction by the Corporation of its
obligations under any employee benefit plan or any other
contractual obligation of the Corporation (other than a
contractual obligation ranking equally with or junior to the
Junior Subordinated Debt Securities);
o make a distribution as a result of a reclassification of the
Corporation's capital stock or the exchange or conversion of one
class or series of the Corporation's capital stock for another
class or series of the Corporation's capital stock; or
o purchase fractional interests in shares of the Corporation's stock
pursuant to the conversion or exchange provisions, of such capital
stock or the security being converted or exchanged.
Prior to the termination of any Extension Period, the Corporation may
further extend such Extension Period. However, no Extension Period may exceed 20
consecutive quarterly periods or extend beyond the Stated Maturity of the Junior
Subordinated Debt Securities. Upon the termination of any Extension Period and
the payment of all amounts then accrued and unpaid on the Junior Subordinated
Debt Securities (together with interest thereon accrued at __% per annum,
compounded quarterly, to the extent permitted by applicable law), the
Corporation may elect to begin a new Extension Period. No interest or other
amounts shall be due and payable during an Extension Period, except at the end
thereof.
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<PAGE>
The Corporation must give the Property Trustee, the Administrative
Trustees and the Debenture Trustee notice of its election of any such Extension
Period at least three Business Days prior to the earlier of (i) the date the
Distributions on the Capital Securities would have been payable except for the
election to begin such Extension Period or (ii) the date the Administrative
Trustees are required to give notice to any automated quotation system or to
holders of such Capital Securities of the record date or the date such
Distributions are payable, but in any event not less than three Business Days
prior to such record date. The Debenture Trustee shall give notice of the
Corporation's election to begin or extend an Extension Period to the holders of
the Capital Securities. There is no limitation on the number of times that the
Corporation may elect to begin an Extension Period. See "Description of Junior
Subordinated Debt Securities--Option to Extend Interest Payment Date" and
"Certain United States Federal Income Tax Consequences--Interest Income and
Original Issue Discount."
The Corporation has no current intention of exercising its right to
defer payments of interest on the Junior Subordinated Debt Securities.
The revenue of the Trust available for distribution to holders of the
Capital Securities will be limited to payments under the Junior Subordinated
Debt Securities. See "Description of Junior Subordinated Debt
Securities--General." If the Corporation does not make interest payments on the
Junior Subordinated Debt Securities, the Property Trustee will not have funds
available to pay Distributions on the Capital Securities. The payment of
Distributions (if and to the extent the Trust has funds legally available for
the payment of such Distributions and cash sufficient to make such payments) is
guaranteed by the Corporation on a limited basis as set forth herein under
"Description of Guarantee."
Mandatory Redemption
Upon the repayment or redemption, in whole or in part, of the Junior
Subordinated Debt Securities, whether at maturity or upon earlier redemption as
provided in the Junior Subordinated Indenture, the proceeds from such repayment
or redemption shall be applied by the Property Trustee to redeem a Like Amount
(as defined below) of the Trust Securities, upon not less than 30 nor more than
60 days' notice, at a redemption price (the "Redemption Price") equal to the
aggregate Liquidation Amount of such Capital Securities plus accumulated but
unpaid Distributions thereon to the date of redemption (the "Redemption Date")
and the related amount of the premium, if any, paid by the Corporation upon the
concurrent redemption of such Junior Subordinated Debt Securities. See
"Description of Junior Subordinated Debt Securities--Optional Redemption." If
less than all the Junior Subordinated Debt Securities are to be repaid or
redeemed on a Redemption Date, then the proceeds from such repayment or
redemption shall be allocated to the redemption pro rata of the Capital
Securities and the Common Securities. The amount of premium, if any, paid by the
Corporation upon the redemption of all or any part of the Junior Subordinated
Debt Securities to be repaid or redeemed on a Redemption Date shall be allocated
to the redemption pro rata of the Capital Securities and the Common Securities.
The Corporation has the right to redeem the Junior Subordinated Debt
Securities (i) on or after __________ 15, 2004, in whole at any time or in part
from time to time, or (ii) in whole, but not in part, at any time within 90 days
following the occurrence and during the continuation of a Tax Event, Investment
Company Event or Capital Treatment Event (each as defined below), in each case
subject to possible regulatory approval. A redemption of the Junior Subordinated
Debt Securities would cause a mandatory redemption of a Like Amount of the
Capital Securities and Common Securities at the Redemption Price.
The Redemption Price, in the case of a redemption on or after
_________________ 15, 2004, shall equal the following prices, expressed in
percentages of the Liquidation Amount (as defined below), together with
accumulated Distributions to but excluding the date fixed for redemption, if
redeemed during the 12-month period beginning ______________ 15:
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<PAGE>
Year Redemption Price
2004 % ($_______)
2005
2006
2007
2008
2009
2010
2011
2012
2013
and at 100% on or after _______________ 15, 2014
The Redemption Price, in the case of a redemption prior to 15, 2004
following a Tax Event, Investment Company Event or Capital Treatment Event, will
equal for each Capital Security the Make-Whole Amount for a corresponding $25
principal amount of Junior Subordinated Debt Securities together with
accumulated Distributions to but excluding the date fixed for redemption. The
"Make-Whole Amount" will be equal to the greater of (i) 100% of the principal
amount of such Junior Subordinated Debt Securities and (ii) as determined by a
Quotation Agent (as defined below), the sum of the present values of the
principal amount and premium payable as part of the Redemption Price with
respect to an optional redemption of such Junior Subordinated Debt Securities on
15, 2004 together with the present values of scheduled payments of interest (not
including the portion of any such payments of interest accrued as of the
Redemption Date) from the Redemption Date to 15, 2004 (the "Remaining Life"), in
each case discounted to the Redemption Date on a quarterly basis (assuming a
360-day year consisting of 30-day months) at the Adjusted Treasury Rate.
"Adjusted Treasury Rate" means, with respect to any Redemption Date,
the Treasury Rate plus (i) 2.00% if such Redemption Date occurs on or before
January 15, 1999, or (ii) 1.25% if such Redemption Date occurs after _________
15, 2000
"Treasury Rate" means (i) the yield, under the heading which represents
the average for the week immediately prior to the calculation date, appearing in
the most recently published statistical release designated "H.15 (519)" or any
successor publication which is published weekly by the Federal Reserve and which
establishes yields on actively traded United States Treasury securities adjusted
to constant maturity under the caption "Treasury Constant Maturities," for the
maturity corresponding to the Remaining Life (if no maturity is within three
months before or after the Remaining Life, yields for the two published
maturities most closely corresponding to the Remaining Life shall be determined
and the Treasury Rate shall be interpolated or extrapolated from such yields on
a straight-line basis, rounding to the nearest month) or (ii) if such release
(or any successor release) is not published during the week preceding the
calculation date or does not contain such yields, the rate per annum equal to
the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue (expressed as a
percentage of its principal amount) equal to the Comparable Treasury Price for
such Redemption Date. The Treasury Rate shall be calculated on the third
Business Day preceding the Redemption Date.
"Like Amount" means (i) with respect to a redemption of Trust
Securities, Trust Securities having a Liquidation Amount (as defined below)
equal to that portion of the principal amount of Junior Subordinated Debt
Securities to be contemporaneously redeemed in accordance with the Junior
Subordinated Indenture, allocated to the Common Securities and to the Capital
Securities based upon the relative Liquidation Amounts of such classes and (ii)
with respect to a distribution of Junior Subordinated Debt Securities to holders
of Trust Securities in connection with a dissolution or
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<PAGE>
liquidation of the Trust, Junior Subordinated Debt Securities having a principal
amount equal to the Liquidation Amount of the Trust Securities of the holder to
whom such Junior Subordinated Debt Securities are distributed.
"Liquidation Amount" means the stated amount of $25 per Trust Security.
"Tax Event" means the receipt by the Trust of an opinion of counsel to
the Corporation 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 or administrative pronouncement or action or judicial decision
interpreting or applying such laws or regulations, which amendment or change is
effective or which pronouncement or decision is announced on or after the date
of issuance of the Capital Securities, there is more than an insubstantial risk
that (i) the Trust is, or will be within 90 days of the delivery of such
opinion, subject to United States federal income tax with respect to income
received or accrued on the Junior Subordinated Debt Securities, (ii) interest
payable by the Corporation on the Junior Subordinated Debt Securities is not, or
within 90 days of the delivery of such opinion, will not be, deductible by the
Corporation, in whole or in part, for United States federal income tax purposes
or (iii) the Trust is, or will be within 90 days of the delivery of such
opinion, subject to more than a de minimis amount of other taxes, duties or
other governmental charges.
"Investment Company Event" means the receipt by the Trust of an opinion
of counsel to the Corporation experienced in such matters to the effect that, as
a result of the occurrence of a change in law or regulation or a written change
(including any announced prospective change) in interpretation or application of
law or regulation by any legislative body, court, governmental agency or
regulatory authority, there is more than an insubstantial risk that the Trust is
or will be considered an "investment company" that is required to be registered
under the Investment Company Act, which change or prospective change becomes
effective or would become effective, as the case may be, on or after the date of
the issuance of the Capital Securities.
"Capital Treatment Event" means the reasonable determination by the
Corporation that, as a result of the occurrence of any amendment to, or change
(including any announced prospective change) in, the laws (or any rules or
regulations thereunder) of the United States or any political subdivision
thereof or therein, or as a result of any official or administrative
pronouncement or action or judicial decision interpreting or applying such laws
or regulations, which amendment or change is effective or such pronouncement,
action or decision is announced on or after the date of issuance of the Capital
Securities, there is more than an insubstantial risk that the Corporation will
not be entitled to treat an amount equal to the Liquidation Amount of the
Capital Securities as "Tier I Capital" (or the then equivalent thereof) for
purposes of the risk-based capital adequacy guidelines of the Federal Reserve,
as then in effect and applicable to the Corporation.
Payment of Additional Sums. If a Tax Event described in clause (i) or
(iii) of the definition of Tax Event above has occurred and is continuing and
the Trust is the holder of all the Junior Subordinated Debt Securities, the
Corporation will pay Additional Sums (as defined below), if any, on the Junior
Subordinated Debt Securities.
"Additional Sums" means the additional amounts as may be necessary in
order that the amount of Distributions then due and payable by the Trust on the
outstanding Capital Securities and Common Securities of the Trust will not be
reduced as a result of any additional taxes, duties and other governmental
charges to which the Trust has become subject as a result of a Tax Event.
Redemption Procedures
Trust Securities shall be redeemed, if at all, at the Redemption Price
with the proceeds from the contemporaneous repayment or redemption of the Junior
Subordinated Debt Securities. Redemptions of the Trust Securities shall be made
and the Redemption Price shall be payable on each Redemption Date (as defined
below) only to
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<PAGE>
the extent that the Trust has funds on hand available for the payment of such
Redemption Price. See also "Subordination of Common Securities."
If the Trust gives a notice of redemption in respect of the Capital
Securities, then, by 12:00 noon, Richmond, Virginia time, on the date fixed for
redemption (the "Redemption Date"), to the extent funds are available, with
respect to the Capital Securities held in global form, the Property Trustee will
deposit irrevocably with DTC funds sufficient to pay the Redemption Price and
will give DTC irrevocable instructions and authority to pay the Redemption Price
to the holders of the Capital Securities. See "Form, Denomination, Book-Entry
Procedures and Transfer." With respect to the Capital Securities held in
certificated form, the Property Trustee, to the extent funds are available, will
irrevocably deposit with the paying agent for the Capital Securities funds
sufficient to pay the 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 the Capital
Securities. See "Payment and Paying Agency." Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date shall be payable to the
holders of the Capital Securities on the relevant record dates for the related
Distribution Dates.
If notice of redemption shall have been given and funds deposited as
required, then upon the date of such deposit, all rights of the holders of the
Capital Securities will cease, except the right of the holders of the Capital
Securities to receive the Redemption Price, but without interest on such
Redemption Price, and the Capital Securities will cease to be outstanding. In
the event that any date fixed for redemption of Capital Securities is not a
Business Day, then payment of the Redemption Price payable on such date will be
made on the next succeeding day which is a Business Day (and without any
interest or other payment in respect of any such delay), except that, if such
Business Day falls in the next calendar year, such payment will be made on the
immediately preceding Business Day. In the event that payment of the Redemption
Price is improperly withheld or refused and not paid either by the Trust or by
the Corporation pursuant to the Guarantee as described under "Description of
Guarantee," Distributions on Capital 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, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the Redemption Price.
Subject to applicable law (including, without limitation, United States
federal securities laws), the Corporation or its subsidiaries may at any time
and from time to time purchase outstanding, Capital Securities by tender in the
open market or by private agreement.
Notice of any redemption (other than at the Stated Maturity of the
Junior Subordinated Debt Securities) will be mailed at least 30 days but not
more than 60 days before the Redemption Date to each holder of Trust Securities
at its registered address. Unless the Corporation defaults in payment of the
Redemption Price on, or in the repayment of, the Junior Subordinated Debt
Securities, on and after the Redemption Date, Distributions will cease to accrue
on the Trust Securities called for redemption.
Liquidation of the Trust and Distribution of Junior Subordinated Debt Securities
The Corporation, as the holder of the outstanding Common Securities,
will have the right at any time (including, without limitation, upon the
occurrence of a Tax Event or Capital Treatment Event) to terminate the Trust and
cause a Like Amount of the Junior Subordinated Debt Securities to be distributed
to the holders of the Trust Securities upon liquidation of the Trust. Such right
to terminate is subject to prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve.
Upon liquidation of the Trust and certain other events, the Junior
Subordinated Debt Securities may be distributed to holders of the Capital
Securities. Under current United States federal income tax law, a distribution
of Junior Subordinated Debt Securities upon the dissolution of the Trust would
not be a taxable event to holders of the Capital Securities. If, however, the
Trust is characterized for United States federal income tax purposes as an
association
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<PAGE>
taxable as a corporation at the time of dissolution of the Trust, the
distribution of the Junior Subordinated Debt Securities may constitute a taxable
event to holders of Capital Securities. See "Certain United States Federal
Income Tax Consequences--Distribution of Junior Subordinated Debt Securities to
Holders of Capital Securities."
The Trust shall automatically terminate upon the first to occur of: (i)
certain events of bankruptcy, dissolution or liquidation of the Corporation;
(ii) the distribution of a Like Amount of the Junior Subordinated Debt
Securities to the holders of the Trust Securities if the Corporation, as
Depositor, has given written direction to the Property Trustee to terminate the
Trust (which direction is optional and, except as described above, wholly within
the discretion of the Corporation, as Depositor); (iii) redemption of all of the
Trust Securities as described under "Mandatory Redemption" above; (iv)
expiration of the term of the Trust; and (v) the entry of an order for the
dissolution of the Trust by a court of competent jurisdiction.
If an early termination occurs as described in clause (i), (ii), (iv)
or (v) above, the Trust shall be liquidated by the Trustees as expeditiously as
the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to the
holders of such Trust Securities a Like Amount of the Junior Subordinated Debt
Securities, unless such distribution would not be practical, in which event such
holders will be entitled to receive out of the assets of the Trust available for
distribution to holders, after satisfaction of liabilities to creditors of the
Trust as provided by applicable law, an amount equal to, in the case of holders
of Capital Securities, 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 available to pay in full the
aggregate Liquidation Distribution, then the amounts payable directly by the
Trust on the Capital Securities shall be paid on a pro rata basis. The holder(s)
of the Common Securities will be entitled to receive distributions upon any such
liquidation pro rata with the holders of the Capital Securities, except that if
a Debenture Event of Default (or an event that, with notice or passage of time,
would become such an Event of Default) or an Event of Default under the
Declaration has occurred and is continuing, the Capital Securities shall have a
priority over the Common Securities with respect to any such distributions. See
"Subordination of Common Securities." If an early termination occurs as
described in clause (v) above, the Junior Subordinated Debt Securities will be
subject to optional redemption in whole (but not in part).
If the Corporation elects not to redeem the Junior Subordinated Debt
Securities prior to maturity and the Trust is not liquidated and the Junior
Subordinated Debt Securities are not distributed to holders of the Trust
Securities, the Capital Securities will remain outstanding until the repayment
of the Junior Subordinated Debt Securities at the Stated Maturity.
On and after the liquidation date is fixed for any distribution of
Junior Subordinated Debt Securities to holders of the Trust Securities, (i) the
Capital Securities will no longer be deemed to be outstanding, (ii) DTC or its
nominee, as the record holder of the Capital Securities, will receive a
registered global certificate or certificates representing the Junior
Subordinated Debt Securities to be delivered upon such distribution with respect
to Capital Securities held by DTC or its nominee and (iii) any certificates
representing Capital Securities not held by DTC or its nominee will be deemed to
represent Junior Subordinated Debt Securities having a principal amount equal to
the Liquidation Amount of such Capital Securities and bearing accrued and unpaid
interest in an amount equal to the accumulated and unpaid Distributions on such
Capital Securities until such certificates are presented to the Administrative
Trustees or their agent for cancellation, whereupon the Corporation will issue
to such holder, and the Debenture Trustee will authenticate, a certificate
representing such Junior Subordinated Debt Securities.
There can be no assurance as to the market prices for the Capital
Securities or the Junior Subordinated Debt Securities that may be distributed in
exchange for the Trust Securities if a dissolution and liquidation of the Trust
were to occur. Accordingly, the Capital Securities that an investor may
purchase, or the Junior Subordinated Debt Securities that the investor may
receive on dissolution and liquidation of the Trust, may trade at a discount to
the price that the investor paid to purchase the Capital Securities offered
hereby.
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Subordination of Common Securities
Payment of Distributions on, and the Redemption Price of, the Capital
Securities and Common Securities, as applicable, shall be made pro rata to the
holders of Capital Securities and Common Securities based on the Liquidation
Amount of the Trust Securities. However, if on any Distribution Date or
Redemption Date any Debenture Event of Default (or an event that, with notice or
passage of time, would become such an Event of Default) or an Event of Default
under the Declaration shall have occurred and be continuing, no payment of any
Distribution on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions on all of the outstanding Capital
Securities for all Distribution periods terminating on or prior thereto, or, in
the case of payment of the Redemption Price, the full amount of such Redemption
Price on all of the outstanding Capital Securities, shall have been made or
provided for, and all funds available to the Property Trustee shall first be
applied to the payment in full in cash of all Distributions on, or the
Redemption Price of, the Capital Securities then due and payable.
In the case of any Event of Default under the Declaration resulting
from a Debenture Event of Default, the Corporation as holder of the Common
Securities will be deemed to have waived any right to act with respect to any
such Event of Default under the Declaration until the effect of all such Events
of Default have been cured, waived or otherwise eliminated. Until all such
Events of Default under the Declaration have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the holders of
such Capital Securities and not on behalf of the Corporation as holder of the
Common Securities, and only the holders of the Capital Securities will have the
right to direct the Property Trustee to act on their behalf.
Events of Default; Notice
Any one of the following events constitutes an "Event of Default" under
the Declaration (an "Event of Default") (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(i) the occurrence of a Debenture Event of Default (see
"Description of Junior Subordinated Debt Securities--Debenture Events
of Default"); or
(ii) 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; or
(iii) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(iv) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in the Declaration
(other than a covenant or warranty, a default in the performance of
which or the breach of which is addressed in clause (ii) or (iii)
above), and continuation of such default or breach for a period of 60
days after there has been given, by registered or certified mail, to
the defaulting Trustee or Trustees by the holders of at least 25% in
aggregate Liquidation Amount of the outstanding Capital Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default" under
the Declaration; or
(v) the occurrence of certain events of bankruptcy or
insolvency with respect to the Property Trustee and the failure by the
Corporation to appoint a successor Property Trustee within 60 days
thereof.
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Within five Business Days after the occurrence of any Event of Default
actually known to the Property Trustee, the Property Trustee shall transmit
notice of such Event of Default to the holders of the Capital Securities, the
Administrative Trustees and the Corporation, as Depositor, unless such Event of
Default shall have been cured or waived. The Corporation, as Depositor, and the
Administrative Trustees are required to file annually with the Property Trustee
a certificate as to whether or not they are in compliance with all the
conditions and covenants applicable to them under the Declaration.
If a Debenture Event of Default (or an event that with notice or the
passage of time, would become such an Event of Default) or an Event of Default
under the Declaration has occurred and is continuing, the Capital Securities
shall have a preference over the Common Securities as described above. See
"Liquidation of the Trust and Distribution of Junior Subordinated Debt
Securities" and "Subordination of Common Securities."
Removal of Trustees
Unless a Debenture 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 a Debenture Event of Default has occurred and is continuing, the
Property Trustee and the Delaware Trustee may be removed at such time by the
holders of a majority in Liquidation Amount of the outstanding Capital
Securities. In no event will the holders of the Capital Securities have the
right to vote to appoint, remove or replace the Administrative Trustees, which
voting rights are vested exclusively in the Corporation as the holder of the
Common Securities. No resignation or removal of 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.
Co-trustees and Separate Property Trustee
Unless an Event of Default shall have occurred and be continuing, at
any time or times, for the purpose of meeting the legal requirements of the
Trust Indenture Act or of any jurisdiction in which any part of the Trust's
property may at the time be located, the Corporation, as the holder of the
Common Securities, and the Administrative Trustees shall have power to appoint
one or more persons either to act as a co-trustee, jointly with the Property
Trustee, of all or any part of such Trust's property, or to act as separate
trustee of any such property, in either case with such powers as may be provided
in the instrument of appointment, and to vest in such person or persons in such
capacity any property, title, right or power deemed necessary or desirable,
subject to the provisions of the Declaration. In case a Debenture Event of
Default has occurred and is continuing, the Property Trustee alone shall have
power to make such appointment.
Merger or Consolidation of 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 Trustee shall be a party, or any
person succeeding to all or substantially all the corporate trust business of
such Trustee, shall be the successor of such Trustee under the Declaration,
provided such person shall be otherwise qualified and eligible.
Mergers, Consolidations, Amalgamations or Replacements of the Trust
The Trust may not merge with or into, consolidate, amalgamate or be
replaced by, or convey, transfer or lease its properties and assets
substantially as an entirety to any corporation or other person, except as
described below or as otherwise set forth in the Declaration.
The Trust may, at the request of the Corporation, as Depositor, with
the consent of the Administrative Trustees but without the consent of the
holders of the Capital Securities, the Property Trustee or the Delaware Trustee,
merge with
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or into, consolidate, amalgamate or be replaced by, or convey, transfer or lease
its properties and assets substantially as an entirety to, a trust organized as
such under the laws of any State; provided, however, that:
(i) such successor entity either (a) expressly assumes all of the
obligations of the Trust with respect to the Capital Securities or (b)
substitutes for the Capital Securities other securities having substantially the
same terms as the Capital Securities (the "Successor Securities") so long as the
Successor Securities rank the same as the Capital Securities rank in priority
with respect to distributions and payments upon liquidation, redemption and
otherwise;
(ii) the Corporation expressly appoints a trustee of such successor
entity possessing the same powers and duties as the Property Trustee as the
holder of the Junior Subordinated Debt Securities;
(iii) the Successor Securities are listed or traded, or any Successor
Securities will be listed or traded upon notification of issuance, on any
national securities exchange or other organization on which the Capital
Securities are then listed or traded, if any;
(iv) such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease does not adversely affect the rights, preferences
and privileges of the holders of the Capital Securities (including any Successor
Securities) in any material respect;
(v) such successor entity has a purpose identical and limited to
that of the Trust;
(vi) prior to such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, the Corporation has received an opinion from
independent counsel to the Trust experienced in such matters to the effect that
(a) such merger, consolidation, amalgamation, replacement, conveyance, transfer
or lease does not adversely affect the rights, preferences and privileges of the
holders of the Capital Securities (including any Successor Securities) in any
material respect, and (b) following such merger, consolidation, amalgamation,
replacement, conveyance, transfer or lease, neither the Trust nor such successor
entity will be required to register as an investment company under the
Investment Company Act of 1940 (the "Investment Company Act"); and
(vii) the Corporation or any permitted successor or assignee owns all
of the common securities of such successor entity and guarantees the obligations
of such successor entity under the Successor Securities at least to the extent
provided by the Guarantee.
Notwithstanding the foregoing, the Trust shall not, except with the
consent of holders of 100% in Liquidation Amount of the Trust Securities,
consolidate, amalgamate, merge with or into, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to any
other entity or permit any other entity to consolidate, amalgamate, merge with
or into, or replace it, if such consolidation, amalgamation, merger,
replacement, conveyance, transfer or lease would cause the Trust or the
successor entity to be classified as an association taxable as a corporation or
as other than a grantor trust for United States federal income tax purposes.
Voting Rights; Amendment of the Declaration
Except as provided below and under "Description of
Guarantee--Amendments and Assignment" and as otherwise required by law and the
Declaration, the holders of the Capital Securities will have no voting rights.
The Declaration may be amended from time to time by the Corporation,
the Property Trustee and the Administrative Trustees, without the consent of the
holders of the Trust Securities, to:
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(i) cure any ambiguity, correct or supplement any provision in the
Declaration that may be inconsistent with any other provision, or to make any
other provisions with respect to matters or questions arising under the
Declaration, which shall not be inconsistent with the other provisions of the
Declaration, or
(ii) 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 or as other
than an association taxable as a corporation 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, amendment made under clause (i), above may not adversely
affect in any material respect the interests of any holder of Trust Securities,
and any amendments of the Declaration shall become effective when notice thereof
is given to the holders of the Trust Securities.
The Declaration may otherwise be amended by the Trustees and the
Corporation with the consent of holders representing not less than a majority
(based upon Liquidation Amounts) of the outstanding Capital Securities, and
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 cause the Trust to be classified as an association
taxable as a corporation or 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
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.
So long as any Junior Subordinated Debt Securities are held by the
Trust, 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 the Property Trustee with respect to
the Junior Subordinated Debt Securities, (ii) waive any past default that is
waivable under Section 5.13 of the Indenture, (iii) exercise any right to
rescind or annul a declaration that the principal of all the Junior Subordinated
Debt Securities shall be due and payable or (iv) consent to any amendment,
modification or termination of the Indenture or the Junior Subordinated Debt
Securities, where such consent shall be required, without, in each case,
obtaining the prior approval of the holders of a majority in aggregate
Liquidation Amount of all outstanding Capital Securities; provided, however,
that where a consent under the Indenture would require the consent of each
holder of Junior Subordinated Debt Securities affected thereby, no such consent
shall be given by the Property Trustee without the prior consent of each holder
of the Capital Securities. The Trustees shall not revoke any action previously
authorized or approved by a vote of the holders of the Capital Securities except
by subsequent vote of such holders. The Property Trustee shall notify each
holder of Capital Securities of any notice of default with respect to the Junior
Subordinated Debt Securities. In addition to obtaining the foregoing approvals
of such holders of the Capital Securities, prior to taking any of the foregoing
actions, the Trustees shall obtain an opinion of counsel experienced in such
matters to the effect that the Trust will not be classified as an association
taxable as a corporation for United States federal income tax purposes as a
result of such action and such action would not cause the Trust to be classified
as other than a grantor trust for United States federal income tax purposes.
Any required approval of holders of Capital Securities may be given at
a meeting of such holders convened for such purpose or pursuant to written
consent. The Property Trustee will cause a notice of any meeting at which
holders of Capital Securities are entitled to vote, or of any matter upon which
action by written consent of such holders is to be taken, to be given to each
holder of record of Capital Securities in the manner set forth in the
Declaration.
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No vote or consent of the holders of Capital Securities will be
required for the Trust to redeem and cancel the Capital Securities in accordance
with the Declaration.
Notwithstanding that holders of the Capital Securities are entitled to
vote or consent under any of the circumstances described above, any of the
Capital Securities that are owned by the Corporation, the Trustees or any
affiliate of the Corporation or any Trustees, shall, for purposes of such vote
or consent, be treated as if they were not outstanding.
Expenses and Taxes
In the Indenture, the Corporation, as borrower, has agreed to pay all
debts, expenses and other obligations of the Trust (other than payments of
Distributions, amounts payable upon redemption and the Liquidation Amount of the
Trust Securities). These expenses include costs and expenses relating to the
organization of the Trust, the fees and expenses of the Trustees, the costs and
expenses of operating the Trust, costs of offering the Capital Securities, and
all taxes and all costs and expenses with respect to the foregoing (other than
United States withholding taxes) to which the Trust might become subject. The
foregoing obligations of the Corporation under the Indenture are for the benefit
of, and shall be enforceable by, any person to whom any such debts, obligations,
costs, expenses and taxes are owed (a "Creditor") whether or not such Creditor
has received notice thereof. Any Creditor may enforce such obligations of the
Corporation directly against the Corporation, and the Corporation has
irrevocably waived any right or remedy to require that any such Creditor take
any action against the Trust or any other person before proceeding against the
Corporation. The Corporation has also agreed in the Indenture to execute such
additional agreement(s) as may be necessary or desirable to give full effect to
the foregoing.
Form, Denomination, Book-Entry Procedures and Transfer
The Capital Securities initially will be evidenced by certificates in
fully registered form (each, a "Certificate"). The Property Trustee will from
time to time register the transfer of any outstanding Certificate upon surrender
thereof at the office of the Property Trustee which is currently located at 1100
N. Market Street, Wilmington, Delaware 19890, Attention: Corporate Trust
Administration (the "Property Trustee's Office"), duly endorsed by, or
accompanied by a written instrument or instruments of transfer in a form
satisfactory to the Property Trustee duly executed by the holder thereof, a duly
appointed legal representative or a duly authorized attorney. Such signature
must be guaranteed by a bank or trust company having a correspondent office in
New York City or by a broker or dealer that is a member of the National
Association of Securities Dealers, Inc. (the "NASD") or a member of a national
securities exchange. A new Certificate will be issued to the transferee upon any
such registration of transfer.
At the option of a holder, Certificates may be exchanged for other
Certificates representing a like number of Capital Securities, upon surrender to
the Property Trustee at the Property Trustee's Office of the Certificates to be
exchanged. The Corporation will thereupon execute, and the Property Trustee will
authenticate and deliver, one or more new Certificates representing such like
number of Capital Securities.
If any Certificate is mutilated, lost, stolen or destroyed, the
Corporation shall execute, and the Property Trustee shall authenticate and
deliver, in exchange and substitution for such mutilated Certificate, or in
replacement for such lost, stolen or destroyed Certificate, a new Certificate
representing the same number of Capital Securities represented by such
Certificate, but only upon receipt of evidence satisfactory to the Corporation
and to the Property Trustee of loss, theft or destruction of such Certificate
and security or indemnity, if requested, satisfactory to them. Holders
requesting replacement Certificates must also comply with such other reasonable
regulations as the Corporation or the Property Trustee may prescribe.
No service charge will be made for any registration of transfer or
exchange of Certificates, but the Corporation may require the payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection
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therewith, other than exchanges not involving any transfer. In the case of the
replacement of mutilated, lost, stolen or destroyed Certificates, the
Corporation may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith and any
other expenses (including the fees and expenses of the Property Trustee)
connected therewith.
Possible Exchange for Book-Entry Capital Securities.
Following the issuance of the Capital Securities, the Corporation will
make the Capital Securities available in book-entry form ("Book-Entry Capital
Securities"). Holders may (but are not required to) exchange Certificates for
Book-Entry Capital Securities, which will be represented by a beneficial
interest in a Global Security (as defined below), by causing the Certificates to
be delivered to Depository Trust Corporation ("DTC"), in proper form for deposit
into DTC's book-entry system, on or after the Initial Exchange Date (as defined
below). Certificates received by DTC for exchange during the period commencing
on a date designated by the Corporation (the "Initial Exchange Date") and ending
on the fifth day after the Initial Exchange Date (the "Initial Exchange Period")
will be exchanged for Book-Entry Capital Securities by the close of business on
the Business Day on which they are received by DTC (if received by DTC by its
then applicable cut-off time for same-day credit) or on the following Business
Day (if received by DTC by its then applicable cut-off time for next-day
credit).
After the last day of the Initial Exchange Period, DTC will not be
required to accept delivery of Certificates in exchange for Book-Entry Capital
Securities, but DTC may permit such Certificates to be so exchanged on a
case-by-case basis. It is anticipated that after the Initial Exchange Period,
Certificates delivered to DTC in good order and in proper form for deposit will
be accepted by DTC for exchange for Book-Entry Capital Securities generally
within three to four Business Days after delivery to DTC. However, there can be
no assurance that such Certificates will be accepted for exchange or, if
accepted, that such exchange will occur within such time period. Certificates
surrendered at any time for exchange for Book-Entry Capital Securities may not
be delivered for settlement or transfer until such exchange has been effected.
Accordingly, persons purchasing Capital Securities in secondary market trading
after the Initial Exchange Date may wish to make specific arrangements with
brokers or DTC's participants if they wish to purchase only Book-Entry Capital
Securities and not Certificates.
The Corporation will notify DTC, the Property Trustee and each holder
of a Certificate by overnight mail that exchanges of Certificates for Book-Entry
Capital Securities will commence on the Initial Exchange Date, which will be
approximately one Business Day after the date on which the Corporation notifies
DTC that it has elected to permit such exchanges. The Initial Exchange Date will
not be later than one day after _________ __, 1999.
In order to be exchanged for Book-Entry Capital Securities, a
Certificate must be delivered to DTC, in proper form for deposit, by a
Participant. Accordingly, holders of Capital Securities that are not
Participants must deliver their Certificates, in proper form for deposit, to a
Participant, either directly or through a brokerage firm that maintains an
account with a Participant, in order to have their Certificates exchanged for
Book-Entry Capital Securities. Holders of Capital Securities that want to
exchange their Certificates for Book-Entry Capital Securities should contact
their broker or a Participant to obtain information on procedures for submitting
their Certificates to DTC, including the proper form for submission and (during
the Initial Exchange Period) the cut-off times for same-day and next-day
exchange. A Certificate that is held on behalf of a beneficial owner in nominee
or "street name" may be automatically exchanged for Book-Entry Capital
Securities by the broker or other entity that is the registered holder of such
Capital Securities, without any action of or consent by the beneficial owner of
the Capital Securities.
Book-Entry System.
Any Book-Entry Capital Securities will be represented by a single
global security (a "Global Security"), which will be deposited with, or on
behalf of, DTC, and registered in the name of a nominee of DTC. Certificates
that have been exchanged for Book-Entry Capital Securities may not be
re-exchanged for Certificates, except under the limited
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circumstances described in "Description of Capital Securities--Form,
Denomination, Book-Entry Procedures and Transfer - Exchange of Book-Entry
Capital Securities for Certificated Capital Securities." Unless and until it is
exchanged in whole or in part for Certificates, the Global Security may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of DTC
to DTC.
Transfer of beneficial interests in the Global Capital Securities will
be subject to the applicable rules and procedures of DTC and its direct or
indirect participants which may change from time to time.
Depositary Procedures
DTC has advised the Trust and the Corporation as follows: DTC is a
limited purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the Uniform Commercial Code and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act. DTC was created
to hold securities for its participating organizations (collectively, the
"Participants") and to facilitate the clearance and settlement of transactions
in those securities between Participants through electronic book-entry changes
to accounts of its Participants, thereby eliminating the need for physical
movement of certificates. Participants include securities brokers and dealers
(including the Underwriter), banks, trust companies, clearing corporations and
certain other organizations. Indirect access to DTC's system is also available
to other entities such as banks, brokers, dealers and trust companies that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly (collectively, the "Indirect Participants"). Persons who are not
Participants may beneficially own securities held by or on behalf of DTC only
through the Participants or the Indirect Participants. The ownership interest
and transfer of ownership interest of each actual purchaser of each security
held by or on behalf of DTC are recorded on the records of the Participants and
Indirect Participants.
DTC has also advised the Trust and the Corporation that, pursuant to
procedures established by it, (i) upon deposit of the Global Capital Securities,
DTC will credit the accounts of Participants with portions of the principal
amount of the Global Capital Securities and (ii) ownership of such interests in
the Global Capital Securities will be shown on, and the transfer of ownership
thereof will be effected only through, records maintained by DTC (with respect
to the Participants) or by the Participants and the Indirect Participants (with
respect to other owners of beneficial interests in the Global Capital
Securities).
Investors in the Global Capital Securities may hold their interests
therein directly through DTC, if they are Participants in DTC, or indirectly
through organizations which are Participants in such system. All interests in a
Global Capital Security will be subject to the procedures and requirements of
DTC. The laws of some states require that certain persons take physical delivery
in certificated form of certain securities, such as the Capital Securities, that
they own. Consequently, the ability to transfer beneficial interests in a Global
Capital Security to such persons will be limited to that extent. Because DTC can
act only on behalf of Participants, which in turn act on behalf of Indirect
Participants and certain banks, the ability of a person having beneficial
interests in a Global Capital Security to pledge such interests to persons or
entities that do not participate in the DTC system, or otherwise take actions in
respect of such interests, may be affected by the lack of a physical certificate
evidencing such interests. For certain other restrictions on the transferability
of the Capital Securities, see "Exchange of Book-Entry Capital Securities for
Certificated Capital Securities."
Except as described below, owners of beneficial interests in the Global
Capital Securities will not be entitled to have Capital Securities registered in
their names, will not receive or be entitled to receive physical delivery of
Capital Securities in certificated form and will not be considered the
registered owners or holders thereof under the Declaration for any purpose.
Payments in respect of the Global Capital Security registered in the
name of DTC or its nominee will be payable by the Property Trustee to DTC or its
nominee as the registered holder under the Declaration by wire transfer in
immediately available funds on each Distribution Date. Under the terms of the
Declaration, the Property Trustee will
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treat the persons in whose names the Capital Securities, including the Global
Capital Securities, are registered as the owners thereof for the purpose of
receiving such payments and for any and all other purposes whatsoever.
Consequently, neither the Property Trustee nor any agent thereof has or will
have any responsibility or liability for (i) any aspect of DTC's records or any
Participant's or Indirect Participant's records relating to, or payments made on
account of, beneficial ownership interests in the Global Capital Securities, or
for maintaining, supervising or reviewing any of DTC's records or any
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in the Global Capital Securities, or (ii) any other matter
relating to the actions and practices of DTC or any of its Participants or
Indirect Participants. DTC has advised the Trust and the Corporation that its
current practice, upon receipt of any payment in respect of securities such as
the Capital Securities, is to credit the accounts of the relevant Participants
with the payment on the payment date, in amounts proportionate to their
respective holdings in Liquidation Amount of beneficial interests in the Global
Capital Security, as shown on the records of DTC, unless DTC has reason to
believe it will not receive payment on such payment date. Payments by the
Participants and the Indirect Participants to the beneficial owners of Capital
Securities represented by Global Capital Securities held through such
Participants will be governed by standing instructions and customary practices
and will be the responsibility of the Participants or the Indirect Participants
and will not be the responsibility of DTC, the Property Trustee or the Trust.
Neither the Trust nor the Property Trustee will be liable for any delay by DTC
or any of its Participants in identifying the beneficial owners of the Capital
Securities, and the Trust and the Property Trustee may conclusively rely on and
will be protected in relying on instructions from DTC or its nominee for all
purposes.
Interests in the Global Capital Securities will trade in DTC's Same-Day
Funds Settlement System and secondary market trading activity in such interests
will therefore settle in immediately available funds, subject in all cases to
the rules and procedures of DTC and its Participants. Transfers between
Participants in DTC will be effected in accordance with DTC's procedures, and
will be settled in same-day funds.
DTC has advised the Trust and the Corporation that it will take any
action permitted to be taken by a holder of Capital Securities (including,
without limitation, the presentation of Capital Securities for exchange as
described below) only at the direction of one or more Participants to whose
account with DTC interests in the Global Capital Securities are credited and
only in respect of such portion of the aggregate Liquidation Amount of the
Capital Securities represented by the Global Capital Securities as to which such
Participant or Participants has or have given such direction. However, if there
is an Event of Default under the Declaration, DTC reserves the right to exchange
the Global Capital Securities for legended Capital Securities in certificated
form and to distribute such Capital Securities to its Participants.
So long as DTC or its nominee is the registered owner of the Global
Capital Securities, DTC or such nominee, as the case may be, will be considered
the sole owner or holder of the Capital Securities represented by the Global
Capital Security for all purposes under the Declaration.
Neither DTC nor its nominee will consent or vote with respect to the
Capital Securities. Under its usual procedures, DTC would mail an omnibus proxy
to the Trust as soon as possible after the record date. The omnibus proxy
assigns the consenting or voting rights of DTC or its nominee to those
Participants to whose accounts the Capital Securities are credited on the record
date (identified in a listing attached to the omnibus proxy).
The information in this section concerning DTC and its book-entry
system has been obtained from sources that the Trust and the Corporation believe
to be reliable, but neither the Trust nor the Corporation takes responsibility
for the accuracy thereof.
Although DTC has agreed to the foregoing procedures to facilitate
transfers of interest in the Global Capital Securities among Participants in
DTC, it is under no obligation to perform or to continue to perform such
procedures, and such procedures may be discontinued at any time. Neither the
Trust nor the Property Trustee will have any responsibility for the performance
by DTC or its Participants or Indirect Participants of their respective
obligations under the rules and procedures governing their operations.
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Exchange of Book-Entry Capital Securities for Certificated Capital Securities
A Global Capital Security is exchangeable for Capital Securities in
registered certificated form if (i) DTC (x) notifies the Trust that it is no
longer willing or able to properly discharge its responsibilities with respect
to the Capital Securities and the Corporation is unable to locate a qualified
successor, or (y) has ceased to be a "clearing agency" registered under the
Exchange Act; (ii) the Trust at its sole option elects to terminate the
book-entry system through DTC; or (iii) there shall have occurred and be
continuing a Debenture Event of Default. In addition, beneficial interests in a
Global Capital Security may be exchanged by or on behalf of DTC for certificated
Capital Securities upon request by DTC, but only upon at least 20 days prior
written notice given to the Property Trustee in accordance with DTC's customary
procedures. In all cases, certificated Capital Securities delivered in exchange
for any Global Capital Security or beneficial interests therein will be
registered in the names, and issued in any approved denominations, requested by
or on behalf of DTC (in accordance with its customary procedures) and will bear
the restrictive legend referred to in "Notice to Investors," unless the Property
Trustee (based on an opinion of counsel) determines otherwise in compliance with
applicable law.
Payment and Paying Agency
Payments in respect of the Capital Securities held in global form shall
be made to DTC, which shall credit the relevant accounts at DTC on the
applicable Distribution Dates or in respect of the Capital Securities that are
not held by DTC, such payments shall be made by check mailed to the address of
the holder entitled thereto as such address shall appear on the register. The
paying agent (the "Paying Agent") shall initially be the Property Trustee and
any co-paying agent chosen by the Property Trustee and acceptable to the
Administrative Trustees and the Corporation. The Paying Agent shall be permitted
to resign as Paying Agent upon 30 days' written notice to the Property Trustee,
the Administrative Trustees and the Corporation. In the event that the Property
Trustee shall no longer be the Paying Agent, the Administrative Trustees shall
appoint a successor (which shall be a bank or trust company acceptable to the
Administrative Trustees and the Corporation) to act as Paying Agent.
Wilmington Trust Company has informed the Trust that so long as it
serves as paying agent for the Capital Securities, it anticipates that
information regarding Distributions on the Capital Securities, including payment
date, record date and redemption information, will be made available through
Wilmington Trust Company at 1100 N. Market Street, Wilmington, Delaware,
Attention: Corporate Trust Administration.
Registrar and Transfer Agent
The Property Trustee will act as registrar and transfer agent for the
Capital Securities.
Registration of transfers of the Capital Securities will be effected
without charge by or on behalf of the Trust, but upon payment of any tax or
other governmental charges that may be imposed in connection with any transfer
or exchange. The Trust will not be required to register or cause to be
registered the transfer or exchange of the Capital Securities after they have
been called for redemption.
Information Concerning the Property Trustee
The Property Trustee, other than during the occurrence and continuance
of an Event of Default, undertakes to perform only such duties as are
specifically set forth in the Declaration and, during the existence of an Event
of Default, must exercise the same degree of care and skill as a prudent person
would exercise or use in the conduct of his or her own affairs. Subject to this
provision, the Property Trustee is under no obligation to exercise any of the
powers vested in it by the Declaration at the request of any holder of Trust
Securities unless it is offered reasonable indemnity against the costs, expenses
and liabilities that might be incurred thereby. If no Event of Default has
occurred and is continuing and the
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Property Trustee is required to decide between alternative causes of action,
construe ambiguous provisions in the Declaration or is unsure of the application
of any provision of the Declaration, and the matter is not one on which holders
of the Capital Securities or the Common Securities are entitled under the
Declaration to vote, then the Property Trustee shall take such action as is
directed by the Corporation and, if not so directed, shall take such action as
it deems advisable and in the best interests of the holders of the Trust
Securities and will have no liability except for its own bad faith, negligence
or willful misconduct.
Miscellaneous
The Administrative Trustees are authorized and directed to conduct the
affairs of and to operate the Trust in such a way that the Trust will not be
deemed to be an "investment company" required to be registered under the
Investment Company Act or classified as an association taxable as a corporation
for United States federal income tax purposes or as other than a grantor trust
for United States federal income tax purposes, and so that the Junior
Subordinated Debt Securities will be treated as indebtedness of the Corporation
for United States federal income tax purposes. In this connection, the
Corporation and the Administrative Trustees are authorized to take any action,
not inconsistent with applicable law, the certificate of trust of the Trust or
the Declaration, that the Corporation and the Administrative Trustees determine
in their discretion to be necessary or desirable for such purposes, as long as
such action does not materially adversely affect the interests of the holders of
the Trust Securities.
Holders of the Trust Securities have no preemptive or similar rights.
The Trust may not borrow money or issue debt or mortgage or pledge any
of its assets.
DESCRIPTION OF JUNIOR SUBORDINATED DEBT SECURITIES
The Junior Subordinated Debt Securities are to be issued as a separate
series under a Junior Subordinated Indenture, as supplemented from time to time
(as so supplemented, the "Indenture"), between the Corporation and Wilmington
Trust Company, as trustee (the "Debenture Trustee"). The Indenture will be
qualified under the Trust Indenture Act. This summary of certain terms and
provisions of the Junior Subordinated Debt Securities and the Indenture does not
purport to be complete, and where reference is made to particular provisions of
the Indenture, such provisions, including the definitions of certain terms, some
of which are not otherwise defined herein, are qualified in their entirety by
reference to all of the provisions of the Indenture and those terms made a part
of the Indenture by the Trust Indenture Act.
General
Concurrently with the issuance of the Trust Securities, the Trust will
invest the proceeds thereof in Junior Subordinated Debt Securities issued by the
Corporation. The Junior Subordinated Debt Securities will bear interest at
_____% per annum of the principal amount thereof, payable quarterly in arrears
on the 15th day of March, June, September and December of each year (each, an
"Interest Payment Date"), commencing ____ 15, 1999, to the person in whose name
each Junior Subordinated Debt Security is registered, subject to certain
exceptions, at the close of business on the Business Day next preceding such
Interest Payment Date. It is anticipated that, until the liquidation of the
Trust, each Junior Subordinated Debt Security will be held in the name of the
Property Trustee in trust for the benefit of the holders of the Trust
Securities. The amount of interest payable for any period will be computed on
the basis of the actual number of days elapsed in a year of twelve 30-day
months. In the event that any date on which interest is payable on the Junior
Subordinated Debt Securities is not a Business Day, then payment of the interest
payable on such date will be made on the next succeeding day that is a Business
Day (and without any interest or other payment in respect of any such delay),
with the same force and effect as if made on the date such payment was
originally payable. Accrued interest that is not paid on the applicable Interest
Payment Date will bear additional interest on the amount thereof (to the extent
permitted by law) at ____% per annum thereof, compounded quarterly from the
relevant Interest Payment Date. The
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term "interest" as used herein shall include quarterly payments, interest on
quarterly interest payments not paid on the applicable Interest Payment Date and
Additional Sums, as applicable.
The Junior Subordinated Debt Securities will be issued as a series of
Junior Subordinated Debt Securities under the Indenture. Unless previously
redeemed or repurchased, the Junior Subordinated Debt Securities will mature on
____________ 15, 2029. See "Optional Redemption."
The Junior Subordinated Debt Securities will be unsecured and will rank
junior and be subordinate in right of payment to all Senior Debt. Because the
Corporation is a bank holding company, the right of the Corporation to
participate in any distribution of assets of any subsidiary, including the Bank,
upon such subsidiary's liquidation or reorganization or otherwise (and thus the
ability of holders of the Capital Securities to benefit indirectly from such
distribution), is subject to the prior claims of creditors of such subsidiary,
except to the extent that the Corporation may itself be recognized as a creditor
of such subsidiary. Accordingly, the Junior Subordinated Debt Securities will be
subordinated to all Senior Debt and effectively subordinated to all existing and
future liabilities of the Corporation's subsidiaries, and holders of Junior
Subordinated Debt Securities should look only to the assets of the Corporation
for payments on the Junior Subordinated Debt Securities. The Indenture does not
limit the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture or any existing
or other indenture that the Corporation may enter into in the future or
otherwise. See "Subordination."
The Junior Subordinated Debt Securities will rank equally with all
Other Debentures issued under the Indenture and will be unsecured and
subordinate and junior in right of payment to the extent and in the manner set
forth in the Indenture to all Senior Debt of the Corporation. See
"Subordination." As a holding company, the Corporation conducts its operations
principally through the Bank and, therefore, its principal source of cash, is
receipt of dividends from the Bank. The Corporation is a legal entity separate
and distinct from the Bank. See "Risk Factors--Ranking of Obligations Under the
Guarantee and the Junior Subordinated Debt Securities" and "-Status of the
Corporation as a Bank Holding Company." The Bank is subject to certain
restrictions imposed by federal law on any extensions of credit to, and certain
other transactions with, the Corporation and certain other affiliates, and on
investments in stock or other securities thereof. Such restrictions prevent the
Corporation and such other affiliates from borrowing from the Bank unless the
loans are secured by various types of collateral. In addition, payment of
dividends to the Corporation by the Bank is subject to ongoing review by banking
regulators and is subject to various statutory limitations and in certain
circumstances requires approval by banking regulatory authorities. The Other
Debentures will be issuable in one or more series pursuant to an indenture
supplemental to the Indenture or a resolution of the Corporation's Board of
Directors or a committee thereof.
Denominations, Registration and Transfer
The Junior Subordinated Debt Securities will be represented by one or
more global certificates registered in the name of Cede & Co. as the nominee of
DTC if, and only if, distributed to the holders of the Trust Securities. Until
such time, the Junior Subordinated Debt Securities will be held in the name of
the Property Trustee in trust for the benefit of the holders of the Trust
Securities. Should the Junior Subordinated Debt Securities be distributed to
holders of the Trust Securities, beneficial interests in the Junior Subordinated
Debt Securities will be shown on, and transfers thereof will be effected only
through, records maintained by Participants in DTC. Except as described below,
Junior Subordinated Debt Securities in certificated form will not be issued in
exchange for the global certificates.
A global security shall be exchangeable for Junior Subordinated Debt
Securities registered in the names of persons other than Cede & Co. only if (i)
DTC notifies the Corporation that it is unwilling or unable to continue as a
depositary for such global security and no successor depositary shall have been
appointed, or if at any time DTC ceases to be a "clearing agency" registered
under the Exchange Act, at a time when DTC is required to be so registered to
act as such depositary, (ii) the Corporation in its sole discretion determines
that such global security shall be so exchangeable, or (iii) there shall have
occurred and be continuing a Debenture Event of Default. Any global security
that is
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exchangeable pursuant to the preceding sentence shall be exchangeable for
certificates registered in such names as DTC shall direct. It is expected that
such instructions will be based upon directions received by DTC from its
Participants with respect to ownership of beneficial interests in such global
security.
Payments on Junior Subordinated Debt Securities represented by a global
security will be made to DTC, as the depositary for the Junior Subordinated Debt
Securities. In the event Junior Subordinated Debt Securities are issued in
certificated form, principal and interest will be payable, the transfer of the
Junior Subordinated Debt Securities will be registrable, and Junior Subordinated
Debt Securities will be exchangeable for Junior Subordinated Debt Securities of
other denominations of a like aggregate principal amount, at the corporate
office of the Debenture Trustee in Wilmington, Delaware, or at the offices of
any paying agent or transfer agent appointed by the Corporation, provided that
payment of interest may be made at the option of the Corporation by check mailed
to the address of the persons entitled thereto or by wire transfer.
For a description of DTC and the terms of the depositary arrangements
relating to payments, transfers, voting rights, redemptions and other notices
and other matters, see "Description of Capital Securities--Form, Denomination,
Book-Entry Procedures and Transfer." If the Junior Subordinated Debt Securities
are distributed to the holders of the Trust Securities upon the termination of
the Trust, the form, denomination, book-entry and transfer procedures with
respect to the Capital Securities as described under "Description of Capital
Securities--Form, Denomination, Book-Entry Procedures and Transfer," shall apply
to the Junior Subordinated Debt Securities mutatis mutandis.
Payment and Paying Agents
Payment of principal of and any interest on Junior Subordinated Debt
Securities will be made at the office of the Debenture Trustee in Wilmington,
Delaware or at the office of such Paying Agent or Paying Agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made (except in the case of Junior
Subordinated Debt Securities in global form), (i) by check mailed to the address
of the person entitled thereto as such address shall appear in the register for
Junior Subordinated Debt Securities or (ii) by wire transfer to an account
specified by the person entitled thereto as specified in such register, provided
that proper transfer instructions have been received by the relevant Record
Date. Payment of any interest on any Junior Subordinated Debt Security will be
made to the person in whose name such Junior Subordinated Debt Security is
registered at the close of business on the Record Date for such interest, except
in the case of defaulted interest. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent; however
the Corporation will at all times be required to maintain a Paying Agent in each
Place of Payment for the Junior Subordinated Debt Securities.
Any moneys deposited with the Debenture Trustee or any Paying Agent, or
then held by the Corporation in trust, for the payment of the principal of or
interest on any Junior Subordinated Debt Security and remaining unclaimed for
two years after such principal or interest has become due and payable shall, at
the request of the Corporation, be repaid to the Corporation and the holder of
such Junior Subordinated Debt Security shall thereafter look, as a general
unsecured creditor, only to the Corporation for payment thereof.
Option to Extend Interest Payment Date
So long as no Debenture Event of Default has occurred and is
continuing, the Corporation has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debt Securities at any time or
from time to time for a period not exceeding 20 consecutive quarterly periods
with respect to each Extension Period, provided, that no Extension Period may
extend beyond the Stated Maturity of the Junior Subordinated Debt Securities. At
the end of an Extension Period, the Corporation must pay all interest then
accrued and unpaid on the Junior Subordinated Debt Securities (together with
interest thereon accrued at ____% per annum, compounded quarterly from the
relevant Interest Payment Date, to the extent permitted by applicable law).
During an Extension Period and for so long as the Junior Subordinated Debt
Securities remain outstanding, interest will continue to accrue and holders of
Junior Subordinated
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Debt Securities (and holders of the Capital Securities while Capital Securities
are outstanding) will be required to accrue interest income (in the form of OID)
for United States federal income tax purposes. See "Certain United States
Federal Income Tax Consequences-Interest Income and Original Issue Discount."
With certain exceptions, during any Extension Period, the Corporation
may not pay dividends on its capital stock or acquire shares of its capital
stock. Additionally, the Corporation may not make any payment on or repay,
repurchase or redeem any debt securities of the Corporation that rank equally
with or junior in interest to the Junior Subordinated Debt Securities or make
any guarantee payments with respect to any guarantee by the Corporation of the
debt securities of any subsidiary of the Corporation if such guarantee ranks
equally with or junior in interest to the Junior Subordinated Debt Securities.
See "Description of Capital Securities Distributions." The same restrictions
apply if there is a Debenture Event of Default or a default by the Corporation
under the Guarantee.
Optional Redemption
The Junior Subordinated Debt Securities are redeemable prior to
maturity at the option of the Corporation (i) on or after _____________ 15,
2004, in whole at any time or in part from time to time, or (ii) in whole, but
not in part, at any time within 90 days following the occurrence and during the
continuation of a Tax Event, Investment Company Event or Capital Treatment Event
(each as defined under "Description of Capital Securities - Mandatory
Redemption"), in each case at the redemption price described below. The proceeds
of any such redemption will be used by the Trust to redeem the Capital
Securities.
The Federal Reserve's risk-based capital guidelines, which are subject
to change, currently provide that redemptions of permanent equity or other
capital instruments before stated maturity could have a significant impact on a
bank holding company's overall capital structure and that any organization
considering such a redemption should consult with the Federal Reserve before
redeeming any equity or capital instrument prior to maturity if such redemption
could have a material effect on the level or composition of the organization's
capital base (unless the equity or capital instrument were redeemed with the
proceeds of, or replaced by, a like amount of a similar or higher quality
capital instrument and the Federal Reserve considers the organization's capital
position to be fully adequate after the redemption).
The redemption of the Junior Subordinated Debt Securities by the
Corporation prior to their Stated Maturity would constitute the redemption of
capital instruments under the Federal Reserve's current risk-based capital
guidelines and may be subject to the prior approval of the Federal Reserve. The
redemption of the Junior Subordinated Debt Securities also could be subject to
the additional prior approval of the Federal Reserve under its current
risk-based capital guidelines.
The Redemption Price for Junior Subordinated Debt Securities in the
case of a redemption on or after ___________ 15, 2004 shall equal the following
prices, expressed in percentages of the principal amount, together with accrued
interest to but excluding the date fixed for redemption. If redeemed during the
12-month period beginning ____________ 15:
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Year Redemption Price
2004 % ($_______)
2005
2006
2007
2008
2009
2010
2011
2012
2013
and at 100% on or after _______________ 15, 2014
The Redemption Price for Junior Subordinated Debt Securities, in the
case of a redemption prior to ____________ 15, 2004 following a Tax Event,
Investment Company Event or Capital Treatment Event as described under (ii)
above, will equal the Make-Whole Amount (as defined under "Description of
Capital Securities Mandatory Redemption"), together with accrued interest to but
excluding the date fixed for redemption.
Additional Sums
The Corporation has covenanted in the Junior Subordinated Indenture
that, if and for so long as (i) the Trust is the holder of all Junior
Subordinated Debt Securities and (ii) the Trust is required to pay any
additional taxes, duties or other governmental charges as a result of a Tax
Event, the Company will pay as additional sums on the Junior Subordinated Debt
Securities such amounts as may be required so that the Distributions payable by
the Trust will not be reduced as a result of any such additional taxes, duties
or other governmental charges. See "Description of Capital Securities -
Mandatory Redemption."
Interest
The Junior Subordinated Debt Securities shall bear interest at ___% per
annum, from the original date of issuance, payable quarterly in arrears on the
15th day of March, June, September and December of each year, commencing
________ 15, 1999, to the person in whose name such Junior Subordinated Debt
Security is registered, subject to certain exceptions, at the close of business
on the Business Day next preceding, such Interest Payment Date. The term
"interest" as used herein, as such term relates to the Junior Subordinated Debt
Securities, includes any compounded interest or Additional Sums or any
Additional Distributions payable unless otherwise stated. In the event the
Junior Subordinated Debt Securities are not held solely in book-entry only form,
the Corporation will select relevant record dates, which shall be 15 days prior
to the relevant Interest Payment Date.
The amount of interest payable for any period will be computed on the
basis of the actual number of days elapsed in a year of twelve 30-day months. In
the event that any date on which interest is payable on the Junior Subordinated
Debt -Securities is not a Business Day, then payment of the interest payable -on
- -such date will -be made on the next succeeding day that is a Business Day (and
without any interest or other payment in respect of any such delay) with the
same force and effect as if made on such date.
Modification of Indenture
From time to time the Corporation and the Debenture Trustee may,
without the consent of the holders of Junior Subordinated Debt Securities,
amend, waive or supplement the Indenture for specified purposes, including,
among other things, curing ambiguities, defects or inconsistencies (provided
that any such action does not materially adversely affect
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the interest of the holders of Junior Subordinated Debt Securities or the
holders of the Capital Securities so long as they remain outstanding) and
maintaining the qualification of the Indenture under the Trust Indenture Act.
The Indenture contains provisions permitting the Corporation and the Debenture
Trustee, with the consent of the holders of not less than a majority in
principal amount of outstanding Junior Subordinated Debt Securities, to modify
the Indenture in a manner affecting the rights of the holders of Junior
Subordinated Debt Securities; provided, however, that no such modification may,
without the consent of the holder of each outstanding Junior Subordinated Debt
Security so affected, change the Stated Maturity, or reduce the principal amount
of the Junior Subordinated Debt Securities, or reduce the rate or extend the
time of payment of interest thereon or reduce the percentage of principal amount
of Junior Subordinated Debt Securities, or have certain other effects as set
forth in the Indenture.
In addition, the Corporation and the Debenture Trustee may execute,
without the consent of any holder of Junior Subordinated Debt Securities, any
supplemental Indenture for the purpose of creating any Other Debentures.
Debenture Events of Default
The Indenture provides that any one or more of the following described
events with respect to the Junior Subordinated Debt Securities that has occurred
and is continuing constitutes a "Debenture Event of Default":
o failure for 30 days to pay any interest on the Junior Subordinated
Debt Securities when due (subject to the deferral of any due date
in the case of an Extension Period); or
o failure to pay any principal on the Junior Subordinated Debt
Securities when due, whether at maturity, upon redemption, by
declaration of acceleration or otherwise; or
o failure to observe or perform in any material respect certain
other covenants contained in the Indenture for 90 days after
written notice to the Corporation from the Debenture Trustee or
the holders of at least 25% in aggregate outstanding principal
amount of the Junior Subordinated Debt Securities; or
o certain events in bankruptcy, insolvency or reorganization of the
Corporation; or
o the voluntary or involuntary dissolution, winding-up or
termination of the Trust, except in connection with the
distribution of the Junior Subordinated Debt Securities to the
holder of Trust Securities in liquidation of the Trust, the
redemption of all of the Trust Securities of the Trust, or certain
mergers, consolidations or amalgamations, each as permitted by the
Declaration.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Debenture Trustee. The Debenture Trustee or the holders of not less than 25% in
aggregate outstanding principal amount of the Junior Subordinated Debt
Securities may declare the principal due and payable immediately upon a
Debenture Event of Default and, should the Debenture Trustee or such holders of
Junior Subordinated Debt Securities fail to make such declaration, the holders
of at least 25% in aggregate Liquidation Amount of the Capital Securities shall
have such right. The holders of a majority in aggregate outstanding principal
amount of the Junior Subordinated Debt Securities may annul such declaration and
waive the default if the default (other than the nonpayment of the principal of
the Junior Subordinated Debt Securities 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 Junior
Subordinated Debt Securities fail to annul such declaration and waive such
default, the holders of a majority in aggregate Liquidation Amount of the
Capital Securities shall have such right.
The holders of a majority in aggregate outstanding principal amount of
the Junior Subordinated Debt Securities affected thereby may, on behalf of the
holders of all the Junior Subordinated Debt Securities, waive any past default,
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except a default in the payment of principal of 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) on the Junior Subordinated Debt Securities 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 Debt Security. Should the holders of such Junior Subordinated Debt
Securities fail to annul such declaration and waive such default, the holders of
a majority in aggregate Liquidation Amount of the Capital Securities shall have
such right. The Corporation is required to file annually with the Debenture
Trustee a certificate as to whether or not the Corporation is in compliance with
all the conditions and covenants applicable to it under the Indenture.
In case a Debenture Event of Default shall occur and be continuing, the
Property Trustee will have the right to declare the principal of and the
interest on the Junior Subordinated Debt Securities, and any other amounts
payable under the Indenture, to be forthwith due and payable and to enforce its
other rights as a creditor with respect to the Junior Subordinated Debt
Securities.
Enforcement of Certain Rights by Holders of Capital Securities
If a Debenture Event of Default has occurred and is continuing and such
event is attributable to the failure of the Corporation to pay interest or
principal on the Junior Subordinated Debt Securities on the date such interest
or principal is otherwise payable, a holder of Capital Securities may institute
a Direct Action. The Corporation may not amend the Indenture to remove the
foregoing right to bring a Direct Action without the prior written consent of
the holders of all of the Capital Securities. Notwithstanding any payments made
to a holder of Capital Securities by the Corporation in connection with a Direct
Action, the Corporation shall remain obligated to pay the principal of and
interest on the Junior Subordinated Debt Securities, and the Corporation shall
be subrogated to the rights of the holder of such Capital Securities with
respect to payments on the Capital Securities to the extent of any payments made
by the Corporation to such holder in any Direct Action.
The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in the preceding paragraph,
available to the holders of the Junior Subordinated Debt Securities unless there
shall have been an Event of Default under the Declaration. See "Description of
Capital Securities--Events of Default; Notice."
Consolidation, Merger, Sale of Assets and Other Transactions
The Indenture provides that the Corporation shall not consolidate with
or merge with or into any other person or convey, transfer or lease its
properties and assets substantially as an entirety to any person, and no person
shall consolidate with or merge with or into the Corporation or convey, transfer
or lease its properties and assets substantially as an entirety to the
Corporation, unless:
o in case the Corporation consolidates with or merges with or into
another person or conveys or transfers its properties and assets
substantially as an entirety to any person, the successor person
is organized under the laws of the United States or any state or
the District of Columbia, and such successor person expressly
assumes the Corporation's obligations on the Junior Subordinated
Debt Securities issued under the Indenture;
o immediately after giving effect thereto, no Debenture Event of
Default, and no event which, after notice or lapse of time or
both, would become a Debenture Event of Default, shall have
occurred and be continuing;
o if at the time any Capital Securities are outstanding, such
transaction is permitted under the Declaration and the Guarantee
and does not give rise to any breach or violation of the
Declaration or the Guarantee; and
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o certain other conditions as prescribed in the Indenture are met.
The general provisions of the Indenture do not afford holders of the
Junior Subordinated Debt Securities protection in the event of a highly
leveraged or other transaction involving the Corporation that may adversely
affect holders of the Junior Subordinated Debt Securities.
Subordination
In the Indenture, the Corporation has covenanted and agreed that any
Junior Subordinated Debt Securities issued thereunder shall be subordinate and
junior in right of payment to all Senior Debt to the extent provided in the
Indenture. Upon any payment or distribution of assets to creditors upon any
liquidation, dissolution, winding-up, reorganization, assignment for the benefit
of creditors, marshaling of assets or any bankruptcy, insolvency, debt
restructuring or similar proceedings in connection with any insolvency or
bankruptcy proceeding of the Corporation, the holders of Senior Debt will first
be entitled to receive payment in full of principal of and interest, if any, on
such Senior Debt before the holders of Junior Subordinated Debt Securities, or
the Property Trustee on behalf of the holders, will be entitled to receive or
retain any payment or distribution in respect thereof.
In the event of the acceleration of the maturity of the Junior
Subordinated Debt Securities, the holders of all Senior Debt outstanding at the
time of such acceleration will first be entitled to receive payment in full of
all amounts due thereon (including any amounts due upon acceleration) before the
holders of the Junior Subordinates Debt Securities will be entitled to receive
or retain any payment in respect of the principal of or interest, if any, on the
Junior Subordinated Debt Securities.
In the event that the Corporation shall default in the payment of any
principal of or interest, if any, on any, Senior Debt when the same becomes due
and payable, whether at maturity or at a date fixed for prepayment or by
declaration of acceleration or otherwise, then, unless and until such default
shall have been cured or waived or shall have ceased to exist or all Senior Debt
shall have been paid, no direct or indirect payment (in cash, property,
securities, by set-off or otherwise) shall be made or agreed to be made for
principal or interest, if any, on the Junior Subordinated Debt Securities, or in
respect of any redemption, repayment, retirement, purchase or other acquisition
of any of the Junior Subordinated Debt Securities.
"Senior Debt" means:
o the principal of, and premium, if any, and interest on all
indebtedness of the Corporation for money borrowed, whether
outstanding on the date of execution of the Indenture or
thereafter created, assumed or incurred, except indebtedness that
is expressly stated to rank junior to or equally with the Junior
Subordinated Debt Securities;
o all obligations (except those that are expressly stated to rank
junior to or equally with the Junior Subordinated Debt Securities)
to make payment pursuant to the terms of financial instruments,
such as,
(i) securities contracts and foreign currency exchange
contracts,
(ii) derivative instruments, such as swap agreements
(including interest rate and foreign exchange rate swap agreements),
cap agreements, floor agreements, collar agreements, interest rate
agreements, foreign exchange agreements, options, commodity futures
contracts and commodity options contracts, and
(iii) similar financial instruments;
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o indebtedness or obligations of others of the kinds described above
for the payment of which the Corporation is responsible or liable
as guarantor or otherwise, and
o any deferrals, renewals or extensions of any such Senior Debt.
However, Senior Debt shall not be deemed to include
o any debt of the Corporation which, when incurred and without
respect to any election under Section 1111 (b) of the United
States Bankruptcy Code of 1978, was without recourse to the
Corporation,
o any debt of the Corporation to any of its subsidiaries,
o debt to any employee of the Corporation,
o debt which by its terms is subordinated to trade accounts payable
or accrued liabilities arising in the ordinary course of business
to the extent that payments made to the holders of such debt by
the holders of the Junior Subordinated Debt Securities as a result
of the subordination provisions of the Indenture would be greater
than such payments otherwise would have been as a result of any
obligation of such holders of such debt to pay amounts over to the
obligees on such trade accounts payable or accrued liabilities
arising in the ordinary course of business as a result of
subordination provisions to which such debt is subject,
o trade accounts payable or accrued liabilities arising in the
ordinary course of business and
o any other debt securities issued pursuant to the Indenture.
The Indenture places no limitation on the amount of Senior Debt that
may be incurred by the Corporation. The Corporation expects from time to time to
incur additional indebtedness constituting Senior Debt. At September 30, 1998
the Corporation had no Senior Debt on an unconsolidated basis. The Indenture
also places no limitation on the indebtedness of the Corporation's subsidiaries,
which rank senior in right of payment to the Junior Subordinated Debt
Securities.
Governing Law
The Indenture and the Junior Subordinated Debt Securities will be
governed by and construed in accordance with the laws of the State of Virginia.
Information Concerning the Debenture Trustee
The Debenture Trustee shall have and be subject to all the duties and
responsibilities specified with respect to an indenture trustee under the Trust
Indenture Act. Subject to such provisions, the Debenture Trustee is under no
obligation to exercise any of the powers vested in it by the Indenture at the
request of any holder of Junior Subordinated Debt Securities, 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.
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DESCRIPTION OF GUARANTEE
The Guarantee will be executed and delivered by the Corporation
concurrently with the issuance by the Trust of the Trust Securities for the
benefit of the holders from time to time of such Trust Securities. Wilmington
Trust Company will act as trustee (the "Guarantee Trustee") under the Guarantee
Agreement. The Guarantee Agreement will be qualified 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, including the definitions therein of certain
terms, and the Trust Indenture Act. The Guarantee Trustee will hold the
Guarantee for the benefit of the holders of the Trust Securities.
General
The Corporation will irrevocably agree to pay in full on a subordinated
basis, to the extent set forth herein, the Guarantee Payments (as defined
herein) to the holders of the Trust 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 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 Securities, to the extent that the Trust has funds on hand available
therefor at such time,
(ii) the Redemption Price with respect to Trust Securities called
for redemption, to the extent that the Trust has funds on hand available
therefor at such time, and
(iii) upon a voluntary or involuntary dissolution, winding up or
liquidation of the Trust (other than in connection with the distribution of
Junior Subordinated Debt Securities to the holders of the Trust Securities or
the redemption of all of the Capital Securities) the lesser of (a) the
Liquidation Distribution, to the extent the Trust has funds available therefor
and (b) the amount of assets of the Trust remaining available for distribution
to holders of the Trust Securities upon liquidation of the Trust after
satisfaction of liabilities to creditors of the Trust as required by applicable
law.
The Corporation's obligation to make a Guarantee Payment may be
satisfied by direct payment of the required amounts by the Corporation to the
holders of the Trust Securities or by causing the Trust to pay such amounts to
such holders.
The Guarantee will be an irrevocable guarantee on a subordinated basis
of the Trust's obligations under the Trust Securities, although it will apply
only to the extent that the Trust has funds sufficient to make such payments,
and is not a guarantee of collection. If the Corporation does not make interest
payments on the Junior Subordinated Debt Securities held by the Trust, the Trust
will not be able to pay Distributions on the Capital Securities and will not
have funds legally available therefor.
The Guarantee will rank subordinate and junior in right of payment to
all Senior Debt. See "Status of the Guarantee." As a holding company, the
Corporation conducts its operations principally through its subsidiaries and,
therefore, its principal source of cash is receipt of dividends from the Bank.
However, there are legal limitations on the source and amount of dividends that
a Virginia-chartered, Federal Reserve member bank such as the Bank is permitted
to pay. A Virginia-chartered bank may pay dividends only from net undivided
profits. Additionally, a dividend may not be paid if it would impair the paid-in
capital of the bank. In addition, prior approval of the Federal Reserve is
required if the total of all dividends declared by a member bank in any calendar
year will exceed the sum of that bank's net profits for that year and its
retained net profits for the preceding two calendar years, less any required
transfers to either surplus or any fund for the retirement of any preferred
stock. At September 30, 1998, the Bank could have paid approximately
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$2.7 million in dividends to the Corporation without prior Federal Reserve
approval. The payment of dividends by the Bank may also be affected by other
factors, such as requirements for the maintenance of adequate capital. In
addition, the Federal Reserve is authorized to determine, under certain
circumstances relating to the financial condition of a member bank, whether the
payment of dividends would be an unsafe or unsound banking practice and to
prohibit payment thereof. See "the Corporation." The Guarantee does not limit
the incurrence or issuance of other secured or unsecured debt of the
Corporation, including Senior Debt, whether under the Indenture, any other
indenture that the Corporation may enter into in the future or otherwise.
Taken together, the Corporation's obligations under the Guarantee, the
Declaration, the Junior Subordinated Debt Securities and the Indenture,
including the Corporation's obligation to pay the costs, expenses and other
liabilities of the Trust (other than the Trust's obligations to the holders of
the Trust Securities under the Trust Securities), provide, in the aggregate, a
full, irrevocable and unconditional guarantee of all of the Trust's obligations
under the Capital Securities. No single document standing alone or operating in
conjunction with fewer than all of the other documents constitutes such
guarantee. It is only the combined operation of these documents that has the
effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. See "Relationship Among the
Capital Securities, the Junior Subordinated Debt Securities and the Guarantee."
Status of the Guarantee
The Guarantee will constitute an unsecured obligation of the
Corporation and will rank subordinate and junior in right of payment to all
Senior Debt in the same manner as Junior Subordinated Debt Securities.
The Guarantee will rank equally with all Other Guarantees issued by the
Corporation. The Guarantee will constitute a guarantee of payment and not of
collection (i.e., the guaranteed party may institute a legal proceeding directly
against the Corporation to enforce its rights under the 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 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 Securities of the Junior Subordinated Debt Securities. The
Guarantee does not place a limitation on the amount of additional Senior Debt
that may be incurred by the Corporation. The Corporation expects from time to
time to incur additional indebtedness constituting Senior Debt.
Amendments and Assignment
Except with respect to any changes that do not materially adversely
affect the rights of holders of the Trust Securities (in which case no vote will
be required), the Guarantee may not be amended without the prior approval of the
holders of not less than a majority of the aggregate Liquidation Amount of such
outstanding Capital Securities. The manner of obtaining any such approval will
be as set forth under "Description of Capital Securities--Voting Rights;
Amendment of the Declaration." All guarantees and agreements contained in the
Guarantee shall bind the successors, assigns, receivers, trustees and
representatives of the Corporation and shall inure to the benefit of the holders
of the Capital Securities then outstanding.
Events of Default
An event of default under the Guarantee will occur upon the failure of
the Corporation to perform any of its payment or other obligations thereunder;
provided, however, that except with respect to a default in payment of any
Guarantee Payment, the Corporation shall have received notice of default and
shall not have cured such default within 60 days after receipt of such notice;
and provided, further, that no event of default under the Guarantee shall occur
unless an Event of Default under the Declaration or a Debenture Event of Default
shall have occurred. The holders of not less than a majority in aggregate
Liquidation Amount of the Capital Securities have the right to direct the time,
method and place
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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 Capital Securities may institute a legal proceeding
directly against the Corporation to enforce its rights under the Guarantee
without first instituting a legal proceeding against the Trust, the Guarantee
Trustee or any other person or entity.
The Corporation, as guarantor, is required to file annually with the
Guarantee Trustee a certificate as to whether or not the Corporation is in
compliance with all the conditions and covenants applicable to it under the
Guarantee.
Information Concerning the Guarantee Trustee
The Guarantee Trustee, other than during the occurrence and continuance
of a default by the Corporation in performance of the Guarantee, undertakes to
perform only such duties as are specifically set forth in the Guarantee and,
after default with respect to the Guarantee, must exercise the same degree of
care and skill as a prudent person would exercise or use in the conduct of his
or her own affairs. Subject to this provision, the Guarantee Trustee is under no
obligation to exercise any of the powers vested in it by the Guarantee at the
request of any holder of the Trust Securities unless it is offered reasonable
indemnity against the costs, expenses and liabilities that might be incurred
thereby.
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 Securities, upon full payment
of the amounts payable upon liquidation of the Trust or upon distribution of
Junior Subordinated Debt Securities to the holders of the Trust 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 Securities must restore payment of
any sums paid under the Trust Securities or the Guarantee.
Governing Law
The Guarantee will be governed by and construed in accordance with the
laws of the State of Virginia.
RELATIONSHIP AMONG THE CAPITAL SECURITIES,
THE JUNIOR SUBORDINATED DEBT SECURITIES AND THE GUARANTEE
Full and Unconditional Guarantee
Payments of Distributions and other amounts due on the Capital
Securities (to the extent the Trust has funds available for the payment of such
Distributions) are irrevocably guaranteed by the Corporation as and to the
extent set forth under "Description of Guarantee." Taken together, the
Corporation's obligations under the Junior Subordinated Debt Securities, the
Indenture, the Declaration and the Guarantee provide, in the aggregate, a full,
irrevocable and unconditional guarantee of payments of Distributions and other
amounts due on the Capital Securities. No single document standing alone or
operating in conjunction with fewer than all of the other documents constitutes
such guarantee. It is only the combined operation of these documents that has
the effect of providing a full, irrevocable and unconditional guarantee of the
Trust's obligations under the Capital Securities. If and to the extent that the
Corporation does not make payments on the Junior Subordinated Debt Securities,
the Trust will not pay Distributions or other amounts due on the Capital
Securities. The Guarantee does not cover payment of Distributions when the Trust
does not have sufficient funds to pay such Distributions. In such event, the
remedy of a holder of Capital Securities is to institute a Direct Action. The
obligations of the Corporation under the Guarantee are subordinate and junior in
right of payment to all Senior Debt.
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Sufficiency of Payments
As long as payments of interest and other payments are made when due on
the Junior Subordinated Debt Securities, such payments will be sufficient to
cover Distributions and other payments due on the Capital Securities, primarily
because (i) the aggregate principal amount or Redemption Price of the Junior
Subordinated Debt Securities will be equal to the sum of the aggregate
Liquidation Amount or Redemption Price, as applicable, of the Trust Securities;
(ii) the interest rate and interest and other payment dates on the Junior
Subordinated Debt Securities will match the Distribution rate and Distribution
and other payment dates for the Capital Securities; (iii) the Corporation shall
pay for all costs, expenses and liabilities of the Trust except the Trust's
obligations to holders of Trust Securities under such Trust Securities; and (iv)
the Declaration further provides that the Trust will not engage in any activity
that is not consistent with the limited purposes thereof.
Notwithstanding anything to the contrary in the Indenture, the
Corporation has the right to set off any payment it is otherwise required to
make thereunder with and to the extent the Corporation has theretofore made, or
is concurrently on the date of such payment making, any payment under the
Guarantee used to satisfy the related payment of indebtedness under the
Indenture.
Enforcement Rights of Holders of Capital Securities
A holder of any Capital Security may institute a legal proceeding
directly against the Corporation 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 Debt would not
constitute a default or Event of Default under the Declaration. However, in the
event of payment defaults under, or acceleration of, Senior Debt, the
subordination provisions of the Indenture provide that no payments may be made
in respect of the Junior Subordinated Debt Securities until such Senior Debt has
been paid in full or any payment default thereunder has been cured or waived.
Failure to make required payments on Junior Subordinated Debt Securities would
constitute an Event of Default under the Declaration.
Limited Purpose of the Trust
The Capital Securities evidence a beneficial interest in the Trust, and
the Trust exists for the sole purpose of issuing the Capital Securities and
Common Securities, investing the proceeds of the Trust Securities in Junior
Subordinated Debt Securities and engaging in other activities necessary or
incidental thereto.
Rights Upon Termination
Upon any voluntary or involuntary termination, winding-up or
liquidation of the Trust involving the liquidation of the Junior Subordinated
Debt Securities, after satisfaction of the liabilities of creditors of the Trust
as required by applicable law, the holders of the Trust Securities will be
entitled to receive, out of assets held by the Trust, the Liquidation
Distribution in cash. See "Description of Capital Securities--Liquidation of the
Trust and Distribution of Junior Subordinated Debt Securities." Upon any
voluntary or involuntary liquidation or bankruptcy of the Corporation, the
Property Trustee, as holder of the Junior Subordinated Debt Securities, would be
a subordinated creditor of the Corporation, subordinated in right of payment to
all Senior Debt as set forth in the Indenture, but entitled to receive payment
in full of principal and interest, before any stockholders of the Corporation
receive payments or distributions. Since the Corporation is the guarantor under
the Guarantee and has agreed to pay for all costs, expenses and liabilities of
the Trust (other than the Trust's obligations to the holders of its Trust
Securities), the positions of a holder of Capital Securities and a holder of
Junior Subordinated Debt Securities relative to other creditors and to
stockholders of the Corporation in the event of liquidation or bankruptcy of the
Corporation are expected to be substantially the same.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal
income tax consequences of the purchase, ownership and disposition of Capital
Securities. Unless otherwise stated, this summary addresses only the tax
consequences to a "U.S. Holder" (as defined below) that acquires Capital
Securities on their original issue at their original offering price and does not
address the tax consequences to persons that may be subject to special treatment
under United States federal income tax law, such as banks, insurance companies,
thrift institutions, regulated investment companies, real estate investment
trusts, tax-exempt organizations, dealers in securities or currencies, persons
that hold Capital Securities as part of a position in a "straddle" or as part of
a "hedging", "conversion" or other integrated investment transaction for United
States federal income tax purposes, persons whose functional currency is not the
United States dollar or persons that do not hold Capital Securities as capital
assets. For purposes of this summary, a "U.S. Holder" is a Securityholder (as
defined below) who or that is (i) an individual citizen or resident of the
United States, (ii) a domestic corporation or partnership organized under the
laws of the United States or any State thereof or the District of Columbia or
(iii) an estate or trust the income of which is subject to United States federal
income taxation regardless of source.
The statements of law or legal conclusions set forth in this summary
constitute the opinion of Williams Mullen Christian & Dobbins, tax counsel to
the Corporation and the Trust. This summary is based upon the Internal Revenue
Code of 1986, as amended (the "Code"), Treasury Regulations, Internal Revenue
Service rulings and pronouncements and judicial decisions now in effect, all of
which are subject to change at any time. Such changes may be applied
retroactively in a manner that could cause the tax consequences to vary
substantially from the consequences described below, possibly adversely
affecting a beneficial owner of the Capital Securities. The authorities on which
this summary is based are subject to various interpretations, and it is
therefore possible that the United States federal income tax treatment of the
purchase, ownership and disposition of the Capital Securities may differ from
the treatment described below.
PROSPECTIVE INVESTORS ARE ADVISED TO CONSULT WITH THEIR OWN TAX
ADVISORS IN LIGHT OF THEIR OWN PARTICULAR CIRCUMSTANCES AS TO THE FEDERAL TAX
CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND DISPOSITION OF THE CAPITAL
SECURITIES, AS WELL AS THE EFFECT OF ANY STATE, LOCAL OR FOREIGN TAX LAWS.
Classification of the Junior Subordinated Debt Securities and the Trust
Under current law and assuming compliance with the terms of the Trust
Agreement, the Trust will not be classified as an association taxable as a
corporation for United States federal income tax purposes. Moreover, the Trust
should be classified as a grantor trust, and if not so classified will be
classified as a partnership, for United States federal income tax purposes. As a
result, each beneficial owner of Capital Securities (a "Securityholder") that is
a U.S. Holder will be required to include in its gross income its pro rata share
of the interest income, including OID, paid or accrued with respect to the
Junior Subordinated Debt Securities, whether or not cash is actually distributed
to the Securityholders. See "Interest Income and Original Issue Discount,"
below. The Junior Subordinated Debt Securities will be classified as
indebtedness of the Corporation for United States federal income tax purposes.
Prospective investors should be aware that the IRS has disallowed a
deduction for interest paid by Enron Corporation ("Enron") in 1993 and 1994 on
securities issued by Enron that are similar to the Subordinated Debt Securities.
Enron has filed a petition in the U.S. Tax Court challenging the disallowance of
its deductions. The opinion of Counsel regarding the tax classification of the
Subordinated Debt Securities is based on the law prior to any Tax Court decision
in the Enron case. Although Enron's debt obligations differ in certain respects
from the Subordinated Debt Securities, the arguments of the IRS that interest on
those obligations is not deductible are not entirely focused on those different
terms and thus could apply to the Subordinated Debt Securities. Therefore, if
the Tax Court decides in favor of the IRS in Enron's case, although its decision
might be distinguishable from the Subordinated Debt Securities, it is also
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possible that its decision would result in the receipt by the Corporation or the
Trust of a subsequent opinion counsel that there is more than an insubstantial
risk that interest payable on the Subordinated Debt Securities is not or will
not be deductible. The receipt of such an opinion would constitute a Tax Event,
which would permit the Corporation to cause a redemption of the Capital
Securities.
Interest Income and Original Issue Discount
Under applicable Treasury regulations (the "Regulations"), a "remote"
contingency that stated interest will not be timely paid will be ignored in
determining whether a debt instrument is issued with OID. The Corporation
believes that the likelihood of its exercising its option to defer payments of
interest is remote. Based on the foregoing, the Corporation believes that the
Junior Subordinated Debt Securities will not be considered to be issued with OID
at the time of their original issuance.
Because the discount at which the Junior Subordinated Debt Securities
are being issued is less than 1/4 of 1 percent of the Junior Subordinated Debt
Securities stated redemption price at maturity times the number of complete
years to maturity of the Junior Subordinated Debt Securities, such discount will
constitute de minimis OID and will not be required to be taken into account on a
current basis. The following discussion assumes that unless and until the
Corporation exercises its option to defer interest on the Junior Subordinated
Debt Securities, the Junior Subordinated Debt Securities will not be treated as
issued with OID other than de minimis OID.
Under the Regulations, if the Corporation exercised its option to defer
any payment of interest, the Junior Subordinated Debt Securities would be
treated as reissued with OID, and, thereafter, all stated interest on the Junior
Subordinated Debentures would be treated as OID as long as the Junior
Subordinated Debt Securities remained outstanding. In such event, all of a U.S.
Holder's taxable interest income with respect to the Junior Subordinated Debt
Securities would be accounted for as OID on an economic accrual basis regardless
of such U.S. Holder's method of tax accounting, and actual distributions of
stated interest would not be reported separately as taxable income.
Consequently, a U.S. Holder would be required to include OID in gross income
even though the Corporation would not make any actual cash payments during an
Extension Period.
The Regulations have not been addressed in any rulings or other
interpretations by the IRS, and it is possible that the IRS could take the
position that the Junior Subordinated Debt Securities were issued with OID at
the time of their original issuance.
Because income on the Capital Securities will constitute interest or
OID, corporate U.S. Holders will not be entitled to the dividends-received
deduction with respect to any income recognized with respect to the Capital
Securities. If any Special Interest or Additional Distributions are paid on the
Capital Securities it is possible that such Special Interest or Additional
Distributions might constitute OID (whether or not an Extension Period has
occurred).
Subsequent uses of the term "interest" in this summary shall include
income in the form of OID.
Distribution of the Junior Subordinated Debt Securities to Holders of Capital
Securities
Under current law, a distribution by the Trust of the Junior
Subordinated Debt Securities, as described under the caption "Description of
Capital Securities--Liquidation of the Trust and Distribution of Junior
Subordinated Debt Securities," will be nontaxable and will result in a U.S.
Holder receiving directly its pro rata share of the Junior Subordinated Debt
Securities previously held indirectly through the Trust, with a holding period
and aggregate adjusted tax basis equal to the holding period and aggregate
adjusted tax basis such U.S. Holder had in its Capital Securities immediately
before such distribution. If, however, the liquidation of the Trust were to
occur because the Trust were subject to United States federal income tax with
respect to income accrued or received on the Junior Subordinated Debt
Securities, the distribution of Junior Subordinated Debt Securities to U.S.
Holders by the Trust would be a taxable event
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to the Trust and each U.S. Holder, and each U.S. Holder would recognize gain or
loss as if the U.S. Holder had exchanged its Capital Securities for the Junior
Subordinated Debt Securities it received upon the liquidation of the Trust. A
U.S. Holder will include interest in respect of the Junior Subordinated Debt
Securities received from the Trust in the manner described above under "Interest
Income and Original Issue Discount."
Sales or Redemption of the Capital Securities
Gain or loss will be recognized by a U.S. Holder on a sale, exchange,
or other disposition of the Capital Securities (including a redemption for cash)
in an amount equal to the difference between the amount realized and the U.S.
Holder's adjusted tax basis in the Capital Securities sold or so redeemed.
Assuming that the Corporation does not exercise its option to defer payment of
interest on the Junior Subordinated Debt Securities, a U.S. Holder's adjusted
tax basis in the Capital Securities generally will be its initial purchase
price. If the Junior Subordinated Debentures are deemed to be issued with OID
(as a result of the Corporation's deferral of any interest payment), a U.S.
Holder's adjusted tax basis in the Capital Securities generally will be its
initial purchase price, increased by OID previously included in such U.S.
Holder's gross income to the date of disposition and decreased by distributions
or other payments received on the Capital Securities other than payments of
stated interest that are not treated as OID. Gain or loss recognized by a U.S.
Holder on the Capital Securities generally will be taxable as capital gain or
loss (except to the extent any amount realized is treated as a payment of
accrued interest with respect to such U.S. Holder's pro rata share of the Junior
Subordinated Debt Securities required to be included in income) and generally
will be long-term capital gain or loss if the Capital Securities have been held
for more than one year.
Should the Corporation exercise its option to defer any payment of
interest on the Junior Subordinated Debt Securities, the Capital Securities may
trade at a price that does not fully reflect the value of accrued but unpaid
interest with respect to the underlying Junior Subordinated Debt Securities. In
the event of such a deferral, a Securityholder that disposes of its Capital
Securities between record dates for payments of Distributions (and consequently
does not receive a Distribution from the Trust for the period prior to such
disposition) will nevertheless be required to include in income as ordinary
income accrued but unpaid interest on the Junior Subordinated Debt Securities
through the date of disposition and to add such amount to its adjusted tax basis
in its Capital Securities disposed of Such U.S. Holder will recognize a capital
loss on the disposition of its Capital Securities to the extent the selling
price (which may not fully reflect the value of accrued but unpaid interest) is
less than the U.S. Holder's adjusted tax basis in the Capital Securities (which
will include accrued but unpaid interest). 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, as to the United
States, a foreign corporation, a nonresident alien individual, a foreign
partnership or a nonresident fiduciary of a foreign estate or trust.
Under current United States federal income tax law, and subject to the
discussion of backup withholding below: (i) payments by the Trust or any of its
paying agents to any Securityholder who or that is a United States Alien Holder
will not be subject to United States federal withholding tax; provided that (a)
the Securityholder does not actually or constructively own 10% or more of the
total combined voting power of all classes of stock of the Corporation entitled
to vote, (b) the Securityholder is not a controlled foreign corporation that is
related to the Corporation through stock ownership and (c) either (A) the
Securityholder certifies to the Trust or its agent, under penalties of perjury,
that it is not a United States holder and provides its name and address or (B) a
securities clearing organization, bank or other financial institution that holds
customers' securities in the ordinary course of its trade or business (a
"Financial Institution"), and holds the Capital Security in such capacity,
certifies to the Trust or its agent, under penalties of perjury, that such
statement has been received from the Securityholder by it or by a Financial
Institution holding such security for the Securityholder and furnishes the Trust
or its agent with a copy thereof, and (ii) a United States Alien Holder of a
Capital
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Security will not be subject to United States federal withholding tax on any
gain realized upon the sale or other disposition of a Capital Security.
Information Reporting to Securityholders
Generally, income on the Capital Securities will be reported to
Securityholders on Forms 1099, which forms should be mailed to Securityholders
by January 31 following each calendar year.
Backup Withholding
Payments made on, and proceeds from the sale of, the Capital Securities
may be subject to a "backup" withholding tax of 31% unless the Securityholder
complies with certain certification requirements. Any withheld amounts will be
allowed as a credit against the Securityholder's United States federal income
tax, provided the required information is furnished to the Internal Revenue
Service on a timely basis.
CERTAIN ERISA CONSIDERATIONS
ERISA pension plans, qualified retirement plans, and IRAs (collectively
referred to as retirement plans) are subject to certain transactional
restrictions under ERISA and/or the Internal Revenue Code. For example, a
fiduciary (generally, someone who has discretionary control over plan assets or
receives money for investment advice) is prohibited under these restrictions
from (1) engaging in transactions in its own interest or for its own account or
(2) from receiving consideration from any party dealing with a plan with regard
to its assets. In addition, a plan may not enter into purchase, sale, or loan
transaction with a disqualified person. A disqualified person includes, among
other things, a fiduciary, the plan sponsor, and any entity providing services
(for example, custodial or administrative services) to a plan. Violation of
these transactional restrictions can result in the imposition of federal excise
taxes, federal and state income tax on otherwise exempt retirement trusts, and
accelerated federal and state income tax on the otherwise deferred income
accounts of retirement plan participants.
In the usual case, when a retirement plan invests plan assets in a
security, the security purchased replaces the purchase money as a plan asset and
the purchase money becomes an asset of the entity who offered the security for
sale. Because of a concern that certain enterprises were in reality functioning
as investment managers to plans, but avoiding classification as a fiduciary
under ERISA through the device of issuing participation units in, for example,
limited partnerships, the Department of Labor issued regulations (the "Plan
Asset Regulations") which provide that when certain equity interests (including
a beneficial interest in a trust as well as participation in a limited
partnership) are acquired by a plan, both the equity interest acquired in the
hands of the purchasing plan and the purchase money in the hands of the issuer
of the equity interest constitute plan assets. Since the issuer has
discretionary control over these assets, the issuer becomes a fiduciary under
ERISA with respect to the investing plan. As a result, unless an exception
applies, the Trust's purchase of the Junior Subordinated Debt Securities from
the Corporation with assets invested by retirement plans would constitute an
instance of the Trust as a fiduciary dealing on its own account and in its own
interest with plan assets or receiving consideration from an entity (the
Corporation) engaged in a transaction involving plan assets. The Plan Asset
Regulations provide certain exemptions to its plan asset characterization rules.
It appears that one of the exemptions provided by the Plan Asset
Regulations, namely, the publicly-offered exemption, applies to Junior
Subordinated Debt Securities purchased by the Trust as consequence of a
retirement plan's investment in Capital Securities with the result that the
purchase money or Junior Subordinated Debt Securities will not be deemed to be
plan assets in the hands of the Trustee. Under the Plan Asset Regulations, a
publicly-offered equity interest in a trust or other non-operating entity
purchased by a plan does not constitute a plan asset if the interest is freely
transferable and widely held. The Plan Asset Regulations provide that a security
is publicly-offered if it is sold to a plan as part of an offering of securities
to the public pursuant to an effective registration statement under the
Securities Act of 1933 and the class of securities of which such security is
part is registered under the Securities Exchange Act of 1934
-62-
<PAGE>
within 120 days (or such later time as may be allowed by the Securities and
Exchange Commission) after the end of the fiscal year of the issuer during which
the offering of such securities to the public occurred. The Corporation intends
to cause the Capital Securities to be so registered under the Securities
Exchange Act of 1934. Further, although ultimately under the Plan Asset
Regulations it is a question of fact, a security will generally be deemed to be
freely transferable if its purchase price is $25,000 or less at the time of the
public offering. If, in addition, the securities when offered initially to the
public will be held by 100 or more persons independent of the issuer or of one
another, they will generally be deemed to be widely held. It is anticipated that
with regard to these criteria provided by the Plan Asset Regulations, the
Capital Securities at the time of being initially offered constitute securities
which are publicly-offered, widely held, and freely transferable. Retirement
plans should, nevertheless, consult with their own counsel regarding the
application of the Plan Asset Regulations to the purchase of Capital Securities
from the Trust.
If the Corporation or the Bank provides any services to an investing
retirement plan, then it is a disqualified person with respect to that plan
irrespective of whether the Trust qualifies under the publicly-offered
securities exemption to the Plan Asset Regulations. Consequently, the purchase
of Junior Subordinated Debt Securities by the Trust would be an indirect loan
made by the retirement plan to the Corporation and, as such, would constitute a
prohibited transaction under ERISA.
-63-
<PAGE>
UNDERWRITING
The Underwriter, McKinnon & Company, Inc., 555 Main Street, Norfolk,
Virginia, as agreed, subject to the terms and conditions contained in an
Underwriting Agreement with the Trust and the Corporation, to sell, as selling
agent, on a best efforts basis, up to $8.0 million of Capital Securities. The
Underwriter is not obligated to purchase the Capital Securities if they are not
sold to the public.
The Underwriter has informed the Trust and the Corporation that it
proposes to sell the Capital Securities as selling agent for the Trust, subject
to prior sale, when, as and if issued by the Trust, in part to the public at the
public offering price set forth on the cover page of this Prospectus and, in
part, through certain selected dealers, who are members of the National
Association of Securities Dealers, Inc., to customers of such selected dealers
at such public offering price, for which each selected dealer will receive a
commission of $0.50, for each $25 of Capital Securities that it sells. The
Underwriter reserves the right to reject any order for the purchase of Capital
Securities through it in whole or in part.
The public offering is not contingent upon the occurrence of any event
or the sale of a minimum or maximum number of Capital Securities. Funds received
by the Underwriter from investors in the public offering will be deposited with
and held by the Escrow Agent in a non-interest bearing account until the closing
of the public offering. Closing is expected to occur on or about ______ __,
1999.
As the proceeds of the sale of the Capital Securities will ultimately
be used to purchase the Junior Subordinated Debt Securities, the Underwriting
Agreement provides that the Corporation will pay as compensation ("Underwriter's
Compensation") an amount directly to the Underwriter for its arranging the
investment therein of such proceeds $0.__ per Capital Security (or up to $______
in the aggregate) for the account of the Underwriter.
The Underwriting Agreement provides that Corporation and the Trust will
indemnify the Underwriter against certain liabilities, including liabilities
under the Securities Act or contribute to payments the Underwriter may be
required to make in respect thereof.
The Capital Securities are a new issue of securities with no
established trading market. The Corporation and the Trust do not intend to apply
for listing of the Capital Securities on any securities exchange. The
Corporation and the Trust have been advised by the Underwriter that it may make
a market in the Capital Securities. The Underwriter, however, is not obligated
to make a market in the Capital Securities and may discontinue any market making
at any time without notice. Neither the Corporation nor the Trust can provide
any assurance that a secondary market for the Capital Securities will develop.
The Underwriter provides or has provided investment banking services to
the Corporation from time to time in the ordinary course of business.
-64-
<PAGE>
VALIDITY OF SECURITIES
Certain matters of Delaware law relating to the validity of the Capital
Securities, the enforceability of the Declaration and the formation of the Trust
will be passed upon by Richards, Layton & Finger, special Delaware counsel to
the Corporation and the Trust. The validity of the Guarantee and the Junior
Subordinated Debt Securities, as well as certain matters relating to United
States federal income tax considerations, will be passed upon for the
Corporation by Williams Mullen Christian & Dobbins. Williams Mullen Christian &
Dobbins will rely on the opinion of Richards, Layton & Finger as to matters of
Delaware law.
ACCOUNTANTS
The financial statements of Resource Bank as of December 31, 1997 and
1996 and for each of the years then ended, included in the Bank's 1997 Annual
Report on Form 10-KSB incorporated by reference into this Prospectus, have been
incorporated by reference herein in reliance upon the report of Goodman &
Company, L.L.P., independent auditors, included in the Bank's 1997 Form 10-KSB
and incorporated by reference herein, and upon the authority of said firm as
experts in accounting and auditing.
-65-
<PAGE>
INDEX OF SIGNIFICANT TERMS
<TABLE>
<CAPTION>
<S> <C>
Additional Sums...........................34 interest..................................47
Adjusted Treasury Rate....................33 Interest Payment Date.....................46
Administrative Trustees....................6 Investment Company Act....................39
Bank.......................................4 Investment Company Event..................34
BHCA.......................................5 IRS.......................................14
Book-Entry Capital Securities.............41 Like Amount...............................33
Business Day..............................30 Liquidation Amount........................33
Capital Treatment Event...................34 Liquidation Distribution..................36
Certificate...............................41 Make-Whole Amount.........................33
Code......................................59 NASD......................................41
Commission.................................2 Participants..............................42
Corporation................................2 Paying Agent..............................45
Creditor..................................41 Plan Asset Regulations....................62
Debenture Event of Default................51 Property Trustee...........................6
Debenture Trustee.........................46 Property Trustee's Office.................41
Declaration................................6 Proposed Regulations......................61
Delaware Trustee...........................6 record date...............................30
Distribution Date.........................30 Redemption Date...........................32
DTC.......................................41 Redemption Price..........................32
Eastern American...........................4 Regulations...............................60
EDGAR......................................2 Remaining Life............................33
Enron.....................................14 Securityholder............................59
Event of Default..........................37 Senior Debt...............................53
Federal Reserve...........................12 Successor Securities......................38
Financial Institution.....................61 Tax Event.................................33
Global Security...........................42 Treasury Rate.............................33
Guarantee Agreement.......................30 Trust......................................6
Guarantee Payments........................55 Trust Indenture Act.......................30
Guarantee Trustee.........................54 Trustees...................................6
Indenture.................................46 U.S. Holder...............................59
Indirect Participants.....................43 Underwriter's Compensation................64
Initial Exchange Date.....................41 United States Alien Holder................61
Initial Exchange Period...................41
</TABLE>
-66-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
============================================== ==============================================
No dealer, salesperson or other person is
authorized to give any information or to
represent anything not contained in this
Prospectus. You must not rely on any
unauthorized information or representations.
This Prospectus is an offer to sell only the
securities offered hereby, but only under
circumstances where it is lawful to do so. The
information contained in this Prospectus is
current only as of its date. Neither the
delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances,
create any implication that there has been no
change in the affairs of the Corporation or
the Trust since the date hereof or that the $8,000,000
information contained herein is correct as of RESOURCE CAPITAL TRUST I
any time subsequent to the date of this
Prospectus. $_______ Capital Securities
_______________
(Liquidation Amount
TABLE OF CONTENTS $25 per Capital Security)
NOTICE TO INVESTORS..........................1
WHERE YOU CAN FIND MORE INFORMATION..........2
INCORPORATION OF INFORMATION THAT WE Fully and Unconditionally Guaranteed, as
FILE WITH THE SEC............................2 described herein, by
FORWARD-LOOKING STATEMENTS...................3
PROSPECTUS SUMMARY...........................4
THE OFFERING.................................7 RESOURCE BANKSHARES
RATIO OF EARNINGS TO FIXED CHARGES..........10 CORPORATION
SUMMARY FINANCIAL INFORMATION...............11
RISK FACTORS................................12
USE OF PROCEEDS.............................17
RESOURCE CAPITAL TRUST I....................17 McKinnon & Company, Inc.
SELECTED HISTORICAL FINANCIAL
INFORMATION.................................19
THE CORPORATION.............................20 Prospectus
CAPITALIZATION..............................29
ACCOUNTING TREATMENT........................29 Dated _________________
REGULATORY TREATMENT........................30
DESCRIPTION OF CAPITAL SECURITIES...........30
DESCRIPTION OF JUNIOR SUBORDINATED
DEBT SECURITIES.............................46
DESCRIPTION OF GUARANTEE....................54
RELATIONSHIP AMONG THE CAPITAL
SECURITIES, THE JUNIOR SUBORDINATED
DEBT SECURITIES AND THE GUARANTEE...........57
CERTAIN UNITED STATES FEDERAL INCOME
TAX CONSEQUENCES............................58
CERTAIN ERISA CONSIDERATIONS................62
UNDERWRITING................................64
VALIDITY OF SECURITIES......................65
ACCOUNTANTS.................................65
INDEX OF SIGNIFICANT TERMS..................66
============================================== ==============================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
<S> <C>
Item 14. Other Expenses of Issuance and Distribution
Securities and Exchange Commission Registration Fee $ 2,558 *
National Association of Securities Dealers Examination Fee $ 1,420 *
Printing Expenses $ 1,000
Accounting Fees and Expenses $ 4,000
Legal Fees and Expenses $ 50,000
Blue Sky Fees and Expenses $ 3,700
Miscellaneous Expenses $ 5,000
-------------
Total $ 67,678
=============
</TABLE>
____________________
* Represents actual expenses. All other expenses are estimates.
Item 15. Indemnification of Directors and Officers
Article 10 of Chapter 9 of Title 13.1 of the Code of Virginia, 1950, as
amended (the "Code"), permits a Virginia corporation to indemnify any director
or officer for reasonable expenses incurred in any legal proceeding in advance
of final disposition of the proceeding, if the director or officer furnishes the
corporation a written statement of his good faith belief that he has met the
standard of conduct prescribed by the Code, and a determination is made by the
board of directors that such standard has been met. In a proceeding by or in the
right of the corporation, no indemnification shall be made in respect of any
matter as to which an officer or director is adjudged to be liable to the
corporation, unless the court in which the proceeding took place determines
that, despite such liability, such person is reasonably entitled to
indemnification in view of all the relevant circumstances. In any other
proceeding, no indemnification shall be made if the director or officer is
adjudged liable to the corporation on the basis that personal benefit was
improperly received by him. Corporations are given the power to make any other
or further indemnity, including advance of expenses, to any director or officer
that may be authorized by the articles of incorporation or any bylaw made by the
shareholders, or any resolution adopted, before or after the event, by the
shareholders, except an indemnity against willful misconduct or a knowing
violation of the criminal law. Unless limited by its articles of incorporation,
indemnification of a director or officer is mandatory when he entirely prevails
in the defense of any proceeding to which he is a party because he is or was a
director or officer.
The Articles of Incorporation of the Corporation contain provisions
indemnifying the directors and officers of the Corporation against expenses and
liabilities incurred in legal proceedings to the fullest extent permitted by
Virginia law.
Under the Amended and Restated Declaration of Trust, the Corporation,
as depositor of the Trust, has agreed (i) to indemnify and hold harmless each
Administrative Trustee and any employee or agent of the Trust or its Affiliates
from and against any loss, damage, liability, tax, penalty, expense or claim of
any kind or nature whatsoever incurred by such person by reason of the creation,
operation or termination of the Trust or any act or omission performed or
omitted by such person in good faith on behalf of the Trust and in a manner such
person reasonably believes to be within the scope of authority conferred on such
person by the Declaration, except that no person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such person by
reason of negligence or willful misconduct with respect to such acts or
omissions, and (ii) to advance expenses
II-1
<PAGE>
(including legal fees) incurred by such person in defending any claim, demand,
action, suite or proceeding, from time to time, prior to the final disposition
of such claim, demand, action, suit or proceeding.
Item 16. Exhibits
The following exhibits are filed on behalf of the Registrant as part of
this Registration Statement:
EXHIBIT NO. DESCRIPTION
- ----------- ------------
1.1 Form of Underwriting Agreement for offering of Capital Securities
3.1 Amended and Restated Articles of Incorporation of Resource
Bankshares Corporation (incorporated herein by reference to
Exhibit 3.1 to Resource Bankshares Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
July 1, 1998)
3.2 Bylaws of Resource Bankshares Corporation (incorporated herein by
reference to Exhibit 3.2 to Resource Bankshares Corporation's
Current Report on Form 8-K filed with the Securities and Exchange
Commission on July 1, 1998)
4.1 Certificate of Trust of Resource Capital Trust I
4.2 Trust Agreement between Resource Bankshares Corporation and
Wilmington Trust Company
4.3 Form of Amended and Restated Declaration of Trust for Resource
Capital Trust I
4.4 Form of Junior Subordinated Indenture between Resource Bankshares
Corporation and Wilmington Trust Company, as Trustee
4.5 Form of Capital Security (included in Exhibit 4.3 above)
4.6 Form of Junior Subordinated Debt Security (included in Exhibit
4.4 above)
4.7 Form of Guarantee Agreement with respect to Trust Securities
issued by Resource Capital Trust I
4.8 Form of Escrow Agreement among McKinnon & Company, Inc., Resource
Capital Trust I, Resource Bankshares Corporation and Wilmington
Trust Company
5.1 Opinion of Williams, Mullen, Christian & Dobbins, P.C.
5.2 Opinion of Richards, Layton & Finger
8.1 Opinion of Williams, Mullen, Christian & Dobbins, P.C. as to tax
matters
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Goodman & Company, L.L.P.
23.2 Consent of Williams, Mullen, Christian & Dobbins, P.C. (included
in Exhibit 5.1 above)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2
above)
24.1 Powers of Attorney (included on signature page)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Trustee under the
Junior Subordinated Indenture
II-2
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- ------------
25.2 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Property Trustee
under the Amended and Restated Declaration of Trust of Resource
Capital Trust I
25.3 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Guarantee Trustee
under the Guarantee Agreement for the benefit of holders of Trust
Securities of Resource Capital Trust I
99.1 Resource Bank's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1997, as filed with the Board of Governors of
the Federal Reserve System (incorporated herein by reference to
Exhibit 99.1 to Resource Bankshares Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
July 1, 1998)
99.2 Resource Bank's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1998, as filed with the Board of Governors of the
Federal Reserve System (incorporated herein by reference to
Exhibit 99.2 to Resource Bankshares Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
July 1, 1998)
99.3 Proxy Statement relating to the 1998 Annual Meeting of
Shareholder of Resource Bank (incorporated herein by reference to
Exhibit 99.3 to Resource Bankshares Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission on
July 1, 1998)
Item 17. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of a
Registrant pursuant to the foregoing provisions, or otherwise, each of the
Registrants has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by a Registrant of expenses
incurred or paid by a director, officer or controlling person of a 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, such Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
Each of the undersigned Registrants hereby undertakes to deliver or
cause to be delivered with the Prospectus, to each person to whom the Prospectus
is sent or given, the latest annual report, to security holders that is
incorporated by reference in the Prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to be
presented by Article 3 of Regulation S-X is not set forth in the Prospectus, to
deliver, or cause to be delivered to each person to whom the Prospectus is sent
or given, the latest quarterly report that is specifically incorporated by
reference in the Prospectus to provide such interim financial information.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Virginia Beach, Commonwealth of Virginia, on January 6,
1999.
RESOURCE BANKSHARES CORPORATION
By: /s/ Lawrence N. Smith
-------------------------------------
Lawrence N. Smith
President and Chief Executive Officer
POWER OF ATTORNEY
Each of the undersigned hereby appoints Lawrence N. Smith and Eleanor
J. Whitehurst as attorneys and agents for the undersigned, with full power of
substitution, for and in the name, place and stead of the undersigned, to sign
and file with the Securities and Exchange Commission under the Securities Act of
1933, as amended, any and all amendments and exhibits to the Registration
Statement and any and all applications, instruments and other documents to be
filed with the Securities and Exchange Commission pertaining to the registration
of securities covered hereby with full power and authority to do and perform any
and all acts and things whatsoever requisite or desirable.
In accordance with the requirements of the Securities Act of 1933, as
amended, this registration statement has been signed by the following persons in
the capacities and on the dates stated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Lawrence N. Smith President, Chief Executive Officer and January 6, 1999
- ------------------------------------------- Director
Lawrence N. Smith (Principal Executive Officer)
/s/ Eleanor J. Whitehurst Senior Vice President, Chief Financial January 6, 1999
- ------------------------------------------- Officer and Treasurer
Eleanor J. Whitehurst (Principal Financial Officer)
(Principal Accounting Officer)
Chairman of the Board January _, 1999
- -------------------------------------------
John B. Bernhardt
<PAGE>
Signature Title Date
--------- ----- ----
/s/ Alfred E. Abiouness Director January 6, 1999
- -------------------------------------------
Alfred E. Abiouness
Director January _, 1999
- -------------------------------------------
Thomas W. Hunt
/s/ Louis R. Jones Director January 6, 1999
- -------------------------------------------
Louis R. Jones
Director January _, 1999
- -------------------------------------------
A. Russell Kirk
/s/ Elizabeth A. Twohy Director January 6, 1999
- -------------------------------------------
Elizabeth A. Twohy
</TABLE>
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-2 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Virginia Beach, Commonwealth of Virginia, on January 6,
1999.
RESOURCE CAPITAL TRUST I
By: Resource Bankshares Corporation,
as Depositor
By: /s/ Lawrence N. Smith
-------------------------------------
Lawrence N. Smith
President and Chief Executive Officer
<PAGE>
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1.1 Form of Underwriting Agreement for offering of Capital
Securities
3.1 Amended and Restated Articles of Incorporation of Resource
Bankshares Corporation (incorporated herein by reference to
Exhibit 3.1 to Resource Bankshares Corporation's Current Report
on Form 8-K filed with the Securities and Exchange Commission
on July 1, 1998)
3.2 Bylaws of Resource Bankshares Corporation (incorporated herein
by reference to Exhibit 3.2 to Resource Bankshares
Corporation's Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 1, 1998)
4.1 Certificate of Trust of Resource Capital Trust I
4.2 Trust Agreement between Resource Bankshares Corporation and
Wilmington Trust Company
4.3 Form of Amended and Restated Declaration of Trust for Resource
Capital Trust I
4.4 Form of Junior Subordinated Indenture between Resource
Bankshares Corporation and Wilmington Trust Company, as Trustee
4.5 Form of Capital Security (included in Exhibit 4.3 above)
4.6 Form of Junior Subordinated Debt Security (included in Exhibit
4.4 above)
4.7 Form of Guarantee Agreement with respect to Trust Securities
issued by Resource Capital Trust I
4.8 Form of Escrow Agreement among McKinnon & Company, Inc.,
Resource Capital Trust I, Resource Bankshares Corporation and
Wilmington Trust Company
5.1 Opinion of Williams, Mullen, Christian & Dobbins, P.C.
5.2 Opinion of Richards, Layton & Finger
8.1 Opinion of Williams, Mullen, Christian & Dobbins, P.C. as to
tax matters
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Goodman & Company, L.L.P.
23.2 Consent of Williams, Mullen, Christian & Dobbins, P.C.
(included in Exhibit 5.1 above)
23.3 Consent of Richards, Layton & Finger (included in Exhibit 5.2
above)
24.1 Powers of Attorney (included on signature page)
25.1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Trustee under the
Junior Subordinated Indenture
25.2 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Property Trustee
under the Amended and Restated Declaration of Trust of Resource
Capital Trust I
<PAGE>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
25.3 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of Wilmington Trust Company, as Guarantee Trustee
under the Guarantee Agreement for the benefit of holders of
Trust Securities of Resource Capital Trust I
99.1 Resource Bank's Annual Report on Form 10-KSB for the fiscal
year ended December 31, 1997, as filed with the Board of
Governors of the Federal Reserve System (incorporated herein by
reference to Exhibit 99.1 to Resource Bankshares Corporation's
Current Report on Form 8-K filed with the Securities and
Exchange Commission on July 1, 1998)
99.2 Resource Bank's Quarterly Report on Form 10-QSB for the quarter
ended March 31, 1998, as filed with the Board of Governors of
the Federal Reserve System (incorporated herein by reference to
Exhibit 99.2 to Resource Bankshares Corporation's Current
Report on Form 8-K filed with the Securities and Exchange
Commission on July 1, 1998)
99.3 Proxy Statement relating to the 1998 Annual Meeting of
Shareholder of Resource Bank (incorporated herein by reference
to Exhibit 99.3 to Resource Bankshares Corporation's Current
Report on Form 8-K filed with the Securities and Exchange
Commission on July 1, 1998)
Exhibit 1.1
UNDERWRITING AGREEMENT
for offering of
$______ Capital Securities
RESOURCE CAPITAL TRUST I
(a Delaware Trust)
$_________ Capital Securities (the "Capital Securities")
(Liquidation Amount of $25.00 per Capital Security)
UNDERWRITING AGREEMENT
---------------
January __, 1999
McKinnon & Company, Inc.
555 Main Street
First Virginia Building, 16th Floor
Norfolk, Virginia 23510
Dear Sirs:
Resource Capital Trust I (the "Trust"), a statutory business trust
organized under the Business Trust Act (the "Delaware Act") of the State of
Delaware (Chapter 38, Title 12, of the Delaware Code, 12 Del. C. (S)(S) 3801 et
seq.), and Resource Bankshares Corporation, a Virginia corporation (the
"Company" and, together with the Trust, the "Offerors"), confirm their agreement
(the "Agreement") with McKinnon & Company, Inc. (the "Underwriter") with respect
to the sale by the Trust of $_____ Capital Securities (liquidation amount of
$25.00 per preferred security) of the Trust (the "Capital Securities") set forth
in Schedule A. The Capital Securities will be guaranteed on a subordinated basis
by the Company, to the extent set forth in the Prospectus (as defined herein),
with respect to distributions and payments upon liquidation, redemption and
otherwise (the "Capital Securities Guarantee") pursuant to the Guarantee
Agreement, to be dated as of January ___, 199__, and as may be amended, (the
"Guarantee Agreement"), between the Company and Wilmington Trust Company, as
trustee (the "Guarantee Trustee"), and will be entitled to the benefits of
certain backup undertakings described in the Prospectus (as defined herein) with
respect to the Company's agreement pursuant to the Indenture (as defined herein)
to pay all expenses relating to administration of the Trust (other than payment
obligations with respect to the Capital Securities). The Capital Securities and
the related Capital Securities Guarantee are referred to herein as the
"Securities."
The Offerors have filed with the Securities and Exchange Commission
(the "Commission") a registration statement on Form S-2 (Nos. ___________ and
______________) and a related preliminary prospectus for the registration under
the Securities Act of 1933, as amended (the "1933 Act") of (i) the Capital
Securities, (ii) the Capital Securities Guarantee, and (iii) the Junior
Subordinated Debt Securities (as defined below) to be issued and sold to the
Trust by the Company, have filed such amendments thereto, if any, and such
amended preliminary
<PAGE>
prospectuses as may have been required to the date hereof, and will file such
additional amendments thereto and such amended prospectuses as may hereafter be
required. Such registration statement (as amended) and the prospectus
constituting a part thereof (including, in each case, all documents incorporated
or deemed to be incorporated by reference therein pursuant to Item 12 of Form
S-2 under the 1933 Act and the information, if any, deemed to be part thereof
pursuant to Rule 430A(b) of the rules and regulations of the Commission under
the 1933 Act (the "1933 Act Regulations")), as from time to time amended or
supplemented pursuant to the 1933 Act, the Securities Exchange Act of 1934, as
amended (the "1934 Act"), or otherwise, are hereinafter referred to as the
"Registration Statement" and the "Prospectus," respectively, except that, if any
revised prospectus shall be provided to the Underwriter by the Offerors for use
in connection with the offering of the Capital Securities which differs from the
Prospectus on file at the Commission at the time the Registration Statement
became effective (whether or not such revised prospectus is required to be filed
by the Offerors pursuant to Rule 424(b) of the 1933 Act Regulations), the term
"Prospectus" shall refer to such revised prospectus from and after the time it
is first provided to the Underwriter for such use. All references in this
Agreement to financial statements and schedules and other information that is
"contained," "included" or "stated" in the Registration Statement or the
Prospectus (and all other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information that
are or are deemed to be incorporated by reference in the Registration Statement
or the Prospectus, as the case may be; and all references in this Agreement to
amendments or supplements to the Registration Statement or the Prospectus shall
be deemed to mean and include the filing of any document under the 1934 Act that
is or is deemed to be incorporated by reference in the Registration Statement or
the Prospectus, as the case may be.
The Offerors understand that the Underwriter proposes to make a public
offering of the Capital Securities as soon as the Underwriter deems advisable
after this Agreement has been executed and delivered and the Declaration (as
defined herein), the Indenture (as defined herein) and the Capital Securities
Guarantee have been qualified under the Trust Indenture Act of 1939, as amended
(the "1939 Act"). The entire proceeds to the Trust from the sale of the Capital
Securities will be combined with the entire proceeds from the sale by the Trust
to the Company of its common securities (the "Common Securities"), as guaranteed
on a subordinated basis by the Company, to the extent set forth in the
Prospectus, with respect to distributions and payments upon liquidation and
redemption thereof (the "Common Securities Guarantee" and together with the
Capital Securities Guarantee, the "Guarantees") pursuant to the Guarantee
Agreement between the Company and Guarantee Trustee, as Trustee, and will be
used by the Trust to purchase the $________ aggregate principal amount of
_______% Junior Subordinated Debt Securities due _______ 15, 2029 (the "Junior
Subordinated Debt Securities") issued by the Company under the Indenture (as
defined herein). The Capital Securities and the Common Securities will be issued
pursuant to the Amended and Restated Declaration of Trust of the Trust, to be
dated as of January __, 1999 (the "Declaration"), among the Company, as Sponsor,
____________ and ____________, as trustees (the "Administrative Trustees"), and
Wilmington Trust Company, as property trustee (the "Property Trustee" and,
together with the Administrative Trustees, the "Trustees"), and the holders from
time to time of undivided beneficial interests in the assets of the Trust. The
Junior Subordinated Debt Securities will be issued pursuant to an indenture, to
be dated as of January __, 1999, between the Company and Wilmington Trust
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Company, as trustee (the "Indenture Trustee"), together with any amendments or
supplements thereto, the "Indenture"), between the Company and the Indenture
Trustee.
SECTION 1. REPRESENTATIONS AND WARRANTIES.
(a) The Offerors jointly and severally represent and warrant to the
Underwriter as of the date hereof and as of the Closing Time (as hereinafter
defined) as follows:
(i) At the time the Registration Statement became effective
and as of the date hereof, the Registration Statement complied in all material
respects with the requirements of the 1933 Act and the 1933 Act Regulations and
the 1939 Act and the rules and regulations of the Commission under the 1939 Act
(the "1939 Act Regulations"), and did not 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. The Prospectus, dated
the date hereof (unless the term "Prospectus" refers to a prospectus that has
been provided to the Underwriter by the Trust for use in connection with the
offering of the Securities and that differs from the Prospectus on file at the
Commission at the time the Registration Statement became effective, in which
case, at the time it is first provided to the Underwriter for such use) and at
Closing Time referred to in Section 2 hereof, does not include an 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; provided, however, the Offerors make no
representations or warranties as to (A) that part of the Registration Statement
which constitutes the Statements of Eligibility and Qualification (Forms T-1)
under the 1939 Act of the Indenture Trustee, the Property Trustee or the
Guarantee Trustee or (B) the information contained in or omitted from the
Registration Statement or the Prospectus or any amendment thereof or supplement
thereto in reliance upon and in conformity with information furnished in writing
to the Offerors by or on behalf of the Underwriter specifically for use in the
Registration Statement and the Prospectus.
(ii) The documents incorporated or deemed to be incorporated
by reference in the Registration Statement or Prospectus, at the time they were
or hereafter are filed with the Commission complied and will comply in all
material respects with the requirements of the 1934 Act and the rules and
regulations of the Commission under the 1934 Act (the "1934 Act Regulations").
(iii) To the best knowledge of the Offerors, Goodman &
Company, L.L.P., the accountants who certified the financial statements and
supporting schedules included in or incorporated by reference into the
Registration Statement, are independent public accountants as required by the
1933 Act and the 1933 Act Regulations.
(iv) The Trust has been duly created and is validly existing
and in good standing as a business trust under the Delaware Act with the power
and authority to own property and to conduct its business as described in the
Registration Statement and Prospectus and to enter into and perform its
obligations under this Agreement, the Capital Securities, the Common Securities
and the Declaration; the Trust is not a party to or otherwise bound by any
agreement other than
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those described in the Prospectus; 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; and the Trust is and will be treated as a
consolidated subsidiary of the Company pursuant to generally accepted accounting
principles.
(v) The Common Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered by the Trust to
the Company 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 non-assessable undivided beneficial interests in the
assets of the Trust and will conform to all statements relating thereto
contained in the Prospectus; the issuance of the Common Securities is not
subject to preemptive or other similar rights.
(vi) This Agreement has been duly authorized, executed and
delivered by each of the Offerors.
(vii) The Declaration has been duly authorized by the
Company, as Sponsor, and will have been duly executed and delivered by the
Company and the Trustees, and assuming due authorization, execution and delivery
of the Declaration by the Property Trustee, the Declaration is and will be a
valid and binding obligation of the Company, the Trust and the Administrative
Trustees, enforceable against the Company and the Administrative Trustees in
accordance with its terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium, fraudulent conveyance or
other similar laws affecting the rights of creditors now or hereafter in effect,
and to equitable principles that may limit the right to specific enforcement of
remedies, and further subject to 12 U.S.C. 1818(b)(6)(D) (or any successor
statute) and any bank regulatory powers now or hereafter in effect and to the
application of principles of public policy (collectively, the "Permitted
Exceptions") and will conform to all statements relating thereto in the
Prospectus; and the Declaration has been duly qualified under the 1939 Act.
(viii) The Guarantee Agreement has been duly authorized by the
Company and, when validly executed and delivered by the Company, assuming due
authorization, execution and delivery of the Guarantee Agreement 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 Permitted Exceptions,
and each of the Guarantees and the Guarantee Agreement will conform to all
statements relating thereto contained in the Prospectus; and the trust pursuant
to the Guarantee Agreement will have been duly qualified under the 1939 Act.
(ix) The Capital Securities have been duly authorized by the
Trust pursuant to the Declaration and, when issued and delivered pursuant to
this Agreement and payment of the consideration therefor set forth in Schedule B
hereto, will be validly issued and, subject to the terms of the Declaration,
fully paid and non-assessable undivided beneficial interests in the Trust, will
be entitled to the benefits of the Declaration and will conform to all
statements relating thereto contained in the Prospectus; the issuance of the
Capital Securities is not subject to
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preemptive or other similar rights; and, subject to the terms of the
Declaration, holders of Capital Securities will be entitled to the same
limitation of personal liability under Delaware law as extended to stockholders
of private corporations for profit.
(x) 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; the Declaration has been duly executed and
delivered by the Administrative Trustees and is a valid and binding obligation
of each Administrative Trustee, enforceable against such Administrative Trustee
in accordance with its terms except to the extent that enforcement thereof may
be limited by the Permitted Exceptions.
(xi) None of the Offerors is, and upon the issuance and sale
of the Capital Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Prospectus none will be, an "investment
company" or a company "controlled" by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended (the "1940 Act").
(xii) No authorization, approval, consent or order of any
court or governmental authority or agency is necessary in connection with the
issuance and sale of the Common Securities or the offering of the Capital
Securities, the Junior Subordinated Debt Securities or the Guarantees hereunder,
except such as may be required under the 1933 Act or the 1933 Act Regulations or
state securities laws and the qualification of the Declaration, the Capital
Securities Guarantee Agreement and the Indenture under the 1939 Act.
(b) The Company represents and warrants to the Underwriter as of
the date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the condition,
financial or otherwise, or in the earnings or business affairs of the Trust or
the Company and its subsidiaries, considered as one enterprise, whether or not
arising in the ordinary course of business.
(ii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Virginia with corporate power to own, lease and operate its properties and to
conduct its business as described in the Prospectus, to enter into and perform
its obligations under this Agreement, the Declaration, as Sponsor, the Indenture
and each of the Guarantees and to purchase, own, and hold the Common Securities
issued by the Trust; the Company is duly registered as a bank holding company
under the Bank Holding Company Act of 1956, as amended; and the Company is duly
qualified as a foreign corporation to transact business and is in good standing
in each jurisdiction in which the character or location of its properties or the
nature or the conduct of its business requires such qualification, except for
any failures to be so qualified or in good standing which, taken as a whole, are
not material to the Company and its subsidiaries, considered as one enterprise.
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(iii) Resource Bank (the "Principal Subsidiary Bank") is a
banking association formed under the laws of Virginia and authorized thereunder
to transact business; all of the issued and outstanding capital stock of the
Principal Subsidiary Bank has been duly authorized and validly issued, is fully
paid and non-assessable; and the capital stock of the Principal Subsidiary Bank
owned by the Company, directly or through subsidiaries, is owned free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or equity.
(iv) The Indenture has been duly authorized by the Company
and, when validly executed and delivered by the Company, will constitute a valid
and binding agreement of the Company, enforceable against the Company in
accordance with its terms except to the extent that enforcement thereof may be
limited by the Permitted Exceptions; the Indenture will conform to all
statements relating thereto contained in the Prospectus; and the Indenture has
been duly qualified under the 1939 Act.
(v) The Junior Subordinated Debt Securities have been duly
authorized by the Company and have been duly executed 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 Permitted Exceptions, will be in the form contemplated by, and
subject to the Permitted Exceptions entitled to the benefits of, the Indenture
and will conform to all statements relating thereto in the Prospectus.
(vi) The Company's obligations under the Guarantees are
subordinate and junior in right of payment to all liabilities of the Company.
(vii) The Junior Subordinated Debt Securities are
subordinated and junior in right of payment to all "Senior Debt" (as defined in
the Indenture) of the Company.
(viii) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and
compliance by the Company with its obligations hereunder will not conflict with
or constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company or the Principal Subsidiary Bank pursuant to, any contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the Company
or the Principal Subsidiary Bank is a party or by which it or any of them may be
bound, or to which any of the property or assets of the Company or the Principal
Subsidiary Bank is subject (except for conflicts, breaches and defaults which
would not, individually or in the aggregate, be materially adverse to the
Company and its subsidiaries taken as a whole or materially adverse to the
transactions contemplated by this Agreement), nor will such action result in any
material violation of the provisions of the articles of incorporation or by-laws
of the Company, or any applicable law, administrative regulation or
administrative or court decree.
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(c) Each certificate signed by any officer of the Company and
delivered to the Underwriter shall be deemed to be a representation and warranty
by the Company to the Underwriter as to the matters covered thereby.
(d) The Trust represents and warrants to the Underwriter as of the
date hereof and as of the Closing Time (as hereinafter defined) as follows:
(i) Since the respective dates as of which information is
given in the Registration Statement and the Prospectus, except as otherwise
stated therein, (A) there has been no material adverse change in the a
condition, financial or otherwise, or in the earnings or business affairs of the
Trust, whether or not arising in the ordinary course of business, and (B) there
have been no transactions entered into by the Trust, other than in the ordinary
course of business, which are material with respect to the Trust.
(ii) Except as disclosed in the Prospectus, there is no
action, suit or proceeding before or by any government, governmental
instrumentality or court, domestic or foreign, now pending or, to the best
knowledge of the Trust, threatened, against or affecting the Trust that is
required to be disclosed in the Prospectus, other than actions, suits or
proceedings which are not reasonably expected, individually or in the aggregate,
to have a material adverse effect on the condition, financial or otherwise, or
in the earnings or business affairs of the Trust, whether or not arising in the
ordinary course of business; and there are no transactions, contracts or
documents of the Trust that are required to be filed as exhibits to the
Registration Statement by the 1933 Act or by the 1933 Act Regulations that have
not been so filed.
(iii) The Trust possesses adequate certificates, authorities
or permits issued by the appropriate state, federal or foreign regulatory
agencies or bodies to conduct the business now operated by it, and the Trust has
not received any notice of proceedings relating to the revocation or
modification of any such certificate, authority or permit which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding
would materially and adversely affect the condition, financial or otherwise, or
in the earnings or business affairs of the Trust.
(iv) The execution, delivery and performance of this
Agreement, the Declaration, the Guarantee Agreement and the Guarantees, the
issuance and sale of the Capital Securities and the Common Securities, and the
consummation of the transactions contemplated herein and therein and compliance
by the Trust with its obligations hereunder and thereunder have been duly
authorized by all necessary action (corporate or otherwise) on the part of the
Trust and do not and will not result in any violation of the Declaration or
Certificate of Trust and do not and will not conflict with, or result in a
breach 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
property or assets of the Trust under (A) any contract, indenture, mortgage,
loan agreement, note, lease or other agreement or instrument to which the Trust
is a party or by which it may be bound or to which any of its properties may be
subject or (B) any existing applicable law, rule, regulation, judgment, order or
decree of any government, governmental instrumentality or court, domestic or
foreign, or any regulatory body or administrative agency or other governmental
body having jurisdiction over the Trust, or any of its properties (except for
conflicts, breaches,
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violations or defaults which would not, individually or in the aggregate, be
materially adverse to the Trust, or materially adverse to the transactions
contemplated by this Agreement).
(e) Each certificate signed by any Trustee of the Trust and
delivered to the Underwriter or counsel for the Underwriter shall be deemed to
be a representation and warranty by the Trust to the Underwriter as to the
matters covered thereby.
SECTION 2. SALE AND DELIVERY; CLOSING.
(a) On the basis of the representations, warranties and covenants
herein contained, and subject to the conditions herein set forth, the Trust
agrees to issue and sell the Capital Securities through the Underwriter, as
agent for the Trust, to the public and the Underwriter agrees to use its best
efforts to sell the Capital Securities as agent for the Trust, at the price per
Capital Security set forth on Schedule B (the "Public Offering Price"). The
Company agrees to pay the Underwriter a commission for Capital Securities sold
through the Underwriter in the public offering as set forth on Schedule B (the
"Selling Commission"). The Underwriter may reject any offer to purchase the
Capital Securities made through the Underwriter in whole or in part, and any
such rejection shall not be deemed a breach of the Underwriter's agreement
contained herein.
(b) It is understood that, after the Registration Statement becomes
effective, you propose to sell the Capital Securities to the public as agent for
the Trust upon the terms and conditions set forth in the Prospectus. The escrow
procedures established by the Underwriter shall comply with Commission Rule
15c2-4 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All subscribers to whom the Underwriter directly sells Capital
Securities shall be instructed to make their check for payment of the Capital
Securities payable to "Resource Capital Trust I Escrow Account." In addition,
the Underwriter shall comply with Rule 15c2-4. The Underwriter shall transmit
all funds that it receives from subscribers to Wilmington Trust Company, the
escrow agent (the "Escrow Agent") by noon of the next business day following
receipt thereof. Only broker/dealers who are either (i) members in good standing
of the National Association of Securities Dealers, Inc. (the "NASD") that are
registered with the NASD and maintain net capital pursuant to Rule 15c3-1
promulgated under the Exchange Act of not less than $25,000 or (ii) dealers with
their principal places of business located outside the United States, its
territories and its possessions and not registered as brokers or dealers under
the Exchange Act, who have agreed not to make any sales within the United
States, its territories or its possessions or to persons who are nationals
thereof or residents therein shall be designated selected dealers by the
Underwriter. The Underwriter shall require all selected dealers to comply with
Rule 15c2-4.
(c) The Underwriter shall direct the Escrow Agent to make payment
for the Capital Securities sold hereunder by wire transfer or certified or bank
cashier's check drawn to the order of the Trust in next day funds. Such payment
is to be made at the offices of Resource Bankshares Corporation, at 10:00 a.m.
local time, on or about January __, 1999, or at such other time, date and place
as you and the Trust shall agree upon, such time and date being herein referred
to as the "Closing Time." The certificates for the Capital Securities will be
delivered in such denominations and in such registrations as the Underwriter
requests in writing not later than the third (3rd) full business day prior to
the Closing Time, and will be made available for inspection by the Underwriter
at least twenty-four
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(24) hours prior to the Closing Time. Such certificates will be delivered to the
Escrow Agent by 12:00 p.m. on the day prior to the Closing Time, along with
addressed labels to be used to mail the certificates to the purchasers thereof.
The Trust shall direct the Escrow Agent to deliver (i) payment of the portion of
the Selling Commission due to the Underwriter by wire transfer or certified or
bank cashier's check drawn to the order of the Underwriter in next day funds, to
the Underwriter at the Closing Time and (ii) payment of the portion of the
Selling Commission due to each selected dealer by wire transfer or certified or
bank cashier's check drawn to the order of such selected dealer in next day
funds, to each selected dealer at the Closing Time.
SECTION 3. COVENANTS OF THE OFFERORS. Each of the Offerors jointly and
severally covenants with the Underwriter as follows:
(a) The Offerors will notify the Underwriter promptly, and confirm
the notice in writing, (i) of the effectiveness of the Registration Statement
and any amendment thereto (including any post-effective amendment), (ii) of the
receipt of any comments from the Commission, (iii) of any request by the
Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or for additional information, and (iv) of the
issuance by the Commission of any stop order suspending the effectiveness of the
Registration Statement or the initiation of any proceedings for that purpose.
The Offerors will make every reasonable effort to prevent the issuance of any
stop order and, if any stop order is issued, to obtain the lifting thereof at
the earliest possible moment.
(b) The Offerors will give the Underwriter notice of their
intention to file or prepare (i) any amendment to the Registration Statement
(including any post-effective amendment), (ii) any amendment or supplement to
the Prospectus (including any revised prospectus which the Offerors propose for
use by the Underwriter in connection with the offering of the Capital Securities
which differs from the prospectus on file at the Commission at the time the
Registration Statement became effective, whether or not such revised prospectus
is required to be filed pursuant to Rule 424(b) of the 1933 Act Regulations), or
(iii) any document that would as a result thereof be incorporated by reference
in the Prospectus whether pursuant to the 1933 Act, the 1934 Act or otherwise,
will furnish the Underwriter with copies of any such amendment, supplement or
other document within a reasonable amount of time prior to such proposed filing
or use, as the case may be, and will not file any such amendment, supplement or
other document or use any such prospectus to which the Underwriter or counsel
for the Underwriter shall reasonably object. Subject to the foregoing, the
Offerors will file the Prospectus pursuant to Rule 424(b) and Rule 430A under
the Act not later than the Commission's close of business on the second business
day following the execution and delivery of this Agreement.
(c) The Offerors will deliver to the Underwriter as many signed
copies of the Registration Statement as originally filed and of each amendment
thereto (including exhibits filed therewith or incorporated by reference therein
and documents incorporated or deemed to be incorporated by reference therein) as
the Underwriter may reasonably request and will also deliver to the Underwriter
a conformed copy of the Registration Statement as originally filed and of each
amendment thereto (without exhibits) for the Underwriter.
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(d) The Offerors will furnish to the Underwriter, from time to time
during the period when the Prospectus is required to be delivered under the 1933
Act, such number of copies of the Prospectus (as amended or supplemented) as the
Underwriter may reasonably request for the purposes contemplated by the 1933 Act
or the respective applicable rules and regulations of the Commission thereunder.
(e) If at any time when the Prospectus is required by the 1933 Act
to be delivered in connection with sales of the Capital Securities, any event
shall occur as a result of which the Prospectus as then amended or supplemented
will include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in light of the
circumstances under which they were made not misleading or if it shall be
necessary to amend or supplement the Prospectus in order to comply with the
requirements of the 1933 Act or the 1933 Act Regulations, the Offerors will,
subject to paragraph (b) above, promptly prepare and file with the Commission
such amendment or supplement which will correct such statement or omission or an
amendment which will effect such compliance and the Offerors will furnish to the
Underwriter a reasonable number of copies of such amendment or supplement.
(f) The Offerors will endeavor, in cooperation with the
Underwriter, to qualify the Capital Securities (and the Capital Securities
Guarantee) and the Junior Subordinated Debt Securities for offering and sale
under the applicable securities laws of such states and the other jurisdictions
of the United States as the Underwriter may designate; provided, however, that
none of the Offerors shall be obligated to qualify as a foreign corporation in
any jurisdiction in which it is not so qualified.
(g) The Company will make generally available to its security
holders and to the Underwriter as soon as practicable, but not later than 90
days after the close of the period covered thereby, an earnings statement (which
need not be audited) of the Company and its subsidiaries, covering an applicable
period beginning not later than the first day of the Company's fiscal quarter
next following the "Effective Date" (as defined in Rule 158(c) under the Act) of
the Registration Statement, which will satisfy the provisions of Section 11(a)
of the 1933 Act.
SECTION 4. PAYMENT OF EXPENSES. The Company will pay all expenses
incident to the performance of each Offerors' obligations under this Agreement,
and will pay: (i) the printing and filing of the Registration Statement as
originally filed and of each amendment thereto, (ii) the preparation, issuance
and delivery of the certificates for the Capital Securities, (iii) the fees and
disbursements of the Company's and the Trust's counsel and accountants and
counsel to the Underwriter, (iv) the qualification of the Capital Securities,
the Capital Securities Guarantee and the Junior Subordinated Debt Securities
under securities laws in accordance with the provisions of Section 3(f) hereof,
including fees and expenses incurred in connection with the preparation of any
blue sky survey, (v) the printing and delivery to the Underwriter of copies of
the Registration Statement as originally filed and of each amendment thereto, of
each preliminary prospectus, and of the Prospectus and any amendments or
supplements thereto, (vi) the printing and delivery to the Underwriter of copies
of any blue sky survey, (vii) the fee of the National Association of Securities
Dealers, Inc., if applicable, (viii) the fees and expenses of the Indenture
Trustee, including the fees and disbursements of counsel for the Indenture
Trustee in connection
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with the Indenture and the Junior Subordinated Debt Securities, (ix) the fees
and expenses of the Property Trustee, and the Guarantee Trustee, including the
fees and disbursements of counsel for the Property Trustee in connection with
the Declaration and the Certificate of Trust; (x) the cost and charges of any
transfer agent or registrar, and (xi) the cost of qualifying the Capital
Securities with DTC.
If this Agreement is terminated by the Underwriter in accordance with
the provisions of Section 5 or Section 9 hereof, the Company shall reimburse the
Underwriter for all of its reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of counsel for the Underwriter.
SECTION 5. CONDITIONS OF UNDERWRITER'S OBLIGATIONS. The obligations of
the Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Offerors herein contained or in certificates of officers of
the Company, to the performance by the Offerors of their obligations hereunder,
and to the following further conditions:
(a) The Registration Statement shall have become effective not
later than 5:30 P.M. on the date hereof, or with the consent of the Underwriter,
at a later time and date, not later, however, than 5:30 P.M. on the first
business day following the date hereof, or at such later time and date as may be
approved by the Underwriter; and at Closing Time no stop order suspending the
effectiveness of the Registration Statement shall have been issued under the
1933 Act or proceedings therefor initiated or threatened by the Commission. The
Prospectus shall have been filed with the Commission pursuant to Rule 424(b)
within the applicable time period prescribed for such filing by the 1933
Regulations and in accordance with Section 3(b) and prior to Closing Time the
Offerors shall have provided evidence satisfactory to the Underwriter of such
timely filing.
(b) At Closing Time the Underwriter shall have received:
(1) The favorable opinion of Williams, Mullen, Christian & Dobbins,
P.C., counsel for the Company, dated as of the Closing Time, to the following
effect:
(i) The Company is a duly organized and validly existing
corporation in good standing under the laws of the State of Virginia, has the
corporate power and authority to own its properties, conduct its business as
described in the Prospectus and perform its obligations under this Agreement,
and is duly registered as a bank holding company under the Bank Holding Company
Act of 1956, as amended; the Principal Subsidiary Bank is a banking association
formed under the laws of Virginia and authorized thereunder to transact
business.
(ii) Except for those jurisdictions specifically enumerated
in such opinion, neither the Company nor the Principal Subsidiary Bank is
required to be qualified or licensed to do business as a foreign corporation in
any jurisdiction.
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(iii) All the outstanding shares of capital stock of the
Principal Subsidiary Bank have been duly and validly authorized and issued and
are fully paid and non-assessable, and, except as otherwise set forth in the
Prospectus, all outstanding shares of capital stock of the Principal Subsidiary
Bank are owned, directly or indirectly, by the Company free and clear of any
perfected security interest and, to the best knowledge of such counsel, any
other security interests, claims, liens or encumbrances.
(iv) To the best knowledge of such counsel, there is no
pending threatened action, suit or proceeding before any court or governmental
agency, authority or body or any arbitrator involving the Company or any of its
subsidiaries, of a character required to be disclosed in the Registration
Statement which is not adequately disclosed in the Prospectus, and there is no
franchise, contract, or other document of a character required to be described
in the Registration Statement or Prospectus, or to be filed as an exhibit, which
is not described or filed as required.
(v) The Registration Statement has become effective under
the 1933 Act; to the best knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or threatened; the
Registration Statement, the Prospectus and each amendment thereof or supplement
thereto (other than the financial statements and other financial and statistical
information contained therein or incorporated by reference therein, as to which
such counsel need express no opinion) comply as to form in all material respects
with the applicable requirements of the 1933 Act and the 1933 Act Regulations
and the 1934 Act and the 1934 Act Regulations.
(vi) This Agreement has been duly authorized, executed and
delivered by the Company.
(vii) No authorization, approval, consent or order of any
court or governmental authority or agency is required in connection with the
offering, issuance or sale of the Capital Securities, the Capital Securities
Guarantee and the Junior Subordinated Debt Securities through the Underwriter,
except (a) such as may be required under the 1933 Act and the 1933 Act
Regulations and such as may be required under the blue sky or insurance laws of
any jurisdiction, and (b)the qualification of the Declaration, the Guarantee
Agreement and the Indenture under the 1939 Act.
(viii) The Declaration has been duly authorized, executed and
delivered by the Company and the Administrative Trustees and has been duly
qualified under the 1939 Act.
(ix) The Guarantee Agreement has been duly authorized,
executed and delivered by the Company, and assuming it is duly authorized,
executed and delivered by the Guarantee 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
Permitted Exceptions; and the Guarantee Agreement has been duly qualified under
the 1939 Act.
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<PAGE>
(x) The Indenture has been duly executed and delivered by
the Company and, assuming due authorization, execution, and delivery thereof by
the Indenture Trustee, is 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 Permitted Exceptions; the
Indenture has been duly qualified under the 1939 Act; and the Indenture conforms
to the description thereof in the Prospectus.
(xi) The Junior Subordinated Debt Securities have been duly
authorized and executed by the Company and, when authenticated by the 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 Permitted Exceptions; and the Junior
Subordinated Debt Securities conform to the description thereof in the
Prospectus.
(xii) Neither the Company nor the Trust is, and upon the
issuance and sale of the Securities as herein contemplated and the application
of the net proceeds therefrom as described in the Prospectus neither will be, an
"investment company" or a company "controlled" by an "investment company" within
the meaning of the 1940 Act.
In rendering such opinion, such counsel may rely (A) as to matters
involving certain matters of Delaware law upon the opinion of Richards, Layton &
Finger, special Delaware counsel to the Offerors, which shall be delivered in
accordance with Section 5(b)(2)hereto; and (B) as to matters of fact, to the
extent deemed proper, on the representations and warranties of the Offerors
contained herein or in the Declaration, the Indenture and the Guarantee
Agreement of even date herewith, between the Company and the Trust covering the
Common Securities and on certificates of responsible officers of the Company and
its subsidiaries and public officials.
(2) The favorable opinion of Richards, Layton & Finger, Special
Delaware counsel to the Offerors, in form and substance satisfactory to the
Underwriter, to the effect that:
(i) The Trust has been duly created and is validly existing
in good standing as a business trust under the Delaware Act; all filings
required under the laws of the State of Delaware with respect to the formation
and valid existence of the Trust as a business trust have been made; the Trust
has all necessary power and authority to own property and to conduct its
business as described in the Registration Statement and the Prospectus and to
enter into and perform its obligations under this Agreement, the Capital
Securities and the Common Securities; the Trust is duly qualified and in good
standing as a foreign company in any other jurisdiction in which such
qualification is necessary, except to the extent that the failure to so qualify
or be in good standing would not have a material adverse effect on the Trust;
and the Trust is not a party to or otherwise bound by any agreement other than
those described in the Prospectus.
(ii) Assuming due authorization, execution and delivery by
the Company and the Trustees, the Declaration is a valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
except as enforcement thereof may be limited by the Permitted Exceptions.
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(iii) The Common Securities have been duly authorized by the
Declaration and are validly issued and (subject to the terms of the Declaration)
fully paid and non-assessable beneficial interests in the assets of the Trust,
and the issuance of the Common Securities is not subject to preemptive or other
similar rights.
(iv) The Capital Securities have been duly authorized by the
Declaration and are validly issued and, subject to the terms of the Declaration,
when delivered to and paid for by the Underwriter pursuant to this Agreement,
will be validly issued, fully paid and non-assessable beneficial interests in
the assets of the Trust; the holders of the Capital Securities will, subject to
the terms of the Declaration, be entitled to the same limitation of personal
liability under Delaware law as is extended to stockholders of private
corporations for profit; and the issuance of the Capital Securities is not
subject to preemptive or other similar rights.
(v) The Common Securities, the Capital Securities and the
Declaration conform in all material respects to all statements relating thereto
contained in the Prospectus.
(vi) All of the issued and outstanding Common Securities of
the Trust are directly owned by the Company free and clear of any security
interest, mortgage, pledge, lien, encumbrance, claim or equitable right.
(vii) This Agreement has been duly authorized, executed and
delivered by the Trust.
(viii) The execution, delivery and performance of this
Agreement, the Declaration, the Capital Securities and the Common Securities;
the consummation of the transactions contemplated herein and therein; and the
compliance by the Trust with its obligations hereunder and thereunder do not and
will not result in any violation of the Declaration or Certificate of Trust, and
do not and will not conflict with, or result in, a breach 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 property or assets of the
Trust under (A) any contract, indenture, mortgage, loan agreement, note, lease
or any other agreement or instrument known to such counsel to which the Trust is
a party or by which it may be bound or to which any of its properties may be
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not have a material adverse effect on the condition,
financial or otherwise, or in the earnings or business affairs of the Trust, (B)
any existing applicable law, rule or regulation (other than the securities or
blue sky laws of the various states, as to which such counsel need express no
opinion) or (C) any judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, or any regulatory body or
administrative agency or other governmental body having jurisdiction over the
Trust or any of its properties.
(3) The favorable opinion, dated as of Closing Time, of Richards,
Layton & Finger, counsel to Wilmington Trust Company, as Property Trustee under
the Declaration, Guarantee
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Trustee under the Capital Securities Guarantee Agreement, and Indenture Trustee
under the Indenture, in form and substance satisfactory to the Underwriter, to
the effect that:
(i) Wilmington Trust Company is a Delaware banking
corporation with trust powers, duly organized, validly existing and in good
standing under the laws of the State of Delaware 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
Indenture Trustee of the Indenture and the execution, delivery and performance
by the Property Trustee of the Declaration and the execution, delivery and
performance by the Guarantee Trustee of the Guarantee Agreement have been duly
authorized by all necessary corporate action on the part of the Indenture
Trustee, the Property Trustee and the Guarantee Trustee, respectively. The
Indenture, the Declaration and the Guarantee Agreement have been duly executed
and delivered by the Indenture Trustee, the Property Trustee and the Guarantee
Trustee, respectively, and constitute the legal, valid and binding obligations
of the Indenture Trustee, the Property Trustee and the Guarantee Trustee,
respectively, enforceable against the Indenture Trustee, the Property Trustee
and the Guarantee Trustee, respectively, in accordance with their terms, except
as enforcement thereof may be limited by the Permitted Exceptions.
(iii) The execution, delivery and performance of the
Indenture, the, Declaration and the Guarantee Agreement by the Indenture
Trustee, Property Trustee and the Guarantee Trustee, respectively, does not
conflict with or constitute a breach of the Certificate of Incorporation or
Bylaws of the Indenture Trustee, Property Trustee and the Guarantee Trustee,
respectively.
(iv) No consent, approval or authorization of, or
registration with or notice to, any Delaware or federal banking authority is
required for the execution, delivery or performance by the Indenture Trustee,
the Property Trustee and the Guarantee Trustee of the Indenture, the Declaration
and the Guarantee Agreement, respectively.
(4) The favorable opinion of Williams, Mullen, Christian & Dobbins,
P.C., tax counsel to the Company and the Trust, as to certain Federal tax
matters set forth in the Prospectus under "United States Income Taxation."
(5) Williams, Mullen, Christian & Dobbins, P.C. shall also provide
a written statement that nothing has come to their attention that has caused
them to believe that the Registration Statement (except for financial statements
and schedules and other financial or statistical data included or incorporated
by reference, therein, as to which counsel need make no statement), at the time
it became effective or as of the date of their respective opinions, 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 not misleading
or that the Prospectus (except for financial statements and schedules and other
financial or statistical data included or incorporated by reference therein, as
to which counsel need make no statement), as at the date hereof or at Closing
Time, included an untrue statement of a material fact or omitted to state a
material fact
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<PAGE>
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(6) At Closing Time, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Registration Statement and the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, and the Underwriter shall
have received a certificate of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company and a
certificate of the Trustee of the Trust, and dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1 hereof are true and correct with the
same force and effect as though expressly made at and as of Closing Time, (iii)
the Trust and the Company have complied with all agreements and satisfied all
conditions on its part to be performed or satisfied at or prior to Closing Time,
and (iv) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
initiated or threatened by the Commission.
(7) At the Closing Time, Goodman & Company, L.L.P. shall have
furnished to the Underwriter a letter or letters (which may refer to letters
previously delivered to the Underwriter), dated as of the Closing Time, in form
and substance satisfactory to the Underwriter, confirming that the response, if
any, to Item 10 of the Registration Statement is correct insofar as it relates
to them and stating in effect that:
(i) They are independent accountants within the meaning of
the 1933 Act and the 1934 Act and the1933 Act Regulations and the 1934 Act
Regulations.
(ii) In their opinion, the consolidated financial statements
of the Company and its subsidiaries audited by them and included or incorporated
by reference in the Registration Statement and Prospectus comply as to form in
all material respects with the applicable accounting requirements of the 1933
Act and the 1933 Act Regulations with respect to registration statements on Form
S-2 and the 1934 Act and the 1934 Act Regulations.
(iii) On the basis of procedures (but not in accordance with
generally accepted auditing standards) consisting of:
(a) Reading the minutes of the meetings of the
shareholders, the board of directors, executive committee and audit committee of
the Company and the boards of directors and executive committees of its
subsidiaries as set forth in the minute books through a specified date not more
than five business days prior to the date of delivery of such letter;
(b) Performing the procedures specified by the
American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial Information,
on the unaudited condensed consolidated interim financial statements of the
Company and its consolidated subsidiaries included or incorporated by reference
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<PAGE>
in the Registration Statement and Prospectus and reading the unaudited interim
financial data, if any, for the period from the date of the latest balance sheet
included or incorporated by reference in the Registration Statement and
Prospectus to the date of the latest available interim financial data; and
(c) Making inquiries of certain officials of the
Company who have responsibility for financial and accounting matters regarding
the specific items for which representations are requested below; nothing has
come to their attention as a result of the foregoing procedures that caused them
to believe that:
(1) the unaudited condensed consolidated
interim financial statements, included or incorporated by reference in the
Registration Statement and Prospectus, do not comply as to form in all material
respects with the applicable accounting requirements of the 1934 Act and the
1934 Act Regulations thereunder;
(2) any material modifications should be
made to the unaudited condensed consolidated interim financial statements,
included or incorporated by reference in the Registration Statement and
Prospectus, for them to be in conformity with generally accepted accounting
principles;
(3) (i) at the date of the latest available
interim financial data and at the specified date not more than five business
days prior to the date of the delivery of such letter, there was any change in
the capital stock or the long-term debt (other than scheduled repayments of such
debt) or any decreases in shareholders' equity of the Company and the
subsidiaries on a consolidated basis as compared with the amounts shown in the
latest balance sheet included or incorporated by reference in the Registration
Statement and the Prospectus or (ii) for the period from the date of the latest
available financial data to a specified date not more than five business days
prior to the delivery of such letter, there was any change in the capital stock
or the long-term debt (other than scheduled repayments of such debt) or any
decreases in shareholders' equity of the Company and the subsidiaries on a
consolidated basis, except in all instances for changes or decreases which the
Registration Statement and Prospectus discloses have occurred or may occur, or
Goodman & Company, L.L.P. shall state any specific changes or decreases.
(iv) The letter shall also state that Goodman & Company,
L.L.P. has carried out certain other specified procedures, not constituting an
audit, with respect to certain amounts, percentages and financial information
which are included or incorporated by reference in the Registration Statement
and Prospectus and which are specified by the Underwriter and agreed to by
Goodman & Company, L.L.P., and has found such amounts, percentages and financial
information to be in agreement with the relevant accounting, financial and other
records of the Company and its subsidiaries identified in such letter.
In addition, at or prior to the time this Agreement is executed,
Goodman & Company, L.L.P., shall have furnished to the Underwriter a letter
dated the date of this Agreement, in form and substance satisfactory to the
Underwriter, to the effect set forth in this subsection (7).
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<PAGE>
(8) At Closing Time, the National Association of Securities
Dealers, Inc. ("NASD") shall have confirmed in writing that it has not raised
any objection with respect to the fairness and reasonableness of the
underwriting terms and arrangements.
If any condition specified in this Section shall not have been
fulfilled in all material respects when and as required to be fulfilled, this
Agreement may be terminated by the Underwriter by notice to the Offerors, in
writing or by telephone or telegraph confirmed in writing, at any time at or
prior to Closing Time, and such termination shall be without liability of any
party to any other party except as provided in Section 4 hereof, and except that
Sections 1, 7, and 8 shall survive any such termination and will remain in full
force and effect.
SECTION 6. [INTENTIONALLY OMITTED]
SECTION 7. INDEMNIFICATION AND CONTRIBUTION.
(a) The Offerors jointly and severally agree to indemnify and hold
harmless the Underwriter and each of its partners, officers, directors, and
employees and each person, if any, who controls the Underwriter within the
meaning of the 1933 Act or the 1934 Act against any losses, claims, damages or
liabilities, and any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales of
the Capital Securities), joint or several, which arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material fact
contained in (A) the Registration Statement, or any amendment or supplement
thereto, including information deemed to be part of the Registration Statement
pursuant to Rule 430A(b) of the 1933 Act Regulations, if applicable, (B) the
Prospectus and any amendment or supplement thereto, or (C) any application or
other document, any amendment or supplement thereto, executed by the Offerors or
based upon information furnished by or on behalf of the Offerors filed in any
jurisdiction in order to qualify the Capital Securities under the securities or
blue sky laws thereof (each, an "Application") or (ii) the omission or alleged
omission to state in the Registration Statement, or any amendment or supplement
thereto, the Prospectus or any amendment or supplement thereto, or any
Application, a material fact required to be stated therein or necessary to make
the statements therein not misleading, and shall reimburse as incurred the
Underwriter and each such controlling person for any legal and other expenses
incurred in investigating or defending or preparing to defend against or
appearing as a third party witness in connection with any such loss, claim,
damage, liability or action; provided, however, that neither of the Offerors
shall be liable to the Underwriter in any such case to the extent that any such
loss, claim, damage or liability arises out of, or is based upon, any untrue
statement or alleged untrue statement made in the Prospectus, including any
amendment or supplement thereto, in reliance upon and in conformity with
information furnished in writing to the Offerors by or on behalf of the
Underwriter specifically for inclusion and actually included therein; and
provided further that, as to any Prospectus that has been amended or
supplemented as provided herein, this indemnity agreement shall not inure to the
benefit of the Underwriter, on account of any loss, claim, damage, liability or
action arising out of the sale of Capital Securities to any person by the
Underwriter if (A) the Underwriter failed to send or give a copy of the final
Prospectus as so amended or supplemented to that person at or prior to the
confirmation of the sale of such Capital Securities to such person in any case
where such delivery
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<PAGE>
is required by the 1933 Act, and (B) the untrue statement or alleged untrue
statement of a material fact or omission or alleged omission to state a material
fact in any preliminary Prospectus was corrected in an amendment or supplement
thereto (but only if the sale to such person occurred after the Offerors
provided the Underwriter and the Underwriter received copies of such amendment
or supplement for distribution). This indemnity agreement will be in addition to
any liability which the Offerors may otherwise have.
(b) The Underwriter will indemnify and hold harmless the Company,
the Trust, the Trustees and each of the Company's directors, each of its
officers and each person, if any, who controls the Company or the Trust within
the meaning of the 1933 Act or the 1934 Act, to the same extent as the foregoing
indemnity from the Offerors to the Underwriter, but only with reference to
written information relating to such underwriter furnished to the Offerors by
the Underwriter and specifically included in the Prospectus. This indemnity
shall be in addition to any liability which such Underwriter may otherwise have.
The Offerors acknowledge that the statements set forth under the heading
"Underwriting" in the Prospectus constitute the only information furnished in
writing by the Underwriter for inclusion in the Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 7 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against one or more
indemnifying parties under this Section 7, notify such indemnifying party or
parties of the commencement thereof; but the omission so to notify the
indemnifying party or parties will not relieve it or them from any liability
which it or they may have to any indemnified party otherwise than under
subsection (a) or (b) of this Section 7 or to the extent that the indemnifying
party was not adversely affected by such omission. In case any such action is
brought against an indemnified party and it notifies an indemnifying party or
parties of the commencement thereof, the indemnifying party or parties against
which a claim is to be made will be entitled to participate therein and, to the
extent that it or they may wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified party; provided, however, that if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be one or more legal defenses available to it and/or other
indemnified parties which are different from or additional to those available to
the indemnifying party, the indemnifying party shall not have the right to
direct the defense of such action on behalf of such indemnified party or parties
and such indemnified party or parties shall have the right to select separate
counsel to defend such action on behalf of such indemnified party or parties.
After notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof and approval by such indemnified party
of counsel appointed to defend such action, the indemnifying party will not be
liable to such indemnified party under this Section 7 for any legal or other
expenses, other than reasonable costs of investigation, subsequently incurred by
such indemnified party in connection with the defense thereof, unless (i) the
indemnified party shall have employed separate counsel in accordance with the
proviso to the next preceding sentence (it being understood, however, that in
connection with such action the indemnifying party shall not be liable for the
expenses of more than one separate counsel (in addition to local counsel) in any
one action or separate but substantially similar actions in the same
jurisdiction arising out of the same general allegations or circumstances,
designated by the lead Underwriter in the case of paragraph (a) of this Section
7, representing the indemnified
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parties under such paragraph (a) who are parties to such action or actions), or
(ii) the indemnifying party has authorized in writing the employment of counsel
for the indemnified party at the expense of the indemnifying party. After such
notice from the indemnifying party to such indemnified party, the indemnifying
party will not be liable for the costs and expenses of any settlement of such
action effected by such indemnified party without the consent of the
indemnifying party, which will not be unreasonably withheld, unless such
indemnified party waived its rights under this Section 7 in writing in which
case the indemnified party may effect such a settlement without such consent.
(d) The Company agrees to indemnify the Trust against all losses,
claims, damages or liabilities due from the Trust under Section 7(a) hereof.
(e) If the indemnification provided for in the preceding paragraphs
of this Section 7 is unavailable or insufficient to hold harmless an indemnified
party under paragraph (a) or (b) above in respect of any losses, claims, damages
or liabilities (or actions in respect thereof) referred to therein, then the
Offerors or the Underwriter shall contribute to the aggregate losses, claims,
damages and liabilities (including legal or other expenses reasonably incurred
in connection with investigating or defending same) to which the Offerors and
the Underwriter may be subject in such proportion so that the Underwriter is
responsible for that portion represented by the percentage that the total
discounts and/or commissions received by the Underwriter bears to the sum of
such discounts and/or commissions and the purchase price of the Capital
Securities specified in Schedule B hereto and the Offerors are responsible for
the balance; provided, however, that (y) in no case shall the Underwriter be
responsible for any amount in excess of the total discounts and/or commissions
received by it with respect to the Capital Securities sold under this Agreement
and (z) no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. For purposes of this
Section 7, each person who controls the Underwriter within the meaning of the
1933 Act shall have the same rights to contribution as the Underwriter, and each
person who controls either of the Offerors within the meaning of either the 1933
Act or the 1934 Exchange Act, each officer or trustee of the Offerors who shall
have signed the Registration Statement and each director or trustee of the
Offerors shall have the same rights to contribution as the Offerors, subject in
each case to clause (y) of this paragraph (e). Any party entitled to
contribution will, promptly after receipt of notice of commencement of any
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this paragraph
(e), notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any other obligation it or
they may have hereunder or otherwise than under this paragraph (d).
SECTION 8. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in this
Agreement, or contained in certificates of officers or Trustees of the Offerors
submitted pursuant hereto, shall remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the Underwriter or
controlling person, or by or on behalf of the Offerors and shall survive
delivery of the Capital Securities to the purchasers therefor.
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<PAGE>
SECTION 9. TERMINATION OF AGREEMENT.
(a) The Underwriter may terminate this Agreement, by notice to the
Offerors, at any time at or prior to Closing Time (i) if there has been, since
the date of this Agreement or since the respective dates as of which information
is given in the Registration Statement, any material adverse change in the
condition, financial or otherwise, or in the earnings or business affairs of the
Trust or the Company and its subsidiaries, considered as one enterprise, whether
or not arising in the ordinary course of business, or (ii) if there has occurred
any material adverse change in the financial markets in the United States or
elsewhere or any outbreak of hostilities or escalation thereof or other calamity
or crisis or any change or development involving a prospective change in
national or international political, financial or economic conditions, in each
case the effect of which is such as to make it, in the judgment of the
Underwriter, impracticable to market the Capital Securities or to enforce
contracts for the sale of the Capital Securities, or (iii) if trading in any
securities of the Company or the Trust has been suspended or materially limited
by the Commission or the applicable exchange, or if trading generally on the New
York Stock Exchange, the American Stock Exchange or on the NASDAQ National
Market, has been suspended, limited or restricted or minimum or maximum prices
for trading have been fixed, or maximum ranges for prices for securities have
been required, by said exchanges or such system or by order of the Commission,
the NASD or any governmental authority, or (iv) if a banking moratorium has been
declared by either Federal, New York, Virginia or Delaware authorities.
(b) If this Agreement is terminated pursuant to this Section, such
termination shall be without liability of any party to any other party except as
provided in Section 4 hereof, and except that Sections 1, 7, and 8 shall survive
any such termination and will remain in full force and effect.
SECTION 10. [INTENTIONALLY OMITTED]
SECTION 11. NOTICES. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to McKinnon & Company, 555 Main Street, First
Virginia Building, 16th Floor, Norfolk, Virginia 23510, Attention: William J.
McKinnon. Notices to the Trust and the Company shall be directed to them at
Resource Bankshares Corporation, 3720 Virginia Beach Boulevard, Virginia Beach,
Virginia 23452 Attention: _____________.
SECTION 12. PARTIES. This Agreement shall inure to the benefit of and
be binding upon the Underwriter and the Trust, the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person, firm or corporation, other than the
Underwriter and the Trust and the Company and their respective successors and
the controlling persons and officers, directors and trustees referred to in
Sections 6 and 7 and their heirs and legal Underwriter, 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 are
intended to be for the sole and exclusive benefit of the
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Underwriter and the Trust and the Company and their respective successors, and
said controlling persons and officers, directors and trustees and their heirs
and legal Underwriter, and for the benefit of no other person, firm or
corporation. No purchaser of Capital Securities from the Underwriter shall be
deemed to be a successor by reason merely of such purchase.
SECTION 13. GOVERNING LAW AND TIME. This Agreement shall be governed by
and construed in accordance with the laws of the State of Virginia applicable to
agreements made and to be performed in said State. Except as otherwise set forth
herein, specified times of day refer to City of Richmond time.
SECTION 14. 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 respective counterparts shall together
constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to the Trust a counterpart hereof, whereupon
this instrument, along with all counterparts, will become a binding agreement
between the Underwriter and the Trust and the Company in accordance with its
terms.
Very truly yours,
RESOURCE BANKSHARES CORPORATION
By:______________________________
Title:
RESOURCE CAPITAL TRUST I
By:______________________________
Title: Trustee
By:______________________________
Title: Trustee
CONFIRMED AND ACCEPTED,
as of the date first above written:
McKINNON & COMPANY, INC.
By:_____________________________
William J. McKinnon, Jr.
President
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SCHEDULE A
Name of Underwriter Number of Capital Securities
------------------- ----------------------------
McKinnon & Company, Inc. ____________
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SCHEDULE B
Underwriting Agreement dated January __, 1999
Registration Statement Nos. 333-________ and 333-________
Underwriter: McKinnon & Company, Inc.
Address of Underwriter: 555 Main Street, Suite 1212, Norfolk, Virginia 23510
Title, Purchase Price and Description of Securities:
Title: $_________ Capital Securities (Liquidation Amount $25.00)
1. The initial public offering price per security for the
Capital Securities, determined as provided in said Section 2, shall be
$25.00.
2. The compensation per Capital Security to be paid by the
Company to the Underwriter shall be $0.__, out of which commissions
payable to Selected Dealers shall be paid.
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Exhibit 4.1
CERTIFICATE OF TRUST OF
RESOURCE CAPITAL TRUST I
THIS Certificate of Trust of RESOURCE CAPITAL TRUST I (the "Trust") is
being duly executed and filed on behalf of the Trust by the undersigned, as
trustee, to form a business trust under the Delaware Business Trust Act (12 Del.
C. ss. 3801 et seq.) (the "Act").
1. Name. The name of the business trust formed by this Certificate
of Trust is RESOURCE CAPITAL TRUST I.
2. Delaware Trustee. The name and business address of the trustee
of the Trust in the State of Delaware are Wilmington Trust Company, 1100 North
Market Street, Wilmington, Delaware 19890-0001, Attn: Corporate Trust
Administration.
3. Effective Date. This Certificate of Trust shall be effective
upon filing.
IN WITNESS WHEREOF, the undersigned has duly executed this Certificate
of Trust in accordance with Section 3811(a)(1) of the Act.
WILMINGTON TRUST COMPANY, not in
its individual capacity but solely as Trustee
By: /s/ Emmett R. Harmon
-----------------------------------------
Name: Emmett R. Harmon
Title: Vice President
Exhibit 4.2
TRUST AGREEMENT
THIS TRUST AGREEMENT, dated as of December 23, 1998 (this "Trust
Agreement"), between (i) RESOURCE BANKSHARES CORPORATION, a Virginia corporation
(the "Depositor"), and (ii) WILMINGTON TRUST COMPANY, a Delaware banking
corporation (the "Trustee"). The Depositor and the Trustee hereby agree as
follows:
1. The trust created hereby (the "Trust") shall be known as
"RESOURCE CAPITAL TRUST I" in which name the Trustee, or the Depositor to the
extent provided herein, may engage in the transactions contemplated hereby, make
and execute contracts, and sue and be sued.
2. The Depositor hereby assigns, transfers, conveys and sets over to
the Trustee the sum of $10. The Trustee hereby acknowledges receipt of such
amount in trust from the Depositor, which amount shall constitute the initial
trust estate. The Trustee hereby declares that it will hold the trust estate in
trust for the Depositor. It is the intention of the parties hereto that the
Trust created hereby constitute a business trust under Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. ss. 3801, et seq. (the "Business Trust Act"), and
that this document constitute the governing instrument of the Trust. The Trustee
is hereby authorized and directed to execute and file a certificate of trust
with the Delaware Secretary of State in accordance with the provisions of the
Business Trust Act.
3. The Depositor and the Trustee will enter into an amended and
restated Trust Agreement, satisfactory to each such party and substantially in
the form included as an exhibit to the 1933 Act Registration Statement (as
defined below), to provide for the contemplated operation of the Trust created
hereby and the issuance of the Capital Securities (the "Securities") referred to
therein. Prior to the execution and delivery of such amended and restated Trust
Agreement, the Trustee shall not have any duty or obligation hereunder or with
respect to the trust estate, except as otherwise required by applicable law or
as may be necessary to obtain prior to such execution and delivery of any
licenses, consents or approvals required by applicable law or otherwise.
4. The Depositor and the Trustee hereby authorize and direct the
Depositor, as the Sponsor of the Trust, (i) to file with the Securities and
Exchange Commission (the "Commission") and execute, in each case on behalf of
the Trust, the Registration Statement on Form S-2 (the "1933 Act Registration
Statement"), including any pre-effective or post-effective amendments to the
1933 Act Registration Statement, relating to the registration under the
Securities Act of 1933, as amended, of
<PAGE>
the Securities and possible certain other securities, (ii) to file and execute
on behalf of the Trust such applications, reports, surety bonds, irrevocable
consents, appointments of attorney for service of process and other papers and
documents as shall be necessary or desirable to register the Securities under
the securities or blue sky laws of such jurisdictions as the Depositor, on
behalf of the Trust, may deem necessary or desirable and (iii) to execute on
behalf of the Trust that certain Underwriting Agreement relating to the
Securities, among the Trust, the Depositor and the Underwriter named therein,
substantially in the form included as an exhibit to the 1933 Act Registration
Statement. In connection with the filings referred to above, the Depositor
hereby constitutes and appoints T. A. Grell and Harvard R. Birdsong, and each of
them, as its true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for the Depositor or in the Depositor's name,
place and stead, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to the 1933 Act Registration Statement and
to file the same, with all exhibits thereto, and other documents in connection
therewith, with the Commission and administrators of state securities or blue
sky laws, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in connection therewith, as fully to all intents and purposes as the
Depositor might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their respective substitute
or substitutes, shall do or cause to be done by virtue hereof.
5. This Trust Agreement may be executed in one or more counterparts.
6. The number of Trustees initially shall be one (1) and thereafter
the number of Trustees shall be such number as shall be fixed from time to time
by a written instrument signed by the Depositor which may increase or decrease
the number of Trustees; provided, however, that to the extent required by the
Business Trust Act, one Trustee shall either be 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 and otherwise meets
the requirements of applicable Delaware law. Subject to the foregoing, the
Depositor is entitled to appoint or remove without cause any Trustee at any
time. The Trustees may resign upon thirty (30) days' prior notice to the
Depositor.
7. This Trust Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware (without regard to conflict
of laws of principles).
2
<PAGE>
8. To the fullest extent permitted by applicable law, the Sponsor
shall indemnify and hold harmless the Trustee from and against any loss, damage
or claim incurred by the Trustee by reason of any act or omission performed or
omitted by the Trustee in good faith on behalf of the Trust and in a matter the
Trustee reasonably believed to be within the scope of authority conferred on the
Trustee by this Declaration, except that the Trustee shall not be entitled to be
indemnified in respect of any loss, damage or claim incurred by the Trustee by
reason of gross negligence or willful misconduct with respect to such acts or
omissions.
IN WITNESS WHEREOF, the parties hereto have caused this Trust Agreement
to be duly executed as of the day and year first above written.
RESOURCE BANKSHARES CORPORATION
By: /s/ Lawrence N. Smith
---------------------------------
Lawrence N. Smith
Title: President
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Emmett R. Harmon
---------------------------------
Name: Emmett R. Harmon
Title: Vice President
3
Exhibit 4.3
EXECUTION COPY
================================================================================
AMENDED AND RESTATED
DECLARATION OF TRUST
between
RESOURCE BANKSHARES CORPORATION, as Depositor,
WILMINGTON TRUST COMPANY,
as Property Trustee,
WILMINGTON TRUST COMPANY,
as Delaware Trustee,
and
THE ADMINISTRATIVE TRUSTEES NAMED HEREIN
Dated as of ________ __, 1999
RESOURCE CAPITAL TRUST I
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I -- Defined Terms........................................................................................2
SECTION 1.01. Definitions......................................................................................2
ARTICLE II -- Continuation of the Trust..........................................................................14
SECTION 2.01. Name............................................................................................14
SECTION 2.02. Office of the Delaware Trustee; Principal Place of Business.....................................14
SECTION 2.03. Organizational Expenses.........................................................................14
SECTION 2.04. Issuance of the Capital Securities..............................................................14
SECTION 2.05. Issuance of the Common Securities; Subscription and Purchase of Junior Subordinated Debt
Securities....................................................................................................15
SECTION 2.06. Declaration of Trust............................................................................15
SECTION 2.07. Authorization to Enter into Certain Transactions................................................16
SECTION 2.08. Assets of Trust.................................................................................20
SECTION 2.09. Title to Trust Property.........................................................................20
ARTICLE III -- Payment Account...................................................................................21
SECTION 3.01. Payment Account.................................................................................21
ARTICLE IV -- Distributions; Redemption..........................................................................21
SECTION 4.01. Distributions...................................................................................21
SECTION 4.02. Redemption......................................................................................23
SECTION 4.03. Subordination of Common Securities..............................................................25
SECTION 4.04. Payment Procedures..............................................................................26
SECTION 4.05. Tax Returns and Reports.........................................................................26
SECTION 4.06. Payment of Taxes; Duties of the Trust...........................................................27
SECTION 4.07. Payments Under Indenture........................................................................27
ARTICLE V -- Trust Securities Certificates.......................................................................27
SECTION 5.01. Initial Ownership...............................................................................27
SECTION 5.02. Trust Securities Certificates...................................................................27
SECTION 5.03. Execution and Delivery of Trust Securities Certificates.........................................28
SECTION 5.04. Global Capital Security.........................................................................28
SECTION 5.05. Registration of Transfer and Exchange Generally; Certain Transfers and Exchanges; Capital
Securities Certificates.......................................................................................30
SECTION 5.06. Mutilated, Destroyed, Lost or Stolen Trust Securities Certificates..............................32
SECTION 5.07. Persons Deemed Securityholders..................................................................33
SECTION 5.08. Access to List of Securityholders'Names and Addresses...........................................33
SECTION 5.09. Maintenance of Office or Agency; Transfer Agent.................................................33
SECTION 5.10. Appointment of Paying Agent.....................................................................34
SECTION 5.11. Ownership of Common Securities by Depositor.....................................................34
SECTION 5.12. Notices to Clearing Agency......................................................................35
SECTION 5.13. Rights of Securityholders.......................................................................35
ARTICLE VI -- Acts of Securityholders; Meetings; Voting..........................................................38
SECTION 6.01. Limitations on Capital Securityholder's Voting Rights...........................................38
SECTION 6.02. Notice of Meeting...............................................................................39
SECTION 6.03. Meetings of Securityholders.....................................................................39
SECTION 6.04. Voting Rights...................................................................................40
SECTION 6.05. Proxies.........................................................................................40
SECTION 6.06. Securityholder Action by Written Consent........................................................40
SECTION 6.07. Record Date for Voting and Other Purposes.......................................................40
SECTION 6.08. Acts of Securityholders.........................................................................41
SECTION 6.09. Inspection of Records...........................................................................42
ARTICLE VII -- Representations and Warranties....................................................................42
SECTION 7.01. Representations and Warranties of the Property Trustee and the Delaware Trustee.................42
SECTION 7.02. Representations and Warranties of Depositor.....................................................44
ARTICLEVIII -- The Trustees......................................................................................44
<PAGE>
SECTION 8.01. Certain Duties and Responsibilities.............................................................44
SECTION 8.02. Events of Default Notices; Deferral of Interest Payment Notices.................................46
SECTION 8.03. Certain Rights of Property Trustee..............................................................46
SECTION 8.04. Not Responsible for Recitals....................................................................49
SECTION 8.05. May Hold Securities.............................................................................49
SECTION 8.06. Compensation, Indemnity, Fees...................................................................49
SECTION 8.07. Corporate Property Trustee Required; Eligibility of Trustees....................................51
SECTION 8.08. Conflicting Interests...........................................................................52
SECTION 8.09. Co-Trustees and Separate Trustee................................................................52
SECTION 8.10. Resignation and Removal; Appointment of Successor...............................................54
SECTION 8.11. Acceptance of Appointment by Successor..........................................................55
SECTION 8.12. Merger, Conversion, Consolidation or Succession to Business.....................................56
SECTION 8.13. Preferential Collection of Claims Against Depositor or Trust....................................57
SECTION 8.14. Reports by Property Trustee.....................................................................58
SECTION 8.15. Reports to the Property Trustee.................................................................58
SECTION 8.16. Evidence of Compliance with Conditions Precedent................................................58
SECTION 8.17. Number of Trustees..............................................................................59
SECTION 8.18. Delegation of Power.............................................................................59
ARTICLE IX -- Termination, Liquidation and Merger................................................................60
SECTION 9.01. Termination Upon Expiration Date; Termination Upon Special Event................................60
SECTION 9.02. Early Termination...............................................................................60
SECTION 9.03. Termination.....................................................................................60
SECTION 9.04. Liquidation.....................................................................................61
SECTION 9.05. Mergers, Consolidations, Amalgamations or Replacements of the Trust.............................62
ARTICLE X -- Miscellaneous Provisions............................................................................64
SECTION 10.01. Limitation of Rights of Securityholders........................................................64
SECTION 10.02. Liability of the Depositor.....................................................................64
SECTION 10.03. Amendment......................................................................................64
SECTION 10.04. Separability...................................................................................66
SECTION 10.05. Governing Law..................................................................................66
SECTION 10.06. Payments Due on Non-Business Day...............................................................66
SECTION 10.07. Successors.....................................................................................66
SECTION 10.08. Headings.......................................................................................67
SECTION 10.09. Reports, Notices and Demands...................................................................67
SECTION 10.10. Agreement Not to Petition......................................................................67
SECTION 10.11. Trust Indenture Act; Conflict with Trust Indenture Act.........................................68
SECTION 10.12. Acceptance of Terms of Declaration of Trust, Guarantee and Indenture...........................68
SECTION 10.13. Execution in Counterparts......................................................................69
</TABLE>
ii
<PAGE>
RESOURCE CAPITAL TRUST I
Certain Sections of this Declaration of Trust relating to Sections 310
through 318 of the Trust Indenture Act of 1939:
Trust Indenture Declaration of
Act Section Trust Section
- --------------- -----------------
ss.310 (a)(1)........................................... 8.07
(a)(2)........................................... 8.07
(a)(3)........................................... 8.09
(a)(4)........................................... 2.07(a)(ii)
(b).............................................. 8.08
ss.311 (a).............................................. 8.13
(b).............................................. 8.13
ss.312 (a).............................................. 5.08
(b).............................................. 5.08
(c).............................................. 5.08
ss.313 (a).............................................. 8.14(a)
(a)(4)........................................... 8.14(b)
(b)(1)........................................... 8.14(a)
(b)(2)........................................... 8.14(b)
(c).............................................. 10.09
(d)............................................. 8.14(c)
ss.314 (a).............................................. 8.15
(b).............................................. Not Applicable
(c)(1)........................................... 8.16
(c)(2)........................................... 8.16
(c)(3)........................................... Not Applicable
(d).............................................. Not Applicable
(e).............................................. 1.01, 8.16
ss.315 (a).............................................. 8.01(a), 8.03(a)
(b).............................................. 8.02
(c).............................................. 8.01(a)
(d).............................................. 8.01, 8.03
(e).............................................. Not Applicable
ss.316 (a).............................................. Not Applicable
(a)(1)(A)........................................ Not Applicable
(a)(1)(B)........................................ Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 5.13
(c).............................................. 6.07
ss.317 (a)(1)........................................... Not Applicable
(a)(2)........................................... Not Applicable
(b).............................................. 5.10
ss.318 (a).............................................. 10.11
____________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Declaration of Trust.
<PAGE>
AMENDED AND RESTATED DECLARATION OF TRUST,
dated as of ________ __, 1999, between (i) RESOURCE
BANKSHARES CORPORATION, a Virginia corporation
(including any successors or assigns, the
"Depositor"), (ii) WILMINGTON TRUST COMPANY, a
Delaware corporation, as property trustee (in such
capacity, the "Property Trustee" and, in its separate
corporate capacity and not in its capacity as
Property Trustee, the "Trust Company"), (iii)
WILMINGTON TRUST COMPANY, a Delaware corporation, as
Delaware trustee (the "Delaware Trustee"), (iv) T. A.
GRELL, an individual, and HARVARD R. BIRDSONG, an
individual, each of whose address is c/o Resource
Bankshares Corporation (each an "Administrative
Trustee" and, collectively, the "Administrative
Trustees") (the Property Trustee, the Delaware
Trustee and the Administrative Trustees are referred
to collectively herein as the "Trustees") and (v) the
several Holders, as hereafter defined.
W I T N E S S E T H :
WHEREAS the Depositor, the Delaware Trustee and the Administrative
Trustees have heretofore duly declared and established a business trust pursuant
to the Delaware Business Trust Act by entering into a certain Declaration of
Trust, dated as of ________ __, 199_ (the "Original Declaration of Trust"), and
by the execution and filing by the Delaware Trustee and the Administrative
Trustees with the Secretary of State of the State of Delaware of the Certificate
of Trust, filed on ________ __, 199_ (the "Certificate of Trust"); and attached
as Exhibit A; and
WHEREAS the Depositor, the Delaware Trustee and the Administrative
Trustees desire to amend and restate the Original Declaration of Trust in its
entirety as set forth herein to provide for, among other things (i) the issuance
and sale of the Common Securities by the Trust to the Depositor, (ii) the
issuance and sale of the Capital Securities (the "Capital Securities") by the
Trust pursuant to the Underwriting Agreement, as hereafter defined, (iii) the
acquisition by the Trust from the Depositor of all of the right, title and
interest in the Junior Subordinated Debt Securities, as hereafter defined, and
(iv) the appointment of Wilmington Trust Company, a Delaware corporation (in
such capacity, the "Property Trustee" and, in its separate corporate capacity
and not in its capacity as Property Trustee, the "Trust Company");
NOW, THEREFORE, in consideration of the agreements and obligations set
forth herein and for other good and valuable consideration, the sufficiency of
which is hereby acknowledged, each party, for the benefit of the other parties
and for the benefit of the Securityholders, as hereafter defined, hereby
<PAGE>
amends and restates the Original Declaration of Trust in its entirety and agrees
as follows:
ARTICLE I
Defined Terms
SECTION 1.01. Definitions. For all purposes of this
Declaration of Trust, except as otherwise expressly provided or unless the
context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein that are defined in the
Trust Indenture Act, either directly or by reference therein, have the
meanings assigned to them therein;
(c) unless the context otherwise requires, any reference to
an "Article" or a "Section" refers to an Article or a Section, as the
case may be, of this Declaration of Trust; and
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Declaration of Trust as a whole
and not to any particular Article, Section or other subdivision; and
"Act" has the meaning specified in Section 6.08.
"Additional Distribution" has the meaning specified in Section
4.01(c).
"Adjusted Treasury Rate" means, with respect to any Redemption
Date, the Treasury Rate plus (i) 2.00% if such Redemption Date occurs on or
before ________ 15, ____, or (ii) 1.25% if such Redemption Date occurs after
________ 15, ____.
"Administrative Action" has the meaning specified in the
definition of "Tax Event" in this Section 1.01.
"Administrative Trustee" means each of T. A. Grell and Harvard
R. Birdsong, solely in such Person's capacity as Administrative Trustee of the
Trust continued hereunder and not in such Person's individual capacity, or such
Administrative Trustee's successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified
2
<PAGE>
Person. For the purposes of this definition, "control" when used with respect to
any specified Person means the power to direct the management and policies of
such Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Capital Security or beneficial interest therein,
the rules and procedures of the depositary for such Capital Security, in each
case to the extent applicable to such transaction and as in effect from time to
time.
"Bankruptcy Event" means, with respect to any Person:
(a) the entry of a decree or order by a court having
jurisdiction in the premises adjudging such Person a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjudication or composition of or in
respect of such Person under any applicable federal or state
bankruptcy, insolvency, reorganization or other similar law, or
appointing a receiver, liquidator, assignee, trustee, sequestrator (or
other similar official) of such Person or of any substantial part of
its property or ordering the winding up or liquidation of its affairs,
and the continuance of any such decree or order unstayed and in effect
for a period of 60 consecutive days; or
b) the institution by such Person of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or similar official) of such Person or
of any substantial part of its property or the making by it of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due
and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by such Person in furtherance of any such action.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Depositor to have been duly
adopted by the Depositor's Board of Directors, or such committee of the Board of
Directors or officers of the Depositor to which authority to act on behalf of
the Board of Directors has been delegated, and to be in full
3
<PAGE>
force and effect on the date of such certification and delivered to the
Trustees.
"Business Day" means a day other than (a) a Saturday or
Sunday, (b) a day on which banking institutions in the City of Richmond,
Virginia are authorized or required by law or executive order to remain closed
or (c) a day on which the Property Trustee's Corporate Trust Office or the
Corporate Trust Office of the Debenture Trustee is closed for business.
"Capital Securities" means each of the $_.____ Preferred
Securities to be issued on the date hereof, each representing an undivided
beneficial interest in the assets of the Trust, having a Liquidation Amount of
$25.00 per Capital Security and having the rights provided therefor in this
Declaration of Trust, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Capital Securities Certificate" means a certificate
evidencing ownership of Capital Securities, substantially in the form attached
as Exhibit B.
"Capital Securityholder" means a Person in whose name a
Capital Security or Capital Securities is registered in the Securities Register;
and any such Person shall be deemed to be a beneficial owner within the meaning
of the Delaware Business Trust Act.
"Capital Treatment Event" has the meaning specified in Section
1.01 of the Indenture.
"Cede" has the meaning specified in Section 5.04(a).
"Certificate of Trust" has the meaning specified in the
preamble to this Declaration of Trust.
"Clearing Agency" means an organization registered as a
"clearing agency" pursuant to Section 17A of the Securities Exchange Act of
1934. The Depository Trust Company shall be the initial Clearing Agency.
"Clearing Agency Participant" means a broker, dealer, bank,
other financial institution or other Person for whom from time to time a
Clearing Agency effects book-entry transfers and pledges of securities deposited
with the Clearing Agency.
"Closing Date" has the meaning specified in the Underwriting
Agreement.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Securities Exchange Act of
1934, or, if at any time after the execution of this instrument such Commission
is not existing and
4
<PAGE>
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Securities" means the Common Securities, each
representing an undivided beneficial interest in the assets of the Trust, having
a Liquidation Amount of $25.00 and having the rights provided therefor in this
Declaration of Trust, including the right to receive Distributions and a
Liquidation Distribution as provided herein.
"Common Securities Certificate" means a certificate evidencing
ownership of Common Securities, substantially in the form attached as Exhibit C.
"Comparable Treasury Issue" means with respect to any
Redemption Date the United States Treasury security selected by the Quotation
Agent as having a maturity comparable to the Remaining Life that would be
utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable
maturity to the Remaining Life. If no United States Treasury security has a
maturity that is within a period from three months before to three months after
________ 15, 2004, the two most closely corresponding United States Treasury
securities shall be used as the Comparable Treasury Issue, and the Treasury Rate
shall be interpolated or extrapolated on a straight-line basis, rounding to the
nearest month using such securities.
"Comparable Treasury Price" means (A) the average of five
Reference Treasury Dealer Quotations for such Redemption Date, after excluding
the highest and lowest of such Reference Treasury Dealer Quotations, or (B) if
the Debenture Trustee obtains fewer than five such Reference Treasury Dealer
Quotations, the average of all such Quotations.
"Corporate Trust Office" means the principal office of the
Property Trustee located in Wilmington, Delaware which, at the time of the
execution of this Declaration of Trust, is located at 1100 North Market Street,
Attn: Corporate Trust Administration, Wilmington, Delaware 19890.
"Debenture Event of Default" means an "Event of Default" as
defined in the Indenture.
"Debenture Trustee" means Wilmington Trust Company, a Delaware
corporation and any successor.
"Declaration of Trust" means this Amended and Restated
Declaration of Trust, as the same may be modified, amended or supplemented in
accordance with the applicable provisions hereof, including all exhibits hereto,
including, for all purposes of this Amended and Restated Declaration of Trust,
the provisions of the Trust Indenture Act that are deemed to be a part of and
5
<PAGE>
govern this Amended and Restated Declaration of Trust and any modification,
amendment or supplement of either, respectively.
"Definitive Capital Securities Certificate" means Capital
Securities Certificates issued in certificated, fully registered form.
"Delaware Business Trust Act" means Chapter 38 of Title 12 of
the Delaware Code, 12 Del. C. ss.ss. 3801, et seq., as it may be amended from
time to time.
"Delaware Trustee" means the corporation identified as the
"Delaware Trustee" in the preamble to this Declaration of Trust solely in its
capacity as Delaware Trustee of the Trust continued hereunder and not in its
individual capacity, or its successor in interest in such capacity, or any
successor trustee appointed as herein provided.
"Depositor" has the meaning specified in the preamble to this
Declaration of Trust.
"Distribution Date" has the meaning specified in Section
4.01(a).
"Distributions" means amounts payable in respect of the Trust
Securities as provided in Section 4.01.
"Early Termination Event" has the meaning specified in Section
9.02.
"Escrow Agent" means Wilmington Trust Company.
"Event of Default" means any one of the following events
(whatever the reason for such Event of Default and whether it shall be voluntary
or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(a) the occurrence of a Debenture Event of Default; or
(b) 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; or
(c) default by the Trust in the payment of any Redemption
Price of any Trust Security when it becomes due and payable; or
(d) default in the performance, or breach, in any material
respect, of any covenant or warranty of the Trustees in this
Declaration of Trust (other than a covenant or warranty, a default in
the performance or breach of which is addressed in clause (b) or (c)
above), and continuation
6
<PAGE>
of such default or breach for a period of 60 days after there has been
given, by registered or certified mail, to the defaulting Trustee or
Trustees by the Holders of at least 25% in aggregate Liquidation Amount
of the Outstanding Capital Securities, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder; or
(e) the occurrence of a Bankruptcy Event with respect to the
Property Trustee and the failure by the Depositor to appoint a
successor Property Trustee within 60 days thereof.
"Expiration Date" has the meaning specified in Section 9.01.
"Federal Reserve" means the Board of Governors of the Federal
Reserve System.
"Global Capital Securities" means a beneficial interest in the
Capital Securities, ownership and transfers of which shall be made through book
entries by a Clearing Agency as described in Section 5.11.
"Global Capital Securities Certificate" means a certificate
evidencing ownership of Global Capital Securities, substantially in the form
attached as Exhibit B.
"Guarantee" means the Guarantee Agreement executed and
delivered by the Depositor and Wilmington Trust Company, as trustee,
contemporaneously with the execution and delivery of this Declaration of Trust,
for the benefit of the Holders of the Trust Securities, as amended from time to
time.
"Holder" or "Securityholder" means a Person in whose name a
Trust Security or Trust Securities is registered in the Securities Register; any
such Person shall be deemed to be a beneficial owner of such Trust Securities
within the meaning of the Delaware Business Trust Act; provided, however, that
in determining whether the Holders of the requisite amount of Capital Securities
have voted on any matter provided for in this Declaration of Trust, then for the
purpose of any such determination, so long as Definitive Capital Securities
Certificates have not been issued, the term Securityholders or Holders as used
herein shall refer to the Owners.
"Indenture" means the Junior Subordinated Indenture, dated as
of ________ __, 1999, between the Depositor and the Debenture Trustee, as
trustee, (as amended or supplemented from time to time) relating to the issuance
of the Junior Subordinated Debt Securities.
"Investment Company Event" has the meaning specified in
Section 1.01 of the Indenture.
7
<PAGE>
"Junior Subordinated Debt Securities" means $8,247,425.00 in
aggregate principal amount of the Depositor's Junior Subordinated Debt
Securities due ________ __, 2029, issued pursuant to the Indenture.
"Junior Subordinated Debt Securities Redemption Date" means,
with respect to any Junior Subordinated Debt Securities to be redeemed under the
Indenture, the date fixed for redemption under the Indenture or pursuant to an
Officers' Certificate in accordance with the terms of the Indenture.
"Letter of Representations" means the agreement between the
Trust, the Property Trustee and The Depository Trust Company ("DTC"), as the
initial Clearing Agency, dated as of the Closing Date.
"Lien" means any lien, pledge, charge, encumbrance, mortgage,
deed of trust, adverse ownership interest, hypothecation, assignment, security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever.
"Like Amount" means (a) 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 Debt Securities to be
contemporaneously redeemed in accordance with the Indenture allocated to the
Trust Securities based upon their relative Liquidation Amounts and the proceeds
of which will be used to pay the Redemption Price of such Trust Securities, and
(b) with respect to a distribution of Junior Subordinated Debt Securities to
Holders in connection with a dissolution or liquidation of the Trust, Junior
Subordinated Debt Securities having a principal amount equal to the Liquidation
Amount of the Trust Securities of the Holder to whom such Junior Subordinated
Debt Securities are distributed.
"Liquidation Amount" means the stated amount of $25.00 per
Trust Security.
"Liquidation Date" means the date on which Junior Subordinated
Debt Securities are to be distributed to Holders of Trust Securities in
connection with a termination and liquidation of the Trust pursuant to Section
9.04(a).
"Liquidation Distribution" has the meaning specified in
Section 9.04(d).
"1940 Act" means the Investment Company Act of 1940.
"Officers' Certificate" means a certificate signed by the
Chairman and Chief Executive Officer, President or a Vice President, and by the
Treasurer, an Associate Treasurer, an Assistant Treasurer, the Controller, the
Secretary or an
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Assistant Secretary, of the Depositor, and delivered to the appropriate Trustee.
One of the officers signing an Officers' Certificate given pursuant to Section
8.16 shall be the principal executive, financial or accounting officer of the
Depositor. Any Officers' Certificate delivered with respect to compliance with a
condition or covenant provided for in this Declaration of Trust 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;
(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 counsel for the Trust, the Property Trustee or the Depositor, but not an
employee of any thereof, and which opinion shall be reasonably acceptable to the
Property Trustee.
"Original Declaration of Trust" has the meaning specified in
the preamble to this Declaration of Trust.
"Other Capital Securities" means Capital Securities that are
not Global Capital Securities.
"Outstanding", with respect to Capital Securities, means, as
of the date of determination, all Capital Securities theretofore executed and
delivered under this Declaration of Trust, except;
(a) Capital Securities theretofore canceled by the Property
Trustee or delivered to the Property Trustee for cancellation;
(b) Capital Securities for whose payment or redemption money
in the necessary amount has been theretofore deposited with the
Property Trustee or any Paying Agent for the benefit of the Holders of
such Capital Securities; provided that, if such Capital Securities are
to be redeemed, notice of such redemption has been duly given pursuant
to this Declaration of Trust; and
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(c) Capital Securities that have been paid or in exchange
for or in lieu of which other Capital Securities have been executed and
delivered pursuant to Sections 5.02, 5.04, 5.05, 5.11 and 5.13;
provided, however, that in determining whether the Holders of the
requisite Liquidation Amount of the Outstanding Capital Securities have
given any request, demand, authorization, direction, notice, consent or
waiver hereunder, Capital Securities owned by the Depositor, any
Trustee or any Affiliate of the Depositor or any Trustee shall be
disregarded and deemed not to be Outstanding, except that (a) in
determining whether any Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or
waiver, only Capital Securities that a Responsible Officer of such
Trustee actually knows to be so owned shall be so disregarded and (b)
the foregoing shall not apply at any time when all of the outstanding
Capital Securities are owned by the Depositor, one or more of the
Trustees and/or any such Affiliate. Capital Securities so owned that
have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the satisfaction of the Administrative Trustees
the pledgee's right so to act with respect to such Capital Securities
and that the pledgee is not the Depositor or any Affiliate of the
Depositor.
"Owner" means each Person who is the beneficial owner of a
Global Capital Security as reflected in the records of the Clearing Agency or,
if a Clearing Agency Participant is not the Owner, then as reflected in the
records of a Person maintaining an account with such Clearing Agency (directly
or indirectly), in accordance with the rules of such Clearing Agency.
"Paying Agent" means any paying agent or co-paying agent
appointed pursuant to Section 5.10 and shall initially be the Trust Company.
"Payment Account" means a segregated corporate trust account,
without interest, maintained by the Property Trustee with the Trust Company in
its trust department for the benefit of the Securityholders in which all amounts
paid in respect of the Junior Subordinated Debt Securities will be held and from
which the Property Trustee shall make payments to the Securityholders in
accordance with Sections 4.01 and 4.02.
"Person" means any individual, corporation, partnership, joint
venture, trust, limited liability company or corporation, unincorporated
organization or government or any agency or political subdivision thereof.
"Property Trustee" means the commercial bank or trust company
identified as the "Property Trustee" in the preamble to this Declaration of
Trust solely in its capacity as Property Trustee of the Trust continued
hereunder and not in its individual capacity, or its successor in interest in
such
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capacity, or any successor property trustee appointed as herein provided.
"Quotation Agent" means Wilmington Trust Company, a Delaware
corporation, and its successors; provided, however, that if the foregoing shall
cease to be a primary U.S. Government securities dealer (a "Primary Treasury
Dealer"), the Depositor shall substitute therefor another Primary Treasury
Dealer.
"Redemption Date" means, with respect to any Trust Security to
be redeemed, the date fixed for such redemption by or pursuant to this
Declaration of Trust, provided, however, that each Junior Subordinated Debt
Securities Redemption Date and the Stated Maturity of the Junior Subordinated
Debt Securities shall be a Redemption Date for a Like Amount of Trust
Securities.
"Redemption Price" means:
(a) in the case of a redemption, other than as provided in
Paragraph (b) below, the following prices expressed in percentages of the
Liquidation Amount, together with accumulated Distributions to but excluding the
date fixed for redemption, if redeemed during the 12-month period beginning
________ 15:
Year Redemption Price
2004 _______%
2005 _______%
2006 _______%
2007 _______%
2008 _______%
2009 _______%
2010 _______%
2011 _______%
2012 _______%
2013 _______%
and 100% on or after ________ 15, 2013.
(b) in the case of a redemption prior to ________ 15, 2013
following a Tax Event, Investment Company Event or Capital Treatment Event, an
amount for each Capital Security equal to the Make-Whole Amount for a
corresponding $25.00 principal amount of Junior Subordinated Debentures,
together with accumulated distributions to but excluding the date fixed for
redemption. The "Make-Whole Amount" will be equal to the greater of (i) 100% of
the principal amount of such Junior Subordinated Debentures, and (ii) as
determined by a Quotation Agent, the sum of the present values of the principal
amount and premium payable as part of the Redemption Price with respect to an
optional redemption of such Junior Subordinated Debentures on ________ 15,
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2004, together with the present values of scheduled payments of interest (not
including the portion of any such payments of interest accrued as of the
Redemption Date) from the Redemption Date to ________ 15, 2004 (the "Remaining
Life"), in each case discounted to the Redemption Date on a semi-annual basis
(assuming a 360-day year consisting of 30-day months) at the Adjusted Treasury
Rate. The Redemption Price in the case of a redemption on or after ________ 15,
2004 following a Tax Event, Investment Company Event or Capital Treatment Event
shall equal the Redemption Price then applicable to a redemption under Paragraph
(a) above.
"Reference Treasury Dealer" means (i) the Quotation Agent and
(ii) any other Primary Treasury Dealer selected by the Debenture Trustee after
consultation with the Depositor.
"Reference Treasury Dealer Quotations" means, with respect to
each Reference Treasury Dealer and any Redemption Date, the average, as
determined by the Debenture Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Debenture Trustee by such Reference
Treasury Dealer at 5:00 p.m., Richmond, Virginia time, on the third Business Day
preceding such Redemption Date.
"Relevant Trustee" has the meaning specified in Section 8.10.
"Responsible Officer" means, when used with respect to the
Property Trustee, any officer assigned to the Corporate Trust Office, including
any managing director, vice president, assistant vice president, assistant
treasurer, assistant secretary or any other officer of the Property Trustee
customarily performing functions similar to those performed by any of the above
designated officers and having direct responsibility for the administration for
this Declaration of Trust, and also, with respect to a particular matter, any
other officer to whom such matter is referred because of such officer's
knowledge of and familiarity with the particular subject.
"Securities Act" means the Securities Act of 1933.
"Securities Register" and "Securities Registrar" have the
respective meanings specified in Section 5.05.
"Securityholder" or "Holder" means a Person in whose name a
Trust Security or Trust Securities is registered in the Securities Register; any
such Person shall be deemed to be a beneficial owner within the meaning of the
Delaware Business Trust Act; provided, however, that in determining whether the
Holders of the requisite amount of Capital Securities have voted on any matter
provided for in this Declaration of Trust, then for the purpose of any such
determination, so long as Definitive Capital Securities Certificates have not
been issued, the term
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Securityholders or Holders as used herein shall refer to the Owners.
"Stated Maturity" has the meaning specified in Section 1.01 of
the Indenture.
"Tax Event" has the meaning specified in Section 1.01 of the
Indenture.
"Transfer Agent" means the Trust Company as set forth in the
preamble to this Declaration of Trust.
"Treasury Rate" means (i) the yield, under the heading that
represents the average for the week immediately prior to the calculation date,
appearing in the most recently published statistical release designated "H.15
(519)" or any successor publication that is published weekly by the Board of
Governors of the Federal Reserve System and that establishes yields on actively
traded United States Treasury securities adjusted to constant maturity under the
caption "Treasury Constant Maturities," for the maturity corresponding to the
Remaining Life (if no maturity is within three months before or after the
Remaining Life, yields for the two published maturities most closely
corresponding to the Remaining Life shall be determined and the Treasury Rate
shall be interpolated or extrapolated from such yields on a straight-line basis,
rounding to the nearest month) or (ii) if such release (or any successor
release) is not published during the week preceding the calculation date or does
not contain such yields, the rate per annum equal to the semi-annual equivalent
yield to maturity of the Comparable Treasury Issue, calculated using a price for
the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such Redemption Date. The
Treasury Rate shall be calculated on the third Business Day preceding the
Redemption Date.
"Trust" means Resource Capital Trust I.
"Trust Company" has the meaning specified in the preamble to
this Declaration of Trust.
"Trust Indenture Act" has the meaning specified in Section
1.01 of the Indenture.
"Trust Property" means (a) the Junior Subordinated Debt
Securities, (b) the rights of the Property Trustee under the Guarantee, (c) any
cash or deposit in, or owing to, the Payment Account and (d) all proceeds and
rights in respect of the foregoing.
"Trust Securities Certificate" means any one of the Common
Securities Certificates or the Capital Securities Certificates.
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"Trust Security" means any one of the Common Securities or the
Capital Securities.
"Trustees" means, collectively, the Property Trustee, the
Delaware Trustee and the Administrative Trustees.
"Underwriter" shall mean McKinnon & Company, Inc., a Virginia
corporation.
"Underwriting Agreement" means the Underwriting Agreement,
dated as of ________ __, 199_, between the Trust, the Depositor and the
Underwriter.
ARTICLE II
Continuation of the Trust
SECTION 2.01. Name. The Trust continued hereby shall be known
as "Resource Capital Trust I", as such name may be modified from time to time by
the Administrative Trustees following written notice to the Holders and the
other Trustees, in which name the Trustees may conduct the business of the
Trust, make and execute contracts and other instruments on behalf of the Trust
and sue and be sued.
SECTION 2.02. Office of the Delaware Trustee; Principal Place
of Business. The address of the Delaware Trustee in the State of Delaware is
Wilmington Trust Company, 1100 N. Market Street, Attention: Corporate Trust
Administration, Wilmington, Delaware 19890, or such other address in the State
of Delaware as the Delaware Trustee may designate by written notice to the
Securityholders and the Depositor. The principal executive office of the Trust
is in care of Resource Bankshares Corporation, 3720 Virginia Beach Boulevard,
Virginia Beach, Virginia 23452.
SECTION 2.03. Organizational Expenses. The Depositor, as
borrower on the Junior Subordinated Debt Securities, shall pay all expenses of
the Trust as they arise or shall, upon request of any Trustee, promptly
reimburse such Trustee for any such expenses paid by such Trustee. The Depositor
shall make no claim upon the Trust Property for the payment of such expenses.
SECTION 2.04. Issuance of the Capital Securities. The Capital
Securities to be issued will be limited to $8,000,000.00 aggregate Liquidation
Amount outstanding at any one time.
On ________ __, 199_, the Depositor, on behalf of the Trust,
and pursuant to the Original Declaration of Trust, and the Underwriter executed
and delivered the Underwriting Agreement. Contemporaneously with the execution
and delivery of this Declaration of Trust, an Administrative Trustee, on behalf
of the
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Trust, shall execute or cause to be executed in accordance with Section 5.02 and
delivered to the Escrow Agent, a Definitive Capital Securities Certificate,
registered in the names of the purchasers thereof, in an aggregate amount of
Capital Securities having an aggregate Liquidation Amount of $8,000,000.00
against receipt of the aggregate purchase price of such Capital Securities equal
to 100% of the Liquidation Amount multiplied by the number of Capital Securities
being purchased, which amount the Administrative Trustee shall promptly deliver
to the Property Trustee.
SECTION 2.05. Issuance of the Common Securities; Subscription
and Purchase of Junior Subordinated Debt Securities. Contemporaneously with the
execution and delivery of this Declaration of Trust, an Administrative Trustee,
on behalf of the Trust, shall execute or cause to be executed in accordance with
Section 5.02(a) and delivered to the Depositor Common Securities Certificates,
registered in the name of the Depositor, in an aggregate amount of 9,897 Common
Securities having an aggregate Liquidation Amount of $247,425.00 against payment
by the Depositor of $247,425.00 to the Trust. Contemporaneously therewith, an
Administrative Trustee, on behalf of the Trust, shall subscribe to and purchase
from the Depositor Junior Subordinated Debt Securities, registered in the name
of the Property Trustee and held for the benefit of the Holders of the Capital
Securities having an aggregate principal amount equal to $8,247,425.00, and, in
satisfaction of the purchase price for such Junior Subordinated Debt Securities,
the Trust shall deliver to the Depositor the sum of $8,247,425.00.
SECTION 2.06. Declaration of Trust. The exclusive purposes and
functions of the Trust are to (a) issue and sell Trust Securities, (b) use the
proceeds from the sale of Trust Securities to acquire the Junior Subordinated
Debt Securities, (c) receive payments to be made with respect to the Junior
Subordinated Debt Securities, and (d) engage in only those other activities
necessary or incidental thereto such as registering the transfer of the Capital
Securities. The Depositor hereby appoints the Trustees as trustees of the Trust,
to have all the rights, powers and duties to the extent set forth herein, and
the Trustees hereby accept such appointment. The Property Trustee hereby
declares that it will hold the Trust Property in trust upon and subject to the
conditions set forth herein for the benefit of the Trust and the
Securityholders. The Administrative Trustees shall have all rights, powers and
duties set forth herein and in accordance with applicable law with respect to
accomplishing the purposes of the Trust. 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 Property Trustee or the Administrative
Trustees set forth herein. The Delaware Trustee shall be one of the Trustees of
the Trust for the sole and limited purpose of fulfilling the requirements of
Section 3807 of the Delaware Business Trust Act.
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SECTION 2.07. Authorization to Enter into Certain
Transactions. (a) The Trustees shall conduct the affairs of the Trust in
accordance with the terms of this Declaration of Trust. Subject to the
limitations set forth in paragraph (b) of this Section and in accordance with
the following provisions (i) and (ii), the Trustees shall have the authority to
enter into all transactions and agreements determined by the Trustees to be
appropriate in exercising the authority, express or implied, otherwise granted
to the Trustees under this Declaration of Trust, and to perform all acts in
furtherance thereof, including without limitation, the following:
(i) As among the Trustees, each Administrative Trustee shall
have the power and authority to act on behalf of the Trust with respect
to the following matters:
(A) the issuance and sale of the Trust Securities;
(B) to cause the Trust to enter into, and to execute,
deliver and perform on behalf of the Trust, the Underwriting
Agreement, the Letter of Representations and such other
agreements as may be necessary or desirable in connection with
the purposes and function of the Trust;
(C) assisting in the registration of the Capital
Securities under the Securities Act, and under state
securities or blue sky laws, and the qualification of this
Declaration of Trust as a trust indenture under the Trust
Indenture Act;
(D) assisting in the listing, if any, of the Capital
Securities upon such securities exchange or exchanges as shall
be determined by the Depositor and the registration of the
Capital Securities under the Securities Exchange Act of 1934
(the "Exchange Act"), and the preparation and filing of all
periodic and other reports and other documents pursuant to the
foregoing;
(E) the sending of notices (other than notices of
default) and other information regarding the Trust Securities
and the Junior Subordinated Debt Securities to the
Securityholders in accordance with this Declaration of Trust;
(F) the appointment of a Paying Agent, Transfer Agent
and Securities Registrar in accordance with this Declaration
of Trust;
(G) registering transfer of the Trust Securities in
accordance with this Declaration of Trust;
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(H) to the extent provided in this Declaration of
Trust, the winding up of the affairs and liquidation of the
Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware;
(I) unless otherwise determined by the Depositor, the
Property Trustee or the Administrative Trustees or as
otherwise required by the Delaware Business Trust Act or the
Trust Indenture Act, to execute on behalf of the Trust (either
acting alone or together with any or all of the Administrative
Trustees) any documents that the Administrative Trustees have
the power to execute pursuant to this Declaration of Trust;
and
(J) the taking of any action incidental to the
foregoing as the Trustees may from time to time determine is
necessary or advisable to give effect to the terms of this
Declaration of Trust for the benefit of the Securityholders
(without consideration of the effect of any such action on any
particular Securityholders).
(ii) As among the Trustees, the Property Trustee shall have
the power, duty and authority to act on behalf of the Trust with
respect to the following matters:
(A) the establishment of the Payment Account;
(B) the receipt of the Junior Subordinated Debt
Securities;
(C) the collection of interest, principal and any
other payments made in respect of the Junior Subordinated Debt
Securities in the Payment Account;
(D) the distribution of amounts owed to the
Securityholders in respect of the Trust Securities;
(E) the exercise of all of the rights, powers and
privileges of a holder of the Junior Subordinated Debt
Securities;
(F) the sending of notices of default and other
information regarding the Trust Securities and the Junior
Subordinated Debt Securities to the Securityholders in
accordance with this Declaration of Trust;
(G) the distribution of the Trust Property in
accordance with the terms of this Declaration of Trust;
(H) to the extent provided in this Declaration of
Trust, the winding up of the affairs of and liquidation
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of the Trust and the preparation, execution and filing of the
certificate of cancellation with the Secretary of State of the
State of Delaware;
(I) after an Event of Default (other than an Event of
Default pursuant to paragraph (b), (c), (d) or (e) of the
definition of such term if such Event of Default is by or with
respect to the Property Trustee) the taking of any action
incidental to the foregoing as the Property Trustee may from
time to time determine is necessary or advisable to give
effect to the terms of this Declaration of Trust and protect
and conserve the Trust Property for the benefit of the
Securityholders (without consideration of the effect of any
such action on any particular Securityholder); and
(J) except as otherwise provided in this Section
2.07(a)(ii), the Property Trustee shall have none of the
duties, liabilities, powers or authority of the Administrative
Trustees set forth in Section 2.07(a)(i).
(b) So long as this Declaration of Trust remains in effect,
the Trust (or the Trustees acting on behalf of the Trust) shall not undertake
any business, activities or transactions except as expressly provided herein or
contemplated hereby. In particular, the Trustees shall not (i) acquire any
investments or engage in any activities not authorized by this Declaration of
Trust, (ii) sell, assign, transfer, exchange, mortgage, pledge, set-off or
otherwise dispose of any of the Trust Property or interests therein, including
to Securityholders, except as expressly provided herein, (iii) intentionally
take any action that would cause the Trust to fail or cease to qualify as a
"grantor trust" or as other than an association taxable as a corporation for
United States federal income tax purposes, (iv) incur any indebtedness for
borrowed money or issue any other debt, (v) take or consent to any action that
would result in the placement of a Lien on any of the Trust Property, (vi)
invest any proceeds received by the Trust from holding the Junior Subordinated
Debt Securities, but shall distribute all such proceeds to Holders pursuant to
the terms of this Declaration of Trust and of the Trust Securities, (vii)
acquire any assets other than the Trust Property, (viii) possess any power or
otherwise act in such a way as to vary the Trust Property, (ix) possess any
power or otherwise act in such a way as to vary the terms of the Trust
Securities in any way whatsoever (except to the extent expressly authorized in
this Declaration of Trust or by the terms of the Trust Securities), (x) issue
any securities or other evidences of beneficial ownership of, or beneficial
interest in, the Trust other than the Trust Securities, or (xi) other than as
provided in this Declaration of Trust or by the terms of the Trust Securities,
so long as any Junior Subordinated Debt Securities are held by the Property
Trustee, (A) direct the time, method and place of exercising any trust or power
conferred upon
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the Debenture Trustee with respect to the Junior Subordinated Debt Securities,
(B) waive any past default that is waivable under the Indenture, (C) exercise
any right to rescind or annul any declaration that the principal of all Junior
Subordinated Debt Securities shall be due and payable, or (D) consent to any
amendment, modification, or termination of the Indenture or the Junior
Subordinated Debt Securities where such consent shall be required unless the
Trust shall have received an Opinion of Counsel of a independent law firm to the
effect that such amendment, modification or termination will not cause more than
an insubstantial risk that the Trust will be deemed an Investment Company
required to be registered under the 1940 Act, that the Trust will not be
classified as a grantor trust or will be classified as an association taxable as
a corporation for United States federal income tax purposes or that the Junior
Subordinated Debt Securities will not be classified as indebtedness for such
purposes. The Administrative Trustees shall defend all claims and demands of all
Persons at any time claiming any Lien on any of the Trust Property adverse to
the interest of the Trust or the Securityholders in their capacity as
Securityholders.
(c) In connection with the issuance and sale of the Trust
Securities, the Depositor shall have the right and responsibility to assist the
Trust with respect to, or effect on behalf of the Trust, the following (and any
actions taken by the Depositor in furtherance of the following prior to the date
of this Declaration of Trust are hereby ratified and confirmed in all respects):
(i) the preparation by the Trust of a prospectus relating to
the Trust Securities and the preparation and filing by the Trust with
the Commission and the execution on behalf of the Trust of a
registration statement on the appropriate form in relation to the Trust
Securities, including any amendments thereto;
(ii) the determination of the states in which to take
appropriate action to qualify or register for sale all or part of the
Trust Securities and the determination of any and all such acts, other
than actions that must be taken by or on behalf of the Trust, and the
advice to the Trustees of actions they must take on behalf of the
Trust, and the preparation for execution and filing of any documents to
be executed and filed by the Trust or on behalf of the Trust, as the
Depositor deems necessary or advisable in order to comply with the
applicable laws of any such states;
(iii) the preparation for filing by the Trust with the
Commission and the execution on behalf of the Trust of a registration
statement on Form 8-A relating to the registration of the Trust
Securities under Section 12(b) or 12(g) of the Exchange Act, including
any amendments thereto;
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(iv) the negotiation of the terms of, and the execution and
delivery of, the Underwriting Agreement providing for the sale of the
Trust Securities and such other agreements as may be necessary or
desirable in connection with the consummation of the transactions
contemplated thereby, all in its capacity as Depositor and on behalf of
the Trust; and
(v) the taking of any other actions necessary or desirable
to carry out any of the foregoing activities.
(d) Notwithstanding anything herein to the contrary, each
Administrative Trustee is authorized and directed to conduct the affairs of the
Trust and to operate the Trust so that the Trust will not (i) be deemed to be an
"investment company" required to be registered under the 1940 Act, or (ii) fail
to be classified as a grantor trust or as other than an association taxable as a
corporation for United States federal income tax purposes and so that the Junior
Subordinated Debt Securities will be treated as indebtedness of the Depositor
for United States federal income tax purposes. In this connection, the Depositor
and each of the Administrative Trustees are authorized to take any action, not
inconsistent with applicable law, the Certificate of Trust or this Declaration
of Trust, that each of the Depositor and each Administrative Trustee determines
in its discretion to be necessary or desirable for such purposes, as long as
such action does not adversely affect in any material respect the interests of
the Holders of the Trust Securities.
SECTION 2.08. Assets of Trust. The assets of the Trust shall
consist solely of the Trust Property.
SECTION 2.09. Title to Trust Property. Legal title to all
Trust Property shall be vested at all times in the Property Trustee (in its
capacity as such) and shall be held and administered by the Property Trustee for
the benefit of the Trust and the Securityholders in accordance with this
Declaration of Trust.
ARTICLE III
Payment Account
SECTION 3.01. Payment Account. (a) On or prior to the Closing
Date, the Property Trustee shall establish the Payment Account. The Property
Trustee and any agent of the Property Trustee shall have exclusive control and
sole right of withdrawal with respect to the Payment Account for the purpose of
making deposits in and withdrawals from the Payment Account in accordance with
this Declaration of Trust. All moneys and other property deposited or held from
time to time in the Payment Account shall be held by the Property Trustee in the
Payment
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Account for the exclusive benefit of the Securityholders and for distribution as
herein provided, including (and subject to) any priority of payments provided
for herein or by applicable law.
(b) The Property Trustee shall deposit in the Payment
Account, promptly upon receipt, all payments of principal of or interest on, and
any other payments or proceeds with respect to, the Junior Subordinated Debt
Securities. Amounts held in the Payment Account shall not be invested by the
Property Trustee pending distribution thereof.
ARTICLE IV
Distributions; Redemption
SECTION 4.01. Distributions. (a) Distributions on the Trust
Securities shall be cumulative and will accumulate whether or not there are
funds of the Trust available for the payment of Distributions. Distributions
shall accrue from ________ __, 1999, and, except in the event (and to the
extent) that the Depositor exercises its right to defer the payment of interest
on the Junior Subordinated Debt Securities pursuant to the Indenture, shall be
payable quarterly in arrears on the 15th day of ________, ________, ________ and
________ of each year, commencing on ________ 15, 1999. If any date on which a
Distribution is otherwise payable is not a Business Day, then the payment of
such Distribution shall 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), 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 this Section 4.01(a), a
"Distribution Date"). Accrued Distributions that are not paid on the applicable
Distribution Date will bear interest on the amount thereof (to the extent
permitted by law) at a fixed annual rate equal to _.__%, compounded quarterly
from the relevant Distribution Date in accordance with Section 2.02 of the
Indenture.
(b) The Trust Securities represent undivided beneficial
ownership interests in the Trust Property, and, assuming payments of interest on
the Junior Subordinated Debt Securities are made when due (and before giving
effect to Additional Distributions, defined below, if applicable), Distributions
on each of the Trust Securities shall be payable at a fixed annual rate equal to
$_._____ (which is _.__% of the Liquidation Amount of each of the Trust
Securities) in accordance with Section 2.02 of the Indenture. The amount of
Distributions payable for any period shall be computed on the basis of the
actual number of days elapsed in a year of twelve 30-day months; except that the
amount of interest payable for any partial period shall be computed on the basis
of the actual number of days elapsed in a 360-day year. The amount of
Distributions payable
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for any period shall include the Additional Distributions, if any.
(c) So long as no Debenture Event of Default has occurred
and is continuing, the Depositor has the right under the Indenture to defer the
payment of interest on the Junior Subordinated Debt Securities at any time and
from time to time for a period not exceeding 20 consecutive quarterly periods
(an "Extension Period"), provided that no Extension Period may extend beyond the
Stated Maturity of the Junior Subordinated Debt Securities. As a consequence of
any such deferral, quarterly Distributions on the Trust Securities by the Trust
will also be deferred during any Extension Period (and the amount of
Distributions to which Holders are entitled will accumulate additional
Distributions thereon at a fixed annual rate equal to _.__% thereof, compounded
quarterly from the relevant payment date for such Distributions during any such
Extension Period, to the extent permitted by applicable law, but not exceeding
the interest rate then accruing on the Junior Subordinated Debt Securities (each
such increase in Distribution, as described in this Section 4.01(c), an
"Additional Distribution"). No interest or other amounts shall be due and
payable during an Extension Period except at the end thereof.
(d) Distributions on the Trust Securities shall be made by
the Property Trustee from the Payment Account and shall be payable on each
Distribution Date only to the extent that the Trust has funds then on-hand and
available in the Payment Account for the payment of such Distributions.
(e) Distributions on the Trust Securities with respect to a
Distribution Date shall be payable to the Holders of record as they appear on
the Securities Register for the Trust Securities at the close of the Business
Day next preceding each 15th day of ________, ________, ________ and ________.
SECTION 4.02. Redemption. (a) On each Junior Subordinated Debt
Securities Redemption Date and on the Stated Maturity of the Junior Subordinated
Debt Securities, the Trust will be required to redeem a Like Amount of Trust
Securities at the applicable Redemption Price.
(b) Other than on the Stated Maturity, notice of redemption
shall be given by the Property Trustee by first class mail, postage prepaid,
mailed not less than 30 nor more than 60 days prior to the Redemption Date to
each Holder of Trust Securities to be redeemed, at such Holder's address
appearing in the Security Register. All notices of redemption shall identify the
Trust Securities to be redeemed (including CUSIP numbers) and shall state:
(i) the Redemption Date;
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(ii) the applicable Redemption Price, or, if the
Redemption Price cannot be calculated prior to the time the
notice is required to be sent, the estimate of the Redemption
Price provided pursuant to the Indenture together with a
statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day
prior to the Redemption Date (and, if an estimate is provided,
a further notice shall be sent of the actual Redemption Price
on the date, or as soon as practicable thereafter, that notice
of such actual Redemption Price is received pursuant to the
Indenture);
(iii) the CUSIP number or CUSIP numbers of the Capital
Securities affected;
(iv) if less than all the Outstanding Trust Securities
are to be redeemed, the identification and the total
Liquidation Amount of the particular Trust Securities to be
redeemed; and
(v) that on the Redemption Date the Redemption Price
will become due and payable upon each such Trust Security to
be redeemed and that Distributions thereon will cease to
accrue on and after such date.
The Trust in issuing the Trust Securities may use "CUSIP",
and/or "private placement" numbers (if then generally in use), and, if so, the
Property Trustee shall indicate the "CUSIP" or "private placement" numbers of
the Trust Securities in notices of redemption and related materials 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 Trust Securities or as contained in any notice of redemption and related
material. The Depositor shall promptly notify the Property Trustee of any change
in such numbers.
(c) The Trust Securities redeemed on each Redemption Date
shall be redeemed at the applicable Redemption Price with the proceeds from the
contemporaneous redemption of Junior Subordinated Debt Securities. Redemptions
of the Trust Securities shall be made and the applicable Redemption Price shall
be payable on each Redemption Date only to the extent that the Trust has funds
then on hand and available in the Payment Account for the payment of such
Redemption Price.
(d) If the Property Trustee gives a notice of redemption in
respect of any Trust Securities, then, by 12:00 noon, Richmond, Virginia time,
on the Redemption Date, subject to Section 4.02(c), the Property Trustee will,
so long as the Capital Securities are in book-entry-only form, irrevocably
deposit with the Clearing Agency for the Capital Securities funds sufficient to
pay the applicable Redemption Price and will give
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such Clearing Agency irrevocable instructions and authority to pay the
Redemption Price to the Holders thereof. With respect to Capital Securities held
in certificated form, the Property Trustee, subject to Section 4.02(c), will
irrevocably deposit with the Paying Agent funds sufficient to pay the applicable
Redemption Price and will give the Paying Agent irrevocable instructions and
authority to pay the Redemption Price to the Holders thereof upon surrender of
their Capital Securities Certificates. Notwithstanding the foregoing,
Distributions payable on or prior to the Redemption Date for any Trust
Securities called for redemption shall be payable to the Holders of such Trust
Securities as they appear on the Securities Register 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 Securityholders holding Trust Securities so called for redemption
will cease, except the right of such Securityholders to receive the applicable
Redemption Price and any Distribution payable on or prior to the Redemption
Date, but without interest, and such Capital Securities will cease to be
outstanding. In the event that any date on which any applicable Redemption Price
is payable is not a Business Day, then payment of the applicable Redemption
Price payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of any such
delay), except that, if such Business Day falls in the next calendar year, such
payment will be made on the immediately preceding Business Day, in each case,
with the same force and effect as if made on such date. In the event that
payment of the applicable Redemption Price in respect of any Trust Securities
called for redemption is improperly withheld or refused and not paid either by
the Trust or by the Depositor pursuant to the Guarantee, Distributions on such
Trust Securities will continue to accrue, at the then applicable rate, from the
Redemption Date originally established by the Trust for such Trust Securities to
the date such applicable Redemption Price is actually paid, in which case the
actual payment date will be the date fixed for redemption for purposes of
calculating the applicable Redemption Price.
(e) Payment of the applicable Redemption Price on, and any
distributions of Junior Subordinated Debt Securities to Holders of, the Trust
Securities shall be made to the Holders thereof as they appear on the Securities
Register on the relevant record date, and, with respect to Trust Securities held
in certificated form, upon surrender of such certificated Trust Securities to
the Paying Agent.
(f) Subject to Section 4.03(a), if less than all the
Outstanding Trust Securities are to be redeemed on a Redemption Date, then the
aggregate Liquidation Amount of Trust Securities to be redeemed shall be
allocated on a pro rata basis (based on Liquidation Amounts) among the Trust
Securities. The particular Trust Securities to be redeemed shall be selected on
a pro rata
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basis (based upon Liquidation Amounts) not more than 60 days prior to the
Redemption Date by the Property Trustee from the Outstanding Trust Securities
not previously called for redemption, by such method as the Property Trustee
shall deem fair and appropriate and which may provide for the selection for
redemption of portions (equal to $25.00 or a multiple of $25.00 in excess
thereof) of the Liquidation Amount of Trust Securities. The Property Trustee
shall promptly notify the Securities Registrar in writing of the Trust
Securities selected for redemption and, in the case of any Trust Securities
selected for partial redemption, the Liquidation Amount thereof to be redeemed.
For all purposes of this Declaration of Trust, unless the context otherwise
requires, all provisions relating to the redemption of Trust Securities shall
relate, in the case of any Trust Securities redeemed or to be redeemed only in
part, to the portion of the Liquidation Amount of Trust Securities that has been
or is to be redeemed.
SECTION 4.03. Subordination of Common Securities. (a) Payment
of Distributions (including Additional Distributions, if applicable) on, and the
Redemption Price of the Trust Securities, as applicable, shall be made subject
to Section 4.02(f), pro rata to the Holders of the Trust Securities based on the
Liquidation Amount of the Trust Securities; provided, however, that if on any
Distribution Date or Redemption Date any Debenture Event of Default (or other
event that, with notice or the passage of time or both, would become such an
Event of Default) or an Event of Default shall have occurred and be continuing,
no payment of any Distribution (including Additional Distributions, if
applicable) on, or Redemption Price of, any of the Common Securities, and no
other payment on account of the redemption, liquidation or other acquisition of
such Common Securities, shall be made unless payment in full in cash of all
accumulated and unpaid Distributions (including Additional Distributions, if
applicable) on all outstanding Capital Securities for all Distribution Dates
occurring on or prior thereto, or, in the case of payment of the applicable
Redemption Price the full amount of such Redemption Price on all outstanding
Capital Securities, shall have been made or provided for, and all funds
immediately available to the Property Trustee shall first be applied to the
payment in full in cash of all Distributions (including Additional
Distributions, if applicable) on, or the Redemption Price of, Capital Securities
then due and payable.
(b) In the case of the occurrence of any Event of Default
resulting from any Debenture Event of Default, the Holder of Common Securities
will be deemed to have waived any right to act with respect to any such Event of
Default under this Declaration of Trust until all such Events of Default with
respect to the Capital Securities have been cured, waived or otherwise
eliminated. Until all such Events of Default under this Declaration of Trust
with respect to the Capital Securities have been so cured, waived or otherwise
eliminated, the Property Trustee shall act solely on behalf of the Holders of
the Capital
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Securities and not on behalf of the Holder of the Common Securities, and only
the Holders of the Capital Securities will have the right to direct the Property
Trustee to act on their behalf.
SECTION 4.04. Payment Procedures. In the event Definitive
Capital Securities Certificates are issued, payments of Distributions (including
Additional Distributions, if applicable) in respect of the Capital Securities
shall be made by check mailed to the address of the Person entitled thereto at
such address as shall appear on the Securities Register. If the Capital
Securities are held by a Clearing Agency, such Distributions shall be made to
the Clearing Agency in immediately available funds, which shall credit the
relevant Persons' accounts at such Clearing Agency on the applicable
Distribution Dates. Payments in respect of the Common Securities shall be made
in such manner as shall be mutually agreed between the Property Trustee and the
Common Securityholder.
SECTION 4.05. Tax Returns and Reports. The Administrative
Trustees shall prepare (or cause to be prepared), at the Depositor's expense,
and file all United States federal, state and local tax and information returns
and reports required to be filed by or in respect of the Trust. In this regard,
the Administrative Trustees shall (a) prepare and file (or cause to be prepared
and filed) the appropriate Internal Revenue Service forms required to be filed
in respect of the Trust in each taxable year of the Trust and (b) prepare and
furnish (or cause to be prepared and furnished) to each Securityholder all
Internal Revenue Service forms required to be provided by the Trust. The
Administrative Trustees shall provide the Depositor and the Property Trustee
with a copy of all such returns and reports promptly after such filing or
furnishing. The Administrative Trustees shall comply with United States federal
withholding and backup withholding tax laws and information reporting
requirements with respect to any payments to Securityholders.
SECTION 4.06. Payment of Taxes; Duties of the Trust. Pursuant
to Section 10.06 of the Indenture, the Depositor, as borrower on the Junior
Subordinated Debt Securities, has agreed to, and it shall, promptly pay any
taxes, duties or governmental charges of whatever nature (other than United
States withholding taxes) imposed on the Trust by the United States or any other
taxing authority.
SECTION 4.07. Payments Under Indenture. Any amount payable
hereunder to any Holder (and any Owner with respect thereto) shall be reduced by
the amount of any corresponding payment such Holder (and Owner) has directly
received pursuant to Section 5.08 of the Indenture or Section 5.13 of this
Declaration of Trust.
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ARTICLE V
Trust Securities Certificates
SECTION 5.01. Initial Ownership. Upon the formation of the
Trust and until the issuance of the Trust Securities, and at any time during
which no Trust Securities are outstanding, the Depositor shall be the sole
beneficial owner of the Trust.
SECTION 5.02. Trust Securities Certificates. (a) The Capital
Securities Certificates shall be issued only in minimum denominations of $25.00
Liquidation Amount and multiples of $25.00 in excess thereof, and the Common
Securities Certificates shall be issued in denominations of $25.00 Liquidation
Amount. The Trust Securities Certificates shall be executed on behalf of the
Trust by the manual or facsimile signature of at least one Administrative
Trustee. Trust Securities Certificates bearing the manual or facsimile
signatures of individuals who were, at the time when such signatures shall have
been affixed, authorized to sign on behalf of the Trust, shall be validly issued
and entitled to the benefits of this Declaration of Trust, notwithstanding that
such individuals or any of them shall have ceased to be so authorized prior to
the delivery of such Trust Securities Certificates or did not hold such offices
at the date of delivery of such Trust Securities Certificates. A transferee of a
Trust Securities Certificate shall become a Securityholder, and shall be
entitled to the rights and subject to the obligations of a Securityholder
hereunder, upon due registration of such Trust Securities Certificate in such
transferee's name pursuant to Sections 5.04, 5.05 and 5.06.
(b) Upon their original issuance, Capital Securities
Certificates representing Other Capital Securities shall be issued in definitive
form and may not be represented by the Global Security.
(c) A single Common Securities Certificate representing the
Common Securities shall be issued to the Depositor in the form of a definitive
Common Securities Certificate.
SECTION 5.03. Execution and Delivery of Trust Securities
Certificates. At or prior to the Closing Date, the Administrative Trustees shall
cause Trust Securities Certificates, in an aggregate Liquidation Amount as
provided in Sections 2.04 and 2.05, to be executed on behalf of the Trust and
delivered to the Property Trustee and upon such delivery the Property Trustee
shall countersign such Trust Securities Certificates and make available for
delivery such Trust Securities Certificates upon the written order of the
Depositor, signed by its chairman of the board, president, any executive vice
president or any vice president, treasurer or assistant treasurer or controller
without further corporate action by the Depositor, in authorized denominations.
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SECTION 5.04. Global Capital Security. (a) Any Global Capital
Security issued under this Declaration of Trust shall be registered in the name
of Cede & Co. ("Cede") as nominee of the Clearing Agency and delivered to its
custodian therefor, and such Global Capital Security shall constitute a single
Capital Security for all purposes of this Declaration of Trust.
(b) Notwithstanding any other provision in this Declaration
of Trust, the Global Capital Security may not be exchanged in whole or in part
for Capital Securities registered, and no transfer of the Global Capital
Security in whole or in part may be registered, in the name of any Person other
than the Clearing Agency for such Global Capital Security, Cede, or other
nominee thereof unless (i) such Clearing Agency advises the Property Trustee in
writing that such Clearing Agency is no longer willing or able to properly
discharge its responsibilities as Clearing Agency with respect to such Global
Capital Security, and the Depositor is unable to locate a qualified successor,
(ii) the Trust at its sole option advises DTC in writing that it elects to
terminate the book-entry system through the Clearing Agency, or (iii) there
shall have occurred and be continuing a Debenture Event of Default. In addition,
beneficial interests in a Global Capital Security may be exchanged by or on
behalf of DTC for certificated Capital Securities upon request by DTC, but only
upon at least 20 days prior written notice given to the Property Trustee in
accordance with the Applicable Procedures.
(c) If a Global Capital Security is to be exchanged for
Other Capital Securities or canceled in whole, it shall be surrendered by or on
behalf of the Clearing Agency or its nominee to the Securities Registrar for
exchange or cancellation as provided in this Article V. If a Global Capital
Security is to be exchanged for Other Capital Securities or canceled in part, or
if an Other Capital Security is to be exchanged in whole or in part for a
beneficial interest in the Global Capital Security, then either (i) such Global
Capital Security shall be so surrendered for exchange or cancellation as
provided in this Article V or (ii) the aggregate Liquidation Amount thereof
shall be reduced, subject to Section 5.02, or increased by an amount equal to
the portion thereof to be so exchanged or canceled, or equal to the aggregate
Liquidation Amount of such Other Capital Security to be so exchanged for a
beneficial interest therein, as the case may be, by means of an appropriate
adjustment made on the records of the Securities Registrar, whereupon the
Property Trustee, in accordance with the Applicable Procedures, shall instruct
the Clearing Agency or its authorized representative to make a corresponding
adjustment to its records. Upon any such surrender or adjustment of the Global
Capital Security by the Clearing Agency and Clearing Agency Participants,
accompanied by registration instructions executed by an Administrative Trustee
on behalf of the Trust, the Property Trustee shall, subject to this Article V,
countersign and make available for delivery any executed Capital Securities
delivered to it issuable in exchange
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for such Global Capital Security (or any portion thereof) in accordance with the
instructions of the Clearing Agency. The Property Trustee shall not be liable
for any delay in delivery of such instructions and may conclusively rely on, and
shall be fully protected in relying on, such instructions.
(d) The Clearing Agency or its nominee, as the registered
owner of the Global Capital Security, shall be considered the Holder of the
Capital Securities represented by the Global Capital Security for all purposes
under this Declaration of Trust and the Capital Securities, and owners of
beneficial interests in the Global Capital Security shall hold such interests
pursuant to the Applicable Procedures and, except as otherwise provided herein,
shall not be entitled to have any of the individual Capital Securities
represented by the Global Capital Security registered in their names, shall not
receive or be entitled to receive physical delivery of any such Capital
Securities in definitive form and shall not be considered the Holders thereof
under this Declaration of Trust. Accordingly, any such owner's beneficial
interest in the Global Capital Security shall be shown only on, and the transfer
of such interest shall be effected only through, records maintained by the
Clearing Agency or its nominee. The Securities Registrar and the Trustees shall
be entitled to deal with the Clearing Agency for all purposes of this
Declaration of Trust relating to the Global Capital Securities (including the
payment of the Liquidation Amount of and Distributions on the Global Capital
Securities and the giving of instructions or directions to Owners of Global
Capital Securities) as the sole Holder of Global Capital Securities and shall
have no obligations to the Owners thereof. Neither the Property Trustee nor the
Securities Registrar shall have any liability in respect of any transfers
effected by the Clearing Agency.
(e) The rights of Owners of beneficial interests in the
Global Capital Security shall be exercised only through the Clearing Agency and
shall be limited to those established by law and agreements between such owners
and the Clearing Agency. Neither the Clearing Agency nor its nominee will
consent or vote with respect to the Capital Securities. Under its usual
procedures, the Clearing Agency or its nominee would mail an Omnibus Proxy to
the Trust as soon as possible after the relevant record date. The Omnibus Proxy
assigns the consenting or voting rights of the Clearing Agency or its nominee to
those Clearing Agency Participants, identified in a listing attached to such
Omnibus Proxy, to whose accounts the Capital Securities are credited on such
record date.
SECTION 5.05. Registration of Transfer and Exchange Generally;
Certain Transfers and Exchanges; Capital Securities Certificates. (a) The
Property Trustee shall keep or cause to be kept at its Corporate Trust Office a
register or registers for the purpose of registering Capital Securities
Certificates and Common Securities Certificates and transfers and exchanges of
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Capital Securities Certificates and Common Securities Certificates in which the
registrar and transfer agent with respect to the Capital Securities (the
"Securities Registrar"), subject to such reasonable regulations as it may
prescribe, shall provide for the registration of Capital Securities Certificates
and Common Securities Certificates (subject to Section 5.11 in the case of
Common Securities Certificates) and registration of transfers and exchanges of
Capital Securities Certificates and Common Securities Certificates as herein
provided. Such register is herein sometimes referred to as the "Securities
Register." The Property Trustee is hereby appointed "Securities Registrar" for
the purpose of registering Capital Securities and transfers of Capital
Securities as herein provided. The provisions of Sections 8.01, 8.03 and 8.06
shall apply to the Property Trustee also in its role as Securities Registrar.
Upon surrender for registration of transfer of any Capital
Security at the offices or agencies of the Property Trustee designated for that
purpose, the Administrative Trustees shall execute, and the Property Trustee
shall countersign and make available for delivery, in the name of the designated
transferee or transferees, one or more new Capital Securities of any authorized
denominations of like tenor and aggregate liquidation amount and bearing such
restrictive legends as may be required by this Declaration of Trust.
At the option of the Holder, Capital Securities may be
exchanged for other Capital Securities of any authorized denominations, of like
tenor and aggregate Liquidation Amount and bearing such restrictive legends as
may be required by this Declaration of Trust, upon surrender of the Capital
Securities to be exchanged at such office or agency. Whenever any securities are
so surrendered for exchange, an Administrative Trustee shall execute and the
Property Trustee shall countersign and make available for delivery the Capital
Securities that the Holder making the exchange is entitled to receive.
All Capital Securities issued upon any transfer or exchange of
Capital Securities shall be the valid obligations of the Trust, entitled to the
same benefits under this Declaration of Trust as the Capital Securities
surrendered upon such transfer or exchange.
Every Capital Security presented or surrendered for transfer
or exchange shall (if so required by the Property Trustee) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Property Trustee and the Securities Registrar, duly executed by the Holder
thereof or such Holder's attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer
or exchange of Capital Securities, but the Property Trustee or the Securities
Registrar may require payment of a sum sufficient to cover any tax or other
governmental charge that may
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be imposed in connection with any transfer or exchange of Capital Securities.
Neither the Trust nor the Property Trustee shall be required,
pursuant to the provisions of this Section, (i) to issue, register the transfer
of or exchange any Capital Security during a period beginning at the opening of
business 15 days before the day of mailing of a notice of redemption of Capital
Securities pursuant to Article IV and ending at the close of business on the day
of such mailing of the notice of redemption, or (ii) to register the transfer of
or exchange any Capital Security so selected for redemption in whole or in part,
except, in the case of any such Capital Security to be redeemed in part, any
portion thereof not to be redeemed.
(b) Certain Transfers and Exchanges. Subject to Section
5.04(c), but notwithstanding any other provision of this Declaration of Trust,
transfers and exchanges of Capital Securities and beneficial interests in a
Global Capital Security shall be made only in accordance with this Section
5.05(b) and Section 5.04(c).
(i) Non-Global Capital Security to Global Capital Security.
If the Holder of an Other Capital Security (other than the Global
Capital Security) wishes at any time to transfer all or any portion of
such Other Capital Security to a Person who wishes to take delivery
thereof in the form of a beneficial interest in the Global Capital
Security, such transfer may be effected only in accordance with the
provisions of this Clause (b)(i) and subject to the Applicable
Procedures. Upon receipt by the Securities Registrar of (A) such Other
Capital Security as provided in Section 5.05(a) and instructions
satisfactory to the Securities Registrar directing that a beneficial
interest in the Global Capital Security in a specified liquidation
amount not greater than the liquidation amount of such Other Capital
Security be credited to a specified Clearing Agency Participant's
account and (B) a Capital Securities Certificate duly executed by such
Holder or such Holder's attorney duly authorized in writing, then the
Securities Registrar shall cancel such Other Capital Security (and
issue a new Other Capital Security in respect of any untransferred
portion thereof) as provided in Section 5.01(a) and increase the
aggregate liquidation amount of the Global Capital Security by the
specified liquidation amount as provided in Section 5.04(c).
(ii) Non-Global Capital Security to Non-Global Capital
Security. A Capital Security that is not a Global Capital Security may
be transferred, in whole or in part, to a Person who takes delivery in
the form of another Capital Security that is not a Global Capital
Security as provided in Section 5.05(a).
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(iii) Exchanges Between Global Capital Security and Non-Global
Capital Security. A beneficial interest in the Global Capital Security
may be exchanged for a Capital Security that is not a Global Capital
Security as provided in Section 5.04.
SECTION 5.06. Mutilated, Destroyed, Lost or Stolen Trust
Securities Certificates. Provided Definitive Capital Securities Certificates are
issued, if (a) any mutilated Trust Securities Certificate shall be surrendered
to the Securities Registrar, or if the Securities Registrar shall receive
evidence to its satisfaction of the destruction, loss or theft of any Trust
Securities Certificate and (b) there shall be delivered to the Securities
Registrar and the Administrative Trustees such security or indemnity as may be
required by them to save each of them harmless, then in the absence of notice
that such Trust Securities Certificate shall have been acquired by a bona fide
purchaser, the Administrative Trustees, or any one of them, on behalf of the
Trust shall execute and make available for delivery, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Trust Securities Certificate, a
new Trust Securities Certificate of like class, tenor and denomination. In
connection with the issuance of any new Trust Securities Certificate under this
Section, the Administrative Trustees or the Securities Registrar may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection therewith. Any duplicate Trust Securities
Certificate issued pursuant to this Section shall constitute conclusive evidence
of an undivided beneficial interest in the assets of the Trust, as if originally
issued, whether or not the lost, stolen or destroyed Trust Securities
Certificate shall be found at any time.
SECTION 5.07. Persons Deemed Securityholders. The Trustees or
the Securities Registrar shall treat the Person in whose name any Trust
Securities are issued as the owner of such Trust Securities for the purpose of
receiving Distributions and for all other purposes whatsoever, and neither the
Trustees nor the Securities Registrar shall be bound by any notice to the
contrary.
SECTION 5.08. Access to List of Securityholders' Names and
Addresses. Each Owner of Trust Securities acknowledges that the Depositor, the
Property Trustee, the Delaware Trustee or the Administrative Trustees may from
time to time make reasonable use of information consisting of such Owner's name
and address, including the furnishing of a list of such names and addresses as
contemplated hereunder, and each Owner shall be deemed to have agreed not to
hold the Depositor, the Property Trustee or the Administrative Trustees
accountable by reason of the disclosure of its name and address, regardless of
the source from which such information was derived.
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SECTION 5.09. Maintenance of Office or Agency; Transfer Agent.
The Administrative Trustees shall maintain an office or offices or agency or
agencies where Definitive Capital Securities Certificates, if issued, may be
surrendered for registration of transfer or exchange and where notices and
demands to or upon the Trustees in respect of the Trust Securities may be
served. The Administrative Trustees initially designate Wilmington Trust
Company, 1100 N. Market Street, Attention: Corporate Trust Administration,
Wilmington, Delaware 19890, as its corporate trust office for such purposes. The
Administrative Trustees shall give prompt written notice to the Depositor and to
the Securityholders of any change in the location of the Securities Register or
any such office or agency. The Trust Company shall act as initial transfer agent
for the Trust Securities.
SECTION 5.10. Appointment of Paying Agent. The Paying Agent
shall make Distributions to Securityholders from the Payment Account and shall
report the amounts of such Distributions to the Property Trustee and the
Administrative Trustees. Any Paying Agent shall have the revocable power to
withdraw funds from the Payment Account for the purpose of making the
distributions referred to above. The Administrative Trustees may revoke such
power and remove any Paying Agent if such Administrative Trustees determine in
their sole discretion that such Paying Agent shall have failed to perform its
obligations under this Declaration of Trust in any material respect. The Paying
Agent shall initially be the Trust Company, and any co-paying agent chosen by
the Trust Company and acceptable to the Administrative Trustees and the
Depositor. Any Person acting as Paying Agent shall be permitted to resign as
Paying Agent upon 30 days' written notice to the Administrative Trustees, the
Property Trustee and the Depositor. In the event that the Trust Company shall no
longer be the Paying Agent or a successor Paying Agent shall resign or its
authority to act be revoked, the Administrative Trustees shall appoint a
successor that is acceptable to the Property Trustee and the Depositor to act as
Paying Agent (which shall be a bank or trust company). The Administrative
Trustees shall cause such successor Paying Agent or any additional Paying Agent
appointed by the Administrative Trustees to execute and deliver to the Trustees
an instrument in which such successor Paying Agent or additional Paying Agent
shall agree with the Trustees that, as Paying Agent, such successor Paying Agent
or additional Paying Agent will hold all sums, if any, held by it for payment to
the Securityholders in trust for the benefit of the Securityholders entitled
thereto until such sums shall be paid to such Securityholders. The Paying Agent
shall return all unclaimed funds to the Property Trustee and, upon removal of a
Paying Agent, such Paying Agent shall also return all funds in its possession to
the Property Trustee. The provisions of Sections 8.01, 8.03 and 8.06 herein
shall apply to the Trust Company also in its role as Paying Agent, for so long
as the Trust Company shall act as Paying Agent and to the extent applicable, to
any other paying agent appointed
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hereunder. Any reference in this Declaration of Trust to the Paying Agent shall
include any co-paying agent, unless the context requires otherwise.
SECTION 5.11. Ownership of Common Securities by Depositor. The
Depositor shall acquire and retain beneficial and record ownership of the Common
Securities. To the fullest extent permitted by law, other than a transfer in
connection with a consolidation or merger of the Depositor into another
corporation, or any conveyance, transfer or lease by the Depositor of its
properties and assets substantially as an entirety to any Person, pursuant to
Section 8.01 of the Indenture, any attempted transfer of the Common Securities
shall be void. The Administrative Trustees shall cause each Common Securities
Certificate issued to the Depositor to contain a legend stating "THIS
CERTIFICATE IS NOT TRANSFERABLE".
SECTION 5.12. Notices to Clearing Agency. To the extent that a
notice or other communication to the Owners is required under this Declaration
of Trust, for so long as Capital Securities are represented by a Global
Securities Certificate, the Trustees shall give all such notices and
communications specified herein to be given to Owners to the Clearing Agency,
and shall have no obligations to give duplicates thereof to the Owners.
SECTION 5.13. Rights of Securityholders. (a) The legal title
to the Trust Property is vested exclusively in the Property Trustee (in its
capacity as such) in accordance with Section 2.09, and the Securityholders shall
not have any right or title therein other than the undivided beneficial
ownership interest in the assets of the Trust conferred by their Trust
Securities, and they shall have no right to call for any partition or division
of property, profits or rights of the Trust, except as described below. The
Trust Securities shall be personal property giving only the rights specifically
set forth therein and in this Declaration of Trust. The Trust Securities shall
have no preemptive or singular rights and, when issued and delivered to
Securityholders against payment of the purchase price therefor will be fully
paid and nonassessable. The Holders, in their capacities as such, 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.
(b) For so long as any Capital Securities remain
Outstanding, if, upon a Debenture Event of Default, the Debenture Trustee fails,
or the Holders of not less than 25% in principal amount of the outstanding
Junior Subordinated Debt Securities fail, to declare the principal amount of all
of the Junior Subordinated Debt Securities to be immediately due and payable,
the Holders of at least 25% in Liquidation Amount of the Capital Securities then
Outstanding shall have such right by a notice in writing to the Depositor and
the Debenture Trustee with a copy to
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the Property Trustee; and upon any such declaration such principal amount of and
the accrued interest on all of the Junior Subordinated Debt Securities shall
become immediately due and payable; provided that the payment of principal and
interest on such Junior Subordinated Debt Securities shall remain subordinated
to the extent provided in the Indenture.
At any time after such a declaration of acceleration with
respect to the Junior Subordinated Debt Securities has been made and before a
judgment or decree for payment of the money due has been obtained by the
Debenture Trustee as provided in the Indenture, the holders of a majority in
principal amount of the outstanding Junior Subordinated Debt Securities, by
written notice to the Property Trustee, the Depositor and the Debenture Trustee,
may rescind and annul such declaration and its consequences if:
(i) the Depositor has paid or deposited with the Debenture
Trustee a sum sufficient to pay
(A) all overdue installments of interest (including
any Additional Interest (as defined in the Indenture)) on all
of the Junior Subordinated Debt Securities,
(B) the principal of any Junior Subordinated Debt
Securities that have become due otherwise than by such
declaration of acceleration and interest thereon at the rate
borne by the Junior Subordinated Debt Securities, and
(C) all sums paid or advanced by the Debenture Trustee
under the Indenture and the reasonable compensation, expenses,
disbursements and advances of the Debenture Trustee, its
agents and counsel; and
(ii) all Events of Default with respect to the Junior
Subordinated Debt Securities, other than the nonpayment of the
principal of the Junior Subordinated Debt Securities that has become
due solely by such acceleration, have been cured or waived as provided
in Section 5.13 of the Indenture.
If such holders of the Junior Subordinated Debt Securities
fail to annul any such declaration and waive such default, the Holders of
Capital Securities representing a majority in aggregate Liquidation Amount of
all the Outstanding Capital Securities shall also have the right to rescind and
annul such declaration and its consequences by written notice to the Depositor,
the Property Trustee and the Debenture Trustee, subject to the satisfaction of
the conditions set forth in Clause (i) and (ii) of this Section 5.13(b).
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Should the holders of a majority in aggregate principal amount
of the outstanding Junior Subordinated Debt Securities fail to take such
actions, the Holders of a majority in aggregate Liquidation Amount of the
Capital Securities may, on behalf of the Holders of all the Capital Securities,
waive any past default under the Indenture, except a default in the payment of
principal 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 that, under the Indenture, cannot be modified
or amended without the consent of the holder of each outstanding Junior
Subordinated Debt Security. No such rescission shall affect any subsequent
default or impair any right consequent thereon.
Upon receipt by the Property Trustee of written notice
declaring such an acceleration, or rescission and annulment thereof, by Holders
of the Capital Securities all or part of which is represented by Global Capital
Securities, a record date shall be established for determining Holders of
Outstanding Capital Securities entitled to join in such notice, which record
date shall be at the close of business on the day the Property Trustee receives
such notice. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such notice, whether or not
such Holders remain Holders after such record date; provided that, unless such
declaration of acceleration, or rescission and annulment, as the case may be,
shall have become effective by virtue of the requisite percentage having joined
in such notice prior to the day that is 90 days after such record date, such
notice of declaration of acceleration, or rescission and annulment, as the case
may be, shall automatically and without further action by any Holder be canceled
and of no further effect. Nothing in this paragraph shall prevent a Holder, or a
proxy of a Holder, from giving, after expiration of such 90 day period, a new
written notice of declaration of acceleration, or rescission and annulment
thereof, as the case may be, that is identical to a written notice that has been
canceled pursuant to the proviso to the preceding sentence, in which event a new
record date shall be established pursuant to the provisions of this Section
5.13(b).
(c) For so long as any Capital Securities remain
Outstanding, to the fullest extent permitted by law and subject to the terms of
this Declaration of Trust and the Indenture, upon a Debenture Event of Default
specified in Section 5.01(1) or 5.01(2) of the Indenture, any Holder of Capital
Securities shall have the right to institute a proceeding directly against the
Depositor, pursuant to Section 5.08 of the Indenture, for enforcement of payment
to such Holder of the principal amount of or interest (including any Additional
Interest) on Junior Subordinated Debt Securities having a principal amount equal
to the aggregate Liquidation Amount of the Capital Securities held by such
Holder (a "Direct Action"). Except as set forth in
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Sections 5.13(b) and 5.13(c) hereof, the Holders of Capital Securities shall
have no right to exercise directly any right or remedy available to the Holders
of, or in respect of, the Junior Subordinated Debt Securities.
(d) A Securityholder may institute a legal proceeding
directly against the Guarantor under the Guarantee to enforce its rights under
the Guarantee without first instituting a legal proceeding against the Trust or
any person or entity.
ARTICLE VI
Acts of Securityholders; Meetings; Voting
SECTION 6.01. Limitations on Capital Securityholder's Voting
Rights. (a) Except as provided in this Declaration of Trust and in the Indenture
and as otherwise required by law, no Holder of Capital Securities shall have any
right to vote or in any manner otherwise control the administration, operation
and management of the Trust or the obligations of the parties hereto, nor shall
anything herein set forth, or contained in the terms of the Trust Securities
Certificates, be construed so as to constitute the Capital Securityholders from
time to time as partners or members of an association. Unless a Debenture Event
of Default shall have occurred and be continuing, any Trustee may be removed at
any time by the vote of the Common Securityholder. The right to vote to appoint,
remove or replace the Administrative Trustees is vested exclusively in the
Depositor as the Holder of the Common Securities.
(b) So long as any Junior Subordinated Debt Securities 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 the Property Trustee with
respect to such Junior Subordinated Debt Securities, (ii) waive any past default
that is waivable under Section 5.13 of the Indenture, (iii) exercise any right
to rescind or annul a declaration that the principal of all the Junior
Subordinated Debt Securities shall be due and payable or (iv) consent to any
amendment, modification or termination of the Indenture or the Junior
Subordinated Debt Securities, where such consent shall be required, without, in
each case, obtaining the prior approval of the Holders of at least a majority in
aggregate Liquidation Amount of all Outstanding Capital Securities; provided,
however, that where a consent under the Indenture would require the consent of
each holder of Junior Subordinated Debt Securities affected thereby, no such
consent shall be given by the Property Trustee without the prior written consent
of each Holder of Capital Securities. The Trustees shall not revoke any action
previously authorized or approved by a vote of the Holders of Capital
Securities, except by a subsequent vote of the Holders of Capital Securities.
The Property Trustee shall notify all
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Holders of the Capital Securities of any notice of default received from the
Debenture Trustee with respect to the Junior Subordinated Debt Securities. In
addition to obtaining the foregoing approvals of the Holders of the Capital
Securities, prior to taking any of the foregoing actions, the Trustees shall, at
the expense of the Depositor, 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 as a
result of such action and that such action would not cause the Trust to be
classified as other than a grantor trust.
(c) If any proposed amendment to the Declaration of Trust
provides for, or the Trustees otherwise propose to effect, (i) any action that
would adversely affect in any material respect the interests, powers,
preferences or special rights of the Trust Securities, whether by way of
amendment to the Declaration of Trust or otherwise, or (ii) the dissolution,
winding-up or termination of the Trust, other than pursuant to the terms of this
Declaration of Trust, then the Holders of Outstanding Trust Securities as a
class will be entitled to vote on such amendment or proposal.
SECTION 6.02. Notice of Meeting. Notice of all meetings of the
Securityholders, stating the time, place and purpose of the meeting, shall be
given by the Property Trustee pursuant to Section 10.09 to each Securityholder
of record, at his registered address, at least 15 days and not more than 90 days
before the meeting. At any such meeting, any business properly before the
meeting may be so considered whether or not stated in the notice of the meeting.
Any adjourned meeting may be held as adjourned without further notice.
SECTION 6.03. Meetings of Securityholders. No annual meeting
of Securityholders is required to be held. The Administrative Trustees, however,
shall call a meeting of Securityholders to vote on any matter upon the written
request of the Securityholders of record of 25% of the Securities (based upon
their Liquidation Amount) and the Administrative Trustees or the Property
Trustee may, at any time in their discretion, call a meeting of Securityholders
to vote on any matters as to which Securityholders are entitled to vote.
Securityholders of record of 50% of the Outstanding Securities
(based upon their Liquidation Amount), present in person or represented by
proxy, shall constitute a quorum at any meeting of Securityholders.
If a quorum is present at a meeting, an affirmative vote by
the Securityholders of record present, in person or by proxy, holding more than
a majority of the Securities (based upon their Liquidation Amount) held by the
Securityholders of record present, either in person or by proxy, at such meeting
shall constitute the action of the Securityholders, unless this
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Declaration of Trust requires a greater number of affirmative votes.
SECTION 6.04. Voting Rights. Securityholders shall be entitled
to one vote for each $25.00 of Liquidation Amount represented by their
Outstanding Trust Securities in respect of any matter as to which such
Securityholders are entitled to vote.
SECTION 6.05. Proxies. At any meeting of Securityholders, any
Securityholder entitled to vote thereat may vote by proxy; provided that no
proxy shall be voted at any meeting unless it shall have been placed on file
with the Administrative Trustees, or with such other officer or agent of the
Trust as the Administrative Trustees may direct, for verification prior to the
time at which such vote shall be taken. Proxies may be solicited in the name of
the Property Trustee or one or more officers of the Property Trustee. Only
Securityholders of record shall be entitled to vote. When Trust Securities are
held jointly by several persons, any one of them may vote at any meeting in
person or by proxy in respect of such Trust Securities, but if more than one of
them shall be present at such meeting in person or by proxy, and such joint
owners or their proxies so present disagree as to any vote to be cast, such vote
shall not be received in respect of such Trust Securities. A proxy purporting to
be executed by or on behalf of a Securityholder shall be deemed valid unless
challenged at or prior to its exercise, and the burden of proving invalidity
shall rest on the challenger. No proxy shall be valid more than three years
after its date of execution.
SECTION 6.06. Securityholder Action by Written Consent. Any
action that may be taken by Securityholders at a meeting may be taken without a
meeting if Securityholders holding more than a majority of all Outstanding
Securities (based upon their Liquidation Amount) entitled to vote in respect of
such action (or such larger proportion thereof as shall be required by any
express provision of this Declaration of Trust) shall consent to the action in
writing.
SECTION 6.07. Record Date for Voting and Other Purposes. For
the purposes of determining the Securityholders who are entitled to notice of
and to vote at any meeting or by written consent, or to participate in any
Distribution in respect of which a record date is not otherwise provided for in
this Declaration of Trust, or for the purpose of any other action, the
Administrative Trustees may from time to time fix a date, not more than 90 days
prior to the date of any meeting of Securityholders or the payment of a
Distribution or other action, as the case may be, as a record date for the
determination of the identity of the Securityholders of record for such
purposes.
SECTION 6.08. Acts of Securityholders. Any request, demand,
authorization, direction, notice, consent, waiver or other action provided or
permitted by this Declaration of Trust
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to be given, made or taken by Securityholders or Owners may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed by
such Securityholders or Owners in person or by an agent duly appointed in
writing; and, except as otherwise expressly provided herein, such action shall
become effective when such instrument or instruments are delivered to an
Administrative Trustee. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Securityholders or Owners signing such instrument or instruments. Proof of
execution of any such instrument or of a writing appointing any such agent shall
be sufficient for any purpose of this Declaration of Trust and (subject to
Section 8.01) conclusive in favor of the Trustees, if made in the manner
provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing may be provided by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other manner that any Trustee receiving the same deems sufficient.
The ownership of Trust Securities shall be proved by the
Securities Registrar.
Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Securityholder of any Trust Security shall
bind every future Securityholder of the same Trust Security and the
Securityholder of every Trust Security issued upon the registration of transfer
thereof or in exchange therefor or in lieu thereof in respect of anything done,
omitted or suffered to be done by the Trustees or the Trust in reliance thereon,
whether or not notation of such action is made upon such Trust Security.
Without limiting the foregoing, a Securityholder entitled
hereunder to take any action hereunder with regard to any particular Trust
Security may do so with regard to all or any part of the Liquidation Amount of
such Trust Security or by one or more duly appointed agents each of which may do
so pursuant to such appointment with regard to all or any part of such
Liquidation Amount.
If any dispute shall arise between the Securityholders and the
Administrative Trustees or among such Securityholders or Trustees with respect
to the authenticity, validity or binding
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nature of any request, demand, authorization, direction, consent, waiver or
other Act of such Securityholder or Trustee under this Article VI, then the
determination of such matter by the Property Trustee shall be conclusive with
respect to such matter.
A Holder may institute a legal proceeding directly against the
Depositor under the Guarantee to enforce its rights under the Guarantee without
first instituting a legal proceeding against the Guarantee Trustee (as defined
in the Guarantee), the Trust, any Trustee or any person or entity.
SECTION 6.09. Inspection of Records. Upon reasonable notice to
the Administrative Trustees and the Property Trustee, the records of the Trust
shall be open to inspection by Securityholders during normal business hours for
any purpose reasonably related to such Securityholder's interest as a
Securityholder.
ARTICLE VII
Representations and Warranties
SECTION 7.01. Representations and Warranties of the Property
Trustee and the Delaware Trustee. The Property Trustee and the Delaware Trustee,
each severally on behalf of and as to itself, hereby represents and warrants for
the benefit of the Depositor and the Securityholders that:
(a) The Property Trustee is a corporation with trust powers,
duly organized, validly existing and in good standing under the laws of
the State of Delaware, with trust power and authority to execute and
deliver, and to carry out and perform its obligations under the terms
of this Declaration of Trust.
(b) the execution, delivery and performance by the Property
Trustee of this Declaration of Trust have been duly authorized by all
necessary corporate action on the part of the Property Trustee; and
this Declaration of Trust has been duly executed and delivered by the
Property Trustee, and constitutes a legal, valid and binding obligation
of the Property Trustee, enforceable against it in accordance with its
terms, subject to applicable bankruptcy, reorganization, moratorium,
insolvency, and other similar laws affecting creditors' rights
generally and to general principles of equity and the discretion of the
court (regardless of whether the enforcement of such remedies is
considered in a proceeding in equity or at law).
(c) The execution, delivery and performance of this
Declaration of Trust by the Property Trustee does not conflict with or
constitute a breach of the certificate of incorporation or by-laws of
the Property Trustee.
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(d) At the Closing Date, the Property Trustee has not
knowingly created any liens or encumbrances on such Trust Securities.
(e) No consent, approval or authorization of, or
registration with or notice to, any state or federal authority is
required for the execution, delivery or performance by the Property
Trustee of this Declaration of Trust.
(f) The Delaware Trustee is duly organized, validly existing
and in good standing under the laws of the State of Delaware, with
trust power and authority to execute and deliver, and to carry out and
perform its obligations under the terms of, this Declaration of Trust.
(g) The execution, delivery and performance by the Delaware
Trustee of this Declaration of Trust have been duly authorized by all
necessary corporate action on the part of the Delaware Trustee; and
this Declaration of Trust 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' right 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).
(h) The execution, delivery and performance or this
Declaration of Trust by the Delaware Trustee do not conflict with or
constitute a breach of the certificate of incorporation or by-laws of
the Delaware Trustee.
(i) No consent, approval or authorization of, or
registration with or notice to, any state or federal banking authority
is required for the execution, delivery or performance by the Delaware
Trustee of this Declaration of Trust.
(j) The Delaware Trustee is an entity that has its principal
place of business in the State of Delaware.
SECTION 7.02. Representations and Warranties of Depositor. The
Depositor hereby represents and warrants for the benefit of the Securityholders
that the Trust Securities Certificates issued at the Closing Date on behalf of
the Trust have been duly authorized and will have been duly and validly
executed, issued and delivered by an Administrative Trustee pursuant to the
terms and provisions of, and in accordance with the requirements of, this
Declaration of Trust, and the Securityholders will be, as of each such date,
entitled to the benefits of this Declaration of Trust.
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ARTICLE VIII
The Trustees
SECTION 8.01. Certain Duties and Responsibilities. (a) The
duties and responsibilities of the Trustees shall be as provided by this
Declaration of Trust and, in the case of the Property Trustee, by the Trust
Indenture Act; provided, however, that the Property Trustee shall not be subject
to the provisions of the Trust Indenture Act until such time as this Declaration
of Trust becomes qualified under the Trust Indenture Act. Notwithstanding the
foregoing, no provisions of this Declaration of Trust shall require the Trustees
to expend or risk their own funds or otherwise incur any financial liability in
the performance of any of their duties hereunder, or in the exercise of any of
their rights or powers, if they shall have reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not reasonably assured to it. Whether or not herein expressly so
provided, every provision of this Declaration of Trust relating to the conduct
or affecting the liability of, or affording protection to, the Trustees shall be
subject to the provisions of this Article. Nothing in this Declaration of Trust
shall be construed to release an Administrative Trustee from liability for his
own grossly negligent action, his own grossly negligent failure to act, or his
own willful misconduct. To the extent that, at law or in equity, an
Administrative Trustee has duties (including fiduciary duties) and liabilities
relating to the Trust or to the Securityholders, such Administrative Trustee
shall not be liable to the Trust or to any Securityholder for such Trustee's
good faith reliance on the provisions of this Declaration of Trust. The
provisions of this Declaration of Trust, to the extent that they restrict the
duties and liabilities of the Administrative Trustees otherwise existing at law
or in equity, are agreed by the Depositor and the Securityholders to replace
such other duties and liabilities of the Administrative Trustees.
(b) All payments made by the Property Trustee or a Paying
Agent in respect of the Trust Securities shall be made only from the revenue and
proceeds from the Trust Property and only to the extent that there shall be
sufficient revenue or proceeds from the Trust Property to enable the Property
Trustee or a Paying Agent to make payments in accordance with the terms hereof.
Each Securityholder, by its acceptance of a Trust Security, agrees that it will
look solely to the revenue and proceeds from the Trust Property to the extent
legally available for distribution to it as herein provided and that the
Trustees are not personally liable to it for any amount distributable in respect
of any Trust Security or for any other liability in respect of any Trust
Security. This Section 8.01(b) does not limit the liability of the Trustees
expressly set forth elsewhere
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in this Declaration of Trust or, in the case of the Property Trustee, in the
Trust Indenture Act, if applicable.
(c) No provision of this Declaration of Trust 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) the Property Trustee shall not be liable for any
error of judgment made in good faith by an authorized officer
of the Property Trustee, unless it shall be proved that the
Property Trustee was negligent in ascertaining the pertinent
facts;
(ii) 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 Trust
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 of Trust;
(iii) the Property Trustee's sole duty with respect to
the custody, safekeeping and physical preservation of the
Junior Subordinated Debt Securities and the Payment 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 of Trust and the Trust Indenture Act;
(iv) the Property Trustee shall not be liable for any
interest on any money received by it except as it may
otherwise agree with the Depositor; and money held by the
Property Trustee need not be segregated from other funds held
by it, except in relation to the Payment Account maintained by
the Property Trustee pursuant to Section 3.01 and except to
the extent otherwise required by law; and
(v) the Property Trustee shall not be responsible for
monitoring the compliance by the Administrative Trustees or
the Depositor with their respective duties under this
Declaration of Trust nor shall the Property Trustee be liable
for the default or misconduct of the Administrative Trustees
or the Depositor.
SECTION 8.02. Events of Default Notices; Deferral of Interest
Payment Notices. Within five Business Days after the occurrence of any Event of
Default actually known to a Responsible Officer of the Property Trustee, the
Property Trustee
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shall transmit, in the manner and to the extent provided in Section 10.09,
notice of such Event of Default to the Securityholders, the Administrative
Trustees and the Depositor, unless such Event of Default shall have been cured
or waived. The Depositor and the Administrative Trustees are required to file
annually with the Property Trustee a certificate as to whether or not they are
in compliance with all the conditions and covenants applicable to them under the
Declaration.
Within five Business Days after the receipt of notice of the
Depositor's exercise of its right to defer the payment of interest on the Junior
Subordinated Debt Securities pursuant to the Indenture, the Administrative
Trustee shall transmit, in the manner and to the extent provided in Section
10.09, notice of such exercise to the Securityholders and the Property Trustee,
unless such exercise shall have been revoked.
SECTION 8.03. Certain Rights of Property Trustee. Subject to
the provisions of Section 8.01:
(a) the Property Trustee may conclusively rely and shall be
fully protected in acting or refraining from acting in good faith upon
any resolution, opinion of Counsel, certificate, written representation
of a Holder or transferee, certificate of auditors or any other
certificate, statement, instrument, opinion, report, notice, request,
consent, order, appraisal, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine
and to have been signed or presented by the proper party or parties;
(b) if (i) in performing its duties under this Declaration
of Trust the Property Trustee is required to decide between alternative
courses of action or (ii) in construing any of the provisions of this
Declaration of Trust the Property Trustee finds the same ambiguous or
inconsistent with any other provisions contained herein or (iii) the
Property Trustee is unsure of the application of any provision of this
Declaration of Trust, then, except as to any matter as to which the
Securityholders are entitled to vote under the terms of this
Declaration of Trust, the Property Trustee shall deliver a notice to
the Depositor requesting written instructions of the Depositor as to
the course of action to be taken, and the Property Trustee shall take
such action, or refrain from taking such action, as the Property
Trustee shall be instructed in writing to take, or to refrain from
taking, by the Depositor; provided, however, that if the Property
Trustee does not receive such instructions of the Depositor within ten
Business Days after it has delivered such notice, or such reasonably
shorter period of time set forth in such notice (which, to the extent
practicable, shall not be less than two Business Days), it may, but
shall be under no duty to, take or refrain from taking such action not
inconsistent with this
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Declaration of Trust as it shall deem advisable and in the best
interests of the Securityholders, in which event the Property Trustee
shall have no liability except for its own bad faith, negligence or
willful misconduct;
(c) any direction or act of the Depositor or the
Administrative Trustee contemplated by this Declaration of Trust shall
be sufficiently evidenced by an Officers' Certificate;
(d) whenever in the administration of this Declaration of
Trust, the Property Trustee shall deem it desirable that a matter be
established before undertaking, 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 Depositor
or the Administrative Trustees (which Officers' Certificate will be
evidence only for purposes of determining entitlement to
indemnification of the Property Trustee from the Depositor but not with
respect to any liability to Securityholders);
(e) 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 re-recording, re-filing or re-registration
thereof;
(f) the Property Trustee may consult with counsel of its
selection (which counsel may be counsel to the Depositor or any of its
Affiliates, and may include any of its employees), and the advice of
such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in
good faith and in reliance thereon, and, in accordance with such
advice, such counsel may be counsel to the Depositor 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 of Trust from any court of competent
jurisdiction;
(g) the Property Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Declaration
of Trust at the request or direction of any of the Securityholders
pursuant to this Declaration of Trust, unless such Securityholders
shall have offered to the Property Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction;
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(h) 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,
consent, order, approval, bond, debenture, note or other evidence of
indebtedness or other paper or document, unless requested in writing to
do so by one or more Securityholders, but the Property Trustee may make
such further inquiry or investigation into such facts or matters as it
may see fit;
(i) the Property Trustee may execute any of its trusts or
powers hereunder or perform any of its duties hereunder either directly
or by or through its agents or attorneys, and the Property Trustee
shall not be responsible for any misconduct or negligence on the part
of, or for the supervision of, any such agent or attorney appointed by
it with due care hereunder;
(j) whenever in the administration of this Declaration of
Trust 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 of the Trust Securities, which
instructions may only be given by the Holders of the same proportion in
Liquidation Amount of the Trust Securities as would be entitled to
direct the Property Trustee under the terms of the Trust Securities in
respect of such remedy, right or action, (ii) may refrain from
enforcing such remedy or right or taking such other action until such
instructions are received, and (iii) shall be fully protected in acting
in accordance with such instructions;
(k) except as otherwise expressly provided by this
Declaration of Trust, the Property Trustee shall not be under any
obligation to take any action that is discretionary under the
provisions of this Declaration of Trust;
(l) when the Property Trustee incurs expenses or renders
services in connection with a Bankruptcy Event, such expenses
(including the fees and expenses of its counsel) and the compensation
for such services are intended to constitute expenses of administration
under any bankruptcy law or law relating to creditors' rights
generally; and
(m) the Property Trustee shall not be charged with knowledge
of an Event of Default unless a Responsible Officer of the Property
Trustee obtains actual knowledge of such event or the Property Trustee
receives written notice of such event from Securityholders holding at
least 25% of the Outstanding Trust Securities (based upon Liquidation
Amount).
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No provision of this Declaration of Trust shall be deemed to
impose any duty or obligation on the Property Trustee to perform any act or acts
or exercise any right, power, duty or obligation conferred or imposed on it, in
any jurisdiction in which it shall be illegal, or in which the Property Trustee
shall be unqualified or incompetent in accordance with applicable law, to
perform any such act or acts, or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Property Trustee
shall be construed to be a duty.
SECTION 8.04. Not Responsible for Recitals. The recitals
contained herein and in the Trust Securities Certificates shall be taken as the
statements of Trust, and the Trustees do not assume any responsibility for their
correctness. The Trustees shall not be accountable for the use or application by
the Depositor of the proceeds of the Junior Subordinated Debt Securities.
SECTION 8.05. May Hold Securities. Except as provided in the
definition of the term "Outstanding" in Article I, any Trustee or any other
agent of any Trustee or the Trust, in its individual or any other capacity, may
become the owner or pledgee of Trust Securities and, subject to Sections 8.08
and 8.13, may otherwise deal with the Trust with the same rights that it would
have if it were not a Trustee or such other agent.
SECTION 8.06. Compensation, Indemnity, Fees. Pursuant to
Section 10.06 of the Indenture, the Depositor, as borrower on the Junior
Subordinated Debt Securities, agrees:
(a) to pay to the Trustees from time to time such
compensation as shall from time to time be agreed to in writing by the
Depositor and the respective Trustees for all services rendered by them
hereunder (which compensation shall not be limited by any provision of
law in regard to the compensation of a trustee of an express trust);
(b) to the fullest extent permitted by applicable law and
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 of Trust (including the reasonable
compensation and the expenses and disbursements of its agents and
counsel), except any such expense, disbursement or advance as may be
attributable (i) to the negligence or willful misconduct of the
Property Trustee, or (ii) to the gross negligence or willful misconduct
of any of the other Trustees;
(c) to the fullest extent permitted by applicable law, to
indemnify and hold harmless each Trustee and any employee or agent of
the Trust or its Affiliates (each referred to
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herein as an "Indemnified Person") from and against any loss, damage,
liability, tax, penalty, expense or claim of any kind or nature
whatsoever incurred by such Indemnified Person by reason of the
creation, operation or termination of the Trust or 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 authority conferred on such
Indemnified Person by this Declaration of Trust, except that (i) the
Property Trustee shall not be entitled to be indemnified in respect of
any loss, damage or claim incurred by the Property Trustee by reason of
negligence or willful misconduct with respect to such acts or
omissions, and (ii) no other Indemnified Person shall be entitled to be
indemnified in respect of any loss, damage or claim incurred by such
Indemnified Person by reason of gross negligence or willful misconduct
with respect to such acts or omissions; and
(d) to the fullest extent permitted by applicable law, to
advance expenses (including legal fees) incurred by an Indemnified
Person in defending any claim, demand, action, suit or proceeding, from
time to time, prior to the final disposition of such claim, demand,
action, suit or proceeding upon receipt by the Depositor of (i) a
written affirmation by or on behalf of the Indemnified Person of its or
his good faith belief that it or he has met the standard of conduct set
forth in this Section 8.06 and (ii) an undertaking by or on behalf of
the Indemnified Person to repay such amount if it shall be determined
that the Indemnified Person is not entitled to be indemnified as
authorized in the preceding subsection.
The provisions of this Section 8.06 shall survive the
termination of this Declaration of Trust or the earlier resignation or removal
of any Trustee.
No Trustee may claim any lien or charge on any Trust Property
as a result of any amount due pursuant to this Section 8.06.
The Depositor and any Trustee (in the case of the Property
Trustee, subject to Section 8.08 hereof) 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 none of the
Trust, the Holders, the Depositor or any such Trustee shall have any rights by
virtue of this Declaration of Trust 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. Neither the Depositor, nor any 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
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presented to the Trust, could be taken by the Trust, and the Depositor or any
Trustee shall have the right to take for its own account (individually or as a
partner or fiduciary) or to recommend to others any such particular investment
or other opportunity. Any Trustee may engage or be interested in any financial
or other transaction with the Depositor or any Affiliate of the Depositor, or
may act as depository for, trustee or agent for, or act on any committee or body
of holders of, securities or other obligations of the Depositor or its
Affiliates.
SECTION 8.07. Corporate Property Trustee Required; Eligibility
of Trustees. (a) There shall at all times be a Property Trustee hereunder with
respect to the Trust Securities. The Property Trustee shall be a Person that is
a national or state chartered bank or trust company and eligible pursuant to the
Trust Indenture Act to act as such and has a combined capital and surplus of at
least $50 million. If any such Person publishes reports of condition at least
annually, pursuant to law or to the requirements of its supervising or examining
authority, then for the purposes of this Section, the combined capital and
surplus of such Person 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
the Property Trustee with respect to the Trust Securities shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereafter specified in this
Article; provided, however, that the Property Trustee need not qualify under the
Trust Indenture Act until such time as this Declaration of Trust is qualified
under the Trust Indenture Act.
(b) There shall at all times be one or more Administrative
Trustees hereunder. Each Administrative 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 persons authorized to bind that entity.
(c) There shall at all times be a Delaware Trustee. The
Delaware Trustee shall either be (i) a natural person who is at least 21 years
of age and a resident of the State of Delaware or (ii) a legal entity with its
principal place of business in the State of Delaware, and that otherwise meets
the requirements of applicable Delaware law, that shall act through one or more
persons authorized to bind such entity.
SECTION 8.08. Conflicting Interests. If the Property Trustee
has or shall acquire a conflicting interest within the meaning of the Trust
Indenture Act, the Property Trustee shall either eliminate such interest or
resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Declaration of Trust.
SECTION 8.09. Co-Trustees and Separate Trustee. Unless an
Event of Default shall have occurred and be continuing,
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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
Property may at the time be located, the Depositor and the Administrative
Trustees, by agreed action of the majority of such Trustees, shall have power to
appoint, and upon the written request of the Administrative Trustees, the
Depositor shall for such purpose join with the Administrative Trustees in the
execution, delivery, and performance of all instruments and agreements necessary
or proper to appoint, one or more Persons approved by the Property Trustee
either to act as co-trustee, jointly with the Property Trustee, of all or any
part of such Trust Property, or to the extent required by law 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 the
capacity aforesaid, any property, title, right or power deemed necessary or
desirable, subject to the other provisions of this Section. If the Depositor
does not join in such appointment within 15 days after the receipt by it of a
request so to do, or in case a Debenture Event of Default has occurred and is
continuing, the Property Trustee alone shall have power to make such
appointment. Any co-trustee or separate trustee appointed pursuant to this
Section shall either be (i) a natural person who is at least 21 years of age and
a resident of the United States or (ii) a legal entity with its principal place
of business in the United States that shall act through one or more persons
authorized to bind such entity.
Should any written instrument from the Depositor be required
by any co-trustee or separate trustee so appointed for more fully confirming to
such co-trustee or separate trustee such property, title, right or power, any
and all such instruments shall, on request, be executed, acknowledged and
delivered by the Depositor.
Every co-trustee or separate trustee shall, to the extent
permitted by law, but to such extent only, be appointed subject to the following
terms, namely:
(a) The Trust Securities shall be executed and made
available for delivery, and all rights, powers, duties, and obligations
hereunder in respect of the custody of securities, cash and other personal
property held by, or required to be deposited or pledged with, the Trustees
specified hereunder shall be exercised solely by such Trustees and not by such
co-trustee or separate trustee.
(b) The rights, powers, duties and obligations hereby
conferred or imposed upon the Property Trustee in respect of any property
covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Property Trustee or by the Property Trustee and such co-trustee
or separate trustee jointly, as shall be provided in the instrument appointing
such co-trustee or separate trustee, except to the
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extent that under any law of any jurisdiction in which any particular act is to
be performed, the Property Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and obligations
shall be exercised and performed by such co-trustee or separate trustee.
(c) The Property Trustee at any time, by an instrument in
writing executed by it, with the written concurrence of the Depositor, may
accept the resignation of or remove any co-trustee or separate trustee appointed
under this Section, and, in case a Debenture Event of Default has occurred and
is continuing, the Property Trustee shall have power to accept the resignation
of, or remove, any such co-trustee or separate trustee without the concurrence
of the Depositor. Upon the written request of the Property Trustee, the
Depositor shall join with the Property Trustee in the execution, delivery and
performance of all instruments and agreements necessary or proper to effectuate
such resignation or removal. A successor to any co-trustee or separate trustee
so resigned or removed may be appointed in the manner provided in this Section.
(d) No co-trustee or separate trustee hereunder shall be
personally liable by reason of any act or omission of the Property Trustee or
any other trustee hereunder.
(e) The Property Trustee shall not be required to supervise
any co-trustee or separate trustee, nor shall it be liable by reason of any act
of a co-trustee or separate trustee or any employees or agents of a co-trustee
or separate trustee.
(f) Any Act of Holders delivered to the Property Trustee
shall be deemed to have been delivered to each such co-trustee and separate
trustee.
SECTION 8.10. Resignation and Removal; Appointment of
Successor. No resignation or removal of any Trustee (the "Relevant Trustee") and
no appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 8.11.
Subject to the immediately preceding paragraph, a Relevant
Trustee may resign at any time by giving written notice thereof to the
Securityholders. If the instrument of acceptance by the successor Trustee
required by Section 8.11 shall not have been delivered to the Relevant Trustee
within 30 days after the giving of such notice of resignation or removal, the
Relevant Trustee may petition, at the expense of the Trust, any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
Unless a Debenture Event of Default shall have occurred and be
continuing, any Trustee may be removed at any time by Act of the Common
Securityholder. If a Debenture Event of Default
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shall have occurred and be continuing, the Property Trustee or the Delaware
Trustee, or both of them, may be removed at such time by Act of the Holders of a
majority in Liquidation Amount of the Outstanding Capital Securities, delivered
to the Relevant Trustee (in its individual capacity and on behalf of the Trust).
An Administrative Trustee may be removed by Act of the Common Securityholder at
any time.
If any Trustee shall resign, be removed or become incapable of
acting as Trustee, or if a vacancy shall occur in the office of any Trustee for
any cause, at a time when no Debenture Event of Default shall have occurred and
be continuing, the Common Securityholder, by Act of the Common Securityholder
delivered to the retiring Trustee, shall promptly appoint a successor Trustee or
Trustees and the retiring Trustee shall comply with the applicable requirements
of Section 8.11. If the Property Trustee or the Delaware Trustee shall resign,
be removed or become incapable of continuing to act as the Property Trustee or
the Delaware Trustee, as the case may be, at a time when a Debenture Event of
Default shall have occurred and be continuing, the Capital Securityholders, by
Act of the Capital Securityholders of a majority in Liquidation Amount of the
Capital Securities then outstanding delivered to the retiring Relevant Trustee,
shall promptly appoint a successor Relevant Trustee or Trustees, and such
successor Trustee shall comply with the applicable requirements of Section 8.11.
If an Administrative Trustee shall resign, be removed or become incapable of
acting as Administrative Trustee, at a time when a Debenture Event of Default
shall have occurred and be continuing, the Common Securityholder, by Act of the
Common Securityholder delivered to such Administrative Trustee, shall promptly
appoint a successor Administrative Trustee or Administrative Trustees and such
successor Administrative Trustee or Trustees shall comply with the applicable
requirements of Section 8.11. If no successor Relevant Trustee shall have been
so appointed by the Common Securityholder or the Capital Securityholders and
accepted appointment in the manner required by Section 8.11, any Securityholder
who has been a Securityholder of Trust Securities for at least six months may,
on behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor Relevant Trustee.
The Property Trustee shall give notice of each resignation and
each removal of a Trustee and each appointment of a successor Trustee to all
Securityholders in the manner provided in Section 10.08 and shall give notice to
the Depositor. Each notice shall include the name of the successor Relevant
Trustee and the address of its Corporate Trust Office if it is the Property
Trustee.
Notwithstanding the foregoing or any other provision of this
Declaration of Trust, in the event any Administrative Trustee or a Delaware
Trustee who is a natural person dies, or becomes, in the opinion of the
Depositor, incompetent or
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incapacitated, or, in the case of an Administrative Trustee, ceases to be an
employee of the Depositor, the vacancy created by such death, incompetence,
incapacity or ceasing to be an employee of the Depositor may be filled by (a)
the unanimous act of remaining Administrative Trustees if there are at least two
of them or (b) otherwise by the Depositor (with the successor in each case being
a Person who satisfies the eligibility requirement for Administrative Trustees
or Delaware Trustee, as the case may be, set forth in Section 8.07).
SECTION 8.11. Acceptance of Appointment by Successor. In the
case of the appointment hereunder of a successor Trustee, such successor Trustee
so appointed shall execute, acknowledge and deliver to the Trust and to the
retiring Trustee any instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become effective, and such
successor Trustee, without any further act, deed or conveyance, shall become
vested with the rights, powers, trusts and duties of the retiring Trustee, but,
on the request of the Depositor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee, and, if the Property Trustee is the resigning Trustee, the
Property Trustee shall duly assign, transfer and deliver to the successor
Property Trustee all Trust Property and money held by such retiring Property
Trustee hereunder.
In case of the appointment hereunder of a successor Relevant
Trustee, the retiring Relevant Trustee and each successor Relevant Trustee with
respect to the Trust Securities shall execute and deliver an amendment hereto
wherein each successor Relevant Trustee shall accept such appointment and which
(a) shall contain such provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Relevant Trustee all the rights,
powers, trusts and duties of the retiring Relevant Trustee with respect to the
Trust Securities and the Trust and (b) shall add to or change any of the
provisions of this Declaration of Trust as shall be necessary to provide for or
facilitate the administration of the Trust by more than one Relevant Trustee, it
being understood that nothing herein or in such amendment shall constitute such
Relevant Trustees co-trustees of the same trust and that each such Relevant
Trustee shall be Trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Relevant Trustee;
and, upon the execution and delivery of such amendment, the resignation or
removal of the retiring Relevant Trustee shall become effective to the extent
provided therein, and each such successor Relevant Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Relevant Trustee; but, on request of the Trust or any
successor Relevant Trustee, such retiring Relevant Trustee shall duly assign,
transfer and deliver to such successor
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Relevant Trustee all Trust Property, all proceeds thereof and money held by such
retiring Relevant Trustee hereunder with respect to the Trust Securities and the
Trust.
Upon written request of any such successor Relevant Trustee,
the Trust shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Relevant Trustee all such rights,
powers and trusts referred to in the first or second preceding paragraph, as the
case may be.
No successor Relevant Trustee shall accept its appointment
unless, at the time of such acceptance, such successor Relevant Trustee shall be
qualified and eligible under this Article.
SECTION 8.12. Merger, Conversion, Consolidation or Succession
to Business. 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 corporation resulting
from any merger, conversion or consolidation to which such Relevant Trustee
shall be a party, or any Person succeeding to all or substantially all the
corporate trust business of such Relevant Trustee, shall be the successor of
such Relevant Trustee 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.
SECTION 8.13. Preferential Collection of Claims Against
Depositor or Trust. 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 Trust 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 Trust 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 Trust 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 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
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(b) to collect and receive any moneys or other property
payable or deliverable on any such claims and to distribute 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 Trust 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.
SECTION 8.14. Reports by Property Trustee. Upon qualification
of this Declaration of Trust under the Trust Indenture Act,
(a) Not later than the last calendar day in ________ of each
year commencing with the last calendar day in ________ of 1999, the Property
Trustee shall transmit to all Securityholders in accordance with Section 10.09,
and to the Depositor, a brief report dated as of the prior ________ __ with
respect to:
(i) its eligibility under Section 8.07 or, in lieu
thereof, if to the best of its knowledge it has continued to
be eligible under such Section, a written statement to such
effect; and
(ii) any change in the property and funds in its
possession as Property Trustee since the date of its last
report and any action taken by the Property Trustee in the
performance of its duties hereunder that it has not previously
reported and that in its opinion materially affects the Trust
Securities.
(b) In addition, the Property Trustee shall transmit to
Securityholders such reports concerning the Property Trustee and its actions
under this Declaration of Trust as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(c) A copy of each such report shall, at the time of such
transmission to the Holders, be filed with the Commission and with the
Depositor.
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SECTION 8.15. Reports to the Property Trustee. Upon
qualification of this Indenture under the Trust Indenture Act, the Depositor and
the Administrative Trustees on behalf of the Trust shall provide to the Property
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(a) of the Trust Indenture Act in the form, in the manner and at the
times required by Section 314 of the Trust Indenture Act.
SECTION 8.16. Evidence of Compliance with Conditions
Precedent. Upon qualification of this Indenture under the Trust Indenture Act,
each of the Depositor and the Administrative Trustees on behalf of the Trust
shall provide to the Property Trustee such evidence of compliance with any
conditions precedent, if any, provided for in this Declaration of Trust that
relate to any of the matters set forth in Section 314(c) of the Trust Indenture
Act. Any certificate or opinion required to be given by an officer pursuant to
Section 314(c)(1) of the Trust Indenture Act shall be given in the form of an
Officers' Certificate.
SECTION 8.17. Number of Trustees. (a) The number of Trustees
shall be four (4); provided that the Holder of all of the Common Securities by
written instrument may increase or decrease the number of Administrative
Trustees. The Property Trustee and the Delaware Trustee may be the same Person.
(b) If a Trustee ceases to hold office for any reason and
the number of Administrative Trustees is not reduced pursuant to Section
8.17(a), or if the number of Trustees is increased pursuant to Section 8.17(a),
a vacancy shall occur. The vacancy shall be filled with a Trustee appointed in
accordance with Section 8.10.
(c) The death, resignation, retirement, removal, bankruptcy,
incompetence or incapacity to perform the duties of a Trustee shall not operate
to 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 8.10, the Administrative
Trustees in office, regardless of their number (and notwithstanding any other
provision of this Agreement), shall have all the powers granted to the
Administrative Trustees and shall discharge all the duties imposed upon the
Administrative Trustees by this Declaration of Trust.
SECTION 8.18. 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 2.07(a), including any
registration statement or amendment thereto filed with the Commission, or making
any other governmental filing; and
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(b) The Administrative Trustees shall have power to delegate
from time to time to such of their number or to the Depositor 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 this Declaration of Trust, as
set forth herein.
ARTICLE IX
Termination, Liquidation and Merger
SECTION 9.01. Termination Upon Expiration Date; Termination
Upon Special Event. Unless earlier terminated, the Trust shall automatically
terminate on ________ 15, 2039 (the "Expiration Date"), following the
distribution of the Trust Property in accordance with Section 9.04.
SECTION 9.02. Early Termination. The first to occur of any of
the following events is an "Early Termination Event":
(a) the occurrence of a Bankruptcy Event in respect of, or
the dissolution or liquidation of, the Depositor or the Holder of the
Common Securities;
(b) the written direction to the Property Trustee from the
Depositor, as borrower with respect to the Junior Subordinated Debt
Securities, at any time (which direction is optional and wholly within
the discretion of the Depositor, subject to receipt of prior approval
of the Federal Reserve if then required under applicable capital
guidelines or policies of the Federal Reserve (including upon the
occurrence and continuation of a Tax Event or a Capital Treatment Event
in respect of the Trust)) to terminate the Trust and, after
satisfaction of liabilities to creditors of the Trust as provided by
applicable law, distribute a Like Amount of the Junior Subordinated
Debt Securities to Securityholders;
(c) the redemption of all of the Trust Securities in
connection with the redemption of all of the Junior Subordinated Debt
Securities (including upon the occurrence and continuation of a Tax
Event or a Capital Treatment Event pursuant to Section 11.07(b) of the
Indenture); and
(d) the entry of an order for dissolution of the Trust by a
court of competent jurisdiction.
SECTION 9.03. Termination. The respective obligations and
responsibilities of the Trustees and the Trust created and continued hereby
shall terminate upon the latest to occur of the
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following: (a) the payment of any expenses owed by the Trust, (b) the
distribution by the Property Trustee to Securityholders upon the liquidation of
the Trust pursuant to Section 9.04, or upon the redemption of all of the Trust
Securities pursuant to Section 4.02, of all amounts required to be distributed
hereunder upon the final payment of the Trust Securities, and (c) the discharge
of all administrative duties of the Administrative Trustees, including the
performance of any tax reporting obligations with respect to the Trust or the
Securityholders.
SECTION 9.04. Liquidation. (a) If an Early Termination Event
specified in clause (a), (b) or (d) of Section 9.02 occurs or upon the
Expiration Date, the Trust shall be liquidated by the Trustees as expeditiously
as the Trustees determine to be possible by distributing, after satisfaction of
liabilities to creditors of the Trust as provided by applicable law, to each
Securityholder a Like Amount of Junior Subordinated Debt Securities, subject to
Section 9.04(d). Notice of liquidation shall be given by the Property Trustee by
first-class mail, postage prepaid, mailed not later than 30 nor more than 90
days prior to the Liquidation Date to each Holder at such Holder's address
appearing in the Securities Register. All notices of liquidation shall:
(i) state the Liquidation Date (which, in the case of any
liquidation following the occurrence of a Special Event, shall not be
more than 90 days following such occurrence);
(ii) state that, from and after the Liquidation Date, the
Trust Securities will no longer be deemed to be Outstanding and any
Trust Securities Certificates not surrendered for exchange will be
deemed to represent a Like Amount of Junior Subordinated Debt
Securities; and
(iii) provide such information with respect to the mechanics
by which Holders may exchange Trust Securities Certificates for Junior
Subordinated Debt Securities, or, if Section 9.04(d) applies, receive a
Liquidation Distribution, as the Administrative Trustees or the
Property Trustee shall deem appropriate.
(b) Except where Section 9.02(c) or 9.04(d) applies, in
order to effect the liquidation of the Trust and distribution of the Junior
Subordinated Debt Securities to Securityholders, the Property Trustee shall
establish a record date for such distribution (which shall be not more than 45
days prior to the Liquidation Date) and, either itself acting as exchange agent
or through the appointment of a separate exchange agent, shall establish such
procedures as it shall deem appropriate to effect the distribution of Junior
Subordinated Debt Securities in exchange for the outstanding Trust Securities
Certificates.
(c) Except where Section 9.02(c) or 9.04(d) applies, after
the Liquidation Date, (i) the Trust Securities will no
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longer be deemed to be Outstanding, (ii) certificates representing a Like Amount
of Junior Subordinated Debt Securities will be issued to Holders, upon surrender
of such certificates to the Administrative Trustees or their agent for exchange,
(iii) any Trust Securities Certificates not so surrendered for exchange will be
deemed to represent a Like Amount of Junior Subordinated Debt Securities
accruing interest at the rate provided for in the Junior Subordinated Debt
Securities from the last Distribution Date on which a Distribution was made on
such Trust Securities Certificates until such certificates are so surrendered
(or until such certificates are so surrendered, no payments of interest or
principal will be made to the Holders of Trust Securities Certificates with
respect to such Junior Subordinated Debt Securities) and (iv) all rights of
Securityholders holding Trust Securities will cease, except the right of such
Securityholders to receive Junior Subordinated Debt Securities upon surrender of
Trust Securities Certificates.
(d) In the event that, notwithstanding the other provisions
of this Section 9.04, whether because of an order for dissolution entered by a
court of competent jurisdiction or otherwise, distribution of the Junior
Subordinated Debt Securities in the manner provided herein is determined by the
Property Trustee not to be practical, the Trust Property shall be liquidated,
and the Trust shall be dissolved, wound-up or terminated, by the Property
Trustee in such manner as the Property Trustee determines. In such event, on the
date of the dissolution, winding-up or other termination of the Trust,
Securityholders will be entitled to receive out of the assets of the Trust
available for distribution to Securityholders after satisfaction of liabilities
to creditors of the Trust as provided by applicable law, an amount equal to the
aggregate of the Liquidation Amount plus accumulated and unpaid Distributions
thereon to the date of payment (such amount being the "Liquidation
Distribution"). If, upon any such dissolution, winding up or termination, the
Liquidation Distribution can be paid only in part because the Trust has
insufficient assets available to pay in full the aggregate Liquidation
Distribution, then, subject to the next succeeding sentence, the amounts payable
by the Trust on the Trust Securities shall be paid on a pro rata basis (based
upon Liquidation Amounts). Holders of the Common Securities will be entitled to
receive Liquidation Distributions upon any such dissolution, winding-up or
termination pro rata (determined as aforesaid) with Holders of Capital
Securities, except that, if a Debenture Event of Default has occurred and is
continuing, the Capital Securities shall have a priority over the Common
Securities, and no payments shall be made with respect to the Common Securities
until Holders of Capital Securities have been paid in full. Any such
determination and liquidation by the Property Trustee shall be conclusive upon
the Securityholders and the Property Trustee shall have no liability in
connection therewith.
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SECTION 9.05. 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 substantially as an entirety to any corporation or other Person, except
pursuant to this Section 9.05. At the request of the Depositor, with the consent
of the Administrative Trustees and without the consent of the Holders of the
Capital Securities, the Property Trustee or the Delaware Trustee, the Trust may
merge with or into, consolidate, amalgamate, or be replaced by or convey,
transfer or lease its properties and assets substantially as an entirety to a
trust organized as such under the laws of any State; provided, however, that (i)
such successor entity either (a) expressly assumes all of the obligations of the
Trust with respect to the Capital Securities or (b) substitutes for the Capital
Securities other securities having substantially the same terms as the Capital
Securities (the "Successor Securities") so long as the Successor Securities rank
the same as the Capital Securities rank in priority with respect to
Distributions and payments upon liquidation, redemption and otherwise, (ii) the
Depositor expressly appoints a trustee of such successor entity possessing the
same powers and duties as the Property Trustee as the holder of the Junior
Subordinated Debt Securities, (iii) the Successor Securities (if Capital
Securities) are listed or traded, or any Successor Securities will be listed or
traded upon notification of issuance, on any national securities exchange or
other organization on which the Capital Securities are then listed or traded, if
any, (iv) such merger, consolidation, amalgamation, replacement, conveyance,
transfer or lease does not cause the Capital Securities (including any Successor
Securities) 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 of the Capital Securities (including any Successor
Securities) in any material respect, (vi) such successor entity has a purpose
identical and limited to that of the Trust, (vii) prior to such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease, the
Depositor has received an Opinion of Counsel to the effect that (a) such merger,
consolidation, amalgamation, replacement, conveyance, transfer or lease does not
adversely affect the rights, preferences and privileges of the Holders of the
Capital Securities (including any Successor Securities) in any material respect,
and (b) following such merger, consolidation, amalgamation, replacement,
conveyance, transfer or lease, neither the Trust nor such successor entity will
be required to register as an investment company under the 1940 Act and (viii)
the Depositor or any permitted successor or assignee owns all of the common
securities of such successor entity and guarantees the obligations of such
successor entity under the Successor Securities at least to the extent provided
by the Guarantee. Notwithstanding the foregoing, the Trust shall not, except
with the consent of Holders of 100% in Liquidation Amount of the Trust
Securities, consolidate, amalgamate, merge
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with or into, or be replaced by or convey, transfer or lease its properties and
assets substantially as an entirety to any other entity or permit any other
entity to consolidate, amalgamate, merge with or into, or replace it if such
consolidation, amalgamation, merger, replacement, conveyance, transfer or lease
would cause the Trust or the successor entity to be classified as an association
taxable as a corporation or as other than a grantor trust for United States
federal income tax purposes.
ARTICLE X
Miscellaneous Provisions
SECTION 10.01. Limitation of Rights of Securityholders. The
death, incapacity, liquidation, dissolution, termination or bankruptcy of any
Person having an interest, beneficial or otherwise, in Trust Securities shall
not operate to terminate this Declaration of Trust, or entitle the legal
representatives or heirs of such person, or any Securityholder for such person,
to claim an accounting, take any action or bring any proceeding in any court for
a partition or winding-up of the arrangements contemplated hereby, or otherwise
affect the rights, obligations and liabilities of the parties hereto or any of
them.
SECTION 10.02. Liability of the Depositor. The Depositor, as
borrower with respect to the Junior Subordinated Debt Securities, shall be
liable for all the debts and obligations of the Trust (other than with respect
to payments of principal, interest, or premium, if any, on the Trust Securities)
to the extent not satisfied out of the Trust's assets.
SECTION 10.03. Amendment. (a) This Declaration of Trust may be
amended from time to time by the Property Trustee, the Administrative Trustees
and the Depositor, without the consent of any Securityholders (i) to cure any
ambiguity, correct or supplement any provision herein that may be inconsistent
with any other provision herein, or to make any other provisions with respect to
matters or questions arising under this Declaration of Trust that shall not be
inconsistent with the other provisions of this Declaration of Trust; or (ii) to
modify, eliminate or add to any provisions of this Declaration of Trust 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 or as other than an
association taxable as a corporation 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 1940 Act; provided, however, that in the case of
clause (i), such action shall not adversely affect in any material respect the
interests of any Securityholder, and any amendments of this Declaration of Trust
shall become effective when notice thereof is given to the Securityholders.
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(b) Except as provided in Section 10.02(c), any provision of
this Declaration of Trust may be amended by the Trustees and the Depositor with
(i) the consent of Securityholders representing not less than a majority (based
upon Liquidation Amounts) of the Trust Securities then Outstanding 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 or as
other than an association taxable as a corporation for United States federal
income tax purposes or the Trust's exemption from the status of an investment
company under the 1940 Act.
(c) In addition to and notwithstanding any other provision
in this Declaration of Trust, without the consent of each affected
Securityholder (such consent being obtained in accordance with Section 6.03 or
6.08), this Declaration of Trust 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 Securityholder
to institute suit for the enforcement of any such payment on or after such date.
Notwithstanding any other provision herein, without the unanimous consent of the
Securityholders (such consent being obtained in accordance with Section 6.03 or
6.08), this paragraph (c) of this Section 10.02 may not be amended.
(d) Notwithstanding any other provisions of this Declaration
of Trust, no Trustee shall enter into or consent to any amendment to this
Declaration of Trust that would cause the Trust to fail or cease to qualify for
the exemption from status of an investment company under the 1940 Act or fail or
cease to be classified as a grantor trust or as other than an association
taxable as a corporation for United States federal income tax purposes.
(e) Notwithstanding anything in this Declaration of Trust to
the contrary, without the consent of the Depositor this Declaration of Trust may
not be amended in a manner that imposes any additional obligation on the
Depositor.
(f) Notwithstanding any other provision of this Declaration
of Trust, no amendment to this Declaration of Trust may be made if, as a result
of such amendment, it would cause the Trust to fail to be classified as a
grantor trust or as other than an association taxable as a corporation for
United States federal income tax purposes.
(g) In the event that any amendment to this Declaration of
Trust is made, the Administrative Trustees shall promptly provide to the
Depositor a copy of such amendment.
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(h) Neither the Property Trustee nor the Delaware Trustee
shall be required to enter into any amendment to this Declaration of Trust that
affects its own rights, duties or immunities under this Declaration of Trust or
would otherwise expose the Property Trustee to any liability or be contrary to
applicable law. The Property Trustee shall be entitled to receive an Officers'
Certificate stating that any amendment to this Declaration of Trust is in
compliance with this Declaration of Trust.
SECTION 10.04. Separability. In case any provision in this
Declaration of Trust or in the Trust Securities Certificates shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.
SECTION 10.05. Governing Law. This Declaration of Trust and
the rights and obligations of each of the Securityholders, the Trust and the
Trustees with respect to this Declaration of Trust and the Trust Securities
shall be construed in accordance with and governed by the laws of the State of
Delaware without regard to its conflict of laws principles. The provisions of
Sections 3540 and 3561 of Title 12 of the Delaware Code shall not apply to this
Trust.
SECTION 10.06. Payments Due on Non-Business Day. If the date
fixed for any payment on any Trust Security shall be a day that is not a
Business Day, then such payment need not be made on such date but may be made on
the next succeeding day that is a Business Day (except as otherwise provided in
Section 4.02(d)), with the same force and effect as though made on the date
fixed for such payment, and no interest shall accrue thereon for the period
after such date.
SECTION 10.07. Successors. This Declaration of Trust shall be
binding upon and shall inure to the benefit of any successor to the Depositor,
the Trust or the Relevant Trustee, including any successor by operation of law.
Except in connection with a consolidation, merger or sale involving the
Depositor that is permitted under Article VI of the Indenture and pursuant to
which the assignee agrees in writing to perform the Depositor's obligations
hereunder, the Depositor shall not assign its obligations hereunder.
SECTION 10.08. Headings. The Article and Section headings are
for convenience only and shall not affect the construction of this Declaration
of Trust.
SECTION 10.09. Reports, Notices and Demands. Any report,
notice, demand or other communication that, by any provision of this Declaration
of Trust, is required or permitted to be given or served to or upon any
Securityholder or the Depositor may be given or served in writing by deposit
thereof, first class postage prepaid, in the United States mail, hand
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delivery or facsimile transmission, in each case, addressed, (a) in the case of
a Capital Securityholder, to such Capital Securityholder as such
Securityholder's name and address may appear on the Securities Register, and (b)
in the case of the Common Securityholder or the Depositor, to Resource
Bankshares Corporation, 3720 Virginia Beach Boulevard, Virginia Beach, Virginia
23452, facsimile no.: (757) 431-2441. Any notice to Capital Securityholders may
also be given to such owners as have, within two years preceding the giving of
such notice, filed their names and addresses with the Property Trustee for that
purpose. Such notice, demand or other communication to or upon a Securityholder
shall be deemed to have been sufficiently given or made, for all purposes, upon
hand delivery, mailing or transmission.
Any notice, demand or other communication that by any
provision of this Declaration of Trust is required or permitted to be given or
served to or upon the Trust, the Property Trustee, the Delaware Trustee or the
Administrative Trustees shall be given in writing addressed (until another
address is published by the Trust) as follows: (a) with respect to the Property
Trustee to Wilmington Trust Company, 1100 N. Market Street, Attention: Corporate
Trust Administration, Wilmington, Delaware 19890, facsimile no.: (302) 651-8882;
(b) with respect to the Delaware Trustee to Wilmington Trust Company, 1100 N.
Market Street, Attention: Corporate Trust Administration, Wilmington, Delaware
19890, facsimile no.: (302) 651-8882; and (c) with respect to the Administrative
Trustees, to them at the address above for notices to the Depositor, marked
"Attention: Administrative Trustees of Resource Capital Trust I". Such notice,
demand or other communication to or upon the Trust or the Property Trustee shall
be deemed to have been sufficiently given or made only upon actual receipt of
the writing by the Trust or the Property Trustee.
SECTION 10.10. Agreement Not to Petition. Each of the Trustees
and the Depositor agree for the benefit of the Securityholders that, until at
least one year and one day after the Trust has been terminated in accordance
with Article IX, they shall not file, or join in the filing of, a petition
against the Trust under any bankruptcy, insolvency, reorganization or other
similar law (including, without limitation, the United States Bankruptcy Code)
(collectively, "Bankruptcy Laws") or otherwise join in the commencement of any
proceeding against the Trust under any Bankruptcy Laws. In the event the
Depositor takes action in violation of this Section 10.10, the Property Trustee
agrees, for the benefit of Securityholders, that at the expense of the
Depositor, it shall file an answer with the bankruptcy court or otherwise
properly contest the filing of such petition by the Depositor against the Trust
or the commencement of such action and raise the defense that the Depositor has
agreed in writing not to take such action and should be estopped and precluded
therefrom and such other defenses, if any, as counsel for the Trustee or the
Trust may assert. The provisions of this
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Section 10.10 shall survive the termination of this Declaration of Trust.
SECTION 10.11. Trust Indenture Act; Conflict with Trust
Indenture Act. This Declaration of Trust will be qualified under the Trust
Indenture Act. By its terms, this Declaration of Trust incorporates certain
provisions of the Trust Indenture Act.
(a) This Declaration of Trust is subject to the provisions
of the Trust Indenture Act that are required to be part of this Declaration of
Trust 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 any provision hereof limits, qualifies or conflicts
with another provision hereof that is required to be included in this
Declaration of Trust by any of the provisions of the Trust Indenture Act, such
required provision shall control. If any provision of this Declaration of Trust
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
Declaration of Trust as so modified or excluded, as the case may be.
(d) The application of the Trust Indenture Act to this
Declaration of Trust shall not affect the nature of the Securities as equity
securities representing undivided beneficial interests in the assets of the
Trust.
SECTION 10.12. Acceptance of Terms of Declaration of Trust,
Guarantee and Indenture. THE RECEIPT AND ACCEPTANCE OF A TRUST SECURITY OR ANY
INTEREST THEREIN BY OR ON BEHALF OF A SECURITYHOLDER OR ANY BENEFICIAL OWNER,
WITHOUT ANY SIGNATURE OR FURTHER MANIFESTATION OF ASSENT, SHALL CONSTITUTE THE
UNCONDITIONAL ACCEPTANCE BY THE SECURITYHOLDER AND ALL OTHERS HAVING A
BENEFICIAL INTEREST IN SUCH TRUST SECURITY OF ALL OF THE TERMS AND PROVISIONS OF
THIS DECLARATION OF TRUST AND AGREEMENT TO THE SUBORDINATION PROVISIONS AND
OTHER TERMS OF THE GUARANTEE AND THE INDENTURE, AND SHALL CONSTITUTE THE
AGREEMENT OF THE TRUST, SUCH SECURITYHOLDER AND SUCH OTHERS THAT THE TERMS AND
PROVISIONS OF THIS DECLARATION OF TRUST SHALL BE BINDING, OPERATIVE AND
EFFECTIVE AS BETWEEN THE TRUST AND SUCH SECURITYHOLDER AND SUCH OTHERS.
SECTION 10.13. Execution in Counterparts. This instrument may
be executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
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WITNESS the following signatures:
RESOURCE BANKSHARES CORPORATION,
as Depositor
By:___________________________
Name:_________________________
Title:________________________
WILMINGTON TRUST COMPANY
(as Delaware Trustee and not in its
individual capacity)
By:___________________________
Name:_________________________
Title:________________________
______________________________
T. A. Grell, as
Administrative Trustee
______________________________
Harvard R. Birdsong, as
Administrative Trustee
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EXHIBIT A
CERTIFICATE OF TRUST OF
RESOURCE CAPITAL TRUST I
THIS CERTIFICATE OF TRUST of Resource Capital Trust I (the
"Trust"), dated as of ________ __, is being duly executed and filed by
Wilmington Trust Company, a Delaware corporation, as trustee, T. A. Grell, an
individual, as trustee, and Harvard R. Birdsong, an individual, as trustee, to
form a business trust under the Delaware Business Trust Act (12 Del. C. Section
3801 et seq.).
1. Name. The name of the business trust formed hereby is
Resource Capital Trust I.
2. Delaware Trustee. The name and business address of the
trustee of the Trust with a principal place of business in the State of Delaware
are as follows: Wilmington Trust Company, 1100 N. Market Street, Attention:
Corporate Trust Administration, Wilmington, Delaware 19890.
3. Effective Date. This Certificate of Trust shall be
effective upon filing with the Secretary of State of the State of Delaware.
IN WITNESS WHEREOF, the undersigned, being the trustees of the
Trust, have executed this Certificate of Trust as of the date first written
above.
WILMINGTON TRUST COMPANY, not
in its individual capacity but
solely as trustee
By:____________________________
Name: _________________________
Title: ________________________
_______________________________
T. A. Grell, as Trustee
_______________________________
Harvard R. Birdsong, as Trustee
<PAGE>
EXHIBIT B
IF THE CAPITAL SECURITIES CERTIFICATE IS TO BE A GLOBAL
SECURITIES CERTIFICATE, INSERT--[This Capital Securities Certificate is a Global
Capital Securities Certificate within the meaning of the Declaration of Trust
hereafter referred to and is registered in the name of The Depository Trust
Company (the "Depositary") or a nominee of the Depositary. This Capital
Securities Certificate is exchangeable for Capital Securities Certificates
registered in the name of a person other than the Depositary or its nominee only
in the limited circumstances described in the Declaration of Trust, and no
transfer of this Capital Securities Certificate (other than a transfer of this
Capital Securities Certificate as a whole by the Depositary to a nominee of the
Depositary or by a nominee of the Depositary to the Depositary or another
nominee of the Depositary) may be registered except in the limited circumstances
described in the Declaration of Trust.
Unless this Capital Securities Certificate is presented by an
authorized representative of The Depository Trust Company (55 Water Street, New
York) to Resource Capital Trust I or its agent for registration of transfer,
exchange or payment, and any Capital Securities Certificate issued is registered
in the name of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon is made to
Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]
NO EMPLOYEE BENEFIT OR OTHER PLAN SUBJECT TO TITLE I OF THE
EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (EACH, A "PLAN"),
NO ENTITY WHOSE UNDERLYING ASSETS INCLUDE "PLAN ASSETS" BY REASON OF ANY PLAN'S
INVESTMENT IN THE ENTITY (A "PLAN ASSET ENTITY"), AND NO PERSON INVESTING "PLAN
ASSETS" OF ANY PLAN, MAY ACQUIRE OR HOLD THIS CAPITAL SECURITIES CERTIFICATE OR
ANY INTEREST HEREIN, UNLESS SUCH PURCHASER OR HOLDER IS ELIGIBLE FOR THE
EXEMPTIVE RELIEF AVAILABLE UNDER U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH
PURCHASE OR HOLDING. ANY PURCHASER OR HOLDER OF THIS CAPITAL SECURITIES
CERTIFICATE OR ANY INTEREST HEREIN WILL BE DEEMED TO HAVE REPRESENTED BY ITS
PURCHASE AND HOLDING HEREOF THAT IT EITHER (A) IS NOT A PLAN OR A PLAN ASSET
ENTITY AND IS NOT PURCHASING SUCH SECURITIES ON BEHALF OF OR WITH "PLAN ASSETS"
OF ANY PLAN, OR (B) IS ELIGIBLE FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER PTCE
96-23, 95-60, 91-38, 90-1 OR 84-14 WITH RESPECT TO SUCH PURCHASE OR HOLDING.
<PAGE>
Liquidation Amount of
Certificate Number Capital Securities
CUSIP NO. [ ]
Certificate Evidencing Resource Capital Trust I
$_.____ Capital Securities
(Liquidation Amount $25.00 per Capital Security)
Resource Capital Trust I, a statutory business trust formed
under the laws of the state of Delaware (the "Trust"), hereby certifies that
___________ (the "Holder") is the registered owner of ____________ ( ) Capital
Securities of the Trust in an aggregate liquidation amount of $________________,
representing an undivided beneficial interest in the assets of the Trust and
designated Resource Capital Trust I Capital Trust Securities (Liquidation Amount
$25.00 per Capital Security) (the "Capital Securities"). The Capital Securities
are transferable on the books and records of the Trust, in person or by a duly
authorized attorney, upon surrender of this certificate duly endorsed and in
proper form for transfer as provided in Section 5.05 of the Declaration of Trust
(as defined below). The designations, rights, privileges, restrictions,
preferences and other terms and provisions of the Capital Securities are set
forth in, and this certificate and the Capital Securities represented hereby are
issued and shall in all respects be subject to the terms and 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 of Trust"),
between Resource Bankshares Corporation, as Depositor, Wilmington Trust Company,
as Property Trustee, Wilmington Trust Company, as Delaware Trustee, and the
Administrative Trustees named therein, including the designation of the terms of
Capital Securities as set forth therein. The Holder is entitled to the benefits
of the Guarantee Agreement entered into by Resource Bankshares Corporation, a
Virginia corporation, and Wilmington Trust Company, as Guarantee Trustee, dated
as of ________ __, 1999 (the "Guarantee"), to the extent provided therein. The
Trust will furnish a copy of the Declaration of Trust and the Guarantee to the
Holder without charge upon written request to the Trust at its principal place
of business or registered office.
Terms used but not defined herein have the meanings set forth
in the Declaration of Trust. The Declaration of Trust and this Capital Security
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
Upon receipt of this certificate, the Holder is bound by the
Declaration of Trust and is entitled to the benefits thereunder.
2
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this Certificate this ____ day of _____________.
RESOURCE CAPITAL TRUST I
by _______________________________
Name:__________________________
Title: Administrative Trustee
COUNTERSIGNED AND REGISTERED:
WILMINGTON TRUST COMPANY, as
Property Trustee
by _______________________________
Authorized Signatory
3
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers this
Capital Security to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints
agent to transfer this Capital Security Certificate on the books of the Trust.
The agent may substitute another to act for him or her.
Date: _____________________
Signature _______________________________
(Sign exactly as your name appears on the
other side of this Capital Security
Certificate)
__________________________________________________
The signature(s) should be guaranteed by an
eligible guarantor institution (banks,
stockbrokers, savings and loan associations and
credit unions with membership in an approved
signature guarantee medallion program), pursuant
to SEC Rule 17Ad-15.
<PAGE>
EXHIBIT C
THIS CERTIFICATE IS NOT TRANSFERABLE
Liquidation Amount of
Certificate Number Common Securities
Certificate Evidencing Common Securities
of
Resource Capital Trust I
Common Securities
(Liquidation Amount $25.00 per Common Security)
Resource Capital Trust I, a statutory business trust formed
under the laws of the State of Delaware (the "Trust"), hereby certifies that
Resource Bankshares Corporation (the "Holder") is the registered owner of Nine
Thousand Eight Hundred Ninety-Seven (9,897) common securities of the Trust
representing beneficial interests in the Trust and designated the Common
Securities (Liquidation Amount $25.00 per Common Security) (the "Common
Securities"). Except as provided in Section 5.11 of the Declaration of Trust (as
defined below) the Common Securities are not transferable and any attempted
transfer hereof shall be void. The designations, rights, privileges,
restrictions, preferences and other terms and provisions of the Common
Securities are set forth in, and this certificate and the Common Securities
represented hereby are issued and shall in all respects be subject to the terms
and 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 of Trust"), between Resource Bankshares Corporation, as Depositor,
Wilmington Trust Company, as Property Trustee, Wilmington Trust Company as
Delaware Trustee, and the Administrative Trustees named therein, including the
designation of the terms of the Common Securities as set forth therein. The
Trust will furnish a copy of the Declaration of Trust to the Holder without
charge upon written request to the Trust at its principal place of business or
registered office.
Terms used but not defined herein have the meanings set forth
in the Declaration of Trust. The Declaration of Trust and this Common Security
shall be governed by and construed in accordance with the laws of the State of
Delaware without regard to conflicts of laws principles thereof.
Upon receipt of this certificate, the Holder is bound by the
Declaration of Trust and is entitled to the benefits thereunder.
<PAGE>
IN WITNESS WHEREOF, one of the Administrative Trustees of the
Trust has executed this certificate this ____ day of ________ __, 1999.
RESOURCE CAPITAL TRUST I
By:___________________________
Name:_________________________
Title: Administrative Trustee
COUNTERSIGNED AND REGISTERED:
WILMINGTON TRUST COMPANY, as
Property Trustee
By:__________________________
Authorized Signatory
Dated:
2
Exhibit 4.4
EXECUTION COPY
================================================================================
RESOURCE BANKSHARES CORPORATION
to
WILMINGTON TRUST COMPANY
Trustee
-----------------------------
JUNIOR SUBORDINATED INDENTURE
Dated as of ________ __, 1999
================================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I -- Definitions and Other Provisions of General Application..............................................1
SECTION 1.01. Definitions......................................................................................1
SECTION 1.02. Compliance Certificate and Opinions.............................................................12
SECTION 1.03. Forms of Documents Delivered to Trustee.........................................................12
SECTION 1.04. Acts of Holders.................................................................................13
SECTION 1.05. Notices to Trustee and Company..................................................................14
SECTION 1.06. Notice to Holders: Waiver.......................................................................14
SECTION 1.07. Conflict with Trust Indenture Act...............................................................15
SECTION 1.08. Effect of Headings and Table of Contents........................................................15
SECTION 1.09. Successors and Assigns..........................................................................15
SECTION 1.10. Separability Clause.............................................................................15
SECTION 1.11. Benefits of Indenture...........................................................................15
SECTION 1.12. Governing Law...................................................................................15
SECTION 1.13. Non-Business Day................................................................................16
ARTICLE II -- Security Forms.....................................................................................16
SECTION 2.01. Forms Generally.................................................................................16
SECTION 2.02. Form of Face of Security........................................................................17
SECTION 2.03. Form of Reverse of Security.....................................................................21
SECTION 2.04. Additional Provisions Required in Global Security...............................................26
SECTION 2.05. Form of Trustee's Certificate of Authentication.................................................26
ARTICLE III -- The Securities....................................................................................27
SECTION 3.01. Title and Terms.................................................................................27
SECTION 3.02. Denominations...................................................................................29
SECTION 3.03. Execution, Authentication, Delivery and Dating..................................................30
SECTION 3.04. Temporary Securities............................................................................31
SECTION 3.05. Global Securities...............................................................................32
SECTION 3.06. Registration, Transfer and Exchange Generally: Certain Transfers and Exchanges: Restricted
Securities Legends............................................................................................33
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities................................................37
SECTION 3.08. Payment of Interest; Interest Rights Preserved..................................................38
SECTION 3.09. Persons Deemed Owners...........................................................................40
SECTION 3.10. Cancellation....................................................................................40
SECTION 3.11. Computation of Interest.........................................................................40
SECTION 3.12. Deferrals of Interest Payment Dates.............................................................41
SECTION 3.13. CUSIP Numbers...................................................................................42
ARTICLE IV -- Satisfaction and Discharge.........................................................................42
SECTION 4.01. Satisfaction and Discharge of Indenture.........................................................42
SECTION 4.02. Application of Trust Money......................................................................44
ARTICLE V -- Remedies............................................................................................44
SECTION 5.01. Events of Default...............................................................................44
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment..............................................45
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee.................................47
SECTION 5.04. Trustee May File Proofs of Claim................................................................48
SECTION 5.05. Trustee May Enforce Claim Without Possession of Securities......................................49
SECTION 5.06. Application of Money Collected..................................................................49
SECTION 5.07. Limitation on Suits.............................................................................50
SECTION 5.08. Unconditional Right of Holders to Receive Principal and Interest................................51
SECTION 5.09. Restoration of Rights and Remedies..............................................................51
SECTION 5.10. Rights and Remedies Cumulate....................................................................51
SECTION 5.11. Delay or Omission Not Waiver....................................................................52
SECTION 5.12. Control by Holders..............................................................................52
SECTION 5.13. Waiver of Past Defaults.........................................................................53
SECTION 5.14. Undertaking for Costs...........................................................................53
SECTION 5.15. Waiver of Usury, Stay or Extension Laws.........................................................54
ARTICLE VI -- The Trustee........................................................................................54
<PAGE>
SECTION 6.01. Certain Duties and Responsibilities.............................................................54
SECTION 6.02. Notice of Defaults..............................................................................55
SECTION 6.03. Certain Rights of Trustee.......................................................................55
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities..........................................57
SECTION 6.05. May Hold Securities.............................................................................57
SECTION 6.06. Money Held in Trust.............................................................................57
SECTION 6.07. Compensation and Reimbursement..................................................................57
SECTION 6.08. Disqualification; Conflicting Interests.........................................................58
SECTION 6.09. Corporate Trustee Required; Eligibility.........................................................58
SECTION 6.10. Resignation and Removal, Appointment of Successor...............................................59
SECTION 6.11. Acceptance of Appointment Successor.............................................................61
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business.....................................62
SECTION 6.13. Preferential Collection of Claims Against Company...............................................62
SECTION 6.14. Appointment of Authenticating Agent.............................................................62
SECTION 6.15. Trustee's Rights and Obligations................................................................64
ARTICLE VII -- Holder's Lists and Reports by Trustee and Company.................................................65
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.......................................65
SECTION 7.02. Preservation of Information, Communications to Holders..........................................65
SECTION 7.03. Reports by Trustee..............................................................................65
SECTION 7.04. Reports by Company..............................................................................66
ARTICLE VIII -- Consolidation, Merger, Conveyance, Transfer or Lease.............................................66
SECTION 8.01. Company May Consolidate Only on Certain Terms...................................................66
SECTION 8.02. Successor Company Substituted...................................................................67
ARTICLE IX -- Supplemental Indentures............................................................................68
SECTION 9.01. Supplemental Indentures without Consent of Holders..............................................68
SECTION 9.02. Supplemental Indentures with Consent of Holders.................................................69
SECTION 9.03. Execution of Supplemental Indentures............................................................71
SECTION 9.04. Effect of Supplemental Indentures...............................................................71
SECTION 9.05. Conformity with Trust Indenture Act.............................................................71
SECTION 9.06. Reference in Securities to Supplemental Indentures..............................................72
ARTICLE X -- Covenants...........................................................................................72
SECTION 10.01. Payment of Principal and Interest..............................................................72
SECTION 10.02. Maintenance of Office or Agency................................................................72
SECTION 10.03. Money for Security Payments to be Held in Trust................................................72
SECTION 10.04. Statement as to Compliance.....................................................................74
SECTION 10.05. Waiver of Certain Covenants....................................................................74
SECTION 10.06. Payment of the Trusts'Costs and Expenses.......................................................75
SECTION 10.07. Additional Covenants...........................................................................75
SECTION 10.08. Information Returns............................................................................76
SECTION 10.09. Statement by Officers as to Default............................................................76
SECTION 10.10 Delivery of Certain Information.................................................................77
ARTICLE XI -- Redemption or Prepayment of Securities.............................................................77
SECTION 11.01. Applicability of This Article..................................................................77
SECTION 11.02. Election To Redeem: Notice to Trustee..........................................................77
SECTION 11.03. Selection of Securities to be Redeemed.........................................................78
SECTION 11.04. Notice of Redemption...........................................................................78
SECTION 11.05. Deposit of Redemption Price....................................................................79
SECTION 11.06. Payment of Securities Called for Redemption....................................................80
SECTION 11.07. Company's Right of Redemption..................................................................80
ARTICLE XII -- Sinking Funds.....................................................................................81
SECTION 12.01. Applicability of Article.......................................................................81
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities..........................................81
SECTION 12.03. Redemption of Securities Sinking Fund..........................................................81
ARTICLE XIII -- Subordination of Securities......................................................................83
SECTION 13.01. Securities Subordinate to Senior Debt..........................................................83
SECTION 13.02. Payment Over of Proceeds upon Dissolution......................................................83
SECTION 13.03. Prior Payment to Senior Debt Upon Acceleration of Securities...................................85
SECTION 13.04. No Payment When Senior Debt in Default.........................................................86
ii
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SECTION 13.05. Payment Permitted If No Default................................................................86
SECTION 13.06. Subrogation to Rights of Holders of Senior Debt................................................87
SECTION 13.07. Provisions Solely to Define Relative Rights....................................................87
SECTION 13.08. Trustee to Effectuate Subordination............................................................88
SECTION 13.09. No Waiver of Subordination Provisions..........................................................88
SECTION 13.10. Notice to Trustee..............................................................................88
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating Agent.................................88
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt...............................................89
SECTION 13.13. Rights of Trustee as Holder of Senior Debt: Preservation of Trustee's Rights...................89
SECTION 13.14. Article Applicable to Paying Agents............................................................89
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment................................................89
</TABLE>
iii
<PAGE>
RESOURCE BANKSHARES CORPORATION
Reconciliation and tie between the Trust Indenture Act of 1939
(including cross-references to provisions of Sections 310 to and including 317
which, pursuant to Section 318(c) of the Trust Indenture Act of 1939, as amended
by the Trust Reform Act of 1990, are a part of and govern the Indenture whether
or not physically contained therein) and the Junior Subordinated Indenture,
dated as of ________ __, 1999.
Indenture
Trust Indenture Act Section Section
ss.310(a)(1), (2) and (5)................................... 6.09
ss.310(a)(3)................................................ Not Applicable
ss.310(a)(4)................................................ Not Applicable
ss.310(b)................................................... 6.08, 6.10
ss.310(c)................................................... Not Applicable
ss.311(a)................................................... 6.13
ss.311(b)................................................... 6.13
ss.311(c)................................................... Not Applicable
ss.312(a)................................................... 7.01, 7.02(a)
ss.312(b)................................................... 7.02(b)
ss.312(c)................................................... 7.02(c)
ss.313(a)................................................... 7.03(a)
ss.313(b)................................................... 7.03(b)
ss.313(c)................................................... 7.03(a), 7.03(b)
ss.313(d)................................................... 7.03(c)
ss.314(a)(1), (2) and (3)................................... 7.04
ss.314(a)(4)................................................ 10.04
ss.314(b)................................................... Not Applicable
ss.314(c)(1)................................................ 1.02
ss.314(c)(2)................................................ 1.02
ss.314(c)(3)................................................ Not Applicable
ss.314(d)................................................... Not Applicable
ss.314(e)................................................... 1.02
ss.314(f)................................................... Not Applicable
ss.315(a)................................................... 6.01(a)
ss.315(b)................................................... 6.02, 7.03(a)
ss.315(c)................................................... 6.01(b)
ss.315(d)................................................... 6.01(c)
ss.315(d)(1)................................................ 6.01(c)(1)
ss.315(d)(2)................................................ 6.01(c)(2)
ss.315(d)(3)................................................ 6.01(c)(3)
ss.315(e)................................................... 5.14
ss.316(a)................................................... 5.12
ss.316(a)(1)(A)............................................. 5.12
ss.316(a)(1)(B)............................................. 5.13
ss.316(a)(2)................................................ Not Applicable
ss.316(b)................................................... 5.08
ss.316(c)................................................... 1.04(f)
ss.317(a)(1)................................................ 5.03
ss.317(a)(2)................................................ 5.04
ss.317(b)................................................... 10.03
<PAGE>
ss.318(a)................................................... 1.07
________________
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Junior Subordinated Indenture.
2
<PAGE>
JUNIOR SUBORDINATED INDENTURE, dated as of
________ __, 1999, between RESOURCE BANKSHARES,
CORPORATION, a bank holding company established under
the laws of the Commonwealth of Virginia (hereafter
called the "Company") having its principal office at
3720 Virginia Beach Boulevard, Virginia Beach,
Virginia 23452, and WILMINGTON TRUST COMPANY, a
Delaware corporation, as Trustee (hereafter called
the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured junior
subordinated debt securities in series (hereafter called the "Securities") of
substantially the tenor hereafter provided, including, without limitation,
Securities issued to evidence loans made to the Company of the proceeds from the
issuance from time to time by one or more business trusts (each a "Resource
Capital Trust" and, collectively, the "Resource Capital Trusts") of preferred
trust interests in such Resource Capital Trusts (the "Capital Securities") and
common interests in such Resource Capital Trusts (the "Common Securities" and,
collectively with the Capital Securities, the "Trust Securities"), and to
provide the terms and conditions upon which the Securities are to be
authenticated, issued and delivered.
NOW THEREFORE, THIS INDENTURE WITNESSETH: For and in consideration of
the premises and the purchase of the Securities by the Holders thereof, it is
mutually covenanted and agreed, for the equal and proportionate benefit of all
Holders of the Securities or of any series thereof, as follows:
ARTICLE I
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions. For all purposes of this Indenture, except
as otherwise expressly provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular.
(2) All other terms used herein that are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein.
(3) All accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" with respect
to any computation required
<PAGE>
or permitted hereunder shall mean such accounting principles that are generally
accepted at the date or time of such computation; provided, that when two or
more principles are so generally accepted, it shall mean that set of principles
consistent with those in use by the Company.
(4) 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.
(5) Unless otherwise specified herein, any reference to an "Article"
or Section" refers to an Article or a Section, as the case may be, of this
Indenture.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Additional Interest" means the interest, if any, that shall accrue on
any interest on the Securities of any series the payment of which has not been
made on the applicable Interest Payment Date and that shall accrue at the rate
per annum specified or determined as specified in any Officers' Certificate
delivered pursuant to Section 3.01.
"Additional Sums" has the meaning specified in Section 10.06.
"Administrative Action" has the meaning specified in the definition of
"Tax Event" in this Section 1.01.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Amended and Restated Declaration of Trust" for each series of
Securities has the meaning specified in the Officers' Certificate for such
series delivered pursuant to Section 3.01.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities of one or more series.
"Board of Directors" means either the board of directors of the Company
or any committee of that board duly authorized to act hereunder.
-2-
<PAGE>
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors, or such committee of the Board of Directors or officers
of the Company to which authority to act on behalf of the Board of Directors has
been delegated, and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means any day other than (i) a Saturday or Sunday, (ii)
a day on which banking institutions in the City of Richmond, Virginia are
authorized or required by law or executive order to remain closed, or (iii) a
day on which the Corporate Trust Office of the Trustee, or, with respect to the
Securities of a series issued to a Resource Capital Trust, the Corporate Trust
Office of the Property Trustee under the related Trust Agreement, is closed for
business.
"Capital Securities" has the meaning specified in the first recital of
this Indenture.
"Capital Treatment Event" means 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 rules or regulations
thereunder) of the United States or any political subdivision thereof or therein
or any rules, guidelines or policies of the Federal Reserve or (b) any official
or administrative pronouncement or action or judicial decision interpreting or
applying such laws or regulations, which amendment or change is effective or
such pronouncement, action or decision is announced on or after the original
Issue Date of the Capital Securities, the Company will not be entitled to treat
the Capital Securities as "Tier I Capital" (or the equivalent thereof) (except
to the extent that the Capital Securities would otherwise constitute more than
25% of the Company's Tier I Capital (or the equivalent thereof)) for purposes of
the risk-based capital adequacy guidelines of the Federal Reserve, as then in
effect and applicable to the Company; provided, however, that the distribution
of the Securities in connection with the liquidation of a Resource Capital Trust
by the Company shall not in and of itself constitute a Capital Treatment Event.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Common Securities" has the meaning specified in the first recital of
this Indenture.
-3-
<PAGE>
"Common Stock" means the common stock, $1.50 par value, of the Company.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Company" shall mean such successor Person.
"Company Guarantee" means the guarantee by the Company of the
distributions on the Trust Securities of a Resource Capital Trust to the extent
of the Guarantee Agreement.
"Company Request" and "Company Order" mean, respectively, the written
request or order signed in the name of the Company by the Chairman, Chief
Executive Officer, President or a Vice President, and by the Treasurer, an
Assistant Treasurer, the Controller, the Secretary or an Assistant Secretary of
the Company, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee at
which at any particular time its corporate trust business shall be administered,
which office as of the date of this Indenture is located at 1100 N. Market
Street, Attention: Corporate Trust Administration, Wilmington, Delaware 19890.
"Corporation" includes a corporation, association, company, joint-stock
company or business trust.
"Declaration of Trust" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01.
"Defaulted Interest" has the meaning specified in Section 3.08.
"Depositary" means, with respect to the Securities of any series
issuable or issued in whole or in part in the form of one or more Global
Securities, the Person designated as Depositary by the Company pursuant to
Section 3.01 with respect to such series (or any successor thereto (a "Successor
Depositary")).
"Determination Date" has the meaning specified in Section 2.02.
"Discount Security" means any security that provides for an amount less
than the principal amount thereof to be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.02.
"Dollar" means the currency of the United States of America that, as at
the time of payment, is legal tender for the payment of public and private
debts.
-4-
<PAGE>
"DTC" means The Depository Trust Company.
"Event of Default", unless otherwise specified in the supplemental
indenture creating a series of Securities, has the meaning specified in Article
V.
"Extension Period" has the meaning specified in Section 3.12.
"Federal Reserve" means the Board of Governors of the Federal Reserve
System.
"Foreign Currency" means any currency issued by the government of one
or more countries other than the United States of America or by any recognized
confederation or association of such governments.
"Global Security" means a Security in the form prescribed in Section
2.04 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee for such series, and registered in the name of such Depositary or
its nominee.
"Guarantee Agreement" for each series of Securities has the meaning
specified in the Officers' Certificate for such series delivered pursuant to
Section 3.01.
"Holder" means a Person in whose name a Security is registered in the
Securities Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof
and shall include the terms of each particular series of Securities established
as contemplated by Section 3.01.
"Institutional Accredited Investor" means an accredited investor within
the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act.
"Interest Payment Date" means as to each series of Securities the
Stated Maturity of an installment of interest on such Securities.
"Interest Rate" means the rate of interest specified or determined as
specified in each Security as being the rate of interest payable on such
Security.
"Investment Company Event" means the receipt by a Resource Capital
Trust of an Opinion of Counsel experienced in such matters to the effect that,
as a result of the occurrence of a change in law or regulation or a written
change (including any announced prospective change) in interpretation or
application of law or regulation by any legislative body, court, governmental
-5-
<PAGE>
agency or regulatory authority, there is more than an insubstantial risk that
such Resource Capital Trust is or will be considered an "investment company"
that is required to be registered under the 1940 Act, which change or
prospective change becomes effective or would become effective, as the case may
be, on or after the date of the issuance of the Capital Securities of such
Resource Capital Trust.
"Junior Subordinated Payment" has the meaning specified in Section
13.02.
"Lien" means any mortgage, pledge, lien, security interest or other
encumbrance.
"Liquidation Amount" has the meaning specified in Section 1.01 of the
Trust Agreement.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether as the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"1940 Act" means the Investment Company Act of 1940.
"Officers' Certificate" means a certificate signed by the Chairman and
Chief Executive Officer, President, or Vice President, and by the Treasurer, the
Controller, the Chief Financial Officer, the Secretary or any Assistant
Secretary of the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be
counsel for the Company.
"Original Issue Date" means the date of issuance specified as such in
each Security.
"Other Debentures" means, with respect to any series of Securities, all
junior subordinated debt securities to be issued by the Company pursuant to this
Indenture, other than such series of Securities, with substantially similar
subordination terms, and that will be issued and sold (if at all) to any
Resource Capital Trust established by the Company (if any), and will be
unsecured and subordinate and junior in right of payment to the extent and in
the manner set forth in this Indenture to all Senior Debt of the Company.
"Other Guarantees" means, with respect to any series of Securities, all
guarantees (if any) to be issued by the Company with respect to Capital
Securities (if any) to be issued by any Resource Capital Trust to be established
by the Company (if any), other than the guarantee related to such series of
Securities.
-6-
<PAGE>
"Outstanding" means, when used in reference to any Securities, as of
the date of determination, all Securities theretofore authenticated and
delivered under this indenture, except:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities for whose payment money in the necessary
amount has been theretofore deposited with the Trustee or any Paying
Agent in trust for the Holders of such Securities; and
(iii) Securities in substitution for or in lieu of which other
Securities have been authenticated and delivered or that have been paid
pursuant to Section 3.07, unless proof satisfactory to the Trustee is
presented that any such Securities are held by Holders in whose hands
such Securities are valid, binding and legal obligations of the
Company;
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 that a Responsible Officer actually knows to
be so owned shall be so disregarded. Securities so owned that 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 of such other obligor. Upon the
written request of the Trustee, the Company shall furnish 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.
"Paying Agent" means the Trustee or any Person authorized by the
Company to pay the principal of or interest on any Securities on behalf of the
Company.
-7-
<PAGE>
"Person" means any individual, Corporation, partnership, joint venture,
trust, unincorporated organization or government or any agency or political
subdivision thereof.
"Place of Payment" means, with respect to the Securities of any series,
the place or places where the principal of and interest on the Securities of
such series are payable pursuant to Sections 3.01 and 3.08.
"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 3.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Proceeding" has the meaning specified in Section 13.02.
"Property Trustee" means, in respect of any Resource Capital Trust, the
commercial bank or trust company identified as the "Property Trustee" in the
related Trust Agreement, solely in its capacity as Property Trustee of such
Resource Capital Trust under each Trust Agreement and not in its individual
capacity, or its successor in interest in such capacity, or any successor
property trustee appointed as therein provided.
"Redemption Date", when used with respect to any Security of a series
to be redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"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.
"Regular Record Date" for the interest payable on any Interest Payment
Date with respect to the Securities of a series means, unless otherwise provided
pursuant to Section 3.01 with respect to Securities of a series, the date that
is the Business Day next preceding such Interest Payment Date.
"Resource Capital Trust" has the meaning specified in the first recital
of this Indenture.
"Responsible Officer", when used with respect to the Trustee, means any
officer assigned to the Corporate Trust Office, including any managing director,
vice president, assistant vice president, assistant treasurer, assistant
secretary or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers and having
direct responsibility for the administration of this Indenture, and also, with
respect to a particular matter, any other officer to whom such matter is
-8-
<PAGE>
referred because of such officer's knowledge of and familiarity with the
particular subject.
"Restricted Security" means each Security required pursuant to Section
3.06(c) to bear a Restricted Securities Legend.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Exhibit A to this Indenture.
"Restricted Securities Legend" means a legend substantially in the form
of the legend required in the form of Security set forth in Section 2.02 to be
placed on a Restricted Security.
"Securities" has the meaning specified in the first recital of this
Indenture.
"Securities Act" means the Securities Act of 1933, as amended.
"Securities Certificate" means a certificate evidencing ownership of
Securities.
"Securities Register" and "Securities Registrar" have the respective
meanings specified in Section 3.06.
"Senior Debt" with respect to any series of Securities means (a) the
principal of, and premium, if any, and interest on all indebtedness of the
Company for money borrowed, whether outstanding on the date of execution of this
Indenture or thereafter created, assumed or incurred, (b) all obligations to
make payment pursuant to the terms of financial instruments, such as (i)
securities contracts and foreign currency exchange contracts, (ii) derivative
instruments, such as swap agreements (including interest rate and foreign
exchange note swap agreements), cap agreements, floor agreements, collar
agreements, interest rate agreements, foreign exchange agreements, options,
commodity futures contracts and commodity options contracts, and (iii) similar
financial instruments; except, in the case of both (a) and (b) above, such
indebtedness and obligations that are expressly stated to rank junior in right
of payment to, or pari passu in right of payment with, the Securities, (c) any
indebtedness or obligations of others of the kind described in both (a) and (b)
above for the payment of which the Company is responsible or liable as guarantor
or otherwise, and (d) any deferrals, renewals or extensions of any such Senior
Debt; provided, however, that Senior Debt shall not be deemed to include (a) any
debt of the Company that, when incurred and without respect to any election
under Section 1111(b) of the U.S. Bankruptcy Code of 1978, as amended, was
without recourse to the Company; (b) any debt of the Company to any of its
Subsidiaries; (c) debt to any employee of the Company; (d) debt that by its
terms is subordinated to trade accounts payable or accrued liabilities arising
in the ordinary course of business to the
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extent that payments made to the holders of such debt by the Holders as a result
of the subordination provisions of this Indenture would be greater than such
payments otherwise would have been as a result of any obligation of such holders
of such debt to pay amounts over to the obligees on such trade accounts payable
or accrued liabilities arising in the ordinary course of business as a result of
the subordination provisions to which such debt is subject; (e) trade accounts
payable or accrued liabilities arising in the ordinary course of business; and
(f) any other debt securities issued pursuant to this Indenture.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 3.08.
"Stated Maturity" when used with respect to any Security or any
installment of principal thereof or interest thereon means the date specified
pursuant to the terms of such Security as the date on which the principal of
such Security or such installment of interest is due and payable, in the case of
such principal, as such date may be shortened or extended as provided pursuant
to the terms of such Security and this Indenture.
"Subsidiary" means a corporation more than 50% of the outstanding
voting stock of which is owned, directly or indirectly, by the Company or by one
or more other Subsidiaries, or by the Company and one or more other
Subsidiaries. For purposes of this definition, "voting stock" means stock that
ordinarily has voting power for the election of directors, whether at all times
or only so long as no senior class of stock has such voting power by reason of
any contingency.
"Successor Security" of any particular Security means every Security
issued after, and 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 3.07 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Successor Trustee" has the meaning specified in the definition of
"Trustee" in this Section 1.01.
"Tax Event" means the receipt by the Trust or the Company of an opinion
of an independent tax counsel to the Company 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 political subdivision or taxing authority thereof or
therein, (b) any judicial decision or official administrative pronouncement,
ruling, regulatory procedure, notice or announcement, including any notice or
announcement of intent to adopt such procedures or regulations
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(an "Administrative Action") or (c) any amendment to or change in the
administrative position or interpretation of any Administrative Action or
judicial decision that differs from the theretofore generally accepted position,
in each case, by any legislative body, court, governmental agency or regulatory
body, irrespective of the manner in which such amendment or change is made
known, which amendment or change is effective or such Administrative Action or
decision is announced, in each case, on or after the Original Issue Date of the
applicable series of Securities or the issue date of the applicable Capital
Securities issued by the affected Resource Capital Trust, there is more than an
insubstantial risk that (x) if the Securities are held by or on behalf of the
affected Resource Capital Trust, (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 interest accrued or received on the Securities or subject to more
than a de minimis amount of other taxes, duties or other governmental charges as
determined by such counsel, or (ii) any portion of interest payable by the
Company to the affected Resource Capital Trust 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 (y)
with respect to Securities that are no longer held by or on behalf of the
affected Resource Capital Trust, any portion of 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.
"Trust Agreement" with respect to each series of Securities means the
Declaration of Trust with respect to such series, as amended by the Amended and
Restated Declaration of Trust with respect to such series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb), as in effect on the date of this Indenture, except as
provided in Sections 1.07 and 9.05.
"Trust Securities" has the meaning specified in the first recital of
this Indenture.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee (a "Successor Trustee")
shall have become such pursuant to the applicable provisions of this Indenture,
and thereafter "Trustee" shall mean or include each Person who is then a Trustee
hereunder and, if at any time there is more than one such Person, "Trustee" as
used with respect to the Securities of any series shall mean the Trustee with
respect to Securities of that series.
"Vice President", when used with respect to the Company, means any duly
appointed vice president, whether or not designated by a number or a word or
words added before or after the title "vice president".
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SECTION 1.02. Compliance Certificate and Opinions. Upon any application
or request by the Company to the Trustee to take any action under any provision
of this Indenture, the Company shall furnish to the Trustee an Officers'
Certificate stating that all conditions precedent (including covenants
compliance with which constitutes a condition 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 (including covenants compliance with which constitute a
condition precedent), if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than the
certificates provided regarding conditions or covenants waived by the Holders
pursuant to Section 10.05) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein relating
thereto;
(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 each such individual, 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, in the opinion of each such
individual, such condition or covenant has been complied with.
SECTION 1.03. Forms of Documents Delivered to Trustee. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless
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such officer knows, or in the exercise of reasonable care should know, that the
certificate or opinion or representation with respect to matters upon which his
certificate or opinion is based are erroneous. Any such certificate or Opinion
of Counsel may be based, insofar as it relates to factual matters, upon a
certificate or opinion of, or representations by, an officer or officers of the
Company stating that the information with respect to such factual matters is in
the possession of the Company, unless such counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions, or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 1.04. Acts of Holders. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given to or taken by Holders, may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by an agent duly appointed in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
is or are delivered to the Trustee, and, where it is hereby expressly required,
to the Company. Such instrument or instruments (and the action embodied therein
and evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and (subject to Section 6.01) conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where such
execution is by a Person acting in other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority.
(c) The fact and date of the execution by any Person of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner that the Trustee deems sufficient and in
accordance with such reasonable rules as the Trustee may determine.
(d) The ownership of Securities shall be proved by the
Securities Register.
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(e) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued upon
the transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done or suffered to be done by the Trustee or the Company in reliance
thereon, whether or not notation of such action is made upon such Security.
(f) The Company may, but shall not be obligated to, fix a
record date for the purpose of determining the Holders entitled to take any
action under this Indenture by vote or consent. Except as otherwise provided
herein, such record date shall be the later of 30 days prior to the first
solicitation of such consent or vote or the date of the most recent list of
Security Holders furnished to the Trustee pursuant to Section 7.01 prior to such
solicitation. If a record date is fixed, those persons who were Security Holders
at such record date (or their duly designated proxies), and only those persons,
shall be entitled to take such action by vote or consent or to revoke any vote
or consent previously given, whether or not such persons continue to be Holders
after such record date, provided, however, that unless such vote or consent is
obtained from the Holders (or their duly designated proxies) of the requisite
principal amount of Outstanding Securities prior to the date that is the 120th
day after such record date, any such vote or consent previously given shall
automatically and without further action by any Holder be canceled and of no
further effect.
SECTION 1.05. Notices to Trustee and Company. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with:
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose (except as otherwise provided in Section
5.01 hereof) hereunder if in writing and mailed, first class, postage
prepaid, to the Company addressed to it at the address of its principal
office specified in the first paragraph of this instrument or at any
other address previously furnished in writing to the Trustee by the
Company.
SECTION 1.06. Notice to Holders: Waiver. Where this Indenture provides
for notice to Holders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed, first
class postage prepaid, to each Holder affected by such event, at the address of
such Holder as it appears in the Securities Register, not later
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than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. In case, by reason of the suspension of or
irregularities in regular mail service or for any other reason, it shall be
impossible or impracticable to mail notice of any event to Holders when such
notice is required to be given pursuant to any provision of this Indenture or of
the relevant Securities, then any manner of giving such notice as shall be
satisfactory to the Trustee shall be deemed to be a sufficient giving of such
notice. Where this Indenture provides for notice in any manner, such notice may
be waived in writing by the Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
SECTION 1.07. Conflict with Trust Indenture Act. If any provision of
this Indenture limits, qualifies or conflicts with the duties imposed by any of
Section 310 to 317, inclusive, of the Trust Indenture Act through operation of
Section 318(c) thereof, such imposed duties shall control.
SECTION 1.08. Effect of Headings and Table of Contents. The Article and
Section headings herein and the Table of Contents are for convenience only and
shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns. All covenants and agreements in
this Indenture by the Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 1.10. Separability Clause. In case any provision in this
Indenture or in the Securities shall be invalid, illegal or unenforceable, the
validity, legality or enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.
SECTION 1.11. Benefits of Indenture. Nothing in this Indenture or in
the Securities, express or implied, shall give to any Person, other than the
parties hereto, any Paying Agent and their successors and assigns, the holders
of Senior Debt and the Holders of the Securities, any benefit or any legal or
equitable right, remedy or claim under this Indenture.
SECTION 1.12. Governing Law. This Indenture and the Securities shall be
governed by and construed in accordance with the laws of the Commonwealth of
Virginia, without regard to principles of conflicts of laws.
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SECTION 1.13. Non-Business Day. In any case where any Interest Payment
Date, Redemption Date or Stated Maturity of any Security shall not be a Business
Day, then (notwithstanding any other provision of this Indenture or the
Securities) payment of interest or principal need not be made on such date, but
may be made on the next succeeding Business Day (and no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be, until such next succeeding Business Day)
except that, if such Business Day is in the next succeeding calendar year, such
payment shall be made on the immediately preceding Business Day, in each case
with the same force and effect as if made on the Interest Payment Date or
Redemption Date or at the Stated Maturity, as the case may be.
ARTICLE II
Security Forms
SECTION 2.01. Forms Generally. The Securities of each series and the
Trustee's certificate of authentication shall be in substantially the forms set
forth in this Article, or in such other form or forms as shall be established by
or pursuant to a Board Resolution or in one or more indentures supplemental
hereto, in each case with such appropriate insertions, omissions, substitutions
and other variations as are required or permitted by this Indenture and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with applicable tax
laws or the rules of any securities exchange or as may, consistently herewith,
be determined by the officers executing such securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee at or prior to
the delivery of the Company Order contemplated by Section 3.03 with respect to
the authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods, if required by any securities
exchange on which the Securities may be listed, on a steel engraved border or
steel engraved borders or may be produced in any other manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
Securities distributed to holders of book-entry Capital Securities
shall be distributed in the form of one or more Global Securities registered in
the name of a Depositary or its nominee, and deposited with the Securities
Registrar, as custodian for
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such Depositary, or held by such Depositary for credit by the Depositary to the
respective accounts of the beneficial owners of the Securities represented
thereby (or such other accounts they may direct). Securities distributed to
holders of Capital Securities other than book-entry Capital Securities shall not
be issued in the form of a Global Security or any other form intended to
facilitate book-entry trading in beneficial interests in such Securities.
SECTION 2.02. Form of Face of Security.
[If this Security is a Restricted Security, insert--THIS SECURITY HAS
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "SECURITIES ACT") OR
ANY STATE SECURITIES LAWS. NEITHER THIS SECURITY NOR ANY INTEREST OR
PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED,
ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS
SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS
ACCEPTANCE HEREOF AGREES TO OFFER, SELL OR OTHERWISE TRANSFER SUCH SECURITY
PRIOR TO THE DATE THAT IS ONE YEAR AFTER THE LATER OF THE ORIGINAL ISSUE DATE
HEREOF AND THE LAST DATE ON WHICH RESOURCE BANKSHARES CORPORATION (THE
"COMPANY") OR ANY AFFILIATE OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR
ANY PREDECESSOR OF THIS SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE")
ONLY (A) TO THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO A PERSON
IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE
144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE
MEANING OF SUBPARAGRAPH (a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES
ACT ACQUIRING THE 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 ANOTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, SUBJECT TO THE COMPANY'S AND
THE TRUSTEE'S RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO
CLAUSES (D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN
ACCORDANCE WITH THE AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH
MAY BE OBTAINED FROM THE COMPANY OR THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS TERMINATION DATE.]
RESOURCE BANKSHARES CORPORATION
(Title of Security)
CUSIP No.
$
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RESOURCE BANKSHARES CORPORATION, a corporation organized and existing
under the laws of the Commonwealth of Virginia (hereafter called the "Company",
which term includes any successor corporation under the Indenture hereafter
referred to), for value received, hereby promises to pay to
_________________________, or its registered assigns, the principal sum of
____________________ Dollars on ________ __, (the "Stated Maturity"). The
Company further promises to pay interest on such principal sum from
_______________, or from the most recent interest payment date (each such date,
an "Interest Payment Date") on which interest has been paid or duly provided
for, [monthly] [quarterly] [semi-annually] [annually] [if applicable,
insert--(subject to deferral as set forth herein)], in arrears on [insert
applicable Interest Payment Dates] of each year, commencing _______________, at
the annual rate of [___]%, until the principal hereof shall have become due and
payable, [if applicable, insert--plus Additional Interest, if any,] until the
principal hereof is paid or duly provided for or made available for payment [if
applicable, insert--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 annual rate of [___]% compounded
[monthly] [quarterly] [semi-annually] [annually] as Additional Interest].
The amount of interest payable for any period shall be computed on the
basis of the actual number of days elapsed in a year of twelve 30-day months;
except that the amount of interest payable for any partial period shall be
computed on the basis of the actual number of days elapsed in a 360-day year. In
the event that any date on which interest is payable on this Security is not a
Business Day, then payment of the interest payable on such date will be made on
the next succeeding day that is a Business Day (and without any interest or
other payment in respect of any such delay), except that, if such Business Day
is in the next succeeding calendar year, such payment shall be made on the
immediately preceding Business Day, in each case with the same force and effect
as if made on the date the payment was originally payable. A "Business Day"
shall mean any day other than (i) a Saturday or Sunday, (ii) a day on which
banking institutions in the City of Richmond, Virginia are authorized or
required by law or executive order to remain closed or (iii) a day on which the
Corporate Trust Office of the Trustee or the Corporate Trust Office of the
Property Trustee under the Trust Agreement hereafter referred to for Resource
Capital Trust I is closed for business. 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 the Indenture) is registered
at the close of business on the Regular Record Date for such interest
installment, which shall be the [insert definition of Regular
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Record Date]. Any such interest installment not so punctually paid or duly
provided for shall forthwith cease to be payable to the Holder on such Regular
Record Date and may either 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 for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Record Date, or be paid at
any time in any other lawful manner not inconsistent with the requirements of
any securities exchange on which the Securities of this series may be listed,
and upon such notice as may be required by such exchange, all as more fully
provided in such Indenture.
[If applicable, insert--So long as no Event of Default has occurred and
is continuing, the Company shall have the right at any time during the term of
this Security, from time to time, to defer payment of interest on such Security
for up to _______________ consecutive [monthly] [quarterly] [semi-annual]
[annual] interest payment periods with respect to each deferral period (each an
"Extension Period"), during which Extension Periods the Company shall have the
right to make partial payments of interest on any Interest Payment Date, and at
the end of which the Company shall pay all interest then accrued and unpaid on
the Securities (together with Additional Interest thereon to the extent
permitted by applicable law); provided, however, that no Extension Period may
extend beyond the Stated Maturity of this Security. During any such Extension
Period, the Company may not (i) declare or pay any dividends or distributions,
on or redeem, purchase, acquire or make a liquidation payment with respect to,
any of the Company's capital stock (which includes common and preferred stock)
or (ii) make any payment of principal of, interest or premium, if any, on or
repay, repurchase or redeem any debt securities of the Company (including any
Other Debentures) that rank pari passu with or junior in interest to this
Security or (iii) make any guarantee payments with respect to any guarantee by
the Company of the debt securities of any Subsidiary of the Company (including
Other Guarantees) if such guarantee ranks pari passu with or junior in interest
to this Security (other than (a) dividends or distributions in Common Stock of
the Company, (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 applicable Company Guarantee, (d)
purchases or acquisitions of shares of the Company's Common Stock in connection
with the satisfaction by the Company of its obligations under any employee
benefit plan or other contractual obligation of the Company (other than a
contractual obligation ranking pari passu with or junior to these Securities),
(e) as a result of a reclassification of the Company's capital stock or the
exchange or conversion of one class or series of the Company's capital stock for
another class or series of the Company's capital stock or (f) the purchase of
fractional
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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). Prior to the termination of any such Extension Period, the Company
may further extend such Extension Period, provided, however, that such extension
does not cause such Extension Period to exceed _______________ consecutive
[monthly] [quarterly] [semi-annual] [annual] interest payment periods or extend
beyond the Stated Maturity of this Security. Upon the termination of any such
Extension Period and the payment of all accrued and unpaid interest and any
Additional Interest then due, and, subject to the foregoing limitations, the
Company may elect to begin a new Extension Period. No interest shall be due and
payable during an Extension Period except at the end thereof. The Company shall
give the Trustee notice of its election to begin any Extension Period at least
three Business Days prior to the Interest Payment Date, [if applicable,
insert--or, with respect to the Securities issued to a Resource Capital Trust,
prior to the earlier of (i) the date the Distributions on the Capital Securities
would have been payable except for the election to begin or extend such
Extension Period or (ii) the date the Administrative Trustees are required to
give notice to any automated quotation system or to holders of such Capital
Securities of the record date or the date such Distributions are payable, but in
any event not less than three Business Days prior to such record date]. There is
no limitation on the number of times the Company may elect to begin an Extension
Period.
Payment of the principal of and interest on this Security will be made
at the office or agency of the Trustee in the City of Wilmington, Delaware or at
the office of such Paying Agents in the United States as the Company may
designate from time to time, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts [if applicable, insert--; provided, however, that at the option of
the Company payment of any interest may be made (except in the case of
Securities in Global form) (i) by check mailed to the address of the Person
entitled thereto as such address shall appear in the Securities Register or (ii)
by wire transfer in immediately available funds at such place and to such
account as may be designated by the Person entitled thereto as specified in the
Securities Register].
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 Debt, 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 behalf to take such actions as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes. Each
Holder hereof, by his acceptance hereof, waives all notice of the
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acceptance of the subordination provisions contained herein and in the Indenture
by each holder of Senior Debt, whether now outstanding or hereafter incurred,
and waives reliance by each such holder upon such provisions.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Date: RESOURCE BANKSHARES CORPORATION
[Seal]
By: _______________________________
[President and Chief Operating
Officer, or Vice President]
Attest:
_________________________
[Secretary or Assistant
Secretary]
SECTION 2.03. Form of Reverse of Security. This Security is one of a
duly authorized issue of securities of the Company (herein called the
"Securities"), issued and to be issued in one or more series under a Junior
Subordinated Indenture, dated as of ____________, as supplemented by an
Officers' Certificate dated as of ____________ (herein called the "Indenture"),
between the Company and Wilmington Trust Company, as Trustee (herein called the
"Trustee", which term includes any Successor Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights, limitations of rights, duties and
immunities thereunder of the Trustee, the Company and the Holders of the
Securities, and of the terms upon which the Securities are, and are to be,
authenticated and delivered. This Security is one of the series designated on
the face hereof,[limited in aggregate principal amount to
$____________].
All terms used in this Security that are defined in the Indenture [if
applicable, insert--and in the Amended and Restated Declaration of Trust of
[insert the applicable Resource Capital Trust], dated as of [_______________],
as amended (the "Amended
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and Restated Declaration of Trust"), among Resource Bankshares Corporation, as
Depositor, and the Trustees named therein,] shall have the meanings assigned to
them in the Indenture or, to the extent not defined in the Indenture, the
Amended and Restated Declaration of Trust, as the case may be.
[If applicable, insert--The Company has the right to redeem this
Security (i) on or after _______________, in whole at any time or in part from
time to time, or (ii) in whole (but not in part), at any time within 90 days
following the occurrence and during the continuation of a Tax Event, an
Investment Company Event or a Capital Treatment Event, in each case at the
Redemption Price described below, and subject to possible regulatory approval.]
[If applicable, insert--In the case of a redemption on or after
_______________, the Redemption Price shall equal the following prices,
expressed in percentages of the principal amount hereof, together with accrued
interest to but excluding the date fixed for redemption, if redeemed during the
12-month period beginning
____________:
Year Redemption Price
and 100% on or after ____________, 20__.
In the case of a redemption prior to ____________, 20__, following a Tax Event,
an Investment Company Event or a Capital Treatment Event, the Redemption Price
shall equal the "Make-Whole Amount" (as hereafter defined) for a corresponding
$__________ principal amount hereof, together with accrued interest to but
excluding the date fixed for redemption, which Make-Whole Amount will be equal
to the greater of (i) 100% of the principal amount hereof, and (ii) as
determined by a Quotation Agent (as defined in the Declaration of Trust), the
sum of the present values of the principal amount hereof and the premium, if
any, payable as part of the Redemption Price with respect to an optional
redemption hereof on ____________, 20__, together with the present values of
scheduled payments of interest (not including the portion of any such payments
of interest accrued as of the Redemption Date) from the date fixed for
redemption to ____________, 20__, in each case discounted to the date fixed for
redemption on a semi-annual basis (assuming a 360-day year consisting of 30-day
months) at the Adjusted Treasury Rate (as defined in the Declaration of Trust).
The Redemption Price in the case of a redemption on or after ____________, 20__
following a Tax Event, an Investment Company Event or a Capital Treatment
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Event shall equal the Redemption Price then applicable to a redemption under the
first sentence of this paragraph.]
In the event of redemption of this Security in part only, a new
Security or Securities of this series for the unredeemed portion hereof will be
issued in the name of the Holder hereof upon the cancellation hereof.
[If the Security is not a Discount Security,--If an Event of Default
with respect to Securities of this series shall occur and be continuing, the
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture.]
[If the Security is a Discount Security,--If an Event of Default with
respect to Securities of this series shall occur and be continuing, an amount of
principal of this Security may be declared due and payable in the manner, with
the effect and subject to the conditions provided in the Indenture. Such amount
shall be equal to [--insert formula for determining the amount]. Upon payment
(i) of the amount of principal so declared due and payable and (ii) of interest
on any overdue principal and overdue interest (in each case to the extent that
the payment of such interest shall be legally enforceable), all of the Company's
obligations in respect of the payment of the principal of and interest, if any,
on this Security shall terminate.]
The Indenture permits, with certain exceptions as therein provided, the
Company and the Trustee at any time to enter into a supplemental indenture or
indentures for the purpose of modifying in any manner the rights and obligations
of the Company and of the Holders of the Securities, with the consent of the
Holders of not less than a majority in principal amount of the Outstanding
Securities of each series to be affected by such supplemental indenture. The
Indenture also contains provisions permitting Holders of specified percentages
in principal amount of the Securities of each series at the time Outstanding, on
behalf of the Holders of all Securities of such series, to waive compliance by
the Company with certain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such consent or waiver by the
Holder of this Security shall be conclusive and binding upon such Holder and
upon all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
[If the Security is not a Discount Security,--As provided in and
subject to the provisions of the Indenture, if an Event of Default with respect
to the Securities of this series at the time Outstanding occurs and is
continuing, then and in every such case the Trustee or the Holders of not less
than 25% in aggregate principal amount of the Outstanding Securities of this
series may declare such portion of the principal amount as may be specified
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in the terms of all the Securities of this series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), provided, however, that, in the case of the Securities of this
series issued to a Resource Capital Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series fail to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee with a copy to the Property Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of this
series may annul such declaration and waive the default by written notice to the
Property Trustee, the Company and the Trustee if the default (other than the
nonpayment of the principal of these Securities that 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 Trustee. Should the Holders of the Securities of this
series fail to annul such declaration and waive such default, the holders of a
majority in aggregate Liquidation Amount of the Capital Securities shall have
such right. Upon any such declaration such principal amount and the accrued
interest (including any Additional Interest) on all the Securities of this
series shall become immediately due and payable, provided that the payment of
principal and interest (including any Additional Interest) on such Securities
shall remain subordinated to the extent provided in Article XIII of the
Indenture.]
[If the Security is a Discount Security,--As provided in and subject to
the provisions of the Indenture, if an Event of Default with respect to the
Securities of this series at the time Outstanding occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Outstanding Securities of this series may
declare the principal amount of all the Securities of this series to be due and
payable immediately, by a notice in writing to the Company (and to the Trustee
if given by Holders), provided, however, that, in the case of the Securities of
this series issued to a Resource Capital Trust, if upon an Event of Default, the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of this series fail to declare the principal of all the
Securities of this series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee with a copy to the Property Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of this
series may annul such declaration and waive the default by written notice to the
Property Trustee, the Company and the Trustee if the default (other than the
nonpayment of the principal of these Securities
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that 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 Trustee. Should the
Holders of the Securities of this series fail to annul such declaration and
waive such default, the holders of a majority in aggregate Liquidation Amount of
the Capital Securities shall have such right. Upon any such declaration such
principal amount and the accrued interest (including any Additional Interest) on
all the Securities of this series shall become immediately due and payable,
provided that the payment of principal and interest (including any Additional
Interest) on such Securities shall remain subordinated to the extent provided in
Article XIII of the Indenture.
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 on this
Security at the times, place and rate, and in the coin or currency, herein
prescribed.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Securities
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company maintained pursuant to Section 10.02 of the
Indenture duly endorsed by, or accompanied by a written instrument of transfer
in form satisfactory to the Company and the Securities Registrar duly executed
by, the Holder hereof or his attorney duly authorized in writing and thereupon
one or more new Securities of this series, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated transferee
or transferees. No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
The Securities of this series are issuable in registered form without
coupons. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of such series of a different authorized
denomination, as requested by the Holder surrendering the same.
The Company and, by its acceptance of this Security or a beneficial
interest therein, the Holder of, and any Person that
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acquires a beneficial interest in, this Security intend that such Security
constitute indebtedness and agree to treat such Security as indebtedness for all
United States Federal, state and local tax purposes.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES THEREOF.
SECTION 2.04. Additional Provisions Required in Global Security. Any
Global Security issued hereunder shall, in addition to the provisions contained
in Sections 2.02 and 2.03, bear a legend in substantially the following form:
"This Security is a Global Security within the meaning of the Indenture
hereafter referred to and is registered in the name of The Depository
Trust Company (the "Depositary") or a nominee of the Depositary. This
Security is exchangeable for Securities registered in the name of a
person other than the Depositary or its nominee only in the limited
circumstances described in the Indenture and no transfer of this
Security (other than a transfer of this Security as a whole by the
Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary) may
be registered except in limited circumstances.
Unless this Security is presented by an authorized representative of
The Depository Trust Company (55 Water Street, New York) to Resource
Bankshares Corporation or its agent for registration of transfer,
exchange or payment, and any Security issued is registered in the name
of Cede & Co. or such other name as requested by an authorized
representative of The Depository Trust Company and any payment hereon
is made to Cede & Co., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY A PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & CO., has an interest herein."
SECTION 2.05. Form of Trustee's Certificate of Authentication. This is
one of the Securities referred to in the within mentioned Indenture:
___________________________________
as Trustee
Dated:
By:________________________________
Authorized Signatory
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ARTICLE III
The Securities
SECTION 3.01. Title and Terms. The aggregate principal amount of
Securities that may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of a series:
(a) the title of the securities of such series, which shall
distinguish the Securities of the series from all other Securities;
(b) the limit, if any, upon the aggregate principal amount
of the Securities of such series that may be authenticated and made
available for delivery under this Indenture (except for Securities
authenticated and made available for delivery upon registration of,
transfer of, or in exchange for, or in lieu of, other Securities of the
series pursuant to Section 3.04, 3.06, 3.07, 9.06 or 11.06); provided,
however, that the authorized aggregate principal amount of such series
may be increased above such amount by a Board Resolution to such
effect;
(c) the Stated Maturity or Maturities on which the principal
of the Securities of such series is payable or the method of
determination thereof;
(d) the rate or rates, if any, at which the Securities of
such series shall bear interest, if any, the rate or rates and extent
to which Additional Interest, if any, shall be payable in respect of
any Securities of such series, the Interest Payment Dates on which such
interest shall be payable, the right, pursuant to Section 3.12 or as
otherwise set forth therein, of the Company to defer or extend an
Interest Payment Date, and the Regular Record Date for the interest
payable on any Interest Payment Date or the method by which any of the
foregoing shall be determined;
(e) the place or places where the principal of and interest
on the Securities of such series shall be payable, the place or places
where the Securities of such series may be presented for registration
of transfer or exchange, and the place or places where notices and
demands to or upon the Company in respect of the Securities of such
series may be made;
(f) the period or periods within or the date or dates on
which, if any, the price or prices at which and the terms
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and conditions upon which the Securities of such series may be
redeemed, in whole or in part, at the option of the Company;
(g) the obligation or the right, if any, of the Company to
redeem, repay or purchase the Securities of such series pursuant to any
sinking fund, amortization or analogous provisions, or at the option of
a Holder thereof, and the period or periods within which, the prices or
prices at which, the currency or currencies (including currency unit or
units) in which and the other terms and conditions upon which
Securities of the series shall be redeemed, repaid or purchased, in
whole or in part, pursuant to such obligations;
(h) the denominations in which any Securities of such series
shall be issuable, if other than in blocks having aggregate principal
amounts of not less than $25.00 and multiples of $25.00 in excess
thereof;
(i) if other than Dollars, the currency or currencies
(including currency unit or units) in which the principal of and
interest, if any, on the Securities of the series shall be payable, or
in which the Securities of the series shall be denominated and the
manner of determining the equivalent thereof in Dollars for purposes of
the definition of the term "Outstanding";
(j) the additions, modifications or deletions, if any, in
the Events of Default or covenants of the Company set forth herein with
respect to the Securities of such series;
(k) if other than the principal amount thereof, the portion
of the principal amount of Securities of such series that shall be
payable upon declaration of acceleration of the Maturity thereof;
(l) the additions or changes, if any, to this Indenture with
respect to the Securities of such series as shall be necessary to
permit or facilitate the issuance of the Securities of such series in
bearer form, registrable or not registrable as to principal, and with
or without interest coupons;
(m) any index or indices used to determine the amount of
payments of principal on the Securities of such series or the manner in
which such amounts will be determined;
(n) the issuance of a temporary Global Security representing
all of the Securities of such series and exchange of such temporary
Global Security for definitive Securities of such series;
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(o) whether the Securities of the series shall be issued in
whole or in part in the form of one or more Global Securities and, in
such case, the Depositary for such Global Securities, which Depositary
shall be a clearing agency registered under the Securities Exchange Act
of 1934;
(p) the appointment of any Paying Agent or Agents for the
Securities of such series;
(q) the terms of any right to convert or exchange Securities
of such series into any other securities or property of the Company,
and the additions or changes, if any, to this Indenture with respect to
the Securities of such series to permit or facilitate such conversion
or exchange;
(r) the transfer restrictions and legends required to be on
the Securities;
(s) the definitions of Amended and Restated Declaration of
Trust, Declaration of Trust and Guarantee Agreement for each series;
(t) the relative degree, if any, to which the Securities of
the series shall be senior to or be subordinated to other series of
Securities in right of payment, whether such other series of Securities
are Outstanding or not; and
(u) any other terms of the Securities of such series (which
terms shall not be inconsistent with the provisions of this Indenture).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided herein or in
or pursuant to such Board Resolution and set forth in such Officers' Certificate
or in any such indenture supplemental hereto.
Unless otherwise provided with respect to the Securities of any series,
at the option of the Company, interest on the Securities of any series that
bears interest may be paid (except in the case of Securities in Global form) (i)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the Securities Register or (ii) by wire transfer in immediately
available funds at such place and to such account as may be designated by the
Person entitled thereto as specified in the Securities Register.
SECTION 3.02. Denominations. The Securities of each series shall be in
registered form without coupons and shall be issuable initially in blocks having
aggregate principal amounts of not less than $25.00 and multiples of $25.00 in
excess thereof, unless otherwise specified as contemplated by Section 3.01.
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SECTION 3.03. Execution, Authentication, Delivery and Dating. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its President or one of its Vice Presidents under its corporate seal
reproduced or impressed thereon and attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Securities
may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities. At any time and from time to
time after the execution and delivery of this Indenture, the Company may deliver
Securities executed by the Company to the Trustee for authentication. Securities
may be authenticated on original issuance from time to time and delivered
pursuant to such procedures acceptable to the Trustee ("Procedures") as may be
specified from time to time by Company Order. Procedures may authorize
authentication and delivery pursuant to oral instructions of the Company or a
duly authorized agent, which instructions shall be promptly confirmed in
writing. The Trustee shall authenticate and deliver such Securities in
accordance with such instructions and as provided in this Indenture.
Prior to the delivery of a Security in any such form to the Trustee for
authentication, the Company shall deliver to the Trustee the following:
(a) a Company Order requesting the Trustee's authentication
and delivery of all or a portion of the Securities of such series, and
if less than all, setting forth procedures for such authentication;
(b) the Board Resolution by or pursuant to which such form
of Security has been approved, and the Board Resolution, if any, by or
pursuant to which the terms of the Securities of such series have been
approved, and, if pursuant to a Board Resolution, an Officers'
Certificate describing the action taken;
(c) an Officers' Certificate dated the date such certificate
is delivered to the Trustee, stating that all conditions precedent
provided for in this Indenture relating to the authentication and
delivery of Securities in such form and with such terms have been
complied with; and
(d) an Opinion of Counsel or Opinions of Counsel
substantially to the effect that (i) the form of such Securities has
been duly authorized and approved in conformity with the provisions of
this Indenture; (ii) the
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terms of such Securities have been duly authorized and determined in
conformity with the provisions of this Indenture, or, if such terms are
to be determined pursuant to Procedures, when so determined such terms
shall have been duly authorized and determined in conformity with the
provisions of this Indenture; and (iii) Securities in such form when
completed by appropriate insertions and executed and delivered by the
Company to the Trustee for authentication in accordance with this
Indenture, authenticated and made available for delivery by the Trustee
in accordance with this Indenture within the authorization as to
aggregate principal amount established from time to time by the Board
of Directors and sold in the manner specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the
Company entitled to the benefits of this Indenture, subject to
bankruptcy, reorganization, insolvency, fraudulent transfer, moratorium
and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles, and except as
enforcement thereof may be limited by (A) requirements that a claim
with respect to any Securities denominated other than in Dollars (or a
Foreign Currency or currency unit judgment in respect of such claim) be
converted into Dollars at a rate of exchange prevailing on a date
determined pursuant to applicable law or (B) governmental authority to
limit, delay or prohibit the making of payments in Foreign Currencies
or currency units or payments outside the United States, and subject to
such other qualifications as such counsel shall conclude do not
materially affect the rights of Holders of such Securities.
The Trustee shall be entitled to receive the documents referred to in
clauses (b) and (d) above only at or prior to the first request of the Company
to the Trustee to authenticate Securities of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture, or
be valid or obligatory for any purpose, unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by the manual signature of one of its authorized
officers, and such certificate upon any Security shall be conclusive evidence,
and the only evidence, that such Security has been duly authenticated and made
available for delivery hereunder.
SECTION 3.04. Temporary Securities. Pending the preparation of
definitive Securities of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver, temporary Securities that are
printed, lithographed, typewritten, mimeographed or otherwise produced, in any
denomination, substantially of the tenor of the definitive
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Securities of such series in lieu of which they are issued and with such
appropriate insertions, omissions, substitutions and other variations as the
officers executing such Securities may determine, as evidenced by their
execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. 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 of the Company designated for that purpose
without charge to the Holder. Upon surrender for cancellation of any one or more
temporary Securities, the Company shall execute and the Trustee shall
authenticate and make available for delivery in exchange therefor a like
principal amount of definitive Securities of the same series of authorized
denominations having the same original Issue Date and Stated Maturity and having
the same terms as such temporary Securities. Until so exchanged, the temporary
Securities shall in all respects be entitled to the same benefits under this
Indenture as definitive Securities.
SECTION 3.05. Global Securities. (a) Each Global Security issued under
this Indenture shall be registered in the name of the Depositary designated by
the Company for such Global Security or a nominee thereof and delivered to such
Depositary or a nominee thereof or custodian therefor, and each such Global
Security shall constitute a single Security for all purposes of this Indenture.
(b) Notwithstanding any other provision in this Indenture,
no Global Security may be exchanged in whole or in part for Securities
registered, and no transfer of a Global Security in whole or in part may be
registered, in the name of any Person other than the Depositary for such Global
Security or a nominee thereof unless (i) such Depositary advises the Trustee in
writing that such Depositary is no longer willing or able to continue as a
Depositary with respect to such 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 Securities Exchange Act of 1934, as
amended, at a time when the Depositary is required to be so registered to act as
such depositary, (ii) the Company in its sole discretion determines that such
Global Security shall be so exchangeable, (iii) there shall have occurred and be
continuing an Event of Default or (iv) pursuant to the following sentence. All
or any portion of a Global Security may be exchanged for a Security that has a
like aggregate principal amount and is not a Global Security upon 20 days' prior
request made by the Depositary or its Agent Member to the Securities Registrar.
(c) If any Global Security is to be exchanged for other
Securities or canceled in whole, it shall be surrendered by or on behalf of the
Depositary or its nominee to the Securities
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Registrar for exchange or cancellation as provided in this Article III. If any
Global Security is to be exchanged for other Securities or canceled in part, or
if another Security is to be exchanged in whole or in part for a beneficial
interest in any Global Security, then either (i) such Global Security shall be
so surrendered for exchange or cancellation as provided in this Article III or
(ii) the principal amount thereof shall be reduced, subject to Section
3.06(b)(iv), or increased by an amount equal to the portion thereof to be so
exchanged or canceled, or equal to the principal amount of such other Security
to be so exchanged for a beneficial interest therein, as the case may be, by
means of an appropriate adjustment made on the records of the Securities
Registrar, whereupon the Trustee shall instruct the Depositary or its authorized
representative to make a corresponding adjustment to its records. Upon any such
surrender or adjustment of a Global Security by the Depositary, accompanied by
registration instructions and, to the extent required by Section 3.06, a
Restricted Securities Certificate, the Trustee shall, subject to Section 3.05(b)
and as otherwise provided in this Article III, authenticate and make available
for delivery any Securities issuable in exchange for such Global Security (or
any portion thereof) in accordance with the instructions of the Depositary. The
Trustee shall not be liable for any delay in delivery of such instructions and
may conclusively rely on, and shall be fully protected in relying on, such
instructions.
(d) The Depositary or its nominee, as registered owner of a
Global Security, shall be the Holder of such Global Security for all purposes
under this Indenture and the Securities, and owners of beneficial interests in a
Global Security shall hold such interest pursuant to the rules and procedures of
the Depositary. Accordingly, any such owner's beneficial interests in a Global
Security shall be shown only on, and the transfer of such interest shall be
effected only through, records maintained by the Depositary or its nominee or
its Agent Members. Neither the Trustee nor the Securities Registrar shall have
any liability in respect of any transfers effected by the Depositary.
(e) The rights of the owners of beneficial interests in a
Global Security shall be exercised only through the Depositary and shall be
limited to those established by law and agreements between such owners and the
Depositary and/or its Agent Members.
SECTION 3.06. Registration, Transfer and Exchange Generally: Certain
Transfers and Exchanges: Restricted Securities Legends. (a) The Company shall
cause to be kept at the Corporate Trust 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 the Securities and of transfers of
Securities. Such register is herein sometimes referred to as the "Securities
Register". The Trustee is hereby appointed "Securities Registrar" for the
purpose of registering the Securities and transfers of Securities as herein
provided.
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Upon surrender for registration of transfer of any Security at the
office of the agent of the Company designated for that purpose, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, 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
and having the same terms and bearing such restrictive legends as may be
required by this Indenture.
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
and having the same terms and bearing such restrictive legends as may be
required by this Indenture, upon surrender of the Securities to be exchanged at
such office or agency. Whenever any Securities are so surrendered for exchange,
the Company shall execute, and the Trustee shall authenticate and make available
for delivery, the Securities that the Holder making the exchange is entitled to
receive.
All Securities issued upon any transfer or exchange of Securities shall
be the valid obligations of the Company, evidencing the same debt, and entitled
to the same benefits under this Indenture, as the Securities surrendered upon
such transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall
(if so required by the Company or the Securities Registrar) be duly endorsed, or
be accompanied by a written instrument of transfer in form satisfactory to the
Company and the Securities Registrar, duly executed by the Holder thereof or his
attorney duly authorized in writing.
No service charge shall be made to a Holder for any transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any transfer or exchange of Securities.
Neither the Company nor the Trustee shall be required, pursuant to the
provisions of this Section, (i) to issue, transfer or exchange any Security of
any series during a period beginning at the opening of business 15 days before
the day of mailing of a notice of redemption of Securities pursuant to Article
XI and ending at the close of business on the day of mailing of notice of
redemption or (ii) to transfer or exchange any Security so selected for
redemption in whole or in part, except, in the case of any Security to be
redeemed in part, any portion thereof not to be redeemed.
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(b) Certain Transfers and Exchanges. Notwithstanding any
other provision of this Indenture, transfers and exchanges of Securities and
beneficial interests in a Global Capital Security of the kinds specified in this
Section 3.06(b) shall be made only in accordance with this Section 3.06(b).
(i) Non-Global Security to Global Security. If the
Holder of a Security (other than a Global Security) wishes at any time to
transfer all or any portion of such Security to a Person who wishes to take
delivery thereof in the form of a beneficial interest in a Global Security, such
transfer may be effected only in accordance with the provisions of this clause
(b)(i) and subject to the rules and procedures of the Depositary. Upon receipt
by the Securities Registrar of (A) such Security as provided in Section 3.06(a)
and instructions satisfactory to the Securities Registrar directing that a
beneficial interest in the Global Security in a specified principal amount not
greater than the principal amount of such Security be credited to a specified
Agent Member's account and (B) a Securities Certificate duly executed by such
Holder or such Holder's attorney duly authorized in writing, then the Securities
Registrar shall cancel such Security (and issue a new Security in respect of the
untransferred portion thereof) as provided in Section 3.06(a) and increase the
aggregate principal amount of the Global Security by the specified principal
amount as provided in Section 3.05(c).
(ii) Non-Global Security to Non-Global Security. A
Security that is not a Global Security may be transferred, in whole or in part,
to a Person who takes delivery in the form of another Security that is not a
Global Security as provided in Section 3.06(a); provided, that if such Security
to be transferred in whole or in part is a Restricted Security, the Securities
Registrar shall have received a Restricted Securities Certificate duly executed
by the transferor Holder or such Holder's attorney duly authorized in writing.
(iii) Exchanges between Global Security and Non-Global
Security. A beneficial interest in a Global Security may be exchanged for a
Security that is not a Global Security as provided in Section 3.05.
(c) Restricted Securities Legend. (i) Except as set forth
below, all Securities shall bear a Restricted Securities Legend, substantially
in the following form:
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS. NEITHER THIS
SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED
OF IN THE ABSENCE OF SUCH REGISTRATION UNLESS SUCH TRANSACTION IS
EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT. THE HOLDER OF THIS SECURITY BY ITS ACCEPTANCE HEREOF
AGREES TO OFFER, SELL OR
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OTHERWISE TRANSFER SUCH SECURITY PRIOR TO THE DATE THAT IS ONE YEAR
AFTER THE LATER OF THE ORIGINAL ISSUE DATE HEREOF AND THE LAST DATE ON
WHICH RESOURCE BANKSHARES CORPORATION (THE "COMPANY") OR ANY AFFILIATE
OF THE COMPANY WAS THE OWNER OF THIS SECURITY (OR ANY PREDECESSOR OF
THIS SECURITY) (THE "RESALE RESTRICTIONS TERMINATION DATE") ONLY (A) TO
THE COMPANY, (B) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE SECURITIES ACT, (C) FOR SO LONG AS THIS SECURITY IS ELIGIBLE FOR
RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT ("RULE 144A"), TO
A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE
ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT
THE TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN
INSTITUTIONAL "ACCREDITED INVESTOR" WITHIN THE MEANING OF SUBPARAGRAPH
(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE SECURITIES ACT ACQUIRING
THE 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
ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE COMPANY'S AND THE TRUSTEE'S RIGHT PRIOR
TO ANY SUCH OFFER, SALE OR TRANSFER PURSUANT TO CLAUSES (D) OR (E) TO
REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATION AND/OR
OTHER INFORMATION SATISFACTORY TO EACH OF THEM IN ACCORDANCE WITH THE
AMENDED AND RESTATED DECLARATION OF TRUST, A COPY OF WHICH MAY BE
OBTAINED FROM THE COMPANY OR THE TRUSTEE. THIS LEGEND WILL BE REMOVED
UPON THE REQUEST OF A HOLDER AFTER THE RESALE RESTRICTIONS TERMINATION
DATE.
(ii) Subject to the following clauses of this Section
3.06(c), a Security (other than a Global Security) that does not bear a
Restricted Securities Legend may be issued in exchange for or in lieu
of a Restricted Security or any portion thereof that bears such legend
if, in the Company's judgment, placing such a legend upon such new
Security is not necessary to ensure compliance with the registration
requirements of the Securities Act, and the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
countersign and deliver such a new Security as provided in this Article
III.
(iii) Notwithstanding the foregoing provisions of this Section
3.06(c), a successor Security of a Security that does not bear a
Restricted Securities Legend shall not bear such form of legend unless
the Company has reasonable cause to believe that such successor
Security is a "restricted security" within the meaning of Rule 144
under the Securities Act, in which case the Trustee, at the written
direction of the Company in the form of an Officers' Certificate, shall
countersign and deliver a new Security
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bearing a Restricted Securities Legend in exchange for such successor
Security as provided in this Article III.
(iv) Upon any sale or transfer of a Restricted Security
(including any Restricted Security represented by a Global Security)
pursuant to an effective registration statement under the Securities
Act or pursuant to Rule 144 under the Securities Act after such
registration ceases to be effective: (A) in the case of any Restricted
Security that is a definitive Security, the Securities Registrar shall
permit the Holder thereof to exchange such Restricted Security for a
definitive Security that does not bear the Restricted Securities Legend
and rescind any restriction on the transfer of such Restricted
Security; and (B) in the case of any Restricted Security that is
represented by a Global Security, the Securities Registrar shall permit
the Holder of such Global Security to exchange such Global Security for
another Global Security that does not bear the Restricted Securities
Legend.
(v) If Restricted Securities are being presented or
surrendered for transfer or exchange then there shall be (if so
required by the Trustee), (A) if such Restricted Securities are being
delivered to the Securities Registrar by a Holder for registration in
the name of such Holder, without transfer, a certification from such
Holder to that effect; or (B) if such Restricted Securities are being
transferred, (i) a certification from the transferor in a form
substantially similar to that attached as Exhibit A, and (ii) if the
Company or Securities Registrar so requests, evidence reasonably
satisfactory to them as to the compliance with the restrictions set
forth in the Restricted Securities Legend.
(vi) If the Securities are issued pursuant to an effective
registration statement, no Restricted Securities Legend shall be
required.
SECTION 3.07. Mutilated, Destroyed, Lost and Stolen Securities. If any
mutilated Security is surrendered to the Trustee together with such security or
indemnity as may be required by the Company or the Trustee to hold each of them
harmless, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same issue and series of like
tenor and principal amount, having the same Original Issue Date and Stated
Maturity and bearing the same Interest Rate as such mutilated Security, and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and to the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) such security or indemnity as may be required by them to hold
each of them harmless, then, in the absence of notice to the Company or the
Trustee
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that such Security has been acquired by a bona fide purchaser, the Company shall
execute, and, upon its request, the Trustee shall authenticate and deliver, in
lieu of any such destroyed, lost or stolen Security, a new Security of the same
issue and series of like tenor and principal amount, having the same Original
Issue Date and Stated Maturity and bearing the same Interest Rate as such
destroyed, lost or stolen Security, and bearing a number not contemporaneously
outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.08. Payment of Interest; Interest Rights Preserved. Interest
on any Security of any series that is payable, and is punctually paid or duly
provided for, on any Interest Payment Date, shall be paid to the Person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest in respect of
Securities of such series, except that, unless otherwise provided in the
Securities of such series, interest payable on the Stated Maturity of a Security
shall be paid to the Person to whom principal is paid. The initial payment of
interest on any Security of any series that is issued between a Regular Record
Date and the related Interest Payment Date shall be payable as provided in such
Security or in the Board Resolution pursuant to Section 3.01 with respect to the
related series of Securities.
Any interest on any Security that is payable, but is not timely paid or
duly provided for, on any Interest Payment Date for Securities of such series
(herein called "Defaulted Interest"), shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having
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been such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such series in respect
of which interest is in default (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 Security and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of money
equal to the aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be held
in trust for the benefit of the Persons entitled to such Defaulted Interest as
in this Clause provided. Thereupon the Trustee shall fix a Special Record Date
for the payment of such Defaulted Interest which shall not be more than 15 days
and not 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 Holder of a
Security of such series at the address of such Holder as it appears in the
Securities Register not less than 10 days prior to such Special Record Date. The
Trustee may, in its discretion, in the name and at the expense of the Company,
cause a similar notice to be published at least once in a newspaper, customarily
published in the English language on each Business Day and of general
circulation in the Borough of Manhattan, the City of New York, but such
publication shall not be a condition precedent to the establishment of 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 the Securities of
such series (or their respective Predecessor Securities) are registered on such
Special Record Date and shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted Interest
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of the series in respect of which
interest is in default may be listed and, upon such notice as may be required by
such exchange (or by the Trustee if the Securities are not listed), if, after
notice given by the Company to the Trustee of the proposed payment pursuant to
this Clause, such payment shall be deemed practicable by the Trustee.
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Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest accrued and unpaid, and to
accrue, that were carried by such other Security. Any interest on any Security
that is deferred or extended pursuant to Section 3.12 shall not constitute
Defaulted Interest for purposes of this Section 3.08.
SECTION 3.09. Persons Deemed Owners. The Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in whose name any
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of and (subject to Section 3.08) interest on such
Security and for all other purposes whatsoever, whether or not such Security is
overdue, and neither the Company, the Trustee nor any agent of the Company or
the Trustee shall be affected by notice to the contrary. No holder of any
beneficial interest in any Global Security held on its behalf by a Depositary
shall have any rights under this Indenture with respect to such Global Security,
and such Depositary may be treated by the Company, the Trustee and any agent of
the Company or the Trustee as the owner of such Global Security for all purposes
whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the
Company or the Trustee from giving effect to any written certification, proxy,
or other authorization furnished by a Depositary or impair, as between the
Depositary and such holders of beneficial interests, the operation of customary
practices governing the exercise of the rights of the Depositary (or its
nominee) as Holder of any Security.
SECTION 3.10. Cancellation. All Securities surrendered for payment,
redemption, transfer or exchange shall, if surrendered to any Person other than
the Trustee, be delivered to the Trustee, and any such Securities and Securities
surrendered directly to the Trustee for any such purpose shall be promptly
canceled by it. The Company may at any time deliver to the Trustee for
cancellation any Securities previously authenticated and made available for
delivery hereunder that the Company may have acquired in any manner whatsoever,
and all Securities so delivered shall be promptly canceled by the Trustee. No
Securities shall be authenticated in lieu of or in exchange for any Securities
canceled as provided in this Section, except as expressly permitted by this
Indenture. All canceled Securities shall be delivered to the Company.
SECTION 3.11. Computation of Interest. Except as otherwise specified as
contemplated by Section 3.01 for Securities of any series, interest on the
Securities of each series for any period shall be computed on the basis of a
360-day year of twelve 30-day months, and interest on the Securities of each
series for any partial period shall be computed on the basis of the number of
days elapsed in a 360-day year of twelve 30-day months.
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SECTION 3.12. Deferrals of Interest Payment Dates. If specified as
contemplated by Section 3.01 with respect to the Securities of a particular
series, provided that no Event of Default has occurred and is continuing with
respect to such Securities, the Company shall have the right, at any time or
from time to time during the term of such series, to defer the payment of
interest on such Securities for such period or periods as may be specified as
contemplated by Section 3.01 (each, an "Extension Period") during which
Extension Periods the Company shall have the right to make partial payments of
interest on any Interest Payment Date. No Extension Period shall end on a date
other than an Interest Payment Date. At the end of any such Extension Period the
Company shall pay all interest then accrued and unpaid on the Securities
(together with Additional Interest thereon, if any, at the rate specified for
the Securities of such series to the extent permitted by applicable law),
provided, however, that no Extension Period may extend beyond the Stated
Maturity of these Securities. During any such Extension Period, the Company
shall not (i) declare or pay dividends or distributions on, or redeem, purchase,
acquire or make a liquidation payment with respect to, any of the Company's
capital stock (which includes common and preferred stock), or (ii) make any
payment of principal, interest, or premium, if any, on or repay, repurchase or
redeem any debt securities of the Company (including Other Debentures) that rank
pari passu with or junior in interest to the Securities of such series or (iii)
make any guarantee payments with respect to any guarantee by the Company of the
debt securities of any Subsidiary of the Company (including Other Guarantees) if
such guarantee ranks pari passu with or junior in interest to the Securities of
such series (other than (a) dividends or distributions in common stock of the
Company, (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 applicable Company Guarantee, (d) purchases or
acquisitions of shares of the Company's Common Stock in connection with the
satisfaction by the Company of its obligations under any employee benefit plan
or other contractual obligation of the Company (other than a contractual
obligation ranking pari passu with or junior to these Securities, (e) as a
result of a reclassification of the Company's capital stock or the exchange or
conversion of one class or series of the Company's capital stock for another
class or series of the Company's capital stock, or (f) 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). Prior to the termination of any such Extension Period,
the Company may further extend such Extension Period; provided, however, that no
Extension Period shall exceed the period or periods specified in such Securities
or extend beyond the Stated Maturity of such Securities. Upon termination of any
Extension Period and upon the payment of all accrued and unpaid interest and any
Additional
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Interest then due on any Interest Payment Date, and subject to the foregoing
limitations, the Company may elect to begin a new Extension Period. No interest
shall be due and payable during an Extension Period, except at the end thereof.
The Company shall give the Trustee and the Property Trustee notice of its
election to begin any such Extension Period (or an extension thereof) at least
three Business Days prior to the Interest Payment Date or, with respect to the
Securities of a series issued to a Resource Capital Trust, prior to the earlier
of (i) the date the Distributions on the Trust Securities of such Resource
Capital Trust would have been payable except for the election to begin or extend
such Extension Period or (ii) the date the Administrative Trustees or such
Resource Capital Trust are required to give notice to any automated quotation
system or to holders of Trust Securities of the record date or the date such
Distributions are payable, but in any event not less than three Business Days
prior to such record date. There is no limitation on the number of times that
the Company may elect to begin an Extension Period.
SECTION 3.13. 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 or other related material as a
convenience to Holders; provided, however, that any such notice or other related
material 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 or other related material 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.
So long as the Securities are held by or on behalf of a Resource
Capital Trust, notwithstanding anything to the contrary herein, the Company
shall have the right to set off any payment it is otherwise required to make
hereunder in respect of any Security with and to the extent the Company has
theretofore made, or is concurrently on the date of such payment making, any
payment under a Company Guarantee used to satisfy the related payment of
indebtedness hereunder.
ARTICLE IV
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture. This Indenture,
upon Company Request, shall cease to be of further effect (except as to (i) any
surviving rights of transfer, substitution and exchange of Securities, (ii)
rights hereunder of Holders to receive payments of principal of and interest on
the Securities and other rights, duties and obligations of the Holders as
beneficiaries hereof with respect to the amounts, if any, deposited with the
Trustee pursuant to this Article IV and (iii) the rights and obligations of the
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Trustee hereunder), and the Trustee, on demand of and at the expense of the
Company, shall execute proper instruments acknowledging satisfaction and
discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and
delivered (other than (i) Securities that have been destroyed,
lost or stolen and that have been replaced or paid as provided
in Section 3.07 and (ii) Securities for whose payment money
has theretofore been deposited in trust or segregated and held
in trust by the Company and thereafter repaid to the Company
or discharged from such trust, as provided in Section 10.03)
have been delivered to the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to
the Trustee for cancellation
(i) 9have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year of the date of deposit, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee
for the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company, in the case of Clause (B)(i), (ii) or (iii)
above, has deposited or caused to be deposited with the
Trustee as trust funds in trust for such purpose an amount in
the currency or currencies in which the Securities of such
series are payable sufficient to pay and discharge the entire
indebtedness on such Securities not theretofore delivered to
the Trustee for cancellation, for principal and interest
(including any Additional Interest) to the date of such
deposit (in the case of Securities that have become due and
payable) or to the Stated Maturity or the date for redemption,
as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and
discharge of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture or the earlier
resignation or removal of the Trustee, the
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obligations of the Company to the Trustee under Section 6.07 and, if money shall
have been deposited with the Trustee pursuant to subclause (B) of clause (1) of
this Section, the obligations of the Trustee under Section 4.02 and the last
paragraph of Section 10.03 shall survive.
SECTION 4.02. Application of Trust Money. Subject to the provisions of
the last paragraph of Section 10.03, all money deposited with the Trustee
pursuant to Section 4.01, shall be held in trust and applied by the Trustee, in
accordance with the provisions of the Securities and this Indenture, to the
payment, either directly or through any Paying Agent (including the Company
acting as its own Paying Agent) as the Trustee may determine, to the Persons
entitled thereto, of the principal and interest for the payment of which such
money or obligations have been deposited with or received by the Trustee;
provided, however, that such moneys need not be segregated from other funds
except to the extent required by law.
ARTICLE V
Remedies
SECTION 5.01. Events of Default. "Event of Default", wherever used
herein with respect to the Securities of any series, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Security
of that series, including any Additional Interest in respect thereof,
when it becomes due and payable, and continuance of such default for a
period of 30 days (subject to the deferral of any due date in the case
of an Extension Period); or
(2) default in the payment of the principal of any Security
of that series when due, whether at its Maturity, upon redemption, by
declaration of acceleration or otherwise; or
(3) default in the observance or performance in any material
respect, of any covenant of the Company in this Indenture (other than a
covenant a default in the performance of which or the breach of which
is elsewhere in this Section specifically dealt with), and continuance
of such default for a period of 90 days after there has been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
outstanding principal amount of
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the Securities of that series a written notice specifying such default
and requiring it to be remedied; or
(4) the entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company a bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in respect
of the Company under any applicable federal or state bankruptcy,
insolvency, reorganization or other similar law, or appointing a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property or
ordering the winding up or liquidation of its affairs, and the
continuance of any such decree or order unstayed and in effect for a
period of 60 consecutive days; or
(5) the institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization
or relief under any applicable federal or state bankruptcy, insolvency,
reorganization or other similar law, or the consent by it to the filing
of any such petition or to the appointment of a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or the making by it
of an assignment for the benefit of creditors, or the admission by it
in writing of its inability to pay its debts generally as they become
due and its willingness to be adjudicated a bankrupt, or the taking of
corporate action by the Company in furtherance of any such action; or
(6) in respect of a series issued to a Resource Capital
Trust, the voluntary or involuntary dissolution, winding-up or
termination of a Resource Capital Trust, except in connection with the
distribution of the Securities of such series to the holders of Trust
Securities in liquidation of such Resource Capital Trust, the
redemption of all the Trust Securities of a Resource Capital Trust, or
certain mergers, consolidations or amalgamations, each as permitted by
the applicable Trust Agreement; or
(7) any other Event of Default with respect to Securities of
that series as set forth in the Board Resolution and the Officers'
Certificate, or established in a supplemental indenture hereto, prior
to the issuance of the series of such Securities as contemplated by
Section 3.01.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then
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and in every such case the Trustee or the Holders of not less than 25% in
aggregate principal amount of the Outstanding Securities of that series may
declare the principal amount (or, if the Securities of that series are Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the Trustee if given
by Holders), provided, however, that, in the case of the Securities of a series
issued to a Resource Capital Trust, if, upon an Event of Default, the Trustee or
the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series fail to declare the principal of all the
Securities of that series to be immediately due and payable, the holders of at
least 25% in aggregate Liquidation Amount of the corresponding series of Capital
Securities then outstanding shall have such right by a notice in writing to the
Company and the Trustee with a copy to the Property Trustee. The Holders of a
majority in aggregate principal amount of the Outstanding Securities of a series
may annul such declaration and waive the default by written notice to the
Property Trustee, the Company and the Trustee if the default (other than the
nonpayment of the principal of these Securities that 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 Trustee. Should the Holders of the Securities of such a
series fail to annul such declaration and waive such default, the holders of a
majority in aggregate Liquidation Amount of the Capital Securities shall have
such right. Upon any such declaration such principal amount (or specified
amount) of and the accrued interest (including any Additional Interest) on all
the Securities of such series shall become immediately due and payable,
provided, however, that the payment of principal and interest (including any
Additional Interest) on such Securities shall remain subordinated to the extent
provided in Article XIV.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(A) all overdue installments of interest (including
any Additional Interest) on all Securities of that series,
(B) the principal of any Securities of that series
that has become due otherwise than by such
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declaration of acceleration and interest thereon at the rate
borne by the Securities, and
(C) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel.
(2) all Events of Default with respect to Securities of that
series, other than the nonpayment of the principal of Securities of
that series that has become due solely by such acceleration, have been
cured or waived as provided in Section 5.13.
The Company is required to file annually with the Trustee a certificate
as to whether or not the Company is in compliance with all the conditions and
covenants applicable to it under this Indenture.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
Upon receipt by the Trustee of written notice declaring such an
acceleration, or rescission and annulment thereof, with respect to Securities of
a series all or part of which is represented by a Global Security, a record date
shall be established for determining Holders of Outstanding Securities of such
series entitled to join in such notice, which record date shall be at the close
of business on the day the Trustee receives such notice. The Holders on such
record date, or their duly designated proxies, and only such Persons, shall be
entitled to join in such notice, whether or not such Holders remain Holders
after such record date; provided, however, that, unless such declaration of
acceleration, or rescission and annulment, as the case may be, shall have become
effective by virtue of the requisite percentage having joined in such notice
prior to the day that is 90 days after such record date, such notice of
declaration of acceleration, or rescission and annulment, as the case may be,
shall automatically and without further action by any Holder be canceled and of
no further effect. Nothing in this paragraph shall prevent a Holder, or a proxy
of a Holder, from giving, after expiration of such 90-day period, a new written
notice of declaration of acceleration, or rescission and annulment thereof, as
the case may be, that is identical to a written notice that has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 5.02.
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by
Trustee. The Company covenants that if:
(1) default is made in the payment of any installment of
interest (including any Additional Interest) on any
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Security when such interest becomes due and payable, and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to the Trustee, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal, including any sinking fund payment or
analogous obligations and interest (including any Additional Interest); and, in
addition thereto, all amounts owing to the Trustee under Section 6.07 and
Section 10.06.
If the Company fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon the Securities, wherever
situated.
If an Event of Default with respect to Securities of any series occurs
and is continuing, the Trustee may in its discretion proceed to protect and
enforce its rights and the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall deem most effectual
to protect and enforce any such rights, whether for the specific enforcement of
any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
SECTION 5.04. Trustee May File Proofs of Claim. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company or any other obligor upon the Securities or the property of the
Company or of such other obligor or their creditors,
(a) the Trustee (irrespective of whether the principal of
the Securities of any series 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 on the Company for the payment
of overdue principal or interest (including any Additional Interest))
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(i) to file and prove a claim for the whole amount of
principal and interest (including any Additional Interest)
owing and unpaid in respect to the Securities and to file such
other papers or documents
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as may be necessary or advisable and to take any and all
actions as are authorized under the Trust Indenture Act in
order to have the claims of the Holders and any predecessor to
the Trustee under Section 6.07 and of the Holders allowed in
any such judicial proceedings; and
(ii) in particular, the Trustee shall be authorized to
collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same in
accordance with Section 5.06; and
(b) 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 Trustee for distribution in accordance with Section 5.06, and in
the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due to it and
any predecessor Trustee under Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any proceeding; provided, however, that
the Trustee may, on behalf of the Holders, vote for the election of a trustee in
bankruptcy or similar official and be a member of a creditors' or other similar
committee.
SECTION 5.05. Trustee May Enforce Claim Without Possession of
Securities. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of all the amounts owing to the Trustee and any
predecessor Trustee under Section 6.07, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.06. Application of Money Collected. Any money or property
collected or to be applied by the Trustee with respect to a series of Securities
pursuant to this Article shall be applied in the following order, at the date or
dates fixed by the Trustee and, in case of the distribution of such money or
property on account of principal or interest (including any Additional
Interest), upon presentation of the Securities and the notation thereon of the
payment, if only partially paid, and upon surrender thereof, if fully paid:
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First: to the payment of all amounts due the Trustee and any
predecessor Trustee under Section 6.07;
Second: to the payment of the amounts then due and unpaid upon
such series of Securities for principal and interest (including any
Additional Interest), in respect of which or for the benefit of which
such money has been collected, ratably, without preference or priority
of any kind, according to the amounts due and payable on such series of
Securities for principal and interest (including any Additional
Interest), respectively; and
Third: the balance, if any, to the Person or Persons entitled
thereto.
SECTION 5.07. Limitation on Suits. No Holder of any Securities of any
series shall have any right to institute any proceeding, judicial or otherwise,
with respect to this Indenture or for the appointment of a receiver, assignee,
trustee, liquidator, sequestrator (or other similar official) or for any other
remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default with respect to the Securities
of that series;
(2) the Holders of not less than 25% in principal amount of
the Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of such
Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such
notice, request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing itself of, any
provision of this Indenture to affect, disturb or prejudice the rights of any
other Holders of Securities, or to obtain or to seek to obtain priority or
preference over any other of such Holders or to enforce any right under this
Indenture, except in the manner herein provided and for the equal and ratable
benefit of all such Holders.
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SECTION 5.08. Unconditional Right of Holders to Receive Principal and
Interest. Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right that is absolute and unconditional to receive
payment of the principal of and (subject to Section 3.08) interest (including
any Additional Interest) on such Security on the respective Stated Maturities
expressed in such Security and to institute suit for the enforcement of any such
payment, and such right shall not be impaired without the consent of such
Holder. In the case of Securities of a series issued to a Resource Capital
Trust, any holder of the corresponding series of Capital Securities shall have
the right, upon the occurrence of an Event of Default described in Section
5.01(1) or 5.01(2) hereof, to institute a suit directly against the Company for
enforcement of payment to such Holder of principal of and (subject to Section
3.08) interest (including any Additional Interest) on the Securities having a
principal amount equal to the aggregate Liquidation Amount of the Capital
Securities of the corresponding series held by such Holder. Notwithstanding any
payments made to a holder of Capital Securities by the Company in connection
with a suit directly against the Company, the Company shall remain obligated to
pay the principal of or interest on the Securities, and the Company shall be
subrogated to the rights of the holder of such Capital Securities with respect
to payments on the Capital Securities to the extent of any payments made by the
Company to such holder in any suit directly against the Company.
The holders of the Capital Securities will not be able to exercise
directly any remedies, other than those set forth in this Section 5.08,
available to the holders of the Securities unless there shall have been an Event
of Default under the Trust Agreement.
SECTION 5.09. Restoration of Rights and Remedies. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every case the Company, the Trustee and the Holders shall, subject to any
determination in such proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such proceeding had been
instituted.
SECTION 5.10. Rights and Remedies Cumulate. Except as otherwise
provided in the last paragraph of Section 3.07, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders is intended to be
exclusive of any other right or remedy, and every right and remedy shall, to the
extent permitted by law, be cumulative and in addition to every right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right
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or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver. Except as otherwise
provided in the last paragraph of Section 3.07, no delay or omission of the
Trustee or of any Holder of any Security to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee
or to the Holders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Holders, as the case may be.
SECTION 5.12. Control by Holders. The Holders of a majority in
principal amount of the Outstanding Securities of any series 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, with respect to the Securities of such series, provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture;
(2) the Trustee may take any other action deemed proper by
the Trustee that is not inconsistent with such direction; and
(3) subject to the provisions of Section 6.01, the Trustee
shall have the right to decline to follow such direction if the Trustee
in good faith shall, by a Responsible Officer or Officers of the
Trustee, determine that the proceeding so directed would be unjustly
prejudicial to the Holders not joining in any such direction or would
involve the Trustee in personal liability.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
provided, however, that, unless the Holders of a majority in principal amount of
the Outstanding Securities of such series shall have joined in such notice prior
to the day that is 90 days after such record date, such notice shall
automatically and
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without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new written notice identical
to a written notice that has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 5.12.
SECTION 5.13. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the Outstanding Securities of a series affected
thereby may, on behalf of the Holders of all the Securities of such series,
waive any past default, except a default in the payment of principal of or
interest (including any Additional Interest) (unless such default has been cured
and a sum sufficient to pay all overdue installments of interest and principal
due otherwise than by acceleration has been deposited with the Trustee) on any
Security of such series or a default in respect of a covenant or provision that,
under Article IX, cannot be modified or amended without the consent of the
Holder of each outstanding Security of such series and, in the case of
Securities of a series issued to a Resource Capital Trust, should the Holders of
such Securities fail to annul such declaration and waive such default, the
holders of a majority in aggregate Liquidation Amount of the related series of
Capital Securities shall have such right.
Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 5.14. Undertaking for 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, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; but the provisions of this Section shall not apply to any
suit instituted by the Trustee, to any suit instituted by any Holder, or group
of Holders, holding in the aggregate more than 10% in principal amount of the
outstanding Securities of any series, or to any suit instituted by any Holder
for the enforcement of the payment of the principal of or interest (including
any Additional Interest) on any Security on or after the respective Stated
Maturities expressed in such Security.
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SECTION 5.15. Waiver of Usury, Stay or Extension 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 usury, stay or extension law wherever enacted, now
or at any time hereafter in force, that 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
law, and covenants that it 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
The Trustee
SECTION 6.01. Certain Duties and Responsibilities. (a) Except during
the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only
such duties 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 its part, the Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any such certificates or opinions
that by any provisions 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) In case an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture, and use the same degree of care and skill in their
exercise, as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct except that:
(i) this Subsection shall not be construed to limit the
effect of Subsection (a) of this Section;
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(ii) the 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 Trustee was negligent in ascertaining the pertinent
facts; and
(iii) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in accordance
with the direction of Holders pursuant to Section 5.12 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 with respect to the Securities
of such series.
(d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there shall be reasonable grounds for believing that
repayment of such funds or indemnity satisfactory to it against such risk or
liability is not assured to it.
(e) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection to the Trustee shall be subject to the provisions of
this Section.
SECTION 6.02. Notice of Defaults. Within 90 days after actual knowledge
by a Responsible officer of the Trustee of the occurrence of any default
hereunder with respect to the Securities of any series, the Trustee shall
transmit by mail to all Holders of Securities of such series, as their names and
addresses appear in the Securities Register, notice of such default hereunder
known to a Responsible Officer of the Trustee, unless such default shall have
been cured or waived; provided, however, that, except in the case of a default
in the payment of the principal of or interest (including any Additional
Interest) on any Security of such series, the Trustee shall be fully protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors and/or Responsible
Officers of the Trustee in good faith determines that the withholding of such
notice is in the interests of the Holders of Securities of such series; and
provided, further, however, that, in the case of any default of the character
specified in Section 5.01(3), no such notice to Holders of Securities of such
series shall be given until at least 30 days after the occurrence thereof. For
the purpose of this Section, the term "default" means any event that is, or
after notice or lapse of time or both would become, an Event of Default with
respect to Securities of such series.
SECTION 6.03. Certain Rights of Trustee. Subject to the provisions of
Section 6.01:
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(a) the 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, Security or other paper or
document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence is herein specifically prescribed) shall
be entitled to receive and may, in the absence of bad faith on its
part, conclusively rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its selection
and the advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in
reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to it against the costs, expenses and liabilities that
might be incurred by it in compliance with such request or direction;
(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, direction,
consent, order, bond, indenture, Security or other paper or document,
but the Trustee in its discretion may make such inquiry or
investigation into such facts or matters as it may see fit, and, if the
Trustee shall determine to make such inquiry or investigation, it shall
be entitled to examine the books, records and premises of the Company,
personally or by agent or attorney at the reasonable cost of the
Company upon giving reasonable notice to the Company and shall incur no
liability or additional liability of any kind by reason of such inquiry
or investigation;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either
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directly or by or through agents or attorneys and the Trustee shall not
be responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be under any obligation to take
any action that is discretionary under the provisions of this
Indenture;
(i) the Trustee shall not be charged with knowledge of any
Event of Default unless either (1) a Responsible Officer of the Trustee
shall have actual knowledge or (2) the Trustee shall have received
notice thereof in accordance with Section 1.05(1) hereof from the
Company or a Holder;
(j) no permissive power or authority available to the
Trustee shall be construed as a duty; and
(k) the Trustee shall not be liable for any action taken,
suffered or omitted to be taken by it in good faith and reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred upon it by this Indenture.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except the Trustee's
certificates of authentication, shall be taken as the statements of the Company,
and the Trustee assumes no responsibility for their correctness. The Trustee
makes no representations as to the validity or sufficiency of this Indenture or
of the Securities or any offering or disclosure materials prepared in connection
therewith. The Trustee shall not be accountable for the use or application by
the Company of the Securities or the proceeds thereof.
SECTION 6.05. May Hold Securities. The Trustee, any Paying Agent,
Securities Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 6.08 and 6.13, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Paying Agent, Securities Registrar or such
other agent.
SECTION 6.06. Money Held in Trust. Money held by the Trustee in trust
hereunder need not be segregated from other funds except to the extent required
by law. The Trustee shall be under no liability for interest on any money
received by it hereunder except as otherwise agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement. The Company, as borrower
on the Securities, agrees:
(1) to pay to the Trustee from time to time such
compensation as the Company and the Trustee shall from time
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to time agree in writing for all services rendered by it hereunder
(which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(2) to reimburse the Trustee upon its request for all
reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including
the reasonable compensation and the expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance
as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense (other than taxes based upon,
measured by or determined by the income of the Trustee) (including the
reasonable compensation and the expenses and disbursements of its
agents and counsel) incurred without negligence or bad faith, arising
out of or in connection with the acceptance or administration of this
trust or the performance of its duties hereunder, including the costs
and expenses of defending itself against any claim or liability in
connection with the exercise or performance of any of its powers or
duties hereunder.
The obligations of the Company under this Section 6.07 shall survive
the termination of this Indenture or the earlier resignation or removal of the
Trustee.
To secure the Company's payment obligations in this Section, the
Company and the Holders agree that the Trustee shall have a lien prior to the
Securities on all money or property held or collected by the Trustee.
Such lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 5.01(4) or (5) occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under the Bankruptcy Code of 1978, as amended, or any successor
statute.
The provisions of this Section 6.07 shall survive the termination of
this Indenture.
SECTION 6.08. Disqualification; Conflicting Interests. The Trustee for
the Securities of any series issued hereunder shall be subject to the provisions
of Section 310(b) of the Trust Indenture Act. Nothing herein shall prevent the
Trustee from filing with the Commission the application referred to in the
second-to-last paragraph of Section 310(b) of the Trust Indenture Act.
SECTION 6.09. Corporate Trustee Required; Eligibility. There shall at
all times be a Trustee hereunder that shall be:
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(a) a corporation organized and doing business under the
laws of the United States of America or of any state, territory or the
District of Columbia, authorized under such laws to exercise corporate
trust powers and subject to supervision or examination by Federal,
state, territorial or District of Columbia authority, or
(b) a corporation or other Person organized and doing
business under the laws of a foreign government that is permitted to
act as Trustee pursuant to a rule, regulation or order of the
Commission, authorized under such laws to exercise corporate trust
powers, and subject to supervision or examination by authority of such
foreign government or a political subdivision thereof substantially
equivalent to the supervision or examination applicable to United
States institutional trustees, in either case having a combined capital
and surplus of at least $50,000,000, subject to supervision of
examination by Federal or state authority. If such corporation
publishes reports of condition at least annually, pursuant to law or to
the requirements of the aforesaid supervising or examining authority,
then, for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined capital
and surplus as set forth in its most recent report of condition so
published. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereafter specified in
this Article. Neither the Company nor any Person directly or indirectly
controlling, controlled by or under common control with the Company
shall serve as Trustee for the Securities of any series issued
hereunder.
SECTION 6.10. Resignation and Removal, Appointment of Successor. (a) No
resignation or removal of the Trustee and no appointment of a Successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the Successor Trustee under Section 6.11.
(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice thereof to the
Company. If an instrument of acceptance by a Successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a Successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to
the Securities of any series by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series, delivered to the Trustee
and to the Company.
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(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.08 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(ii) the Trustee shall cease to be eligible under Section
6.09 and shall fail to resign after written request therefor by the
Company or by any such Holder, or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, then, in any such case,
(x) the Company, acting pursuant to the authority of a Board
Resolution, may remove the Trustee, or (y) subject to Section 5.14, any
Holder 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.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause with respect to the Securities of one or more series, the Company, by
a Board Resolution, shall promptly appoint a Successor Trustee with respect to
the Securities of that or those series. If, within one year after such
resignation, removal or incapability, or the occurrence of such vacancy, a
Successor Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the Successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment, become the Successor Trustee with respect to the Securities
of such series and supersede the Successor Trustee appointed by the Company. If
no Successor Trustee with respect to the Securities of any series shall have
been so appointed by the Company or the Holders and accepted appointment in the
manner hereafter provided, within 30 days of such resignation or removal the
Trustee or any Holder who has been a bona fide Holder of a Security for at least
six months, subject to Section 5.14, on behalf of himself and all others
similarly situated, may petition any court of competent jurisdiction for the
appointment of a Successor Trustee with respect to the Securities of such
series.
(f) The Company shall give notice of each resignation and
each removal of the Trustee with respect to the Securities of any series and
each appointment of a Successor Trustee with respect to the Securities of any
series by mailing written notice of such event by first-class mail, postage
prepaid, to the
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Holders of Securities of such series as their names and addresses appear in the
Securities Register. Each notice shall include the name of the Successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 6.11. Acceptance of Appointment Successor. (a) In case of the
appointment hereunder of a Successor Trustee with respect to all Securities,
every such Successor Trustee so appointed shall execute, acknowledge and deliver
to the Company and to the retiring Trustee an instrument accepting such
appointment, and thereupon the resignation or removal of the retiring Trustee
shall become effective and such Successor Trustee, without any further act, deed
or conveyance, shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the Company or the
Successor Trustee, such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such Successor Trustee all the
rights, powers and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such Successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of the Successor
Trustee with respect to the Securities of one or more (but not all) series, the
Company, the retiring Trustee and each Successor Trustee with respect to the
Securities of one or more series shall execute and deliver a written instrument
or an indenture supplemental hereto wherein each Successor Trustee shall accept
such appointment and which (1) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, each
Successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such Successor Trustee relates, (2) if the retiring Trustee is
not retiring with respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series as to which the retiring Trustee is not retiring shall continue
to be vested in the retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such written instrument or supplemental
indenture shall constitute such Trustees as co-trustees of the same trust and
that each such Trustee shall be trustee of a trust or trusts hereunder separate
and apart from any trust or trusts hereunder administered by any other such
Trustee, and upon the execution and delivery of such written instrument or
supplemental indenture, the resignation or removal of the retiring Trustee shall
become effective to the extent provided therein, and each such Successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, and duties of the retiring Trustee
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with respect to the Securities of that or those series to which the appointment
of such Successor Trustee relates; but, on request of the Company or any
Successor Trustee, such retiring Trustee shall duly assign, transfer and deliver
to such Successor Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series to which the
appointment of such Successor Trustee relates.
(c) Upon request of any such Successor Trustee, the Company
shall execute any and all instruments for more fully and certainly vesting in
and confirming to such Successor Trustee all rights, powers and trusts referred
to in paragraph (a) or (b) of this Section, as the case may be.
(d) No Successor Trustee shall accept its appointment unless
at the time of such acceptance such Successor Trustee shall be qualified and
eligible under this Article. In the event that the Trust Indenture Act applies
to this Indenture at the time that any Successor Trustee is appointed, such
Successor Trustee shall qualify under such Act.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article (including qualification under the Trust Indenture Act, if applicable),
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated, and in case any
Securities shall not have been authenticated, any successor to the Trustee may
authenticate such Securities either in the name of any predecessor Trustee or in
the name of such Successor Trustee, and in all cases the certificate of
authentication shall have the full force that it is provided anywhere in the
Securities or in this Indenture that the certificate of the Trustee shall have.
SECTION 6.13. Preferential Collection of Claims Against Company. If and
when the Trustee shall be or become a creditor of the Company (or any other
obligor upon the Securities), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of claims against the Company
(or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. The Trustee may
appoint an authenticating agent or agents (each, an
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"Authenticating Agent") with respect to one or more series of Securities that
shall be authorized to act on behalf of the Trustee to authenticate Securities
of such series issued upon original issue and upon exchange, registration of
transfer or partial redemption thereof, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Where reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, or of any state, Territory or
the District of Columbia, authorized under such laws to act as Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and
subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of such supervising or examining authority, then
for the purposes of this Section the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to all or substantially all of
the corporate trust business of an Authenticating Agent shall be the successor
Authenticating Agent hereunder, provided such corporation shall be otherwise
eligible under this Section, without the execution or filing of any paper or any
further act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written notice
thereof to the Trustee and to the Company. The Trustee may at any time terminate
the agency of an Authenticating Agent by giving written notice thereof to such
Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent that shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities
of the series with respect to which such Authenticating Agent will serve. Any
successor Authenticating Agent upon acceptance of its
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appointment hereunder shall become vested with all the rights, powers and duties
of its predecessor hereunder, with like effect as if originally named as an
Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant
to this Section, the Securities of each series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternative
certificate of authentication in the following form:
This is one of the Securities referred to in the within mentioned
Indenture.
Dated: ___________________________________
Agent Trustee
By:________________________________
As Authenticating Agent
By:________________________________
Authorized Signatory
SECTION 6.15. Trustee's Rights and Obligations. The Trustee shall have
and be subject to all the duties and responsibilities specified with respect to
an indenture trustee under the Trust Indenture Act. Subject to such provisions,
the Trustee is under no obligation to exercise any of the powers vested in it by
this Indenture at the request of any holder of the Securities, unless offered
indemnity to its satisfaction by such holder against the costs, expenses and
liabilities that might be incurred thereby. The Trustee will not be required to
expend or risk its own funds or otherwise incur personal financial liability in
the performance of its duties if the Trustee reasonably believes that repayment
or adequate indemnity is not reasonably assured to it. Notwithstanding the
foregoing, nothing in this Section 6.15 shall be deemed to abrogate any of the
rights, indemnities or protections otherwise provided to the Trustee under this
Indenture.
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ARTICLE VII
Holder's Lists and Reports by Trustee and Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of
Holders. The Company will furnish or cause to be furnished to the Trustee:
(a) quarterly, not more than 15 days after each Regular
Record Date in each year, a list, in such form as the Trustee may
reasonably require, of the names and addresses of the Holders as of
such Regular Record Date, 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, excluding from any
such list names and addresses received by the Trustee in its capacity
as Securities Registrar.
SECTION 7.02. Preservation of Information, Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Securities
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders
with respect to their rights under this Indenture or under the Securities, and
the corresponding rights and privileges of the Trustee, shall be as provided in
the Trust Indenture Act.
(c) 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 agent of either of them shall be held accountable by reason of
the disclosure of information as to the names and addresses of the Holders made
pursuant to the Trust Indenture Act.
SECTION 7.03. Reports by Trustee. (a) The Trustee shall transmit to
Holders 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.
(b) Reports so required to be transmitted at stated
intervals of not more than 12 months shall be transmitted no later than the last
calendar day in ________ of each calendar year, commencing with the last
calendar day in ________ of the year following the Original Issue Date.
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(c) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each securities exchange
upon which the Securities are listed and also with the Commission. The Company
will notify the Trustee whenever the Securities are listed on any securities
exchange.
SECTION 7.04. Reports by Company. The Company shall file with the
Trustee and with the Commission, and transmit to Holders, such information,
documents and other reports, and such summaries thereof, as may be required
pursuant to the Trust Indenture Act at the times and in the manner provided in
the Trust Indenture Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934, as amended, shall be filed
with the Trustee within 15 days after the same is required to be filed with the
Commission. Notwithstanding that the Company may not be required to remain
subject to the reporting requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Company shall continue to file with the
Commission and provide the Trustee with the annual reports and the information,
documents and other reports that are specified in Sections 13 and 15(d) of the
Securities Exchange Act of 1934, as amended. The Company also shall comply with
the other provisions of Trust Indenture Act Section 314(a). 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).
ARTICLE VIII
Consolidation, Merger, Conveyance, Transfer or Lease
SECTION 8.01. Company May Consolidate Only on Certain Terms. The
Company shall not consolidate with or merge with or into any other Person or
convey, transfer or lease its properties and assets substantially as an entirety
to any Person, and no Person shall consolidate with or merge with or into the
Company or convey, transfer or lease its properties and assets substantially as
an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge with
or into another Person or convey, transfer or lease its properties and
assets substantially as an entirety to any Person, the corporation
formed by such consolidation or into which the Company is merged or the
Person that acquires by conveyance or transfer, or that leases, the
properties and assets of the Company substantially as an entirety shall
be a corporation, partnership or trust
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organized and existing under the laws of the United States of America
or any State or the District of Columbia, and shall expressly assume,
by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual
payment of the principal of and interest (including any Additional
Interest) on all the Securities and the performance of every covenant
and every obligation of this Indenture on the part of the Company to be
performed or observed;
(2) immediately after giving effect to such transaction, no
Event of Default, and no event that, after notice or lapse of time, or
both, would become an Event of Default, shall have occurred and be
continuing;
(3) if at such time Securities of a series issued to a
Resource Capital Trust are Outstanding, such consolidation, merger,
conveyance, transfer or lease is permitted under the related Trust
Agreement and Company Guarantee and does not give rise to any breach or
violation of the related Trust Agreement or Company Guarantee; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such
consolidation, merger, conveyance, transfer or lease and any such
supplemental indenture complies with this Article and that all
conditions precedent herein provided for relating to such transaction
have been complied with; and the Trustee, subject to Section 6.01, may
rely upon such Officers' Certificate and Opinion of Counsel as
conclusive evidence that such transaction complies with this Section
8.01.
SECTION 8.02. Successor Company Substituted. Upon any consolidation or
merger by the Company with or into any other Person, or any conveyance, transfer
or lease by the Company of its properties and assets substantially as an
entirety to any Person in accordance with Section 8.01, the successor
corporation formed by such consolidation or into which the Company is merged or
to which such conveyance, transfer or lease is made shall succeed to, and be
substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor Person had been named
as the Company herein; and in the event of any such conveyance, transfer or
lease the Company shall be discharged from all obligations and covenants under
the Indenture and the Securities and may be dissolved and liquidated.
Such successor Person may cause to be signed, and may issue either in
its own name or in the name of the Company, any or all of the Securities
issuable hereunder that theretofore shall not have been signed by the Company
and delivered to the Trustee; and, upon the order of such successor Person
instead of the Company and subject to all the terms, conditions and limitations
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in this Indenture prescribed, the Trustee shall authenticate and shall make
available for delivery any Securities that previously shall have been signed and
delivered by the officers of the Company to the Trustee for authentication
pursuant to such provisions and any Securities that such successor Person
thereafter shall cause to be signed and delivered to the Trustee on its behalf
for the purpose pursuant to such provisions. 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 Securities had been issued at the date of the
execution hereof.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form may be made in the Securities thereafter to
be issued as may be appropriate.
ARTICLE IX
Supplemental Indentures
SECTION 9.01. Supplemental Indentures without Consent of Holders.
Without the consent of any Holders, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following:
(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company herein and in the Securities contained;
(2) to convey, transfer, assign, mortgage or pledge any
property to or with the Trustee or to surrender any right or power
herein conferred upon the Company;
(3) to establish the form or terms of Securities of any
series as permitted by Sections 2.01 or 3.01;
(4) to add to the covenants of the Company for the benefit
of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of
Securities, stating that such covenants are expressly being included
solely for the benefit of such series) or to surrender any right or
power herein conferred upon the Company;
(5) to add any additional Events of Default;
(6) to change or eliminate any of the provisions of this
Indenture; provided that any such change or elimination (a) shall
become effective only when there is no Security
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Outstanding of any series created prior to the execution of such
supplemental indenture that is entitled to the benefit of such
provision or (b) shall not apply to any Outstanding Securities;
(7) to cure any ambiguity, to correct or supplement any
provision herein that may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture; provided that such action
pursuant to this clause (7) shall not materially adversely affect the
interest of (a) the Holders of Securities of any series or, (b) in the
case of the Securities of a series issued to a Resource Capital Trust
and for so long as any of the corresponding series of Capital
Securities shall remain outstanding, the holders of such Capital
Securities;
(8) to evidence and provide for the acceptance of
appointment hereunder by a Successor Trustee with respect to the
Securities of one or more series and to add to or change any of the
provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one
Trustee, pursuant to the requirements of Section 6.11(b); or
(9) to comply with the requirements of the Commission in
order to effect or maintain the qualification of this Indenture under
the Trust Indenture Act.
SECTION 9.02. Supplemental Indentures with Consent of Holders. With the
consent of the Holders of not less than a majority in principal amount of the
Outstanding Securities of each series affected by such supplemental indenture,
by Act of such Holders delivered to the Company and the Trustee, the Company,
when authorized by a Board Resolution, and the Trustee may enter into an
indenture or indentures supplemental hereto 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
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) except to the extent permitted by Section 3.12 or as
otherwise specified as contemplated by Section 3.01 with respect to the
extension of the interest payment period of the Securities of any
series, change the Stated Maturity of the principal of, or any
installment of interest (including any Additional Interest) on, any
Security, or reduce the principal amount thereof or the rate of
interest thereon, or reduce the amount of principal of a Discount
Security that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to Section 5.02, or
change the place of payment where, or the coin or currency in
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which, any Security or interest thereon is payable, or impair the right
to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after
the date fixed for redemption thereof);
(2) reduce the percentage in principal amount of the
Outstanding Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent of whose
Holders is required for any waiver (of compliance with certain
provisions of this Indenture or certain defaults hereunder and their
consequences) provided for in this Indenture;
(3) modify any of the provisions of this Section, Section
5.13 or Section 10.05, except to increase any such percentage or to
provide that certain other provisions of this Indenture cannot be
modified or waived without the consent of the Holder of each Security
affected thereby; or
(4) modify the provisions in Article XIII of this Indenture
with respect to the subordination of outstanding Securities of any
series in a manner adverse to the Holders thereof;
provided that, in the case of the Securities of a series issued to a Resource
Capital Trust, so long as any of the corresponding series of Capital Securities
remain outstanding, no such amendment shall be made that adversely affects the
holders of such Capital Securities in any material respect, and no termination
of this Indenture shall occur, and no waiver of any Event of Default or
compliance with any covenant under this Indenture shall be effective, without
the prior consent of the holders of at least a majority of the aggregate
Liquidation Amount of such Capital Securities then outstanding unless and until
the principal of the Securities of such series and all accrued and, subject to
Section 3.08, unpaid interest (including any Additional Interest) thereon have
been paid in full; and provided further, however, that in the case of the
securities of a series issued to a Resource Capital Trust, so long as any of the
corresponding series of Capital Securities remain outstanding, no amendment
shall be made to Section 5.08 of this Indenture that would impair the rights of
the holders of such Capital Securities provided herein without the prior consent
of the holders of each Capital Security then outstanding unless and until the
principal of the Securities of such series and all accrued and (subject to
Section 3.08) unpaid interest (including any Additional Interest) thereon have
been paid in full.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated Proxies, and only such Persons, shall be entitled to
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consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date that is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
A supplemental indenture that changes or eliminates any covenant or
other provision of this Indenture that has expressly been included solely for
the benefit of one or more particular series of Securities, or that modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures. In executing or
accepting the additional trusts created by any supplemental indenture permitted
by this Article or the modifications thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and (subject to Section
6.01) shall be fully protected in conclusively relying upon, an Officer's
Certificate and an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by this Indenture, and that
all conditions precedent have been complied with. The Trustee may, but shall not
be obligated to, enter into any such supplemental indenture that affects the
Trustee's own rights, duties or immunities under this Indenture or otherwise, or
that may subject it to liability or be contrary to applicable law.
SECTION 9.04. Effect of Supplemental Indentures. Upon the execution of
any supplemental indenture under this Article, this Indenture shall be modified
in accordance therewith, and such supplemental indenture shall form a part of
this Indenture for all purposes; and every Holder of Securities theretofore or
thereafter authenticated and delivered hereunder shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act. No supplemental
indenture will be qualified or executed pursuant to the Trust Indenture Act
unless this Indenture is so qualified, or in connection with Capital Securities
that are registered under the Securities Exchange Act of 1934, as amended, upon
the effectiveness of a registration statement. Every supplemental indenture so
qualified or executed shall conform to the requirements of the Trust Indenture
Act as then in effect.
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SECTION 9.06. Reference in Securities to Supplemental Indentures.
Securities authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article may, and shall if required by the Company,
bear a notation in form approved by the Company as to any matter provided for in
such supplemental indenture. If the Company shall so determine, new Securities
of any series so modified as to conform, in the opinion of the Company, to any
such supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities of such Series.
ARTICLE X
Covenants
SECTION 10.01. Payment of Principal and Interest. The Company covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay the principal of and interest on the Securities of that series in
accordance with the terms of such Securities and this Indenture.
SECTION 10.02. Maintenance of Office or Agency. The Company will
maintain in each Place of Payment for any series, an office or agency where
Securities of that series may be presented or surrendered for payment and an
office or agency where Securities may be surrendered for transfer or exchange
and where notices and demand to or upon the Company in respect of the Securities
and this Indenture may be served. The Company initially appoints the Trustee,
acting through its Corporate Trust Office, as its agent for such purposes. The
Company will give prompt written notice to the Trustee of any change in the
location of any such office or agency. If at any time the Company shall fail to
maintain such office or agency or shall fall to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for any
or all of such purposes, and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such purposes. The Company
will give prompt written notice to the Trustee of any such designation and any
change in the location of any such office or agency.
SECTION 10.03. Money for Security Payments to be Held in Trust. If the
Company shall at any time act as its own Paying
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Agent with respect to any series of Securities, it will, on or before each due
date of the principal of or interest on any of the Securities of such series,
segregate and hold in trust for the benefit of the Persons entitled thereto a
sum sufficient to pay the principal or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its failure so to act.
Whenever the Company shall have one or more Paying Agents, it will,
prior to 10:00 a.m. Richmond, Virginia time on each due date of the principal of
or interest on any Securities, deposit with a Paying Agent a sum sufficient to
pay the principal or interest so becoming due, such sum to be held in trust for
the benefit of the Persons entitled to such principal or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of its failure so to act.
The Company will cause each Paying Agent other than the Trustee to
execute and make available for delivery to the Trustee an instrument in which
such Paying Agent shall agree with the Trustee, subject to the provisions of
this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the
principal of or interest on Securities in trust for the benefit of the
Persons entitled thereto until such sums shall be paid to such Persons
or otherwise disposed of as herein provided;
(2) give the Trustee written notice of any default by the
Company (or any other obligor upon the Securities) in the making of any
payment of principal or interest;
(3) at any time during the continuance of any such default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(4) comply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be held by the Trustee
upon the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by the Company or any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the
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principal of or interest on any Security and remaining unclaimed for two years
after such principal or interest has become due and payable shall (unless
otherwise required by mandatory provision of applicable escheat or abandoned or
unclaimed property law) be paid on Company Request to the Company, or (if then
held by the Company) shall (unless otherwise required by mandatory provision of
applicable escheat or abandoned or unclaimed property law) be discharged from
such trust; and the Holder of such Security shall thereafter, as an unsecured
general creditor, look only to the Company for payment thereof, and all
liability of the Trustee or such Paying Agent with respect to such trust money,
and all liability of the Company as trustee thereof, shall thereupon cease;
provided, however, that the Trustee or such Paying Agent, before being required
to make any such repayment, may at the expense of the Company cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in the Borough of
Manhattan, the City of New York, notice that such money remains unclaimed and
that, after a date specified therein, that shall not be less than 30 days from
the date of such publication, any unclaimed balance of such money then remaining
will be repaid to the Company.
SECTION 10.04. Statement as to Compliance. The Company shall deliver to
the Trustee, within 120 days after the end of such calendar year of the Company
commencing after the date hereof, an Officers' Certificate executed by
authorized officers at least one of whom shall be the principal executive,
financial or accounting officer of the Company covering the preceding calendar
year, stating whether or not to the best knowledge of the signers thereof the
Company is in default in the performance, observance or fulfillment of or
compliance with any of the material terms, provisions covenants and conditions
of this Indenture, and if the Company shall be in such default, specifying all
such defaults and the nature and status thereof of which they may have
knowledge. For the purpose of this Section 10.04, compliance shall be determined
without regard to any grace period (other than an Extension Period) or
requirement of notice provided pursuant to the terms of this Indenture.
SECTION 10.05. Waiver of Certain Covenants. The Company may omit in any
particular instance to comply with any covenant or condition as specified as
contemplated by Section 3.01 with respect to the Securities of any series, if
before or after the time for such compliance the Holders of at least a majority
in principal amount of the outstanding Securities of such series shall, by Act
of such Holders, either waive such compliance in such instance or generally
waive compliance with such covenant or condition, but no such waiver shall
extend to or affect such covenant or condition except to the extent so expressly
waived, and, until such waiver shall become effective, the obligations of the
Company in respect of any such covenant or condition shall remain in full force
and effect.
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SECTION 10.06. Payment of the Trusts' Costs and Expenses. Since the
Resource Capital Trusts are being formed solely to facilitate the investment in
the Securities, the Company, as borrower on the Securities, hereby covenants to
pay all debts and obligations (other than with respect to the payment of
principal and interest on the Trust Securities) and all costs and expenses of
such Trusts (including, but not limited to, all costs and expenses relating to
the organization of such Trusts, the fees and expenses of the Trustees and all
costs and expenses relating to the operation of such Trusts) and to pay any and
all taxes, duties, assessments or other governmental charges of whatever nature
(other than United States withholding taxes) imposed on such Trusts by the
United States, or any other taxing authority (such payments of amounts in
connection with taxes being herein referred to as "Additional Sums"), so that
the net amounts received and retained by such Trusts and their respective
Property Trustees after paying such expenses or Additional Sums will be equal to
the amounts such Trusts and Property Trustees would have received had no such
costs, expenses or taxes, duties, assessments or other governmental charges been
incurred by or imposed on such Trusts. The foregoing obligations of the Company
are for the benefit of, and shall be enforceable by, any person to whom such
debts, obligations, costs, expenses and taxes are owed (a "Creditor") whether or
not such Creditor has received notice thereof. Any such Creditor may enforce
such obligations of the Company hereunder directly against the Company, and the
Company hereby irrevocably waives any right or remedy to require that any such
Creditor take any action against any Trust or any other person before proceeding
against the Company. The Company also agrees hereby to execute such additional
agreements as may be necessary or desirable to give full effect to the
foregoing.
SECTION 10.07. Additional Covenants. The Company covenants and agrees
with each Holder of Securities of a series issued to a Resource Capital Trust
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
shares of the Company's capital stock (which includes common and preferred
stock), or (ii) make any payment of principal, interest or premium, if any, on
or repay, repurchase or redeem any debt securities of the Company (including
Other Debentures) that rank pari passu with or junior in interest to the
Securities of such series or (iii) make any guarantee payments with respect to
any guarantee by the Company of debt securities of any subsidiary of the Company
(including Other Guarantees) if such guarantee ranks pari passu with or junior
in interest to the Securities (other than (a) dividends or distributions in
Common Stock of the Company, (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 Company Guarantee, (d) purchases
or acquisitions of shares of the Company's Common Stock in connection with the
satisfaction by the Company of its obligations under any employee
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benefit plan or other contractual obligation of the Company (other than a
contractual obligation ranking pari passu with or junior in interest to these
Securities), (e) as a result of a reclassification of the Company's capital
Stock or the exchange or conversion of one class or series of the Company's
capital stock for another class or series of the Company's capital stock or (f)
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), if at such time (i) there shall have
occurred an Event of Default, (ii) the Company shall be in default with respect
to its payment of any obligations under the related Company Guarantee or (iii)
the Company shall have given notice of its election to begin an Extension Period
as provided herein and shall not have rescinded such notice, or such Extension
Period, or any extension thereof, shall be continuing.
The Company also covenants with each Holder of Securities of a series
issued to a Resource Capital Trust (i) to maintain directly, or indirectly
through a wholly owned Subsidiary, 100% ownership of the Common Securities of
such Resource Capital Trust; provided, however, that any permitted successor of
the Company hereunder may succeed to the Company's ownership of such Common
Securities, (ii) not to voluntarily terminate, wind-up or liquidate such
Resource Capital Trust, except (a) in connection with a distribution of the
Securities of such series to the holders of Capital Securities in liquidation of
such Resource Capital Trust or (b) in connection with certain mergers,
consolidations or amalgamations permitted by the related Trust Agreement and
(iii) to use its reasonable best efforts, consistent with the terms and
provisions of such Trust Agreement, (x) not to adversely affect such Resource
Capital Trust's status as a grantor trust and (y) not to cause such Resource
Capital Trust to be classified as an association taxable as a corporation for
United States Federal income tax purposes.
SECTION 10.08. Information Returns. For each year during which any
Securities are outstanding, the Company shall furnish to each Paying Agent on a
timely basis such information as may be reasonably requested by each Paying
Agent in order that such Paying Agent may prepare the information that it is
required to report for such year on Internal Revenue Service Forms 1096 and
1099. Such information shall include the amount of original issue discount, if
any, includible in income for each $1,000 of principal amount at Stated Maturity
of outstanding Securities during such year.
SECTION 10.09. Statement by Officers as to Default. The Company shall
deliver to the Trustee, within five days after the Company becomes aware of the
occurrence of any Event of Default, an Officers' Certificate setting forth the
details of such Event of Default and the action that the Company proposes to
take with respect thereto, if known at such time.
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SECTION 10.10 Delivery of Certain Information. If specified as
contemplated by Section 3.01 with respect to a series of Securities, at any time
when the Company is not subject to Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, upon the request of a Holder of a Security,
the Company will promptly furnish or cause to be furnished Rule 144A Information
(as defined below) to such Holder, to a prospective purchaser who is a
"qualified institutional buyer", within the meaning of Rule 144A under the
Securities Act, of such Security designated by such Holder in order to permit
compliance by such Holder with Rule 144A in connection with the resale of such
Security by such Holder; provided, however, that unless otherwise specified as
contemplated by Section 3.01, the Company shall not be required to furnish such
information in connection with any request made on or after the date that is two
years from the later of (i) the date such Security (or any predecessor Security)
was acquired from the Company or (ii) the date such Security (or any predecessor
Security) was last acquired from an "affiliate" of the Company within the
meaning of Rule 144 under the Securities Act. "Rule 144A Information" shall be
such information as is specified pursuant to Rule 144A(d)(4) under the
Securities Act as in effect on the date hereof.
ARTICLE XI
Redemption or Prepayment of Securities
SECTION 11.01. Applicability of This Article. Redemption of Securities
(whether by operation of a sinking fund or otherwise) as permitted or required
by any form of Security issued pursuant to this Indenture shall be made in
accordance with such form of Security and this Article; provided, however, that
if any provision of any such form of security shall conflict with any provision
of this Article, the provision of such form of Security shall govern. Except as
otherwise set forth in the form of Security for such series, each Security shall
be subject to partial redemption only in an amount not less than $100,000 or, in
the case of the Securities of a series issued to a Resource Capital Trust, an
amount not less than $100,000, or multiples of $1,000 in excess thereof.
SECTION 11.02. Election To Redeem: Notice to Trustee. The election of
the Company to redeem any Securities shall be evidenced by or pursuant to a
Board Resolution. In case of any redemption at the election of the Company of
any Securities of any particular series and having the same terms, the Company
shall, not less than 30 nor more than 60 days prior to the date fixed for
redemption (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee and, in the case of Securities held by or on behalf of a
Resource Capital Trust, the Property Trustee of such date and of the principal
amount of Securities of that series to be redeemed. In the case of any
redemption of Securities prior to the expiration of any
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restriction on such redemption provided in the terms of such Securities, the
Company shall furnish the Trustee with an Officers' Certificate and an Opinion
of Counsel evidencing compliance with such restriction. Any such notice given to
the Trustee hereunder shall include the information required by Section 11.04
hereof.
SECTION 11.03. Selection of Securities to be Redeemed. If less than all
the Securities of any series are to be redeemed (unless all the Securities of
such series and of a specified tenor are to be redeemed or unless such
redemption affects only a single Security all as designated to the Trustee by
the Company), the particular Securities to be redeemed shall be selected not
more than 60 days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate and that may provide
for the selection for redemption of a portion of the principal amount of any
Security of such series; provided that the unredeemed portion of the principal
amount of any Security shall be in an authorized denomination (which shall not
be less than the minimum authorized denomination) for such Security. If less
than all the Securities of such series and of a specified tenor are to be
redeemed (unless such redemption affects only a single Security), the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities of such series
and specified tenor not previously called for redemption in accordance with the
preceding sentence.
The Trustee shall promptly notify the Company in writing of the
Securities selected for partial redemption and the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security that has been or is to be
redeemed. If the Company shall so direct, Securities registered in the name of
the Company, any Affiliate or any Subsidiary thereof shall not be included in
the Securities selected for redemption.
SECTION 11.04. Notice of Redemption. Notice of redemption (other than
at the Stated Maturity) shall be given by first-class mail, postage prepaid,
mailed not later than the thirtieth day, and not earlier than the sixtieth day,
prior to the date fixed for redemption, to each Holder of Securities to be
redeemed, at the address of such Holder as it appears in the Securities
Register.
With respect to Securities of each series to be redeemed, each notice
of redemption shall state:
(a) the Redemption Date for Securities of such series;
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(b) the Redemption Price or, if the Redemption Price cannot
be calculated prior to the time the notice is required to be sent, the
estimate of the Redemption Price provided pursuant to this Indenture
together with a statement that it is an estimate and that the actual
Redemption Price will be calculated on the third Business Day prior to
the Redemption Date (if such an estimate of the Redemption Price is
given, a subsequent notice shall be given as set forth above setting
forth the Redemption Price promptly following the calculation thereof);
(c) if less than all Outstanding Securities of such
particular series and having the same terms are to be redeemed, the
identification (and, in the case of partial redemption, the respective
principal amounts) of the particular Securities to be redeemed;
(d) that on the date fixed for redemption, the redemption
price at which such Securities are to be redeemed will become due and
payable upon each such Security or portion thereof, and that interest
thereon, if any, shall cease to accrue on and after such date;
(e) the place or places where such Securities are to be
surrendered for payment of the Redemption Price;
(f) that the redemption is for a sinking fund, if such is
the case;
(g) such other provisions as may be required in respect of
the terms of a particular series of Securities; and
(h) the CUSIP number if any.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall not be
irrevocable. 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, a 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.
SECTION 11.05. Deposit of Redemption Price. Prior to 10:00 a.m.
Richmond, Virginia time on the Redemption Date specified in the notice of
redemption given as provided in Section 11.04, the Company will deposit with the
Trustee or with one or more Paying Agents an amount of money sufficient to
redeem on the Redemption
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Date all the Securities so called for redemption at the applicable Redemption
Price.
SECTION 11.06. Payment of Securities Called for Redemption. If any
notice of redemption has been given as provided in Section 11.04, the Securities
or portion of Securities with respect to which such notice has been given shall
become due and payable on the date and at the place or places stated in such
notice at the applicable Redemption Price. On presentation and surrender of such
Securities at a place of payment in such notice specified, such Securities or
the specified portions thereof shall be paid and redeemed by the Company at the
applicable Redemption Price.
Upon presentation of any Security redeemed in part only, the Company
shall execute and the Trustee shall authenticate and deliver to the Holder
thereof, at the expense of the Company, a new Security or Securities of that
same series, of authorized denominations, in aggregate principal amount equal to
the unredeemed portion of the Security so presented and having the same Original
Issue Date, Stated Maturity and terms. If the Global Security is so surrendered,
such new Security will (subject to Section 3.06) also be a new Global Security.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal of such Security shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security.
SECTION 11.07. Company's Right of Redemption. Unless otherwise
specified as contemplated by Section 3.01 with respect to the Securities of a
particular series and notwithstanding any additional redemption rights that may
be so specified, the Company, at its option, may redeem the Securities, subject
to the Company having received prior approval of the Federal Reserve if then
required under applicable capital guidelines or policies of the Federal Reserve,
(i) on or after the date specified in such Securities, in whole at any time or
in part from time to time, or (ii) upon the occurrence and during the
continuation of a Tax Event, an Investment Company Event or a Capital Treatment
Event, at any time within 90 days following the occurrence and during the
continuation of such Tax Event, Investment Company Event or Capital Treatment
Event, in whole (but not in part), in each case at a Redemption Price specified
in such Securities, together with accrued interest (including Additional
Interest) to the Redemption Date.
If less than all the Securities of any such series are to be redeemed,
the aggregate principal amount of such Securities remaining Outstanding after
giving effect to such redemption shall be sufficient to satisfy any provisions
of the Declaration of Trust related to the Resource Capital Trust to which such
Securities were issued.
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ARTICLE XII
Sinking Funds
SECTION 12.01. Applicability of Article. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of any
series except as otherwise specified as contemplated by Section 3.01 for such
Securities.
The minimum amount of any sinking fund payment provided for by the
terms of any Securities of any series is herein referred to as a "mandatory
sinking fund payment", and any sinking fund payment in excess of such minimum
amount that is permitted to be made by the terms of such Securities of any
series is herein referred to as an "optional sinking fund payment". If provided
for by the terms of any Securities of any series, the case amount of any sinking
fund payment may be subject to reduction as provided in Section 13.02. Each
sinking fund payment shall be applied to the redemption (or purchase by tender
or otherwise) of Securities of any series as provided for by the terms of such
Securities.
SECTION 12.02. Satisfaction of Sinking Fund Payments with Securities.
In lieu of making all or any part of a mandatory sinking fund payment with
respect to any Securities of a series in cash, the Company may at its option, at
any time no more than 16 months and no less than 45 days prior to the date on
which such sinking fund payment is due, deliver to the Trustee Securities of
such series (together with the unmatured Coupons, if any, appertaining thereto)
theretofore purchased or otherwise acquired by the Company, except Securities of
such series that have been redeemed through the application of mandatory or
optional sinking fund payments pursuant to the terms of the Securities of such
series, accompanied by a Company Order instructing the Trustee to credit such
obligations and stating that the Securities of such series were originally
issued by the Company by way of bona fide sale or other negotiation for value;
provided that the Securities to be so credited have not been previously so
credited. The Securities to be so credited shall be received and credited for
such purpose by the Trustee at the redemption price for such Securities, as
specified in the Securities so to be redeemed, for redemption through operation
of the sinking fund, and the amount of such sinking fund payment shall be
reduced accordingly.
SECTION 12.03. Redemption of Securities Sinking Fund. Not less than 45
days prior to each sinking fund payment date for any series of securities, the
Company will deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for such Securities pursuant to
the terms of such Securities, the portion thereof, if any, that is to be
satisfied by payment of cash in the currency in which the Securities of such
series are payable (except as provided
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pursuant to Section 3.01) and the portion thereof, if any, that is to be
satisfied by delivering and crediting Securities pursuant to Section 13.02 and
will also deliver to the Trustee any Securities to be so delivered. Such
Certificate shall be irrevocable and upon its delivery the Company shall be
obligated to make the cash payment or payments therein referred to, if any, on
or before the succeeding sinking fund payment date. In the case of the failure
of the Company to deliver such Certificate (or, as required by this Indenture,
the Securities and coupons, if any, specified in such Certificate) by the due
date therefor, the sinking fund payment due on the succeeding sinking fund
payment date for such series shall be paid entirely in cash and shall be
sufficient to redeem the principal amount of the Securities of such series
subject to a mandatory sinking fund payment without the right to deliver or
credit securities as provided in Section 13.02 and without the right to make the
optional sinking fund payment with respect to such series at such time.
Any sinking fund payment or payments (mandatory or optional) made in
cash plus any unused balance of any preceding sinking fund payments made with
respect to the Securities of any particular series shall be applied by the
Trustee (or by the Company if the Company is acting as its own Paying Agent) on
the sinking fund payment date on which such payment is made (or, if such payment
is made before a sinking fund payment date, on the sinking fund payment date
immediately following the date of such payment) to the redemption of Securities
of such series at the redemption price specified in such Securities with respect
to the sinking fund. Any sinking fund moneys not so applied or allocated by the
Trustee (or by the Company if the Company is acting as its own Paying Agent), in
which case such moneys shall be segregated and held in trust as provided in
Section 10.03) for such series and together with such payment (or such amount so
segregated) shall be applied in accordance with the provisions of this Section
12.03. Any and all sinking fund moneys with respect to the Securities of any
particular series held by the Trustee (or if the Company is acting as its own
Paying Agent, segregated and held in trust as provided in Section 10.03) on the
last sinking fund payment date with respect to Securities of such series and not
held for the payment or redemption of particular Securities of such series shall
be applied by the Trustee (or by the Company if the Company is acting as its own
Paying Agent), together with other moneys, if necessary, to be deposited (or
segregated) sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity. The Trustee shall select the Securities
to be redeemed upon such sinking fund payment date in the manner specified in
Section 11.03 and cause notice of the redemption thereof to be given in the name
of and at the expense of the Company in the manner provided in Section 11.04.
Such notice having been duly given, the redemption of such Securities shall be
made upon the terms and in the manner stated in Section 11.06. On or before each
sinking fund payment date, the Company shall pay to the
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Trustee (or, if the Company is acting as its own Paying Agent, the Company shall
segregate and hold in trust as provided in Section 10.03) in cash a sum in the
currency in which Securities of such series are payable (except as provided
pursuant to Section 3.01) equal to the principal and any interest accrued to the
redemption date for Securities or portions thereof to be redeemed on such
sinking fund payment date pursuant to this Section 12.03.
Neither the Trustee nor the Company shall redeem any Securities of a
series with sinking fund moneys or mail any notice of redemption of Securities
of such series by operation of the sinking fund for such series during the
continuance of a default in payment of interest, if any, on any Securities of
such series or of any Event of Default (other than an Event of Default occurring
as a consequence of this paragraph) with respect to the Securities of such
series, except that if the notice of redemption shall have been provided in
accordance with the provisions hereof, the Trustee (or the Company if the
Company is then acting as its own Paying Agent) shall redeem such Securities if
cash sufficient for that purpose shall be deposited with the Trustee (or
segregated by the Company) for that purpose in accordance with the terms of this
Article XII. Except as aforesaid, any moneys in the sinking fund for such series
at the time when any such default or Event of Default shall occur and any moneys
thereafter paid into such sinking fund shall, during the continuance of such
default or Event of Default, be held as security for the payment of the
Securities and coupons, if any, of such series; provided, however, that in case
such default or Event of Default shall have been cured or waived herein, such
moneys shall thereafter be applied on the next sinking fund payment date for the
Securities of such series on which such moneys may be applied pursuant to the
provisions of this Section 12.03.
ARTICLE XIII
Subordination of Securities
SECTION 13.01. Securities Subordinate to Senior Debt. The Company
covenants and agrees, and each Holder of a Security, by its acceptance thereof,
likewise covenants and agrees, that, to the extent and in the manner hereafter
set forth in this Article, the payment of the principal of and interest
(including any Additional Interest) on each and all of the Securities are hereby
expressly made subordinate and junior in right of payment to the prior payment
in full of all amounts then due and payable in respect of all Senior Debt.
SECTION 13.02. Payment Over of Proceeds upon Dissolution. In the event
of (a) any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceeding relative to
the Company, its
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<PAGE>
creditors or its property, (b) any proceeding for the liquidation, dissolution,
or other winding up of the Company, voluntary or involuntary, whether or not
involving insolvency or bankruptcy proceedings, (c) any assignment by the
Company for the benefit of creditors or (d) any other marshaling of the assets
of the Company (each such event, if any, herein sometimes referred to as a
"Proceeding"), then the holders of Senior Debt shall be entitled to receive
payment in full of principal of and interest, if any, on such Senior Debt, or
provision shall be made for such payment in cash or cash equivalents or
otherwise in a manner satisfactory to the holders of Senior Debt, before the
Holders of the Securities are entitled to receive or retain any payment or
distribution of any kind or character, whether in cash, property or securities
(including any payment by distribution that may be payable or deliverable by
reason of the payment of any other debt of the Company (including any series of
the Securities) subordinated to the payment of the Securities, such payment or
distribution being hereafter referred to as a "Junior Subordinated Payment"), on
account of principal of or interest (including any Additional Interest) on the
Securities or on account of the purchase or other acquisition of Securities by
the Company or any Subsidiary and to that end the holders of Senior Debt shall
be entitled to receive, for application to the payment thereof, any payment or
distribution of any kind or character, whether in cash, property or securities,
including any Junior Subordinated Payment, that may be payable or deliverable in
respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, including any Junior Subordinated
Payment, before all Senior Debt is paid in full or payment thereof is provided
for in cash or cash equivalents or otherwise in a manner satisfactory to the
holders of Senior Debt, and if such fact shall, at or prior to the time of such
payment or distribution, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
or distribution shall be paid over or delivered forthwith to the trustee in
bankruptcy, receiver, liquidating trustee, custodian, assignee, agent or other
Person making payment or distribution of assets of the Company for application
to the payment of all Senior Debt remaining unpaid, to the extent necessary to
pay all Senior Debt in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
For purposes of this Article only, the words "any payment or
distribution of any kind or character, whether in 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 or reorganization or readjustment, in each case, which securities are
subordinated in right of payment to all then outstanding
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<PAGE>
Senior Debt to substantially the same extent as, or to a greater extent than,
the Securities are so subordinated as provided in this Article. 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 of
all or substantially all of its properties and assets as an entirety to another
Person or the liquidation or dissolution of the Company following the sale of
all or substantially all of its properties and assets as an entirety to another
Person upon the terms and conditions set forth in Article VIII shall not be
deemed a Proceeding for the purposes of this Section if the Person formed by
such consolidation or into which the Company is merged or the Person that
acquires by sale such properties and assets substantially as an entirety, as the
case may be, shall, as a part of such consolidation, merger, or sale comply with
the conditions set forth in Article VIII.
SECTION 13.03. Prior Payment to Senior Debt Upon Acceleration of
Securities. In the event that any Securities are declared due and payable before
their Stated Maturity, then and in such event the holders of the Senior Debt
outstanding at the time such Securities so become due and payable shall first be
entitled to receive payment in full of all amounts due on or in respect of such
Senior Debt (including any amounts due upon acceleration), or provision shall be
made for such payment in cash or cash equivalents or otherwise in a manner
satisfactory to the holders of Senior Debt, before the Holders of the Securities
will be entitled to receive or retain any payment or distribution of any kind or
character, whether in cash, property or securities (including any Junior
Subordinated Payment) by the Company on account of the principal of or interest
(including any Additional Interest) on the Securities or on account of the
purchase or other acquisition of Securities by the Company or any Subsidiary;
provided, however, that nothing in this Section shall prevent the satisfaction
of any sinking fund payment in accordance with this Indenture or as otherwise
specified as contemplated by Section 3.01 for the Securities of any series by
delivering and crediting pursuant to Section 12.02 or as otherwise specified as
contemplated by Section 3.01 for the Securities of any series of Securities that
have been acquired (upon redemption or otherwise) prior to such declaration of
acceleration.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.02 would be applicable.
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<PAGE>
SECTION 13.04. No Payment When Senior Debt in Default. (a) In the event
and during the continuation of any default by the Company in the payment of
principal of or interest, if any, on any Senior Debt, or in the event that any
event of default with respect to any Senior Debt shall have occurred and be
continuing and shall have resulted in such Senior Debt becoming or being
declared due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and such acceleration shall have
been rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default in payment or event of default, then no
direct or indirect payment or distribution of any kind or character, whether in
cash, property or securities (including any Junior Subordinated Payment), by
set-off or otherwise, shall be made or agreed to be made by the Company on
account of principal or interest (including any Additional Interest) on the
Securities or on account of any redemption, repayment, retirement, purchase or
other acquisition of any Securities by the Company or any Subsidiary; provided,
however, that nothing in this Section shall prevent the satisfaction of any
sinking fund payment in accordance with this Indenture or as otherwise specified
as contemplated by Section 3.01 for the Securities of any series by delivering
and crediting pursuant to Section 12.02 or as otherwise specified as
contemplated by Section 3.01 for the Securities of any series of Securities that
have been acquired (upon redemption or otherwise) prior to such default in
payment or event of default.
In the event that, notwithstanding the foregoing, the Company shall
make any payment to the Trustee or the Holder of any Security prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such payment, have been made known to a Responsible Officer of the
Trustee or, as the case may be, such Holder, then and in such event such payment
shall be paid over and delivered forthwith to the Company.
The provisions of this Section shall not apply to any payment with
respect to which Section 13.02 would be applicable.
SECTION 13.05. Payment Permitted If No Default. Nothing contained in
this Article or elsewhere in this Indenture or in any of the Securities shall
prevent (a) the Company, at any time except during the pendency of any
Proceeding referred to in Section 13.02 or under the conditions described in
Sections 13.03 and 13.04, from making payments at any time of principal of or
interest (including any Additional Interest) on the Securities, or (b) the
application by the Trustee of any money deposited with it hereunder to the
payment of or on account of the principal of or interest (including any
Additional Interest) on the Securities or the retention of such payment by the
Holders, if, at the time of such payment by the Company or application by the
Trustee, as
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<PAGE>
the case may be, it did not have knowledge that such payment or application, as
the case may be, would have been prohibited by the provisions of this Article.
SECTION 13.06. Subrogation to Rights of Holders of Senior Debt. Subject
to the payment in full of all amounts due on all Senior Debt to the extent
required under Sections 13.02 and 13.03 of this Indenture, or the provision for
such payment in cash or cash equivalents or otherwise in a manner satisfactory
to the holders of Senior Debt, the Holders of the Securities shall be subrogated
to the extent of the payments or distributions made to the holders of such
Senior Debt pursuant to the provisions of this Article (equally and ratably with
the holders of all indebtedness of the Company that by its express terms is
subordinated to Senior Debt of the Company to substantially the same extent as
the Securities are subordinated to the Senior Debt and is entitled to like
rights of subrogation by reason of any payments or distributions made to holders
of such Senior Debt) to the rights of the holders of such Senior Debt to receive
payments and distributions of cash, property and securities applicable to the
Senior Debt until the principal of and interest on the Securities shall be paid
in full. For purposes of such subrogation or assignment, no payments or
distributions to the holders of the Senior Debt of any cash, property or
securities to which the Holders of the Securities or the Trustee would be
entitled except for the provisions of this Article, and no payments over
pursuant to the provisions of this Article to the holders of Senior Debt by
Holders of the Securities or the Trustee, shall, as among the Company, its
creditors other than holders of Senior Debt, and the Holders of the Securities,
be deemed to be a payment or distribution by the Company to or on account of the
Senior Debt.
SECTION 13.07. Provisions Solely to Define Relative Rights. The
provisions of this Article are and are intended solely for the purpose of
defining the relative rights of the Holders of the Securities on the one hand
and the holders of Senior Debt on the other hand. Nothing contained in this
Article or elsewhere in this Indenture or in the Securities is intended to or
shall (a) impair, as between the Company and the Holders of the Securities, the
obligations of the Company, which are absolute and unconditional, to pay to the
Holders of the Securities the principal of and interest (including any
Additional Interest) on the Securities as and when the same shall become due and
payable in accordance with their terms; or (b) affect the relative rights
against the Company of the Holders of the Securities and creditors of the
Company other than their rights in relation to the holders of Senior Debt; or
(c) prevent the Trustee or the Holder of any Security from exercising all
remedies otherwise permitted by applicable law upon default under this Indenture
including, without limitation, filing and voting claims in any Proceeding,
subject to the rights, if any, under this Article of the holders of Senior Debt
to receive cash, property and
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<PAGE>
securities otherwise payable or deliverable to the Trustee or such Holder.
SECTION 13.08. Trustee to Effectuate Subordination. Each Holder of a
Security by his or her acceptance thereof 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 provided in this Article and
appoints the Trustee his or her attorney-in-fact for any and all such purposes.
SECTION 13.09. No Waiver of Subordination Provisions. No right of any
present or future holder of any Senior Debt to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Company with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof that any such holder may have or be otherwise charged with.
SECTION 13.10. Notice to Trustee. The Company shall give prompt written
notice to the Trustee of any fact known to the Company that would prohibit the
making of any payment to or by the Trustee in respect of the Securities.
Notwithstanding the provisions of this Article 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 to or by the Trustee in
respect of the Securities, unless and until the Trustee shall have received
written notice thereof from the Company or a holder of Senior Debt or from any
trustee, agent or representative therefor (whether or not the facts contained in
such notice are true); provided, however, that if the Trustee shall not have
received the notice provided for in this Section at least two Business Days
prior to the date upon which by the terms hereof any monies may become payable
for any purpose (including, without limitation, the payment of the principal of
or interest (including any Additional Interest) on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such monies and to apply the same to the purpose
for which they were received and shall not be affected by any notice to the
contrary that may be received by it within two Business Days prior to such date.
SECTION 13.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article, the Trustee, subject to the provisions of Article VI, and the
Holders of the Securities shall be entitled to conclusively rely upon any order
or decree entered by any court of competent jurisdiction in which such
Proceeding is pending, or a certificate of the trustee in bankruptcy, receiver,
liquidating trustee, custodian, assignee for the benefit of creditors, agent or
other Person making such
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<PAGE>
payment or distribution, delivered to the Trustee or to the Holders of
Securities, for the purpose of ascertaining the Persons entitled to participate
in such payment or distribution, the holders of the Senior Debt 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.
SECTION 13.12. Trustee Not Fiduciary for Holders of Senior Debt. The
Trustee, in its capacity as trustee under this Indenture, shall not be deemed to
owe any fiduciary duty to the holders of Senior Debt and shall not be liable to
any such holders if it shall in good faith mistakenly pay over or distribute to
Holders of Securities or to the Company or to any other Person cash, property or
securities to which any holders of Senior Debt shall be entitled by virtue of
this Article or otherwise.
SECTION 13.13. Rights of Trustee as Holder of Senior Debt: Preservation
of Trustee's Rights. The Trustee in its individual capacity shall be entitled to
all the rights set forth in this Article with respect to any Senior Debt that
may at any time be held by it, to the same extent as any other holder of Senior
Debt, and nothing in this Indenture shall deprive the Trustee of any of its
rights as such holder.
SECTION 13.14. Article Applicable to Paying Agents. In case at any time
any Paying Agent other than the Trustee shall have been appointed by the Company
and be then acting hereunder, the term "Trustee" as used in this Article shall
in such case (unless the context otherwise requires) be construed as extending
to and including such Paying Agent within its meaning as fully for all intents
and purposes as if such Paying Agent were named in this Article in addition to
or in place of the Trustee.
SECTION 13.15. Certain Conversions or Exchanges Deemed Payment. For
purposes of this Article XIII only, (a) the issuance and delivery of junior
securities (as defined below) upon conversion or exchange of Securities shall
not be deemed to constitute a payment or distribution on account of the
principal of or interest (including any Additional Interest) on the Securities
or on account of the purchase or other acquisition of Securities, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute payment on account of the principal of such Security. For the
purposes of this Section, the term "junior securities" means (i) shares of any
stock of any class of the Company and (ii) securities of the Company that are
subordinated in right of payment to all Senior Debt that may be outstanding at
the time of issuance or delivery of such securities to substantially the same
extent as, or to a greater extent than, the Securities are so subordinated as
provided in this Article.
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<PAGE>
This instrument may be executed in any number of counterparts, each of
which when so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first written above.
RESOURCE BANKSHARES CORPORATION
By:________________________________
Name:
Title:
[Seal]
WILMINGTON TRUST COMPANY,
as Trustee
By:________________________________
Name:
Title:
[Seal]
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<PAGE>
EXHIBIT A
[Form of Restricted Securities Certificate]
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section 3.05 and Section 3.06
of the Junior Subordinated Indenture)
[_________________________],
as Security Registrar
[address]
Re: Junior Subordinated Debt Securities of Resource Bankshares Corporation
(the "Company") (the "Securities")
Reference is made to the Junior Subordinated Indenture, dated as of
____________ (the "Indenture"), between Resource Bankshares Corporation and
Wilmington Trust Company, as trustee (the "Trustee"). Terms used herein and
defined in the Indenture or in Regulation D, Rule 144A or Rule 144 under the
U.S. Securities Act of 1933, as amended (the "Securities Act"), are used herein
as so defined.
This certificate relates to $____________ aggregate principal amount of
Securities, that are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s). __________________________________________
CERTIFICATE No(s). ____________________________________
CURRENTLY IN BOOK-ENTRY FORM: __Yes __No (check one)
The person in whose name this certificate is executed below (the "undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner".
If the Specified Securities are represented by a Global Security, they are held
through the Depositary in the name of the Undersigned, as or on behalf of the
Owner. If the Specified Securities are not represented by a Global Security,
they are registered in the name of the Undersigned, as or on behalf of the
Owner.
The Owner has requested that the Specified Securities be transferred to
a person (the "Transferee") who will take delivery in the form of a Restricted
Security. In connection with such transfer, the Owner hereby certifies that,
unless such transfer is being effected pursuant to an effective registration
statement
<PAGE>
under the Securities Act, it is being effected in accordance with one of the
following as indicated (check one):
___ (1) transferred to the Company; or
___ (2) exchanged for the undersigned's own account without transfer; or
___ (3) transferred pursuant to and in compliance with Rule 144A under the
Securities Act; or
___ (4) 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 the Securities for its own
account, or for the account of such an institutional "accredited
investor," for investment purposes and not with a view to, or for
offer or sale in connection with, any distribution in violation of
the Securities Act; or
___ (5) transferred pursuant to another available exemption from the
registration requirements of the Securities Act.
Unless such transfer is being effected in accordance with one of the above, the
Securities Registrar will refuse to register any of the Securities evidenced by
this certificate in the name of any person other than the Holder thereof;
provided, however, that if (4) or (5) is applicable, the Securities Registrar
may require, prior to registering any such transfer of the Securities such legal
opinions, certifications and other information as the Company has reasonably
requested to confirm that such transfer is being made pursuant to an exemption
from, or in a transaction not subject to, the registration requirements of the
Securities Act, such as the exemption provided by Rule 144 under such Act;
provided, further, that if box (3) is checked, the transferee must also certify
that it is a qualified institutional buyer as defined in Rule 144A.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company.
Dated: __________________________________________
(Print the name of the Undersigned, as
such term is defined in the second
paragraph of this certificate.)
By:_______________________________________
Name:
Title:
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<PAGE>
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the
Undersigned must be stated.)
-3-
Exhibit 4.7
EXECUTION COPY
================================================================================
GUARANTEE AGREEMENT
Between
RESOURCE BANKSHARES CORPORATION
(as Guarantor)
and
WILMINGTON TRUST COMPANY
(as Trustee)
Dated as of
________ __, 1999
================================================================================
<PAGE>
CROSS-REFERENCE TABLE*
Section of Trust Indenture Section of
Act of 1939, as amended Guarantee Agreement
310(a) .............................................. 4.01(a)
310(b) .............................................. 4.01(c), 2.08
310(c) .............................................. Inapplicable
311(a) .............................................. 2.02(b)
311(b) .............................................. 2.02(b)
311(c) .............................................. Inapplicable
312(a) .............................................. 2.02(a)
312(b) .............................................. 2.02(b)
313(a) .............................................. 2.03
313(b) .............................................. 2.03
313(c) .............................................. 2.03
313(d) .............................................. 2.03
314(a) .............................................. 2.04
314(b) .............................................. Inapplicable
314(c) .............................................. 2.05
314(d) .............................................. Inapplicable
314(e) .............................................. 1.01, 2.05, 3.02
314(f) .............................................. 2.01, 3.02
315(a) .............................................. 3.01(d)
315(b) .............................................. 2.07
315(c) .............................................. 3.01(c)
315(d) .............................................. 3.01(d)
316(a) .............................................. 1.01, 2.06, 5.04
316(b) .............................................. 5.03, 5.04
316(c) .............................................. 8.02
317(a) .............................................. Inapplicable
317(b) .............................................. Inapplicable
318(a) .............................................. 2.01(b)
___________________
* This Cross-Reference Table does not constitute part of the Guarantee
Agreement and shall not affect the interpretation of any of its terms or
provisions.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE I -- Definitions.............................................................................2
SECTION 1.01. Definitions.........................................................................2
ARTICLE II -- Trust Indenture Act....................................................................5
SECTION 2.01. Trust Indenture Act; Application....................................................5
SECTION 2.02. List of Holders.....................................................................5
SECTION 2.03. Reports by the Guarantee Trustee....................................................6
SECTION 2.04. Periodic Reports to the Guarantee Trustee...........................................6
SECTION 2.05. Evidence of Compliance with Conditions Precedent....................................6
SECTION 2.06. Events of Default; Waiver...........................................................6
SECTION 2.07. Event of Default; Notice............................................................6
SECTION 2.08. Conflicting Interests...............................................................7
ARTICLE III -- Powers, Duties and Rights of the Guarantee Trustee....................................7
SECTION 3.01. Powers and Duties of the Guarantee Trustee..........................................7
SECTION 3.02. Certain Rights of Guarantee Trustee.................................................9
SECTION 3.03. Indemnity..........................................................................11
SECTION 3.04. Expenses...........................................................................11
ARTICLE IV -- Guarantee Trustee.....................................................................11
SECTION 4.01. Guarantee Trustee: Eligibility.....................................................11
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee Trustee......................12
ARTICLE V -- Guarantee..............................................................................13
SECTION 5.01. Guarantee..........................................................................13
SECTION 5.02. Waiver of Notice and Demand........................................................13
SECTION 5.03. Obligations Not Affected...........................................................13
SECTION 5.04. Rights of Holders..................................................................14
SECTION 5.05. Guarantee of Payment...............................................................14
SECTION 5.06. Subrogation........................................................................15
SECTION 5.07. Independent Obligations............................................................15
ARTICLE VI -- Covenants and Subordination...........................................................15
SECTION 6.01. Subordination......................................................................15
SECTION 6.02. Pari Passu Guaranty................................................................15
ARTICLE VII -- Termination..........................................................................16
SECTION 7.01. Termination........................................................................16
ARTICLE VIII -- Miscellaneous.......................................................................16
SECTION 8.01. Successors and Assigns.............................................................16
SECTION 8.02. Amendments.........................................................................16
SECTION 8.03. Notices............................................................................16
SECTION 8.04. Benefit............................................................................18
SECTION 8.05. Interpretation.....................................................................18
SECTION 8.06. Governing Law......................................................................18
</TABLE>
<PAGE>
GUARANTEE AGREEMENT (this "Guarantee
Agreement"), dated as of ________ __, 1999, executed
and delivered by RESOURCE BANKSHARES CORPORATION, a
bank holding company (the "Guarantor") having its
principal office at 3720 Virginia Beach Boulevard,
Virginia Beach, Virginia 23452, and WILMINGTON TRUST
COMPANY, a Delaware corporation (the "Guarantee
Trustee"), for the benefit of the Holders (as defined
herein) from time to time of the Trust Securities (as
defined herein) of RESOURCE CAPITAL TRUST I, a
Delaware statutory business trust (the "Issuer").
WHEREAS pursuant to an Amended and Restated Declaration of Trust (the
"Declaration of Trust"), dated as of ________ __, 1999, among the Trustees named
therein, the Guarantor, as Depositor, and the Holders from time to time of
undivided beneficial ownership interests in the assets of the Issuer, the Issuer
is issuing $8,000,000.00 aggregate Liquidation Amount of its Capital Trust
Securities, Liquidation Amount $25.00 per security (the "Capital Securities"),
and $247,425.00 aggregate Liquidation Amount of its Common Securities,
Liquidation Amount $25.00 per security (the "Common Securities" and collectively
with the Capital Securities, the "Trust Securities"), representing undivided
beneficial ownership interests in the assets of the Issuer and having the terms
set forth in the Declaration of Trust;
WHEREAS the Trust Securities will be issued by the Issuer and the
proceeds thereof will be used by the Issuer to purchase the Junior Subordinated
Debt Securities due ________ 15, 2029 (as defined in the Declaration of Trust)
(the "Junior Subordinated Debt Securities") of the Guarantor, which will be held
by Wilmington Trust Company, as Property Trustee under the Declaration of Trust,
as trust assets; and
WHEREAS, as incentive for the Holders to purchase Trust Securities, the
Guarantor desires irrevocably and unconditionally to agree, to the extent set
forth herein, 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.
NOW, THEREFORE, in consideration of the purchase of Trust Securities by
each Holder, which purchase the Guarantor hereby agrees shall benefit the
Guarantor, the Guarantor executes and delivers this Guarantee Agreement for the
benefit of the Holders from time to time of the Trust Securities.
<PAGE>
ARTICLE I
Definitions
SECTION 1.01. Definitions. As used in this Guarantee Agreement, the
terms set forth below shall, unless the context otherwise requires, have the
following meanings. Capitalized or otherwise defined terms used but not
otherwise defined herein shall have the meanings assigned to such terms in the
Declaration of Trust as in effect on the date hereof.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person; provided, however, that an Affiliate of the
Guarantor shall not be deemed to include the Issuer. For the purposes of this
definition, "control" when used with respect to any specified Person means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise; and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Capital Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Common Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Declaration of Trust" shall have the meaning specified in the first
recital of this Guarantee Agreement.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Guarantee Agreement; provided, however,
that, except with respect to a default in payment of any Guarantee Payments, the
Guarantor shall have received notice of default and shall not have cured such
default within 60 days after receipt of such notice; provided, further, that no
Event of Default shall occur unless an Event of Default (as defined in the
Indenture or the Declaration of Trust) shall have occurred and be continuing.
"Guarantee Payments" means the following payments or distributions,
without duplication, with respect to the Trust Securities, to the extent not
paid or made by or on behalf of the Issuer: (i) any accrued and unpaid
Distributions required to be paid on the Trust Securities, to the extent that
the Issuer shall have funds on hand available therefor at such time, (ii) the
redemption price, including all accrued and unpaid Distributions to the date of
redemption (the "Redemption Price"), with respect
2
<PAGE>
to the Trust Securities called for redemption by the Issuer to the extent that
the Issuer shall have funds on hand available therefor at such time, and (iii)
upon a voluntary or involuntary termination, winding-up or liquidation of the
Issuer, unless Junior Subordinated Debt Securities are distributed to the
Holders or all of the Capital Securities are redeemed, the lesser of (a) the
aggregate of the Liquidation Amount of $25 per Trust Security plus accrued and
unpaid Distributions on the Trust Securities to the date of payment to the
extent that the Issuer shall have funds on hand available to make such payment
at such time and (b) the amount of assets of the Issuer remaining available for
distribution to Holders in liquidation of the Issuer after satisfaction of
liabilities to creditors of the Issuer as required by applicable law (in either
case, the "Liquidation Distribution"). If an Event of Default under the
Declaration of Trust has occurred and is continuing, no Guarantee Payments with
respect to the Common Securities or any guarantee payment under any Other
Guarantees (as defined in the Indenture) with respect to Common Securities of
any other Resource Capital Trust (as defined in the Indenture), if any, shall be
made until the Holders of Capital Securities shall be paid in full the Guarantee
Payments to which they are entitled under this Guarantee Agreement.
Subordination of Guarantee Payments on the Common Securities following such an
Event of Default under the Declaration of Trust shall be analogous to the
subordination of the Common Securities provided for in Section 4.03 of the
Declaration of Trust.
"Guarantee Trustee" means Wilmington Trust Company, until a Successor
Guarantee Trustee has been appointed and has accepted such appointment pursuant
to the terms of this Guarantee Agreement and thereafter means each such
Successor Guarantee Trustee.
"Guarantor" shall have the meaning specified in the first recital of
this Guarantee Agreement.
"Holder" means a person in whose name a Trust Security or Trust
Securities is registered on the books and records of the Issuer; provided,
however, that in determining whether the holders of the requisite percentage of
Trust Securities have given any request, notice, consent or waiver hereunder,
"Holder" shall not include the Guarantor, the Guarantee Trustee, or any
Affiliate of the Guarantor or the Guarantee Trustee.
"Indenture" means the Junior Subordinated Indenture dated as of
________ __, 1999, as supplemented and amended between the Guarantor and
Wilmington Trust Company, as trustee, relating to the issuance of the Junior
Subordinated Debt Securities.
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"Issuer" shall have the meaning specified in the first recital of this
Guarantee Agreement.
"List of Holders" has the meaning specified in Section 2.02(a).
"Majority in Liquidation Amount of the Securities" means, except as
provided by the Trust Indenture Act, a vote by the Holder(s), voting separately
as a class, of more than 50% of the aggregate Liquidation Amount of all then
Outstanding Capital Securities.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by the Chairman and Chief Executive Officer, President or a
Vice President, and by the Treasurer, an Associate Treasurer, an Assistant
Treasurer, the Controller, the Secretary or an Assistant Secretary of such
Person, and delivered to the Guarantee Trustee. Any Officers' Certificate
delivered with respect to compliance with a condition or covenant provided for
in this Guarantee Agreement 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;
(c) statement that each 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
officer, such condition or covenant has been complied with.
"Responsible Officer" when used with respect to the Guarantee Trustee
means any officer assigned to the Corporate Trust Office, including any managing
director, vice president, assistant vice president, assistant treasurer,
assistant secretary or any other officer of the Guarantee Trustee customarily
performing functions similar to those performed by any of the above designated
officers and having direct responsibility for the administration of this
Guarantee Agreement, and also, with respect to a particular matter, any other
officer to whom such matter is referred because of such officer's knowledge of
and familiarity with the particular subject.
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"Senior Debt" shall have the meaning specified in the Indenture.
"Successor Guarantee Trustee" means a successor Guarantee Trustee
possessing the qualifications to act as Guarantee Trustee under Section 4.01.
"Trust Indenture Act" has the meaning specified in Section 1.01 of the
Indenture.
"Trust Securities" shall have the meaning specified in the first
recital of this Guarantee Agreement.
ARTICLE II
Trust Indenture Act
SECTION 2.01. Trust Indenture Act; Application. (a) This Guarantee
Agreement will not be qualified under the Trust Indenture Act except upon the
effectiveness of a registration statement with respect to this Guarantee
Agreement.
(b) Upon qualification under the Trust Indenture Act as
contemplated in clause (a) above, if and to the extent that any provision of
this Guarantee Agreement limits, qualifies or conflicts with the duties imposed
by Sections 310 to 317, inclusive, of the Trust Indenture Act, such imposed
duties shall control.
SECTION 2.02. List of Holders. (a) The Guarantor shall furnish or cause
to be furnished to the Guarantee Trustee (i) semiannually, not more than 15 days
after ________ 15 and ________ 15 of each year, a list, in such form as the
Guarantee Trustee may reasonably require, of the names and addresses of the
Holders ("List of Holders") as of a date not more than 15 days prior to the
delivery thereof, and (ii) at such other times as the Guarantee Trustee may
request in writing, within 30 days after the receipt by the Guarantor of any
such request, a List of Holders as of a date not more than 15 days prior to the
time such list is furnished, in each case to the extent such information is in
the possession or control of the Guarantor and is not identical to a previously
supplied list of Holders or has not otherwise been received by the Guarantee
Trustee in its capacity as such. The Guarantee Trustee may destroy any List of
Holders previously given to it on receipt of a new List of Holders.
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(b) The Guarantee Trustee shall comply with its obligations
under Section 311(a), Section 311(b) and Section 312(b) of the Trust Indenture
Act.
SECTION 2.03. Reports by the Guarantee Trustee. Not later than the last
calendar day in ________ of each calendar year, commencing with the last
calendar day in ________, 1999, the Guarantee Trustee shall provide to the
Holders such reports, if any, as are required by Section 313 of the Trust
Indenture Act in the form and in the manner provided by Section 313 of the Trust
Indenture Act. The Guarantee Trustee shall also comply with the requirements of
Section 313(d) of the Trust Indenture Act.
SECTION 2.04. Periodic Reports to the Guarantee Trustee. The Guarantor
shall provide to the Guarantee Trustee, the Securities and Exchange Commission
and the Holders such documents, reports and information, if any, as required by
Section 314 of the Trust Indenture Act 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.
SECTION 2.05. Evidence of Compliance with Conditions Precedent. The
Guarantor shall provide to the Guarantee Trustee such evidence of compliance
with such conditions precedent, if any, provided for in this Guarantee Agreement
that relate to any of the matters set forth in Section 314(c) of the Trust
Indenture Act. Any certificate or opinion required to be given by any officer
pursuant to Section 314(c)(1) may be given in the form of an Officers'
Certificate.
SECTION 2.06. Events of Default; Waiver. The Holders of a Majority in
Liquidation Amount of the Securities may, by vote, on behalf of the Holders,
waive any past Event of Default and its consequences. Upon such waiver, any such
Event of Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured, for every purpose of this
Guarantee Agreement, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent therefrom.
SECTION 2.07. Event of Default; Notice. (a) The Guarantee Trustee
shall, within 90 days after the occurrence of an Event of Default, transmit by
mail, first class postage prepaid, to the Holders, notices of all Events of
Default known to the Guarantee Trustee, unless such Events of Default have been
cured before the giving of such notice; provided that, except in the case of a
default in the payment of a Guarantee Payment, the Guarantee Trustee shall be
protected in withholding such notice if and so long as the Board of Directors,
the executive committee or a
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trust committee of directors and/or a Responsible Officer in good faith
determines that the withholding of such notice is in the interests of the
Holders.
(b) The Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless a Responsible Officer charged with the
administration of the Declaration of Trust shall have received written notice of
such Event of Default.
SECTION 2.08. Conflicting Interests. The Declaration of Trust shall be
deemed to be specifically described in this Guarantee Agreement for the purposes
of clause (i) of the first proviso contained in Section 310(b) of the Trust
Indenture Act.
ARTICLE III
Powers, Duties and Rights of the
Guarantee Trustee
SECTION 3.01. Powers and Duties of the Guarantee Trustee. (a) This
Guarantee Agreement shall be held by the Guarantee Trustee for the benefit of
the Holders, and the Guarantee Trustee shall not transfer this Guarantee
Agreement to any Person except a Holder exercising his or her rights pursuant to
Section 5.04(iv) or to a Successor Guarantee Trustee on acceptance by such
Successor Guarantee Trustee of its appointment to act as Successor Guarantee
Trustee. The right, title and interest of the Guarantee Trustee shall
automatically vest in any Successor Guarantee Trustee, upon acceptance by such
Successor Guarantee Trustee of its appointment hereunder, and such vesting and
cessation of title shall be effective whether or not conveyancing documents have
been executed and delivered pursuant to the appointment of such Successor
Guarantee Trustee.
(b) If an Event of Default has occurred and is continuing,
the Guarantee Trustee shall enforce this Guarantee Agreement for the benefit of
the Holders.
(c) The Guarantee Trustee, before the occurrence of any
Event of Default and after the curing of all Events of Default that may have
occurred, shall undertake to perform only such duties as are specifically set
forth in this Guarantee Agreement, and no implied covenants shall be read into
this Guarantee Agreement against the Guarantee Trustee. In case an Event of
Default has occurred (that has not been cured or waived pursuant to Section
2.06), the Guarantee Trustee shall exercise such of the rights and powers vested
in it by this Guarantee Agreement, and use the same degree of care and skill in
its
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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 Guarantee Agreement shall be
construed to relieve the Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and
after the curing or waiving of all such Events of Default that may have
occurred:
(A) the duties and obligations of the Guarantee
Trustee shall be determined solely by the express provisions
of this Guarantee Agreement, and the Guarantee Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Guarantee
Agreement; and
(B) in the absence of bad faith on the part of the
Guarantee Trustee, the 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 Guarantee Trustee and conforming to
the requirements of this Guarantee Agreement; but in the case
of any such certificates or opinions that by any provision
hereof or of the Trust Indenture Act are specifically required
to be furnished to the Guarantee Trustee, the Guarantee
Trustee shall be under a duty to examine the same to determine
whether or not they conform to the requirements of this
Guarantee Agreement;
(ii) the Guarantee Trustee shall not be liable for any error
of judgment made in good faith by a Responsible Officer of the
Guarantee Trustee, unless it shall be proved that the Guarantee Trustee
was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the 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 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 Guarantee Trustee, or exercising any trust or power conferred
upon the Guarantee Trustee under this Guarantee Agreement; and
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(iv) no provision of this Guarantee Agreement shall require
the 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
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not assured to it under the
terms of this Guarantee Agreement or indemnity satisfactory to it
against such risk or liability is not reasonably assured to it.
SECTION 3.02. Certain Rights of Guarantee Trustee. (a) Subject to the
provisions of Section 3.01:
(i) The 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 reasonably
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 Guarantee Agreement shall be sufficiently evidenced by an
Officers' Certificate unless otherwise prescribed herein.
(iii) Whenever, in the administration of this Guarantee
Agreement, the Guarantee Trustee shall deem it desirable that a matter
be proved or established before taking, suffering or omitting to take
any action hereunder, the 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 from the Guarantee Trustee, shall
be promptly delivered by the Guarantor.
(iv) The Guarantee Trustee may consult with legal counsel,
and the advice or written opinion of such legal counsel with respect to
legal matters shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted to be taken by it
hereunder in good faith and in accordance with such advice or opinion.
Such legal counsel may be legal counsel to the Guarantor or any of its
Affiliates and may be one of its employees. The Guarantee Trustee shall
have the right at any time to seek instructions concerning the
administration
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of this Guarantee Agreement from any court of competent jurisdiction.
(v) The Guarantee Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by this Guarantee
Agreement at the request or direction of any Holder, unless such Holder
shall have provided to the Guarantee Trustee such security and
indemnity reasonably satisfactory to it, against the costs, expenses
(including attorneys' fees and expenses) 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 Guarantee Trustee;
provided, that nothing contained in this Section 3.02(a)(v) shall be
taken to relieve the Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested
in it by this Guarantee Agreement.
(vi) The 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 Guarantee Trustee, in
its discretion, may make such further inquiry or investigation into
such facts or matters as it may see fit.
(vii) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through its agents or attorneys, and the Guarantee Trustee shall not
be responsible for any misconduct or negligence on the part of any such
agent or attorney appointed with due care by it hereunder.
(viii) Whenever in the administration of this Guarantee
Agreement the Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking
any other action hereunder, the Guarantee Trustee (A) may request
instructions from the Holders, (B) may refrain from enforcing such
remedy or right or taking such other action until such instructions are
received and (C) shall be fully protected in acting in accordance with
such instructions.
(ix) The Guarantee Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either directly or by
or through agents or attorneys, and the 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.
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(b) No provision of this Guarantee Agreement shall be deemed
to impose any duty or obligation on the 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 Guarantee
Trustee shall be unqualified or incompetent in accordance with applicable law,
to perform any such act or acts or to exercise any such right, power, duty or
obligation. No permissive power or authority available to the Guarantee Trustee
shall be construed to be a duty to act in accordance with such power and
authority.
SECTION 3.03. Indemnity. The Guarantor agrees to indemnify the
Guarantee Trustee, and to hold it harmless against, any loss, liability or
expense including taxes (other than taxes based upon, measured by or determined
by the income of the Guarantee Trustee) incurred without negligence or bad faith
on the part of the Guarantee Trustee, arising out of or in connection with the
acceptance or administration of this Guarantee Agreement, including the costs
and expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder. The
Guarantee Trustee will not claim or exact any lien or charge on any Guarantee
Payments as a result of any amount due to it under this Guarantee Agreement.
This indemnity shall survive the termination of this Guarantee Agreement or the
resignation or removal of the Guarantee Trustee.
SECTION 3.04. Expenses. The Guarantor, as obligor on the Junior
Subordinated Debt Securities, shall from time to time reimburse the Guarantee
Trustee for such expenses and costs incurred in connection with the performance
of its duties hereunder as shall be agreed to in writing from time to time by
the Guarantor and the Guarantee Trustee.
ARTICLE IV
Guarantee Trustee
SECTION 4.01. Guarantee Trustee: Eligibility. (a) There shall at all
times be a Guarantee Trustee that shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of
at least $50,000,000, and shall be a corporation meeting the
requirements of Section 310(c) of the Trust Indenture Act. If such
corporation publishes reports of
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condition at least annually, pursuant to law or to the requirements of
the supervising or examining authority, then, for the purposes of this
Section and to the extent permitted by the Trust Indenture Act, 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 Guarantee Trustee shall cease to be
eligible to so act under Section 4.10(a), the Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.02(c).
(c) If the Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Guarantee Trustee and Guarantor shall in all respects comply
with the provisions of Section 310(b) of the Trust Indenture Act.
SECTION 4.02. Appointment, Removal and Resignation of the Guarantee
Trustee. (a) Subject to Section 4.02(b), in the absence of the existence of an
Event of Default, the Guarantee Trustee may be appointed or removed without
cause at any time by the Guarantor.
(b) The Guarantee Trustee shall not be removed until a
Successor Guarantee Trustee has been appointed and has accepted such appointment
by written instrument executed by such Successor Guarantee Trustee and delivered
to the Guarantor.
(c) The Guarantee Trustee appointed hereunder shall hold
office until a Successor Guarantee Trustee shall have been appointed or until
its removal or resignation. The Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Guarantee Trustee and delivered to the Guarantor, which
resignation shall not take effect until a Successor Guarantee Trustee has been
appointed and has accepted such appointment by instrument in writing executed by
such Successor Guarantee Trustee and delivered to the Guarantor and the
resigning Guarantee Trustee.
(d) If no Successor Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.02 within 30
days after delivery to the Guarantor of an instrument of resignation, the
resigning Guarantee Trustee may petition, at the expense of the Guarantor, any
court of competent jurisdiction for appointment of a Successor Guarantee
Trustee. Such court may thereupon, after prescribing such notice, if any, as it
may deem proper, appoint a Successor Guarantee Trustee.
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ARTICLE V
Guarantee
SECTION 5.01. Guarantee. The Guarantor irrevocably and unconditionally
agrees to pay in full to the Holders the Guarantee Payments (without duplication
of amounts theretofore paid by or on behalf of 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. The
Guarantor shall give written notice to the Guarantee Trustee as promptly as
practicable in the event it makes any direct payment hereunder.
SECTION 5.02. Waiver of Notice and Demand. The Guarantor hereby waives
notice of acceptance of the Guarantee Agreement and of any liability to which it
applies or may apply, presentment, demand for payment, any right to require a
proceeding first against the Guarantee Trustee, 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 5.03. Obligations Not Affected. The obligations, covenants,
agreements and duties of the Guarantor under this Guarantee Agreement shall in
no way be affected or impaired by reason of the happening from time to time of
any of the following:
(a) the release or waiver, by operation of law or otherwise,
of the performance or observance by the Issuer of any express or
implied agreement, covenant, term or condition relating to the Trust
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 (other than any extension of
time for payment of Distributions that results from the extension of
any interest payment period on the Junior Subordinated Debt Securities
as so provided in the Indenture), Redemption Price, Liquidation
Distribution or any other sums payable under the terms of the Trust
Securities or the extension of time for the performance of any other
obligation arising under, out of or in connection with the Trust
Securities;
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(c) any failure, omission, delay or lack of diligence on the
part of the Holders to enforce, assert or exercise any right,
privilege, power or remedy conferred on the Holders pursuant to the
terms of the Trust 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
Securities;
(f) the settlement or compromise of any obligation
guaranteed hereby or hereby incurred; or
(g) any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a guarantor, it
being the intent of this Section 5.03 that the obligations of the
Guarantor hereunder shall be absolute and unconditional under any and
all circumstances.
There shall be no obligation of the Holders to give notice to,
or obtain the consent of, the Guarantor with respect to the happening of any of
the foregoing.
SECTION 5.04. Rights of Holders. The Guarantor expressly acknowledges
that: (i) this Guarantee Agreement will be deposited with the Guarantee Trustee
to be held for the benefit of the Holders; (ii) the Guarantee Trustee has the
right to enforce this Guarantee Agreement on behalf of the Holders; (iii) the
Holders of a Majority in Liquidation Amount of the Securities 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 this Guarantee Agreement or
exercising any trust or power conferred upon the Guarantee Trustee under this
Guarantee Agreement; and (iv) any Holder may institute a legal proceeding
directly against the Guarantor to enforce its rights under this Guarantee
Agreement, without first instituting a legal proceeding against the Issuer or
any other Person.
SECTION 5.05. Guarantee of Payment. This Guarantee Agreement creates a
guarantee of payment and not of collection. This Guarantee Agreement will not be
discharged except by payment of the Guarantee Payments in full (without
duplication of amounts
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theretofore paid by the Issuer) or upon distribution of Junior Subordinated Debt
Securities to Holders as provided in the Declaration of Trust.
SECTION 5.06. Subrogation. The Guarantor shall be subrogated to all (if
any) rights of the Holders against the Issuer in respect of any amounts paid to
the Holders by the Guarantor under this Guarantee Agreement and shall have the
right to waive payment by the Issuer pursuant to Section 5.01; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any rights 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 Guarantee Agreement,
if at the time of any such payment, any amounts are due and unpaid under this
Guarantee Agreement. 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 5.07. Independent Obligations. The Guarantor acknowledges that
its obligations hereunder are independent of the obligations of the Issuer with
respect to the Trust Securities and that the Guarantor shall be liable as
principal and as debtor hereunder to make Guarantee Payments pursuant to the
terms of this Guarantee Agreement notwithstanding the occurrence of any event
referred to in subsections (a) through (g), inclusive, of Section 5.03.
ARTICLE VI
Covenants and Subordination
SECTION 6.01. Subordination. This Guarantee Agreement will constitute
an unsecured obligation of the Guarantor and will rank subordinate and junior in
right of payment to all Senior Debt of the Guarantor, to the same extent and in
the same manner that the Junior Subordinated Debt Securities are subordinated to
Senior Debt pursuant to the Indenture, it being understood that the terms of
Article XIII of the Indenture shall apply to the obligations of the Guarantor
under this Guarantee Agreement as if (x) such Article XIII were set forth herein
in full and (y) such obligations were substituted for the term "Securities"
appearing in such Article XIII.
SECTION 6.02. Pari Passu Guaranty. This Guarantee Agreement shall rank
pari passu with any similar guarantee agreements issued by the Guarantor on
behalf of the holders of
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trust securities issued by a trust created by the Guarantor similar to Resource
Capital Trust I.
ARTICLE VII
Termination
SECTION 7.01. Termination. This Guarantee Agreement shall terminate and
be of no further force and effect upon (i) full payment of the Redemption Price
of all Trust Securities, (ii) the distribution of Junior Subordinated Debt
Securities to the Holders in exchange for all of the Trust Securities or (iii)
full payment of the amounts payable in accordance with the Declaration of Trust
upon liquidation of the Issuer. Notwithstanding the foregoing, this Guarantee
Agreement will continue to be effective or will be reinstated, as the case may
be, if at any time any Holder must repay any sums paid with respect to Trust
Securities or this Guarantee Agreement.
ARTICLE VIII
Miscellaneous
SECTION 8.01. Successors and Assigns. All guarantees and agreements
contained in this Guarantee Agreement shall bind the successors, assigns,
receivers, trustees and representatives of the Guarantor and shall inure to the
benefit of the Holders then outstanding. Except in connection with a
consolidation, merger or sale involving the Guarantor that is permitted under
Article VIII of the Indenture and pursuant to which the assignee agrees in
writing to perform the Guarantor's obligations hereunder, the Guarantor shall
not assign its obligations hereunder.
SECTION 8.02. Amendments. Except with respect to any changes that do
not adversely affect the rights of the Holders in any material respect (in which
case no consent of the Holders will be required), this Guarantee Agreement may
only be amended with the prior approval of the Holders of not less than a
Majority in Liquidation Amount of the Securities. The provisions of Article VI
of the Declaration of Trust concerning meetings of the Holders shall apply to
the giving of such approval.
SECTION 8.03. Notices. Any notice, request or other communication
required or permitted to be given hereunder shall be in writing, duly signed by
the party giving such notice, and delivered, telecopied (confirmed by delivery
of the original) or mailed by first class mail as follows:
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(a) if given to the Guarantor, to the address set forth
below or such other address, facsimile number or to the attention of
such other Person as the Guarantor may give notice to the Holders:
RESOURCE BANKSHARES CORPORATION
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
Facsimile No.: (757) 431-2441
(b) if given to the Issuer, in care of the Guarantee
Trustee, at the Issuer's (and the Guarantee Trustee's) address set
forth below or such other address as the Guarantee Trustee on behalf of
the Issuer may give notice to the Holders:
RESOURCE CAPITAL TRUST I
c/o RESOURCE BANKSHARES CORPORATION
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
Facsimile No.: (757) 431-2441
with a copy to:
Wilmington Trust Company
1100 North Market Street
Attn: Corporate Trust Administration
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
(c) if given to the Guarantee Trustee:
Wilmington Trust Company
1100 North Market Street
Attn: Corporate Trust Administration
Wilmington, Delaware 19890
Facsimile No.: (302) 651-8882
(d) if given to any Holder, at the address set forth on the
books and records of the Issuer.
All notices hereunder 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.
17
<PAGE>
SECTION 8.04. Benefit. This Guarantee Agreement is solely for the
benefit of the Holders and is not separately transferable from the Trust
Securities.
SECTION 8.05. Interpretation. In this Guarantee Agreement, unless the
context otherwise requires:
(a) a term defined anywhere in this Guarantee Agreement has
the same meaning throughout;
(b) all references to "the Guarantee Agreement" or "this
Guarantee Agreement" are to this Guarantee Agreement as modified,
supplemented or amended from time to time;
(c) all references in this Guarantee Agreement to Articles
and Sections are to Articles and Sections of this Guarantee Agreement
unless otherwise specified;
(d) a term defined in the Trust Indenture Act has the same
meaning when used in this Guarantee Agreement unless otherwise defined
in this Guarantee Agreement or unless the context otherwise requires;
(e) a reference to the singular includes the plural and vice
versa; and
(f) the masculine, feminine or neuter genders used herein
shall include the masculine, feminine and neuter genders.
SECTION 8.06. Governing Law. THIS GUARANTEE AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH
OF VIRGINIA WITHOUT REGARD TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
18
<PAGE>
THIS GUARANTEE AGREEMENT is executed as of the day and year first above
written.
WILMINGTON TRUST COMPANY,
as Guarantee Trustee
By:_____________________________
Name:___________________________
Title:__________________________
RESOURCE BANKSHARES CORPORATION,
as Guarantor
By:_____________________________
Name:___________________________
Title:__________________________
19
Exhibit 4.8
ESCROW AGREEMENT
This Escrow Agreement made and entered into as of the ___ day of
January, 1999, by and among McKINNON & COMPANY, INC., a Virginia corporation
(the "Underwriter"), RESOURCE CAPITAL TRUST I, a statutory business trust
organized under Delaware law (the "Trust") and RESOURCE BANKSHARES CORPORATION,
a Virginia corporation (the "Company" and, together with the Trust, the
"Offerors"), and WILMINGTON TRUST COMPANY, a Delaware banking corporation (the
"Escrow Agent").
R E C I T A L S :
A. The Offerors propose to sell up to $___ million of $_______
Capital Securities, liquidation amount of $25.00 per preferred security (the
"Capital Securities") and $_______ of Common Securities, to the public at a
price of $25.00 per Capital Security (the "Offering").
B. The Offerors have retained the Underwriter, as selling agent for
the Offerors on a best efforts basis, to sell the Capital Securities in the
Offering, and the Underwriter has agreed to sell the Capital Securities as the
Offerors' selling agent on a best efforts basis in the Offering, and the
Underwriter has agreed to serve in this capacity, the terms of which
relationship are set forth in an Underwriting Agreement between the Offerors and
the Underwriter, the form of which is attached hereto as Exhibit A (the
"Underwriting Agreement").
C. The Underwriter will enter into agreements with other
brokers/dealers (the "Selected Dealers" or individually, the "Selected Dealer")
to assist in the sale of the Capital Securities.
D. The Offerors have agreed to pay the Underwriter a commission of
up to $_________.
E. The Escrow Agent is willing to hold the proceeds in escrow
pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained in this Agreement, it is hereby agreed as
follows:
1. Establishment of the Escrow Account. On or prior to the
date of commencement of the Offering, the parties shall establish a
non-interest-bearing account with the Escrow Agent, which escrow account shall
be entitled "Resource Capital Trust I, Escrow Account" (the "Escrow Account").
The Underwriter shall make, and shall instruct purchasers and Selected Dealers
to make payment for the Common Securities and Capital Securities by wire
transfer of immediately available funds as follows:
<PAGE>
Fed. Funds to be wired to:
Wilmington Trust Company
Wilmington, Delaware
ABA No. 031100092
for credit to the account of Resource Capital Trust I-Escrow
Account No. ______
Attention: Terri Tavani, Corporate Trust Administration
Telephone No. 302-651-8558
Fax No. 302-651-8882
The Offerors will make payment of the Underwriter's commission as
provided above.
2. Deposits into the Escrow Account. Funds received from the
Underwriter, purchasers and Selected Dealers shall be deposited in the Escrow
Account. All monies so deposited in the Escrow Account are hereinafter referred
to as the "Escrow Amount." The Escrow Account shall be a non-interest-bearing
account.
3. Escrow Period. The escrow period (the "Escrow Period")
shall begin on January __, 1999 and shall terminate at 5:00 p.m. on January ___,
1999, or such other time as shall be mutually agreed upon in writing by the
parties. During the Escrow Period, the Offerors acknowledge that they are not
entitled to any funds received into escrow and no amounts deposited by the
Escrow Agent shall become property of the Offerors or any other entity, or be
subject to the debts of the Offerors or any other entity.
4. Delivery of Escrow Account Proceeds. At the Closing as
defined in the Underwriting Agreement, the Underwriter and Offerors shall
provide the Escrow Agent with written directions for the distribution of the
Escrow Account, and the Escrow Agent agrees to distribute the Escrow Account
pursuant to such written directions. If no direction is received on or before
5:00 p.m., January __, 1999 (unless such time shall be extended by written
agreement of the Underwriter, Offerors and the Escrow Agent), the Escrow Agent
shall return the Escrow Amount to the parties that made payments to the Escrow
Account and this Agreement shall be of no further force or effect.
5. Closing Date. The "Closing" and "Closing Time" shall be
that date specified in the Underwriting Agreement.
6. Duties and Rights of the Escrow Agent. The foregoing
agreements and obligations of the Escrow Agent are subject to the following
provisions:
(a) The Escrow Agent's duties hereunder are limited
solely to the safekeeping of the Escrow Account in accordance with the terms of
this Agreement. It is agreed that the Escrow Agent shall have no other duties or
obligations hereunder except as expressly set forth herein, shall be responsible
only for the performance of such duties and obligations, shall not be required
to take any action otherwise than in accordance with the terms hereof, shall not
be required to perform any acts that may violate any applicable laws, and shall
not be liable or responsible in any manner for any loss or damage arising by
reason of any act or omission to act hereunder or in connection with any of the
transactions contemplated hereby, including, but not limited to, any loss or
damage that may occur by reason of forgery, false representation, the exercise
of its discretion in any particular manner or for any other reason, except any
loss or damage arising by reason of its gross negligence or willful misconduct.
-2-
<PAGE>
(b) The Escrow Agent may rely upon, and shall be
protected in acting or refraining from acting upon, any written instructions
furnished to it hereunder and in good faith believed by it to be genuine or
presented by the proper party or parties, and the Escrow Agent may assume that
any person or entity purporting to give instructions in connection with
provisions hereof has been duly authorized to do so. The Escrow Agent may at any
time request written instructions from the Underwriter and the Offerors with
respect to the interpretation of this Agreement or of any action to be taken or
suffered or not taken hereunder.
(c) In the event that the Escrow Agent shall be
uncertain about the interpretation of this Escrow Agreement or about its rights
or obligations hereunder or the propriety of any action contemplated hereunder,
or if the Escrow Agent shall receive instructions with respect to the Escrow
Account that are in its opinion in conflict with any other instructions with
respect to the Escrow Account that it has received or in conflict with any
provision of this Agreement, (i) the Escrow Agent promptly shall notify the
Underwriter and the Offerors (and any other involved parties, if necessary) of
such uncertainty or inconsistent instructions, (ii) the Escrow Agent shall be
entitled to refrain from taking any action other than to keep safely the Escrow
Account until it shall be directed otherwise in writing signed by the
Underwriter and the Offerors (any other involved parties, if necessary) or by a
final order or judgment of a court of competent jurisdiction, and (iii) if the
Escrow Agent does not receive a notice signed by the Underwriter and the
Offerors (and any other involved parties, if necessary) resolving such
uncertainty or inconsistent instructions within a reasonable time, the Escrow
Agent shall have the right (but not the obligation) to file suit in interpleader
and obtain an order or judgment from a court of competent jurisdiction requiring
all persons involved to interplead and litigate in such court their several
claims and rights among themselves and, upon the conclusion thereof, to act in
accordance with the resolution of such litigation.
7. Indemnification and Fees of the Escrow Agent. The
Underwriter and the Offerors hereby jointly and severally agree to indemnify,
defend and save harmless the Escrow Agent from and against any and all losses,
expenses (including without limitation, reasonable fees, disbursements and other
expenses of counsel), assessments, liabilities, claims, damages, actions, suits
or other charges incurred by or assessed against the Escrow Agent for anything
done or omitted by it in the performance of its duties hereunder other than as a
result of its gross negligence or willful misconduct. In addition to the
foregoing, the Underwriter and the Offerors hereby agree that the Escrow Agent
shall deduct from the Escrow Account prior to distributing or delivering the
Escrow Account in accordance with Section 8 hereof reasonable compensation for
the services rendered by the Escrow Agent hereunder.
8. Resignation and Replacement of the Escrow Agent.
(a) The Escrow Agent may resign at any time and
thereupon be discharged of its duties and obligations as escrow agent hereunder
by giving five (5) days' prior written notice thereof to the Underwriter and
Offerors. Upon expiration of such five day period, the Escrow Agent shall take
no further action until the Underwriter and the Offerors have jointly appointed
a successor escrow agent. Upon receipt of written instructions signed by the
Underwriter and the Offerors, the Escrow Agent shall promptly turn over the
Escrow Account to the successor escrow agent. The Escrow Agent shall thereafter
have no further duties or obligations hereunder.
(b) The Escrow Agent may be removed and discharged from
its duties and obligations as escrow agent hereunder upon the mutual agreement
of the Underwriter and the Offerors by delivering a written notice executed by
the Underwriter and the Offerors of such removal to the Escrow Agent specifying
the date when such removal shall be effective (but such a removal shall in no
event be effective prior to the appointment of a successor escrow agent). In the
event of such removal, the Underwriter and the Offerors shall, within thirty
(30) days after such notice, jointly appoint a
-3-
<PAGE>
successor escrow agent and, upon receipt of written instructions signed by the
Underwriter and the Offerors, the Escrow Agent shall promptly turn over the
Escrow Account to such successor escrow agent. The Escrow Agent shall thereafter
have no further duties or obligations hereunder.
9. Notices. It is further agreed as follows:
(a) All notices given hereunder will be in writing,
served by registered or certified mail, return receipt requested, postage
prepaid, or by hand-delivery, to the parties at the following addresses:
To the Offerors:
Resource Capital Trust I
Resource Bankshares Corporation
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
Attention:_______________
To the Underwriter:
McKinnon & Company, Inc.
1609 First Virginia Tower
555 Main Street
Norfolk, Virginia 23510
Attention: William J. McKinnon, Jr.
To the Escrow Agent:
Wilmington Trust Company
1100 North Market Street
Wilmington, Delaware 19890
Attention: Jack Beeson
10. Miscellaneous.
(a) This Agreement shall be binding upon, inure to the
benefit of and be enforceable by the parries hereto and their respective
successors and assigns.
(b) If any provision of this Agreement shall be held
invalid by any court of competent jurisdiction, such holding shall not
invalidate any other provision hereof.
(c) This Agreement shall be governed by the applicable
laws of the State of Delaware.
(d) This Agreement may not be modified except in writing
signed by the parties hereto.
(e) All demands, notices, approvals, consents, requests
and other communications hereunder shall be given in the manner provided in this
Agreement.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in their respective names, all as of the date first above written.
McKINNON & COMPANY, INC.
By:
--------------------------------
William J. McKinnon, Jr.
President
RESOURCE CAPITAL TRUST I
By:
--------------------------------
Trustee
RESOURCE BANKSHARES CORPORATION
By:
--------------------------------
Title:
-----------------------------
WILMINGTON TRUST COMPANY
By:
--------------------------------
Title:
-----------------------------
-5-
Exhibit 5.1
[WILLIAMS, MULLEN, CHRISTIAN & DOBBINS LETTERHEAD]
January __, 1999
Resource Bankshares Corporation
3720 Virginia Beach Boulevard
Virginia Beach, VA 23452
Re: Resource Capital Trust I
Ladies and Gentlemen:
We have acted as counsel to Resource Bankshares Corporation (the
"Corporation") in connection with the registration by the Corporation of (i) an
aggregate of $9,200,000 of its junior subordinated debt securities (the "Debt
Securities") and (ii) the guarantee of the Capital Securities of Resource
Capital Trust I (the "Guarantee"), a business trust created under the laws of
the State of Delaware (the "Trust"), to be executed and delivered by the
Corporation for the benefit of the holders of the Capital Securities, each as
set forth in the Registration Statement on Form S-2, File Nos. 333-_________ and
333-_________ (the "Registration Statement") filed with the Securities and
Exchange Commission (the "Commission") by the Corporation and the Trust pursuant
to the Securities Act of 1933, as amended. This opinion letter is Exhibit 5.1 to
the Registration Statement.
We have relied upon an officer's certificate as to corporate action
heretofore taken with respect to the Debt Securities and the Guarantee.
We have also assumed (i) the due incorporation and valid existence of
the Corporation, (ii) that the Corporation has the requisite corporate power and
authority to enter into and perform its obligations under the Declaration of
Trust (the "Declaration") among the Corporation, as Depositor, the individuals
named therein as Administrative Trustees and Wilmington Trust Company, as
Property Trustee, and the holders from time to time of undivided beneficial
interests in the assets of the Trust, the form of Indenture (the "Indenture")
between the Corporation and Wilmington Trust Company, as trustee, the Debt
Securities and the Guarantee and (iii) the due authorization, execution and
delivery of the Declaration, the Indenture, the Debt Securities and the
Guarantee by the Corporation.
Based on the foregoing, and subject to the qualifications herein
stated, we are of the opinion that when (i) the Registration Statement shall
have been declared effective by order of the Commission and (ii) the
Declaration, the Indenture and the Guarantee have been duly authorized, executed
and delivered by the parties thereto:
<PAGE>
1. The Debt Securities, when duly authenticated by the Trustee pursuant
to the terms of the Indenture, and delivered and paid for in accordance with the
terms of the Indenture and as contemplated by the Registration Statement, will
be validly issued and will constitute the legally binding obligations of the
Corporation, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
2. The Guarantee will constitute the legally binding obligation of the
Corporation, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting creditors'
rights and remedies generally, and subject, as to enforceability, to general
principles of equity, including principles of commercial reasonableness, good
faith and fair dealing (regardless of whether enforcement is sought in a
proceeding at law or in equity).
In rendering this opinion, we are not expressing an opinion as to the
laws of any jurisdiction other than the Commonwealth of Virginia and we express
no opinion as to the applicability of the laws of any other jurisdiction to the
subject matter hereof or to the effects of such laws thereon.
This opinion is rendered to you and for your benefit solely in
connection with the transactions described herein. This opinion may not be
relied on by you for any other purpose and may not be relied upon by, nor may
copies thereof be provided to, any other person, firm, corporation or entity for
any purposes whatsoever without our prior written consent. We hereby consent to
be named in the Registration Statement and in each of the Prospectuses as
attorneys who passed upon the legality of the Debt Securities and the Guarantee
and to the filing of a copy of this opinion as Exhibit 5.1 to the Registration
Statement. Unless the prior written consent of our firm is obtained, this
opinion is not to be quoted or otherwise referred to in any written report,
proxy statement or other registration statement, nor is it to be filed with or
furnished to any other governmental agency or other person, except as otherwise
required by law.
Very truly yours,
WILLIAMS, MULLEN, CHRISTIAN & DOBBINS
By___________________________________
A Shareholder
Exhibit 5.2
[LETTERHEAD OF RICHARDS, LAYTON & FINGER]
January __, 1999
Resource Capital Trust I
c/o Resource Bankshares Corporation
3720 Virginia Beach Boulevard
Virginia Beach, VA 23452
Re: Resource Capital Trust I
Ladies and Gentlemen:
We have acted as special Delaware counsel for Resource Bankshares
Corporation, a Virginia corporation (the "Company) and Resource Capital Trust I,
a Delaware business trust (the "Trust"), in connection with the matters set
forth herein. At your request, this opinion is being furnished to you.
For purposes of giving the opinions hereinafter set forth, our
examination of documents has been limited to the examination of originals or
copies of the following:
(a) The Certificate of Trust of the Trust (the "Certificate"), as
filed in the office of the Secretary of State of the State of Delaware (the
"Secretary of State") on December 23, 1998;
(b) The Trust Agreement of the Trust, dated as of December 23,
1998,between the Company and the Trustee;
(c) The Registration Statement (the "Registration Statement") on
Form S-2, including a preliminary prospectus with respect to the Trust (the
"Prospectus"), relating to the Capital Securities of the Trust representing
preferred undivided beneficial interests in the Trust (each, a "Capital
Security" and collectively, the "Capital Securities"), as filed by the Company
and the Trust with the Securities and Exchange Commission on January 8, 1999;
(d) A form of Amended and Restated Declaration of Trust for the
Trust, to be entered into among the Company, the trustees of the Trust, and the
holders, from time to
<PAGE>
Resource Capital Trust I
c/o Resource Bankshares Corporation
January __, 1999
Page 2
time, of undivided beneficial interests in the assets of such Trust (including
the exhibits) (the "Declaration"), attached as an exhibit to the Registration
Statement; and
(e) A Certificate of Good Standing for the Trust, dated January 8,
1999; obtained from the Secretary of State.
Initially capitalized terms used herein and not otherwise defined are
used as defined in the Declaration.
For purposes of this opinion, we have not reviewed any documents other
than the documents listed in paragraphs (a) through (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
constitutes the entire agreement among the parties thereto with respect to the
subject matter thereof, including with respect to the creation, operation and
termination of the Trust, and that the Declaration and the Certificate of Trust
are in full force and effect and have not been amended, (ii) except to the
extent provided in paragraph 1 below, the due creation or due organization or
due formation, as the case may be, and valid existence in good standing of each
party to the documents examined by us under the laws of the jurisdiction
governing its creation, organization or formation, (iii) the legal capacity of
natural persons who are parties to the documents examined by us, (iv) that each
of the parties to the documents examined by us has the power and authority to
execute and deliver, and to perform its obligations under, such documents, (v)
the due authorization, execution and delivery by all parties thereto of all
documents examined by us, (vi) the receipt by each Person to whom a Capital
Security is to be issued by the Trust (collectively, the "Capital Security
Holders") of a Capital Security Certificate for such Capital Security and the
payment for the Capital Security, in accordance
<PAGE>
Resource Capital Trust I
c/o Resource Bankshares Corporation
January __, 1999
Page 3
with the Declarations and the Registration Statement, and (vii) that the Capital
Securities are issued and sold to the Capital Security Holders in accordance
with the Declaration and the Registration Statement. We have not participated in
the preparation of the Registration Statement and assume no responsibility for
its contents.
This opinion is limited to the laws of the State of Delaware (excluding
the securities laws of the State of Delaware), and we have not considered and
express no opinion on the laws of any other jurisdiction, including federal laws
and rules and regulations relating thereto. Our opinions are rendered only with
respect to Delaware laws and rules, regulations and orders thereunder which are
currently in effect.
Based upon the foregoing, and upon our examination of such questions of
law and statutes of the State of Delaware as we have considered necessary or
appropriate, and subject to the assumptions, qualifications, limitations and
exceptions set forth herein, we are of the opinion that:
1. The Trust has been duly created and is validly existing in good
standing as a business trust under the Delaware Business Trust Act, 12 Del. C.
ss. 3801, et seq.
2. The Capital Securities of the Trust will represent valid and,
subject to the qualifications set forth in paragraph 3 below, fully paid and
nonassessable undivided beneficial interests in the assets of the Trust.
3. The Capital Security Holders, as beneficial owners of the Trust,
will be entitled to the same limitation of personal liability extended to
stockholders of private corporations for profit organized under the General
Corporation Law of the State of Delaware. We note that the Capital Security
Holders may be obligated to make payments as set forth in the Declaration.
We consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement. In addition, we
hereby consent to the use of our name under the heading "Validity of Securities"
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,
Exhibit 8.1
[WILLIAMS, MULLEN, CHRISTIAN & DOBBINS LETTERHEAD]
January ___, 1999
McKinnon & Company, Inc.
555 Main Street
Norfolk, VA 23510
Re: Resource Capital Trust I
Ladies and Gentlemen:
We have acted as counsel to Resource Bankshares Corporation (the
"Corporation") and Resource Capital Trust I, a statutory business trust formed
under the laws of Delaware (the "Trust") in connection with the preparation and
filing with the Securities and Exchange Commission of the Registration Statement
on Form S-2, as amended to the date hereof (the "Registration Statement"), under
the Securities Act of 1933, as amended, and the Prospectus that is a part
thereof (the "Prospectus") with respect to the issuance by the Trust of up to
$9.2 million of its $__ Capital Securities Securities (the "Capital
Securities").
In connection with this opinion, we have examined (i) the Registration
Statement, (ii) the Prospectus, (iii) the Declaration of Trust of the Trust,
dated as of December 23, 1998, among the Corporation and the Trustees of the
Trust named therein, and (iv) such other corporate records, agreements,
documents and other instruments as we have deemed necessary as a basis for the
opinion hereinafter set forth ((i) (ii), (iii) and (iv) collectively the
"Offering Documents"). We assume the correctness of the factual matters
contained in such reliance sources and have made no independent investigation
for the purpose of confirming that such factual matters are correct. We have
assumed that the operative documents described in the Prospectus will be
performed in accordance with the terms described therein.
We have assumed (i) the genuineness of all signatures on the Offering
Documents, (ii) the due authorization, execution, and delivery of all documents
and the validity and binding effect thereof, (iii) the authenticity of all
documents submitted to us as originals, (iv) the conforming to the originals of
all documents submitted to us as copies in the authenticity of the originals
from which the copies were made, and (v) the legal capacity of natural persons.
<PAGE>
Based on the foregoing, we hereby confirm to you our opinion as set
forth in the Prospectus under the heading "Certain United States Federal Income
Tax Consequences," subject to the limitations set forth therein.
In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code, Treasury Regulations promulgated thereunder,
pertinent judicial authorities, interpretive rulings of the Internal Revenue
Service, and other authorities we have considered relevant. Our opinion is
limited to the federal tax law of the United States of America and is expressed
as of the date hereof. We do not assume any obligation to update or supplement
our opinion to reflect any fact or circumstance which hereinafter comes to our
attention or any change in law which herein occurs. Our opinions are limited to
the matters expressly stated; no opinion is implied or may be inferred beyond
such matters.
This opinion is rendered to you and for your benefit solely in
connection with the transactions described herein. We hereby consent to the
filing of this opinion as an exhibit to the Registration Statement, which has
been filed by the Corporation and the Trust with the Securities and Exchange
Commission and to the reference of our firm under the caption "Certain Federal
Income Tax Consequences" in the Prospectus. This opinion may not, without our
prior consent, be otherwise distributed or relied upon by any other person, or
filed with any other government agency or quoted in any other document.
Very truly yours,
WILLIAMS, MULLEN, CHRISTIAN &
DOBBINS
By:__________________________________
Exhibit 12.1
CALCULATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997 1997 1996 1995 1994 1993
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Net Income........................ 2,300 1,304 1,821 1,466 905 651 351
Tax............................... 1,239 672 965 153 144 (180) (132)
Fixed Charges
Including Interest on
Deposits (1)................ 8,678 4,141 5,995 4,698 3,508 1,912 1,150
----- ----- ----- ----- ----- ----- -----
Total............................. 12,217 6,117 8,781 6,317 4,557 2,383 1,369
Fixed Charges
Excluding Interest on
Deposits (2)................ 882 169 299 98 252 103 9
Ratio of Earnings to Fixed Charges:
Excluding Interest on
Deposits (3)................ 5.01 12.69 10.32 17.52 4.16 5.57 25.33
Including Interest on
Deposits (4)................ 1.41 1.48 1.46 1.34 1.30 1.25 1.19
</TABLE>
(1) Fixed Charges Included on Deposits is equal to Gross Interest Expense.
(2) Fixed Charges Excluding Interest on Deposits contain only Fed Funds
purchased, interest on demand notes issued to the U.S. Treasury, and
all other interest.
(3) Ratio of Fixed Charges Excluding Interest on Deposits is computed by
dividing the Total of Net Income, Tax, and Fixed Charges Including
Interest on Deposits by Fixed Charges Excluding Interest on Deposits.
(4) Ratio of Fixed Charges Including Interest on Deposits is computed by
dividing the Total of Net Income, Tax, and Fixed Charges Including
Interest on Deposits by Fixed Charges Including Interest on Deposits.
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTS
As independent public accountants, we hereby consent to the inclusion in the
Form S-2 Registration Statement for Resource Bankshares Corporation of our
report, dated January 30, 1998, on the financial statements of Resource Bank for
the years ended December 31, 1997 and 1996, and to the reference to our firm in
the "Experts Section" of the Form S-2 Registration Statement.
/s/ Goodman & Company, L.L.P.
One Commercial Place
Norfolk, Virginia
January 8, 1999
Exhibit 25.1
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
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) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
RESOURCE BANKSHARES CORPORATION
(Exact name of obligor as specified in its charter)
Virginia 54-1904386
(State of incorporation) (I.R.S. employer identification no.)
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
(Address of principal executive offices) (Zip Code)
Junior Subordinated Debt Securities of Resource Bankshares Corporation
(Title of the indenture securities)
================================================================================
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ITEM 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.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 5th day
of January, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Emmett R. Harmon
---------------------------- ----------------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
H:\...\trinact\t1\resourjs.wpd
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EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
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Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold,
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purchase, convey, mortgage or otherwise deal in real and
personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require,
to make by-laws not inconsistent with the Constitution or
laws of the United States or of this State, to discount
bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the
powers, rights, privileges and franchises incident to a
corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other
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instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of
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interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other
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<PAGE>
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
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(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
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<PAGE>
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of
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Directors in the resolution or resolutions adopted pursuant to
authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of
such of the series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of
them; provided, however, that the Board of Directors may provide in
the resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as
shall be therein fixed) of the outstanding shares of such series
voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class
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shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any
reason, and any newly created directorships resulting from any
increase in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until
the next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold office
until the next election of the class for which such director shall
have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the
term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing
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procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
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Fourteenth: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares").
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Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that some lesser percentage may be specified, by law or in
any agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter
12
<PAGE>
defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
13
<PAGE>
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
14
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE>
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be
3
<PAGE>
subject to implementation by Resolutions of the Board of Directors presently
existing or hereafter passed from time to time for that purpose, and any
provisions of these By-Laws (other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members or at the call of its chairman. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business.
(D) Minutes of each meeting of the Trust Committee shall
be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the
4
<PAGE>
Board of Directors with respect thereto or with respect to any other matters
pertaining to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
5
<PAGE>
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE>
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
7
<PAGE>
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
8
<PAGE>
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal
9
<PAGE>
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust, enterprise or non-profit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The Corporation shall
indemnify a person in connection with a proceeding initiated by such person only
if the proceeding was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 5, 1999 By: /s/ Emmett R. Harmon
--------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1998.
-------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................180,755
Interest-bearing balances.............................................................................0
Held-to-maturity securities.................................................................................148,529
Available-for-sale securities.............................................................................1,216,482
Federal funds sold and securities purchased under agreements to resell......................................203,500
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,951,771
LESS: Allowance for loan and lease losses........... 64,835
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,886,936
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases)....................................................137,819
Other real estate owned.......................................................................................1,847
Investments in unconsolidated subsidiaries and associated companies.............................................997
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................3,105
Other assets.................................................................................................82,400
Total assets..............................................................................................5,862,370
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices.......................................................................................4,338,785
Noninterest-bearing................ 792,528
Interest-bearing................... 3,546,257
Federal funds purchased and Securities sold under agreements to repurchase................................. 249,670
Demand notes issued to the U.S. Treasury.....................................................................74,347
Trading liabilities (from Schedule RC-D)..........................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................576,507
With original maturity of more than one year.....................................................43,000
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities (from Schedule RC-G)......................................................................104,687
Total liabilities.........................................................................................5,386,996
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus (exclude all surplus related to preferred stock).....................................................62,118
Undivided profits and capital reserves......................................................................399,222
Net unrealized holding gains (losses) on available-for-sale securities.......................................13,534
Total equity capital........................................................................................475,374
Total liabilities, limited-life preferred stock, and equity capital.......................................5,862,370
</TABLE>
2
Exhibit 25.2
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
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) ___
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
RESOURCE BANKSHARES CORPORATION
RESOURCE CAPITAL TRUST I
(Exact name of obligor as specified in its charter)
Virginia 54-1904386
Delaware
(State of incorporation) (I.R.S. employer identification no.)
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
(Address of principal executive offices) (Zip Code)
Capital Securities of Resource Capital Trust I
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 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.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 5th day
of January, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Emmett R. Harmon
--------------------------- ---------------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
H:\...\trinact\t1\resourcp.wpd
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EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
<PAGE>
Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold,
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purchase, convey, mortgage or otherwise deal in real and
personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require,
to make by-laws not inconsistent with the Constitution or
laws of the United States or of this State, to discount
bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the
powers, rights, privileges and franchises incident to a
corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other
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instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of
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interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other
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<PAGE>
negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
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<PAGE>
(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
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<PAGE>
as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of
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Directors in the resolution or resolutions adopted pursuant to
authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of
such of the series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of
them; provided, however, that the Board of Directors may provide in
the resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as
shall be therein fixed) of the outstanding shares of such series
voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class
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shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any
reason, and any newly created directorships resulting from any
increase in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until
the next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold office
until the next election of the class for which such director shall
have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the
term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing
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procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
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Fourteenth: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares").
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Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that some lesser percentage may be specified, by law or in
any agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter
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defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
13
<PAGE>
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
14
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE>
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be
3
<PAGE>
subject to implementation by Resolutions of the Board of Directors presently
existing or hereafter passed from time to time for that purpose, and any
provisions of these By-Laws (other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members or at the call of its chairman. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business.
(D) Minutes of each meeting of the Trust Committee shall
be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the
4
<PAGE>
Board of Directors with respect thereto or with respect to any other matters
pertaining to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
5
<PAGE>
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE>
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
7
<PAGE>
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
8
<PAGE>
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal
9
<PAGE>
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust, enterprise or non-profit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The Corporation shall
indemnify a person in connection with a proceeding initiated by such person only
if the proceeding was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 5, 1999 By: /s/ Emmett R. Harmon
--------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1998.
-------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................180,755
Interest-bearing balances.............................................................................0
Held-to-maturity securities.................................................................................148,529
Available-for-sale securities.............................................................................1,216,482
Federal funds sold and securities purchased under agreements to resell......................................203,500
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,951,771
LESS: Allowance for loan and lease losses........... 64,835
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,886,936
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases)....................................................137,819
Other real estate owned.......................................................................................1,847
Investments in unconsolidated subsidiaries and associated companies.............................................997
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................3,105
Other assets.................................................................................................82,400
Total assets..............................................................................................5,862,370
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices.......................................................................................4,338,785
Noninterest-bearing................ 792,528
Interest-bearing................... 3,546,257
Federal funds purchased and Securities sold under agreements to repurchase................................. 249,670
Demand notes issued to the U.S. Treasury.....................................................................74,347
Trading liabilities (from Schedule RC-D)..........................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................576,507
With original maturity of more than one year.....................................................43,000
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities (from Schedule RC-G)......................................................................104,687
Total liabilities.........................................................................................5,386,996
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus (exclude all surplus related to preferred stock).....................................................62,118
Undivided profits and capital reserves......................................................................399,222
Net unrealized holding gains (losses) on available-for-sale securities.......................................13,534
Total equity capital........................................................................................475,374
Total liabilities, limited-life preferred stock, and equity capital.......................................5,862,370
</TABLE>
2
Exhibit 25.3
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM T-1
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) ____
WILMINGTON TRUST COMPANY
(Exact name of trustee as specified in its charter)
Delaware 51-0055023
(State of incorporation) (I.R.S. employer identification no.)
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890
(Address of principal executive offices)
Cynthia L. Corliss
Vice President and Trust Counsel
Wilmington Trust Company
Rodney Square North
Wilmington, Delaware 19890
(302) 651-8516
(Name, address and telephone number of agent for service)
RESOURCE BANKSHARES CORPORATION
(Exact name of obligor as specified in its charter)
Virginia 54-1904386
(State of incorporation) (I.R.S. employer identification no.)
3720 Virginia Beach Boulevard
Virginia Beach, Virginia 23452
(Address of principal executive offices) (Zip Code)
Guarantee of Resource Bankshares Corporation as to the Capital Securities
(Title of the indenture securities)
================================================================================
<PAGE>
ITEM 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.
Federal Deposit Insurance Co. State Bank Commissioner
Five Penn Center Dover, Delaware
Suite #2901
Philadelphia, PA
(b) Whether it is authorized to exercise corporate trust powers.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
If the obligor is an affiliate of the trustee, describe each
affiliation:
Based upon an examination of the books and records of the
trustee and upon information furnished by the obligor, the obligor is
not an affiliate of the trustee.
ITEM 3. LIST OF EXHIBITS.
List below all exhibits filed as part of this Statement of
Eligibility and Qualification.
A. Copy of the Charter of Wilmington Trust Company, which includes
the certificate of authority of Wilmington Trust Company to
commence business and the authorization of Wilmington Trust
Company to exercise corporate trust powers.
B. Copy of By-Laws of Wilmington Trust Company.
C. Consent of Wilmington Trust Company required by Section 321(b)
of Trust Indenture Act.
D. Copy of most recent Report of Condition of Wilmington Trust
Company.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, Wilmington Trust Company, a corporation organized and
existing under the laws of Delaware, has duly caused this Statement of
Eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Wilmington and State of Delaware on the 5th day
of January, 1999.
WILMINGTON TRUST COMPANY
[SEAL]
Attest: /s/ Donald G. MacKelcan By: /s/ Emmett R. Harmon
--------------------------- ---------------------------
Assistant Secretary Name: Emmett R. Harmon
Title: Vice President
H:\...\trinact\t1\resourgt.wpd
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EXHIBIT A
AMENDED CHARTER
Wilmington Trust Company
Wilmington, Delaware
As existing on May 9, 1987
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Amended Charter
or
Act of Incorporation
of
Wilmington Trust Company
Wilmington Trust Company, originally incorporated by an Act of the
General Assembly of the State of Delaware, entitled "An Act to Incorporate the
Delaware Guarantee and Trust Company", approved March 2, A.D. 1901, and the name
of which company was changed to "Wilmington Trust Company" by an amendment filed
in the Office of the Secretary of State on March 18, A.D. 1903, and the Charter
or Act of Incorporation of which company has been from time to time amended and
changed by merger agreements pursuant to the corporation law for state banks and
trust companies of the State of Delaware, does hereby alter and amend its
Charter or Act of Incorporation so that the same as so altered and amended shall
in its entirety read as follows:
First: - The name of this corporation is Wilmington Trust Company.
Second: - The location of its principal office in the State of
Delaware is at Rodney Square North, in the City of Wilmington,
County of New Castle; the name of its resident agent is Wilmington
Trust Company whose address is Rodney Square North, in said City. In
addition to such principal office, the said corporation maintains
and operates branch offices in the City of Newark, New Castle
County, Delaware, the Town of Newport, New Castle County, Delaware,
at Claymont, New Castle County, Delaware, at Greenville, New Castle
County Delaware, and at Milford Cross Roads, New Castle County,
Delaware, and shall be empowered to open, maintain and operate
branch offices at Ninth and Shipley Streets, 418 Delaware Avenue,
2120 Market Street, and 3605 Market Street, all in the City of
Wilmington, New Castle County, Delaware, and such other branch
offices or places of business as may be authorized from time to time
by the agency or agencies of the government of the State of Delaware
empowered to confer such authority.
Third: - (a) The nature of the business and the objects and purposes
proposed to be transacted, promoted or carried on by this
Corporation are to do any or all of the things herein mentioned as
fully and to the same extent as natural persons might or could do
and in any part of the world, viz.:
(1) To sue and be sued, complain and defend in any Court of
law or equity and to make and use a common seal, and alter
the seal at pleasure, to hold,
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purchase, convey, mortgage or otherwise deal in real and
personal estate and property, and to appoint such officers
and agents as the business of the Corporation shall require,
to make by-laws not inconsistent with the Constitution or
laws of the United States or of this State, to discount
bills, notes or other evidences of debt, to receive deposits
of money, or securities for money, to buy gold and silver
bullion and foreign coins, to buy and sell bills of
exchange, and generally to use, exercise and enjoy all the
powers, rights, privileges and franchises incident to a
corporation which are proper or necessary for the
transaction of the business of the Corporation hereby
created.
(2) To insure titles to real and personal property, or any
estate or interests therein, and to guarantee the holder of
such property, real or personal, against any claim or
claims, adverse to his interest therein, and to prepare and
give certificates of title for any lands or premises in the
State of Delaware, or elsewhere.
(3) To act as factor, agent, broker or attorney in the
receipt, collection, custody, investment and management of
funds, and the purchase, sale, management and disposal of
property of all descriptions, and to prepare and execute all
papers which may be necessary or proper in such business.
(4) To prepare and draw agreements, contracts, deeds,
leases, conveyances, mortgages, bonds and legal papers of
every description, and to carry on the business of
conveyancing in all its branches.
(5) To receive upon deposit for safekeeping money, jewelry,
plate, deeds, bonds and any and all other personal property
of every sort and kind, from executors, administrators,
guardians, public officers, courts, receivers, assignees,
trustees, and from all fiduciaries, and from all other
persons and individuals, and from all corporations whether
state, municipal, corporate or private, and to rent boxes,
safes, vaults and other receptacles for such property.
(6) To act as agent or otherwise for the purpose of
registering, issuing, certificating, countersigning,
transferring or underwriting the stock, bonds or other
obligations of any corporation, association, state or
municipality, and may receive and manage any sinking fund
therefor on such terms as may be agreed upon between the two
parties, and in like manner may act as Treasurer of any
corporation or municipality.
(7) To act as Trustee under any deed of trust, mortgage,
bond or other
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instrument issued by any state, municipality, body politic,
corporation, association or person, either alone or in
conjunction with any other person or persons, corporation or
corporations.
(8) To guarantee the validity, performance or effect of any
contract or agreement, and the fidelity of persons holding
places of responsibility or trust; to become surety for any
person, or persons, for the faithful performance of any
trust, office, duty, contract or agreement, either by itself
or in conjunction with any other person, or persons,
corporation, or corporations, or in like manner become
surety upon any bond, recognizance, obligation, judgment,
suit, order, or decree to be entered in any court of record
within the State of Delaware or elsewhere, or which may now
or hereafter be required by any law, judge, officer or court
in the State of Delaware or elsewhere.
(9) To act by any and every method of appointment as
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian, bailee, or
in any other trust capacity in the receiving, holding,
managing, and disposing of any and all estates and property,
real, personal or mixed, and to be appointed as such
trustee, trustee in bankruptcy, receiver, assignee, assignee
in bankruptcy, executor, administrator, guardian or bailee
by any persons, corporations, court, officer, or authority,
in the State of Delaware or elsewhere; and whenever this
Corporation is so appointed by any person, corporation,
court, officer or authority such trustee, trustee in
bankruptcy, receiver, assignee, assignee in bankruptcy,
executor, administrator, guardian, bailee, or in any other
trust capacity, it shall not be required to give bond with
surety, but its capital stock shall be taken and held as
security for the performance of the duties devolving upon it
by such appointment.
(10) And for its care, management and trouble, and the
exercise of any of its powers hereby given, or for the
performance of any of the duties which it may undertake or
be called upon to perform, or for the assumption of any
responsibility the said Corporation may be entitled to
receive a proper compensation.
(11) To purchase, receive, hold and own bonds, mortgages,
debentures, shares of capital stock, and other securities,
obligations, contracts and evidences of indebtedness, of any
private, public or municipal corporation within and without
the State of Delaware, or of the Government of the United
States, or of any state, territory, colony, or possession
thereof, or of any foreign government or country; to
receive, collect, receipt for, and dispose of
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interest, dividends and income upon and from any of the
bonds, mortgages, debentures, notes, shares of capital
stock, securities, obligations, contracts, evidences of
indebtedness and other property held and owned by it, and to
exercise in respect of all such bonds, mortgages,
debentures, notes, shares of capital stock, securities,
obligations, contracts, evidences of indebtedness and other
property, any and all the rights, powers and privileges of
individual owners thereof, including the right to vote
thereon; to invest and deal in and with any of the moneys of
the Corporation upon such securities and in such manner as
it may think fit and proper, and from time to time to vary
or realize such investments; to issue bonds and secure the
same by pledges or deeds of trust or mortgages of or upon
the whole or any part of the property held or owned by the
Corporation, and to sell and pledge such bonds, as and when
the Board of Directors shall determine, and in the promotion
of its said corporate business of investment and to the
extent authorized by law, to lease, purchase, hold, sell,
assign, transfer, pledge, mortgage and convey real and
personal property of any name and nature and any estate or
interest therein.
(b) In furtherance of, and not in limitation, of the powers
conferred by the laws of the State of Delaware, it is hereby
expressly provided that the said Corporation shall also have the
following powers:
(1) To do any or all of the things herein set forth, to the
same extent as natural persons might or could do, and in any
part of the world.
(2) To acquire the good will, rights, property and
franchises and to undertake the whole or any part of the
assets and liabilities of any person, firm, association or
corporation, and to pay for the same in cash, stock of this
Corporation, bonds or otherwise; to hold or in any manner to
dispose of the whole or any part of the property so
purchased; to conduct in any lawful manner the whole or any
part of any business so acquired, and to exercise all the
powers necessary or convenient in and about the conduct and
management of such business.
(3) To take, hold, own, deal in, mortgage or otherwise lien,
and to lease, sell, exchange, transfer, or in any manner
whatever dispose of property, real, personal or mixed,
wherever situated.
(4) To enter into, make, perform and carry out contracts of
every kind with any person, firm, association or
corporation, and, without limit as to amount, to draw, make,
accept, endorse, discount, execute and issue promissory
notes, drafts, bills of exchange, warrants, bonds,
debentures, and other
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negotiable or transferable instruments.
(5) To have one or more offices, to carry on all or any of
its operations and businesses, without restriction to the
same extent as natural persons might or could do, to
purchase or otherwise acquire, to hold, own, to mortgage,
sell, convey or otherwise dispose of, real and personal
property, of every class and description, in any State,
District, Territory or Colony of the United States, and in
any foreign country or place.
(6) It is the intention that the objects, purposes and
powers specified and clauses contained in this paragraph
shall (except where otherwise expressed in said paragraph)
be nowise limited or restricted by reference to or inference
from the terms of any other clause of this or any other
paragraph in this charter, but that the objects, purposes
and powers specified in each of the clauses of this
paragraph shall be regarded as independent objects, purposes
and powers.
Fourth: - (a) The total number of shares of all classes of stock
which the Corporation shall have authority to issue is forty-one
million (41,000,000) shares, consisting of:
(1) One million (1,000,000) shares of Preferred stock, par
value $10.00 per share (hereinafter referred to as
"Preferred Stock"); and
(2) Forty million (40,000,000) shares of Common Stock, par
value $1.00 per share (hereinafter referred to as "Common
Stock").
(b) Shares of Preferred Stock may be issued from time to time in one
or more series as may from time to time be determined by the Board
of Directors each of said series to be distinctly designated. All
shares of any one series of Preferred Stock shall be alike in every
particular, except that there may be different dates from which
dividends, if any, thereon shall be cumulative, if made cumulative.
The voting powers and the preferences and relative, participating,
optional and other special rights of each such series, and the
qualifications, limitations or restrictions thereof, if any, may
differ from those of any and all other series at any time
outstanding; and, subject to the provisions of subparagraph 1 of
Paragraph (c) of this Article Fourth, the Board of Directors of the
Corporation is hereby expressly granted authority to fix by
resolution or resolutions adopted prior to the issuance of any
shares of a particular series of Preferred Stock, the voting powers
and the designations, preferences and relative, optional and other
special rights, and the qualifications, limitations and restrictions
of such series, including, but without limiting the generality of
the foregoing, the following:
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(1) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute such series, which
number may be increased (except where otherwise provided by
the Board of Directors) or decreased (but not below the
number of shares thereof then outstanding) from time to time
by like action of the Board of Directors;
(2) The rate and times at which, and the terms and
conditions on which, dividends, if any, on Preferred Stock
of such series shall be paid, the extent of the preference
or relation, if any, of such dividends to the dividends
payable on any other class or classes, or series of the same
or other class of stock and whether such dividends shall be
cumulative or non-cumulative;
(3) The right, if any, of the holders of Preferred Stock of
such series to convert the same into or exchange the same
for, shares of any other class or classes or of any series
of the same or any other class or classes of stock of the
Corporation and the terms and conditions of such conversion
or exchange;
(4) Whether or not Preferred Stock of such series shall be
subject to redemption, and the redemption price or prices
and the time or times at which, and the terms and conditions
on which, Preferred Stock of such series may be redeemed.
(5) The rights, if any, of the holders of Preferred Stock of
such series upon the voluntary or involuntary liquidation,
merger, consolidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation.
(6) The terms of the sinking fund or redemption or purchase
account, if any, to be provided for the Preferred Stock of
such series; and
(7) The voting powers, if any, of the holders of such series
of Preferred Stock which may, without limiting the
generality of the foregoing include the right, voting as a
series or by itself or together with other series of
Preferred Stock or all series of Preferred Stock as a class,
to elect one or more directors of the Corporation if there
shall have been a default in the payment of dividends on any
one or more series of Preferred Stock or under such
circumstances and on such conditions as the Board of
Directors may determine.
(c) (1) After the requirements with respect to preferential
dividends on the Preferred Stock (fixed in accordance with the
provisions of section (b) of this Article Fourth), if any, shall
have been met and after the Corporation shall have complied with all
the requirements, if any, with respect to the setting aside of sums
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as sinking funds or redemption or purchase accounts (fixed in
accordance with the provisions of section (b) of this Article
Fourth), and subject further to any conditions which may be fixed in
accordance with the provisions of section (b) of this Article
Fourth, then and not otherwise the holders of Common Stock shall be
entitled to receive such dividends as may be declared from time to
time by the Board of Directors.
(2) After distribution in full of the preferential amount,
if any, (fixed in accordance with the provisions of section
(b) of this Article Fourth), to be distributed to the
holders of Preferred Stock in the event of voluntary or
involuntary liquidation, distribution or sale of assets,
dissolution or winding-up, of the Corporation, the holders
of the Common Stock shall be entitled to receive all of the
remaining assets of the Corporation, tangible and
intangible, of whatever kind available for distribution to
stockholders ratably in proportion to the number of shares
of Common Stock held by them respectively.
(3) Except as may otherwise be required by law or by the
provisions of such resolution or resolutions as may be
adopted by the Board of Directors pursuant to section (b) of
this Article Fourth, each holder of Common Stock shall have
one vote in respect of each share of Common Stock held on
all matters voted upon by the stockholders.
(d) No holder of any of the shares of any class or series of stock
or of options, warrants or other rights to purchase shares of any
class or series of stock or of other securities of the Corporation
shall have any preemptive right to purchase or subscribe for any
unissued stock of any class or series or any additional shares of
any class or series to be issued by reason of any increase of the
authorized capital stock of the Corporation of any class or series,
or bonds, certificates of indebtedness, debentures or other
securities convertible into or exchangeable for stock of the
Corporation of any class or series, or carrying any right to
purchase stock of any class or series, but any such unissued stock,
additional authorized issue of shares of any class or series of
stock or securities convertible into or exchangeable for stock, or
carrying any right to purchase stock, may be issued and disposed of
pursuant to resolution of the Board of Directors to such persons,
firms, corporations or associations, whether such holders or others,
and upon such terms as may be deemed advisable by the Board of
Directors in the exercise of its sole discretion.
(e) The relative powers, preferences and rights of each series of
Preferred Stock in relation to the relative powers, preferences and
rights of each other series of Preferred Stock shall, in each case,
be as fixed from time to time by the Board of
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Directors in the resolution or resolutions adopted pursuant to
authority granted in section (b) of this Article Fourth and the
consent, by class or series vote or otherwise, of the holders of
such of the series of Preferred Stock as are from time to time
outstanding shall not be required for the issuance by the Board of
Directors of any other series of Preferred Stock whether or not the
powers, preferences and rights of such other series shall be fixed
by the Board of Directors as senior to, or on a parity with, the
powers, preferences and rights of such outstanding series, or any of
them; provided, however, that the Board of Directors may provide in
the resolution or resolutions as to any series of Preferred Stock
adopted pursuant to section (b) of this Article Fourth that the
consent of the holders of a majority (or such greater proportion as
shall be therein fixed) of the outstanding shares of such series
voting thereon shall be required for the issuance of any or all
other series of Preferred Stock.
(f) Subject to the provisions of section (e), shares of any series
of Preferred Stock may be issued from time to time as the Board of
Directors of the Corporation shall determine and on such terms and
for such consideration as shall be fixed by the Board of Directors.
(g) Shares of Common Stock may be issued from time to time as the
Board of Directors of the Corporation shall determine and on such
terms and for such consideration as shall be fixed by the Board of
Directors.
(h) The authorized amount of shares of Common Stock and of Preferred
Stock may, without a class or series vote, be increased or decreased
from time to time by the affirmative vote of the holders of a
majority of the stock of the Corporation entitled to vote thereon.
Fifth: - (a) The business and affairs of the Corporation shall be
conducted and managed by a Board of Directors. The number of
directors constituting the entire Board shall be not less than five
nor more than twenty-five as fixed from time to time by vote of a
majority of the whole Board, provided, however, that the number of
directors shall not be reduced so as to shorten the term of any
director at the time in office, and provided further, that the
number of directors constituting the whole Board shall be
twenty-four until otherwise fixed by a majority of the whole Board.
(b) The Board of Directors shall be divided into three classes, as
nearly equal in number as the then total number of directors
constituting the whole Board permits, with the term of office of one
class expiring each year. At the annual meeting of stockholders in
1982, directors of the first class shall be elected to hold office
for a term expiring at the next succeeding annual meeting, directors
of the second class
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shall be elected to hold office for a term expiring at the second
succeeding annual meeting and directors of the third class shall be
elected to hold office for a term expiring at the third succeeding
annual meeting. Any vacancies in the Board of Directors for any
reason, and any newly created directorships resulting from any
increase in the directors, may be filled by the Board of Directors,
acting by a majority of the directors then in office, although less
than a quorum, and any directors so chosen shall hold office until
the next annual election of directors. At such election, the
stockholders shall elect a successor to such director to hold office
until the next election of the class for which such director shall
have been chosen and until his successor shall be elected and
qualified. No decrease in the number of directors shall shorten the
term of any incumbent director.
(c) Notwithstanding any other provisions of this Charter or Act of
Incorporation or the By-Laws of the Corporation (and notwithstanding
the fact that some lesser percentage may be specified by law, this
Charter or Act of Incorporation or the ByLaws of the Corporation),
any director or the entire Board of Directors of the Corporation may
be removed at any time without cause, but only by the affirmative
vote of the holders of two-thirds or more of the outstanding shares
of capital stock of the Corporation entitled to vote generally in
the election of directors (considered for this purpose as one class)
cast at a meeting of the stockholders called for that purpose.
(d) Nominations for the election of directors may be made by the
Board of Directors or by any stockholder entitled to vote for the
election of directors. Such nominations shall be made by notice in
writing, delivered or mailed by first class United States mail,
postage prepaid, to the Secretary of the Corporation not less than
14 days nor more than 50 days prior to any meeting of the
stockholders called for the election of directors; provided,
however, that if less than 21 days' notice of the meeting is given
to stockholders, such written notice shall be delivered or mailed,
as prescribed, to the Secretary of the Corporation not later than
the close of the seventh day following the day on which notice of
the meeting was mailed to stockholders. Notice of nominations which
are proposed by the Board of Directors shall be given by the
Chairman on behalf of the Board.
(e) Each notice under subsection (d) shall set forth (i) the name,
age, business address and, if known, residence address of each
nominee proposed in such notice, (ii) the principal occupation or
employment of such nominee and (iii) the number of shares of stock
of the Corporation which are beneficially owned by each such
nominee.
(f) The Chairman of the meeting may, if the facts warrant, determine
and declare to the meeting that a nomination was not made in
accordance with the foregoing
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procedure, and if he should so determine, he shall so declare to the
meeting and the defective nomination shall be disregarded.
(g) No action required to be taken or which may be taken at any
annual or special meeting of stockholders of the Corporation may be
taken without a meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied.
Sixth: - The Directors shall choose such officers, agent and
servants as may be provided in the By-Laws as they may from time to
time find necessary or proper.
Seventh: - The Corporation hereby created is hereby given the same
powers, rights and privileges as may be conferred upon corporations
organized under the Act entitled "An Act Providing a General
Corporation Law", approved March 10, 1899, as from time to time
amended.
Eighth: - This Act shall be deemed and taken to be a private Act.
Ninth: - This Corporation is to have perpetual existence.
Tenth: - The Board of Directors, by resolution passed by a majority
of the whole Board, may designate any of their number to constitute
an Executive Committee, which Committee, to the extent provided in
said resolution, or in the By-Laws of the Company, shall have and
may exercise all of the powers of the Board of Directors in the
management of the business and affairs of the Corporation, and shall
have power to authorize the seal of the Corporation to be affixed to
all papers which may require it.
Eleventh: - The private property of the stockholders shall not be
liable for the payment of corporate debts to any extent whatever.
Twelfth: - The Corporation may transact business in any part of the
world.
Thirteenth: - The Board of Directors of the Corporation is expressly
authorized to make, alter or repeal the By-Laws of the Corporation
by a vote of the majority of the entire Board. The stockholders may
make, alter or repeal any By-Law whether or not adopted by them,
provided however, that any such additional By-Laws, alterations or
repeal may be adopted only by the affirmative vote of the holders of
two-thirds or more of the outstanding shares of capital stock of the
Corporation entitled to vote generally in the election of directors
(considered for this purpose as one class).
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Fourteenth: - Meetings of the Directors may be held outside of the
State of Delaware at such places as may be from time to time
designated by the Board, and the Directors may keep the books of the
Company outside of the State of Delaware at such places as may be
from time to time designated by them.
Fifteenth: - (a) In addition to any affirmative vote required by
law, and except as otherwise expressly provided in sections (b) and
(c) of this Article Fifteenth:
(A) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with or into (i) any
Interested Stockholder (as hereinafter defined) or (ii) any
other corporation (whether or not itself an Interested
Stockholder), which, after such merger or consolidation,
would be an Affiliate (as hereinafter defined) of an
Interested Stockholder, or
(B) any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of related
transactions) to or with any Interested Stockholder or any
Affiliate of any Interested Stockholder of any assets of the
Corporation or any Subsidiary having an aggregate fair
market value of $1,000,000 or more, or
(C) the issuance or transfer by the Corporation or any
Subsidiary (in one transaction or a series of related
transactions) of any securities of the Corporation or any
Subsidiary to any Interested Stockholder or any Affiliate of
any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an
aggregate fair market value of $1,000,000 or more, or
(D) the adoption of any plan or proposal for the liquidation
or dissolution of the Corporation, or
(E) any reclassification of securities (including any
reverse stock split), or recapitalization of the
Corporation, or any merger or consolidation of the
Corporation with any of its Subsidiaries or any similar
transaction (whether or not with or into or otherwise
involving an Interested Stockholder) which has the effect,
directly or indirectly, of increasing the proportionate
share of the outstanding shares of any class of equity or
convertible securities of the Corporation or any Subsidiary
which is directly or indirectly owned by any Interested
Stockholder, or any Affiliate of any Interested Stockholder,
shall require the affirmative vote of the holders of at least two-thirds of the
outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors, considered for the purpose of this
Article Fifteenth as one class ("Voting Shares").
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Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that some lesser percentage may be specified, by law or in
any agreement with any national securities exchange or otherwise.
(2) The term "business combination" as used in this
Article Fifteenth shall mean any transaction which is
referred to any one or more of clauses (A) through (E) of
paragraph 1 of the section (a).
(b) The provisions of section (a) of this Article Fifteenth
shall not be applicable to any particular business
combination and such business combination shall require only
such affirmative vote as is required by law and any other
provisions of the Charter or Act of Incorporation of By-Laws
if such business combination has been approved by a majority
of the whole Board.
(c) For the purposes of this Article Fifteenth:
(1) A "person" shall mean any individual firm, corporation or other
entity.
(2) "Interested Stockholder" shall mean, in respect of any business
combination, any person (other than the Corporation or any
Subsidiary) who or which as of the record date for the determination
of stockholders entitled to notice of and to vote on such business
combination, or immediately prior to the consummation of any such
transaction:
(A) is the beneficial owner, directly or indirectly, of more
than 10% of the Voting Shares, or
(B) is an Affiliate of the Corporation and at any time
within two years prior thereto was the beneficial owner,
directly or indirectly, of not less than 10% of the then
outstanding voting Shares, or
(C) is an assignee of or has otherwise succeeded in any
share of capital stock of the Corporation which were at any
time within two years prior thereto beneficially owned by
any Interested Stockholder, and such assignment or
succession shall have occurred in the course of a
transaction or series of transactions not involving a public
offering within the meaning of the Securities Act of 1933.
(3) A person shall be the "beneficial owner" of any Voting Shares:
(A) which such person or any of its Affiliates and
Associates (as hereafter
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defined) beneficially own, directly or indirectly, or
(B) which such person or any of its Affiliates or Associates
has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time),
pursuant to any agreement, arrangement or understanding or
upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise, or (ii) the right to vote
pursuant to any agreement, arrangement or understanding, or
(C) which are beneficially owned, directly or indirectly, by
any other person with which such first mentioned person or
any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock
of the Corporation.
(4) The outstanding Voting Shares shall include shares deemed owned
through application of paragraph (3) above but shall not include any
other Voting Shares which may be issuable pursuant to any agreement,
or upon exercise of conversion rights, warrants or options or
otherwise.
(5) "Affiliate" and "Associate" shall have the respective meanings
given those terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as in effect on December
31, 1981.
(6) "Subsidiary" shall mean any corporation of which a majority of
any class of equity security (as defined in Rule 3a11-1 of the
General Rules and Regulations under the Securities Exchange Act of
1934, as in effect in December 31, 1981) is owned, directly or
indirectly, by the Corporation; provided, however, that for the
purposes of the definition of Investment Stockholder set forth in
paragraph (2) of this section (c), the term "Subsidiary" shall mean
only a corporation of which a majority of each class of equity
security is owned, directly or indirectly, by the Corporation.
(d) majority of the directors shall have the power and duty
to determine for the purposes of this Article Fifteenth on
the basis of information known to them, (1) the number of
Voting Shares beneficially owned by any person (2) whether a
person is an Affiliate or Associate of another, (3) whether
a person has an agreement, arrangement or understanding with
another as to the matters referred to in paragraph (3) of
section (c), or (4) whether the assets subject to any
business combination or the consideration received for the
issuance or transfer of securities by the Corporation, or
any Subsidiary has an aggregate fair market value of
$1,000,000 or more.
13
<PAGE>
(e) Nothing contained in this Article Fifteenth shall be
construed to relieve any Interested Stockholder from any
fiduciary obligation imposed by law.
Sixteenth: Notwithstanding any other provision of this Charter or
Act of Incorporation or the By-Laws of the Corporation (and in
addition to any other vote that may be required by law, this Charter
or Act of Incorporation by the By-Laws), the affirmative vote of the
holders of at least two-thirds of the outstanding shares of the
capital stock of the Corporation entitled to vote generally in the
election of directors (considered for this purpose as one class)
shall be required to amend, alter or repeal any provision of
Articles Fifth, Thirteenth, Fifteenth or Sixteenth of this Charter
or Act of Incorporation.
Seventeenth: (a) a Director of this Corporation shall not be liable
to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a Director, except to the extent such
exemption from liability or limitation thereof is not permitted
under the Delaware General Corporation Laws as the same exists or
may hereafter be amended.
(b) Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a
Director of the Corporation existing hereunder with respect
to any act or omission occurring prior to the time of such
repeal or modification."
14
<PAGE>
EXHIBIT B
BY-LAWS
WILMINGTON TRUST COMPANY
WILMINGTON, DELAWARE
As existing on January 16, 1997
<PAGE>
BY-LAWS OF WILMINGTON TRUST COMPANY
ARTICLE I
Stockholders' Meetings
Section 1. The Annual Meeting of Stockholders shall be held on the
third Thursday in April each year at the principal office at the Company or at
such other date, time, or place as may be designated by resolution by the Board
of Directors.
Section 2. Special meetings of all stockholders may be called at any
time by the Board of Directors, the Chairman of the Board or the President.
Section 3. Notice of all meetings of the stockholders shall be given
by mailing to each stockholder at least ten (10) days before said meeting, at
his last known address, a written or printed notice fixing the time and place of
such meeting.
Section 4. A majority in the amount of the capital stock of the
Company issued and outstanding on the record date, as herein determined, shall
constitute a quorum at all meetings of stockholders for the transaction of any
business, but the holders of a small number of shares may adjourn, from time to
time, without further notice, until a quorum is secured. At each annual or
special meeting of stockholders, each stockholder shall be entitled to one vote,
either in person or by proxy, for each shares of stock registered in the
stockholder's name on the books of the Company on the record date for any such
meeting as determined herein.
ARTICLE II
Directors
Section 1. The number and classification of the Board of Directors
shall be as set forth in the Charter of the Bank.
Section 2. No person who has attained the age of seventy-two (72)
years shall be nominated for election to the Board of Directors of the Company,
provided, however, that this limitation shall not apply to any person who was
serving as director of the Company on September 16, 1971.
Section 3. The class of Directors so elected shall hold office for
three years or until their successors are elected and qualified.
Section 4. The affairs and business of the Company shall be managed
and conducted by the Board of Directors.
<PAGE>
Section 5. The Board of Directors shall meet at the principal office
of the Company or elsewhere in its discretion at such times to be determined by
a majority of its members, or at the call of the Chairman of the Board of
Directors or the President.
Section 6. Special meetings of the Board of Directors may be called
at any time by the Chairman of the Board of Directors or by the President, and
shall be called upon the written request of a majority of the directors.
Section 7. A majority of the directors elected and qualified shall
be necessary to constitute a quorum for the transaction of business at any
meeting of the Board of Directors.
Section 8. Written notice shall be sent by mail to each director of
any special meeting of the Board of Directors, and of any change in the time or
place of any regular meeting, stating the time and place of such meeting, which
shall be mailed not less than two days before the time of holding such meeting.
Section 9. In the event of the death, resignation, removal,
inability to act, or disqualification of any director, the Board of Directors,
although less than a quorum, shall have the right to elect the successor who
shall hold office for the remainder of the full term of the class of directors
in which the vacancy occurred, and until such director's successor shall have
been duly elected and qualified.
Section 10. The Board of Directors at its first meeting after its
election by the stockholders shall appoint an Executive Committee, a Trust
Committee, an Audit Committee and a Compensation Committee, and shall elect from
its own members a Chairman of the Board of Directors and a President who may be
the same person. The Board of Directors shall also elect at such meeting a
Secretary and a Treasurer, who may be the same person, may appoint at any time
such other committees and elect or appoint such other officers as it may deem
advisable. The Board of Directors may also elect at such meeting one or more
Associate Directors.
Section 11. The Board of Directors may at any time remove, with or
without cause, any member of any Committee appointed by it or any associate
director or officer elected by it and may appoint or elect his successor.
Section 12. The Board of Directors may designate an officer to be in
charge of such of the departments or division of the Company as it may deem
advisable.
2
<PAGE>
ARTICLE III
Committees
Section 1. Executive Committee
(A) The Executive Committee shall be composed of not
more than nine members who shall be selected by the Board of Directors from its
own members and who shall hold office during the pleasure of the Board.
(B) The Executive Committee shall have all the powers of
the Board of Directors when it is not in session to transact all business for
and in behalf of the Company that may be brought before it.
(C) The Executive Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members, or at the call of the Chairman of the
Executive Committee or at the call of the Chairman of the Board of Directors.
The majority of its members shall be necessary to constitute a quorum for the
transaction of business. Special meetings of the Executive Committee may be held
at any time when a quorum is present.
(D) Minutes of each meeting of the Executive Committee
shall be kept and submitted to the Board of Directors at its next meeting.
(E) The Executive Committee shall advise and superintend
all investments that may be made of the funds of the Company, and shall direct
the disposal of the same, in accordance with such rules and regulations as the
Board of Directors from time to time make.
(F) In the event of a state of disaster of sufficient
severity to prevent the conduct and management of the affairs and business of
the Company by its directors and officers as contemplated by these By-Laws any
two available members of the Executive Committee as constituted immediately
prior to such disaster shall constitute a quorum of that Committee for the full
conduct and management of the affairs and business of the Company in accordance
with the provisions of Article III of these By-Laws; and if less than three
members of the Trust Committee is constituted immediately prior to such disaster
shall be available for the transaction of its business, such Executive Committee
shall also be empowered to exercise all of the powers reserved to the Trust
Committee under Article III Section 2 hereof. In the event of the
unavailability, at such time, of a minimum of two members of such Executive
Committee, any three available directors shall constitute the Executive
Committee for the full conduct and management of the affairs and business of the
Company in accordance with the foregoing provisions of this Section. This By-Law
shall be
3
<PAGE>
subject to implementation by Resolutions of the Board of Directors presently
existing or hereafter passed from time to time for that purpose, and any
provisions of these By-Laws (other than this Section) and any resolutions which
are contrary to the provisions of this Section or to the provisions of any such
implementary Resolutions shall be suspended during such a disaster period until
it shall be determined by any interim Executive Committee acting under this
section that it shall be to the advantage of the Company to resume the conduct
and management of its affairs and business under all of the other provisions of
these By-Laws.
Section 2. Trust Committee
(A) The Trust Committee shall be composed of not more
than thirteen members who shall be selected by the Board of Directors, a
majority of whom shall be members of the Board of Directors and who shall hold
office during the pleasure of the Board.
(B) The Trust Committee shall have general supervision
over the Trust Department and the investment of trust funds, in all matters,
however, being subject to the approval of the Board of Directors.
(C) The Trust Committee shall meet at the principal
office of the Company or elsewhere in its discretion at such times to be
determined by a majority of its members or at the call of its chairman. A
majority of its members shall be necessary to constitute a quorum for the
transaction of business.
(D) Minutes of each meeting of the Trust Committee shall
be kept and promptly submitted to the Board of Directors.
(E) The Trust Committee shall have the power to appoint
Committees and/or designate officers or employees of the Company to whom
supervision over the investment of trust funds may be delegated when the Trust
Committee is not in session.
Section 3. Audit Committee
(A) The Audit Committee shall be composed of five
members who shall be selected by the Board of Directors from its own members,
none of whom shall be an officer of the Company, and shall hold office at the
pleasure of the Board.
(B) The Audit Committee shall have general supervision
over the Audit Division in all matters however subject to the approval of the
Board of Directors; it shall consider all matters brought to its attention by
the officer in charge of the Audit Division, review all reports of examination
of the Company made by any governmental agency or such independent auditor
employed for that purpose, and make such recommendations to the
4
<PAGE>
Board of Directors with respect thereto or with respect to any other matters
pertaining to auditing the Company as it shall deem desirable.
(C) The Audit Committee shall meet whenever and wherever
the majority of its members shall deem it to be proper for the transaction of
its business, and a majority of its Committee shall constitute a quorum.
Section 4. Compensation Committee
(A) The Compensation Committee shall be composed of not
more than five (5) members who shall be selected by the Board of Directors from
its own members who are not officers of the Company and who shall hold office
during the pleasure of the Board.
(B) The Compensation Committee shall in general advise
upon all matters of policy concerning the Company brought to its attention by
the management and from time to time review the management of the Company, major
organizational matters, including salaries and employee benefits and
specifically shall administer the Executive Incentive Compensation Plan.
(C) Meetings of the Compensation Committee may be called
at any time by the Chairman of the Compensation Committee, the Chairman of the
Board of Directors, or the President of the Company.
Section 5. Associate Directors
(A) Any person who has served as a director may be
elected by the Board of Directors as an associate director, to serve during the
pleasure of the Board.
(B) An associate director shall be entitled to attend
all directors meetings and participate in the discussion of all matters brought
to the Board, with the exception that he would have no right to vote. An
associate director will be eligible for appointment to Committees of the
Company, with the exception of the Executive Committee, Audit Committee and
Compensation Committee, which must be comprised solely of active directors.
Section 6. Absence or Disqualification of Any Member of a Committee
(A) In the absence or disqualification of any member of
any Committee created under Article III of the By-Laws of this Company, the
member or members thereof present at any meeting and not disqualified from
voting, whether or not he or they constitute a quorum, may unanimously appoint
another member of the Board of Directors to act at the meeting in the place of
any such absence or disqualified member.
5
<PAGE>
ARTICLE IV
Officers
Section 1. The Chairman of the Board of Directors shall preside at
all meetings of the Board and shall have such further authority and powers and
shall perform such duties as the Board of Directors may from time to time confer
and direct. He shall also exercise such powers and perform such duties as may
from time to time be agreed upon between himself and the President of the
Company.
Section 2. The Vice Chairman of the Board. The Vice Chairman of the
Board of Directors shall preside at all meetings of the Board of Directors at
which the Chairman of the Board shall not be present and shall have such further
authority and powers and shall perform such duties as the Board of Directors or
the Chairman of the Board may from time to time confer and direct.
Section 3. The President shall have the powers and duties pertaining
to the office of the President conferred or imposed upon him by statute or
assigned to him by the Board of Directors in the absence of the Chairman of the
Board the President shall have the powers and duties of the Chairman of the
Board.
Section 4. The Chairman of the Board of Directors or the President
as designated by the Board of Directors, shall carry into effect all legal
directions of the Executive Committee and of the Board of Directors, and shall
at all times exercise general supervision over the interest, affairs and
operations of the Company and perform all duties incident to his office.
Section 5. There may be one or more Vice Presidents, however
denominated by the Board of Directors, who may at any time perform all the
duties of the Chairman of the Board of Directors and/or the President and such
other powers and duties as may from time to time be assigned to them by the
Board of Directors, the Executive Committee, the Chairman of the Board or the
President and by the officer in charge of the department or division to which
they are assigned.
Section 6. The Secretary shall attend to the giving of notice of
meetings of the stockholders and the Board of Directors, as well as the
Committees thereof, to the keeping of accurate minutes of all such meetings and
to recording the same in the minute books of the Company. In addition to the
other notice requirements of these By-Laws and as may be practicable under the
circumstances, all such notices shall be in writing and mailed well in advance
of the scheduled date of any other meeting. He shall have custody of the
corporate seal and shall affix the same to any documents requiring such
corporate seal and to attest the same.
6
<PAGE>
Section 7. The Treasurer shall have general supervision over all
assets and liabilities of the Company. He shall be custodian of and responsible
for all monies, funds and valuables of the Company and for the keeping of proper
records of the evidence of property or indebtedness and of all the transactions
of the Company. He shall have general supervision of the expenditures of the
Company and shall report to the Board of Directors at each regular meeting of
the condition of the Company, and perform such other duties as may be assigned
to him from time to time by the Board of Directors of the Executive Committee.
Section 8. There may be a Controller who shall exercise general
supervision over the internal operations of the Company, including accounting,
and shall render to the Board of Directors at appropriate times a report
relating to the general condition and internal operations of the Company.
There may be one or more subordinate accounting or controller
officers however denominated, who may perform the duties of the Controller and
such duties as may be prescribed by the Controller.
Section 9. The officer designated by the Board of Directors to be in
charge of the Audit Division of the Company with such title as the Board of
Directors shall prescribe, shall report to and be directly responsible only to
the Board of Directors.
There shall be an Auditor and there may be one or more Audit
Officers, however denominated, who may perform all the duties of the Auditor and
such duties as may be prescribed by the officer in charge of the Audit Division.
Section 10. There may be one or more officers, subordinate in rank
to all Vice Presidents with such functional titles as shall be determined from
time to time by the Board of Directors, who shall ex officio hold the office
Assistant Secretary of this Company and who may perform such duties as may be
prescribed by the officer in charge of the department or division to whom they
are assigned.
Section 11. The powers and duties of all other officers of the
Company shall be those usually pertaining to their respective offices, subject
to the direction of the Board of Directors, the Executive Committee, Chairman of
the Board of Directors or the President and the officer in charge of the
department or division to which they are assigned.
ARTICLE V
Stock and Stock Certificates
Section 1. Shares of stock shall be transferrable on the books of
the Company and a transfer book shall be kept in which all transfers of stock
shall be recorded.
7
<PAGE>
Section 2. Certificate of stock shall bear the signature of the
President or any Vice President, however denominated by the Board of Directors
and countersigned by the Secretary or Treasurer or an Assistant Secretary, and
the seal of the corporation shall be engraved thereon. Each certificate shall
recite that the stock represented thereby is transferrable only upon the books
of the Company by the holder thereof or his attorney, upon surrender of the
certificate properly endorsed. Any certificate of stock surrendered to the
Company shall be cancelled at the time of transfer, and before a new certificate
or certificates shall be issued in lieu thereof. Duplicate certificates of stock
shall be issued only upon giving such security as may be satisfactory to the
Board of Directors or the Executive Committee.
Section 3. The Board of Directors of the Company is authorized to
fix in advance a record date for the determination of the stockholders entitled
to notice of, and to vote at, any meeting of stockholders and any adjournment
thereof, or entitled to receive payment of any dividend, or to any allotment or
rights, or to exercise any rights in respect of any change, conversion or
exchange of capital stock, or in connection with obtaining the consent of
stockholders for any purpose, which record date shall not be more than 60 nor
less than 10 days proceeding the date of any meeting of stockholders or the date
for the payment of any dividend, or the date for the allotment of rights, or the
date when any change or conversion or exchange of capital stock shall go into
effect, or a date in connection with obtaining such consent.
ARTICLE VI
Seal
Section 1. The corporate seal of the Company shall be in the
following form:
Between two concentric circles the words "Wilmington
Trust Company" within the inner circle the words
"Wilmington, Delaware."
ARTICLE VII
Fiscal Year
Section 1. The fiscal year of the Company shall be the calendar
year.
8
<PAGE>
ARTICLE VIII
Execution of Instruments of the Company
Section 1. The Chairman of the Board, the President or any Vice
President, however denominated by the Board of Directors, shall have full power
and authority to enter into, make, sign, execute, acknowledge and/or deliver and
the Secretary or any Assistant Secretary shall have full power and authority to
attest and affix the corporate seal of the Company to any and all deeds,
conveyances, assignments, releases, contracts, agreements, bonds, notes,
mortgages and all other instruments incident to the business of this Company or
in acting as executor, administrator, guardian, trustee, agent or in any other
fiduciary or representative capacity by any and every method of appointment or
by whatever person, corporation, court officer or authority in the State of
Delaware, or elsewhere, without any specific authority, ratification, approval
or confirmation by the Board of Directors or the Executive Committee, and any
and all such instruments shall have the same force and validity as though
expressly authorized by the Board of Directors and/or the Executive Committee.
ARTICLE IX
Compensation of Directors and Members of Committees
Section 1. Directors and associate directors of the Company, other
than salaried officers of the Company, shall be paid such reasonable honoraria
or fees for attending meetings of the Board of Directors as the Board of
Directors may from time to time determine. Directors and associate directors who
serve as members of committees, other than salaried employees of the Company,
shall be paid such reasonable honoraria or fees for services as members of
committees as the Board of Directors shall from time to time determine and
directors and associate directors may be employed by the Company for such
special services as the Board of Directors may from time to time determine and
shall be paid for such special services so performed reasonable compensation as
may be determined by the Board of Directors.
ARTICLE X
Indemnification
Section 1. (A) The Corporation shall indemnify and hold harmless, to
the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, any person who was or is made or is threatened to be made
a party or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "proceeding") by reason of
the fact that he, or a person for whom he is the legal
9
<PAGE>
representative, is or was a director, officer, employee or agent of the
Corporation or is or was serving at the request of the Corporation as a
director, officer, employee, fiduciary or agent of another corporation or of a
partnership, joint venture, trust, enterprise or non-profit entity, including
service with respect to employee benefit plans, against all liability and loss
suffered and expenses reasonably incurred by such person. The Corporation shall
indemnify a person in connection with a proceeding initiated by such person only
if the proceeding was authorized by the Board of Directors of the Corporation.
(B) The Corporation shall pay the expenses incurred in
defending any proceeding in advance of its final disposition, provided, however,
that the payment of expenses incurred by a Director officer in his capacity as a
Director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the Director or officer to repay
all amounts advanced if it should be ultimately determined that the Director or
officer is not entitled to be indemnified under this Article or otherwise.
(C) If a claim for indemnification or payment of
expenses, under this Article X is not paid in full within ninety days after a
written claim therefor has been received by the Corporation the claimant may
file suit to recover the unpaid amount of such claim and, if successful in whole
or in part, shall be entitled to be paid the expense of prosecuting such claim.
In any such action the Corporation shall have the burden of proving that the
claimant was not entitled to the requested indemnification of payment of
expenses under applicable law.
(D) The rights conferred on any person by this Article X
shall not be exclusive of any other rights which such person may have or
hereafter acquire under any statute, provision of the Charter or Act of
Incorporation, these By-Laws, agreement, vote of stockholders or disinterested
Directors or otherwise.
(E) Any repeal or modification of the foregoing
provisions of this Article X shall not adversely affect any right or protection
hereunder of any person in respect of any act or omission occurring prior to the
time of such repeal or modification.
ARTICLE XI
Amendments to the By-Laws
Section 1. These By-Laws may be altered, amended or repealed, in
whole or in part, and any new By-Law or By-Laws adopted at any regular or
special meeting of the Board of Directors by a vote of the majority of all the
members of the Board of Directors then in office.
10
<PAGE>
EXHIBIT C
Section 321(b) Consent
Pursuant to Section 321(b) of the Trust Indenture Act of 1939, as
amended, Wilmington Trust Company hereby consents that reports of examinations
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon requests therefor.
WILMINGTON TRUST COMPANY
Dated: January 5, 1999 By: /s/ Emmett R. Harmon
--------------------
Name: Emmett R. Harmon
Title: Vice President
<PAGE>
EXHIBIT D
NOTICE
This form is intended to assist state nonmember banks and savings banks with
state publication requirements. It has not been approved by any state banking
authorities. Refer to your appropriate state banking authorities for your state
publication requirements.
R E P O R T O F C O N D I T I O N
Consolidating domestic subsidiaries of the
WILMINGTON TRUST COMPANY of WILMINGTON
- ---------------------------------------------------- ------------------
Name of Bank City
in the State of DELAWARE , at the close of business on September 30, 1998.
-------------
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Thousands of dollars
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coins.............................................180,755
Interest-bearing balances.............................................................................0
Held-to-maturity securities.................................................................................148,529
Available-for-sale securities.............................................................................1,216,482
Federal funds sold and securities purchased under agreements to resell......................................203,500
Loans and lease financing receivables:
Loans and leases, net of unearned income............. 3,951,771
LESS: Allowance for loan and lease losses........... 64,835
LESS: Allocated transfer risk reserve............... 0
Loans and leases, net of unearned income, allowance, and reserve..............................3,886,936
Assets held in trading accounts...................................................................................0
Premises and fixed assets (including capitalized leases)....................................................137,819
Other real estate owned.......................................................................................1,847
Investments in unconsolidated subsidiaries and associated companies.............................................997
Customers' liability to this bank on acceptances outstanding......................................................0
Intangible assets.............................................................................................3,105
Other assets.................................................................................................82,400
Total assets..............................................................................................5,862,370
CONTINUED ON NEXT PAGE
<PAGE>
LIABILITIES
Deposits:
In domestic offices.......................................................................................4,338,785
Noninterest-bearing................ 792,528
Interest-bearing................... 3,546,257
Federal funds purchased and Securities sold under agreements to repurchase................................. 249,670
Demand notes issued to the U.S. Treasury.....................................................................74,347
Trading liabilities (from Schedule RC-D)..........................................................................0
Other borrowed money:.......................................................................................///////
With original maturity of one year or less......................................................576,507
With original maturity of more than one year.....................................................43,000
Bank's liability on acceptances executed and outstanding..........................................................0
Subordinated notes and debentures.................................................................................0
Other liabilities (from Schedule RC-G)......................................................................104,687
Total liabilities.........................................................................................5,386,996
EQUITY CAPITAL
Perpetual preferred stock and related surplus.....................................................................0
Common Stock....................................................................................................500
Surplus (exclude all surplus related to preferred stock).....................................................62,118
Undivided profits and capital reserves......................................................................399,222
Net unrealized holding gains (losses) on available-for-sale securities.......................................13,534
Total equity capital........................................................................................475,374
Total liabilities, limited-life preferred stock, and equity capital.......................................5,862,370
</TABLE>
2
